Common use of Realization upon Defaulted Contracts Clause in Contracts

Realization upon Defaulted Contracts. (a) The Servicer shall use commercially reasonable efforts, consistent with the Servicing Standard, to 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 Contract, remarket, either through sale or release, the Collateral upon the expiration of the term of the related Contract and act as sales and processing agent for Collateral which it repossesses. The Servicer shall 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 the contracts and other actions by the Servicer in order to realize upon such a Contract, which may include commercially reasonable efforts to enforce any recourse obligations of Obligors and repossessing and selling the Collateral at public or private sale. The foregoing is subject to the provision that, in any case in which the Collateral shall have suffered damage, the Servicer shall not be required to expend funds in connection with any repair or towards the repossession of such Collateral unless it shall determine in its discretion that such repair and/or repossession will increase the 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 Originators 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. To the extent that an escrow account has been established by the related Obligor to cover defaults on contracts between such Obligor and an Originator, amounts in such escrow account shall be applied against defaults under each such contract in the order that such defaults occur with respect to any such contract. (c) The Servicer shall remit to the Collection Account within two Business Days of receipt all Liquidation Proceeds, if any, received directly by the Servicer, notwithstanding the Servicer's notice to each Obligor pursuant to Section 4.01(f) hereof, in connection with the sale or disposition of a Defaulted Contract to the extent such Liquidation Proceeds do not constitute Excluded Amounts. (d) The Servicer shall remit to the Collection Account within two Business Days of receipt all payments made directly to the Servicer, notwithstanding any notice given pursuant to Section 4.01(f) hereof, with respect to any guaranties of an Obligor's obligations under any Contract.

Realization upon Defaulted Contracts. (a) The Servicer shall use commercially reasonable efforts, consistent with the Servicing Standard, to 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 Contract, and remarket, either through sale or releasere-lease, the Collateral upon the expiration of the term of the related Contract or following a default under the Contract and act as sales and processing agent for Collateral which it repossesses. The Servicer shall 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 the contracts and other actions by the Servicer in order to realize upon such a Contract, which may include commercially reasonable efforts to enforce any recourse obligations of Obligors and repossessing and selling the Collateral at public or private sale. The foregoing is subject to the provision that, in any case in which the Collateral shall have suffered damage, that the Servicer shall not be required to expend funds in connection with any repair or towards the repossession of such Collateral foregoing unless it shall determine in its discretion accordance with the Servicing Standard, that such repair and/or repossession action will increase the 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; providedPROVIDED, howeverHOWEVER, 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 providedPROVIDED, furtherFURTHER, 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 Originators 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. To the extent that an escrow account has been established by the related Obligor to cover defaults on contracts between such Obligor and an the Originator, amounts in such escrow account shall be applied against defaults under each such contract in the order that such defaults occur with respect to any such contract. (c) The Servicer shall remit to the Collection Account within two Business Days of receipt all Liquidation Proceeds, if any, received directly by the Servicer, notwithstanding the Servicer's notice to each Obligor pursuant to Section 4.01(f) hereof, in -15- connection with the sale or disposition of a 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 a liquidation then from Excluded Amounts and 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 Servicer, notwithstanding any notice given pursuant to Section 4.01(f) hereof, with respect to any guaranties of an Obligor's obligations under any Contract.

Realization upon Defaulted Contracts. (a) The In the event that a Contract becomes and continues to be a Defaulted Contract, the Master Servicer shall use commercially take all reasonable effortsand lawful steps necessary for Repossession; provided however, consistent that the Master Servicer shall not be obligated to institute any action for Repossession through judicial proceedings unless it determines in its good faith judgment, which determination will be conclusive and binding, that Insurance Proceeds or Liquidation Proceeds that would be realized in connection therewith or amounts payable pursuant to the last sentence of this Section 3.08 would be sufficient for the reimbursement in full of its out-of-pocket expenses pursuant to this Agreement. In connection with the Servicing Standard, to 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 Contract, remarket, either through sale or releasesuch Repossession, the Collateral upon the expiration of the term of the related Contract and act as sales and processing agent for Collateral which it repossesses. The Master Servicer shall follow such practices and procedures as are consistent with the Servicing Standard required by Section 3.01 and as it shall deem necessary or advisable and as make advances of its own funds for any out-of-pocket expenses incurred. The Master Servicer shall be customary and usual in its servicing reimbursed for Liquidation Expenses (including advances) by retention of contracts similar the required reimbursement from the first Liquidation Proceeds or Insurance Proceeds received with respect to such Defaulted Contract. The Master Servicer shall be entitled to receive the contracts and other actions by the Servicer in order to realize upon such a Contractfollowing amounts, which may include commercially reasonable efforts to enforce any recourse obligations of Obligors and repossessing and selling the Collateral at public or private sale. The foregoing is subject to the provision that, in any case in which the Collateral shall have suffered damage, the Servicer shall not be required to expend funds in connection with any repair or towards the repossession of such Collateral unless it shall determine in its discretion that such repair and/or repossession will increase the 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 Originators 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. To the extent that an escrow account has been established by the related Obligor to cover defaults on contracts between such Obligor and an Originator, amounts in such escrow account shall be applied against defaults under each such contract in the order that such defaults occur distributable pursuant to Sections 3.11(b)(i) with respect to any such contract. (c) The Servicer shall remit Contract the Obligor of which has filed bankruptcy or against whom a petition for involuntary bankruptcy has been filed: a one time fee of $200 in respect of those Contracts not referred to outside legal counsel, or, in the Collection Account within two Business Days case of receipt all Liquidation Proceedsthose Contracts that are so referred, reimbursement of the fees and expenses of outside legal counsel, if any, received directly by their retention was necessary in the reasonable judgment of the Master Servicer, notwithstanding the Servicer's notice to each Obligor pursuant to Section 4.01(f) hereof, in connection with the sale or disposition of a Defaulted Contract to the extent such Liquidation Proceeds do not constitute Excluded Amounts. (d) The Servicer shall remit to the Collection Account within two Business Days of receipt all payments made directly to the Servicer, notwithstanding any notice given pursuant to Section 4.01(f) hereof, with respect to any guaranties of an Obligor's obligations under any Contract.