Common use of Defective Contracts Clause in Contracts

Defective Contracts. (a) If, upon examination of any Contract File in accordance with Section 4.03 hereof, the Custodian determines that such Contract File does not satisfy the requirements described in Section 4.03(b), or is unable to confirm that such requirements have been met, the Custodian shall promptly notify the Servicer, the Partnership and the Transferor by telephone or telecopy. If the Transferor does not satisfy the Custodian in accordance with the foregoing sentence prior to the second Business Day prior to the applicable Acquisition Date, the Custodian shall return the applicable Substitute Contract and related files to the Transferor, or as otherwise directed by the Transferor. Notwithstanding the foregoing, if the Majority Holders approve an Exception Report and allow the inclusion of any Substitute Contract that the Custodian has identified as defective in its review under Section 4.03(b), all parties agree that such approval shall be valid only with respect to such included Substitute Contract, shall not constitute a course of dealing, and the allowance of such included Contract shall not operate as a waiver of any rights of the Trustee or any Secured Party hereunder, under the Purchase and Contribution Agreement, the Assignment Agreements or any other Transaction Documents with respect to any adverse consequence caused by such defect. (b) If a Responsible Officer of the Trustee, or if another party to any of the Transaction Documents, notifies the Servicer (pursuant to the Servicing Agreement), the Partnership, the Transferor, the Back-up Servicer and the Issuer of the existence of any Warranty Event, the Partnership (pursuant to the Servicing Agreement) or the Transferor (pursuant to the Purchase and Contribution Agreement) shall (i) cure the breach(es) which caused the Warranty Event or (ii) repurchase or substitute, as applicable, such Contract and related Contract Assets at the Contract Repurchase Price or for a Substitute Contract, respectively, as required in accordance with Section 3.03 of the Purchase and Contribution Agreement or Section 3.09 of the Servicing Agreement. If any such Contract is substituted or repurchased by the Partnership in accordance with the provisions of the Servicing Agreement, or repurchased by the Transferor pursuant to the Purchase and Contribution Agreement, and the Trustee has received a written request in the form attached hereto as Exhibit D-1 relating thereto, the Trustee shall, upon receipt of the applicable Contract Repurchase Price, but subject to Section 4.07 hereof, return the affected Contract and related files to the Issuer (or, if the Issuer so requests, directly to the Servicer or the Transferor, as the case may be), release its interest therein and in the related Contract Assets, and such items shall no longer constitute a Contract or Contract Asset hereunder and shall be released from the Lien of this Indenture.

Defective Contracts. (a) If, upon examination of any Contract File in accordance with Section 4.03 hereof, the Custodian determines that such Contract File does not satisfy the requirements described in Section 4.03(b), or is unable to confirm that such requirements have been met, the Custodian shall promptly notify the Servicer, the Partnership and the Transferor Note Insurer by telephone or telecopy. If the Transferor Partnership does not satisfy the Custodian in accordance with the foregoing sentence prior to the second Business Day prior to the applicable Acquisition Date, the Custodian shall return the applicable Substitute Contract and related files to the TransferorPartnership, or as otherwise directed by the TransferorPartnership. Notwithstanding the foregoing, if the Majority Holders approve Control Party approves an Exception Report and allow allows the inclusion of any Substitute Contract that the Custodian has identified as defective in its review under Section 4.03(b), all parties agree that such approval shall be valid only with respect to such included Substitute Contract, shall not constitute a course of dealing, dealing and the allowance of such included Contract shall not operate as a waiver of any rights of the Trustee or any Secured Party hereunder, under the each Purchase and Contribution Sale Agreement, the Assignment Agreements or any other Transaction Documents with respect to any adverse consequence caused by such defect. (b) If a Responsible Officer of the Trustee, or if another party to any of the Transaction Documents, notifies the Servicer (pursuant to the Servicing Agreement), the Partnership, the related Transferor, the Back-up Servicer and the Issuer of the existence of any Warranty Event, the Partnership initial Servicer (pursuant to the Servicing Agreement) or the related Transferor (pursuant to the related Purchase and Contribution Sale Agreement) shall (i) cure the breach(es) which caused the Warranty Event or (ii) repurchase or substitute, as applicable, such Contract and related Contract Assets at the Contract Repurchase Price or for a Substitute Contract, respectively, as required in accordance with Section 3.03 of the related Purchase and Contribution Sale Agreement or Section 3.09 of the Servicing Agreement. If any such Contract is substituted or repurchased purchased by the Partnership initial Servicer in accordance with the provisions of the Servicing Agreement, or repurchased by the related Transferor pursuant to the related Purchase and Contribution Sale Agreement, and the Trustee has received a written request in the form attached hereto as Exhibit D-1 relating thereto, the Trustee shall, upon receipt of the applicable Contract Repurchase Price, but subject to Section 4.07 hereof, return the affected Contract and related files to the Issuer (or, if the Issuer so requests, directly to the Servicer or the related Transferor, as the case may be), release its interest therein and in the related Contract Assets, Assets and such items shall no longer constitute a Contract or Contract Asset hereunder and shall be released from the Lien of this Indenture.