Common use of Realization upon Defaulted Contracts Clause in Contracts

Realization upon Defaulted Contracts. (a) Servicer shall use all commercially reasonable efforts consistent with the servicing procedures set forth herein, to lawfully repossess or otherwise convert the ownership of the Financed Vehicle securing any Contract as to which Servicer shall have determined eventual payment in full is unlikely, and where permitted by the express terms of the Contract and applicable Law. Servicer shall commence efforts to repossess or otherwise convert the ownership of a Financed Vehicle for any Defaulted Contract as determined by Servicer's reasonable judgment after considering the current status of such Contract; provided, however, that Servicer may elect not to commence such efforts within such time period if, in good faith and reasonable judgment, it determines either that such action would violate the terms of the related Contract, it would be impracticable to do so or that the proceeds ultimately recoverable with respect to such Contract would be increased by forbearance, in which case, such Contract shall constitute a Defaulted Contract. (b) Servicer shall use all commercially reasonable efforts to timely make all collections on Contracts, which may include reasonable efforts consistent with the terms hereof and applicable Law to recover under any recourse provisions from Dealers, originators or transferors, and selling the Financed Vehicle at public or private sale. If Servicer determines in its reasonable judgment that it should retain the services of an attorney to exercise Owner's rights pursuant to such recourse provisions by commencing litigation or taking such other action, Servicer shall so advise Owner in writing of such recommended course of action, and if such recommended course of action is agreed to by Owner, Owner will pay all reasonable attorney's fees, court costs and related litigation expenses relating to such proceeding or action. Upon obtaining such approval from the Owner, Servicer will select the attorney(s) to commence litigation and/or take such other action necessary or appropriate to protect the interests of Owner. Servicer shall sell all repossessed Financed Vehicles at auction, unless it determines in its good faith and reasonable judgment either that it would be impractical to do so or that the proceeds ultimately recoverable with respect to such Contracts would be increased by an alternative sale procedure. The foregoing shall be subject to the provision that, in any case in which the Financed Vehicle shall have suffered damage, Servicer shall not expend funds in connection with the repair or the repossession of such Financed Vehicle unless it shall determine in its good faith and reasonable discretion that such repair and/or repossession will increase the net proceeds ultimately recoverable with respect to such Contracts by an amount greater than the amount of such expenses. All amounts received upon sale of a Financed Vehicle shall be remitted directly by Servicer to the Collections Account within one (1) Business Day after receipt by the Servicer. (c) If Servicer receives a notice that an Obligor has died or has filed for relief under the United States Bankruptcy Code, Servicer shall notify Owner of the death or file a proof of claim and notify Owner of the bankruptcy filing. In the event that activities outside the scope of routine consumer bankruptcy proceedings, and follow-up are necessary, Owner may, at its option, instruct Servicer to retain counsel to represent Owner and Servicer in the Obligor's bankruptcy at the expense of Owner. If Owner determines that Servicer should retain the services of an attorney to represent the interests of the Owner, Servicer will select the attorney, and Owner will pay all reasonable attorney's fees and costs, including all filing fees, relating to such proceeding.

Realization upon Defaulted Contracts. (a) Subject to applicable law, the Servicer shall use all commercially reasonable efforts consistent with the servicing procedures set forth hereinrepossess, to lawfully repossess foreclose upon or otherwise comparably convert the ownership of Collateral securing all Contracts that come into default and which the Financed Vehicle securing any Contract as Servicer believes in its good faith business judgment will not be brought current. Subject to which Section 4.17, the Servicer shall have determined eventual payment in full is unlikelymanage, conserve and protect such Collateral for the purposes of their prompt disposition and sale, and where permitted by shall dispose of such Collateral on such terms and conditions as it deems in the express terms best interests of the Contract and applicable LawCertificateholders. If the Servicer has actual knowledge that a Mortgaged Property is affected by hazardous waste, then the Servicer shall commence efforts not cause the Trust Fund or the Trustee to repossess acquire title to such Mortgaged Property in a foreclosure or otherwise convert similar proceeding. For purposes of the ownership preceding sentence, the Servicer shall not be deemed to have actual knowledge that Collateral is affected by hazardous waste unless it shall have received written notice that hazardous waste is present on such property. In connection with such repossession, foreclosure or other conversion, the Servicer shall take such action as (i) shall be consistent with Section 3.01, (ii) the Servicer shall determine consistently with Accepted Servicing Practices to be in the best interest of a Financed Vehicle for the Trustee and Certificateholders, and (iii) is consistent with the requirements of the insurer under any Defaulted Contract as determined by Servicer's reasonable judgment after considering the current status of such ContractRequired Insurance Policy; provided, however, that the Servicer may elect shall not be required to commence such efforts within such time period if, expend its own funds in good faith and reasonable judgment, connection with any foreclosure or towards the restoration of any property unless it determines either shall determine (i) that such action would violate restoration and/or foreclosure will increase the terms proceeds of liquidation of the related ContractContract after reimbursement to itself of such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the related Collection Account). The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it would shall be impracticable entitled to do so or that reimbursement thereof from the proceeds ultimately recoverable Liquidation Proceeds with respect to such Contract would be increased by forbearance, in which case, such Contract shall constitute a Defaulted Contractthe related Mortgaged Property or otherwise pursuant to Section 3.07(a). (b) The decision of a Servicer shall use all commercially reasonable efforts to timely make all collections foreclose on Contracts, which may include reasonable efforts consistent with the terms hereof and applicable Law to recover under any recourse provisions from Dealers, originators or transferors, and selling the Financed Vehicle at public or private sale. If Servicer determines in its reasonable judgment that it should retain the services of an attorney to exercise Owner's rights pursuant to such recourse provisions by commencing litigation or taking such other action, Servicer shall so advise Owner in writing of such recommended course of action, and if such recommended course of action is agreed to by Owner, Owner will pay all reasonable attorney's fees, court costs and related litigation expenses relating to such proceeding or action. Upon obtaining such approval from the Owner, Servicer will select the attorney(s) to commence litigation and/or take such other action necessary or appropriate to protect the interests of Owner. Servicer shall sell all repossessed Financed Vehicles at auction, unless it determines in its good faith and reasonable judgment either that it would be impractical to do so or that the proceeds ultimately recoverable with respect to such Contracts would be increased by an alternative sale procedure. The foregoing a defaulted Contract shall be subject to a determination by the provision thatServicer that the proceeds of such foreclosure would exceed the costs and expenses of bringing such a proceeding. The income earned from the management of any Repossessed Collateral, in net of reimbursement to the Servicer for expenses incurred (including any case in which the Financed Vehicle shall have suffered damage, Servicer shall not expend funds property or other taxes) in connection with such management and net of applicable accrued and unpaid Servicing Fees, and unreimbursed Advances and Servicing Advances, shall be applied to the repair or payment of principal of and interest on the repossession related defaulted Contracts (with interest accruing as though such Contracts were still current) and all such income shall be deemed, for all purposes in this Agreement, to be payments on account of such Financed Vehicle unless it principal and interest on the related Mortgage Notes and shall determine in its good faith and reasonable discretion that such repair and/or repossession will increase be deposited into the related Collection Account. To the extent the net proceeds ultimately recoverable with respect to such Contracts by an amount greater than income received during any calendar month is in excess of the amount of attributable to amortizing principal and accrued interest at the related Contract Rate on the related Contract for such expenses. All amounts received upon sale of a Financed Vehicle calendar month, such excess shall be remitted directly by Servicer considered to be a partial prepayment of principal of the Collections Account within one (1) Business Day after receipt by the Servicerrelated Contract. (c) If The proceeds from any liquidation of a Contract, as well as any income from an Repossessed Collateral, will be applied in the following order of priority: first, to reimburse the Servicer receives for any related unreimbursed Servicing Advances, including insurance premiums; second, to reimburse the Servicer for any unreimbursed Advances; third, to reimburse the related Collection Account for any Nonrecoverable Advances (or portions thereof) that were previously withdrawn by the Servicer pursuant to Section 3.07 that related to such Contract; fourth, to accrued and unpaid interest (to the extent no Advance has been made for such amount or any such Advance has been reimbursed) on the Contract or related Repossessed Collateral, at the per annum rate equal to the related Contract Rate reduced by the Servicing Fee Rate to the Due Date occurring in the month in which such amounts are required to be distributed; and fifth, as a notice that an Obligor has died or has filed for relief under the United States Bankruptcy Code, Servicer shall notify Owner recovery of principal of the death or file a proof of claim and notify Owner of the bankruptcy filing. In the event that activities outside the scope of routine consumer bankruptcy proceedings, and follow-up are necessary, Owner may, at its option, instruct Servicer to retain counsel to represent Owner and Servicer in the Obligor's bankruptcy at the expense of Owner. If Owner determines that Servicer should retain the services of an attorney to represent the interests of the Owner, Servicer will select the attorney, and Owner will pay all reasonable attorney's fees and costs, including all filing fees, relating to such proceedingContract.

Realization upon Defaulted Contracts. (a) Subject to applicable law, the Servicer shall use all commercially reasonable efforts consistent with the servicing procedures set forth hereinrepossess, to lawfully repossess foreclose upon or otherwise comparably convert the ownership of Collateral securing all Contracts that come into default and which the Financed Vehicle securing any Contract as Servicer believes in its good faith business judgment will not be brought current. Subject to which Section 4.17, the Servicer shall have determined eventual payment in full is unlikelymanage, conserve and protect such Collateral for the purposes of their prompt disposition and sale, and where permitted by shall dispose of such Collateral on such terms and conditions as it deems in the express terms best interests of the Contract and applicable LawCertificateholders. If the Servicer has actual knowledge that a Mortgaged Property is affected by hazardous waste, then the Servicer shall commence efforts not cause the Trust Fund or the Trustee to repossess acquire title to such Mortgaged Property in a foreclosure or otherwise convert similar proceeding. For purposes of the ownership preceding sentence, the Servicer shall not be deemed to have actual knowledge that Collateral is affected by hazardous waste unless it shall have received written notice that hazardous waste is present on such property. In connection with such repossession, foreclosure or other conversion, the Servicer shall take such action as (i) shall be consistent with Section 3.01, (ii) the Servicer shall determine consistently with Accepted Servicing Practices to be in the best interest of a Financed Vehicle for the Trustee and Certificateholders, and (iii) is consistent with the requirements of the insurer under any Defaulted Contract as determined by Servicer's reasonable judgment after considering the current status of such ContractRequired Insurance Policy; provided, however, that the Servicer may elect shall not be required to commence such efforts within such time period if, expend its own funds in good faith and reasonable judgment, connection with any foreclosure or towards the restoration of any property unless it determines either shall determine (i) that such action would violate restoration and/or foreclosure will increase the terms proceeds of liquidation of the related ContractContract after reimbursement to itself of such expenses and (ii) that such expenses will be recoverable to it through Liquidation Proceeds (respecting which it shall have priority for purposes of withdrawals from the related Collection Account). The Servicer shall be responsible for all other costs and expenses incurred by it in any such proceedings; provided, however, that it would shall be impracticable entitled to do so or that reimbursement thereof from the proceeds ultimately recoverable Liquidation Proceeds with respect to such Contract would be increased by forbearance, in which case, such Contract shall constitute a Defaulted Contractthe related Mortgaged Property or otherwise pursuant to Section 3.07(a). (b) The decision of a Servicer shall use all commercially reasonable efforts to timely make all collections foreclose on Contracts, which may include reasonable efforts consistent with the terms hereof and applicable Law to recover under any recourse provisions from Dealers, originators or transferors, and selling the Financed Vehicle at public or private sale. If Servicer determines in its reasonable judgment that it should retain the services of an attorney to exercise Owner's rights pursuant to such recourse provisions by commencing litigation or taking such other action, Servicer shall so advise Owner in writing of such recommended course of action, and if such recommended course of action is agreed to by Owner, Owner will pay all reasonable attorney's fees, court costs and related litigation expenses relating to such proceeding or action. Upon obtaining such approval from the Owner, Servicer will select the attorney(s) to commence litigation and/or take such other action necessary or appropriate to protect the interests of Owner. Servicer shall sell all repossessed Financed Vehicles at auction, unless it determines in its good faith and reasonable judgment either that it would be impractical to do so or that the proceeds ultimately recoverable with respect to such Contracts would be increased by an alternative sale procedure. The foregoing a defaulted Contract shall be subject to a determination by the provision thatServicer that the proceeds of such foreclosure would exceed the costs and expenses of bringing such a proceeding. The income earned from the management of any Repossessed Collateral, in net of reimbursement to the Servicer for expenses incurred (including any case in which the Financed Vehicle shall have suffered damage, Servicer shall not expend funds property or other taxes) in connection with such management and net of applicable accrued and unpaid Servicing Fees, and unreimbursed Advances and Servicing Advances, shall be applied to the repair or payment of principal of and interest on the repossession related defaulted Contracts (with interest accruing as though such Contracts were still current) and all such income shall be deemed, for all purposes in this Agreement, to be payments on account of such Financed Vehicle unless it principal and interest on the related Mortgage Notes and shall determine in its good faith and reasonable discretion that such repair and/or repossession will increase be deposited into the related Collection Account. To the extent the net proceeds ultimately recoverable with respect to such Contracts by an amount greater than income received during any Due Period is in excess of the amount of attributable to amortizing principal and accrued interest at the related Contract Rate on the related Contract for such expenses. All amounts received upon sale of a Financed Vehicle Due Period, such excess shall be remitted directly by Servicer considered to be a partial prepayment of principal of the Collections Account within one (1) Business Day after receipt by the Servicerrelated Contract. (c) If The proceeds from any liquidation of a Contract, as well as any income from an Repossessed Collateral, will be applied in the following order of priority: first, to reimburse the Servicer receives for any related unreimbursed Servicing Advances, including insurance premiums; second, to reimburse the Servicer for any unreimbursed Advances; third, to reimburse the related Collection Account for any Nonrecoverable Advances (or portions thereof) that were previously withdrawn by the Servicer pursuant to Section 3.07 that related to such Contract; fourth, to accrued and unpaid interest (to the extent no Advance has been made for such amount or any such Advance has been reimbursed) on the Contract or related Repossessed Collateral, at the per annum rate equal to the related Contract Rate reduced by the Servicing Fee Rate to the Due Date occurring in the month in which such amounts are required to be distributed; and fifth, as a notice that an Obligor has died or has filed for relief under the United States Bankruptcy Code, Servicer shall notify Owner recovery of principal of the death or file a proof of claim and notify Owner of the bankruptcy filing. In the event that activities outside the scope of routine consumer bankruptcy proceedings, and follow-up are necessary, Owner may, at its option, instruct Servicer to retain counsel to represent Owner and Servicer in the Obligor's bankruptcy at the expense of Owner. If Owner determines that Servicer should retain the services of an attorney to represent the interests of the Owner, Servicer will select the attorney, and Owner will pay all reasonable attorney's fees and costs, including all filing fees, relating to such proceedingContract.

Realization upon Defaulted Contracts. (a) The Servicer shall use all commercially reasonable efforts efforts, consistent with the servicing procedures set forth hereinServicing Standard, to lawfully repossess accelerate, repossess, foreclose upon, or otherwise comparably convert the ownership of any Collateral that it has reasonably determined should be repossessed or otherwise converted following a default under the Financed Vehicle securing any Contract as to which Servicer shall have determined eventual payment in full is unlikelyContract, and where permitted by remarket, either through sale or re-lease, the express terms Collateral upon the expiration of the term of the related Contract or following a default under the Contract and applicable Lawact as sales and processing agent for Collateral which it repossesses. The Servicer shall commence efforts follow such practices and procedures as are consistent with the Servicing Standard and as it shall deem necessary or advisable and as shall be customary and usual in its servicing of contracts similar to repossess or otherwise convert the ownership of contracts and other actions by the Servicer in order to realize upon such a Financed Vehicle for any Defaulted Contract as determined by Servicer's reasonable judgment after considering the current status of such Contract; provided, however, that Servicer may elect not to commence such efforts within such time period if, in good faith and reasonable judgment, it determines either that such action would violate the terms of the related Contract, it would be impracticable to do so or that the proceeds ultimately recoverable with respect to such Contract would be increased by forbearance, in which case, such Contract shall constitute a Defaulted Contract. (b) Servicer shall use all may include commercially reasonable efforts to timely make all collections on Contracts, which may include reasonable efforts consistent with the terms hereof and applicable Law to recover under enforce any recourse provisions from Dealers, originators or transferors, obligations of Obligors and repossessing and selling the Financed Vehicle Collateral at public or private sale. If Servicer determines in its reasonable judgment that it should retain the services of an attorney to exercise Owner's rights pursuant to such recourse provisions by commencing litigation or taking such other action, Servicer shall so advise Owner in writing of such recommended course of action, and if such recommended course of action is agreed to by Owner, Owner will pay all reasonable attorney's fees, court costs and related litigation expenses relating to such proceeding or action. Upon obtaining such approval from the Owner, Servicer will select the attorney(s) to commence litigation and/or take such other action necessary or appropriate to protect the interests of Owner. Servicer shall sell all repossessed Financed Vehicles at auction, unless it determines in its good faith and reasonable judgment either that it would be impractical to do so or that the proceeds ultimately recoverable with respect to such Contracts would be increased by an alternative sale procedure. The foregoing shall be is subject to the provision that, in any case in which that the Financed Vehicle shall have suffered damage, Servicer shall not be required to expend funds in connection with the repair or the repossession of such Financed Vehicle foregoing unless it shall determine in its good faith and reasonable discretion accordance with the Servicing Standard, that such repair and/or repossession action will increase the net proceeds ultimately recoverable with respect to such Contracts Liquidation Proceeds by an amount greater than the amount of such expenses. (b) Notwithstanding the foregoing, the Servicer shall take action to accelerate all amounts due under any Contract immediately after such Contract becomes a Defaulted Contract and shall, in accordance with its Credit and Collection Policies and Procedures, bring an action against the Obligor for all amounts due under the Contract and, to the extent applicable, institute proceedings to repossess, foreclose upon and sell or re-lease the Collateral; PROVIDED, HOWEVER, that the Servicer will not accelerate any Scheduled Payment unless permitted to do so by the terms of the Contract or under applicable law; and PROVIDED, FURTHER, that the Servicer shall not declare an Obligor to be in default under a Contract nor exercise any other remedies under such Contract based solely on a default by such Obligor under any other obligation of such Obligor to the Originator or either of their Affiliates, if such Obligor is not also in default under such Contract unless it concludes that declaring such default is in the best interest of the Noteholders or will maximize potential recoveries from such Obligor for the Issuers for the benefit of the Noteholders. All To the extent that an escrow account has been established by the related Obligor to cover defaults on contracts between such Obligor and the Originator, amounts received upon sale of a Financed Vehicle in such escrow account shall be remitted directly by Servicer applied against defaults under each such contract in the order that such defaults occur with respect to the Collections Account within one (1) Business Day after receipt by the Servicerany such contract. (c) If Servicer receives a notice that an Obligor has died or has filed for relief under the United States Bankruptcy Code, The Servicer shall notify Owner remit to the Collection Account within two Business Days of receipt all Liquidation Proceeds, if any, received directly by the death Servicer, notwithstanding the Servicer's notice to each Obligor pursuant to Section 4.01(f) hereof, in -15- connection with the sale or file disposition of a proof Defaulted Contract to the extent such Liquidation Proceeds do not constitute Excluded Amounts. Expenses and costs plus interest on such amounts related to this Section at the Reimbursement Rate shall first be reimbursed from proceeds received in respect of claim a liquidation then from Excluded Amounts and notify Owner then pursuant to Section 3.04(b)(I)(xxi) or Section 3.04(b)(II)(xx), as applicable. (d) The Servicer shall remit to the Collection Account within two Business Days of receipt all payments made directly to the bankruptcy filing. In the event that activities outside the scope Servicer, notwithstanding any notice given pursuant to Section 4.01(f) hereof, with respect to any guaranties of routine consumer bankruptcy proceedings, and follow-up are necessary, Owner may, at its option, instruct Servicer to retain counsel to represent Owner and Servicer in the an Obligor's bankruptcy at the expense of Owner. If Owner determines that Servicer should retain the services of an attorney to represent the interests of the Owner, Servicer will select the attorney, and Owner will pay all reasonable attorney's fees and costs, including all filing fees, relating to such proceedingobligations under any Contract.