Document:

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                                                                   Exhibit 10.1

                        SHARE SALE AND PURCHASE AGREEMENT
                          AND ASSIGNMENT OF SHARES IN

                     AAVID THERMALLOY GERMANY HOLDINGS GMBH

     Today, on July 11, 2002 (two thousand and two), appeared before me,

                               DR. HEINZ KEILBACH

     Notary Public in Passau, with his business seat at 94032 Passau, Gro(beta)e
     Klingergasse 2a, Germany

     1.   Mr. Ralph Hummel

     identified by his identity card and acting not for himself, but on behalf
     of

                        AAVID THERMAL TECHNOLOGIES, INC.
                                   (Delaware)
                          One Eagle Square, Suite 509,
                          Concord, New Hampshire 03301
                                     U.S.A.

                                   - SELLER -

     based on certified and, by adding of an Apostille, legalized
     Power-of-Attorney dated July 2, 2002, presented as original and attached as
     copy

     and

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     2. Mr. Stefan Petters

     personally known to me and acting not for himself, but on behalf of

        ELECTROVAC FABRIKATION ELECTROTECHNISCHER SPEZIALARTIKEL GES MBH
                     Aufeldgasse 37-39, 3400 Klosterneuburg
                               Osterreich/Austria

                                  - PURCHASER -

     based on certified Power-of-Attorney dated July 10, 2002 presented as
     original and attached as copy.

     At the request of the persons appearing I record, after denial of prior
     involvement, in accordance with his statements the following:

                                                                  EXECUTION COPY

                                       2

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                        SHARE SALE AND PURCHASE AGREEMENT

                               DATED JULY 11, 2002

                                     BETWEEN

                        AAVID THERMAL TECHNOLOGIES, INC.,

                                   AS SELLER,

                                       AND

        ELECTROVAC FABRIKATION ELECTROTECHNISCHER SPEZIALARTIKEL GESMBH,

                                  AS PURCHASER.

                                       3

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TABLE OF CONTENTS

<TABLE>
<CAPTION>

SECTION                                                                                                         PAGE

<S>                                                                                                              <C>
1.    DEFINITIONS AND INTERPRETATION..............................................................................2

   1.1.     DEFINITIONS.  IN THIS AGREEMENT:......................................................................2
   1.2.     INTERPRETATION........................................................................................5

2.    SALE AND PURCHASE OF THE SHARES.............................................................................7

3.    PURCHASE PRICE AND PAYMENT..................................................................................8

4.    CLOSING AND POST-CLOSING....................................................................................8

5.    REPRESENTATIONS AND WARRANTIES OF THE SELLER................................................................9

   5.1.     POWER AND AUTHORITY..................................................................................10
   5.2.     ACCURACY OF INFORMATION..............................................................................10
   5.3.     STANDING OF AAVID GERMANY AND THE COMPANIES..........................................................11
   5.4.     TITLE TO THE SHARES; AAVID GERMANY'S CURAMIK SHARES AND THE SUBSIDIARY SHARES........................11
   5.5.     OTHER SUBSIDIARIES, ASSOCIATIONS AND BRANCHES........................................................12
   5.6.     THE ACCOUNTS AND THE PRE-CLOSING ACCOUNTS............................................................13
   5.7.     UNDISCLOSED LIABILITIES..............................................................................14
   5.8.     CONDUCT OF BUSINESS BETWEEN THE ACCOUNTS DATE AND THE CLOSING DATE...................................15
   5.9.     DIVIDENDS............................................................................................16
   5.10.    SUBSIDIES ETC........................................................................................16
   5.11.    REAL PROPERTY AND OTHER ASSETS.......................................................................17
   5.12.    INTELLECTUAL PROPERTY................................................................................18
   5.13.    AGREEMENTS...........................................................................................20
   5.14.    ANTI-COMPETITIVE ARRANGEMENTS........................................................................21
   5.15.    NO POWERS OF ATTORNEY................................................................................21
   5.16.    INSIDER CONTRACTS....................................................................................21
   5.17.    MARKETING INFORMATION................................................................................22
   5.18.    CUSTOMERS............................................................................................22
   5.19.    LITIGATION AND COMPLAINTS............................................................................22
   5.20.    LICENSES AND COMPLIANCE WITH LAWS....................................................................22
   5.21.    EMPLOYEES............................................................................................23
   5.22.    ENVIRONMENTAL........................................................................................25
   5.23.    INSURANCE............................................................................................26
   5.24.    NO ILLEGAL OR IMPROPER TRANSACTIONS..................................................................27
   5.25.    TAX..................................................................................................27
   5.26.    BROKERS..............................................................................................28
   5.27.    INDEBTEDNESS ETC BETWEEN ANY OF THE MEMBERS OF THE SELLER GROUP......................................28

6.    REPRESENTATIONS AND WARRANTIES OF THE PURCHASER............................................................28

   6.1.     POWER AND AUTHORITY OF THE PURCHASER.................................................................28
   6.2.     CONSENTS AND APPROVALS...............................................................................29
   6.3.     DUE DILIGENCE........................................................................................29
   6.4.     BROKERS..............................................................................................29
</TABLE>

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<S>                                                                                                              <C>
7.    CLOSING CONDITIONS.........................................................................................30
   7.1.     CONDITIONS TO SELLER'S OBLIGATIONS TO CLOSE..........................................................30
   7.2.     CONDITIONS TO THE OBLIGATIONS OF PURCHASER TO CLOSE..................................................30

8.    INDEMNIFICATION - GENERAL..................................................................................31
   8.1.     BREACH OF THE WARRANTIES.............................................................................31
   8.2.     COMMERCIAL, GOVERNMENTAL AND CONTRACTUAL LIABILITIES.................................................33
   8.3.     ENVIRONMENTAL REMEDIATION LIABILITIES................................................................34
   8.4.     SELLER'S LIABILITY...................................................................................35
   8.5.     LIMITATION OF SELLER'S LIABILITY.....................................................................35
   8.6.     PURCHASER'S LIABILITY................................................................................36

9.    NOTICES....................................................................................................37

10.      TERMINATION; TERMINATION FEE............................................................................38
   10.1.    TERMINATION..........................................................................................38
   10.2.    EFFECT OF TERMINATION................................................................................38
   10.3.    TERMINATION FEE......................................................................................38

11.      MISCELLANEOUS...........................................................................................39

12.      GOVERNING LAW AND DISPUTES..............................................................................40
</TABLE>

SCHEDULES

2              Material Agreements
5.4.2          Aavid Germany Share Capital
5.4.3          Curamik Share Capital
5.4.5          Outstanding obligations, warrants, options, pre-emptive rights
5.4.6          Liens and Security Interests
5.4.7          Voting agreements or other shareholder agreements
5.5.2          Branches or permanent establishments outside of Germany
5.6.1(c)       Non-conforming financial statement preparation procedures re:
               Accounts
5.6.1(d)       Capital Commitments Re: Accounts
5.6.2(c)       Non-conforming financial statement preparation procedures re:
               Pre-Closing Accounts
5.6.2(d)       Capital Commitments Re: Pre-Closing Accounts
5.6.3          Accounts Receivable Aging
5.6.4          Payments Re: post-closing date services/expenses
5.8.3(j)       Material investments in fixed assets
5.8.4          Related party payment transactions
5.10.1A        Grants, subsidies and instruments pertaining to the receipt of
               financial assistance, trade secrets, etc.(confidential)
5.10.1B        Grants, subsidies and instruments pertaining to the receipt of
               financial assistance (non-confidential)
5.11.1         Real Property
5.11.2         Material defects
5.11.3         Effect of consummation of sale of Shares on Leases

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iii

5.12.1         Intellectual property infringement claims
5.12.2         Registered intellectual property rights
5.12.6         Intellectual property rights held by Seller Group and third
               parties
5.13.5         Sole source suppliers; canceled orders and threats to cancel
               orders
5.16.1         Insider contracts
5.21.2         List of employees
5.21.3         Consulting agreements
5.21.5         Commissions and non-salary remuneration
5.21.6         Severance, redundancy payment obligations
5.21.9         Employee benefit plans
5.21.12        Collective bargaining, shop or similar agreements
5.21.14        Persons who may be owed obligations under the Employee Inventions
               Act
5.21.15        Violations of workers' health and/or safety laws, regulations,
               rules and standards
5.22.3         Environmental assessment reports
5.23           Insurance
5.25.1         Tax returns and taxes - open items
5.25.2         Taxes paid or reserved for
5.25.3         Tax penalties, fines, interest
5.25.4         Tax audits, investigations, etc.

EXHIBITS

A        Accounts
B        Share Transfer Agreement
C        Articles of Association of Aavid Germany and the Companies
D        Form of Assumption of Subsidy Obligations

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                        SHARE SALE AND PURCHASE AGREEMENT

This share sale and purchase agreement is made on July 11, 2002

BETWEEN

(1)  Aavid Thermal Technologies, Inc., a corporation duly incorporated,
     organized and validly existing in good standing under the laws of Delaware,
     having its principal office located at One Eagle Square, Suite 509,
     Concord, New Hampshire 03301 ( "SELLER"); and

(2)  Electrovac Fabrikation Electrotechnischer Spezialartikel GesmbH, a company
     duly incorporated, organized and validly existing under the laws of
     Austria, having its principal office located at Aufeldgasse 37-39, 3400
     Klosterneuburg, Austria, (the "PURCHASER").

WHEREAS

A.   Aavid Thermalloy Germany Holdings GmbH, registered under number HRB 2253
     with the Commercial Register of the Municipal Court in Weiden/Oberpfalz,
     (the "AAVID GERMANY") is a limited liability company incorporated in
     Germany, having a registered share capital of Euro25,000 divided into one
     share with the following nominal value: Euro25,000 (the "SHARES").

B.   curamik electronics GmbH, registered under number HRB 632 with the
     Commercial Register of the Municipal Court in Weiden/Oberpfalz ("CURAMIK"),
     is a limited liability company incorporated in Germany, having a registered
     share capital of Euro25,650 divided into three shares with the following
     nominal values: Euro22,950, Euro2,500 and Euro200 (the "CURAMIK SHARES").

C.   Curamik Electronics, Inc. (the "SUBSIDIARY") is a corporation organized
     under the laws of Texas which is authorized to issue 1,000,000 shares of
     common stock 1,000 of which are issued and outstanding (the "SUBSIDIARY
     SHARES").

D.   Seller owns all of the Shares.

E.   Aavid Germany owns Curamik Shares constituting Euro22,950 of Curamik's
     registered share capital.

F.   Mr. Peter Maier, residing at Hugo Dietz-Strasse 19, 91207 Lauf a.d.
     Pegnitz, Germany ("MR. MAIER"), owns Curamik Shares constituting Euro2,500
     of Curamik's registered share capital.

G.   Dr. Jurgen Schulz-Harder, residing at Hugo Dietz-Strasse 32, 91207 Lauf
     a.d. Pegnitz, Germany ("DR. SCHULZ-HARDER"), owns Curamik Shares
     constituting Euro200 of Curamik's registered share capital..

H.   Curamik owns all of the Subsidiary Shares.

I.   Curamik is engaged in the business of developing, manufacturing and selling
     electronic components and devices consisting wholly or in part, of direct
     bonded copper substrate

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     materials ("DBC COMPONENTS"). The Subsidiary is engaged in the business of
     selling DBC Components manufactured by Curamik.

J.   The Seller wishes to sell and the Purchaser wishes to purchase all the
     Shares, pursuant to the terms, and subject to the conditions set forth in
     this Agreement.

NOW, THEREFORE, the Parties hereto agree as follows:

1.   DEFINITIONS AND INTERPRETATION

1.1. Definitions. In this Agreement:

     "ACCOUNTING PRINCIPLES" means the accounting principles that have been
     consistently applied for each of the financial years immediately preceding
     the Accounts Date for Aavid Germany and each of the Companies, and are (a)
     with respect to Aavid Germany and Curamik, in accordance with applicable
     laws and general accepted accounting principles in Germany; and (b) with
     respect to the Subsidiary, in accordance with applicable laws and general
     accepted accounting principles in the United States.

     "ACCOUNTS" means (a) the audited balance sheets as at the Accounts Date,
     and the audited profit and loss reports for the year ending on that date
     for Curamik, individually, and the auditors' reports and the notes relating
     to them; and (b) the unaudited balance sheet as at the Accounts Date and
     the unaudited profit and loss report for the year ending on that date for
     each of Aavid Germany and the Subsidiary, individually, copies of all of
     which have been attached hereto as Exhibit A;

     "ACCOUNTS DATE" means December 31, 2001;

     "AFFILIATE" means, when referring to a person, is a person that directly or
     indirectly, through one or more intermediaries, controls, is controlled by,
     or is under common control with, the first-mentioned person;

     "BENEFIT PLAN" and "BENEFIT PLANS" have the meanings attributed to such
     terms in Section 5.21.9;

     "BUSINESS DAY" means a day (other than a Saturday or Sunday) on which banks
     are generally open in Eschenbach, Germany for normal business;

     "CLOSING" means closing of the sale and purchase of the Shares in
     accordance with Section 4;

     "CLOSING DATE" means July 17, 2002, or such other date as the Parties shall
     mutually agree upon in writing;

     "COMPANIES" means collectively, Curamik and the Subsidiary;

     "ELIGIBLE CLAIM" means a claim that Seller shall not dispute or which, if
     so disputed, shall be resolved, pursuant to Section 12.2 in Purchaser's
     favor, in an amount not less

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     than Euro10,000 arising from a breach of (a) any Warranty; or (b) any
     obligation owed by Seller with respect to any of the commercial,
     governmental and contractual liabilities set forth in Section 8.2.

     "GOVERNMENTAL ENTITY" has the meaning attributed to such term in Section
     6.2;

     "INTELLECTUAL PROPERTY RIGHT" means all (i) patents, patent applications,
     patent disclosures, utility models, utility model applications and
     inventions (including employee inventions whether claimed or not), (ii)
     trademarks, service marks, trade dress, trade names, URL's, logos and
     corporate names and registrations and applications for registration
     thereof, together with all of the goodwill associated therewith, (iii)
     copyrights (registered or unregistered) and copyrightable works and
     registrations and applications for registration thereof, design patents and
     applications for registration thereof, (iv) mask works and registrations
     and applications for registration thereof, (v) computer software, data,
     data bases and documentation thereof, (vi) trade secrets and other
     confidential information (including ideas, formulas, compositions,
     inventions (whether patentable or unpatentable and whether or not reduced
     to practice), know-how, manufacturing and production processes and
     techniques, research and development information, drawings, specifications,
     designs, plans, proposals, technical data, copyrightable works, financial
     and marketing plans and customer and supplier lists and information), (vii)
     other intellectual property rights and (viii) copies and tangible
     embodiments thereof (in whatever form or medium);

     "LIEN" means any right which (a) shall entitle any person to terminate,
     amend, accelerate or cancel any agreement, option, license or other
     instrument to which any of the Companies is a Party by reason of the
     occurrence of (i) a violation, breach or default thereunder by any of the
     Companies; or (ii) an event which with or without notice or lapse of time
     or both would become a default thereunder; or (b) if exercised by the
     holder thereof, will (i) entitle such person to accelerate the performance
     of any obligations or the payment of any sums owed by any of the Companies
     under any agreement, option, license or other instrument, or (ii) result in
     any loss of any benefit under, or the creation of any pledges, claims,
     equities, options, liens, charges, call rights, rights of first refusal,
     "tag" or "drag" along rights, encumbrances and security interests of any
     kind or nature whatsoever on any of the property or assets of any of the
     Companies;

     "MATERIAL ADVERSE EFFECT" means (i) any fact, event or circumstance that
     results in or could reasonably be expected to result in an adverse change
     or effect in the financial condition, assets, liabilities, business,
     properties, results of operations or business prospects of the Companies,
     collectively or individually, which change or effect is material with any
     other such changes or effects, to the specified entities or entity, or (ii)
     any event, matter, condition or effect which materially impairs the ability
     of the specified entities or entity to perform on a timely basis their or
     its obligations under this Agreement or the consummation of the
     transactions contemplated hereby;

     "MATERIAL AGREEMENT" means each agreement listed in Schedule 2 which has
     been delivered in escrow to John Mitchell, Esq. who shall hold same until
     the Closing, at which time he shall deliver such Schedule to the Purchaser;

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     "MATERIAL PRE-CLOSING CLAIM" means a claim that Seller shall not dispute or
     which, if so disputed, shall be resolved, pursuant to Section 12.2 in
     Purchaser's favor, in an amount equal to or greater than Euro300,000
     arising from a breach of (a) any Warranty; or (b) any obligation owed by
     Seller with respect to any of the commercial, governmental and contractual
     liabilities set forth in Section 8.2.

     "MEMBER OF THE SELLER GROUP" means Seller, Aavid Germany, Curamik or the
     Subsidiary, as the case may be;

     "NET ASSETS" means the Operating Assets less Operating Liabilities;

     "NET ASSETS ADJUSTMENT" has the meaning attributed to such term in Section
     3.3;

     "NET ASSETS CERTIFICATE" has the meaning attributed to such term in Section
     3.3;

     "OPERATING ASSETS" means the difference, determined as at the Pre-Closing
     Account Date, between (a) the sum of the current assets and property, plant
     and equipment of each of the Companies; and (b) the sum of the cash and
     cash equivalents of each of the Companies;

     "OPERATING LIABILITIES" means the sum of the trade accounts payable,
     accrued expenses and other liabilities and accrued taxes payable (as such
     terms are employed in the balance sheet included in the Accounts) of each
     of the Companies determined as at the Pre-Closing Accounts Date;

     "PARTIES" means collectively, the Seller and the Purchaser;

     "PARTY" means individually the Seller or the Purchaser, as the case may be;

     "PERSON" means a natural person, company, corporation, partnership,
     association, trust or any unincorporated organization;

     "PRE-CLOSING ACCOUNTS" means (a) the unaudited balance sheets as at the
     Pre-Closing Accounts Date and the unaudited profit and loss reports for the
     Pre-Closing Accounts Period for each of Aavid Germany and Curamik,
     individually as well as on a consolidated basis, and the notes relating to
     them; and (b) the unaudited balance sheet as at the Pre-Closing Accounts
     Date and the unaudited profit and loss report for the Pre-Closing Accounts
     Period for the Subsidiary, individually;

     "PRE-CLOSING ACCOUNTS DATE" means the last day of the month immediately
     preceding the month during which the Closing shall take place;

     "PRE-CLOSING ACCOUNTS PERIOD" means the date commencing on the date
     immediately following the Accounts Date and ending on the Pre-Closing
     Accounts Date;

     "PURCHASE PRICE" has the meaning attributed to such term in Section 3.1;

     "SELLER GROUP" means the Seller, Aavid Germany, Curamik and the Subsidiary,
     collectively.

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      "SOCIAL SECURITY CONTRIBUTIONS" mean all payments to be made by any of the
      Companies under applicable law for health (Krankenversicherung),
      unemployment (Erwerb-slosenversicherung), retirement (Rentenversicherung),
      accident (Unfallversicherung), social care (Pflegeversicherung) and any
      other insurance coverage or benefit scheme;

      "TAX", "TAXES" and "TAXATION" mean (a) income taxes, ad valorem taxes,
      excise taxes, withholding taxes, stamp taxes or other taxes of or with
      respect to gross receipts, premiums, real property, personal property,
      windfall profits, sales, use, transfers, licensing, employment, payroll
      and franchises imposed by or under any federal, state, local or foreign
      statute, law, rule or regulation, and such terms shall include any
      interest, fines, penalties, assessments or additions to tax resulting
      from, attributable to or incurred in connection with any such tax or any
      contest or dispute thereof; (b) liability of any of the Companies or any
      fiduciary for the payment of any amounts of the type described in clause
      (a) as a result of being a member of an affiliated, combined consolidated
      or unitary group for any taxable period; and (c) liability of any of the
      Companies for the payment of any amounts of the type described in clauses
      (a) or (b) as a result of any express or implied obligation to indemnify
      any other person;

      "TAXATION AUTHORITY" means any federal, state, local or foreign
      governmental agency, department or other entity which is authorized by
      applicable law to assess and collect Taxes; and

      "WARRANTIES" means the warranties and representations set out in Article 5
      below.

1.2.  Interpretation

      (a)   As used in this Agreement and each Schedule hereof and Exhibit
            hereto, unless the context clearly indicates otherwise:

            (i)   words used in the singular include the plural and words in the
                  plural include the singular;

            (ii)  reference to any person includes such person's successors and
                  assigns, but only if such successors and assigns are permitted
                  by this Agreement or such other Schedule hereof or Exhibit
                  hereto, and reference to a person in a particular capacity
                  excludes such Person in any other capacity;

            (iii) reference to any gender includes the other gender;

            (iv)  whenever the words "include," "includes" or "including" are
                  used in this Agreement or any Schedule hereof or Exhibit
                  hereto, they shall be deemed to be followed by the words
                  "without limitation" or "but not limited to" or words of
                  similar import;

            (v)   reference to any Article, Section, Exhibit or Schedule means
                  such Article or Section of, or such Exhibit or Schedule to,
                  this Agreement, as the case may be, and references in any
                  Section or definition to any clause means such clause of such
                  Section or definition;

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            (vi)  the words "herein," "hereunder," "hereof," "hereto" and words
                  of similar import shall be deemed references to this Agreement
                  as a whole and not to any particular Section or other
                  provision hereof;

            (vii) reference to any agreement, instrument or other document means
                  such agreement, instrument or other document as amended,
                  supplemented and modified from time to time to the extent
                  permitted by the provisions thereof and by this Agreement;

            (viii) reference to any law (including statutes and ordinances)
                  means such law (including all rules and regulations
                  promulgated thereunder) as amended, modified, codified or
                  reenacted, in whole or in part, and in effect at the time of
                  determining compliance or applicability, and reference to any
                  particular provision of any law shall be interpreted to
                  include any revision of or successor to that provision
                  regardless of how numbered or classified;

            (ix)  relative to the determination of any period of time, "from"
                  means "from and including," "to" means "to but excluding" and
                  "through" means "through and including";

            (x)   in the event of any conflict between the provisions of the
                  body of this Agreement and the Exhibits or Schedules hereto,
                  the provisions of the body of this Agreement shall control;

            (xi)  the titles to Articles and headings of Sections contained in
                  this Agreement have been inserted for convenience of reference
                  only and shall not be deemed to be a part of or to affect the
                  meaning or interpretation of this Agreement; and

            (xii) the word or phrase "material," "any material respect;" "all
                  material respects;" "in material compliance with" and all such
                  other words or phrases of similar construction employed in
                  this Agreement shall mean, if such word or phrase refers to

                  1) a Person's compliance with a statute, law, ordinance,
                  regulation or rule enacted or promulgated by a governmental
                  authority having jurisdiction over such Person, that the
                  Person's conduct or actions do not or shall not constitute,
                  have not resulted in or shall not result in, a violation
                  thereof which would entitle that governmental authority to a)
                  obtain a judgment, injunction or other court order awarding
                  monetary damages or imposing monetary sanctions against, or
                  restricting the conduct of, such Person in a manner that is
                  consequential to the Person's earning power over a
                  commercially reasonable period of time; or b) terminate any
                  right, license, franchise, subsidy or other grant previously
                  awarded by such authority to such Person that is consequential
                  to the Person's earning power over a commercially reasonable
                  period of time;

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7

                  2) a Person's compliance with, conduct pursuant to or
                  representations and warranties made in, an agreement
                  (including this Agreement), license, deed or other instrument
                  or document entered into and executed by such Person which
                  pertains to or grants rights with respect to material assets,
                  material Intellectual Property Rights or material property of
                  any nature and description (in each case, a "Rights
                  Instrument"), that the Person's conduct or actions do not or
                  shall not constitute, have not resulted in or shall not result
                  in, a default thereunder that, if not cured within the time
                  provided therefor, would entitle any other party to the Rights
                  Instrument to 1) rescind, cancel, terminate or materially
                  adversely affect the defaulting Person's rights under such
                  Rights Instrument; or 2) obtain a judgment, injunction or
                  other court order awarding monetary damages or imposing
                  monetary sanctions against; or restricting the conduct of,
                  such Person in a manner that is consequential to the Person's
                  earning power over a commercially reasonable period of time;
                  and

                  3) a Material Adverse Effect, an adverse change or effect in
                  the financial condition, assets, liabilities, business,
                  properties, results of operations or business prospects of the
                  Companies, collectively or individually, the amount of which
                  shall be in excess of the applicable limit set forth in clause
                  4) hereof.

      (b)   This Agreement and each of the Schedules hereof and Exhibits hereto
            were negotiated by the Parties with the benefit of legal
            representation, and no rule of construction or interpretation
            otherwise requiring this Agreement or any of the Schedules hereof
            and Exhibits hereto to be construed or interpreted against any Party
            shall apply to any construction or interpretation hereof. Subject to
            Section 11.4, this Agreement shall be interpreted and construed to
            the maximum extent possible so as to uphold the enforceability of
            each of the terms and provisions hereof, it being understood and
            acknowledged that this Agreement was entered into by the Parties
            after substantial negotiations and with full awareness by the
            Parties of the terms and provisions hereof and the consequences
            thereof.

      (c)   Where a statement in this Agreement (including the schedules) is
            qualified by the expression "to the best of the Seller's knowledge"
            or "so far as the Seller is aware" or any similar expression shall
            be deemed to include the Seller's actual knowledge and what the
            Seller should have known after reasonable inquiry of the Managing
            Director, the members of the Board of Directors and any relevant
            person(s) involved in the management of the business of each of the
            respective Companies, such as the controller, the human resources
            manager and the technology and manufacturing management.

2.    SALE AND PURCHASE OF THE SHARES

2.1.  The Seller shall sell and assign and the Purchaser shall purchase and
      accept the assignment of the Shares under the terms of this Agreement.

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8

2.2.  The assignment of the Shares to the Purchaser, as herein and in Exhibit B
      hereto provided, shall be effective and in force upon fulfillment or
      waiver of all conditions precedent contained as Closing Conditions in
      Section 7 and exchange of confirmations of the Parties on such fulfillment
      or waiver upon Closing pursuant to Section 4.2(a) against payment of the
      Purchase Price pursuant to Section 3.2.

2.3.  The sale of the Shares by the Seller to the Purchaser shall include all
      rights of the Seller thereunder.

3.    PURCHASE PRICE AND PAYMENT

3.1.  The purchase price for the Shares and the compensation to be paid for all
      obligations assumed or to be performed by the Seller hereunder shall be
      Euro31,290,000, minus, to the extent applicable, the Net Assets
      Adjustment (the "Purchase Price").

3.2.  The Purchase Price shall be paid at Closing to the Seller.

3.3.  On the Closing Date, the Seller shall deliver to the Purchaser a
      certificate of the accounting firm that audited the Accounts which shall
      contain a calculation of the Operating Assets and the Operating
      Liabilities in accordance with the provisions of this Agreement, and shall
      state the amount of the Net Assets (the "Net Assets Certificate"). In the
      event that the Net Assets is less than Euro8,000,000, the difference
      therein as stated in said certificate (the "Net Assets Adjustment") shall
      be applied as an adjustment to the Purchase Price pursuant to Section 3.1

3.4.  The Parties agree that no Taxes or other public charges shall be payable
      in addition to the Purchase Price. The costs of notarization of this deed
      shall be borne by the Purchaser.

3.5.  The Seller recognizes and agrees that any and all payments and deliveries
      made by the Purchaser to the Seller shall be in full discharge of the
      Purchaser's obligations to the Seller under this Agreement. The Purchaser
      has no responsibility whatsoever for the allocation of the Purchase Price
      among the Seller.

4.    CLOSING AND POST-CLOSING

4.1.  Closing shall take place at the offices of Hall Dickler Kent Goldstein &
      Wood, LLP at 909 Third Avenue, New York, NY 10022-4731, USA. All actions
      taken at the Closing shall be deemed to have been taken simultaneously at
      the time the last of any such actions is taken or completed. The Closing
      shall occur at 3:00 P.M. local time on the Closing Date.

4.2.  At Closing the Seller shall

      (a)   confirm in writing in the form included in Exhibit B hereto that all
            Closing Conditions and any other conditions precedent to the
            assignment of the Shares, are fulfilled, pursuant to the provisions
            of the Share Assignment Agreement annexed hereto as EXHIBIT B, and
            that the assignment of all of the Seller's

<PAGE>
9

            respective rights, title and interests in the Shares therewith has
            become legally effective;

      (b)   deliver to the Purchaser the written resignations of such of the
            officers, members of the Boards and/or managing directors of Aavid
            Germany and of each of the Companies, other than Mr. Maier and Dr.
            Schulz-Harder, as the Purchaser shall designate in writing not later
            than five days prior to the Closing, in each case acknowledging that
            such resigning officer or Board member has no claim against the
            Company whether for loss of office or otherwise;

      (c)   deliver to the Purchaser duly executed minutes of a shareholders'
            resolution of Aavid Germany on the appointment of Mr. Stefan
            Petters, born May 3, 1956 and Mr. Ingo Pfeil, born October 4, 1958
            as managing directors of Aavid Germany each released from the
            limitations of Section 181 Alt 2 (Verbot der Mehrvertretung) of the
            German Civil Code; and

      (d)   deliver to the Purchaser the written release by Canadian Imperial
            Bank of Commerce of the pledge on the Shares and the security
            interests as set out in Schedule 5.4.6.

4.3.  At Closing the Purchaser shall

      (a)   transfer the amount to be paid pursuant to Section 3.2 by wire to
            account no 4112017009 at Citibank AG - Frankfurt, Neue Mainzer
            Strasse 75, 60311 Frankfurt Germany (Swift Address: CITIDEFF) in the
            name of Keybank National Association, Cleveland, Ohio for the
            benefit of Aavid Thermalloy/Aavid Thermal Technologies as full
            consideration for the Shares and for all obligations assumed or to
            be performed by the Seller hereunder; and

      (b)   confirm in writing in the form as included in Exhibit B hereto that
            all Closing Conditions, and any other conditions precedent to the
            assignment of the Shares, are fulfilled, pursuant to the provisions
            of the Share Assignment Agreement annexed hereto as Exhibit B, and
            that the Purchaser's acceptance of assignment of all of the Shares
            therewith has become legally effective.

4.4.  At the Closing and from time to time thereafter, the Seller shall execute
      such additional instruments and take such other reasonable actions as
      Purchaser may reasonably request in order to effectively sell, transfer
      and assign the Shares to Purchaser and confirm Purchaser's title thereto.

5.    REPRESENTATIONS AND WARRANTIES OF THE SELLER

      In entering into this Agreement, Purchaser is relying upon the correctness
      of the representations and warranties as defined in Section 434 para 1
      sentence 1 German Civil Code ("Beschaffenheitsangaben" as defined in ss.
      434 Absatz 1 Satz 1 BGB) made by the Seller to the Purchaser below. The
      parties to this Agreement agree that the representations and warranties
      contained in this Article 5 are not given as "Garantien" in

<PAGE>
10

       the meaning of Sections 444 Alt 2 and 443 of the German Civil Code and
       that none of Seller's statements in public, especially advertisement
       ("Werbung"), in the meaning of Sections 443 para. 1 and 434 para 1
       sentence 3 of the German Civil Code shall be interpreted as
       representation or warranty. The Seller shall be liable for
       representations and warranties being correct both as of the date hereof
       as well as on the Closing Date. The Seller and the Purchaser acknowledge
       and agree that the representations and warranties contained in this
       Article 5 and the legal consequences which will result pursuant to
       Article 8 below if any of such representations and warranties shall not
       be correct or shall not be complied with are homogeneous with, and an
       inseparable part of, this Agreement. No other representations and/or
       warranties than expressly given in this Article 5 are given by Seller.
       Section 434 para 1 sentences 2 and 3 German Civil Code shall not apply.

5.1.   Power and Authority

       5.1.1. The Seller has full power and authority to sell, assign, transfer
              and deliver the Shares to the Purchaser, to perform all other
              undertakings of the Seller hereunder and to execute, deliver and
              perform this Agreement.

       5.1.2  Assuming all filings, registrations, approvals, notifications etc
              required by applicable laws are made, the execution and delivery
              of this Agreement by the Seller, the assignment of the Shares to
              the Purchaser and the Closing of the transactions contemplated
              hereby:

              (a) will not violate any provision of the respective articles of
              association of any member of the Seller Group;

              (b) will not violate any statute, rule, regulation, order, award,
              judgment, injunction or decree of any public body or authority by
              which any member of the Seller Group or any of their respective
              properties or assets is bound;

              (c) will not result in a violation or breach of, or constitute a
              default under, any license, franchise, permit, indenture,
              agreement or other instrument to which any member of the Seller
              Group is a party, or by which any of them is bound; and

              (d) will not result in the creation or imposition of any Lien,
              charge or encumbrance of any nature on any of the properties or
              assets of Aavid Germany or any of the Companies.

5.2.   Accuracy of Information

       5.2.1. The particulars relating to Aavid Germany and the Companies, and
              their respective businesses, properties and assets set out in this
              Agreement without qualification, including the recitals and the
              schedules to this Agreement, are correct in all material respects.
              The particulars relating to Aavid Germany and the Companies, and
              their respective businesses, properties and assets set out in this
              Agreement as being "to the best of Seller's knowledge", including

<PAGE>
11

              the recitals and the schedules to this Agreement, are, to the best
              of Seller's knowledge, correct in all material respects.

5.3.   Standing of Aavid Germany and the Companies

       5.3.1. Each of Aavid Germany and Curamik is duly incorporated, registered
              and organized, and validly existing under the laws of Germany and
              has the corporate power to own its respective properties and carry
              on its respective business as and where its business is now
              conducted.

       5.3.2. The Subsidiary is duly incorporated, registered and organized, and
              validly existing under the laws of Texas and has the corporate
              power to own its property and carry on its respective business as
              and where its business is now conducted.

       5.3.3. All returns, resolutions, minutes, annual reports and other
              documents which Aavid Germany and the Companies are required by
              law or regulations to file with or deliver to the respective
              governmental authorities having jurisdiction over them have been
              correctly prepared in all material respects and duly filed or
              delivered.

       5.3.4. The articles of association (or the similar organizational
              documents) of Aavid Germany and the Companies, as attached in
              Exhibit C, are in full force and effect in compliance with
              applicable laws.

5.4.   Title to the Shares; Aavid Germany's Curamik Shares and the Subsidiary
       Shares

       5.4.1. At the Closing, the Seller shall deliver good and marketable title
              to the Shares, free and clear of all Liens, encumbrances, claims,
              options and restrictions of every kind.

       5.4.2. The Shares as sold under this Agreement represent Euro25,000
              (100%) of the registered share capital of Aavid Germany. The
              division of the registered share capital of Aavid Germany and the
              nominal values of the Shares are set forth in Schedule 5.4.2. The
              Shares have been validly issued and are fully paid and
              non-assessable. No repayments of share capital of Aavid Germany
              has been made to the Seller, and no contribution obligation
              (Nachschu(beta)verpflichtung) exists with regard to the Shares.

       5.4.3. Aavid Germany is the owner of Curamik Shares with an aggregate
              nominal value of Euro22,950 constituting (89.4%) of Curamik's
              registered share capital of Euro25,650. The division of the
              registered share capital of Curamik and the nominal values of the
              shares in the registered share capital of Curamik as well as the
              ownership of the remaining shares in the registered share capital
              of Curamik are set forth in SCHEDULE 5.4.3. The shares of Curamik
              issued to Aavid Germany have been validly issued and are fully
              paid and non-assessable. No repayments of share capital of Curamik
              have been made to Aavid Germany or any other shareholder of
              Curamik, and no contribution

<PAGE>
12

              obligation (Nachschlu(beta)verpflichtung) exists with regard to
              the shares of Curamik held by Aavid Germany or any other
              shareholder of Curamik. On the Closing Date, Aavid Germany shall
              have good and marketable title to the shares of Curamik issued to
              Aavid Germany, free and clear of all Liens, encumbrances, claims,
              options and restrictions of every kind.

       5.4.4. Curamik is the owner of 100% of the issued and outstanding
              Subsidiary Shares. The Subsidiary Shares issued to Curamik have
              been validly issued and are fully paid and non-assessable. On the
              Closing Date, Curamik shall have good and marketable title to the
              Subsidiary Shares, free and clear of all Liens, encumbrances,
              claims, options and restrictions of every kind.

       5.4.5. Except as set forth in SCHEDULE 5.4.5, there are no outstanding
              obligations, warrants, options, pre-emptive rights or other
              agreements to which any member of the Seller Group is a party or
              otherwise bound providing for the issuance of any additional
              shares, warrants, options or other securities of Aavid Germany or
              any of the Companies, or for the purchase, repurchase, redemption
              or other acquisition of any of the Shares, any of the shares in
              the share capital of Curamik, or any of the outstanding shares of
              the Subsidiary, except for this Agreement.

       5.4.6. Other than security interests pertaining to the Shares granted by
              Seller in favor of its senior creditors as set forth in SCHEDULE
              5.4.6, there are no options, restrictions, pledges, Liens or other
              forms of security or encumbrance on, over or affecting any of the
              Shares, any of the shares in the share capital of Curamik or any
              of the shares of the Subsidiary, nor is there any commitment to
              give or create any of the foregoing.

       5.4.7. There are no voting agreements or other shareholder agreements to
              which any member of the Seller Group is a party with respect to
              the Shares and or any shares in the share capital of any of or the
              Companies and/or with respect to the ownership of Aavid Germany or
              any of the Companies.

5.5.   Other Subsidiaries, Associations and Branches

       5.5.1. Except for Aavid Germany's ownership interest in Curamik and
              Curamik's ownership interest in the Subsidiary, neither Aavid
              Germany nor any of the Companies owns, and none of them has agreed
              to acquire, any shares or securities of interest or participation
              in any other corporation (whether incorporated in Germany or
              elsewhere), or any other entity or business association of
              whatever kind.

       5.5.2. Except as set forth in Schedule 5.5.2, and except for the
              Subsidiary, neither Aavid Germany nor Curamik has any branch or
              permanent establishment outside of Germany.

       5.5.3. Except for its shareholdings in Aavid Germany and its indirect
              controlling interest in Curamik, Seller does not hold directly, or
              indirectly through one

<PAGE>
13

              or several intermediaries, any shares, participations or other
              interests in, and does not control any such shares, participations
              or interests in any other entity, which is active in the field of
              business conducted by Curamik

5.6.   The Accounts and the Pre-Closing Accounts

       5.6.1. The Accounts:

       (a) have been included in Exhibit A;

       (b) have been prepared (i) with respect to Aavid Germany and Curamik, in
       accordance with German generally accepted accounting principles; and (ii)
       with respect to the Subsidiary, in accordance with U.S. generally
       accepted accounting principles, and fairly present the financial
       condition of Aavid Germany and Curamik, individually, or on a
       consolidated basis, as the case may be, and the Subsidiary, individually,
       as at the Accounts Date, and of the profit or loss of Aavid Germany and
       Curamik, individually, and the Subsidiary, individually, for the year
       then ended;

       (c) have been prepared on bases consistent with the bases respectively
       employed in the preparation of the financial statements of Aavid Germany
       and each of the Companies for each of the three immediately preceding
       fiscal years, except as disclosed in SCHEDULE 5.6.1(c);

       (d) contain, except for any capital commitments disclosed on SCHEDULE
       5.6.1(d), either provisions adequate to cover, or full particulars in
       notes of, all Taxation and other liabilities (whether quantified,
       contingent or otherwise) of Aavid Germany and each of the Companies,
       individually, or on a consolidated basis, as the case may be, as at the
       Accounts Date; and

       (e) are not affected by any unusual or non-recurring items or by any
       contract or arrangement which is not of arm's length nature.

       5.6.2. The Pre-Closing Accounts:

       (a) shall be delivered to the Purchaser not less than five calendar days
       prior to the Closing Date;

       (b) shall be prepared (i) with respect to Aavid Germany and Curamik, in
       accordance with German generally accepted accounting principles; and (ii)
       with respect to the Subsidiary, in accordance with U.S. generally
       accepted accounting principles, and shall present fairly the financial
       condition of Aavid Germany and Curamik, individually, and the Subsidiary,
       individually, as at the Pre-Closing Accounts Date, and of the profit or
       loss of Aavid Germany and Curamik, individually, or on a consolidated
       basis, as the case may be, and the Subsidiary, individually, for the
       Pre-Closing Accounts Period;

<PAGE>
14

       (c) on bases consistent with the bases respectively employed in the
       preparation of the financial statements of Aavid Germany and each of the
       Companies for each of the three immediately preceding fiscal years,
       except as disclosed in SCHEDULE 5.6.2(c);

       (d) shall contain, except for any capital commitments disclosed on
       SCHEDULE 5.6.2(d), either provisions adequate to cover, or full
       particulars in notes of, all Taxation and other liabilities (whether
       quantified, contingent or otherwise) of Aavid Germany and each of the
       Companies, individually, or on a consolidated basis, as the case may be,
       as at the Pre-Closing Accounts Date; and

       (e) shall not be affected by any unusual or non-recurring items or by any
       contract or arrangement which is not of arm's length nature.

       5.6.3. SCHEDULE 5.6.3 is a true, correct and complete listing and aging
              of each of the respective accounts receivable of the Companies as
              of May 31, 2002 determined in accordance with the Accounting
              Principles consistently applied and determined in a manner
              consistent with the presentation in the Accounts. All of such
              accounts receivable have arisen in bona fide arm's length
              transactions in the ordinary course of business and are valid and
              binding obligations of the account debtors. Such accounts
              receivable are collectible in full in the ordinary course of
              business, except to the extent of any reserves for doubtful
              accounts that have been established with respect thereto. The
              reserves for doubtful accounts established by each of the
              Companies and reflected on Schedule 5.6.3 have been determined in
              accordance with the Accounting Principles consistently applied and
              are consistent with the presentation in the Accounts, it being
              understood that in no event shall the reserve exceed 10% of the
              total face amount of the receivables.

       5.6.4. Any payments (in the form of retainers or otherwise) from, the
              customers or potential customers of any of the Companies for
              services to be rendered or for expenses to be incurred subsequent
              to the Closing Date are set forth on SCHEDULE 5.6.4 and have been
              recognized consistent with previously applied principles in the
              books of each of the Companies.

5.7.   Undisclosed Liabilities

       As of the date hereof, neither Aavid Germany nor any of the Companies
       has, and as of the Closing Date, neither Aavid Germany nor any of the
       Companies will have, any liabilities or obligations (whether accrued,
       absolute, contingent or otherwise) except (a) to the extent set forth in,
       or specifically reserved against in, the Accounts; and (b) for
       liabilities and obligations arising in the ordinary course of business
       since the Accounts Date, consistent in form and amount with past
       practice, none of which liabilities or obligations, individually or in
       the aggregate, would have, individually or in the aggregate, a Material
       Adverse Effect. Neither Aavid Germany nor any of the Companies is under
       any obligation, contingent or otherwise, other than obligations of such
       nature incurred in

<PAGE>
15

       the ordinary course of its respective business, to refund or rebate any
       material amounts paid or payable to it for services rendered prior to the
       date hereof.

5.8.   Conduct of Business Between the Accounts Date and the Closing Date

       5.8.1. Since its organization, Aavid Germany has not engaged in any
              business activity except as a non-operating holding company with
              respect to the Shares and the exercise of its rights as a
              shareholder of Curamik.

       5.8.2. The activities of each of the Companies during the period from the
              Accounts Date to the date of this Agreement have been conducted,
              and the activities of each of the Companies during the period from
              the date of this Agreement through the Closing date shall be
              conducted, in a normal manner and with a view to maintaining each
              of them as going concerns.

       5.8.3. There has not been, arisen or occurred, during the period between
              the Accounts Date and the date of this Agreement in respect of
              each of the Companies, and there shall not have been, arisen or
              occurred, during the period from the date of this Agreement
              through the Closing Date in respect of each of the Companies:

              (a) any change in their respective financial conditions or in the
              operations of their respective businesses which would have a
              Material Adverse Effect;

              (b) any amendment or termination of, or any agreement to amend or
              terminate, any material agreement;

              (c) any material obligations or liabilities incurred, I.E.,
              obligations or liabilities other than those arising in the
              ordinary course of business consistent in form and amount with
              past practices;

              (d) any waiver of any debts, claims or rights out of the ordinary
              course of business;

              (e) any sale, assignment, transfer, lease or other disposal of any
              material assets, i.e., assets other than those which the Companies
              have historically sold, assigned, transferred, leased or otherwise
              disposed of in the ordinary course of their respective businesses
              consistent in form and amount with past practices;

              (f) any ex gratia payments or promises to any employee;

              (g) any loan or advance to any Party in excess of Euro10,000;

              (h) any change of accounting methods, principles or practices,
              except as disclosed in Schedule 5.6.1(c) and 5.6.2(c);

              (i) any change in manner or methods of paying creditors;

<PAGE>
16

              (j) any material investments in fixed assets, except as disclosed
              in SCHEDULE 5.8.3(j); or

              (k) any material increase in compensation or benefits or
              introduction of new benefits to any director, officer or employee
              of Aavid Germany or any of the Companies.

       5.8.4. Summaries describing the payor, the recipient, the amount in
              question and the underlying reasons regarding (a) all transactions
              since the Accounts Date between Aavid Germany or any of the
              Companies and the Seller; and (b) all payments by Aavid Germany or
              any of the Companies to the Seller since the Accounts Date, are
              set out in SCHEDULE 5.8.4.

       5.8.5. On or before the Closing Date, Aavid Germany and each of the
              Companies shall undertake such transactions as may be necessary so
              that at the time of Closing of the transactions contemplated
              herein and hereby, neither Aavid Germany nor any of the Companies
              shall have (a) any cash on hand except for the cash that Curamik
              must have on hand pursuant to the provisions of Section 7.2.4; or
              (b) any liabilities other than the Operating Liabilities.

5.9.   Dividends

       Except as set out in the Accounts and the minutes from the respective
       general shareholders or directors meetings of Aavid Germany and each of
       the Companies, neither Aavid Germany nor any of the Companies has
       declared, since the Accounts Date, any dividends or made any other
       distributions of profits or assets to their respective shareholders. No
       directors' or shareholders' resolutions concerning profit distributions
       have been adopted by Aavid Germany or any of the Companies, or will be
       adopted through the Closing Date. All dividends or other distributions of
       profits or assets declared, made or paid by Aavid Germany or any of the
       Companies have been declared made and paid in accordance with applicable
       laws and their respective articles of association. The performance based
       bonus payments made by Curamik pursuant to its employment agreements with
       each of Mr. Maier and Dr. Shultz-Harder were based upon Curamik's
       achievement of a pre-determined amount of EBITDA. Such payments were not
       intended to be distributions of Curamik's earnings and profits, and
       Curamik shall not be obligated to make further payments of such bonuses
       in any year in which such the pre-determined amount of EBITDA shall not
       be achieved. Accordingly, the Parties agree that, for purposes of this
       Agreement, the making of such payments shall not be viewed as a basis for
       establishing any entitlement in the nature of a custom and practice
       (betriebliche Ubung). Nothing contained in this Section 5.9 shall be
       construed as limiting or prohibiting the rights of Aavid Germany, Curamik
       and the Subsidiary, pursuant to Section 5.8.5, but subject to Section
       7.2.4, to transfer or reduce their respective holdings of cash on hand.

5.10.  Subsidies etc.

<PAGE>
17

       5.10.1. A list identifying and setting forth the particulars regarding
              all grants, subsidies and instruments pertaining to the receipt of
              financial assistance with respect to which Aavid Germany, Curamik
              and/or the Subsidiary is a party and which relate to trade
              secrets, and/or competitively sensitive information about
              products, processes or customers of any of Aavid Germany, Curamik
              and the Subsidiary is set forth in SCHEDULE 5.10.1A. A list
              identifying and setting forth the particulars regarding all other
              grants, subsidies and instruments pertaining to the receipt of
              financial assistance with respect to which Aavid Germany, Curamik
              and/or the Subsidiary is a party is set forth on SCHEDULE 5.10.1B.
              Schedule 5.10.1A has been delivered in escrow to John Mitchell,
              Esq. who shall hold same until the Closing, at which time he shall
              deliver such Schedule to the Purchaser. Except as set forth in
              Schedule 5.10.1A and Schedule 5.10.1B, neither Aavid Germany nor
              any of the Companies is subject to any arrangement for receipt or
              repayment of any grant, subsidy or financial assistance from any
              government department or other body.

       5.10.2. Curamik has complied and will, through the Closing Date continue
              to comply in all material respects with the conditions,
              regulations and rules applying to the Subsidies set forth in
              Schedule 5.10. The continuation after the Closing of the business
              of Curamik as presently conducted will not violate the conditions,
              regulations and rules applicable to the Subsidies in any material
              respect; and consummation of the transactions contemplated in this
              Agreement will not violate in any material respect the conditions,
              regulations and rules applicable to the Subsidies set forth in
              Schedule 5.10.

5.11.  Real Property and Other Assets

       5.11.1. Neither Aavid Germany nor any of the Companies owns any real
              property. SCHEDULE 5.11.1 sets for the addresses of all real
              property leased by Aavid Germany and any of the Companies, as
              lessee (the "Properties"). Neither Aavid Germany nor any of the
              Companies engages in manufacturing activities at any of the
              Properties located outside of Germany.

       5.11.2. To the best of Seller's knowledge, (a) there is no material
              defect in the structure or physical condition of any of the
              Properties; (b) except as disclosed on SCHEDULE 5.11.2, each of
              the Properties is in good operating condition and repair,
              reasonable wear and tear excepted, is usable in the ordinary
              course of business and is adequate and suitable for the uses to
              which they are being put.

       5.11.3. Seller has provided or made available to Purchaser all leases for
              each of the Properties which are currently in effect (the
              "Leases"). All such Leases are valid and binding in accordance
              with their respective terms and neither Aavid Germany nor any of
              the Companies is in default in any respect under any Lease or
              otherwise in violation of the terms of any such Lease, except for
              such instances of default or violation thereunder that would not

<PAGE>
18

              individually or in the aggregate result in a Material Adverse
              Effect. Except as set forth in SCHEDULE 5.11.3, the execution and
              delivery of this Agreement and the consummation of the
              transactions contemplated hereby, do not and will not result in a
              breach or violation of, or constitute a default or an event that,
              with the passage of time or the giving of notice, or both, would
              constitute a default or violation, give rise to a right of
              termination, material modification (including as to the amount,
              timing or nature of lease payments), cancellation or acceleration
              or require the consent or approval of any party (other than one or
              more of Aavid Germany and the Companies (as applicable)) under any
              Lease.

       5.11.4. Each of Aavid Germany and the Companies has good and marketable
              title or rights as lessees to all real, personal, mixed, tangible
              and intangible property of any kind or nature owned or used by
              them, and each of them owns each of the assets identified in the
              Accounts, in each case, except to the extent otherwise disclosed
              in the Accounts or the schedules to this Agreement, free and clear
              of all Liens, claims and encumbrances. The assets and properties
              owned or leased by Aavid Germany and each of the Companies are, as
              at the date hereof, and shall be through the Closing Date,
              sufficient to operate and conduct the respective businesses of
              Aavid Germany and each of the Companies in a manner consistent
              with at least the same standards of quality and reliability as
              have been achieved as of the date hereof.

       5.11.5. Machinery, equipment and other tangible assets owned by Aavid
              Germany and the Companies are in fair or good operating condition
              and repair, reasonable wear and tear excepted, are usable in the
              ordinary course of business and are adequate and suitable for the
              uses to which they are being put. To the best of Seller's
              knowledge, none of such items requires any repairs or replacement
              except for maintenance in the ordinary course of business or such
              other repairs or replacements which are not material, individually
              or in the aggregate, in nature or cost. All such assets and
              property are located at the Properties.

       5.11.6. Except as otherwise set forth in Schedule 5.11.6, none of Aavid
              Germany or any of the Companies is contemplating, or is obligated
              to make any capital expenditures other than (a) in the ordinary
              course of their respective businesses; and (b) in amounts which in
              the aggregate, will not exceed Euro20,000 for any of them.

5.12.  Intellectual Property

       5.12.1. The activities of the Companies (or of any licensee under any
              license granted by the Companies) do not infringe in any material
              respect or, to the best of Seller's knowledge, are not likely to
              infringe on any Intellectual Property Rights, including any moral
              rights, of any third party and, except for the notices of
              potential claims made by Ixys and Ferraz (the "Ixys and Ferraz
              Claims"), and as otherwise set forth on SCHEDULE 5.12.1, no claim
              has been

<PAGE>
19

              made, has been threatened or, to the best of Seller's knowledge,
              is likely to be made or threatened, against any of the Companies
              or any such licensee in respect of such infringement.

       5.12.2. A list of all registered Intellectual Property Rights (including
              applications to register the same) owned or licensed by Aavid
              Germany or any of the Companies is set out in Schedule 5.12.2.
              Such list contains with respect to each of the Intellectual
              Property Rights identified thereon, a description thereof, the
              owner of each of such Intellectual Property Rights, the royalty
              and/or other compensation, if any, to be paid by Aavid Germany or
              any of the Companies to the owner thereof and the date, if any,
              when the Intellectual Property Rights held by Aavid Germany or any
              of the Companies shall expire. Each of the Intellectual Property
              Rights owned or licensed by Aavid Germany or any of the Companies
              is valid, owned or licensed, as the case may be, by the owners or
              applicants identified in Schedule 5.12.2, enforceable, not subject
              to any Lien, other encumbrance or any license or authority in
              favor of another and, to the to the best of the Seller's
              knowledge, not being infringed. All application and renewal fees
              pertaining to such Intellectual Property Rights have been paid and
              all steps which are reasonably required for the maintenance and
              protection of such Intellectual Property Rights have been taken.
              There are no legal deficiencies to any of the Intellectual
              Property Rights described in Schedule 5.12.2, and no action or
              proceeding is pending which contests the validity of any of the
              Intellectual Property Rights described in Schedule 5.12.2.

       5.12.3. Except for unregistered Intellectual Property Rights that have
              not been documented or otherwise described in writing by Aavid
              Germany or any of the Companies, neither Aavid Germany nor any of
              the Companies (a) uses in its respective business operations any
              Intellectual Property Rights, other than the Intellectual Property
              Rights identified on Schedule 5.12.2, and (b) is under any
              obligation to pay license fees royalties or other remuneration for
              any Intellectual Property Rights other than those identified on
              said Schedule. Except for unregistered Intellectual Property
              Rights owned or licensed by Aavid Germany or either of the
              Companies, the Intellectual Property Rights used by Aavid Germany
              and the Companies comprise all the rights and interests in
              Intellectual Property Rights necessary or convenient for the
              carrying on of the business of Aavid Germany and the Companies in
              and to the extent which it is presently conducted or intended to
              be conducted.

       5.12.4. All licenses and agreements pertaining to the Intellectual
              Property Rights identified on Schedule 5.12.2 are presently in
              effect, no notice having been given by either of the respective
              parties thereto to terminate any of them, and no agreements having
              been made to alter any of them. The obligations of all parties to
              such licenses and agreements have been fully complied with in all
              material respects and will be complied with in all material
              respects during the period commencing on the date hereof and
              continuing through the

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20

              Closing Date. No disputes have arisen or, to the best of Seller's
              knowledge, are foreseeable in respect thereof.

       5.12.5. No member of the Seller Group has made any disclosure of know-how
              owned or licensed by any of the Companies to any person other than
              the Purchaser, except in the ordinary course of business or on the
              basis that such disclosure is to be treated as being of a
              confidential character.

       5.12.6. None of the members of the Seller Group or any third party other
              than as disclosed in SCHEDULE 5.12.6, has any rights to any
              Intellectual Property Rights used by any of the Companies. All
              inventions made by employees of the Companies that the Companies
              are using or have used or intend to use, were made in the normal
              course of the duties of the employees concerned. There are no
              outstanding claims, or to the best of Seller's knowledge,
              potential claims, against any of the Companies under any contract
              or under Sections 9, 10 of the German Act on Employees' Inventions
              or any equivalent provision or case law of any foreign
              jurisdiction providing for employee compensation or ownership in
              respect of any rights or interests in Intellectual Property
              Rights.

       5.12.7. The Seller does not hold any Intellectual Property Rights which
              are used by any of the Companies or has any claim for compensation
              for such Intellectual Property Rights.

       5.12.8. The Companies do not carry on business under any names other than
              their respective corporate names.

       5.12.9. Each of the Companies' abilities to use the Intellectual Property
              Rights used by them, respectively, at the date of this Agreement
              will not be adversely affected by or impaired in any material
              respect as a result of the consummation of the transactions
              contemplated hereby.

5.13.  Agreements

       5.13.1. None of the Companies is party to any contract, agreement,
              arrangement or obligation of material importance to its respective
              businesses, other than the Material Agreements listed in Schedule
              2. Each Material Agreement is valid and in presently in effect.

       5.13.2. The Companies have neither received nor given notice of
              termination of any Material Agreement. No party to any Material
              Agreement has the right to terminate or modify its obligations as
              a result of the transactions contemplated by this Agreement.

       5.13.3. Neither the Companies, nor the other parties to the Material
              Agreements are in material default under or in breach of any
              Material Agreement.

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21

       5.13.4. Except to the extent set forth in Schedule 2, none of the
              Companies is party to any contract, agreement, arrangement or
              obligation which was not entered into in the ordinary course of
              their respective businesses, or any agreement or arrangement which
              restricts the Companies' freedom to carry on any business in any
              part of the world in such manner as they deem to be fit.

       5.13.5. None of the Companies has since January 1, 2002 received any
              material complaints concerning products and/or services resulting
              in each individual case in a cost or other charge for any of the
              Companies exceeding Euro25000. Except as set out in SCHEDULE
              5.13.5, none of the Companies' customers has since January 1, 2002
              threatened or to the best of the Seller's knowledge attempted to
              cancel or reduce any material purchases from any of the Companies.
              None of the Companies' suppliers has since January 1, 2002
              canceled or reduced or to the knowledge of the Seller is currently
              attempting to cancel or reduce the supply of products or services
              to any of the Companies. Except as otherwise disclosed on Schedule
              5.13.5, none of the Companies' suppliers, with the exception of
              public utility suppliers, is the sole source of supply without any
              other available source of supply preventing the Companies to
              obtain at substantially equivalent terms and conditions a source
              of supply of products or services.

5.14.  Anti-Competitive Arrangements

       5.14.1. To the best of Seller's knowledge, neither Aavid Germany nor any
              of the Companies has been, since its respective date of
              registration, a party to any agreement, arrangement, concerted
              practice or course of conduct which:

              (a) infringes in any material respect any law, legislation or
              regulation (civil or criminal) relating to competition,
              restrictive trade practices, anti-trust, monopolies, merger
              control, fair trading, restraint of trade, pricing, anti-dumping
              or free movement of goods and services in any jurisdiction in
              which the Companies carry on business or have assets or sales; or

              (b) is void or unenforceable (whether in whole or in part) or may
              render any of the Companies liable to proceedings under any such
              law, legislation or regulation as is referred to in subparagraph
              (a) above which would have a Material Adverse Effect.

5.15.  No Powers of Attorney

       None of the Companies has granted any power of attorney or similar
       authority which remains in force as of the date of this Agreement which
       would have a Material Adverse Effect.

5.16.  Insider Contracts

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22

       5.16.1. The Companies are not parties to any currently in force contract
              or arrangement in which the Seller is interested, directly or
              indirectly. There has not been any such contract or arrangement at
              any time from the registration of the Companies up to the date of
              this Agreement. All contract agreements and other arrangements
              between the Companies and the Seller or any affiliate of the
              Seller are listed in SCHEDULE 5.16.1.

       5.16.2. The Companies are not parties to any currently in force contract
              or arrangement which is not of an arms length nature.

       5.16.3. Neither of the Companies nor the Seller has any direct or
              indirect interest in any competitor, competing business, supplier
              or customer of any of the Companies or in any other person which
              conducts a business that competes with the respective businesses
              of the Companies.

5.17.  Marketing Information

       The marketing materials produced by or on behalf of the Companies are not
       subject to any restriction which materially and adversely affects the
       Companies' respective abilities to use such information for the purpose
       of their respective businesses.

5.18.  Customers

       None of the customers for whom any of the Companies provided material
       services at any time since January 1, 2002 has cancelled or otherwise
       terminated, or, to the knowledge of the Seller, threatened to cancel or
       otherwise terminate, its relationship with the Companies or materially
       reduced, or to the knowledge of the Companies and the Seller, has
       threatened to materially reduce, its business with the Companies. Neither
       any of the Companies nor the Seller has received any notice and none of
       them has knowledge or reason to believe that any customer for whom any of
       the Companies provided material services at any time since January 1,
       2002 intends to cancel or otherwise modify its relationship with the
       Companies on account of the transactions contemplated hereby or
       otherwise.

5.19.  Litigation and Complaints

       5.19.1. The Companies are not engaged in any litigation or arbitration
              proceedings, and there are no such proceedings pending, or to the
              best of Seller's knowledge, threatened against or by any of the
              Companies.

       5.19.2. To the best of Seller's knowledge, (a) the Companies are not
              subject to any investigation, inquiry or enforcement proceedings
              or processes by any governmental, administrative or regulatory
              body, and (b) Seller is not aware of anything which is likely to
              give rise to any such investigation, inquiry, proceedings or
              process.

5.20.  Licenses and Compliance with Laws

<PAGE>
23

       The respective operations of the Companies have been conducted in
       material compliance with applicable laws, their respective articles of
       association, and applicable regulations, judgments, orders and the like.
       Each of the Companies has all necessary licenses and permits required for
       the operation of its business; each such license and permit is in full
       force and effect; no material violations are or have been recorded in
       respect of any such existing licenses or permits which remain
       uncorrected; no proceeding is pending which seeks the revocation or
       limitation of any such existing licenses or permits or that might
       prejudice their renewal; and, to the best of Seller's knowledge, no
       grounds exist for revocation of, or for the commencement of limitation
       proceedings with respect to, any of such licenses or permits.

5.21.  Employees

        5.21.1. Aavid Germany has no employees. Curamik currently has two
                Persons employed pursuant to agreements with Seller's subsidiary
                in Italy. Such agreements shall be terminated, or Curamik's
                obligations thereunder shall be assumed without recourse by
                another Person (other than Aavid Germany or either of the
                Companies) on or before the Closing Date.

        5.21.2. SCHEDULE 5.21.2 lists the Companies' respective employees and
                also sets forth all outstanding offers (whether accepted or not)
                of employment made to any person by any of the Companies.

        5.21.3. SCHEDULE 5.21.3 describes the material particulars of any
                agreement for the provision of consulting services to any of the
                Companies by any person.

        5.21.4. No current management level employee of any of the Companies has
                given, or has been given, notice of termination of his
                employment or has indicated an intention to terminate his
                employment.

        5.21.5. Except as otherwise provided on SCHEDULE 5.21.5, there is no
                scheme in operation by or in relation to the Companies under
                which any employee or other person is entitled to a commission
                or remuneration of any other sort arising in relation to the
                level of and/or calculated by reference to the whole or part of
                the turnover, profits or sales of the Companies.

        5.21.6. Except as otherwise provided on SCHEDULE 5.21.6, none of the
                Companies has any obligation to make any severance payment or
                pay any compensation for loss of office or employment or a
                redundancy payment to any present or former employee (including
                directors) or other payment beyond payment of salary during the
                period of the notice of termination pursuant to applicable law
                and no such sums have been paid since the Accounts Date.

        5.21.7. The Companies have in all material respects complied with their
                respective obligations to their respective employees and former
                employees and any relevant trade union or other employee
                representative body, whether such obligations have arisen by
                statute, under applicable rulings and decisions by judicial or
                governmental authorities, contract, collective agreements

<PAGE>
24

                (including, but not limited to collective bargaining agreements
                and shop agreements). No claim has been made or, to the best of
                Seller's knowledge, threatened against any of the Companies or
                against any person to whom the Companies are or may be liable
                for compensation or indemnification and, to the best of the
                Seller's knowledge, no inquiry or investigation has been made or
                threatened by any governmental body or authority in respect of
                any matter relating to any application for employment by any
                person or the employment or termination of employment of any
                person, and the Seller are not aware of any circumstance which
                may give rise to any such claim or investigation.

        5.21.8. To the best of Seller's knowledge, during the twelve month
                period which preceded the date of this Agreement, none of the
                Companies (a) gave notice of any redundancies to any
                Governmental Entity or commenced discussions with appropriate
                employee representatives in connection with any proposed
                redundancies, and (b) failed to comply with any obligation,
                whether legal or otherwise, to engage in such discussions.

        5.21.9. SCHEDULE 5.21.9 sets forth a complete list of all "employee
                benefit plans" including, but not limited to, employment
                contracts, bonus, pension, profit sharing, deferred
                compensation, incentive compensation, excess benefit, stock,
                stock option, severance, termination pay, change in control or
                other employee benefit plans, programs or arrangements,
                including those providing medical, dental, vision, disability,
                life insurance and vacation benefits (other than those required
                to be maintained by law), whether written or unwritten,
                qualified or unqualified, funded or unfunded, foreign or
                domestic, currently maintained, or contributed to, or required
                to be maintained or contributed to, by any of the Companies
                (each of which is referred to as a "Benefit Plan" and all of
                which are collectively referred to as the "Benefit Plans").

        5.21.10. Each of the Companies has made all payments or contributions,
                as required by each of the Benefit Plans, applicable law and
                generally accepted accounting practices in such aggregate
                amounts as are sufficient to cover the full amount of all
                liabilities, calculated as at the Accounts Date, in respect of
                the present and former directors, officers and employees of the
                Companies. Such payments and/or contributions and the respective
                obligations of the Companies under their respective Benefit
                Plans have been recorded in their respective Accounts or have
                been reflected in the notes thereto.

        5.21.11. No event has occurred and, to the knowledge of the Seller,
                there exists no condition or set of circumstances in connection
                with which any of the Companies is or would reasonably be
                expected to be subject to any material liability under the terms
                of any Benefit Plan, employment contract or any applicable law,
                rule or regulation, domestic or foreign. No statement, either
                written or oral, has been made by any of the Companies to any
                person with regard to any Benefit Plan that was not in
                accordance with the terms of the Benefit Plan and that would
                have a Material Adverse Effect.

<PAGE>
25

        5.21.12. Except for the collective bargaining agreement and shop
                agreements identified in SCHEDULE 5.21.12, none of the Companies
                is a party to or bound, directly or indirectly, by any
                collective bargaining, shop or similar agreements.

        5.21.13. All Social Security Contributions of any of the Companies which
                shall be due and payable prior to Closing have been paid or
                shall be paid prior thereto in accordance with the applicable
                laws and statutes.

        5.21.14. SCHEDULE 5.21.14 identifies each person to whom either of the
                Companies may be obligated to pay remunerations under the
                Employee Inventions Act (Arbeitnehmererfindungsgesetz). On or
                before the Closing Date, Curamik or the Subsidiary, as the case
                may be, shall enter into written agreements with each of such
                persons that shall satisfy its respective obligations under such
                Act. On the Closing Date there shall not be any circumstances on
                the basis of which any employee of any of the Companies could
                raise such a claim under the Employee Inventions Act against any
                of the Companies.

        5.21.15. During the three year period ended June 30, 2002, except as
                disclosed in SCHEDULE 5.21.15, neither Aavid Germany nor any of
                the Companies has violated any workers' health and/or safety
                laws, regulations, rules and standards.

5.22.   Environmental

        5.22.1. For purposes of this Agreement, the term "Environmental Permit"
                means any permit, license, approval or other authorization
                issued under any Environmental Law (as defined below).

        5.22.2. Each of the Companies and their respective properties, assets,
                businesses, and operations has all required Environmental
                Permits that are material to the business conducted by each of
                the Companies, and each of the Companies and their respective
                properties, assets, businesses and operations is, and has been,
                in compliance with all applicable Environmental Laws (as defined
                below) and Environmental Permits, except for such violations as
                would not, individually or in the aggregate, have a Material
                Adverse Effect. The term "Environmental Laws" means any federal,
                state, local or foreign statute, code, ordinance, rule,
                regulation, agreement, policy, guideline, technical instruction,
                permit, consent, approval, license, judgment, order, writ,
                decree, injunction or other authorization, including the
                requirement to register underground storage tanks, relating to:
                (i) releases or discharges of "Hazardous Material" (as such term
                may be defined under any of the Environmental Laws) into the
                environment or any structure, including into air, ambient air,
                soil, soil gas, sediments, land surface or subsurface, buildings
                or facilities, surface water, groundwater, publicly-owned
                treatment works, septic systems or land; or (ii) the generation,
                treatment, storage,

<PAGE>
26

                recycling, disposal, use, handling, manufacturing,
                transportation, distribution in commerce, or shipment of
                Hazardous Material.

        5.22.3. No Environmental Claims or Environmental Liabilities (as such
                terms are defined below) are being asserted against any of the
                Companies and none of the Companies is aware of any acts,
                omissions, facts, or circumstances which would so subject it,
                arising from or based upon any act, omission, event, condition
                or circumstance occurring or existing on or prior to the date
                hereof or for which any of the Companies is responsible,
                including any such Environmental Claims or Environmental
                Liabilities arising from or based upon the present or former
                ownership or the present or former operation of assets,
                businesses or properties of any of the Companies which, if
                adversely determined, would individually or in the aggregate
                have a Material Adverse Effect. None of the Companies has
                received any notice of any violation of any Environmental Law or
                Environmental Permit or any Environmental Claim in connection
                with its present or former assets, properties, businesses or
                operations. The Seller has provided to Purchaser and has
                disclosed on SCHEDULE 5.22.3 all environmental assessment
                reports prepared by, or on behalf of, any of the Companies since
                January 1, 1997 (or earlier for any such matter which is
                unresolved) regarding the environmental condition of any of the
                Companies' properties or the environmental compliance of any of
                the Companies. The term "Environmental Claim" means any third
                party (including claims of Governmental Entities, employees or
                other private parties) action, lawsuit, claim, investigation
                proceeding which seeks to impose liability for (i) noise; (ii)
                pollution or contamination of the air, ambient air, surface
                water, ground water, soil, soil gas or any structure, building
                or facility; (iii) Hazardous Materials Management; (iv) exposure
                to Hazardous Material; (v) the safety or health of employees,
                consumers, customers or vendors; or (vi) any violation of any
                Environmental Law or Environmental Permit. The term
                "Environmental Liabilities" includes all costs arising from any
                Environmental Claim or violation or alleged violation or
                circumstance or condition which would give rise to a violation
                or liability under any Environmental Permit or Environmental Law
                under any theory of recovery, at law or in equity, and whether
                based on negligence, strict liability or otherwise, including
                but not limited to: remedial, removal, response, abatement,
                investigative, monitoring, personal injury and damage to
                property, and any other related costs, expenses, losses,
                damages, investigatory remediation or monitoring costs,
                penalties, fines, liabilities and obligations, including
                reasonable attorney's fees and court costs.

5.23.   Insurance

        SCHEDULE 5.23 is a list and description, including policy numbers, of
        all insurance policies owned or held by the Companies covering the
        Companies, their respective employees or assets. Such policies are in
        full force and effect, and the Companies are not in default under any of
        them in any material respect. None of the Companies has received any
        notice of non-renewal, cancellation or intent to cancel or intent not to
        renew with respect

<PAGE>
27

        to such insurance policies or, to the best knowledge of the Seller, is
        there any basis for any such action. Schedule 5.23 also contains a list
        of all pending claims with any insurance company and any instances
        within the previous three years of a denial of coverage of the Companies
        by any insurance company.

5.24.   No Illegal or Improper Transactions

        No member of the Seller Group, and none of their respective directors,
        officers or employees has, directly or indirectly used funds or other
        assets of Aavid Germany or any of the Companies, or made any promise or
        undertaking, for (a) illegal contributions, gifts, entertainment or
        other expenses relating to political activity; (b) illegal payments to
        or for the benefit of governmental officials or employees, whether
        domestic or foreign; (c) illegal payments to or for the benefit of any
        person, firm, corporation or other entity, or any director, officer,
        employee, agent or representative thereof; or (d) the establishment or
        maintenance of a secret or unrecorded fund; and there have been no
        intentionally false or fictitious entries made in the books or records
        of Aavid Germany or any of the Companies.

5.25.   Tax

        5.25.1. Except to the extent disclosed in SCHEDULE 5.25.1, all tax
                returns, notices, computations and other documents relating to
                any Tax required by law to be filed by Aavid Germany or any of
                the Companies prior to Closing have been (or not later than the
                Closing Date, shall be) duly and properly filed and all requests
                from any Taxation Authority pertaining to any of such filings
                have been (or not later than the Closing Date, shall be) duly
                and properly answered. Except to the extent disclosed in
                Schedule 5.25.1, all returns, notices, computations and other
                documents and responses, relating to any taxable year of Aavid
                Germany or any of the Companies challenged or which still may be
                challenged by the Taxation Authorities, are accurate, are not
                subject to any material dispute, and to the best knowledge of
                the Seller, are not likely to become subject to any material
                dispute.

        5.25.2. Except as otherwise set forth in SCHEDULE 5.25.2, each Tax with
                respect to Aavid Germany and each of the Companies which shall
                be due and payable prior to Closing has been paid or shall be
                paid prior thereto (except to the extent disputed). No
                assessments for Taxes owed by Aavid Germany or any of the
                Companies have been made or proposed which have not been
                provided for in the Accounts. All Tax of Aavid Germany and the
                Companies relating to the period up to and including the
                Accounts Date have been paid or accounted for in the Accounts.

        5.25.3. Except as set forth on SCHEDULE 5.25.3, neither Aavid Germany
                nor any of the Companies has paid or become liable to pay, and
                there are not any circumstances which, to the best knowledge of
                the Seller, are likely to arise prior to Closing by reason of
                which Aavid Germany or any of the Companies is likely to become
                liable to pay, any penalty, fine, surcharge or interest

<PAGE>
28

                (other than interest unrelated to the assessment of a penalty,
                fine or surcharge) to any Taxation Authority.

        5.25.4. Except to the extent otherwise disclosed on SCHEDULE 5.25.4,
                neither Aavid Germany nor any of the Companies has suffered any
                on-site investigation, audit or visit by any Taxation Authority
                during the period between January 1, 1999 and the date of this
                Agreement; and Seller is not aware, to the best of its
                knowledge, of any such investigation, audit or visit planned for
                the next twelve months.

        5.25.5. Neither Aavid Germany nor any of the Companies shall become
                liable for the payment of any Tax solely by virtue of the
                execution and/or closing of this Agreement.

        5.25.6. No transactions or arrangements involving Aavid Germany or any
                of the Companies shall have taken place prior to Closing which
                are such that any provision relating to transfer pricing is
                likely to be invoked by a Taxation Authority. Except as provided
                in the Accounts, Aavid Germany and the Companies have no
                liability as of the Accounts Date to Taxation on income or gains
                except in respect of and to the extent of income and profits
                actually received, nor shall any arrangements prior to Closing
                exist which might give rise to such a liability.

5.26.   Brokers

        No member of the Seller Group has (i) incurred any obligation or
        liability, contingent or otherwise, for brokers' or finders' fees or
        commissions in connection with the transactions contemplated by this
        Agreement which could be payable by Aavid Germany or any of the
        Companies; or (ii) made any statement or representation or entered into
        any discussion which could give rise to any such obligation or
        liability.

5.27.   Indebtedness etc between any of the Members of the Seller Group

        5.27.1. There is no indebtedness due from any of the members of the
                Seller Group to any other member of the Seller Group that shall
                not be satisfied in full on or prior to the Closing Date.

        5.27.2. No member of the Seller Group has given any guarantees or
                indemnities in respect of any liabilities of any other member of
                the Seller Group.

6.      REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

        The Purchaser hereby gives the following representations and warranties
        to the Seller. Unless otherwise specifically stated, the representations
        and warranties shall be true and accurate as of the date of Closing.

6.1.    Power and Authority of the Purchaser

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29

        6.1.1.  The Purchaser is a limited liability company duly organized and
                validly existing under the laws of the Austria.

        6.1.2.  The Purchaser has full power and authority to purchase the
                Shares and to perform all other undertakings hereunder and the
                execution, delivery and performance of this Agreement. This
                Agreement has been duly and validly executed and delivered by
                the Purchaser, and, assuming this Agreement constitutes a valid
                and binding obligation of the Seller, this Agreement constitutes
                a valid and binding agreement of the Purchaser, enforceable
                against the Purchaser in accordance with its terms, subject to
                bankruptcy, insolvency, fraudulent transfer, reorganization,
                moratorium and similar laws of general applicability relating to
                or affecting creditors' rights and to general equity principles.

6.2.    Consents and Approvals

        The execution, delivery and performance of this Agreement do not, and
        the consummation of the transactions contemplated hereby and compliance
        with the provisions of this Agreement will not (a) conflict with or
        violate the deed of foundation or the articles of association of the
        Purchaser, (b) conflict with or violate any statute, ordinance, rule,
        regulation, judgment, order, writ, injunction, decree or law applicable
        to the Purchaser, or by which any of them or any of their respective
        properties or assets may be bound or affected, or (c) result in a
        violation or breach of or constitute a default (or an event which with
        or without notice or lapse of time or both would become a default)
        under, or give to others any rights of termination, amendment,
        acceleration or cancellation of, or result in any loss of any benefit
        under, or the creation of Liens on any of the property or assets of the
        Purchaser. No consent, approval, order or authorization of, or
        registration, declaration or filing with, any federal, state or local
        government or any court, administrative or regulatory agency or
        commission or other governmental authority or agency, domestic or
        foreign (a "Governmental Entity"), is required by the Purchaser in
        connection with the execution and delivery of this Agreement by the
        Purchaser or the consummation by it of the transactions contemplated
        hereby, except for consents, approvals, orders, authorizations,
        registrations, declarations or filings, the failure of which to obtain
        would not individually or in the aggregate have a Material Adverse
        Effect.

6.3.    Due Diligence

        The Purchaser has conducted a due diligence review of Aavid Germany and
        the Companies and, as of the date of this Agreement, is unaware of any
        facts that are inconsistent with the warranties and representations of
        the Seller contained in Article 5 hereof.

6.4.    Brokers

        Except for the obligations owed by the Purchaser to Blitzer Ricketson &
        Company, Purchaser has not (i) incurred any obligation or liability,
        contingent or otherwise, for

<PAGE>
30

        brokers' or finders' fees or commissions in connection with the
        transactions contemplated by this Agreement which could be payable by
        Purchaser; or (ii) made any statement or representation or entered into
        any discussion which could give rise to any such obligation or
        liability. Purchaser shall be solely responsible for the payment of all
        obligations owed by it to Blitzer Ricketson & Company.

7.      CLOSING CONDITIONS

7.1.    Conditions to Seller's Obligations to Close

        The obligation of the Seller to consummate the transactions contemplated
        hereby at the Closing is subject to the fulfillment to the satisfaction
        of the Seller, or the waiver by the Seller, at or prior to the Closing
        of each of the following conditions:

        7.1.1.  Each of the representations and warranties of the Purchaser
                contained in Article 6 shall be true, correct and complete on
                and as of the Closing Date as though then made.

        7.1.2.  All covenants, agreements and conditions contained in this
                Agreement to be performed or complied with by the Purchaser on
                or prior to the Closing Date shall have been performed or
                complied with.

        7.1.3.  On or prior to the Closing Date, the Purchaser shall execute a
                written instrument of assumption of the guarantee and
                indemnification obligations for the subsidies provided by German
                government agencies for the Property occupied by Curamik in
                Eschenbach, Germany (the "Eschenbach Property") in the form as
                annexed hereto as Exhibit D.

7.2.    Conditions to the Obligations of Purchaser to Close

        The obligation of the Purchaser to consummate the transactions
        contemplated hereby at the Closing is subject to the fulfillment to the
        satisfaction of Purchaser, or the waiver by them, at or prior to the
        Closing of each of the following conditions:

        7.2.1.  Each of the Warranties contained in Article 5 shall be true,
                correct and complete on and as of the Closing Date as though
                then made, provided, HOWEVER, that if any of such Warranties
                shall not be true, correct and complete on and as of the Closing
                Date, such untrue, incorrect or incomplete Warranty or
                Warranties shall not have, individually or in the aggregate, a
                Material Adverse Effect.

        7.2.2.  All covenants, agreements and conditions contained in this
                Agreement to be performed or complied with by each of the
                members of the Seller Group on or prior to the Closing Date
                shall have been performed or complied with in all material
                respects.

        7.2.3.  On or prior to the Closing Date, all filings, registrations,
                approvals, notifications etc that any member of the Seller Group
                shall be required by

<PAGE>
31

                law to have in order to consummate the transfer of the Shares to
                the Purchaser, and to consummate the transactions contemplated
                by this Agreement shall have been duly obtained by the
                appropriate member of the Seller Group and shall be effective on
                and as of the Closing Date.

        7.2.4.  On the Closing Date, Curamik shall have cash on hand in the
                aggregate amount of Euro894,000 which shall remain with, and
                shall not be transferred from, Curamik through the consummation
                at the Closing of the transactions contemplated herein and
                hereby.

        7.2.5.  On the Closing Date, Seller shall have delivered the Net Assets
                Certificate to the Purchaser.

        7.2.6.  There shall have been (a) no Material Pre-Closing Claim; (b) no
                Material Adverse Effect upon the assets, business, operations,
                employee relations, customer or supplier relations, operating
                results, prospects or condition (financial or otherwise) of the
                Companies taken as a whole and (c) no material adverse Federal
                or state legislative or regulatory change affecting the
                respective businesses, products or services of the Companies
                taken as a whole.

8.      INDEMNIFICATION - GENERAL

8.1.    Breach of the Warranties

        8.1.1.  If and to the extent any of the representations and warranties
                set forth in Article 5 is incorrect or not complied with, the
                legal consequences set forth in this Article 8 shall apply. The
                Parties acknowledge that the legal consequences set forth in
                this Article 8, the representations and warranties set forth in
                Article 5 and the commercial, governmental and contractual
                liabilities set forth in Section 8.2 are homogeneous with and an
                inseparable part of, this Agreement.

        (a)     If any of the representations and warranties set forth in
                Article 5 is incorrect or not complied with, or if Seller shall
                become liable with respect to any of the commercial,
                governmental and contractual liabilities set forth in Section
                8.2, then Purchaser shall not be entitled to

                (i)     rescind this Agreement in accordance with Sections 437
                        para 2, 440, 323 and 326 para 5 of the German Civil Code
                        ("Rucktritt").

                (ii)    ask for completion or repetition of performance in
                        accordance with Sections 437 para 1 and 439 of the
                        German Civil Code ("Nachbesserung" or "Nacherfullung").
                        Also, Seller shall not be entitled to conduct such
                        completion or repetition of performance.

<PAGE>
32

                (iii)   to claim for damages instead of full performance
                        according to Sections 437 para 3, 440, 280, 281, and 311
                        a German Civil Code ("Schadensersatz statt der ganzen
                        Leistung").

        (b)     In case of any Seller's negligence prior to execution of this
                Agreement, Purchaser's rights according to Section 311 para 2 of
                the German Civil Code ("culpa in contrahendo") shall be limited
                to claims for damages. The Purchaser waives any right to rescind
                this Agreement ("Rucktritt") or claim for adjustment of the
                Agreement ("Vertragsanpassung").

        (c)     The rights excluded by Sections 8.1.1 (a) and (b) are, to the
                extent legally possible, waived by Purchaser and Seller.

        (d)     If any of the representations and warranties set forth in
                Article 5 is incorrect or not complied with, or if Seller shall
                become liable with respect to any of the commercial,
                governmental and contractual liabilities set forth in Section
                8.2, then Purchaser shall be entitled to

                (i)     reduce the purchase price in accordance with Sections
                        437 para 2 and 441 of the German Civil Code
                        ("Minderung") and to ask for repayment of the purchase
                        price which shall be calculated in accordance with
                        Section 8.1.1. (f) and limited in accordance with
                        Section 8.5; or

                (ii)    damages, excluding damages instead of full performance
                        ("Schadensersatz statt der ganzen Leistung").

        (e)     Wherever and to the extent that in this Agreement
                representations and warranties are given by the Seller "to the
                best of the Seller's knowledge" or "so far as the Seller is
                aware" Purchaser waives the right to claim for reduction of the
                purchase price in accordance with Sections 437 para 2 and 441 of
                the German Civil Code ("Minderung"). Purchaser's rights shall
                then be limited to claim for damages exclusively, excluding
                damages instead of full performance ("Schadensersatz statt der
                ganzen Leistung") according to Section 8.1.1. (d) (ii). The
                Parties agree that Seller's breach of such representations and
                warranties only shall be deemed as negligent according to
                Section 280 para 1 German Civil Code if Seller did not comply
                with Section 1.2 (c) of this Agreement. The Seller shall have
                the burden of proof to have complied with its duties according
                to Section 1.2 (c). Seller's liability and its duty to
                investigate the correctness of such given representations and
                warranties shall be limited to the scope of "to the best of the
                Seller's knowledge" as described in Section 1.2 (c).

        (f)     Purchaser's claims for damages may include all costs or losses
                according to Sections 249 following of the German Civil Code
                ("ss.ss. 249 ff BGB") that will be necessary to put Purchaser
                or, at the Purchaser's option, whichever of the Companies shall
                be affected, into the position it would have been in if the
                respective representation and warranty had been correct or had
                been complied

<PAGE>
33

                with, including the compensation of any damages, cost, loss or
                expense incurred by the affected company or the Purchaser as the
                case may be.

        8.1.2.  Purchaser shall notify Seller of an asserted claim for reduction
                of the Purchase price under this Section 8 within 90 days of its
                discovery of the material facts. Such notice shall specify the
                particulars of the claim. In the event that the Seller disputes
                the Purchaser's claim, such dispute shall be resolved in
                accordance with the provisions of Article 12 hereof.

        8.1.3.  The provisions of Articles 5 and 8 shall survive the execution,
                delivery and performance of this Agreement and the consummation
                of the transactions contemplated hereby.

8.2.    Commercial, Governmental and Contractual Liabilities

        8.2.1.  The Seller shall indemnify and hold harmless the Purchaser, any
                Affiliate of the Purchaser, as well as Aavid Germany and each of
                the Companies (collectively, the "Indemnitees") with respect to
                89.4% of any and all loss, claim or damage (together with all of
                the Indemnitees' respective reasonable counsel fees pertaining
                thereto) that any of the Indemnitees may suffer as a result of
                or with respect to:

        (a) the exercise of any put or call option applying to any shares of
        Curamik not held by Aavid Germany, Mr. Maier or Dr. Schulz-Harder, and
        existing prior to the Closing, the exercise of any rights that the
        holder of any such option may possess and the demand by the holder of
        any such option may make regarding the performance of any obligations
        that any member of the Seller Group may owe pursuant to any such option;

        (b) the ownership prior to the Closing by any member of the Seller Group
        of (a) a limited partnership interest in Sario GmbH & Co KG; and (b)
        shares of and/or a share capital interest in Sario
        Grundstucks-Vermietungsgesellschaft mbH;

        (c) any claims, actions or proceedings alleging infringement by, seeking
        payment of damages from and/or requesting injunctive relief against any
        of the Indemnitees which shall be asserted by (a) any of the holders of
        US patent nos. 5423376 and 4483810, European patent nos. 0611235 and
        0085914, Japanese patent no. 16854871 and French patent no. 9301870; and
        (b) any third party asserting rights against any of the Indemnitees on
        the basis of the aforementioned patents, so long as the use of the
        aforementioned patents is consistent with the past practices of Aavid
        Germany and the Companies;

        (d) any claims, actions or proceedings resulting from events,
        transactions or occurrences prior to the Closing alleging (a)
        non-compliance with Environmental Permit requirements; (b) violation of
        emission and discharge limits or other restrictions set forth in any
        license, permit or other authorization granted to any of the Companies
        under any applicable law including any Environmental Law or

<PAGE>
34

        Environmental Permit; (c) non-compliance with Environmental Laws
        regarding the treatment, storage transportation or any other handling of
        waste; or (d) contamination of soil, soil gas or groundwater;

        (e) the transport prior to the Closing of any caustic solution to BECE
        Leiterplatten-Chemie GmbH including, but not limited to, any claims,
        actions or proceedings alleging violation of applicable waste
        transportation laws and regulations resulting from the transport
        thereof;

        (f) violations prior to the Closing of workers' health and/or safety
        laws, regulations, rules and standards disclosed in Schedule 5.21.15
        hereto;

        (g) any increase of redundancy payments, as a result of events prior to
        the Closing, beyond the level common in the industry by the provisions
        of any social plan concluded between the management and the works
        council of Curamik concerning redundancies; and

        (h) the requalification of freelancers, individuals holding service
        agreements other contractual partners of Aavid Germany or any of the
        Companies as of the Closing as employees thereof including, but not
        limited to, any liability for the payment of any Taxes and/or Social
        Security Contributions for any period up to the next termination date
        for the freelance or other agreements of such individuals.

8.3.    Environmental Remediation Liabilities

        The parties agree that Seller shall cause Curamik to engage the services
        of a reputable environmental engineering firm, subject to the approval
        of the Purchaser, which such approval shall not be unreasonably withheld
        of delayed, to conduct Phase I and Phase II environmental site
        assessments of the Eschenbach Property. Purchaser shall pay the
        reasonable fees and expenses of such engineering firm in performing such
        site assessments. Such site assessments shall be conducted as soon after
        the execution of this Agreement as is reasonably possible. Prior to
        commencement of the site assessments, the Parties will agree upon the
        scope thereof which shall include, but may not be limited to, a
        determination of the existence or presence of any contamination of soil,
        gas, water and ground water, buildings and installations as well as the
        compliance with legal requirements, permits and environmental
        agreements. Neither of the Parties shall unreasonably delay or withhold
        its agreement to the determination of such scope. In the event that
        either of the site assessment reports issued by said engineering firm
        upon completion of such site assessments reveals or establishes that (a)
        any of the warranties or representations contained in Section 5.22 is
        untrue; (b) any Hazardous Material is present at, on, within or beneath
        the land and buildings comprising the Eschenbach Property in
        concentrations that are in excess of permissible levels established by
        the relevant governmental authorities; (c) any provision of any
        Environmental Law has been violated by reason of the existence or
        presence of any impermissible substance or condition at, on, within or
        beneath the land and buildings comprising the Eschenbach Property;
        and/or (d) any provision, requirement or condition pertaining to any
        Environmental Permit held by

<PAGE>
35

        Curamik with respect to the Eschenbach Property has been violated,
        Seller shall either reimburse Purchaser or Curamik for all fees, costs
        and expenses that either of them shall reasonably incur in connection
        with the repair, remediation and elimination of all Environmental
        Liabilities resulting therefrom, or Seller shall engage the services of
        all persons reasonably required to effectuate the repair, remediation
        and elimination of such Environmental Liabilities, and shall pay all
        fees, costs and expenses pertaining thereto directly. Upon completion of
        all work at the Eschenbach Property that shall be required in order to
        repair, remediate and eliminate of all Environmental Liabilities
        revealed or established by said reports, the Seller shall undertake and
        pay for such further site assessments as shall be necessary and
        appropriate to establish that the Eschenbach Property is in full
        compliance with all applicable Environmental Laws and Environmental
        Permits, and shall pay the reasonable fees and expenses of the attorneys
        and other advisors that Curamik or Purchaser shall engage in order to
        obtain appropriate findings, pronouncements, orders and approvals of the
        relevant governmental authorities regarding such compliance.

8.4.    Seller's Liability

        Subject to the limitations and conditions set forth in this Article 8,
        the Seller shall be liable for any breach of the Warranties set forth in
        Article 5, the commercial, governmental and contractual liabilities set
        forth in Section 8.2 and the environmental remediation liabilities set
        forth in Section 8.3.

8.5.    Limitation of Seller's Liability

        8.5.1.  The liability of the Seller shall be limited as follows:

        (a) Seller shall have no liability in respect of any breach or breaches
        of the Warranties set forth in Article 5 and/or the commercial,
        governmental and contractual liabilities set forth in Section 8.2 unless
        89.4% of the aggregate amount of the liability in respect of all
        Eligible Claims exceeds the sum of Euro200,000 in which case (subject to
        the other provisions of this Section 8.5.1) Seller shall be liable for
        the payment of the aggregate amount thereof.

        (b) Seller's liability for any breach or breaches of any of the
        warranties and representations set forth in Section 5.4, Seller's
        obligations pursuant to Section 8.3 hereof and/or either of the Ixys and
        Ferraz Claims shall not exceed, in the aggregate, the Purchase Price.

        (c) Except as otherwise provided in Section 8.5.1(b), Seller's liability
        for any breach or breaches of the Warranties set forth in Article 5
        and/or the commercial, governmental and contractual liabilities set
        forth in Section 8.2 shall not exceed, in the aggregate, Euro3,200,000.

        (d) Liability in respect of the Warranties shall terminate:

<PAGE>
36

                (i)     in respect of matters contained in Section 5.4 (Title),
                        six months after the date the respective statute of
                        limitation for such matters expires;

                (ii)    in respect of matters contained in Section 5.12
                        (Intellectual Property Rights), the second anniversary
                        of the Closing Date;

                (iii)   in respect of matters contained in Section 5.22
                        (Environmental), ten days after Purchaser's receipt of
                        the Phase I and Phase II environmental site assessments
                        referred to in Section 8.3 hereof if such assessments
                        reveal that no Environmental Liabilities exist,
                        otherwise on the 30th day after the earlier of the date
                        all appropriate findings, pronouncements, orders and
                        approvals of the relevant governmental authorities
                        establishing that the Eschenbach Property is in
                        compliance in all material respects with all applicable
                        Environmental Laws and Environmental Permits have been
                        issued or the date that Purchaser ceases to diligently
                        seek to obtain any such findings, pronouncements, orders
                        and approvals.

                (iv)    in respect of matters contained in Section 5.25 (Tax)
                        six months after the date the respective statute of
                        limitations for such matters runs, or six months after
                        the final assessment of any Taxes following a tax audit
                        (Betriebsprufung) for the respective Tax and the
                        respective period, whichever first occurs; and

                (v)     on December 31, 2003 in respect of all others matters
                        contained in Article 5; except in respect of any claim
                        of which notice, as provided in Section 8.1.3, is given
                        to the Seller before that date.

        (e) Liability in respect of commercial, governmental and contractual
        liabilities set forth in Section 8.2 shall terminate six months after
        the date the respective statute of limitation for the relevant matter
        expires.

        (f) The Seller shall not be obligated to pay any amount in respect of
        the matter giving rise to a claim of liability to the extent (i) any
        specific allowance, provision or reserve is made with respect thereto in
        the Accounts; or (ii) that any recovery is made by Aavid Germany or
        either of the Companies with respect thereto pursuant to any claim made
        under any policy of insurance.

        8.5.2.  If any deficiency, damage, cost, loss or expense incurred by any
                of the Companies or the Purchaser, as the case may be, in
                respect of the breach of any of the Warranties generates a Tax
                credit, loss or deduction with respect thereto for any of the
                Companies, the amount of the reduction of the Purchase Price or
                the indemnity to be paid by the Seller shall be reduced by an
                amount equal to the actual reduction in Tax that the Companies
                shall be entitled to receive.

8.6.    Purchaser's Liability

<PAGE>
37

        Purchaser shall indemnify and hold Seller harmless with respect to any
        loss or damage (including Seller's reasonable counsel fees) that Seller
        may suffer or incur in the event that Purchaser fails to obtain, within
        90 days after the Closing Date, any authorizations, consents, approvals
        or permits of any Governmental Entity that the Purchaser shall be
        required by law to have in order to consummate the transactions
        contemplated by this Agreement.

9.      NOTICES

9.1.    All notices and other communications hereunder shall be in writing and
        shall be deemed given if sent by facsimile transmission (if receipt is
        electronically confirmed) or by a prepaid overnight courier service (if
        receipt is confirmed in writing) addressed to the Parties at the
        following addresses (or at such other address for a Party as shall be
        specified by like notice):

        (a)     In the case of the Seller:

                Aavid Thermal Technologies, Inc.
                One Eagle Square
                Suite 509
                Concord, New Hampshire  03301
                Attention: President
                Facsimile:  +1 603 224 6673

                with a copy to

                Faegre Benson Brendel
                Rechtsanwaelte
                Theodor-Heuss-Allee 108
                60486 Frankfurt am Main
                Germany
                Attention: Ralph Hummel
                Facsimile: +49 69 631561 11

        (b)     In the case of the Purchaser:

                Electrovac Fabrikation Electrotechnischer Spezialartikel GesmbH
                Aufeldgasse 37-39
                3400 Klosterneuburg
                Austria
                Attention: President
                Facsimile: + 43 2243 450 698

                with a copy to

                Hall Dickler Kent Goldstein & Wood, LLP
                909 Third Avenue, New York, New York  10022, USA

<PAGE>
38

                Attention: Steven D. Dreyer
                Facsimile: +1 212 935 3121

10.     TERMINATION; TERMINATION FEE

10.1.   Termination.

        This Agreement may be terminated by written notice by the terminating
        party to the other Party:

        10.1.1. by the mutual written consent of Purchaser and Seller;

        10.1.2. by Purchaser, if the Seller shall have breached or failed to
                perform in any respect any of its representations or warranties
                required to be performed by it under this Agreement (other than
                breaches that individually or in the aggregate would not
                materially impair the ability of the Parties to perform on a
                timely basis their respective obligations under this Agreement
                or the consummation of the transactions contemplated herein and
                hereby), and such breach or failure to perform has continued
                unremedied for ten business days following notice of such breach
                to Seller by the Purchaser;

        10.1.3. by the Seller, if Purchaser shall have breached or failed to
                perform in any respect any of its Warranties required to be
                performed by it under this Agreement (other than breaches that
                individually or in the aggregate would not materially impair the
                ability of the Parties to perform on a timely basis their
                respective obligations under this Agreement or the consummation
                of the transactions contemplated herein and hereby), and such
                breach or failure to perform has continued unremedied for ten
                business days following notice of such breach to Purchaser by
                the Seller; and

        10.1.4. by the Seller on, or at any time after July 17, 2002 in the
                event that no Closing occurs on or before such date, and
                Purchaser fails to obtain, on or before July 10, 2002, the
                financing commitments that Purchaser shall require in order to
                pay the Purchase Price.

10.2.   Effect of Termination

        In the event of termination of this Agreement as provided in Section
        10.1, this Agreement, upon Delivery of the Deposit by the Escrow Agent
        pursuant to the applicable provisions of Section 10.3, shall immediately
        become void and there shall be no liability or obligation on the part of
        Purchaser or the Seller or their respective officers, directors,
        shareholders or affiliates, except as set forth in Section 10.3 below;
        provided, however, that the provisions of Sections 10.2 and 10.3 of this
        Agreement shall remain in full force and effect and survive any
        termination of this Agreement.

10.3.   Termination Fee

<PAGE>
39

        10.3.1. Upon execution of this Agreement, the Purchaser shall deliver
                the sum of USD 250,000 (the "Deposit") to John Mitchell, Esq.,
                counsel for the Seller (the "Escrow Agent"), who shall hold the
                deposit in escrow in an interest bearing account and dispose of
                same pursuant to the provisions of this Agreement.

        10.3.2. Upon the Closing of the transactions contemplated herein and
                hereby, the Escrow Agent shall deliver the Deposit, together
                with all interest which shall have accrued thereon, to the
                Seller, and the amount thereof shall be credited by the Seller
                as a partial payment of the Purchase Price by the Purchaser.

        10.3.3. In the event that this Agreement (a) is terminated by the Seller
                pursuant to Section 10.1.4, or (b) fails to close for reasons
                (i) solely caused by the Purchaser, or (ii) solely attributable
                to the Purchaser including, but not limited to, Purchaser's
                breach of any warranty or representation contained in Article 6
                hereof, or inability to obtain financing in such aggregate
                amount as it shall require in order to pay the Purchase Price,
                the Escrow Agent shall deliver the Deposit, together with all
                interest which shall have accrued thereon, to the Seller, and
                this Agreement shall thereupon terminate without further
                liability or obligation on the part of any part to the other.

10.4.   In the event that this Agreement fails to close for reasons which are
        (i) solely caused by the Seller, or (ii) solely attributable to the
        Seller, the Escrow Agent shall deliver the Deposit, together with all
        interest which shall have accrued thereon, to the Purchaser, and this
        Agreement shall thereupon terminate without further liability or
        obligation on the part of any part to the other.

11.     MISCELLANEOUS

11.1.   This Agreement, including the Schedules hereof and the Exhibits hereto,
        and the documents referred to herein which form a part hereof, contain
        the entire agreement of the Parties hereto with respect to the subject
        matter contained herein and therein. All prior negotiations and
        agreements between the Parties hereto with respect to the transactions
        provided for herein are superseded by this Agreement.

11.2.   No waiver of any of the provisions of this Agreement shall be effective
        against any party to this Agreement unless reduced in writing and duly
        signed by such Party. The waiver by any Party of any right hereunder or
        of any breach of any of the terms hereof or defaults hereunder shall not
        be deemed a waiver of any other rights or any subsequent breach or
        default, whether of the same or of a similar nature, and shall not in
        any way affect the terms hereof except to the extent of such waiver.

11.3.   This Agreement can not be amended or modified unless made in writing and
        duly signed by or on behalf of the Seller and the Purchaser. The
        provisions of the immediately preceding sentence shall not apply to the
        extent that a notarial recording of any amendment or modification may be
        required in connection with the consummation of the

<PAGE>
40

        transactions contemplated hereby. In such event, the required amendment
        or modification shall be notarially recorded.

11.4.   If any provision of this Agreement is or becomes illegal, invalid or
        unenforceable that shall not affect the validity or enforceability of
        any other provisions of this Agreement.

11.5.   This Agreement may not be transferred, assigned, pledged or hypothecated
        by any Party hereto, other than by operation of law, except that the
        Purchaser may assign this Agreement to any of its affiliates. This
        Agreement shall be binding upon and shall inure to the benefit of the
        Parties hereto and their respective successors and assignees.

11.6.   Except as otherwise expressly provided in this Agreement, each Party
        shall pay its own and its own advisers' fees and expenses (including
        financial and legal advisors) incurred in connection with the
        negotiation, execution and closing of this Agreement or the transactions
        contemplated herein, and the Seller shall bear the fees and expenses of
        Aavid Germany and the Companies incurred in connection with the
        negotiation, execution and closing of this Agreement.

11.7.   Neither the Purchaser nor any of the members of Seller Group, or any of
        their respective directors, officers or employees, shall make any
        disclosure regarding the terms or conditions of this Agreement or the
        transfer and sale of the Shares to Purchaser without each Party's prior
        written consent, which consent shall not be unreasonably withheld or
        delayed. Notwithstanding the foregoing, the Seller shall be entitled to
        make such disclosures about this Agreement and the transactions
        contemplated hereby as it may be obligated to make in accordance with
        the applicable provisions of the United States Securities Exchange Act
        of 1934 and the regulations promulgated thereunder.

11.8.   No failure or delay on the part of any Party hereto in the exercise of
        any right hereunder shall impair such right or be construed to be a
        waiver of, or acquiescence in, any breach of any representation,
        warranty or agreement herein, nor shall any single or partial exercise
        of any such right preclude other or further exercise thereof or of any
        other right.

11.9.   This Agreement may be executed in any number of counterparts, each of
        which will be considered an original instrument, but all of which
        together will be considered one and the same agreement, and will become
        binding when one or more counterparts have been signed by and delivered
        to each of the Parties.

12.     GOVERNING LAW AND DISPUTES

12.1.   This Agreement shall be governed by and construed and enforced in
        accordance with the laws of the Federal Republic of Germany excluding
        the conflicts of laws provisions thereof and the provisions of the CISG.

12.2.   Any dispute, controversy or claim arising out of or in connection with
        this Agreement, or the breach, termination or invalidity thereof, shall
        be exclusively settled by arbitration in accordance with the arbitration
        rules of the DIS e.V. The arbitral tribunal shall be composed of three
        arbitrators. The place of arbitration including the making of the award
        shall be Frankfurt am Main, Germany. The language to be used in the
        arbitral

<PAGE>
41

        proceedings, and in all documents and submissions made to the arbitral
        tribunal, shall be English. Each party to the arbitral proceedings shall
        be responsible for its, his or her own and its, his or her own advisers'
        fees and expenses (including financial and legal advisors), PROVIDED,
        HOWEVER, that each of the parties to such proceedings shall pay their
        respective pro rata shares of the fees and other charges imposed by the
        administrator of such proceedings.

        This deed including Exhibit B was read aloud by in presence of the
        Notary Public to and approved by the persons appearing and signed by
        them and the Notary Public in their own hands as follows:

<PAGE>

                                    EXHIBIT A

                                    ACCOUNTS
                                    --------

<PAGE>
2

                                    EXHIBIT B

to
DEED-NO.___________________/2002

                            SHARE TRANSFER AGREEMENT

                                   I. RECITALS

The Seller holds in the stated capital of

                     AAVID THERMALLOY GERMANY HOLDINGS GMBH

- COMPANY -

with its registered seat in Eschenbach/oberpfalz, business address:

                                 Am Stadtwald 2
                               92676 Eschenbach,
                               Deutschland/Germany

registered in the Commercial Register of the Weiden in der Oberpfalz Local Court
under

                                    HRB 2253

in the nominal amount of Euro 25,000.--(Euro twenty five thousand) one share in
the nominal amount of Euro 25,000.-- (Euro twenty five thousand).

The share is fully paid in.

                             II. SALE AND ASSIGNMENT

Subject to the condition precedent

<PAGE>
3

that all Closing Conditions contained in Section 7 of the Share Sale and
Purchase Agreement are fulfilled the Seller hereby assigns his aforementioned
share to the Purchaser who hereby accepts the assignment. The condition
precedent shall be deemed to be fulfilled as soon as the Parties exchange the
following confirmations:

"The Seller/Purchaser herewith confirms that the condition precedent subject to
which the assignment of the sole share in Aavid Thermalloy Germany Holdings GmbH
was notarized on July 11, 2002 (UR-Nr. _________/2002 by Notary Public Dr. Heinz
Keilbach, Passau), is fulfilled and the transfer of the mentioned share
therewith has become effective. The fulfillment of other eventually existing
conditions precedent is herewith waived."

The aforementioned confirmations have to be sent to the Notary Public
respectively by the receiving Party without undue delay after receipt.

                                 III. WARRANTIES

The Seller warrants that his share described in the Recitals hereinabove is
legally existing, that the share is not encumbered with any rights of third
parties and that the capital contribution is fully paid in and not reimbursed at
any time.

<PAGE>
4

                                IV. PROFIT RIGHTS

The dividend rights for the current business year and all undistributed profits
shall accrue to the Purchaser.

                      B. KOSTEN, ABSCHRIFTEN/COSTS, COPIES

Separate certified copies of this Exhibit B, i.e. of the Share Transfer
Agreement contained therein shall be forwarded to:

-       the Company as notification in accordance with sec. 16 GmbHG (German Act
        on Companies with Limited Liability),

-       the person appearing,

-       the tax authority competent for the Company,

-       the Commercial Register.

The persons appearing declare that the relevant text for the certification of
this deed shall be the German text. In case of a different interpretation of the
German and English text, the German text shall therefore prevail.

<PAGE>
5

                                    EXHIBIT C

           ARTICLES OF ASSOCIATION OF AAVID GERMANY AND THE COMPANIES
           ----------------------------------------------------------

<PAGE>
6

                                    EXHIBIT D

                    FORM OF ASSUMPTION OF SUBSIDY OBLIGATIONS
                    -----------------------------------------

Electrovac Fabrikation Electrotechnischer Spezialartikel GesmbH ("Purchaser") as
Purchaser of all Shares in Aavid Thermalloy Germany Holdings GmbH hereby
undertakes to assume all guarantee and indemnification obligations from Aavid
Thermal Technologies, Inc. ("Seller") directly or indirectly related to the
contingent repayment obligation of curamik electronics GmbH in connection with
the subsidy granted by the State of Bavaria (represented by the Regierung
Oberpfalz) in the amount of DM 1,990,000 (reference no. ("Aktenzeichen")
300.1.-3079-15/95) within 30 days from the date of this Agreement at the latest
and will indemnify the Seller from and against any obligations, cost or expenses
it may suffer from the above obligations.

--------------,   -------------
Place                 Date

-----------------------------------
Electrovac Fabrikation
Elektrotechnischer Spezialartikel GesmbH<PAGE>

                                                                  EXECUTION COPY

                   HONDA AUTO RECEIVABLES 2002-3 OWNER TRUST,
                                   as Issuer,

                                       and

                         U.S. BANK NATIONAL ASSOCIATION,

                              as Indenture Trustee

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

                                    INDENTURE

                            Dated as of July 1, 2002

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

<PAGE>

                             CROSS REFERENCE TABLE*

<TABLE>
<CAPTION>

TIA Section                                                                                  Indenture Section
-----------                                                                                  -----------------
<S>                                                                                         <C>
310      (a)(1).................................................................                    6.11
         (a)(2).................................................................                    6.11
         (a)(3).................................................................                 6.10; 6.11
         (a)(4).................................................................                     N/A**
         (a)(5).................................................................                    6.11
         (b)....................................................................                 6.08; 6.11
         (c)....................................................................                    N/A
311      (a)....................................................................                    6.12
         (b)....................................................................                    6.12
         (c)....................................................................                    N.A.
312      (a)....................................................................                    7.01
         (b)....................................................................                    7.02
         (c)....................................................................                    7.02
313      (a)....................................................................                    7.04
         (b)(1).................................................................                    7.04
         (b)(2).................................................................                    7.04
         (c)....................................................................                7.04; 11.05
         (d)....................................................................                    7.04
314      (a)....................................................................                    7.03
         (b)....................................................................                   11.15
         (c)(1).................................................................                   11.01
         (c)(2).................................................................                   11.01
         (c)(3).................................................................                   11.01
         (d)....................................................................                   11.01
         (e)....................................................................                   11.01
         (f)....................................................................                   11.01
315      (a)....................................................................                    6.01
         (b)....................................................................                6.05; 11.01
         (c)....................................................................                    6.01
         (d)....................................................................                    6.01
         (e)....................................................................                    5.13
316      (a)....................................................................                    1.01
         (a)(1)(A)..............................................................                    5.11
         (a)(1)(B)..............................................................                    5.12
         (a)(2).................................................................                    N.A.
         (b)....................................................................                    5.07
         (c)....................................................................                    N.A.
317      (a)(1).................................................................                    5.03
</TABLE>

---------------
*    This Cross Reference Table shall not, for any purpose, be deemed to be part
     of this Indenture.
**   N.A. means Not Applicable.

                                       i
<PAGE>

<TABLE>
<CAPTION>

TIA Section                                                                                  Indenture Section
-----------                                                                                  -----------------
<S>                                                                                         <C>

         (a)(2).................................................................                    5.03
         (b)....................................................................                    3.03
318      (a)....................................................................                   11.07
</TABLE>

                                       ii
<PAGE>

<TABLE>
<CAPTION>
                                                  TABLE OF CONTENTS

                                                                                                                Page

                                                    ARTICLE ONE
                                    DEFINITIONS AND INCORPORATION BY REFERENCE
   <S>                                                                                                       <C>
   Section 1.01.     Definitions..................................................................................2
   Section 1.02.     Incorporation by Reference of Trust Indenture Act............................................8
   Section 1.03.     Rules of Construction.  .....................................................................8

                                                    ARTICLE TWO
                                                     THE NOTES

   Section 2.01.     Form ........................................................................................9
   Section 2.02.     Execution, Authentication and Delivery.......................................................9
   Section 2.03.     Temporary Notes.............................................................................10
   Section 2.04.     Registration, Registration of Transfer and Exchange.........................................10
   Section 2.05.     Mutilated, Destroyed, Lost or Stolen Notes..................................................11
   Section 2.06.     Persons Deemed Owner........................................................................12
   Section 2.07.     Payment of Principal and Interest, Defaulted Interest.......................................12
   Section 2.08.     Cancellation................................................................................13
   Section 2.09.     Book-Entry Notes............................................................................14
   Section 2.10.     Notices to Clearing Agency..................................................................14
   Section 2.11.     Definitive Notes............................................................................14
   Section 2.12.     Release of Collateral.......................................................................15
   Section 2.13.     Tax Treatment...............................................................................15
   Section 2.14.     Employee Benefit Plans......................................................................15

                                                   ARTICLE THREE
                                                     COVENANTS

   Section 3.01.     Payment of Principal and Interest...........................................................16
   Section 3.02.     Maintenance of Office or Agency.............................................................16
   Section 3.03.     Money for Payments to be Held in Trust......................................................16
   Section 3.04.     Existence...................................................................................18
   Section 3.05.     Protection of Owner Trust Estate............................................................18
   Section 3.06.     Opinions as to Owner Trust Estate...........................................................18
   Section 3.07.     Performance of Obligations; Servicing of Receivables........................................19
   Section 3.08.     Negative Covenants..........................................................................20
   Section 3.09.     Annual Statement as to Compliance...........................................................21
   Section 3.10.     Issuer May Consolidate, etc., Only on Certain Terms.........................................21
   Section 3.11.     Successor or Transferee.....................................................................23
   Section 3.12.     No Other Business...........................................................................23
   Section 3.13.     No Borrowing................................................................................23
</TABLE>

                                      iii
<PAGE>

<TABLE>
<CAPTION>
   <S>                                                                                                       <C>
   Section 3.14.     Servicer's Obligations......................................................................23
   Section 3.15.     Guarantees, Loans, Advances and Other Liabilities...........................................23
   Section 3.16.     Capital Expenditures........................................................................24
   Section 3.17.     Removal of Administrator....................................................................24
   Section 3.18.     Restricted Payments.........................................................................24
   Section 3.19.     Notice of Events of Default.................................................................24
   Section 3.20.     Further Instruments and Acts................................................................24
   Section 3.21.     Compliance with Laws........................................................................24
   Section 3.22.     Amendments of Sale and Servicing Agreement and Trust Agreement..............................24

                                                   ARTICLE FOUR
                                            SATISFACTION AND DISCHARGE

   Section 4.01.     Satisfaction and Discharge of Indenture.....................................................25
   Section 4.02.     Application of Trust Money..................................................................26
   Section 4.03.     Repayment of Monies Held by Paying Agent....................................................26

                                                   ARTICLE FIVE
                                                     REMEDIES

   Section 5.01.     Events of Default...........................................................................26
   Section 5.02.     Acceleration of Maturity, Rescission and Annulment..........................................27
   Section 5.03.     Collection of Indebtedness and Suits for Enforcement by Indenture Trustee...................28
   Section 5.04.     Remedies, Priorities........................................................................30
   Section 5.05.     Optional Preservation of the Receivables....................................................31
   Section 5.06.     Limitation of Suits.........................................................................32
   Section 5.07.     Unconditional Rights of Noteholders to Receive Principal and Interest.......................32
   Section 5.08.     Restoration of Rights and Remedies..........................................................32
   Section 5.09.     Rights and Remedies Cumulative..............................................................33
   Section 5.10.     Delay or Omission Not a Waiver..............................................................33
   Section 5.11.     Control by Noteholders......................................................................33
   Section 5.12.     Waiver of Past Defaults.....................................................................33
   Section 5.13.     Undertaking for Costs.......................................................................34
   Section 5.14.     Waiver of Stay or Extension Laws............................................................34
   Section 5.15.     Action on Notes.............................................................................34
   Section 5.16.     Performance and Enforcement of Certain Obligations..........................................34

                                                    ARTICLE SIX
                                               THE INDENTURE TRUSTEE

   Section 6.01.     Duties of Indenture Trustee.................................................................35
   Section 6.02.     Rights of Indenture Trustee.................................................................36
   Section 6.03.     Individual Rights of Indenture Trustee......................................................37
   Section 6.04.     Indenture Trustee's Disclaimer..............................................................37
   Section 6.05.     Notice of Defaults..........................................................................38
   Section 6.06.     Reports by Indenture Trustee to Holders.....................................................38
   Section 6.07.     Compensation and Indemnity..................................................................38
</TABLE>

                                       iv
<PAGE>

<TABLE>
<CAPTION>
   <S>                                                                                                       <C>
   Section 6.08.     Replacement of Indenture Trustee............................................................38
   Section 6.09.     Successor Indenture Trustee by Merger.......................................................40
   Section 6.10.     Appointment of Co-Trustee or Separate Trustee...............................................40
   Section 6.11.     Eligibility, Disqualification...............................................................41
   Section 6.12.     Preferential Collection of Claims Against Issuer............................................42
   Section 6.13.     Representations and Warranties of Indenture Trustee.........................................42

                                                   ARTICLE SEVEN
                                           NOTEHOLDERS'LISTS AND REPORTS

   Section 7.01.     Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders......................43
   Section 7.02.     Preservation of Information; Communications, Reports and Certain Documents to Noteholders...43
   Section 7.03.     Reports by Issuer...........................................................................43
   Section 7.04.     Reports by Indenture Trustee................................................................44

                                                   ARTICLE EIGHT
                                       ACCOUNTS, DISBURSEMENTS AND RELEASES

   Section 8.01.     Collection of Money.........................................................................44
   Section 8.02.     Accounts....................................................................................44
   Section 8.03.     General Provisions Regarding Accounts.......................................................45
   Section 8.04.     Release of Owner Trust Estate...............................................................46
   Section 8.05.     Opinion of Counsel..........................................................................46

                                                   ARTICLE NINE
                                              SUPPLEMENTAL INDENTURES

   Section 9.01.     Supplemental Indentures Without Consent of Noteholders......................................47
   Section 9.02.     Supplemental Indentures With Consent of Noteholders.........................................48
   Section 9.03.     Execution of Supplemental Indentures........................................................49
   Section 9.04.     Effect of Supplemental Indenture............................................................50
   Section 9.05.     Conformity with Trust Indenture Act.........................................................50
   Section 9.06.     Reference in Notes to Supplemental Indentures...............................................50

                                                    ARTICLE TEN
                                                REDEMPTION OF NOTES

   Section 10.01.    Redemption..................................................................................50
   Section 10.02.    Form of Redemption Notice...................................................................50
   Section 10.03.    Notes Payable on Redemption Date............................................................51

                                                  ARTICLE ELEVEN
                                                   MISCELLANEOUS

   Section 11.01.    Compliance Certificates and Opinions, etc...................................................51
   Section 11.02.    Form of Documents Delivered to Indenture Trustee............................................53
</TABLE>

                                       v
<PAGE>

<TABLE>
<CAPTION>
   <S>                                                                                                       <C>
   Section 11.03.    Acts of Noteholders.........................................................................54
   Section 11.04.    Notices, etc., to Indenture Trustee, Issuer and Rating Agencies.............................54
   Section 11.05.    Notices to Noteholders; Waiver..............................................................55
   Section 11.06.    Alternate Payment and Notice Provisions.....................................................55
   Section 11.07.    Conflict with Trust Indenture Act...........................................................56
   Section 11.08.    Effect of Headings and Table of Contents....................................................56
   Section 11.09.    Successors and Assigns......................................................................56
   Section 11.10.    Separability................................................................................56
   Section 11.11.    Benefits of Indenture.......................................................................56
   Section 11.12.    Legal Holidays..............................................................................56
   Section 11.13.    Governing Law...............................................................................56
   Section 11.14.    Counterparts................................................................................56
   Section 11.15.    Recording of Indenture......................................................................57
   Section 11.16.    Trust Obligation............................................................................57
   Section 11.17.    No Petition.................................................................................57
   Section 11.18.    Inspection..................................................................................57
</TABLE>

SCHEDULES

Schedule A - Schedule of Receivables                      SA-1

                                    EXHIBITS

Exhibit A-1 - Form of Note                                A-1
Exhibit B-1 - Form of Note Depository Agreement           B-1

                                       vi
<PAGE>

     This Indenture, dated as of July 1, 2002, is between Honda Auto Receivables
2002-3 Owner Trust, a Delaware business trust (the "Issuer"), and U.S. Bank
National Association, as indenture trustee (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 Issuer's Class A-1 1.8225% Asset
Backed Notes (the "Class A-1 Notes"), Class A-2 2.26% Asset Backed Notes (the
"Class A-2 Notes"), Class A-3 3.00% Asset Backed Notes (the "Class A-3 Notes")
and Class A-4 3.61% Asset Backed Notes (the "Class A-4 Notes" and, together with
the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes, the "Notes"):

                                 GRANTING CLAUSE

     The Issuer hereby Grants to the Indenture Trustee at the Closing Date, on
behalf of and for the benefit of the Holders of the Notes, without recourse, all
of the Issuer's right, title and interest in, to and under (i) the Receivables
and all monies due thereon and received thereon on and after July 1, 2002; (ii)
the security interests in the Financed Vehicles; (iii) any proceeds of any
physical damage insurance policies covering the Financed Vehicles and in any
proceeds of any credit life or credit disability insurance policies relating to
the Receivables or the Obligors; (iv) any proceeds of Dealer Recourse; (v) the
right to realize upon any property (including the right to receive future
Liquidation Proceeds) that shall have secured a Receivable and have been
repossessed by or on behalf of the Issuer; (vi) all funds on deposit from time
to time in the Accounts, including the Reserve Fund Initial Deposit and the
Yield Supplement Account Deposit and in all investment income and proceeds
thereof; (vii) the rights of the Seller under the Receivables Purchase Agreement
and the rights of the Issuer under the Sale and Servicing Agreement; (viii) any
Servicer Letter of Credit; and (ix) 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 thereof, voluntary or involuntary, into
cash or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and other
forms of obligations and receivables, instruments and other property which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing as each such term is defined in Section 1.01 (collectively, the
"Collateral").

     The foregoing Grant is made in trust to secure the payment of principal of
and interest on, and any other amounts owing in respect of, the 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.

     The Indenture Trustee, as Indenture Trustee on behalf of the Holders of the
Notes, acknowledges such Grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties as required in this Indenture to the best of its ability to the end that
the interests of the Holders of the Notes may be adequately and effectively
protected.

<PAGE>

                                  ARTICLE ONE

                   DEFINITIONS AND INCORPORATION BY REFERENCE

     Section 1.01. Definitions.

     (a) Except as otherwise specified herein or as the context may otherwise
require, the following terms have the respective meanings set forth below for
all purposes of this Indenture.

     "Act" shall have the meaning specified in Section 11.03(a).

     "Administration Agreement" means the Administration Agreement, dated as of
July 1, 2002, among the Administrator, the Issuer, the Depositor and the
Indenture Trustee.

     "Administrator" means AHFC or any successor Administrator under the
Administration Agreement.

     "AHFC" means American Honda Finance Corporation, and its successors.

     "Authorized Officer" means, with respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Issuer and who is identified on the list of Authorized Officers delivered
by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter) and, so long as
the Administration Agreement is in effect, any Vice President or more senior
officer of the Administrator who is authorized to act for the Administrator in
matters relating to the Issuer and to be acted upon by the Administrator
pursuant to the Administration Agreement and who is identified on the list of
Authorized Officers delivered by the Administrator to the Indenture Trustee on
the Closing Date (as such list may be modified or supplemented from time to time
thereafter).

     "Book-Entry Notes" means a beneficial interest in the Notes, ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 2.09.

     "Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions or trust companies in Los Angeles, California,
Chicago, Illinois, Wilmington, Delaware, or New York, New York are authorized or
obligated by law, regulation, executive order or governmental decree to remain
closed.

     "Benefit Plan" means (a) an employee benefit plan (as defined in Section
3(3) of ERISA) that is subject to Title I of ERISA, (b) a plan (as defined in
Section 4975(e)(1) of the Code) that is subject to Section 4975 of the Code, and
(c) an entity whose underlying assets include assets of a plan described in (a)
or (b) plan assets by reason of a plan's investment in such entities.

     "Class" means all Notes whose form is identical except for variation in
denomination, principal amount or owner.

     "Class A-1 Final Payment Date" means August 15, 2003.

                                       2
<PAGE>

     "Class A-1 Interest Rate" means 1.8225% per annum (computed on the basis of
the actual number of days in the related Interest Accrual Period divided by
360).

     "Class A-1 Notes" means the Class A-1 1.8225% Asset Backed Notes,
substantially in the form of Exhibit A.

     "Class A-2 Interest Rate" means 2.26% per annum (computed on the basis of a
360-day year consisting of twelve 30-day months).

     "Class A-2 Notes" means the Class A-2 2.26% Asset Backed Notes,
substantially in the form of Exhibit A.

     "Class A-3 Interest Rate" means 3.00% per annum (computed on the basis of a
360-day year consisting of twelve 30-day months).

     "Class A-3 Notes" means the Class A-3 3.00% Asset Backed Notes,
substantially in the form of Exhibit A.

     "Class A-4 Interest Rate" means 3.61% per annum (computed on the basis of a
360-day year consisting of twelve 30-day months).

     "Class A-4 Notes" means the Class A-4 3.61% Asset Backed Notes,
substantially in the form of Exhibit A.

     "Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act, which initially shall be The
Depository Trust Company.

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

     "Closing Date" means July 24, 2002.

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

     "Collateral" has the meaning specified in the Granting Clause of this
Indenture.

     "Corporate Trust Office" means an office of the Indenture Trustee at which
at any particular time its corporate trust business shall be administered, which
office at the date of execution of this Indenture is located at 400 North
Michigan Avenue, 2nd Floor, Chicago, Illinois 60611, Attention: Corporate Trust
Services, or at such other address as the Indenture Trustee may designate from
time to time by notice to the Noteholders and the Issuer, or the principal
corporate trust office of any successor Indenture Trustee at the address
designated by such successor Indenture Trustee by notice to the Noteholders and
the Issuer.

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

                                       3
<PAGE>

     "Definitive Notes" shall have the meaning specified in Section 2.11.

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

     "Event of Default" shall have the meaning specified in Section 5.01.

     "Executive Officer" means, with respect to any corporation or depository
institution, the Chief Executive Officer, Chief Operating Officer, Chief
Financial Officer, President, Executive Vice President, any Vice President, the
Secretary or the Treasurer of such corporation or depository institution; and
with respect to any partnership, any general partner thereof.

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

     "Holder" means the Person in whose name a Note is registered on the Note
Register.

     "Indenture" means this Indenture, as amended or supplemented from time to
time.

     "Indenture Trustee" means U.S. Bank National Association, a national
banking association, as Indenture Trustee under this Indenture, or any successor
Indenture Trustee under this Indenture.

     "Independent" means, when used with respect to any specified Person, that
the Person (i) is in fact independent of the Issuer, any other obligor on the
Notes, the Seller and any of their respective Affiliates, (ii) does not have any
direct financial interest or any material indirect financial interest in the
Issuer, any such other obligor, the Seller or any of their respective Affiliates
and (iii) is not connected with the Issuer, any such other obligor, the Seller
or any of their respective Affiliates as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.

     "Independent Certificate" means a certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, made by an
Independent appraiser or other expert appointed by an Issuer Order and approved
by the Indenture Trustee in the exercise of reasonable care, and such opinion or
certificate shall state that the signer has read the definition of "Independent"
in this Indenture and that the signer is Independent within the meaning thereof.

     "Interest Accrual Period" means, subject to Section 11.12 hereof, with
respect to any Payment Date and (i) the Class A-1 Notes, the period from and
including the immediately

                                       4
<PAGE>

preceding Payment Date (or, in the case of the first Payment Date, the Closing
Date) to but excluding such Payment Date and (ii) the Class A-2 Notes, Class A-3
Notes and Class A-4 Notes, the period from and including the eighteenth day of
the prior month (or, in the case of the first Payment Date, the Closing Date) to
but excluding the eighteenth day of the month of such Payment Date.

     "Interest Rate" means the Class A-1 Interest Rate, the Class A-2 Interest
Rate, the Class A-3 Interest Rate or the Class A-4 Interest Rate, as applicable.

     "Issuer" means Honda Auto Receivables 2002-3 Owner Trust until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein and required by the TIA, each other obligor on the
Notes.

     "Issuer Order" or "Issuer Request" means a written order or request signed
in the name of the Issuer by any Authorized Officer and delivered to the
Indenture Trustee.

     "Note Depository Agreement" means the agreement dated July 24, 2002, among
the Issuer, the Indenture Trustee and The Depository Trust Company, as the
initial Clearing Agency, relating to the Notes, substantially in the form of
Exhibit B hereto.

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

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

     "Note Register" and "Note Registrar" shall have the respective meanings
specified in Section 2.04.

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

     "Officer's Certificate" means a certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.01, and delivered to
the Indenture Trustee. Unless otherwise specified, any reference in this
Indenture to an Officer's Certificate shall be to an Officer's Certificate of
the Issuer.

     "Opinion of Counsel" means one or more written opinions of counsel who may,
except as otherwise expressly provided in this Indenture, be an employee of or
counsel to the Issuer and who shall be satisfactory to the Indenture Trustee,
and which opinion or opinions shall be addressed to the Indenture Trustee as
Indenture Trustee, shall comply with any applicable requirements of Section
11.01 and shall be in form and substance satisfactory to the Indenture Trustee.

                                       5
<PAGE>

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

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

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

         (iii) Notes in exchange for or in lieu of which other Notes have been
     authenticated and delivered pursuant to this Indenture unless proof
     satisfactory to the Indenture Trustee is presented that any such Notes are
     held by a bona fide Protected Purchaser;

provided, that in determining whether the Holders of the requisite Outstanding
Amount have given any request, demand, authorization, direction, notice, consent
or waiver hereunder or under any other Basic Document, Notes owned by the
Issuer, any other obligor upon the Notes, the Seller or any of their respective
Affiliates shall be disregarded and deemed not to be Outstanding, except that,
in determining whether the Indenture Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Notes that the Indenture Trustee knows to be so owned shall be so
disregarded. Notes so owned that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Issuer, any other obligor upon the Notes, the Seller or any
Affiliate of any of their respective Affiliates.

     "Outstanding Amount" means, except as otherwise indicated by the context,
the aggregate principal amount of all Notes of all Classes Outstanding at the
date of determination.

     "Owner Trust Estate" means the Grant of the Collateral to the Indenture
Trustee under this Indenture, including all proceeds thereof.

     "Owner Trustee" means Chase Manhattan Bank USA, National Association, not
in its individual capacity but solely as Owner Trustee under the Trust
Agreement, or any successor Owner Trustee under the Trust Agreement.

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

     "Payment Date" means the eighteenth calendar day of each month, commencing
August 2002, or if such day is not a Business Day, then the next succeeding
Business Day; provided, however, that if any Class A-1 Notes are outstanding
after the Payment Date in July 2003, a

                                       6
<PAGE>

payment of interest and principal on the Class A-1 Notes only will be made on
the Class A-1 Final Payment Date, which shall be a Payment Date hereunder for
the Class A-1 Notes only.

     "Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

     "Predecessor Note" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 in lieu of a mutilated, lost,
destroyed or stolen Note shall be deemed to evidence the same debt as the
mutilated, lost, destroyed or stolen Note.

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

     "Protected Purchaser" shall have the meaning set forth in Article 8 of the
UCC.

     "Rating Agency Condition" means, with respect to any action, that each
Rating Agency shall have been given ten days (or such shorter period as is
acceptable to each Rating Agency) prior notice thereof and that each Rating
Agency shall have notified the Seller, the Servicer, the Indenture Trustee and
the Owner Trustee in writing that such action will not result in a
qualification, reduction or withdrawal of the then current rating of the Notes.

     "Record Date" means, with respect to a Payment Date or Redemption Date, the
day immediately preceding such Payment Date or Redemption Date or, if Definitive
Notes have been issued, the close of business on the last day of the month
immediately preceding the month in which such Payment Date or Redemption Date
occurs.

     "Redemption Date" means, in the case of a redemption of the Notes pursuant
to Section 10.01, the Payment Date specified by the Servicer or the Issuer
pursuant to Section 10.01.

     "Redemption Price" means, in the case of a redemption of the Notes pursuant
to Section 10.01, an amount equal to the unpaid principal amount of the Notes
redeemed plus accrued and unpaid interest thereon at the weighted average of the
Interest Rates for each Class of Notes being so redeemed to but excluding the
Redemption Date.

     "Registered Holder" means the Person in whose name a Note is registered on
the Note Register on the applicable Record Date.

     "Sale and Servicing Agreement" means the Sale and Servicing Agreement,
dated as of July 1, 2002, between the Issuer, the Seller and the Servicer.

     "Schedule of Receivables" means the list of the Receivables set forth in
Schedule A hereto.

     "Securities Act" means the Securities Act of 1933, as amended.

                                       7
<PAGE>

     "Servicer" means American Honda Finance Corporation, in its capacity as
servicer under the Sale and Servicing Agreement, and any Successor Servicer
thereunder.

     "State" means any one of the 50 states of the United States or the District
of Columbia.

     "Seller" means American Honda Receivables Corp., in its capacity as seller
under the Sale and Servicing Agreement, and its successors.

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

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

     "United States" means the United States of America.

     (b) Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used herein that are not otherwise defined shall have
the meanings ascribed thereto in the Sale and Servicing Agreement.

     Section 1.02. Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:

     "Commission" means the Securities and Exchange Commission.

     "indenture securities" means the Notes.

     "indenture security holder" means a Noteholder.

     "indenture to be qualified" means this Indenture.

     "indenture trustee" or "institutional trustee" means the Indenture Trustee.

     "obligor" on the indenture securities means the Issuer 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 Commission rule have
the meaning assigned to them by such definitions.

     Section 1.03. Rules of Construction. Unless the context otherwise requires:
(i) a term has the meaning assigned to it; (ii) an accounting term not otherwise
defined has the meaning assigned to it in accordance with generally accepted
accounting principles as in effect from time to time; (iii) "or" is not
exclusive; (iv) "including" means including without limitation; (v) words in the
singular include the plural and words in the plural include the singular; (vi)
any agreement, instrument or statute defined or referred to herein or in any
instrument or certificate delivered in

                                       8
<PAGE>

connection herewith means such agreement, instrument or statute as from time to
time amended, modified or supplemented and includes (in the case of agreements
or instruments) references to all attachments thereto and instruments
incorporated therein; (vii) references to a Person are also to its permitted
successors and assigns; (viii) the words "hereof', "herein" and "hereunder" and
words of similar import when used in this Indenture shall refer to this
Indenture as a whole and not to any particular provision of this Indenture; (ix)
the term "proceeds" shall have the meaning set forth in the applicable UCC; and
(x) Section, subsection and Schedule references contained in this Indenture are
references to Sections, subsections and Schedules in or to this Indenture unless
otherwise specified.

                                   ARTICLE TWO

                                    THE NOTES

     Section 2.01. Form. The Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes and the Class A-4 Notes, in each case together with the Indenture
Trustee's certificate of authentication, shall be in substantially the form set
forth in Exhibit A, with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.

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

     Each Note shall be dated the date of its authentication. The terms of the
Notes are the terms of this Indenture.

     Section 2.02. Execution, Authentication and Delivery. The Notes shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile. 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
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.

     The Indenture Trustee shall, upon Issuer Order, authenticate and deliver
for original issue the following aggregate principal amount of Notes: (i)
$285,500,000 of Class A-1 Notes, (ii) $261,000,000 of Class A-2 Notes, (iii)
$290,000,000 of Class A-3 Notes and (iv) $167,750,000 of Class A-4 Notes. The
aggregate principal amount of Class A-1 Notes, Class A-2 Notes, Class A-3 Notes
and Class A-4 Notes outstanding at any time may not exceed such respective
amounts except as provided in Section 2.05.

                                       9
<PAGE>

     Each Note shall be dated the date of its authentication. The Notes shall be
issuable as registered Notes in minimum denominations of $1,000 and in integral
multiples of $1,000 in excess thereof.

     No Note 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 provided for herein 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 2.03. Temporary Notes. Pending the preparation of Definitive Notes,
the Issuer may execute, and upon receipt of an Issuer Order the Indenture
Trustee shall authenticate and deliver, temporary Notes that are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the Definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.

     If temporary Notes 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 office or agency of the Issuer to be
maintained as provided in Section 3.02, without charge to the related Holder.
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 tenor and principal amount of Definitive Notes of
authorized denominations. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits under this Indenture as Definitive
Notes.

     Section 2.04. Registration, Registration of Transfer and Exchange. The
Issuer shall cause to be kept a register (the "Note Register") in which, subject
to such reasonable regulations as it may prescribe, the Issuer shall provide for
the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee initially shall be the "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. Upon any
resignation of any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects not to make such an appointment, assume the duties of Note
Registrar.

     If a Person other than the 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, and the Indenture Trustee shall have the
right to inspect the Note Register at all reasonable times and to obtain copies
thereof, and 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 Holders of the Notes and the
principal amounts and number of such Notes.

     Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.02, provided that
the requirements of Section 8-401 of the UCC are met, the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, in the name of the designated

                                       10
<PAGE>

transferee or transferees, one or more new Notes of the same Class in any
authorized denominations, of a like aggregate principal amount.

     At the option of the Holder, 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 such office or agency.
Whenever any Notes are so surrendered for exchange, provided that the
requirements of Section 8-401 of the UCC are met (as determined by the Issuer),
the Issuer shall execute, and the Indenture Trustee shall authenticate and the
Noteholder shall obtain from the Indenture Trustee, the Notes which the
Noteholder making the exchange is entitled to receive.

     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.

     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 duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Exchange Act.

     No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer or the 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 2.03 or 9.06 not
involving any transfer.

     The preceding provisions of this Section notwithstanding, the Issuer shall
not be required to make and the Note Registrar need not register transfers or
exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to the Note.

     Section 2.05. Mutilated, Destroyed, Lost or Stolen Notes. 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, (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 and (iii) the requirements of Section 8-405 of the UCC are met, 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 its 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 the same Class; provided, however, that if
any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
become or within seven days shall be due and payable, or shall have been called
for redemption, instead of issuing a replacement Note, the Issuer may pay such
destroyed, lost or stolen Note when so due or

                                       11
<PAGE>

payable or upon the Redemption Date without surrender thereof. If, after the
delivery of such replacement Note or payment of a destroyed, lost or stolen Note
pursuant to the proviso to the preceding sentence, a 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 the Person to
whom it was delivered or any Person taking such replacement Note from such
Person to whom such replacement Note was delivered or any assignee of such
Person, except a protected purchaser, and shall be entitled to recover upon the
security or indemnity provided therefor to the extent of any loss, damage, cost
or expense incurred by the Issuer or the Indenture Trustee in connection
therewith.

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

     Every replacement Note issued pursuant to this Section in replacement of
any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.

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

     Section 2.06. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
of their respective agents may treat the Person in whose name any Note is
registered (as of the day of determination) as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any, on such Note
and for all other purposes whatsoever, whether or not such Note be overdue, and
none of the Issuer, the Indenture Trustee or any of their respective agents
shall be affected by notice to the contrary.

     Section 2.07. Payment of Principal and Interest, Defaulted Interest.

     (a) Each Class of Notes shall accrue interest at the related Interest Rate,
and such interest shall be due and payable on each Payment Date as specified
therein, subject to Sections 3.01 and 11.12 hereof. Any installment of interest
or principal, if any, payable on any Note that is punctually paid or duly
provided for by the Issuer on the applicable Payment Date shall be paid to the
Person in whose name such Note (or one or more Predecessor Notes) is registered
on the Record Date by check mailed first-class postage prepaid to such Person's
address as it appears on the Note Register on such Record Date, except that,
unless Definitive Notes have been issued pursuant to Section 2.12, with respect
to Notes registered on the Record Date in the name of the nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payment will be made
by wire transfer in immediately available funds to the account designated

                                       12
<PAGE>

by such nominee and except for the final installment of principal payable with
respect to such Note on a Payment Date, a Redemption Date or on the related
Final Scheduled Payment Date, as the case may be (and except for the Redemption
Price for any Note called for redemption pursuant to Section 10.01), which shall
be payable as provided below. The funds represented by any such checks returned
undelivered shall be held in accordance with Section 3.03.

     (b) The principal of each Note shall be payable as provided in Section
8.02(d) hereof. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable, if not previously paid, on the
related Final Payment Date or the date on which an Event of Default shall have
occurred and be continuing, if the Indenture Trustee or Holders of the Notes
representing not less than a majority of the Outstanding Amount have declared
the Notes to be immediately due and payable in the manner provided in Section
5.02. All principal payments on each Class of Notes shall be made pro rata to
the Noteholders of such Class entitled thereto. The Indenture Trustee shall
notify the Person in whose name a Note is registered at the close of business 5
Business Days preceding the Payment Date on which the Issuer expects that the
final installment of principal of and interest on such Note will be paid. Such
notice shall be mailed or transmitted by facsimile prior to such final Payment
Date and shall specify that such final installment will be payable only upon
presentation and surrender of such Note and shall specify the place where such
Note may be presented and surrendered for payment of such installment. Notices
in connection with redemptions of Notes shall be mailed to Noteholders as
provided in Section 10.02. In addition, the Administrator shall notify each
Rating Agency upon the final payment of interest and principal of each Class of
Notes, and upon the termination of the Trust, in each case pursuant to Section
1.02(a)(iii) of the Administration Agreement.

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

     Section 2.08. Cancellation. All Notes surrendered for payment, registration
of transfer, exchange or redemption shall, if surrendered to any Person other
than the Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly cancelled 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 cancelled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled 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 destroyed or returned to it; provided, that such Issuer Order is timely and
the Notes have not been previously disposed of by the Indenture Trustee.

                                       13
<PAGE>

     Section 2.09. Book-Entry Notes. The Notes, upon original issuance, will be
issued in the form of a typewritten Note or Notes representing the Book-Entry
Notes, to be delivered to the Indenture Trustee, as agent for The Depository
Trust Company, the initial Clearing Agency, by, or on behalf of, the Issuer. The
Book-Entry Notes shall be registered initially on the Note Register in the name
of Cede & Co., the nominee of the initial Clearing Agency, and no Note Owner
will receive a definitive Note representing such Note Owner's interest in such
Note, except as provided in Section 2.11. Unless and until definitive, fully
registered Notes (the "Definitive Notes") have been issued to such Note Owners
pursuant to Section 2.11:

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

         (ii) 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 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;

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

         (iv) the rights of Note Owners shall be exercised only through the
     Clearing Agency and shall be limited to those established by law and
     agreements between such Note Owners and the Clearing Agency and/or the
     Clearing Agency Participants. Pursuant to the Note Depository Agreement,
     unless and until Definitive Notes are issued pursuant to Section 2.11, the
     Clearing Agency will make book-entry transfers among the Clearing Agency
     Participants and receive and transmit payments of principal of and interest
     on the Notes to such Clearing Agency Participants; and

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

     Section 2.10. 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 such Note Owners pursuant to
Section 2.11, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Clearing Agency, and shall have no obligation to such Note Owners.

     Section 2.11. Definitive Notes. If (i)(A) 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 Book-Entry
Notes and (B) neither the Indenture Trustee nor the Administrator is able 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

                                       14
<PAGE>

the Clearing Agency or (iii) after the occurrence of an Event of Default or a
Servicer Default, Owners of Book-Entry Notes representing beneficial interests
aggregating at least a majority of the Outstanding Amount of such Notes advise
the Indenture Trustee and the Clearing Agency Participants through the Clearing
Agency, in writing that the continuation of a book-entry system through the
Clearing Agency is no longer in the best interests of such Note Owners, then, in
each case, the Indenture Trustee shall notify all Note Owners of the related
Class of Notes through the Clearing Agency of the occurrence of any such event
and of the availability of Definitive Notes of the related Class of Notes to
Note Owners requesting the same. Upon surrender to the Indenture Trustee of the
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 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 of a Class, the
Indenture Trustee shall recognize the Holders of the Definitive Notes as
Noteholders hereunder.

     Section 2.12. Release of Collateral. Subject to Section 11.01 and the terms
of the other Basic Documents, the Indenture Trustee shall release property from
the lien of this Indenture only upon receipt of an Issuer Request accompanied by
an Officer's Certificate, an Opinion of Counsel and Independent Certificates in
accordance with TIA (Sections) 314(c) and 314(d)(1) or an Opinion of Counsel in
lieu of such Independent Certificates to the effect that the TIA does not
require any such Independent Certificates.

     Section 2.13. Tax Treatment. The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for all purposes
including federal, state and local income, single business and franchise tax
purposes, the Notes will qualify as indebtedness of the Issuer secured by the
Owner Trust Estate. The Issuer, by entering into this Indenture, and each
Noteholder, by its acceptance of a Note (and each Note Owner by its acceptance
of an interest in the applicable Book-Entry Note), agree to treat the Notes for
all purposes including federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.

     Section 2.14. Employee Benefit Plans. The transfer of a Definitive Note
shall not be registered unless the prospective transferee has represented in
writing to the Indenture Trustee that either (i) it is not a Benefit Plan and is
not acting on behalf of or investing the assets of a Benefit Plan or (ii) its
acquisition and holding of the Definitive Note will be covered by a U.S.
Department of Labor prohibited transaction class exemption. Any Person that
acquires a beneficial interest in a Book-Entry Note with the assets of a Benefit
Plan shall be deemed to represent that its acquisition and holding of such
beneficial interest is covered by a U.S. Department of Labor prohibited
transaction class exemption.

                                       15
<PAGE>

                                  ARTICLE THREE

                                    COVENANTS

     Section 3.01. Payment of Principal and Interest. The Issuer will duly and
punctually pay the principal of and interest, if any, on the Notes in accordance
with the terms of the Notes and this Indenture. Without limiting the foregoing,
subject to Section 8.02(c), the Issuer will cause to be distributed all amounts
on deposit in the Note Distribution Account on a Payment Date deposited therein
in accordance with Section 8.02(d). Amounts properly withheld under the Code by
any Person from a payment to any Noteholder of interest and/or principal shall
be considered as having been paid by the Issuer to such Noteholder for all
purposes of this Indenture.

     Section 3.02. Maintenance of Office or Agency. The Issuer will maintain in
the Borough of Manhattan, The City of New York, an office or agency where Notes
may be surrendered 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 will give prompt written
notice to the Indenture Trustee of the location, and of any change in the
location, of any such office or agency. If at any time the Issuer shall fail to
maintain any such office or agency or shall fail to furnish the Indenture
Trustee with the address thereof, such surrenders, notices and demands may be
made or served at the Corporate Trust Office, and the Issuer hereby appoints the
Indenture Trustee as its agent to receive all such surrenders, notices and
demands, provided that the Indenture Trustee shall not serve as an agent or
office for the purpose of service of process on behalf of the Issuer.

     Section 3.03. Money for Payments to be Held in Trust. As provided in
Sections 5.04 and 8.02, all payments of amounts due and payable with respect to
any Notes that are to be made from amounts withdrawn from the Collection Account
and the Note Distribution Account pursuant to Section 8.02(c) shall be made on
behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no
amounts so withdrawn from the Collection Account and the Note Distribution
Account for payments of Notes shall be paid over to the Issuer except as
provided in this Section.

     On or before the Business Day immediately preceding each Payment Date and
Redemption Date, the Issuer shall deposit or cause to be deposited in the
Collection Account (to be transferred to the Note Distribution Account on the
related Payment Date) an aggregate sum sufficient to pay the amounts then
becoming due under the Notes, such sum to be held in trust for the benefit of
the Persons entitled thereto, and (unless the Paying Agent is the Indenture
Trustee) shall promptly notify the Indenture Trustee in writing of its action or
failure so to act.

     The Issuer will 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, that such Paying Agent will:

                                       16
<PAGE>

         (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 at the time of its appointment; and

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

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

     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 two years after
such amount has become due and payable shall be discharged from such trust and
be paid 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 repayment,
shall at the expense and written direction 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 will be repaid to or for the
account of the Issuer. The Indenture Trustee shall also adopt and employ, at the
expense and written direction of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or

                                       17
<PAGE>

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 3.04. Existence. The Issuer will 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, in which
case the Issuer will keep in full effect its existence, rights and franchises
under the laws of such other jurisdiction) and will obtain and preserve its
qualification to do business in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of this
Indenture, the Notes, the Collateral and each other instrument or agreement
included in the Owner Trust Estate, including all licenses required under the
Pennsylvania Motor Vehicle Sales Finance Act and MD. Fin. Inst. Code Ann., Title
11, Subtitle 4 in connection with this Agreement and the other Basic Documents
and the transactions contemplated hereby and thereby until such time as the
Issuer shall terminate in accordance with the terms hereof.

     Section 3.05. Protection of Owner Trust Estate. The Issuer intends the
security interest Granted pursuant to this Indenture in favor of the Indenture
Trustee on behalf of the Noteholders to be prior to all other liens in respect
of the Owner Trust Estate, and the Issuer shall take all actions necessary to
obtain and maintain, for the benefit of the Indenture Trustee on behalf of the
Noteholders, a first lien on and a first priority, perfected security interest
in the Owner Trust Estate. The Issuer will from time to time execute and deliver
all such supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
all as prepared by the Administrator and delivered to the Issuer, and will take
such other action necessary or advisable to:

         (i) Grant more effectively any portion of the Owner Trust Estate;

         (ii) maintain or preserve the lien and security interest (and the
     priority thereof) created by this Indenture or carry out more effectively
     the purposes hereof;

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

         (iv) enforce any of the Collateral;

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

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

     Section 3.06. Opinions as to Owner Trust Estate.

     (a) Promptly after the execution and delivery of this Indenture, the Issuer
shall furnish to the Indenture Trustee an Opinion of Counsel to the effect that,
in the opinion of such counsel, either (i) all financing statements and
continuation statements have been executed and

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<PAGE>

filed that are necessary to create and continue the Indenture Trustee's first
priority perfected security interest in the collateral for the benefit of the
Noteholders, and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (ii) no such action
shall be necessary to perfect such security interest.

     (b) Within 90 days after the beginning of each fiscal year of the Issuer
beginning with the first fiscal year beginning more than three months after the
Cutoff Date, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel, dated as of a date during such 90-day period, to the effect that, in
the opinion of such counsel, either (i) all financing statements and
continuation statements have been executed and filed that are necessary to
create and continue the Indenture Trustee's first priority perfected security
interest in the collateral for the benefit of the Noteholders, and reciting the
details of such filings or referring to prior Opinions of Counsel in which such
details are given, or (ii) no such action shall be necessary to perfect such
security interest.

     Section 3.07. Performance of Obligations; Servicing of Receivables.

     (a) The Issuer will not take any action and will use its best efforts not
to permit any action to be taken by others that would release any Person from
any of such Person's material covenants or obligations under any instrument or
agreement included in the Owner Trust Estate or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the other Basic Documents 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 an Officer's 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 will and will cause the Administrator to, punctually perform
and observe all of its obligations and agreements contained in this Indenture,
the other Basic Documents and in the instruments and agreements included in the
Owner Trust Estate, including but not limited to filing or causing to be filed
all UCC financing statements and continuation statements required to be filed by
the terms of this Indenture and the other Basic Documents in accordance with and
within the time periods provided for herein and therein. Except as otherwise
expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Basic Document or any provision thereof without the
consent of the Indenture Trustee or the Holders of at least a majority of the
Outstanding Amount or such greater percentage as may be specified in the
particular provision.

     (d) If the Issuer shall have knowledge of the occurrence of a Servicer
Default, the Issuer shall promptly provide written notice to a Responsible
Officer of the Indenture Trustee and to each Rating Agency thereof, and shall
specify in such notice the action, if any, the Issuer 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 Sale and Servicing
Agreement with

                                       19
<PAGE>

     respect to the Receivables, the Issuer shall take all reasonable steps
available to it to remedy such failure.

     (e) As promptly as possible after the giving of notice of termination to
the Servicer of the Servicer's rights and powers pursuant to Section 7.01 of the
Sale and Servicing Agreement, the Indenture Trustee shall appoint a Successor
Servicer, and such Successor Servicer shall accept its appointment by a written
assumption in a form acceptable to the Indenture Trustee. In the event that a
Successor Servicer has not been appointed and accepted its appointment at the
time when the Servicer ceases to act as Servicer, the Indenture Trustee without
further action shall automatically be appointed the Successor Servicer. The
Indenture Trustee may resign as the Servicer by giving written notice of such
resignation to the Issuer and in such event will be released from such duties
and obligations, such release not to be effective until the date a new servicer
enters into a servicing agreement as provided below. Upon delivery of any such
notice to the Issuer, the Issuer shall obtain a new servicer as the Successor
Servicer under the Sale and Servicing Agreement. Any Successor Servicer other
than the Indenture Trustee shall (i) be an established financial institution
having a net worth of not less than $50,000,000 and whose regular business
includes the servicing of motor vehicle receivables and (ii) enter into a
servicing agreement with the Issuer and the Seller having substantially the same
provisions as the provisions of the Sale and Servicing Agreement applicable to
the Servicer. If within 30 days after the delivery of the notice referred to
above, the Issuer shall not have obtained such a new servicer, the Indenture
Trustee may appoint, or may petition a court of competent jurisdiction to
appoint, a Successor Servicer. In connection with any such appointment, the
Issuer may make such arrangements for the compensation of such successor as it
and such successor shall agree, subject to the limitations set forth below and
in the Sale and Servicing Agreement, and in accordance with Section 7.02 of the
Sale and Servicing Agreement, the Issuer and the Seller shall enter into an
agreement with such successor for the servicing of the Receivables (such
agreement to be in form and substance satisfactory to the Indenture Trustee). If
the Indenture Trustee shall succeed to the Servicer's duties as servicer of the
Receivables as provided herein, it shall do so in its individual capacity and
not in its capacity as Indenture Trustee and, accordingly, the provisions of
Article Six shall be inapplicable to the Indenture Trustee in its duties as the
successor to the Servicer and the servicing of the Receivables. In case the
Indenture Trustee shall become successor to the Servicer under the Sale and
Servicing Agreement, the Indenture Trustee shall be entitled to appoint as
Servicer any one of its Affiliates or agents, provided that it shall be fully
liable for the actions and omissions of such Affiliate or agent in such capacity
as Successor Servicer.

     (f) Upon any termination of the Servicer's rights and powers pursuant to
the Sale and Servicing Agreement, the Issuer shall promptly notify a Responsible
Officer of the Indenture Trustee. As soon as a Successor Servicer is appointed,
the Issuer shall notify the Indenture Trustee of such appointment, specifying in
such notice the name and address of such Successor Servicer.

     Section 3.08. Negative Covenants. So long as any Notes are Outstanding, the
Issuer shall not:

         (i) except as expressly permitted by Section 3.10(b) and the Basic
     Documents, sell, transfer, exchange or otherwise dispose of any of the
     properties or assets

                                       20
<PAGE>

     of the Issuer, including those included in the Owner Trust Estate, unless
     directed to do so by the Indenture Trustee;

         (ii) 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 Owner Trust
     Estate;

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

         (iv) dissolve or liquidate in whole or in part.

     Section 3.09. Annual Statement as to Compliance. The Issuer will deliver to
the Indenture Trustee, within 120 days after the end of each fiscal year of the
Issuer (commencing with the fiscal year ended March 2003), an Officer's
Certificate stating, as to the Authorized Officer signing such Officer's
Certificate, that:

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

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

     Section 3.10. Issuer May Consolidate, etc., Only on Certain Terms.

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

         (i) the Person (if other than the Issuer) formed by or surviving such
     consolidation or merger shall be a Person organized and existing under the
     laws of the United States or any State and shall expressly assume, by an
     indenture supplemental hereto, executed and delivered to the Indenture
     Trustee, in form satisfactory to the

                                       21
<PAGE>

     Indenture Trustee, the due and punctual payment of the principal of and
     interest on all Notes and the performance or observance of every agreement
     and covenant of this Indenture, and each other Basic Document, on the part
     of the Issuer to be performed or observed;

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

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

         (iv) the Issuer shall have received an Opinion of Counsel (and shall
     have delivered copies thereof to the Indenture Trustee) to the effect that
     such transaction will not have any material adverse tax consequence to the
     Issuer, any Noteholder or any Certificateholder;

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

         (vi) the Issuer shall have delivered to the Indenture Trustee an
     Officer's Certificate and an Opinion of Counsel (which shall describe the
     actions taken as required by clause (v) above or that no actions will be
     taken) each stating that such consolidation or merger comply with this
     Article and that all conditions precedent herein provided for relating to
     such transaction have been complied with (including any filing required by
     the Exchange Act).

     (b) The Issuer shall not convey or transfer all or substantially all of its
properties or assets, including those included in the Owner Trust Estate, to any
Person (except as expressly permitted by the Basic Documents), unless:

         (i) the Person that acquires by conveyance or transfer the properties
     or assets of the Issuer shall (A) be a United States citizen or a Person
     organized and existing under the laws of the United States or any State,
     (B) expressly assume, by an indenture supplemental hereto, executed and
     delivered to the Indenture Trustee, in form satisfactory to the Indenture
     Trustee, the due and punctual payment of the principal of and interest on
     all Notes and the performance or observance of every agreement and covenant
     of this Indenture and each other Basic Document on the part of the Issuer
     to be performed or observed, all as provided herein, (C) expressly agree by
     means of such supplemental indenture that all right, title and interest so
     conveyed or transferred shall be subject and subordinate to the rights of
     Holders of the Notes, (D) unless otherwise provided in such supplemental
     indenture, expressly agree to indemnify, defend and hold harmless the
     Issuer against and from any loss, liability or expense arising under or
     related to this Indenture and the Notes and (E) expressly agree by means of
     such supplemental indenture 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;

                                       22
<PAGE>

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

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

         (iv) the Issuer shall have received an Opinion of Counsel (and shall
     have delivered copies thereof to the Indenture Trustee) to the effect that
     such transaction will not have any material adverse federal tax consequence
     to the Issuer, any Noteholder or any Certificateholder;

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

         (vi) the Issuer shall have delivered to the Indenture Trustee an
     Officer's Certificate and an Opinion of Counsel (which shall describe the
     actions taken as required by clause (v) above or that no actions will be
     taken) each stating that such conveyance or transfer and such supplemental
     indenture comply with this Article and that all conditions precedent herein
     provided for relating to such transaction have been complied with
     (including any filing required by the Exchange Act).

     Section 3.11. Successor or Transferee.

     (a) Upon any consolidation or merger of the Issuer in accordance with
Section 310(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 of the properties or assets of the
Issuer pursuant to Section 3.10(b), the Issuer will 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 Notes immediately upon the delivery of written
notice to the Indenture Trustee stating that the Issuer is to be so released.

     Section 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning, selling and managing the
Receivables in the manner contemplated by this Indenture and the other Basic
Documents and activities incidental thereto.

     Section 3.13. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for (i) the Notes and (ii) any other indebtedness permitted
by or arising under the other Basic Documents.

     Section 3.14. Servicer's Obligations. The Issuer shall cause the Servicer
to comply with Sections 3.10, 3.11, 3.12, 4.10 and Article Eight of the Sale and
Servicing Agreement.

     Section 3.15. Guarantees, Loans, Advances and Other Liabilities. Except as
contemplated by the 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

                                       23
<PAGE>

payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree 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 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).

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

     Section 3.18. Restricted Payments. Except as expressly permitted by the
Basic Documents, the Issuer shall not, directly or indirectly, (i) pay any
dividend or make any distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, to the Owner
Trustee or any owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of the Issuer or
to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value
any such ownership or equity interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose; provided, however, that
the Issuer may make, or cause to be made, (a) distributions as contemplated by,
and to the extent funds are available for such purpose under, the Sale and
Servicing Agreement or the Trust Agreement and (b) payments to the Indenture
Trustee pursuant to Section 1.02(b)(ii) of the Administration Agreement. The
Issuer will not, directly or indirectly, make payments to or distributions from
the Collection Account except in accordance with this Indenture and the Basic
Documents.

     Section 3.19. Notice of Events of Default. The Issuer shall give a
Responsible Officer of the Indenture Trustee and each Rating Agency prompt
written notice of each Event of Default hereunder and each default on the part
of the Servicer or the Seller of its obligations under the Sale and Servicing
Agreement.

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

     Section 3.21. Compliance with Laws. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
Basic Document.

     Section 3.22. Amendments of Sale and Servicing Agreement and Trust
Agreement. The Issuer shall not agree to, any amendment to Section 9.01 of the
Sale and Servicing Agreement or Section 11.01 of the Trust Agreement to
eliminate the requirements thereunder that the Indenture Trustee or the Holders
of the Notes consent to amendments thereto as provided therein.

                                       24
<PAGE>

                                  ARTICLE FOUR

                           SATISFACTION AND DISCHARGE

     Section 4.01. 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 3.03, 3.04, 3.05, 3.08,
3.10, 3.12, 3.13, 3.20 and 3.22, (v) the rights, obligations and immunities of
the Indenture Trustee hereunder (including the rights of the Indenture Trustee
under Section 6.07 and the obligations of the Indenture Trustee under Section
4.02) 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, when

         (i) either

               (A) all Notes theretofore authenticated and delivered (other than
         (i) Notes that have been destroyed, lost or stolen and that have been
         replaced or paid as provided in Section 2.05 and (ii) Notes for whose
         payment money has theretofore been deposited in trust or segregated and
         held in trust by the Issuer and thereafter repaid to the Issuer or
         discharged from such trust, as provided in Section 3.03) have been
         delivered to the Indenture Trustee for cancellation; or

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

                    (1) have become due and payable,

                    (2) will become due and payable at the Class A-4 Final
               Payment Date within one year, or

                    (3) 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 clauses (1), (2) or (3) 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 (which will mature prior to the date
         such amounts are payable), in trust for such purpose, in an amount
         sufficient to pay and discharge the entire indebtedness on such Notes
         not theretofore delivered to the Indenture Trustee for cancellation
         when due to the related Final Payment Date or Redemption Date (if Notes
         shall have been called for redemption pursuant to Section 10.01), as
         the case may be;

                                       25
<PAGE>

         (ii) the Issuer has paid or performed or caused to be paid or performed
     all amounts and obligations which the Issuer may owe to or on behalf of the
     Indenture Trustee for the benefit of the Noteholders under this Indenture
     or the Notes; and

         (iii) the Issuer has delivered to the Indenture Trustee an Officer's
     Certificate, 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
     11.01 (a) and, subject to Section 11.02, each stating that all conditions
     precedent herein provided for relating to the satisfaction and discharge of
     this Indenture have been complied with.

     Section 4.02. Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.01 shall be held in trust in a
segregated non-interest bearing account 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 of the Issuer except to the extent required herein
or in the Sale and Servicing Agreement or required by law.

     Section 4.03. Repayment of Monies Held by Paying Agent. In connection with
the satisfaction and discharge of this Indenture with respect to the Notes, all
monies then held by any Paying Agent other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.03 and thereupon such Paying Agent shall be released from all further
liability with respect to such monies.

                                  ARTICLE FIVE

                                    REMEDIES

     Section 5.01. Events of Default. "Event of Default", wherever used herein,
means any one of the following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

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

         (ii) default by the Issuer in the payment of the principal of or any
     installment of the principal of any Note when the same becomes due and
     payable;

         (iii) default in the observance or performance 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 elsewhere
     in this Section specifically dealt with),

                                       26
<PAGE>

     or any representation or warranty of the Issuer made in this Indenture or
     in any certificate or other writing delivered pursuant hereto or in
     connection herewith proving to have been incorrect in any material respect
     as of the time when the same shall have been made, and such default shall
     continue or not be cured, or the circumstance or condition in respect of
     which such misrepresentation or warranty was incorrect shall not have been
     eliminated or otherwise cured, for a period of 30 days after there shall
     have been given, by registered or certified mail, to the Issuer by the
     Indenture Trustee or to the Issuer and the Indenture Trustee by the Holders
     of at least 25% of the Outstanding Amount, a written notice specifying such
     default or incorrect representation or warranty and requiring it to be
     remedied and stating that such notice is a "Notice of Default" hereunder;

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

         (v) 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 any action by the Issuer in furtherance
     of any of the foregoing.

The Issuer shall deliver to a Responsible Officer of the Indenture Trustee,
within five days after the occurrence thereof, written notice in the form of an
Officer's Certificate of any event which with the giving of notice and the lapse
of time would become an Event of Default under clause (iii) above, its status
and what action the Issuer is taking or proposes to take with respect thereto.

     Section 5.02. Acceleration of Maturity, Rescission and Annulment.

     (a) If an Event of Default should occur and be continuing, then and in
every such case the Indenture Trustee or the Holders of Notes representing not
less than a majority of the Outstanding Amount 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 Noteholders), and upon any such declaration the
unpaid principal amount of such 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 has been
made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee as hereinafter in this Article provided, the
Holders of Notes representing a majority of

                                       27
<PAGE>

the Outstanding Amount, by written notice to the Issuer and the Indenture
Trustee, may rescind and annul such declaration and its consequences if:

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

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

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

         (ii) all Events of Default, other than the nonpayment of the principal
     of the Notes that has become due solely by such acceleration, have been
     cured or waived as provided in Section 5.12.

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

     Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.

     (a) The Issuer covenants that if the Notes are accelerated following the
occurrence of an Event of Default, the Issuer will, upon demand of the Indenture
Trustee, pay to it, for the benefit of the Holders of the Notes, the whole
amount then due and payable on such Notes for principal and interest, with
interest on the overdue principal and, to the extent payment at such rate of
interest shall be legally enforceable, on overdue installments of interest at
the related Interest Rate and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.

     (b) In case 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 such 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 5.04, 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 law.

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<PAGE>

     (d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Owner Trust Estate, Proceedings under Title 11 of the United States Code or
any other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
or 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, 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
     principal and interest owing and unpaid 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 Trustee and each predecessor
     Indenture 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 Indenture
     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 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, in the event that 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 Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee except as a result of negligence or bad faith.

     (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

                                       29
<PAGE>

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 action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes.

     (g) In any Proceedings brought by the Indenture Trustee (including 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 Holders of the Notes, and it shall not be necessary to
make any Noteholder a party to any such Proceedings.

     Section 5.04. Remedies, Priorities.

     (a) If an Event of Default shall have occurred and be continuing, the
Indenture Trustee may do one or more of the following (subject to Sections 5.02
and 5.05):

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

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

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

         (iv) sell the Owner Trust Estate or any portion thereof or rights or
     interest therein, at one or more public or private sales called and
     conducted in any manner permitted by law;

provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Owner Trust Estate following an Event of Default, other than an
Event of Default described in Section 5.01(i) or (ii), unless (A) the Holders of
100% of the Outstanding Amount consent thereto, (B) the proceeds of such sale or
liquidation distributable to the Noteholders are sufficient to discharge in full
all amounts then due and unpaid upon such Notes for principal and interest or
(C) the Indenture Trustee determines that the Owner Trust Estate will not
continue to provide sufficient funds for the payment of principal of and
interest on the Notes as would have become due if the Notes had not been
declared due and payable, and the Indenture Trustee obtains the consent of
Holders of 66 2/3% of the Outstanding Amount. In determining such sufficiency or

                                       30
<PAGE>

insufficiency with respect to clause (B) and (C) above, 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 Owner Trust Estate for such
purpose.

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

         (i) to the Indenture Trustee and the Owner Trustee, any amounts due
     under the Trust Agreement or Section 6.07 hereof;

         (ii) to the Servicer, for amounts due and unpaid in respect of
     Nonrecoverable Advances under the Sale and Servicing Agreement;

         (iii) to the Servicer, for amounts due and unpaid in respect of the
     Total Servicing Fee under the Sale and Servicing Agreement;

         (iv) to the Holders of the Notes of each Class, the Note Interest
     Distributable Amount ratably in proportion to the Note Interest
     Distributable Amount for each Class at their respective Interest Rates;

         (v) to the Holders of Notes of all Classes, the outstanding principal
     amount of the Notes, pro rata in proportion to the Outstanding principal
     amount of each Class;

         (vi) to the Holders of the Trust Certificates, the Certificate Interest
     Distributable Amount;

         (vii) to the Holders of the Trust Certificates, the outstanding
     principal amount of the Trust Certificates; and

         (viii) to the Seller, any remaining amount.

The Indenture Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section. At least 15 days before such record date,
the Issuer shall mail to each Noteholder and the Indenture Trustee a notice that
states the record date, the payment date and the amount to be paid.

     Section 5.05. Optional Preservation of the Receivables. If the Notes have
been declared to be due and payable under Section 5.02 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to maintain possession
of the Owner Trust Estate. 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 maintain possession
of the Owner Trust Estate. In determining whether to maintain possession of the
Owner Trust Estate, 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 Owner Trust Estate for such purpose.

                                       31
<PAGE>

     Section 5.06. 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 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

         (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.

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

     In the event 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, the Indenture
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture. The Indenture
Trustee shall not be liable for any such determination made in good faith.

     Section 5.07. Unconditional Rights of Noteholders to Receive Principal and
Interest. Notwithstanding any other provisions in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Note on or after the
respective due dates thereof expressed in such Note or in this Indenture (or, in
the case of redemption, 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 5.08. 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 and respectively to their former positions hereunder, and
thereafter all

                                       32
<PAGE>

rights and remedies of the Indenture Trustee and the Noteholders shall continue
as though no such Proceeding had been instituted.

     Section 5.09. 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.

     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 or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article 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 Notes representing a
majority of the Outstanding Amount shall have the right to direct the time,
method and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided that:

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

         (ii) subject to the terms of Section 5.04, any direction to the
     Indenture Trustee to sell or liquidate the Owner Trust Estate shall be by
     the Holders of Notes representing not less than 100% of the Outstanding
     Amount;

         (iii) if the conditions set forth in Section 5.05 have been satisfied
     and the Indenture Trustee elects to retain the Owner Trust Estate pursuant
     to such Section, then any direction to the Indenture Trustee by the Holders
     of Notes representing less than 100% of the Outstanding Amount to sell or
     liquidate the Owner Trust Estate 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.

Notwithstanding the rights of Noteholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action for which it will
not be adequately indemnified or might materially adversely affect the rights of
any Noteholders not consenting to such action.

     Section 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes of not less than a majority of the Outstanding Amount may waive
any past Default or Event of Default and its consequences except a Default (i)
in payment of principal of or interest on any of the Notes or

                                       33
<PAGE>

(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 case of any such
waiver, the Issuer, the Indenture Trustee and the Holders of the Notes shall
respectively be restored to their former positions and rights hereunder; but no
such waiver shall extend to any subsequent or other Default or Event of Default
or impair any right consequent thereto. Upon any such waiver, such Default shall
cease to exist and be deemed to have been cured and not to have occurred, and
any Event of Default arising therefrom shall be deemed to have been cured and
not to have occurred, for every purpose of this Indenture.

     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 suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (i) any suit instituted by the
Indenture Trustee, (ii) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount or (iii) any suit instituted by any Noteholder for the
enforcement of the payment of principal of or interest on any Note on or after
the respective due dates expressed in such Note and in this Indenture (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 will 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 affect the covenants or the performance of this Indenture; and
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 will not hinder,
delay or impede the execution of any power herein granted to the Indenture
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.

     Section 5.15. 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 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 Owner Trust Estate 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 5.04(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 shall take all such lawful action as the
Indenture Trustee may request to compel or secure the performance and observance
by the Seller or the Servicer, as

                                       34
<PAGE>

applicable, of each of their obligations to the Issuer under or in connection
with the Sale and Servicing Agreement in accordance with the terms thereof, and
to exercise any and all rights, remedies, powers and privileges lawfully
available to the Issuer under or in connection with the Sale and Servicing
Agreement to the extent and in the manner directed by the Indenture Trustee,
including the transmission of notices of default on the part of the Seller or
the Servicer thereunder and the institution of legal or administrative actions
or proceedings to compel or secure performance by the Seller or the Servicer of
each of their obligations under the Sale and Servicing Agreement.

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

                                  ARTICLE SIX

                              THE INDENTURE TRUSTEE

     Section 6.01. Duties of Indenture Trustee.

     (a) If an Event of Default has occurred and is continuing of which a
Responsible Officer of the Indenture Trustee has actual knowledge, the Indenture
Trustee shall exercise the rights and powers vested in it by this Indenture and
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; provided, however, that if the Indenture Trustee shall assume the
duties of the Servicer pursuant to Section 3.07(e), the Indenture Trustee in
performing such duties shall use the degree of care and skill customarily
exercised by a prudent institutional servicer with respect to installment sale
contracts that it services for itself or others.

     (b) Except during the continuance of an Event of Default:

         (i) the Indenture Trustee shall undertake to perform such duties and
     only such duties as are specifically set forth in this Indenture and no
     implied covenants or obligations shall be read into this Indenture 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;
     however, the Indenture Trustee shall examine the certificates and opinions
     to determine whether or not they conform to the requirements of this
     Indenture.

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<PAGE>

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

         (i) this paragraph does not limit the effect of Section 6.01(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) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b) and (c) of this Section.

     (e) 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.

     (f) 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 Sale and Servicing Agreement.

     (g) 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 repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.

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

     (i) The Indenture Trustee shall not be charged with knowledge of any Event
of Default unless either (i) a Responsible Officer shall have actual knowledge
of such Event of Default or (ii) written notice of such Event of Default shall
have been given to the Indenture Trustee in accordance with the provisions of
this Indenture.

     Section 6.02. Rights of Indenture Trustee.

     (a) Except as otherwise provided in the second succeeding sentence, the
Indenture Trustee may conclusively 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, calculation or matter stated in the
document. Notwithstanding the foregoing, the Indenture Trustee, upon receipt of
all resolutions, certificates, statements, opinions, reports, documents, orders
or other instruments furnished to the Indenture Trustee that shall be
specifically required to be furnished pursuant to any provision of this
Indenture, shall examine them to determine whether they comply as to form to the
requirements of this Indenture.

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<PAGE>

     (b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on an 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, that the Indenture Trustee's conduct does not
constitute willful misconduct, negligence or bad faith.

     (e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to 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.

     (f) The Indenture Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Indenture or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order or
direction of any of the Noteholders, pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Indenture Trustee
security or indemnity reasonably satisfactory to the Indenture Trustee against
the costs, expenses and liabilities which may be incurred therein or thereby;
provided, however, nothing contained herein shall, however, relieve the
Indenture Trustee of the obligation, upon the occurrence of an Event of Default
of which a Responsible Officer of the Indenture Trustee shall have actual
knowledge (which has not been cured), to exercise such of the rights and powers
vested in it by this Indenture, and to 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.

     Section 6.03. Individual Rights of Indenture Trustee. The Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Indenture Trustee. Any Paying Agent, Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Indenture Trustee must comply with Sections 6.11 and 6.12.

     Section 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee shall
not be responsible for and makes no representation as to the validity or
adequacy of this Indenture, the Owner Trust Estate or the Notes, it shall not be
accountable for the Issuer's use of the proceeds from the Notes, and it shall
not be responsible for any statement of the Issuer in this 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.

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<PAGE>

     Section 6.05. 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 90 days after
it occurs. Except in the case of a Default in payment of principal of or
interest on any Note (including payments pursuant to the mandatory redemption
provisions of such 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 6.06. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such holder to prepare its federal and state income tax returns. The
Indenture Trustee shall have the right to change the way such statements are
distributed in order to make such distribution more convenient and/or more
accessible to the above parties and the Indenture Trustee shall provide timely
and adequate notification to all above parties regarding any such changes;
provided, however, that the Indenture Trustee will also mail copies of any such
statements to any requesting Noteholder.

     Section 6.07. Compensation and Indemnity. The Issuer shall, or shall cause
the Administrator to, (i) pay to the Indenture Trustee from time to time
reasonable compensation for its services, which compensation shall not be
limited by any law on compensation of a trustee of an express trust, (ii)
reimburse the Indenture Trustee for all reasonable out-of-pocket expenses
incurred or made by it, including without limitation, costs of collection, in
addition to the compensation for its services, which expenses shall include the
reasonable compensation and expenses, disbursements and advances of the
Indenture Trustee's agents, counsel, accountants and experts and (iii) indemnify
the Indenture Trustee and its officers, directors, employees and agents against
any and all loss, liability or expense (including reasonable attorneys' fees and
expenses) incurred by it in connection with the administration of this trust and
the performance of its duties hereunder not resulting from its own willful
misconduct, negligence or bad faith. The Indenture Trustee shall notify the
Issuer and the Administrator promptly of any claim for which it may seek
indemnity. Failure by the Indenture Trustee to so notify the Issuer and the
Administrator shall not relieve the Issuer or the Administrator of its
obligations hereunder. The Issuer shall, or shall cause the Administrator to,
defend any such claim, and the Indenture Trustee may have separate counsel and
the Issuer shall, or shall cause the Administrator to, pay the fees and expenses
of such counsel. Neither the Issuer nor the Administrator need reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.

     The Issuer's payment obligations to the Indenture Trustee pursuant to this
Section shall survive the discharge of this Indenture or the earlier resignation
or discharge of the Indenture Trustee. When the Indenture Trustee incurs
expenses after the occurrence of a Default specified in Section 5.01 (iv) or (v)
with respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
federal or state bankruptcy, insolvency or similar law.

     Section 6.08. Replacement of Indenture Trustee. No resignation or removal
of the Indenture Trustee and no appointment of a successor Indenture Trustee
shall become effective until the acceptance of appointment by the successor
Indenture Trustee pursuant to this Section. The Indenture Trustee may resign at
any time by so notifying the Issuer. Noteholders

                                       38
<PAGE>

representing a majority of the Outstanding Amount may remove the Indenture
Trustee at any time and appoint a successor Indenture Trustee by so notifying
the Indenture Trustee. The Issuer shall remove the Indenture Trustee if:

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

         (ii) a court having jurisdiction in the premises in respect of the
     Indenture Trustee in an involuntary case or proceeding under federal or
     state banking or bankruptcy laws, as now or hereafter constituted, or any
     other applicable federal or state bankruptcy, insolvency or other similar
     law, shall have entered a decree or order granting relief or appointing a
     receiver, liquidator, assignee, custodian, trustee, conservator,
     sequestrator (or similar official) for the Indenture Trustee or for any
     substantial part of the Indenture Trustee's property, or ordering the
     winding-up or liquidation of the Indenture Trustee's affairs, provided any
     such decree or order shall have continued unstayed and in effect for a
     period of 30 consecutive days;

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

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

     If the Indenture Trustee resigns 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 a successor Indenture Trustee.

     A successor Indenture Trustee shall deliver a written acceptance of its
appointment 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 the Noteholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.

     If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Holders of a majority in Outstanding Amount may
petition any court of competent jurisdiction for the appointment of a successor
Indenture Trustee.

     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.

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<PAGE>

     Any resignation or removal of the Indenture Trustee and appointment of a
successor Indenture Trustee pursuant to the provisions of this Section shall not
become effective until acceptance of appointment by the successor Indenture
Trustee pursuant to this Section and payment of all fees and expenses owed to
the outgoing Indenture Trustee. Notwithstanding the replacement of the Indenture
Trustee pursuant to this Section, the Issuer's and the Administrator's
obligations under Section 6.07 shall continue for the benefit of the retiring
Indenture Trustee.

     Section 6.09. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates or merges with, converts or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation shall, without
any further act, be the successor Indenture Trustee; provided, that such
corporation or banking association shall be otherwise qualified and eligible
under Section 6.11. The Indenture Trustee shall provide each Rating Agency prior
written notice of any such transaction.

     In case at the time such successor or successors by merger, conversion 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; and in all such cases such certificates
shall have the full force as is provided anywhere in the Notes or in this
Indenture that the certificate of the Indenture Trustee shall have.

     Section 6.10. Appointment of Co-Trustee or Separate Trustee.

     (a) Notwithstanding any other provision of this Indenture, at any time, for
the purpose of meeting any legal requirement of any jurisdiction in which any
part of the Owner Trust Estate may at the time be located, the Indenture Trustee
and the Administrator, acting jointly, 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
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Noteholders, such title to the Owner Trust Estate or any part
thereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Indenture Trustee may consider
necessary or desirable. If the Administrator shall not have joined in such
appointment within 15 days after its receipt of a request to do so, the
Indenture Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.08.

     (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:

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<PAGE>

         (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 Owner Trust Estate 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 and the Administrator 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 Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the 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 and a copy thereof given to the Administrator.

     (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.

     Section 6.11. Eligibility, Disqualification. 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 the time
deposits of the Indenture Trustee shall be rated at least A-1 by Standard &
Poor's and P-1 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.

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<PAGE>

     In the event that, (A) the Indenture Trustee (i) or any of its directors or
executive officers is an underwriter, or (ii) directly or indirectly, controls
or is controlled by, or is in common control with, an underwriter; and (B) an
Event of Default occurs, the Indenture Trustee shall comply with TIA (Section)
310(b). For this purpose only and pursuant to TIA (Section) 310(b), an
"underwriter" means any person who, within one year prior to the occurrence of
the Event of Default, was an underwriter of any of the notes outstanding at the
time of such Event of Default.

     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). An Indenture Trustee who
has resigned or been removed shall be subject to TIA (Section) 31l(a) to the
extent indicated.

     Section 6.13. Representations and Warranties of Indenture Trustee. The
Indenture Trustee hereby makes the following representations and warranties on
which the Issuer and Noteholders shall rely:

         (i) it is a national banking association duly organized, validly
     existing and in good standing under the laws of the United States;

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

         (iii) the duties and obligations of the Indenture Trustee under the
     Indenture constitute the valid, legal and binding obligations of the
     Indenture Trustee enforceable in accordance with its terms except as
     enforcement may be limited by bankruptcy, insolvency, reorganization or
     similar laws or equitable principles limiting creditors' rights generally,
     and provided that no representation is expressed as to the availability of
     equitable remedies;

         (iv) that to the best knowledge of the Indenture Trustee, the Indenture
     Trustee is not in breach of or default under any law or administrative rule
     or regulation of the United States of America or any department, division,
     agency or instrumentality thereof, or any applicable court or
     administrative decree or order, and which would materially impair the
     ability of the Indenture Trustee to perform its obligations under the
     Indenture; and

         (v) that to the best knowledge of the Indenture Trustee, no
     authorization, consent or other order of any state or federal government
     authority or agency having jurisdiction over the trust powers of the
     Indenture Trustee are required to be obtained by the Indenture Trustee for
     the valid authorization, execution and delivery by the Indenture Trustee of
     the Indenture or the authentication of the Notes.

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<PAGE>

                                  ARTICLE SEVEN

                         NOTEHOLDERS' LISTS AND REPORTS

     Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders. If Definitive Notes are issued, the Issuer will furnish or cause to
be furnished to the Indenture Trustee (i) not more than five days after the
earlier of (a) each Record Date and (b) three months after the last Record 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 such Record Date, and (ii) at
such other times as the Indenture Trustee may request in writing, within 30 days
after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than ten 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.

     Section 7.02. Preservation of Information; Communications, Reports and
Certain Documents 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 7.01 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 7.01 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).

     (d) The Indenture Trustee will provide to Securityholders the reports,
certificates, opinions and documents specified in Section 3.15 of the Sale and
Servicing Agreement, upon written request to the Indenture Trustee.

     Section 7.03. 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 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) that 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

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<PAGE>

     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 7.03(a) and 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 March 31 of each year.

     Section 7.04. Reports by Indenture Trustee. If required by TIA (Section)
313(a), within 60 days after each December 15 beginning with December 15, 2002,
the Indenture Trustee shall mail to each 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 each report at the time of its mailing to Noteholders shall 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 EIGHT

                      ACCOUNTS, DISBURSEMENTS AND RELEASES

     Section 8.01. Collection of Money. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Owner Trust Estate, 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 a Default or Event of Default
under this Indenture and any right to proceed thereafter as provided in Article
Five.

     Section 8.02. Accounts.

     (a) Pursuant to Section 4.01 of the Sale and Servicing Agreement, there has
been established and there shall be maintained an Eligible Account (initially at
U.S. Bank National Association) in the name, and under the sole dominion and
control, of the Indenture Trustee until the Outstanding Amount has been reduced
to zero, and thereafter, in the name, and under the sole dominion and control,
of the Owner Trustee, which is designated as the Yield Supplement Account.

                                       44
<PAGE>

     (b) On or prior to the Closing Date, the Issuer shall cause the Servicer to
establish and maintain, in the name of the Indenture Trustee, Eligible Accounts
for the benefit of the (i) Securityholders, the Collection Account, the Yield
Supplement Account and the Payahead Account, and (ii) Noteholders, the Note
Distribution Account and the Reserve Fund as provided in Section 4.01 of the
Sale and Servicing Agreement.

     (c) On or before each Payment Date, with respect to the preceding
Collection Period, all amounts required to be deposited in the Collection
Account will be deposited as provided in Sections 4.02 and 4.05 of the Sale and
Servicing Agreement. On or before each Payment Date, all amounts required to be
deposited in the Note Distribution Account with respect to the preceding
Collection Period pursuant to Sections 4.06 and 4.07 of the Sale and Servicing
Agreement will be transferred from the Collection Account, the Reserve Fund, the
Payahead Account and/or the Yield Supplement Account to the Note Distribution
Account.

     (d) On each Payment Date and Redemption Date, the Indenture Trustee shall
distribute all amounts on deposit in the Note Distribution Account to
Noteholders in respect of the Notes to the extent of amounts due and unpaid on
the Notes for principal and interest (including any premium) in the following
amounts and in the following order of priority (except as otherwise provided in
Section 5.04(b)):

         (i) the Note Interest Distributable Amount; provided, that if there are
     not sufficient funds in the Note Distribution Account to pay the allocable
     portion of the Note Interest Distribution Amount with respect to each Class
     of Notes, the amount in the Note Distribution Account shall be applied to
     the payment of such amount pro rata on the basis of the total Note Interest
     Distributable Amount due on the Notes;

         (ii) the Note Principal Distributable Amount (first to the Class A-1
     Notes until the Class A-1 Notes are paid in full, second to the Class A-2
     Notes until paid in full, third to the Class A-3 Notes until paid in full,
     and fourth to the Class A-4 Notes until paid in full);

         (iii) notwithstanding clause (ii) above, on each Payment Date after the
     Notes have been accelerated as provided in Section 5.02(a) following the
     occurrence of an Event of Default, until such time as the Notes have been
     paid in full, the Note Principal Distributable Amount shall be paid first
     to the Class A-1 Notes until the Class A-1 Notes are paid in full and then
     to the Class A-2, Class A-3 and Class A-4 Notes on a pro rata basis based
     on the Outstanding Amount of each such Class of Notes; and

         (iv) in the event that there are insufficient funds in the Note
     Distribution Account, an amount will be withdrawn from the Reserve Fund
     pursuant to Section 4.07(b) of the Sale and Servicing Agreement.

     Section 8.03. General Provisions Regarding Accounts.

     (a) So long as no Default or Event of Default shall have occurred and be
continuing, all or a portion of the funds in the Accounts shall be invested in
Eligible Investments and reinvested by the Indenture Trustee upon the written
direction of the Servicer, subject to the

                                       45
<PAGE>

provisions of Section 4.01(b) of the Sale and Servicing Agreement. Except as
otherwise provided in Section 4.01 (b) of the Sale and Servicing Agreement, all
income or other gain from investments of monies deposited in the Accounts shall
be paid to the Servicer, and any loss resulting from such investments shall be
charged to the related Account.

     (b) Subject to Section 6.01(c), the Indenture Trustee shall not in any way
be held liable by reason of any insufficiency in any of the 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.

     (c) If (i) the Servicer shall have failed to give investment directions for
any funds on deposit in the Accounts to the Indenture Trustee by 2:00 P.M., New
York Time (or such other time as may be agreed by the Issuer and the Indenture
Trustee) on any Business Day or (ii) to the knowledge of a Responsible Officer
of the Indenture Trustee a Default or Event of Default shall have occurred and
be continuing with respect to the Notes but the Notes shall not have been
declared due and payable pursuant to Section 5.02 or (iii) if such Notes shall
have been declared due and payable following an Event of Default but amounts
collected or receivable from the Owner Trust Estate are being applied in
accordance with Section 5.05 as if there had not been such a declaration, then
the Indenture Trustee upon actual knowledge by a Responsible Officer of such
event shall, to the fullest extent practicable, invest and reinvest funds in the
Accounts in the Eligible Investment listed in clause (vii) of the definition
thereof.

     Section 8.04. Release of Owner Trust Estate.

     (a) Subject to the payment of its fees and expenses pursuant to Section
6.07, the Indenture Trustee may, and when required by the provisions of this
Indenture shall, execute instruments to release property from the lien of this
Indenture, or convey the Indenture Trustee's interest in the same, in a manner
and under circumstances that are not inconsistent with the provisions of this
Indenture. No party relying upon an instrument executed by the Indenture Trustee
as provided in this Article shall be bound to ascertain the Indenture Trustee's
authority, inquire into the satisfaction of any conditions precedent or see to
the application of any monies.

     (b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07 have
been paid, release any remaining portion of the Owner Trust Estate 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 Accounts. The Indenture
Trustee shall release property from the lien of this Indenture pursuant to this
Section 8.04(b) only upon receipt of an Issuer Request accompanied by an
Officer's Certificate, an Opinion of Counsel and (if required by the TIA)
Independent Certificates in accordance with TIA (Sections) 314(c) and 314(d)(1)
meeting the applicable requirements of Section 11.01.

     Section 8.05. 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 8.04(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

                                       46
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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
will 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 Owner Trust Estate. Counsel rendering any
such opinion may rely, without independent investigation, on the accuracy and
validity of any certificate or other instrument delivered to the Indenture
Trustee in connection with any such action.

                                  ARTICLE NINE

                             SUPPLEMENTAL INDENTURES

     Section 9.01. Supplemental Indentures Without Consent of Noteholders.

     (a) Without the consent of the Holders of any Notes but with prior notice
to each Rating Agency, 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 the applicable
     provisions hereof, of another Person to the Issuer, and the assumption by
     any such successor of the covenants of the Issuer herein and in the Notes
     contained;

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

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

         (v) to cure any ambiguity, to correct or supplement any provision
     herein or in any supplemental indenture that may be inconsistent with any
     other provision herein or in any supplemental indenture or the other Basic
     Documents or to make any other provisions with respect to matters or
     questions arising under this Indenture or in any supplemental indenture;
     provided, that such action shall not adversely affect the interests of the
     Holders of the Notes;

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

                                       47
<PAGE>

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

     The Indenture Trustee 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 Holders of the Notes but with
prior notice to each Rating Agency, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder.

     Section 9.02. Supplemental Indentures With Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may,
with prior notice to each Rating Agency and with the consent of the Holders of
not less than a majority of the Outstanding Amount, 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, or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Outstanding Note affected thereby:

         (i) change the date of payment of any installment of principal of or
     interest on any Note, or reduce the principal amount thereof, the Interest
     Rate thereon or the Redemption Price with respect thereto, change the
     provisions of this Indenture relating to the application of collections on,
     or the proceeds of the sale of, the Owner Trust Estate to payment of
     principal of or interest on the Notes, or change any place of payment
     where, or the coin or currency in which, any Note or the interest thereon
     is payable, 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 Five, 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, the consent of
     the Holders of which is required for any such supplemental indenture, or
     the consent of the Holders of which is required for any waiver of
     compliance with certain provisions of this Indenture or certain defaults
     hereunder and their consequences provided for in this Indenture;

         (iii) modify or alter the provisions of the proviso to the definition
     of the term "Outstanding";

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<PAGE>

         (iv) reduce the percentage of the Outstanding Amount required to direct
     the Indenture Trustee to direct the Issuer to sell or liquidate the Owner
     Trust Estate pursuant to Section 5.04 or amend the provisions of this
     Article which specify the percentage of the Outstanding Amount required to
     amend this Indenture or the other Basic Documents;

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

         (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 Payment Date (including the calculation of
     any of the individual components of such calculation) or affect the rights
     of the Holders of Notes to the benefit of any provisions for the mandatory
     redemption of the Notes contained herein; 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 Owner Trust
     Estate or, except as otherwise permitted or contemplated herein, terminate
     the lien of this Indenture on any property at any time subject hereto or
     deprive the Holder of any Note of the security provided by the lien of this
     Indenture.

     The Administrator shall certify to the Indenture Trustee whether or not any
Notes would be affected by any supplemental indenture and any such certification
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder.

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

     Promptly after the execution by the Issuer and the Indenture Trustee of any
supplemental indenture pursuant to this Section, the Indenture Trustee shall
mail to the Holders of the Notes 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 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article or the modification thereby of the trusts created by
this Indenture, the Indenture Trustee shall be entitled to receive, and subject
to Sections 6.01 and 6.02, 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. 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.

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<PAGE>

     Section 9.04. Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of 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 9.05. Conformity with Trust Indenture Act. Every amendment of this
Indenture and every supplemental indenture executed pursuant to this Article
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 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article 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 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.

                                   ARTICLE TEN

                               REDEMPTION OF NOTES

     Section 10.01. Redemption. The Outstanding Notes are subject to redemption
in whole, but not in part, pursuant to Section 8.01 of the Sale and Servicing
Agreement, on any Payment Date on which the Servicer exercises its option to
purchase the Owner Trust Estate pursuant to said Section, for a purchase price
equal to the Redemption Price; provided that the Issuer has available funds
sufficient to pay the Redemption Price. The Servicer or the Issuer shall furnish
each Rating Agency notice of such redemption. If the outstanding Notes are to be
redeemed pursuant to this Section, the Servicer or the Issuer shall furnish
notice of such election to the Indenture Trustee not later than 20 days prior to
the Redemption Date and the Issuer shall deposit by 8:00 A.M., Los Angeles time,
on the Redemption Date with the Indenture Trustee in the Note Distribution
Account the Redemption Price of the Notes to be redeemed, whereupon all such
Notes shall be due and payable on the Redemption Date upon the furnishing of a
notice complying with Section 10.02 to each Holder of the Notes.

     Section 10.02. Form of Redemption Notice. Notice of redemption under
Section 10.01 shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile mailed or transmitted not later than ten days
prior to the applicable Redemption Date to each Holder of Notes, as of the close
of business on the Record Date preceding the applicable Redemption Date, at such
Holder's address or facsimile number appearing in the Note Register.

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<PAGE>

     All notices of redemption shall state:

         (i) the Redemption Date;

         (ii) the Redemption Price;

         (iii) the place where such Notes are to be surrendered for payment of
     the Redemption Price (which shall be the office or agency of the Issuer to
     be maintained as provided in Section 3.02); and

         (iv) that on the Redemption Date, the Redemption Price will become due
     and payable upon each Note and that interest thereon shall cease to accrue
     from and after the Redemption Date.

Notice of redemption of the 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 Note shall not impair or affect the
validity of the redemption of any other Note.

     Section 10.03. Notes Payable on Redemption Date. The Notes or portions
thereof to be redeemed shall, following notice of redemption as required by
Section 10.02, on the Redemption Date become due and payable at the Redemption
Price and (unless the Issuer shall default in the payment of the Redemption
Price) no interest shall accrue on the Redemption Price for any period after the
date to which accrued interest is calculated for purposes of calculating the
Redemption Price.

                                 ARTICLE ELEVEN

                                  MISCELLANEOUS

     Section 11.01. 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, 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;

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<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 opinion of each such signatory, such
     signatory has made such examination or investigation as is necessary to
     enable such signatory to express an informed opinion as to whether or not
     such covenant or condition has been complied with; and

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

     (b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 11.01 (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 90 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 (i) above, the Issuer
     shall also deliver to the Indenture Trustee an Independent Certificate as
     to the same matters, if the fair value to the Issuer of the securities to
     be so deposited and of all other such securities made the basis of any such
     withdrawal or release since the commencement of the then-current fiscal
     year of the Issuer, as set forth in the certificates delivered pursuant to
     clause (i) above and this clause (ii), is 10% or more of the Outstanding
     Amount, 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 any release described in clause (A) or
     (B) of Section 11.01(b)(v), 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 90 days of such release) of the property or securities proposed to
     be released and stating that in the opinion of such person the proposed
     release will not impair the security under this Indenture in contravention
     of the provisions hereof.

         (iv) Whenever the Issuer is required to furnish to the Indenture
     Trustee an Officer's Certificate certifying or stating the opinion of any
     signer thereof as to the matters described in clause (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 property described in
     clauses (A) or (B) of Section 11.01 (b)(v)) 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 (iii)

                                       52
<PAGE>

     above and this clause (iv), equals 10% or more of the Outstanding Amount,
     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.

         (v) Notwithstanding Section 2.10 or any other provision of this
     Section, the Issuer may, without compliance with the requirements of the
     other provisions of this Section, (A) collect, liquidate, sell or otherwise
     dispose of Receivables and Financed Vehicles as and to the extent permitted
     or required by the Basic Documents and (B) make cash payments out of the
     Accounts as and to the extent permitted or required by the Basic Documents,
     so long as the Issuer shall deliver to the Indenture Trustee every six
     months, commencing December 15, 2002, an Officer's Certificate of the
     Issuer stating that all the dispositions of Collateral described in clauses
     (A) and (B) above that occurred during the preceding six calendar months
     were in the ordinary course of the Issuer's business and that the proceeds
     thereof were applied in accordance with the Basic Documents.

     Section 11.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.

     Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's 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.

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

     Whenever in this Indenture, 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,

                                       53
<PAGE>

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 Six.

     Section 11.03. Acts of Noteholders.

     (a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Noteholders
may be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such Noteholders in person or by agents duly appointed
in writing; and except as herein otherwise expressly provided such action shall
become effective when such instrument or instruments are delivered to the
Indenture Trustee and, where it is hereby expressly required, to the Issuer.
Such instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Noteholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.01) conclusive in favor of
the Indenture Trustee and the Issuer, if made in the manner provided in this
Section.

     (b) The fact and date of the execution by any person of any such instrument
or writing may be proved in any 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 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 11.04. 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
shall be in writing and if such request, demand, authorization, direction,
notice, consent, waiver or Act of Noteholders is to be made upon, given or
furnished to or filed with:

         (i) the Indenture Trustee by any Noteholder or by the Issuer shall be
     sufficient for every purpose hereunder if made, given, furnished or filed
     in writing and mailed first-class, postage prepaid, overnight courier or
     facsimile (followed by original) to or with the Indenture Trustee at its
     Corporate Trust Office, or

         (ii) the Issuer by the Indenture Trustee or by any Noteholder shall be
     sufficient for every purpose hereunder if in writing and mailed
     first-class, postage prepaid, overnight courier or facsimile (followed by
     original) to the Issuer addressed to: Honda Auto Receivables 2002-3 Owner
     Trust, in care of Chase Manhattan Bank USA, National Association, c/o
     JPMorgan Chase, 500 Stanton Christiana Road, OPS4/3rd Floor, Newark,
     Delaware 19713, Attention: Institutional Trust Services or at any other
     address previously furnished in writing to the Indenture Trustee by the
     Issuer or the

                                       54
<PAGE>

     Administrator. The Issuer shall promptly transmit any notice received by it
     from the Noteholders to the Indenture Trustee.

     Notices required to be given to each Rating Agency by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally
delivered, couriered or mailed by certified mail, return receipt requested, to
(i) in the case of Fitch, at the following address: One State Street Plaza, New
York, New York 10004, Attention: Asset Backed Surveillance Department, (ii) in
the case of Moody's, at the following address: Moody's Investors Service, Inc.,
ABS Monitoring Department, 99 Church Street, New York, New York 10007 or (iii)
in the case of Standard & Poor's, at the following address: Standard & Poor's
Ratings Services, a division of The McGraw-Hill Companies, Inc., 55 Water
Street, New York, New York 10041, Attention of Asset Backed Surveillance
Department; or at such other address as shall be designated by written notice to
the other parties.

     Section 11.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Holder's address as it appears on the Note Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.

     Where this Indenture 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.

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

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

     Section 11.06. 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 will furnish to the Indenture Trustee a copy of
each such agreement and the Indenture Trustee will cause payments to be made and
notices to be given in accordance with such agreements.

                                       55
<PAGE>

     Section 11.07. Conflict with Trust Indenture Act. 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 Trust Indenture
Act, such required provision shall control.

     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 11.08. 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 11.09. Successors and Assigns. All covenants and agreements in this
Indenture and the Notes by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture shall bind its successors, co-trustees and agents.

     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 of this Indenture and the Notes 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, and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Owner Trust Estate, any benefit or any legal or equitable right, remedy
or claim under this Indenture.

     Section 11.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Note's 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 CALIFORNIA, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, EXCEPT THAT
THE DUTIES, RIGHTS AND PROTECTIONS OF THE INDENTURE TRUSTEE SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK.

     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.

                                       56
<PAGE>

     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. Trust Obligation. 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 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 its individual capacity, 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 its
individual capacity, 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 capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. 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 Six, Seven and Eight of the Trust
Agreement.

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

     Section 11.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. Notwithstanding
anything herein to the contrary, the foregoing shall not be construed to
prohibit (i) the disclosure of any and all information that is or becomes
publicly known, or information obtained by the Indenture Trustee from sources
other than the Servicer or the Issuer, (ii) the disclosure of any and all
information (A) if required to do so by any applicable law, rule or regulation,
(B) to any government agency or regulatory body having or claiming authority to
regulate or oversee any aspects of the Indenture Trustee's business or that of
its affiliates, (C) pursuant to any subpoena, civil investigative demand or
similar demand or request of any court, regulatory authority, arbitrator or
arbitration to which the Indenture Trustee or any affiliate or an officer,
director, employer or shareholder thereof is a

                                       57
<PAGE>

party, (D) in any preliminary or final offering circular, registration statement
or contract or other document pertaining to the transactions contemplated by the
Agreement approved in advance by the Servicer or the Issuer or (E) to any
affiliate, independent or internal auditor, agent, employee or attorney of the
Indenture Trustee having a need to know the same, provided that the Indenture
Trustee advises such recipient of the confidential nature of the information
being disclosed, or (iii) any other disclosure authorized by the Servicer or the
Issuer.

                                       58
<PAGE>

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

                                   HONDA AUTO RECEIVABLES 2002-3 OWNER
                                   TRUST,

                                   By: CHASE MANHATTAN BANK USA,
                                       NATIONAL ASSOCIATION, not in its
                                       individual capacity but solely as Owner
                                       Trustee,

                                   By: /s/ John J. Cashin
                                       -----------------------------------------
                                      Name:  John J. Cashin
                                      Title: Vice President

                                   U.S. BANK NATIONAL ASSOCIATION, not in its
                                   individual capacity but solely as Indenture
                                   Trustee,

                                   By: /s/ Nancie J. Arvin
                                       -----------------------------------------
                                      Name: Nancie J. Arvin
                                      Title: Vice President

<PAGE>

STATE OF Delaware                )
                                 ) ss
COUNTY OF New Castle             )

     On May 19, 2002 before me, Deborah J. Goodchild, Notary Public, personally
appeared John J. Cashin, ____________

     [X]  personally known to me, or

     [ ]  proved to me on the basis of satisfactory evidence to be the person(s)
          whose name(s) is/are subscribed to the within instrument,

and acknowledged to me that she executed the same in her authorized capacity,
and that by her signature on the instrument the person, or the entity upon
behalf of which such person acted, executed the instrument.

WITNESS my hand and official seal.

Signature /s/ Deborah J. Goodchild                           [Seal]
         --------------------------------------------

<PAGE>

STATE OF Illinois             )
                              ) ss
COUNTY OF Cook                )

     On May 22, 2002 before me, Harry Petruleas, Notary Public, personally
appeared Nancie J. Arvin, Vice President

     [X]  personally known to me, or

     [ ]  proved to me on the basis of satisfactory evidence to be the person(s)
          whose name(s) is/are subscribed to the within instrument,

and acknowledged to me that she executed the same in her authorized capacity,
and that by her signature on the instrument the person, or the entity upon
behalf of which such person acted, executed the instrument.

WITNESS my hand and official seal.

Signature   /s/ Harry Petruleas                           [Seal]
         --------------------------------------------

<PAGE>
                                                                      SCHEDULE A

                             SCHEDULE OF RECEIVABLES

                    Provided to the Owner Trustee at Closing

                                      SA-1

<PAGE>

                                                                       EXHIBIT A

                                  FORM OF NOTE

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

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

REGISTERED                                                     $__________
No. R-__                                                       CUSIP NO. _______

                    HONDA AUTO RECEIVABLES 2002-3 OWNER TRUST

             ____% ASSET BACKED NOTES, CLASS [A-1] [A-2] [A-3] [A-4]

     Honda Auto Receivables 2002-3 Owner Trust, a business trust organized and
existing under the laws of the State of Delaware (the "Issuer"), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of _____________________ Dollars ($__________), payable to the
extent described in the Indenture referred to on the reverse hereof on each
Payment Date; provided, however, that the entire unpaid principal amount of this
Note shall be payable on the earlier of ________________ ___, 20__ (the "Class
[A-1] [A-2] [A-3] [A-4] Final Payment Date") and the Redemption Date, if any,
selected pursuant to the Indenture.

     The Issuer will pay interest on this Note at the rate per annum shown above
on each Payment 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
Payment Date (after giving effect to all payments of principal made on the
preceding Payment Date), or on the Closing Date in the case of the first Payment
Date or if no interest has yet been paid, subject to certain limitations
contained in the Indenture. [[Interest on this Class A-1 Note will accrue for
each Payment Date from and including the immediately preceding Payment Date (or,
in the case of the first Payment Date, the Closing Date), to but excluding such
Payment Date]. [Interest on this [Class A-2,] [Class A-3,] [Class A-4] Note will
accrue for each Payment Date from and including the eighteenth day of the prior
month (or, in the case of the first Payment Date, the Closing Date) to

                                      A-1
<PAGE>

but excluding the eighteenth day of the month of such Payment Date] and will be
computed on the basis of [the actual number of days in the Interest Accrual
Period with respect to the Class A-1 Notes divided by 360] [a 360-day year
consisting of twelve 30-day months in the case of the Class A-2, Class A-3 and
Class A-4 Notes]. Such principal of and interest on this Note shall be paid in
the manner specified on the reverse hereof.

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

                                      A-2
<PAGE>

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

Date:                                 HONDA AUTO RECEIVABLES 2002-3 OWNER
                                      TRUST,

                                      By:  CHASE MANHATTAN BANK USA, NATIONAL
                                           ASSOCIATION, not in its individual
                                           capacity but solely as Owner Trustee
                                           under the Trust Agreement,

                                      By:
                                         --------------------------------------
                                                 Authorized Signatory

                                      A-3
<PAGE>

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

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

Date:                                    U.S. BANK NATIONAL ASSOCIATION, not in
                                         its individual capacity but solely as
                                         Indenture Trustee,

                                         By:
                                            -----------------------------------
                                                    Authorized Signatory

                                      A-4
<PAGE>

     This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its ___% Asset Backed Notes, Class [A- 1 ] [A-2] [A-3] [A-4] (the
"Class [A-1] [A-2] [A-3] [A-4] Notes"), all issued 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 Holders of the Notes. The Notes are subject to all
terms of the Indenture. Capitalized terms used herein that are not otherwise
defined shall have the meanings ascribed thereto in the Indenture.

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

     Principal payable on the Notes will be paid on each Payment Date in the
amount specified in the Indenture and in the Sale and Servicing Agreement. As
described above, the entire unpaid principal amount of this Note will be payable
on the earlier of the Class [A-1] [A-2] [A-3] [A-4] Final Payment Date and the
Redemption Date, if any, selected pursuant to the Indenture. Notwithstanding the
foregoing, under certain circumstances, the entire unpaid principal amount of
the Class [A-1] [A-2] [A-3] [A-4] Notes shall be due and payable following the
occurrence and continuance of an Event of Default, as described in the
Indenture. All principal payments on the Class [A-1] [A-2] [A-3] [A-4] Notes
shall be made pro rata to the Class [A-1] [A-2] [A-3] [A-4] Noteholders entitled
thereto.

     Payments of principal and interest on this Note due and payable on each
Payment Date or Redemption Date shall be made by check mailed to the Person
whose name appears as the registered Holder of this Note (or one or more
Predecessor Notes) on the Note Register as of the close of business on the
related Record Date, except that with respect to Notes registered on the Record
Date in the name of the nominee of the Depository (initially, such nominee to be
Cede & Co.), payments will be made by wire transfer in immediately available
funds to the account designated by such nominee. Such checks shall be mailed to
the Person entitled thereto at the address of such Person as it appears on the
Note Register as of the applicable Record Date without requiring that this Note
be submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) affected by any payments made
on any Payment Date or Redemption Date shall be binding 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 noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the remaining unpaid principal amount of this Note on a Payment Date or
Redemption Date, then the Indenture Trustee, in the name of and on behalf of the
Issuer, will notify the Person who was the registered Holder hereof as of the
Record Date preceding such Payment Date or Redemption Date by notice mailed
within five days of such Payment Date or Redemption Date and the amount then due
and payable shall be payable only upon presentation and surrender of this Note
at the Corporate Trust Office of the Indenture Trustee or at the office of the
Indenture Trustee's agent appointed for such purposes located in The City of New
York.

     As provided in the Indenture and subject to the limitations set forth
therein and on the face hereof, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to

                                      A-5
<PAGE>

the Indenture, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Indenture Trustee duly executed by, the
Holder hereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes of authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any such registration
of transfer or exchange.

     Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a
Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee 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 its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, 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 its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.

     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 by accepting
the benefits of the Indenture that such Noteholder or Note Owner will not at any
time institute against the Seller or the Issuer, or join in any institution
against the Seller or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings under any United States
federal or state bankruptcy or similar law in connection with any obligations
relating to the Notes, the Indenture or the other Basic Documents.

     Any Person that acquires a beneficial interest in this Note with the assets
of a Benefit Plan shall be deemed to represent that its acquisition and holding
of such beneficial interest is covered by a U.S. Department of Labor prohibited
transaction class exemption.

     The Issuer has entered into the Indenture and this Note is issued with the
intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness secured by the
Owner Trust Estate. Each Noteholder, by acceptance of a Note (and each Note
Owner by acceptance of a beneficial interest in a Note), agrees to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.

                                      A-6
<PAGE>

     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 be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.

     The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Holders of Notes representing a
majority of the Outstanding Amount of all Notes at the time Outstanding. The
Indenture also contains provisions permitting the Holders of Notes representing
specified percentages of the Outstanding Amount of the Notes, 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 or 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 Holders of the
Notes issued thereunder.

     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 California, 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 duties of the
Indenture Trustee are governed by New York law.

     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.

                                      A-7
<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

--------------------------------------------------------------------------------
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.

Dated:                                                                         *
      ----------------------------            ---------------------------------
                                              Signature Guaranteed:            *

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

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

                                      A-8
<PAGE>

                                                                       EXHIBIT B

                        FORM OF NOTE DEPOSITORY AGREEMENT

                       [On File with Dewey Ballantine LLP]

                                      B-1

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