SALE AND SERVICING AGREEMENT

Sales Agreement

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HONDA AUTO RECEIVABLES 2005-2 OWNER TRUST, | AMERICAN HONDA RECEIVABLES CORP., | AMERICAN HONDA FINANCE CORPORATION,

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Title: SALE AND SERVICING AGREEMENT
Governing Law: New York Date: 5/5/2005

Execution Copy

HONDA AUTO RECEIVABLES 2005-2 OWNER TRUST,

as Issuer,

AMERICAN HONDA RECEIVABLES CORP.,

as Seller,

And

AMERICAN HONDA FINANCE CORPORATION,

as Servicer

SALE AND SERVICING AGREEMENT

Dated as of April 1, 2005

TABLE OF CONTENTS

Page

ARTICLE ONE
DEFINITIONS

Section 1.01.

General Definitions

Section 1.02.

Other Definitional Provisions

Section 1.03.

Interpretive Provisions

ARTICLE TWO
CONVEYANCE OF RECEIVABLES; CUSTODY OF RECEIVABLES FILES

Section 2.01.

Conveyance of Receivables

Section 2.02.

Custody of Receivable Files

Section 2.03.

Representations and Warranties of Seller as to the Receivables

Section 2.04.

Repurchase of Receivables Upon Breach

Section 2.05.

Duties of Servicer as Custodian

Section 2.06.

Instructions; Authority to Act

Section 2.07.

Indemnification by Custodian

Section 2.08.

Effective Period and Termination

ARTICLE THREE
ADMINISTRATION AND SERVICING OF RECEIVABLES

Section 3.01.

Duties of Servicer

Section 3.02.

Collection of Receivable Payments

Section 3.03.

Rebates on Full Prepayments

Section 3.04.

Realization Upon Receivables

Section 3.05.

Maintenance of Physical Damage Insurance Policies

Section 3.06.

Maintenance of Security Interests in Financed Vehicles

Section 3.07.

Covenants of Servicer

Section 3.08.

Purchase of Receivables Upon Breach

Section 3.09.

Total Servicing Fee; Payment of Certain Expenses by Servicer

Section 3.10.

Servicer’s Certificate

Section 3.11.

Annual Statement as to Compliance; Notice of Default

Section 3.12.

Annual Accountants’ Report

Section 3.13.

Access to Certain Documentation and Information Regarding Receivables

Section 3.14.

Amendments to Schedule of Receivables

Section 3.15.

Reports to Securityholders and Rating Agencies

Section 3.16.

Appointment of Subservicer

ARTICLE FOUR
DISTRIBUTIONS; RESERVE FUND; STATEMENTS TO SECURITYHOLDERS

Section 4.01.

Establishment of Accounts

Section 4.02.

Collections

Section 4.03.

Application of Collections

Section 4.04.

Advances

Section 4.05.

Additional Deposits

Section 4.06.

Distributions

Section 4.07.

Reserve Fund

Section 4.08.

Yield Supplement Account

Section 4.09.

Net Deposits

Section 4.10.

Statements to Securityholders

ARTICLE FIVE
THE SELLER

Section 5.01.

Representations of Seller

Section 5.02.

Liability of Seller; Indemnities

Section 5.03.

Merger, Consolidation or Assumption of the Obligations of Seller; Certain Limitations

Section 5.04.

Limitation on Liability of Seller and Others

Section 5.05.

Seller May Own Notes

ARTICLE SIX
THE SERVICER

Section 6.01.

Representations of Servicer

Section 6.02.

Indemnities of Servicer

Section 6.03.

Merger, Consolidation or Assumption of the Obligations of Servicer

Section 6.04.

Limitation on Liability of Servicer and Others

Section 6.05.

AHFC Not to Resign as Servicer

ARTICLE SEVEN
SERVICER DEFAULTS

Section 7.01.

Servicer Defaults

Section 7.02.

Appointment of Successor Servicer

Section 7.03.

Notification of Servicer Termination

Section 7.04.

Waiver of Past Defaults

Section 7.05.

Repayment of Advances

ARTICLE EIGHT
TERMINATION

Section 8.01.

Optional Purchase of All Receivables

ARTICLE NINE
MISCELLANEOUS

Section 9.01.

Amendment

Section 9.02.

Protection of Title to Trust

Section 9.03.

Notices

Section 9.04.

Assignment

Section 9.05.

Limitations on Rights of Others

Section 9.06.

Severability

Section 9.07.

Separate Counterparts

Section 9.08.

Headings

Section 9.09.

Governing Law

Section 9.10.

Nonpetition Covenants

Section 9.11.

Limitation of Liability of Owner Trustee and Indenture Trustee

Section 9.12.

Confidentiality

Section 9.13.

Federal Tax Treatment

SCHEDULES

Schedule A - Schedule of Receivables

A-1

Schedule B - Location of Receivable Files

B-1

EXHIBITS

Exhibit A - Form of Distribution Statement

of Securityholders

A-1

Exhibit B - Form of Servicer’s Certificate

B-1

This Sale and Servicing Agreement, dated as of April 1, 2005, is among American Honda Receivables Corp., a California corporation (“AHRC” or, in its capacity as Seller, the “Seller”), American Honda Finance Corporation, a California corporation (“AHFC” or, in its capacity as Servicer, the “Servicer”), and Honda Auto Receivables 2005-2 Owner Trust, a Delaware statutory trust, as issuer (the “Issuer”).

WHEREAS the Issuer desires to purchase from the Seller a portfolio of receivables arising in connection with retail installment sale or conditional sale contracts (the “Receivables”) generated by AHFC in the ordinary course of its business, which Receivables have been sold by AHFC to AHRC;

WHEREAS, AHRC is willing to sell the Receivables to the Issuer pursuant to the terms hereof; and

WHEREAS, AHFC is willing to service the Receivables pursuant to the terms hereof;

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

ARTICLE ONE

DEFINITIONS

Section 1.01.

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

“ Absolute Prepayment Model ” means a model calculating prepayment of receivables with respect to which the receivables prepay at a specified constant monthly prepayment rate.

“ Accounts ” means the Collection Account, the Note Distribution Account, the Payahead Account, the Yield Supplement Account and the Reserve Fund.

“ Account Property ” means, with respect to each Account, such Account, together with all cash, securities, financial assets and investments and other property from time to time deposited or credited to such Account and all proceeds thereof, including, with respect to the (i) Reserve Fund, the Reserve Fund Initial Deposit and (ii) Yield Supplement Account, the Yield Supplement Account Deposit.

“ Actual Payment ” means, with respect to a Receivable and a Collection Period, all payments received by the Servicer from or for the account of the related Obligor on such Receivable during such Collection Period, net of any Supplemental Servicing Fees attributable to such Receivable. Actual Payments do not include Applied Payments Ahead.

“ Actuarial Receivable ” means any Receivable which provides for the allocation of payments according to the “actuarial” method.

“ Administration Agreement ” means the Administration Agreement, dated as of April 1, 2005, among the Administrator, the Issuer, the Depositor and the Indenture Trustee.

“ Administrator ” means AHFC, or any successor Administrator under the Administration Agreement.

“ Administrative Purchase Payment ” means, with respect to a Payment Date and to an Administrative Receivable purchased by the Seller or the Servicer as of the end of the related Collection Period, which Receivable is (i) a Precomputed Receivable, (a) the sum of (1) all Scheduled Payments on such Receivable due after the last day of such Collection Period, (2) an amount equal to any reimbursement of Outstanding Advances made pursuant to the first sentence of Section 4.04(c) with respect to such Receivable, (3) all past due Scheduled Payments for which an Advance has not been made, minus (b) the sum of (1) all Payments Ahead in respect of such Administrative Receivable held by the Servicer or on deposit in the Payahead Account, (2) any Rebate and (3) any proceeds of the liquidation of such Receivable previously received (to the extent applied to reduce the Principal Balance of such Receivable) or (ii) a Simple Interest Receivable, the sum of (a) the unpaid principal balance owed by the related Obligor in respect of such Receivable and (b) interest on such unpaid principal balance at a rate equal to the APR of the related Receivable from the date of last payment by such Obligor to the last day of such Collection Period.

“ Administrative Receivable ” means a Receivable which the Servicer is required to purchase pursuant to Section 3.08 or which the Servicer has elected to purchase pursuant to Section 8.01.

“ Advance ” means a Precomputed Advance or a Simple Interest Advance.

“ Affiliate ” means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purpose of this definition, “control”, when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“ Aggregate Net Losses ” means, with respect to a Collection Period, an amount equal to the aggregate Principal Balance of all Receivables that became Defaulted Receivables during such Collection Period minus all Net Liquidation Proceeds collected during such Collection Period with respect to all Defaulted Receivables.

“ Agreement ” means this Sale and Servicing Agreement, and all amendments hereof and supplements hereto.

“ AHFC ” means American Honda Finance Corporation, and its successors.

“ AHRC ” means American Honda Receivables Corp., and its successors.

“ Amount Financed ” in respect of a Receivable means the aggregate amount advanced under such Receivable toward the purchase price of the related Financed Vehicle and any related costs, including but not limited to accessories, insurance premiums, service and warranty contracts and other items customarily financed as part of motor vehicle retail installment sale contracts.

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

“ Applied Payment Ahead ” means, with respect to a Precomputed Receivable and a Collection Period as to which (i) the Actual Payment is less than the Scheduled Payment and (ii) a Deferred Prepayment is on deposit in the Payahead Account or otherwise retained by the Servicer pursuant to Section 4.02(c), an amount equal to the lesser of (a) such Deferred Prepayment and (b) the amount by which the Scheduled Payment exceeds the Actual Payment.

“ Available Amount ” means, with respect to any Payment Date, the sum of Available Interest and Available Principal.

“ Available Interest ” means, with respect to any Payment Date, the total of the following amounts allocable to interest received by the Servicer on or in respect of the Receivables during the related Collection Period (computed, in the case of Precomputed Receivables, by the actuarial method and, in the case of Simple Interest Receivables, by the simple interest method): (i) the sum of the interest component of all (a) collections on or in respect of all Receivables other than Defaulted Receivables (including the interest portion of Applied Payments Ahead, but excluding Payments Ahead to be applied in one or more future Collections Periods), (b) Net Liquidation Proceeds, (c) Advances made by the Servicer, (d) Warranty Purchase Payments, (e) Administrative Purchase Payments and (f) the Yield Supplement Withdrawal Amount, if any, for the related Payment Date, less (ii) the sum of all (a) amounts received on or in respect of a particular Receivable (other than a Defaulted Receivable) to the extent of the aggregate Outstanding Interest Advances in respect of such Receivable and (b) Net Liquidation Proceeds with respect to a particular Receivable to the extent of the aggregate Outstanding Interest Advances in respect of such Receivable.

“ Available Principal ” means, with respect to any Payment Date, the total of the following amounts allocable to principal received by the Servicer on or in respect of the Receivables during the related Collection Period (computed, in the case of Precomputed Receivables, by the actuarial method and, in the case of Simple Interest Receivables, by the simple interest method): (i) the sum of the principal component of all (a) collections on or in respect of all Receivables other than Defaulted Receivables (including the principal portion of Applied Payments Ahead but excluding Payments Ahead), (b) Net Liquidation Proceeds, (c) Advances made by the Servicer, (d) Warranty Purchase Payments and (e) Administrative Purchase Payments, less (ii) an amount equal to all (a) amounts received on or in respect of a particular Receivable (other than a Defaulted Receivable) to the extent of the aggregate Outstanding Principal Advances in respect of such Receivable and (b) Net Liquidation Proceeds with respect to a particular Receivable to the extent of the aggregate Outstanding Principal Advances in respect of such Receivable.

“ Basic Documents ” means this Agreement, the Administration Agreement, the Indenture, the Note Depository Agreement, the Receivables Purchase Agreement, the Trust Agreement and the Control Agreement and any other documents or certificates delivered in connection therewith as the same may be amended, supplemented or otherwise modified and in effect.

“ Basic Servicing Fee ” means the fee payable pursuant to Section 3.09 to the Servicer on each Payment Date for services rendered during the related Collection Period, which shall be equal to one-twelfth of the Servicing Fee Rate multiplied by the Pool Balance as of the first day of the related Collection Period or, with respect to the first Payment Date, the Original Pool Balance.

“ Business Day ” means any day other than a Saturday, a Sunday or a day on which banking institutions in New York, New York, Los Angeles, California or Wilmington, Delaware are authorized or obligated by law, executive order or governmental decree to be closed.

“ Certificate Balance ” means, on any Payment Date, the Original Certificate Balance reduced by all distributions of principal previously made in respect of the Certificates.

“ Certificate Distributable Amount ” means, with respect to any Payment Date, the sum of the Certificate Interest Distributable Amount and the Certificate Principal Distributable Amount for such Payment Date.

“ Certificate Distribution Account ” has the meaning specified in the Trust Agreement.

“ Certificate Interest Carryover Shortfall ” means, with respect to any Payment Date, the excess, if any, of (x) the sum of (i) the Certificate Monthly Interest Distributable Amount and (ii) any outstanding Certificate Interest Carryover Shortfall for the preceding Payment Date, over (y) the amount in respect of interest on the Certificates that is actually paid as interest on the Certificates on such Payment Date, plus, to the extent permitted by applicable law, interest on the Certificate Interest Carryover Shortfall at the Certificate Rate for the Interest Accrual Period.

“ Certificate Interest Distributable Amount ” means, with respect to any Payment Date, the sum of the Certificate Monthly Interest Distributable Amount for such Payment Date and the Certificate Interest Carryover Shortfall for such Payment Date.

“ Certificate Monthly Interest Distributable Amount ” means, with respect to any Payment Date, interest accrued for the related Interest Accrual Period at the Certificate Rate on the Certificate Balance on the immediately preceding Payment Date after giving effect to all payments of principal to Certificateholders on or prior to such Payment Date (or, in the case of the first Payment Date, on the Original Certificate Balance).

“ Certificate Monthly Principal Distributable Amount ” means, with respect to any Payment Date, the Certificate Percentage of the Principal Distributable Amount for such Payment Date.

“ Certificate Percentage ” means (i) for each Payment Date until the principal amount of the Class A-1 Notes has been paid in full, 0%; (ii) after the principal amount of the Class A-1 Notes has been paid in full, for each Payment Date to and including the Payment Date on which the principal amount of the Class A-4 Notes has been paid in full, the percent equivalent of a fraction, the numerator of which is the initial principal amount of the Certificates and the denominator of which is the sum of the initial aggregate principal amount of the Class A-2, Class A-3 and Class A-4 Notes and the initial principal amount of the Certificates; and (iii) for each Payment Date after the Payment Date on which the principal amount of the Class A-4 Notes has been paid in full, 100%; notwithstanding the foregoing, for each Payment Date after the acceleration of the Notes following an Event of Default, the Certificate Percentage shall be 0% until the Notes have been paid in full.

“ Certificate Pool Factor ” means, with respect to the Certificates on any Payment Date, a seven-digit decimal figure equal to the outstanding principal balance of the Certificates on such Payment Date (after giving effect to any reductions thereof to be made on such Payment Date) divided by the Original Certificate Balance.

“ Certificate Principal Carryover Shortfall ” means, with respect to any Payment Date, the excess, if any, of (x) the sum of (i) the Certificate Monthly Principal Distributable Amount and (ii) any outstanding Certificate Principal Carryover Shortfall for the preceding Payment Date, over (y) the amount in respect of principal that is actually paid as principal on the Certificates on such Payment Date.

“ Certificate Principal Distributable Amount ” means, with respect to any Payment Date, the sum of the Certificate Monthly Principal Distributable Amount for each Payment Date and any outstanding Certificate Principal Carryover Shortfall as of the close of the immediately preceding Payment Date; provided, however, that the Certificate Principal Distributable Amount shall not exceed the Certificate Balance. In addition, on the Payment Date as of which all of the Receivables are to be purchased pursuant to Section 8.01, the principal required to be deposited into the Certificate Distribution Account will include the amount necessary to reduce the Certificate Balance to zero.

“ Certificate Rate ” means 4.15% per annum (computed on the basis of a 360 day year consisting of twelve 30-day months).

“ Certificateholders ” has the meaning specified in the Trust Agreement.

“ Charge-off Rate ” with respect to a Collection Period will equal the Aggregate Net Losses with respect to the Receivables expressed, on an annualized basis, as a percentage of the average of the (i) Pool Balance on the last day of the immediately preceding Collection Period and (ii) Pool Balance on the last day of such current Collection Period.

“ Class ” means all Securities whose form is identical except for variation in denomination, principal amount or owner (i.e., each of Class A-1, Class A-2, Class A-3 and Class A-4).

“ Class A-1 Final Payment Date ” means the May 15, 2006 Payment Date.

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

“ Class A-2 Final Payment Date ” means the August 15, 2007 Payment Date.

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

“ Class A-3 Final Payment Date ” means the January 15, 2009 Payment Date.

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

“ Class A-4 Final Payment Date ” means the October 15, 2010 Payment Date.

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

“ Closing Date ” means April 26, 2005.

“ Collection Account ” means the account designated as such, and established and maintained pursuant to Section 4.01.

“ Collection Period ” means each calendar month during the term of this Agreement (or, in the case of the first Collection Period, the period of time since the Cutoff Date through the last day of the calendar month immediately preceding the month in which the first Payment Date occurs).

“ Commission ” means the Securities and Exchange Commission, and its successors.

“ Control ” shall have the meaning specified in Section 8-106 of the UCC.

“ Control Agreement ” means the control agreement, dated as of April 1, 2005, among AHRC, the Issuer, the Servicer, the Indenture Trustee and JPMorgan Chase Bank, N.A., as securities intermediary, as amended or supplemented from time to time.

“ Corporate Trust Office ” means the principal office of the Indenture Trustee at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of this Agreement is located at JPMorgan Chase Bank, N.A., (i) solely for purposes of Note transfers, exchanges or surrenders, 2001 Bryan Street, 10 ^th Floor, Dallas, Texas 75201, Attention: Institutional Trust Services – Honda Auto Receivables 2005-2 and (ii) for all other purposes, 4 New York Plaza, 6 ^th Floor, New York, New York 10004, Attention: Institutional Trust Services/Global Debt – Honda Auto Receivables 2005-2; or at such other address as the Indenture Trustee may designate from time to time by notice to the Noteholders and the Seller, or the principal corporate trust office of any successor Indenture Trustee (of which address such successor Indenture Trustee will notify the Noteholders and the Seller).

“ Current Receivable ” means each Receivable that is not a Defaulted Receivable or a Liquidated Receivable.

“ Cutoff Date ” means April 1, 2005.

“ Dealer ” means the dealer of motor vehicles who sold a Financed Vehicle and who originated and assigned the Receivable relating to such Financed Vehicle to AHFC under an existing agreement between such dealer and AHFC.

“ Dealer Recourse ” means, with respect to a Receivable, all recourse rights against the Dealer which originated the Receivable, and any successor to such Dealer.

“ Defaulted Receivable ” means a Receivable (other than an Administrative Receivable or a Warranty Receivable as to which a Warranty Purchase Payment or an Administrative Purchase Payment has been made) as to which (i) all or any part of a Scheduled Payment is 120 or more days past due and the Servicer has not repossessed the related Financed Vehicle or (ii) the Servicer has, in accordance with its customary servicing procedures, determined that eventual payment in full is unlikely and either repossessed and liquidated the related Financed Vehicle or repossessed and held the related Financed Vehicle in its repossession inventory for 90 days, whichever occurs first.

“ Deferred Prepayment ” means, with respect to a Receivable and a Collection Period, the aggregate amount, if any, of Payments Ahead remitted to the Servicer in respect of such Receivable during one or more prior Collection Periods and currently held by the Servicer or in the Payahead Account.

“ Delaware Trustee ” means the Person acting as Delaware Trustee under the Trust Agreement, its successors in interest and permitted assigns, initially The Bank of New York (Delaware).

“ Delinquency Percentage ” means, with respect to a Collection Period, the percentage equivalent of a fraction, the numerator of which is the number of (i) Receivables 61 days or more delinquent (after taking into account permitted extensions) as of the last day of such Collection Period, determined in accordance with the Servicer’s normal practices, plus (ii) Receivables the related Financed Vehicles of which have been repossessed but have not been liquidated (to the extent the related Receivable is not otherwise reflected in clause (i) above or is not a Defaulted Receivable), and the denominator of which is the aggregate number of Current Receivables on the last day of such Collection Period.

“ Deposit Date ” means, with respect to any Collection Period and Payment Date, the Business Day immediately preceding such Payment Date.

“ Depositor ” means the Seller in its capacity as Depositor under the Trust Agreement.

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

“ Discount Receivable ” means any Receivable that has an APR which is less than the Required Rate.

“ Eligible Account ” means either (A) a segregated deposit account over which the applicable Trustee has sole signature authority, maintained with an Eligible Institution meeting the requirements of clause (i) thereof or (B) a segregated trust account maintained with an Eligible Institution meeting the requirements of clause (ii) thereof, in each case bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Securityholders, the Noteholders or the Certificateholders, as the case may be.

“ Eligible Institution ” means a depository institution or trust company, (i) the commercial paper or other short-term unsecured debt obligations of which have the Required Deposit Rating or (ii) having corporate trust powers and organized under the laws of the United States, any state thereof, the District of Columbia or the Commonwealth of Puerto Rico which has a long-term deposit rating from (A) Moody’s of at least Baa3 or (B) Standard and Poor’s of at least BBB- (or such lower rating as either Rating Agency shall approve in writing).

“ Eligible Investments ” means, at any time, any one or more of the following obligations and securities:

(i)

obligations of, and obligations fully guaranteed as to timely payment of principal and interest by, the United States or any agency thereof, provided such obligations are backed by the full faith and credit of the United States;

(ii)

general obligations of or obligations guaranteed by FNMA, any state of the United States, the District of Columbia or the Commonwealth of Puerto Rico then rated the highest available credit rating of each Rating Agency for such obligations;

(iii)

securities bearing interest or sold at a discount issued by any corporation incorporated under the laws of the United States or any state thereof, the District of Columbia or the Commonwealth of Puerto Rico, so long as at the time of such investment or contractual commitment providing for such investment either the long-term unsecured debt of such corporation has the highest available credit rating from each Rating Agency for such obligations or the commercial paper or other short-term debt which is then rated has the highest available credit rating of each Rating Agency for such obligations;

(iv)

certificates of deposit issued by any depository institution or trust company (including the Trustee) incorporated under the laws of the United States or any state thereof, the District of Columbia or the Commonwealth of Puerto Rico and subject to supervision and examination by banking authorities of one or more of such jurisdictions, provided that the short-term unsecured debt obligations of such depository institution or trust company has the highest available credit rating of each Rating Agency for such obligations;

(v)

certificates of deposit issued by any bank, trust company, savings bank or other savings institution and fully insured by the FDIC;

(vi)

repurchase obligations held by the Trustee that are acceptable to the Trustee with respect to any security described in clauses (i) or (ii) hereof or any other security issued or guaranteed by any other agency or instrumentality of the United States, in either case entered into with a federal agency or a depository institution or trust company (acting as principal) described in clause (iv) above;

(vii)

any mutual fund, money market fund, common trust fund or other pooled investment vehicle having a rating, at the time of such investment, of no less than Aaa or its equivalent by Moody’s, AAA or its equivalent by Standard & Poor’s and AAA or its equivalent by Fitch, if rated by Fitch (including, but not limited to funds of which JPMorgan Chase Bank, N.A. or an affiliate thereof is the manager or financial advisor);

(viii)

such other investments acceptable to each Rating Agency in writing as will not result in the qualification, downgrading or withdrawal of the rating then assigned to any Rated Securities by such Rating Agency;

provided that each of the foregoing investments shall mature no later than the Deposit Date immediately following the date of purchase (other than in the case of the investment of monies in instruments of which the entity at which the related Account or the Certificate Distribution Account, as the case may be, is located is the obligor, which may mature on the related Payment Date), and shall be required to be held to such maturity.

Notwithstanding anything to the contrary contained in this definition, (a) no Eligible Investment may be purchased at a premium, and (b) no obligation or security is an “Eligible Investment” unless (i) the Trustee has Control over such obligation or security and (ii) at the time such obligation or security was delivered to the Trustee or the Trustee became the related Entitlement Holder, the Trustee did not have notice of any adverse claim with respect thereto within the meaning of Section 8-105 of the UCC.

For purposes of this definition, any reference to the highest available credit rating of an obligation shall mean the highest available credit rating for such obligation, or such lower credit rating (as approved in writing by each Rating Agency) as will not result in the qualification, downgrading or withdrawal of the rating then assigned to any Rated Securities by such Rating Agency.

“ Entitlement Holder ” shall have the meaning specified in Section 8-102 of the UCC.

“ Entitlement Order ” shall have the meaning specified in Section 8-102 of the UCC.

“ Excess Payment ” means, with respect to a Receivable and a Collection Period, the amount, if any, by which the Actual Payment exceeds the sum of (i) the Scheduled Payment and (ii) any Overdue Payment.

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

“ FDIC ” means the Federal Deposit Insurance Corporation.

“ FHLMC ” means the Federal Home Loan Mortgage Corporation, and its successors.

“ FNMA ” means the Federal National Mortgage Association, and its successors.

“ Final Payment Dates ” means, collectively, the Class A-1 Final Payment Date, the Class A-2 Final Payment Date, the Class A-3 Final Payment Date and the Class A-4 Final Payment Date.

“ Final Scheduled Maturity Date ” means October 15, 2010.

“ Financed Vehicle ” means, with respect to any retail installment sale or conditional sale contract, the related new or used Honda or Acura motor vehicle, together with all accessions thereto, securing the related Obligor’s indebtedness under such retail installment sale or conditional sale contract.

“ Financial Asset ” shall have the meaning specified in Section 8-102(a)(9) of the UCC.

“ Fitch ” means Fitch Ratings, or its successors.

“ Indenture ” means the indenture, dated as of April 1, 2005 between the Issuer and the Indenture Trustee.

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

“ Independent Director ” means a director of the Seller who is not (i) a director, officer or employee of any Affiliate of the Seller, (ii) a natural person related to any director or officer of any Affiliate of the Seller, (iii) a holder (directly or indirectly) of more than 10% of any voting securities of any Affiliate of the Seller or (iv) a natural person related to a holder (directly or indirectly) of more than 10% of any voting securities of any Affiliate of the Seller.

“ Insolvency Event ” means, with respect to a specified Person, (i) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any substantial part of its property in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person’s affairs, and such decree or order shall remain unstayed and in effect for a period of 90 consecutive days; or (ii) the commencement by such Person of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing.

“ Insurance Policy ” means, with respect to a Receivable, an insurance policy covering physical damage, credit life, credit disability, theft, mechanical breakdown or any similar event relating to the related Financed Vehicle or Obligor.

“ Letter of Credit Bank ” means any Person who has provided a Servicer Letter of Credit pursuant to Section 4.02(b).

“ Lien ” means any security interest, lien, charge, pledge, equity or encumbrance of any kind other than tax liens, mechanics’ liens and any liens that attach to a Receivable or any property, as the context may require, by operation of law.

“ Liquidated Receivable ” means a Receivable that (i) has been the subject of a Prepayment in full, (ii) has otherwise been paid in full or (iii) the Servicer has determined that the final amounts in respect of such payment have been paid with respect to a Defaulted Receivable, regardless of whether all or any part of such payment has been made by the Obligor under such Receivable, the Seller pursuant to this Agreement, AHFC pursuant to the Receivables Purchase Agreement, the Servicer pursuant hereto, an insurer pursuant to an Insurance Policy or otherwise.

“ Liquidation Expenses ” means, with respect to a Defaulted Receivable, the amount charged by the Servicer, in accordance with its customary servicing procedures, to or for its account for repossessing, refurbishing and disposing of the related Financed Vehicle and other out-of-pocket costs related to such liquidation.

“ Liquidation Proceeds ” means, with respect to a Defaulted Receivable, all amounts realized with respect to such Receivable from whatever sources (including, without limitation, proceeds of any Insurance Policy), net of amounts that are required by law or such Receivable to be refunded to the related Obligor.

“ Maximum Yield Supplement Amount ” means with respect to any Collection Period and the related Deposit Date, after giving effect to the Yield Supplement Amount, the maximum amount required to be on deposit in the Yield Supplement Account on the immediately succeeding Payment Date, which is equal to the present value (using an interest rate of: 0.75%) of the sum of all Yield Supplement Amounts for all future Payment Dates, assuming that future Scheduled Payments on the Discount Receivables are made on the date on which they are scheduled as being due.

“ Monthly Payment ” means, with respect to any Receivable, the amount of each fixed monthly payment payable to the obligee under such Receivable in accordance with the terms thereof, net of any portion of such monthly payment that represents late payment charges, extension fees or collections allocable to payments to be made by Obligors for payment of insurance premiums, extended service contracts or similar items.

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

“ Motor Vehicle Receivables ” shall have the meaning specified in Section 5.03(b)(ii)(A).

“ Net Liquidation Proceeds ” means, with respect to a Defaulted Receivable, Liquidation Proceeds less Liquidation Expenses.

“ Nonrecoverable Advance ” shall have the meaning specified in Section 4.04(c).

“ Note Amount ” means, with respect to any Payment Date, the aggregate outstanding principal amount of the Notes after giving effect to payments of principal made on the Notes on such Payment Date.

“ Note Distributable Amount ” means, with respect to any Payment Date, the sum of the Note Interest Distributable Amount and the Note Principal Distributable Amount for such Payment Date.

“ Note Distribution Account ” means the account designated as such, and established and maintained pursuant to Section 4.01.

“ Note Interest Carryover Shortfall ” means, with respect to any Payment Date and a Class of Notes, the excess, if any, of (x) the sum of (i) the Note Monthly Interest Distributable Amount for such Class for the preceding Payment Date and (ii) any outstanding Note Interest Carryover Shortfall for such Class on such preceding Payment Date, over (y) the amount of interest that is actually paid on the Notes on such preceding Payment Date, plus, to the extent permitted by law, interest on the Note Interest Carryover Shortfall at the related Interest Rate for the related Interest Accrual Period.

“ Note Interest Distributable Amount ” means, with respect to any Payment Date and a Class of Notes, the sum of the Note Monthly Interest Distributable Amount for such Payment Date and the Note Interest Carryover Shortfall for such Class of Notes. For all purposes of this Agreement and the other Basic Documents, interest with respect to the Class A-2, Class A-3 and Class A-4 Notes shall be computed on the basis of a 360-day year consisting of twelve 30-day months; and interest with respect to the Class A-1 Notes shall be computed on the basis of the actual number of days in each applicable Interest Accrual Period, divided by 360.

“ Note Monthly Interest Distributable Amount ” means, with respect to any Payment Date, interest accrued for the related Interest Accrual Period at the related Interest Rate for each Class of Notes on the Outstanding Amount of the Notes of each such Class on the immediately preceding Payment Date (or, in the case of the first Payment Date, the original principal amount of each such Class of Notes), after giving effect to all distributions of principal to the Noteholders of each such Class on or prior to such Payment Date.

“ Note Monthly Principal Distributable Amount ” means, with respect to any Payment Date, the Note Percentage of the Principal Distributable Amount for such Payment Date.

“ Note Percentage ” means (i) for each Payment Date until the principal amount of the Class A-1 Notes has been paid in full, 100%; (ii) for each Payment Date on or after the principal amount of the Class A-1 Notes has been paid in full to and including the Payment Date on which the principal amount of the Class A-4 Notes has been paid in full, the percent equivalent of a fraction, the numerator of which is the initial aggregate principal amount of the Class A-2, Class A-3 and Class A-4 Notes and the denominator of which is the sum of the initial aggregate principal amount of the Class A-2, Class A-3 and Class A-4 Notes and the initial principal amount of the Certificates; and (iii) for each Payment Date after the Payment Date on which the principal amount of the Class A-4 Notes has been paid in full, 0%; notwithstanding the foregoing, for each Payment Date after the acceleration of the Notes following an Event of Default, the Note Percentage shall be 100% until the Notes have been paid in full.

“ Note Pool Factor ” means, with respect to each Class of Notes as of any Payment Date, a seven-digit decimal figure equal to the Outstanding Amount of such Class of Notes as of such Payment Date (after giving effect to any reductions thereof to be made on such Payment Date) divided by the original outstanding principal balance of such Class of Notes.

“ Note Principal Carryover Shortfall ” means, with respect to any Payment Date, the excess, if any, of the sum of the Note Monthly Principal Distributable Amount plus any outstanding Note Principal Carryover Shortfall for the preceding Payment Date, over the amount in respect of principal that is actually paid as principal on the Notes on such Payment Date.

“ Note Principal Distributable Amount ” means, with respect to any Payment Date, the sum of (i) the Note Monthly Principal Distributable Amount, (ii) any outstanding Note Principal Carryover Shortfall as of the close of the immediately preceding Payment Date and, (iii) on the Final Payment Date for a Class of Notes or the Payment Date as of which all of the Receivables are to be purchased pursuant to Section 8.01, the amount necessary (after giving effect to all amounts allocable to principal required to be deposited in the Note Distribution Account on such Payment Date) to reduce the Outstanding Amount of each related Class of Notes to zero; provided, however, that the Note Principal Distributable Amount with respect to a Class of Notes shall not exceed the Outstanding Amount of such Class of Notes.

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

“ Obligor ” on a Receivable means the purchaser or co-purchasers of the related Financed Vehicle purchased in part or in whole by the execution and delivery of a retail installment contract or any other Person who owes or may be liable for payments under such retail installment contract.

“ Offered Securities ” shall have the meaning specified in Section 5.03(b)(ii)(B).

“ Officer’s Certificate ” means a certificate signed by the president, any Vice President, the treasurer or the secretary of the Seller or the Servicer, as the case may be, and delivered to the Trustee.

“ Opinion of Counsel ” means a written opinion of counsel (who, in the case of counsel to the Seller or the Servicer, may be an employee of or outside counsel to the Seller or the Servicer), which counsel shall be acceptable to the Trustee.

“ Original Certificate Balance ” means $33,687,395.81.

“ Original Pool Balance ” means $1,033,687,395.81.

“ Outstanding Advances ” means, with respect to a Receivable and the last day of a Collection Period, the sum of all Advances made as of or prior to such date, minus (1) all payments or collections as of or prior to such date which are specified in Section 4.04(b) and (c) as applied to reimburse all unpaid Advances with respect to such Receivable and (2) all amounts for which the Servicer has deemed to have released all claims for reimbursement of Outstanding Advances pursuant to Section 3.08.

“ Outstanding Amount ” means the aggregate principal amount of all Notes, or if indicated by the context, all Notes of any class, outstanding at the date of the determination.

“ Outstanding Interest Advances ” means, as of the last day of a Collection Period with respect to a Receivable, the portion of Outstanding Advances allocable to interest.

“ Outstanding Principal Advances ” means, as of the last day of a Collection Period with respect to a Receivable, the portion of Outstanding Advances allocable to principal.

“ Overdue Payment ” shall have the meaning specified in Section 4.03(a).

“ Owner Trust Estate ” shall have the meaning specified in the Trust Agreement.

“ Owner Trustee ” means the Person acting as Owner Trustee under the Trust Agreement, its successors in interest and any successor owner trustee under the Trust Agreement.

“ Payahead Account ” means the account designated as such and established and maintained pursuant to Section 4.01.

“ Payment Ahead ” means, with respect to a Precomputed Receivable and a Collection Period, any Excess Payment (not representing, when added to any Deferred Prepayment with respect to such Precomputed Receivable, a prepayment in full of such Precomputed Receivable) which the Servicer, in accordance with its customary servicing practices, will apply towards the payment of Scheduled Payments due in one or more future Collection Periods.

“ Payment Date ” means, with respect to a Collection Period, the fifteenth calendar day of the next succeeding calendar month or, if such day is not a Business Day, the next succeeding Business Day, commencing May, 2005.

“ Percentage Interests ” shall have the meaning specified in the Trust Agreement.

“ Person ” means any legal person, including any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.

“ Pool Balance ” means, as of any date, the aggregate Principal Balance of the Receivables (exclusive of all Administrative Receivables for which the Servicer has paid the Administrative Purchase Payment, Warranty Receivables for which the Seller has paid the Warranty Purchase Payment and Defaulted Receivables) as of the close of business on such date.

“ Precomputed Advance ” shall have the meaning specified in Section 4.04(a).

“ Precomputed Receivable ” means any Actuarial Receivable or Rule of 78s Receivable.

“ Prepayment ” means any Excess Payment with respect to a Receivable other than a Payment Ahead.

“ Principal Balance ” means, with respect to any Receivable as of any date, the Amount Financed minus the sum of the following amounts: (i) in the case of a Precomputed Receivable, that portion of all Scheduled Payments due on or prior to such date allocable to principal, computed in accordance with the actuarial method, (ii) in the case of a Simple Interest Receivable, that portion of all Scheduled Payments actually received on or prior to such date allocable to principal, computed in accordance with the simple interest method, (iii) any Warranty Purchase Payment or Administrative Purchase Payment with respect to such Receivable allocable to principal and (iv) any Prepayments or other payments applied to reduce the unpaid principal balance of such Receivable.

“ Principal Distributable Amount ” means, with respect to any Payment Date, the sum of the following amounts (i) in the case of (a) Precomputed Receivables, the principal portion of all Scheduled Payments due during the related Collection Period, computed in accordance with the actuarial method and (b) Simple Interest Receivables, the principal portion of all Scheduled Payments actually received during the related Collection Period, computed in accordance with the simple interest method, (ii) the principal portion of all Prepayments, received during such Collection Period (to the extent such amounts are not included in clause (i) above), (iii) the Principal Balance of each Receivable that became an Administrative Receivable or a Warranty Receivable during such Collection Period (to the extent such amounts are not included in clauses (i) or (ii) above) and (iv) the Principal Balance of each Receivable that became a Defaulted Receivable during such Collection Period (to the extent such amounts are not included in clauses (i), (ii) or (iii) above).

“ Rated Securities ” means each Class of Securities that has been rated by a Rating at the request of the Seller.

“ Rating Agency ” means Fitch, Moody’s and Standard & Poor’s.

“ Rating Agency Condition ” means, with respect to any action, that each Rating Agency shall have been given ten days’ (or such shorter period as shall be acceptable to each Rating Agency) prior notice thereof and that each Rating Agency shall have notified the Seller, the Servicer and the Trustees in writing that such action will not result in a reduction or withdrawal of the then current rating of the Rated Securities.

“ Rebate ” means, with respect to a Precomputed Receivable and any date, the rebate, calculated in accordance with the actuarial method, under such Receivable that is or would be payable to the related Obligor for unearned finance charges or any other charges rebatable to the Obligor if such Obligor were to prepay such Receivable in full on such date.

“ Receivable ” means any retail installment sale contract executed by an Obligor in respect of a Financed Vehicle, and all proceeds thereof and payments thereunder, which Receivables shall be identified in a Schedule of Receivables.

“ Receivable Files ” means the documents specified in Section 2.02.

“ Receivables Purchase Agreement ” means the receivables purchase agreement, dated as of April 1, 2005, between AHFC and the Seller, as amended or supplemented from time to time.

“ Released Administrative Amount ” means, with respect to a Payment Date and to an Administrative Receivable, the Deferred Prepayment, if any, for such Administrative Receivable.

“ Released Warranty Amount ” means, with respect to a Payment Date and to a Warranty Receivable, the Deferred Prepayment, if any, for such Warranty Receivable.

“ Required Rate ” means 5.50%.

“ Required Deposit Rating ” means the short-term credit rating of the related entity is at least equal to P-1 by Moody’s, A-1+ by Standard & Poor’s and F1 by Fitch.

“ Required Servicer Rating ” means, with respect to the Servicer, that the then short-term unsecured debt obligations of the Servicer are rated at least equal to P-1 by Moody’s, and A-1 by Standard & Poor’s.

“ Reserve Fund ” means the account designated as such, and established and maintained pursuant to Section 4.01.

“ Reserve Fund Initial Deposit ” means the initial deposit of cash in the amount of $5,168,436.98 made by or on behalf of the Seller into the Reserve Fund on the Closing Date.

“ Reserve Fund Property ” means, the Reserve Fund Initial Deposit and all proceeds thereof and all other amounts deposited in or credited to the Reserve Fund from time to time under this Agreement, all Eligible Investments made with amounts on deposit therein, all earnings and distributions thereon and proceeds thereof.

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

“ retail installment contracts ” means retail installment sale and conditional sale contracts.

“ Rule of 78s Receivable ” means any Receivable which provides for the allocation of payments according to the “sum of periodic balances” or “sum of monthly payments” method.

“ Schedule of Receivables ” means the schedule of Receivables attached as Schedule A to this Agreement, as it may be amended from time to time.

“ Scheduled Payment ” means, with respect to any Payment Date and to a Receivable, the payment set forth in such Receivable as due from the Obligor in the related Collection Period; provided, however, that in the case of the first Collection Period, the Scheduled Payment shall include all such payments due from the Obligor on or after the Cutoff Date.

“ Securities ” means the Notes and the Trust Certificates.

“ Security Entitlement ” shall have the meaning specified in Section 8-102(a)(17) of the UCC.

“ Securityholders ” means the Noteholders and the Certificateholders.

“ Seller ” means AHRC, in its capacity as Seller of the Receivables under this Agreement, and each successor thereto (in the same capacity) pursuant to Section 5.03.

“ Servicer ” means AHFC, in its capacity as servicer of the Receivables pursuant to this Agreement, and each successor thereto (in the same capacity) pursuant to Section 6.03.

“ Servicer Default ” shall have the meaning specified in Section 7.01.

“ Servicer Letter of Credit ” means, if the Servicer desires to remit collections on or in respect of the Receivables to the Collection Account on a monthly basis upon satisfaction of the conditions described in Section 4.02(b)(ii), (i) an irrevocable letter of credit, issued by a Letter of Credit Bank and naming the Indenture Trustee a beneficiary or (ii) a surety bond, insurance policy or deposit of cash or securities, which is satisfactory to each Rating Agency.

“ Servicer’s Certificate ” means an Officers’ Certificate of the Servicer delivered pursuant to Section 3.10, substantially in the form of Exhibit B.

“ Servicing Fee Rate ” means 1.00% per annum.

“ Simple Interest Advance ” shall have the meaning specified in Section 4.04(a).

“ Simple Interest Receivable ” means any Receivable which provides for the allocation of payments according to the “simple interest” method.

“ Specified Reserve Fund Balance ” means, on the Closing Date $5,168,436.98, and with respect to any Payment Date 0.75% of the initial aggregate principal balance of the Receivables as of the Cutoff Date; except that, if on any Payment Date (i) the average of the Charge-off Rates for the three preceding Collection Periods exceeds 2.25% or (ii) the average of the Delinquency Percentages for the three preceding Collection Periods exceeds 2.25%, then the Specified Reserve Fund Balance will be an amount equal to a specified percentage of the Pool Balance as of the last day of the immediately preceding Collection Period. Such percentage shall be determined by deducting from 8.00% the following fraction, expressed as a percentage: (a) one minus (b) a fraction, the numerator of which is the outstanding principal amount of the Notes with respect to such Payment Date and the denominator of which is such Pool Balance. Notwithstanding the foregoing, in no event will the Specified Reserve Fund Balance be more than the outstanding principal amount of the Notes.

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

“ Successor Servicer ” means any entity appointed as a successor to the Servicer pursuant to Section 7.02.

“ Supplemental Servicing Fee ” means any interest earned on investment of the monies on deposit in the Accounts (other than the Yield Supplement Account and the Reserve Fund) during a Collection Period, net of any investment expenses and losses from such investments, plus all late fees, prepayment charges and other administrative fees and expenses or similar charges allowed by applicable law with respect to the Receivables, including, in the case of a Rule of 78s Receivable and that is prepaid in full, the difference between the Principal Balance of a Rule of 78s Receivable, minus the Principal Balance of such Receivable computed according to the actuarial method (plus accrued interest to the date of prepayment), received by the Servicer during such Collection Period.

“ Total Servicing Fee ” means the sum of the Basic Servicing Fee and the Supplemental Servicing Fee.

“ Trust ” means the Issuer.

“ Trust Agreement ” means the trust agreement, dated as of March 18, 2005 as amended and restated, on April 26, 2005, between the Depositor, the Delaware Trustee and the Owner Trustee.

“ Trust Fees and Expenses ” means all accrued and unpaid Trustees’ fees, any amounts due to the Trustees for reimbursement of expenses or in respect of indemnification and other administrative fees of the Trust.

“ Trustee ” means any of the Owner Trustee, the Indenture Trustee or the Delaware Trustee, as the context requires.

“ Trustees ” means the Owner Trustee, the Indenture Trustee and the Delaware Trustee.

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

“ United States ” means the United States of America.

“ Vice President ” of any Person means any vice president of such Person, whether or not designated by a number or words before or after the title “Vice President,” who is a duly elected officer of such Person.

“ Warranty Purchase Payment ” means, with respect to a Payment Date and to a Warranty Receivable repurchased by the Seller as of the end of the related Collection Period, which Receivable is (i) a Precomputed Receivable, (a) the sum of (1) all Scheduled Payments on such Receivable due after the last day of such Collection Period, (2) all past due Scheduled Payments for which an Advance has not been made, (3) all Outstanding Advances made in respect of such Receivable and (4) an amount equal to any reimbursement of Outstanding Advances made pursuant to the first sentence of Section 4.04(c) with respect to such Receivable minus (b) the sum of (1) all Payments Ahead in respect of such Warranty Receivable held by the Servicer or on deposit in the Payahead Account, (2) any Rebate and (3) any proceeds of the liquidation of such Receivable previously received (to the extent applied to reduce the Principal Balance of such Receivable) or (ii) a Simple Interest Receivable, the sum of (a) the unpaid principal balance owed by the related Obligor in respect of such Receivable and (b) interest on such unpaid principal balance at a rate equal to the APR of the related Receivable from the date of last payment by such Obligor to the last day of such Collection Period.

“ Warranty Receivable ” means a Receivable which the Seller is required to repurchase pursuant to Section 2.04.

“ Yield Supplement Account ” means the account designated as such, and established and maintained pursuant to Section 4.01.

“ Yield Supplement Account Deposit ” means the initial deposit of cash in the amount of $31,428,774.90 made by or on behalf of the Seller into the Yield Supplement Account on the Closing Date.

“ Yield Supplement Amount ” means, with respect to any Collection Period and the related Deposit Date, the aggregate amount by which one month’s interest on the Principal Balance as of the first day of such Collection Period of each Discount Receivable (other than a Discount Receivable that is a Defaulted Receivable) at a rate equal to the Required Rate, exceeds one month’s interest on such Principal Balance at the APR of each such Receivable.

“ Yield Supplement Withdrawal Amount ” means, with respect to any Collection Period and the related Deposit Date, the lesser of (a) the amount on deposit in the Yield Supplement Account and (b) the sum of (i) the Yield Supplement Amount and (ii) after giving effect to the withdrawal of the Yield Supplement Amount, the amount by which the amount on deposit in the Yield Supplement Account exceeds the Maximum Yield Supplement Amount.

Section 1.02.

Other Definitional Provisions .

(a)

Capitalized terms used herein that are not otherwise defined herein shall have the meanings ascribed thereto in the Indenture.

(b)

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

Section 1.03.

Interpretive Provisions .

(a)

For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires, (i) terms used herein include, as appropriate, all genders and the plural as well as the singular, (ii) references to words such as “herein,” “hereof” and the like shall refer to this Agreement as a whole and not to any particular part, article or section within this Agreement, (iii) references to a section such as “Section 1.01” and the like shall refer to the applicable section of this Agreement, (iv) the term “include” and all variations thereof shall mean “include without limitation,” (v) the term “or” shall include “and/or,” and (vi) the term “proceeds” shall have the meaning set forth in the applicable UCC.

(b)

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

ARTICLE TWO

CONVEYANCE OF RECEIVABLES; CUSTODY OF RECEIVABLES FILES

Section 2.01.

Conveyance of Receivables .

(a)

In consideration of the Issuer’s delivery to or upon the order of the Seller of the Certificates and the net proceeds of the sale of the Notes, less an amount equal to the Reserve Fund Initial Deposit to be deposited to the Reserve Fund and the Yield Supplement Account Deposit to be deposited to the Yield Supplement Account, each on the Closing Date, the Seller does hereby sell, transfer, assign, set over and otherwise convey to the Issuer, without recourse (subject to the obligations of the Seller set forth herein), all right, title and interest of the Seller in, to and under:

(i)

the Receivables and all monies due thereon or paid thereunder or in respect thereof (including proceeds of the repurchase of Receivables by the Seller pursuant to Section 2.04 or the purchase of Receivables by the Servicer pursuant to Section 3.08 or 8.01) on or after the Cutoff Date;

(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 Receivables Purchase Agreement, but not the obligations of the Seller thereunder;

(vi)

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;

(vii)

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;

(viii)

any Servicer Letter of Credit; and

(ix)

the proceeds of any and all of the foregoing.

The Seller hereby confirms to the Issuer that, as of the Closing Date, the Seller shall have caused the portions of all related electronic records relating to the Receivables to be clearly and unambiguously marked, and shall have made the appropriate entries in its general accounting records, to indicate that such Receivables have been transferred and sold to the Issuer.

(b)

The parties hereto intend that the conveyance hereunder be a sale. In the event that the conveyance hereunder is not for any reason considered a sale, the Seller hereby grants to the Issuer a first priority perfected security interest in all of its right, title and interest in, to and under the Receivables, and all other property conveyed hereunder and all proceeds of any of the foregoing. The parties hereto intend that this Agreement constitute a security agreement under applicable law. Such grant is made to secure the payment of all amounts payable hereunder.

Section 2.02.

Custody of Receivable Files . To assure uniform quality in servicing the Receivables and to reduce administrative costs, the Issuer hereby revocably appoints the Servicer, and the Servicer accepts such appointment, to act for the benefit of the Issuer and the Indenture Trustee as custodian of the following documents or instruments which are hereby constructively delivered to the Indenture Trustee, as pledgee of the Issuer, as of the Closing Date with respect to each Receivable:

(a)

the fully executed original of the Receivable;

(b)

documents evidencing or related to any Insurance Policy;

(c)

the original credit application of each Obligor, fully executed by such Obligor on AHFC’s customary form, or on a form approved by AHFC for such application;

(d)

the original certificate of title (or evidence that such certificate of title has been applied for) or such documents that the Servicer shall keep on file, in accordance with its customary procedures, evidencing the security interest in the related Financed Vehicle; and

(e)

any and all other documents that the Seller or the Servicer, as the case may be, shall keep on file, in accordance with its customary procedures, relating to such Receivable or the related Obligor or Financed Vehicle.

Section 2.03.

Representations and Warranties of Seller as to the Receivables . The Seller makes the following representations and warranties as to the Receivables on which the Issuer shall rely in acquiring the Receivables. Such representations and warranties speak as of the execution and delivery of this Agreement and as of the Closing Date, but shall survive the sale, transfer and assignment of the Receivables to the Issuer and the pledge thereof to the Indenture Trustee.

(a)

Characteristics of Receivables . Each Receivable (i) shall have been originated in the United States by a Dealer for the retail sale of the related Financed Vehicle in the ordinary course of such Dealer’s business, shall have been fully and properly executed by the parties thereto, shall have been purchased by AHFC from such Dealer under an existing agreement with AHFC, shall have been validly assigned by such Dealer to AHFC in accordance with the terms of such agreement, shall have been subsequently sold by AHFC to the Seller pursuant to the Receivables Purchase Agreement and, to the best knowledge of the Seller, shall have been sold by a Dealer without fraud or misrepresentation, (ii) shall have created or shall create a valid, continuing and enforceable first priority security interest in favor of AHFC in the related Financed Vehicle, which security interest has been assigned by AHFC to the Seller and shall be assignable, and shall be so assigned, by the Seller to the Owner Trustee, (iii) shall contain customary and enforceable provisions such that the rights and remedies of the holder thereof shall be adequate for realization against the collateral of the benefits of the security, (iv) shall, except as otherwise provided in this Agreement, provide for level Monthly Payments (provided that the payment in the first or last month in the life of the Receivable may be minimally different from the level payment) that fully amortize the Amount Financed over its original term and shall provide for a finance charge or shall yield interest at its APR, (v) shall provide for, in the event that such Receivable is prepaid, a prepayment that fully pays the Principal Balance and includes accrued but unpaid interest at least through the date of prepayment in an amount calculated by using an interest rate at least equal to its APR, (vi) shall have an Obligor that is not a federal, state or local governmental entity and (vii) is a retail installment contract.

(b)

Schedule of Receivables . The information set forth in the Schedule of Receivables shall be true and correct in all material respects as of the opening of business on the Cutoff Date, and no selection procedures believed to be adverse to the Securityholders were utilized in selecting the Receivables from those motor vehicle receivables of AHFC which met the selection criteria set forth in this Agreement.

(c)

Compliance with Law . Each Receivable and each sale of the related Financed Vehicle shall have complied at the time it was originated or made, and shall comply at the time of execution of this Agreement, in all material respects with all requirements of applicable federal, state and local laws, and regulations thereunder, including usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act, Federal Reserve Board Regulations B , M and Z, state adaptations of the National Consumer Act and of the Uniform Consumer Credit Code and other consumer credit, equal credit opportunity and disclosure laws.

(d)

Binding Obligation . Each Receivable shall constitute the genuine, legal, valid and binding payment obligation in writing of the related Obligor, enforceable by the holder thereof in accordance with its terms, except as enforceability may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium, liquidation or other similar laws affecting the enforcement of creditors’ rights in general and by general principles of equity, regardless of whether such enforceability shall be considered in a proceeding in equity or at law.

(e)

No Bankrupt Obligors . According to the records of the Seller, as of the Cutoff Date, no Obligor is the subject of a bankruptcy proceeding.

(f)

Security Interest in Financed Vehicles . According to the records of the Seller, as of the Cutoff Date, no Financed Vehicle has been repossessed and not reinstated and immediately prior to the sale, assignment and transfer thereof, all necessary steps shall be taken so that each Receivable shall be secured by a validly perfected first priority security interest in the related Financed Vehicle in favor of AHFC as secured party or all necessary and appropriate action with respect to such Receivable shall have been taken to perfect a first priority security interest in such Financed Vehicle in favor of AHFC as secured party.

(g)

Receivables in Force . No Receivable shall have been satisfied, subordinated or rescinded, nor shall any Financed Vehicle have been released in whole or in part from the lien granted by the related Receivable.

(h)

No Waivers . No provision of a Receivable shall have been waived in such a manner that such Receivable fails to meet all of the other representations and warranties made by the Seller herein with respect thereto.

(i)

No Amendments . No Receivable shall have been amended or modified in such a manner that the total number of Scheduled Payments has been increased or that the related Amount Financed has been increased or that such Receivable fails to meet all of the other representations and warranties made by the Seller herein with respect thereto.

(j)

No Defenses . No facts shall be known to the Seller which would give rise to any right of rescission, setoff, counterclaim or defense, nor shall the same have been asserted or threatened, with respect to any Receivable.

(k)

No Liens . To the knowledge of the Seller, no liens or claims shall have been filed, including liens for work, labor or materials relating to a Financed Vehicle, that shall be liens prior to, or equal or coordinate with, the security interest in such Financed Vehicle granted by the related Receivable. To the knowledge of the Seller, there are no tax liens against the Seller, or against an Obligor affecting the related Receivable.

(l)

No Defaults . Except for payment defaults that, as of the Cutoff Date, have been continuing for a period of not more than 30 days, no default, breach, violation or event permitting acceleration under the terms of any Receivable shall have occurred as of the Cutoff Date and no continuing condition that with notice or the lapse of time would constitute a default, breach, violation or event permitting acceleration under the terms of any Receivable shall have arisen; and the Seller shall not have waived any of the foregoing except as otherwise permitted hereunder.

(m)

Insurance . Pursuant to the Receivables, each Obligor has been required to obtain physical damage insurance covering the related Financed Vehicle and the Obligor is required under the terms of the related Receivable to maintain such insurance.

(n)

Title . It is the intention of the Seller that the transfer and assignment herein contemplated, taken as a whole, constitute a sale of the Receivables from the Seller to the Issuer and that the beneficial interest in and title to the Receivables not be part of the debtor’s estate in the event of the filing of a bankruptcy petition by or against the Seller under any bankruptcy law. Other than (1) the sale by the Seller to the Issuer pursuant to this Agreement and (2) the security interest granted by the Issuer to the Indenture Trustee in the Indenture, no Receivable has been sold, transferred, assigned or pledged by the Seller to any Person other than the Issuer, and no Receivable has been sold, transferred, assigned or pledged by the Issuer to any Person other than the Indenture Trustee, and no provision of a Receivable shall have been waived, except as provided in clause (h) above; immediately prior to the transfer and assignment herein contemplated, the Seller had good and marketable title to each Receivable free and clear of all Liens and rights of any other Person and immediately prior to the pledge of security interest contemplated in the Indenture, the Issuer had good and marketable title to each Receivable free and clear of all Liens and rights of any other Person; immediately upon the transfer and assignment contemplated herein, the Issuer shall have good and marketable title to each Receivable, free and clear of all Liens and rights of any other Person and immediately upon the pledge of the security interest contemplated in the Indenture, the Indenture Trustee will have a valid and continuing security interest in the Receivables; and both the transfer and assignment herein contemplated and the pledge of security interest contemplated by the Indenture have been perfected under the applicable UCC.

(o)

Lawful Assignment . No Receivable shall have been originated in, or shall be subject to the laws of, any jurisdiction under which the sale, transfer and assignment of such Receivable under this Agreement or pursuant to a transfer of the Securities shall be unlawful, void or voidable.

(p)

All Filings Made . Both the Seller and the Issuer, respectively, have caused or will have caused, or have taken or will take, within ten days of the Closing Date, all steps necessary, including the filing of all appropriate financing statements (including UCC filings) necessary in the appropriate jurisdictions under the applicable law, to give the Issuer a first priority perfected security interest in the Receivables, and to give the Indenture Trustee a first priority perfected security interest therein, shall have been made. Except as contemplated hereby or in the Indenture, as applicable, neither the Seller or the Issuer has authorized the filing of nor is aware of any financing statements with respect to the Receivables, other than such financing statements that have been terminated on or prior to the Closing Date.

(q)

One Original . There shall be only one original executed copy of each Receivable.

(r)

Chattel Paper . Each Receivable constitutes “tangible chattel paper” as defined within the meaning of the applicable UCC.

(s)

Maturity of Receivables . Each Receivable shall have an original maturity of not less than 12 months nor greater than 60 months and, as of the Cutoff Date, a remaining maturity of not less than 6 months nor greater than 60 months.

(t)

Finance Charge . Each Receivable provides for the payment of a finance charge calculated on the basis of an APR ranging from 1.90% to 15.24%.

(u)

Principal Balance . Each Receivable had an original principal balance of not less than $2,457.56 nor greater than $64,000.00 and an average unpaid principal balance, as of the Cutoff Date, of $15,754.55.

(v)

Origination . Each Receivable was originated on or after August 27, 2000 and on or before December 31, 2004.

(w)

No Overdue Payments . No Receivable shall have a Scheduled Payment that is more than 30 days past due as of the Cutoff Date.

(x)

Location of Receivable Files . Each Receivable File shall be kept at one of the locations listed in Schedule B hereto.

(y)

Financed Vehicles . Each Financed Vehicle shall be a new or used Honda or Acura motor vehicle.

(z)

Addresses of Obligors . The Obligor under each Receivable had a current billing address in the United States as of the Cutoff Date.

(aa)

Security Interest . The Indenture creates a valid and continuing security interest (as defined in the applicable UCC) in the Receivables in favor of the Indenture Trustee, which security interest is prior to all other Liens, and is enforceable as such as against creditors of and purchasers from the Issuer.

(bb)

Possession of Documents . The Servicer has in its possession all original copies of the agreements that constitute or evidence the Receivables. The agreements that constitute or evidence the Receivables do not have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any Person other than the Indenture Trustee. All financing statements filed or to be filed against the Issuer in favor of the Indenture Trustee in connection herewith describing the Receivables contain a statement to the following effect: "A purchase of or security interest in any collateral described in this financing statement will violate the rights of the Indenture Trustee."

Section 2.04.

Repurchase of Receivables Upon Breach . Upon discovery by the Seller or the Servicer or upon the actual knowledge of a Responsible Officer of either the Indenture Trustee or the Owner Trustee of a breach of any of the representations and warranties of the Seller set forth in Section 2.03 that materially and adversely affects the interests of the Issuer, any of the Trustees or the Securityholders in any Receivable, the party discovering such breach shall give prompt written notice to the others. As of the last day of the second Collection Period following the Collection Period in which it discovers or receives notice of such breach (or, at the Seller’s election, the last day of the first Collection Period following the Collection Period in which it discovers or receives notice of such breach), the S

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