Exhibit 10.2


 


EXECUTION COPY


 


HONDA
AUTO RECEIVABLES 2018-4 OWNER TRUST,

as Issuer,


 


AMERICAN
HONDA RECEIVABLES LLC,

as Seller,


 


and 


 


AMERICAN
HONDA FINANCE CORPORATION,

as Servicer, RPA Seller and Sponsor 




SALE AND SERVICING AGREEMENT


 


Dated
November 28, 2018


 







    	



     


    

 


Table
of Contents


 


	 	 	Page
	 	 	 
	ARTICLE One	DEFINITIONS	1
	Section 1.01.	General Definitions	1
	Section 1.02.	Other Definitional Provisions	1
	ARTICLE Two	CONVEYANCE OF RECEIVABLES; CUSTODY OF RECEIVABLES FILES	1
	Section 2.01.	Conveyance of Receivables	1
	Section 2.02.	Custody of Receivable Files	2
	Section 2.03.	Representations and Warranties as to the Receivables	3
	Section 2.04.	Repurchase of Receivables Upon Breach	5
	Section 2.05.	Duties of Servicer as Custodian	5
	Section 2.06.	[Reserved]	6
	Section 2.07.	Indemnification by Custodian	6
	Section 2.08.	Effective Period and Termination	6
	ARTICLE Three	ADMINISTRATION AND SERVICING OF RECEIVABLES	7
	Section 3.01.	Duties of Servicer	7
	Section 3.02.	Collection of Receivable Payments	7
	Section 3.03.	[Reserved]	7
	Section 3.04.	Realization Upon Receivables	8
	Section 3.05.	Maintenance of Physical Damage Insurance Policies	8
	Section 3.06.	Maintenance of Security Interests in Financed Vehicles	8
	Section 3.07.	Covenants of Servicer	8
	Section 3.08.	Purchase of Receivables Upon Breach	9
	Section 3.09.	Total Servicing Fee; Payment of Certain Expenses by Servicer	9
	Section 3.10.	Servicer’s Certificate	9
	Section 3.11.	Annual Statement as to Compliance; Notice of Default	10
	Section 3.12.	Assessment of Compliance and Annual Accountants’ Report	10
	Section 3.13.	Access to Certain Documentation and Information Regarding Receivables	11
	Section 3.14.	[Reserved]	11
	Section 3.15.	Reports to Securityholders and Rating Agencies	11
	Section 3.16.	Appointment of Subservicer or Subcontractor	12


 




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Table
of Contents


(continued)


 


	 	 	Page
	 	 	 
	Section 3.17.	Information to be Provided by the Servicer	13
	Section 3.18.	Remedies	14
	ARTICLE Four	DISTRIBUTIONS; RESERVE FUND; STATEMENTS TO SECURITYHOLDERS	14
	Section 4.01.	Establishment of Accounts	14
	Section 4.02.	Collections	15
	Section 4.03.	Application of Collections	16
	Section 4.04.	Advances	17
	Section 4.05.	Additional Deposits	17
	Section 4.06.	Distributions	18
	Section 4.07.	Reserve Fund	19
	Section 4.08.	Yield Supplement Account	20
	Section 4.09.	Net Deposits	20
	Section 4.10.	Statements to Securityholders	20
	ARTICLE Five	THE SELLER	21
	Section 5.01.	Representations of Seller	21
	Section 5.02.	Liability of Seller; Indemnities	22
	Section 5.03.	Merger, Consolidation or Assumption of the Obligations of Seller; Certain Limitations	23
	Section 5.04.	Limitation on Liability of Seller and Others	23
	Section 5.05.	Seller May Own Notes	23
	ARTICLE Six	THE SERVICER	23
	Section 6.01.	Representations of Servicer	23
	Section 6.02.	Indemnities of Servicer	25
	Section 6.03.	Merger, Consolidation or Assumption of the Obligations of Servicer	26
	Section 6.04.	Limitation on Liability of Servicer and Others	26
	Section 6.05.	AHFC Not to Resign as Servicer	26
	ARTICLE Seven	SERVICER DEFAULTS	27
	Section 7.01.	Servicer Defaults	27
	Section 7.02.	Appointment of Successor Servicer	28


 




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Table
of Contents


(continued)


	 	 	Page
	 	 	 
	Section 7.03.	Notification of Servicer Termination	29
	Section 7.04.	Waiver of Past Defaults	29
	Section 7.05.	Repayment of Advances	29
	ARTICLE Eight	TERMINATION	29
	Section 8.01.	Optional Purchase of All Receivables	29
	ARTICLE Nine	MISCELLANEOUS	31
	Section 9.01.	Amendment	31
	Section 9.02.	Protection of Title to Trust	32
	Section 9.03.	Notices	34
	Section 9.04.	Assignment	34
	Section 9.05.	Limitations on Rights of Others	34
	Section 9.06.	Severability	34
	Section 9.07.	Separate Counterparts	34
	Section 9.08.	Headings	35
	Section 9.09.	Governing Law; Submission to Jurisdiction; Waiver of Jury Trial	35
	Section 9.10.	Nonpetition Covenants	35
	Section 9.11.	Limitation of Liability of Owner Trustee and Indenture Trustee	36
	Section 9.12.	Third-Party Beneficiary	36
	Section 9.13.	Confidentiality	36
	Section 9.14.	Federal Tax Treatment	37
	Section 9.15.	Intent of the Parties; Reasonableness	37
	Section 9.16.	Cooperation with Voting	37


 




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	APPENDICES	 	 	 
	 	 	 	 
	Appendix A	-	Definitions	A-1
	 	 	 	 
	SCHEDULES	 	 	 
	 	 	 	 
	Schedule A	-	Addresses for Notices	A-1
	 	 	 	 
	EXHIBITS	 	 	 
	 	 	 	 
	Exhibit A	-	Form of Redemption Notice	A-1
	Exhibit B	-	Form of Officer’s Certificate	B-1
	Exhibit C	-	Form of Annual Certification	C-1
	Exhibit D	-	Servicing Criteria to be Addressed In Assessment of Compliance	D-1


 






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This Sale and Servicing Agreement, dated
November 28, 2018 is among American Honda Receivables LLC, a Delaware limited liability company (“AHR” 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 in its capacity as seller under the Receivables Purchase
Agreement, the “RPA Seller”), and Honda Auto Receivables 2018-4 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 contracts (the “Receivables”)
generated by AHFC in the ordinary course of its business, which Receivables have been sold by AHFC to AHR;


 


WHEREAS, AHR 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, any capitalized term shall have the meaning set forth in Appendix A to
this Agreement.


 


Section 1.02.         Other
Definitional Provisions. 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.


 


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 RPA 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 (excluding Receivables repurchased from the Issuer);


 


(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; and


 


(viii)      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,
and intends 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)          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;


 




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(c)          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


 


(d)          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;


 


provided that the Servicer may appoint one or more agents
to act as subcustodians of certain items contained in a Receivable File so long as the Servicer remains primarily responsible for
their safekeeping.


 


Section 2.03.         Representations
and Warranties as to the Receivables.


 


(a)          The
RPA Seller has made each of the representations and warranties set forth in Exhibit A to the Receivables Purchase Agreement
and has consented to the assignment by the Seller to the Issuer of the Seller’s rights with respect thereto. Such representations
and warranties speak as of the respective dates set forth therein, but shall survive the sale, transfer and assignment of the Receivables
to the Issuer hereunder and the pledge of such Receivables to the Indenture Trustee under the Indenture. Pursuant to Section
2.01 of this Agreement, the Seller has sold, assigned, transferred and conveyed to the Issuer, as part of the assets of the
Issuer, its rights under the Receivables Purchase Agreement, including the representations and warranties of the RPA Seller therein
as set forth in Exhibit A to the Receivables Purchase Agreement (upon which representations and warranties the Issuer relies
in accepting the Receivables and delivering the Securities) together with all rights of the Seller with respect to any breach thereof,
including the right to require the RPA Seller to repurchase Receivables in accordance with the Receivables Purchase Agreement.
It is understood and agreed that the representations and warranties referred to in this Section shall survive the sale and delivery
of the Receivables to the Issuer.


 


(b)          The
RPA Seller hereby agrees that the Issuer shall have the right to enforce any and all rights under the Receivables Purchase Agreement
assigned to the Issuer herein, including the right to cause the RPA Seller to repurchase any Receivable with respect to which it
is in breach of any of its representations and warranties set forth in Exhibit A to the Receivables Purchase Agreement,
directly against the RPA Seller as though the Issuer were a party to the Receivables Purchase Agreement, and the Issuer shall not
be obligated to exercise any such rights indirectly through the Seller.


 


(c)          The
Seller makes the following representations and warranties 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.


 




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(i)          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.


 


(ii)         All
Filings Made. Both the Seller and the Issuer, respectively, have caused or will have caused, or have taken or will take, within
ten (10) 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 nor the Issuer has authorized
the filing of or 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.


 


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


 




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Section 2.04.         Repurchase
of Receivables Upon Breach. In the event of a breach of any representation or warranty set forth on Exhibit A to the
Receivables Purchase Agreement which materially and adversely affects the interests of the Issuer or the Securityholders and unless
the breach shall have been cured by the last day of the second Collection Period following the Collection Period in which the discovery
of the breach is made or notice is received, as the case may be (or, at the option of the RPA Seller, the last day in the first
Collection Period following the Collection Period in which such discovery is made), the RPA Seller shall repurchase such Receivable
from the Issuer. On the Business Day before the related Payment Date, the RPA Seller shall remit the Warranty Purchase Payment
in respect of such Receivable to the Collection Account in the manner specified in Section 4.05. Upon any such repurchase,
the Issuer shall, without further action, be deemed to transfer, assign, set-over and otherwise convey to the RPA Seller, all right,
title and interest of the Issuer in, to and under such repurchased Receivable, all monies due or to become due with respect thereto
and all proceeds thereof. The Issuer and the Trustees shall execute such documents and instruments of transfer and assignment and
take such other actions as shall be reasonably requested by the RPA Seller to effect the conveyance of such Receivable pursuant
to this Section. The sole remedy of the Issuer, the Trustees and the Securityholders with respect to a breach of the RPA Seller’s
representations and warranties pursuant to Exhibit A to the Receivables Purchase Agreement shall be to require the RPA Seller
to repurchase the related Receivable pursuant to this Section. Neither the Owner Trustee nor the Indenture Trustee shall have any
duty to conduct an affirmative investigation as to the occurrence of any condition requiring the repurchase of any Receivable pursuant
to Section 2.04 or the eligibility of any Receivables for purposes of this Agreement.


 


Section 2.05.         Duties
of Servicer as Custodian.


 


(a)          Safekeeping.
The Servicer, in its capacity as custodian, shall hold the Receivable Files for the benefit of the Issuer and maintain such accurate
and complete accounts, records and computer systems pertaining to each Receivable File as shall enable the Issuer to comply with
this Agreement. In performing its duties as custodian, the Servicer shall act with reasonable care, using that degree of skill
and attention that it exercises with respect to the receivable files of comparable automobile receivables (including light-duty
trucks) that the Servicer services for itself or others. The Servicer shall conduct, or cause to be conducted, periodic examinations
of the files of all receivables owned or serviced by it which shall include the Receivable Files held by it under this Agreement,
and of the related accounts, records and computer systems, in such a manner as shall enable the Issuer or the Indenture Trustee
to verify the accuracy of the Servicer’s record keeping. The Servicer shall promptly report to the Issuer and the Indenture
Trustee any failure on its part to hold the Receivable Files and maintain its accounts, records and computer systems as herein
provided and promptly take appropriate action to remedy any such failure. Nothing herein shall be deemed to require an initial
review or any periodic review of the Receivable Files by the Issuer or the Indenture Trustee.


 


(b)          Maintenance
of and Access to Records. The Servicer shall maintain each Receivable File solely in its capacity as Servicer at one of its
(or its agents’) offices or the offices of one of its custodians in the United States or at such other office as shall be
specified to the Issuer and the Indenture Trustee in writing upon the request of such party. The Servicer shall make available
to the Issuer and the Indenture Trustee or its duly authorized representatives, attorneys or auditors the Receivable Files and
the related accounts, records and computer systems maintained by the Servicer at such times as the Issuer and the Indenture Trustee
shall reasonably instruct.


 


(c)          Release
of Documents. Upon instruction from the Indenture Trustee, the Servicer shall release any document in the Receivable Files
to the Indenture Trustee or its agent or designee, as the case may be, at such place or places as the Indenture Trustee may designate,
as soon as practicable. The Servicer shall not be responsible for any loss occasioned by the failure of the Indenture Trustee to
return any document or any delay in doing so.


 




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Section 2.06.         [Reserved].


 


Section 2.07.         Indemnification
by Custodian. The Servicer, as custodian of the Receivable Files, shall fully indemnify and hold harmless the Issuer and the
Trustees for any and all liabilities, obligations, losses, compensatory damages, payments, costs or expenses of any kind whatsoever
(including any reasonable legal fees and expenses incurred by any Trustee in connection with the enforcement of any indemnification
or other obligation of the Servicer, as custodian of the Receivable Files) that may be imposed on, incurred or asserted against
the Issuer and the Trustees as the result of any improper act or omission in any way relating to the maintenance and custody of
the Receivable Files by the Servicer, as custodian; provided, however, that the Servicer shall not be liable for
any portion of any such amount resulting from the willful misfeasance, bad faith or negligence of the Indenture Trustee or the
willful misfeasance, bad faith or gross negligence (except for errors in judgment) of the Owner Trustee or of the Delaware Trustee.


 


Section 2.08.         Effective
Period and Termination. The Servicer’s appointment as custodian of the Receivable Files shall become effective as of
the Cutoff Date and shall continue in full force and effect until terminated pursuant to this Section. If the Servicer shall resign
as Servicer pursuant to Section 6.05 or if all of the rights and obligations of the Servicer have been terminated pursuant
to Section 7.02, the appointment of the Servicer as custodian of the Receivable Files shall be terminated without further
action by the Indenture Trustee or by the Noteholders. The Indenture Trustee or, with the written consent of the Indenture Trustee,
the Owner Trustee may terminate the Servicer’s appointment as custodian of the Receivable Files with cause at any time immediately
upon written notification to the Servicer and, without cause, upon thirty (30) days’ prior written notification by the Servicer.
As soon as practicable, but in no event later than thirty (30) days immediately following the effective date of any termination
of such appointment, the Servicer shall deliver the Receivable Files to the Indenture Trustee or its agent at such place or places
as the Indenture Trustee may reasonably designate. Notwithstanding the termination of the Servicer as custodian of the Receivable
Files, the Indenture Trustee agrees that upon any such termination, the Indenture Trustee shall provide, or cause its agent to
provide, access to the Receivable Files to the Servicer for the purpose of carrying out its duties and responsibilities with respect
to the servicing of the Receivables pursuant to this Agreement.


 




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ARTICLE
Three



ADMINISTRATION AND SERVICING OF RECEIVABLES


 


Section 3.01.         Duties
of Servicer. The Servicer, for the benefit of the Issuer (to the extent provided herein), shall manage, service, administer
and make collections on the Receivables (other than Administrative Receivables and Warranty Receivables) with reasonable care,
using that degree of skill and attention that the Servicer exercises with respect to all comparable automobile receivables (including
light-duty trucks) that it services for itself or others. The Servicer’s duties shall include collecting and posting of all
payments, responding to inquiries of Obligors or by federal, state or local government authorities with respect to the Receivables,
investigating delinquencies, sending payment statements to Obligors, reporting tax information to Obligors in accordance with its
customary practices, policing the collateral, accounting for collections and furnishing monthly and annual statements to the Trustees
with respect to distributions, generating federal income tax information, making Advances and performing the other duties specified
herein. The Servicer shall follow its customary standards, policies and procedures and shall have full power and authority, acting
alone, to do any and all things in connection with such managing, servicing, administering and collecting that it may deem necessary
or desirable. Without limiting the generality of the foregoing, the Servicer shall be authorized and empowered to execute and deliver,
on behalf of itself, the Issuer, the Trustees, the Securityholders or any of them, any and all instruments of satisfaction or cancellation,
or of partial or full release or discharge and all other comparable instruments, with respect to the Receivables and the Financed
Vehicles. The Servicer is hereby authorized to commence, in its own name or in the name of the Issuer, a legal proceeding to enforce
a Defaulted Receivable pursuant to Section 3.04 or to commence or participate in a legal proceeding (including without limitation
a bankruptcy proceeding) relating to or involving a Receivable, including a Defaulted Receivable. If the Servicer commences or
participates in such a legal proceeding in its own name, the Issuer shall thereupon be deemed to have automatically assigned, solely
for the purpose of collection on behalf of the party retaining an interest in such Receivable, such Receivable and the other property
conveyed to the Issuer pursuant to Section 2.01 with respect to such Receivable to the Servicer for purposes of commencing
or participating in any such proceeding as a party or claimant, and the Servicer is authorized and empowered by the Issuer to execute
and deliver in the Servicer’s name any notices, demands, claims, complaints, responses, affidavits or other documents or
instruments in connection with any such proceeding. If in any enforcement suit or legal proceeding it shall be held that the Servicer
may not enforce a Receivable on the grounds that it shall not be a real party in interest or a holder entitled to enforce such
Receivable, the Owner Trustee on behalf of the Issuer shall, at the Servicer’s expense and written direction, take steps
to enforce such Receivable, including bring suit in its name or the name of the Issuer, the Indenture Trustee, the Noteholders
or the Certificateholders. The Owner Trustee on behalf of the Issuer shall furnish the Servicer with any powers of attorney and
other documents and take any other steps which the Servicer may deem necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties hereunder.


 


Section 3.02.         Collection
of Receivable Payments. The Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions
of the Receivables as and when the same shall become due, and shall follow such collection procedures as it follows with respect
to all comparable automobile receivables (including light-duty trucks) that it services for itself or others. The Servicer shall
be authorized to grant extensions, rebates or adjustments on a Receivable without the prior consent of the Issuer. If, as a result
of the extending of payments in accordance with the customary servicing standards of the Servicer, any Receivable will be outstanding
later than the Final Scheduled Maturity Date of the latest maturing class of Notes, the Servicer shall be obligated to repurchase
such Receivable pursuant to Section 3.08. Notwithstanding the foregoing, extensions or modifications of the payment schedule
of a Receivable can be made only in accordance with the customary servicing procedures of the Servicer, as such customary servicing
procedures may be changed from time to time. The Servicer may, in accordance with its customary servicing procedures, waive any
prepayment charge, late payment charge or any other fees that may be collected in the ordinary course of servicing the Receivables.


 


Section 3.03.         [Reserved] 


 




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Section 3.04.         Realization
Upon Receivables. On behalf of the Issuer, the Servicer shall use its best efforts, consistent with its customary servicing
procedures, to repossess or otherwise comparably convert the ownership of any Financed Vehicle that it has reasonably determined
should be repossessed or otherwise converted following a default under the Receivable secured by the Financed Vehicle. The Servicer
shall follow such practices and procedures as it shall deem necessary or advisable and as shall be customary and usual in its servicing
of automobile receivables (including light-duty trucks), which practices and procedures may include reasonable efforts to realize
upon any Dealer Recourse, selling the related Financed Vehicle at public or private sale and other actions by the Servicer in order
to realize upon such a Receivable. The Servicer shall be entitled to recover its reasonable Liquidation Expenses with respect to
each Defaulted Receivable, which are not to exceed the related Net Liquidation Proceeds with respect to each such Defaulted Receivable;
provided, however, that the Servicer shall not be obligated to take actions to realize upon any Defaulted Receivables
unless, in its reasonable opinion, Liquidation Proceeds will exceed Liquidation Expenses. All Net Liquidation Proceeds realized
in connection with any such action with respect to a Receivable shall be deposited by the Servicer in the Collection Account in
the manner specified in Section 4.02(a).


 


Section 3.05.         Maintenance
of Physical Damage Insurance Policies. The Servicer shall, in accordance with its customary servicing procedures and underwriting
standards, require that each Obligor shall have obtained physical damage insurance covering each Financed Vehicle as of the origination
of the related Receivable.


 


Section 3.06.         Maintenance
of Security Interests in Financed Vehicles. The Servicer is hereby authorized to and shall, in accordance with its customary
servicing procedures and at its own expense, take such steps as are necessary to maintain perfection of and/or reperfect the security
interest created by each Receivable in the related Financed Vehicle, including in the event of the relocation of a Financed Vehicle
or for any other reason. In the event that the assignment of a Receivable to the Issuer is insufficient, without a notation on
the related Financed Vehicle’s certificate of title, to grant to the Issuer a first priority perfected security interest
in the related Financed Vehicle, the Servicer hereby agrees to serve as the agent of the Issuer for the purpose of perfecting the
security interest of the Issuer in such Financed Vehicle and agrees that the Servicer’s listing as the secured party on the
certificate of title is solely in its capacity as agent of the Issuer.


 


Section 3.07.         Covenants
of Servicer. The Servicer makes the following covenants on which the Issuer shall rely in accepting the Receivables in trust
pursuant to Section 2.01:


 


(a)          Liens
in Force. Except as otherwise contemplated by this Agreement, the Servicer shall not release in whole or in part any Financed
Vehicle from the security interest securing the related Receivable.


 


(b)          No
Impairment. The Servicer shall do nothing to impair the rights of the Issuer in the Receivables.


 


(c)          No
Amendments. Subject to Section 3.02, the Servicer shall not amend or otherwise modify any Receivable such that the total
number of Scheduled Payments is extended beyond the Final Scheduled Maturity Date, or either the Amount Financed or the APR is
altered, unless it is required to take the action by law or court order.


 




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Section 3.08.         Purchase
of Receivables Upon Breach. Upon a breach of any of the covenants of the Servicer set forth in Section 3.07 that materially
and adversely affects the interests of the Issuer or the Securityholders in any Receivable, or if an improper extension, rescheduling
or modification of a Receivable is made by the Servicer as described in Section 3.02, and such breach or impropriety shall
not have been cured in all material respects, the Servicer shall, as of the last day of the second Collection Period following
the Collection Period in which it discovers such breach (or, at the Servicer’s election, the last day of the first Collection
Period following the Collection Period in which it discovers such breach) purchase from the Issuer such Receivable and remit on
the related Payment Date the Administrative Purchase Payment to the Collection Account in the manner specified in Section 4.05.
Upon such deposit of the Administrative Purchase Payment, the Servicer shall for all purposes of this Agreement be deemed to have
released all claims for reimbursement of Outstanding Advances made in respect of such Receivable. The sole remedy of the Issuer,
the Trustees or the Securityholders against the Servicer with respect to a breach pursuant to Section 3.02 or 3.07
shall be to require the Servicer to purchase the related Receivables pursuant to this Section, except as otherwise provided in
Section 6.02. Neither the Owner Trustee nor the Indenture Trustee shall have any duty to conduct any affirmative investigation
as to the occurrence of any condition requiring the repurchase of any Receivable pursuant to this Section.


 


Section 3.09.         Total
Servicing Fee; Payment of Certain Expenses by Servicer. As compensation for the performance of its obligations hereunder, the
Servicer shall be entitled to receive on each Payment Date the Total Servicing Fee; provided, the Servicing Fee in respect
of a Collection Period (together with any portion of the Servicing Fee that remains unpaid from prior Payment Dates) will be paid
at the beginning of that Collection Period out of collections of interest on the Receivables for such Collection Period. The Basic
Servicing Fee in respect of a Collection Period shall be calculated based on a 360 day year comprised of twelve 30-day months.
Except to the extent otherwise provided herein, the Servicer shall be required to pay all expenses incurred by it in connection
with its activities under this Agreement (including taxes imposed on the Servicer and expenses incurred in connection with the
preparation of reports and fees to independent accountants).


 


Section 3.10.         Servicer’s
Certificate. On or before each Determination Date, the Servicer will deliver to the Trustees and the Administrator (which the
Administrator shall make available to each Rating Agency pursuant to Section 1.02(c) of the Administration Agreement) a servicing
report containing all information necessary to make the payments, transfers and distributions pursuant to Sections 4.05,
4.06 and 4.07 hereof and Section 8.02(d) of the Indenture for the related Payment Date, together with the written
statements to be furnished pursuant to Section 4.10 hereof and Section 6.06 of the Indenture
(such report, the “Servicer’s Certificate”) for that Payment Date and the related Collection Period. 
A Responsible Person of the Servicer will certify that the information in the Servicer’s Certificate is accurate, to the
best of his/her knowledge, in all material respects.


 




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Section 3.11.         Annual
Statement as to Compliance; Notice of Default.


 


(a)          The
Servicer shall deliver to the Trustees and the Administrator, on or before ninety (90) days after the end of each fiscal year for
which a report on Form 10-K is required to be filed with the Commission by or on behalf of the Issuer, commencing with the fiscal
year ended March 31, 2019, an Officer’s Certificate of the Servicer (which the Administrator shall make available to each
Rating Agency pursuant to Section 1.02(c) of the Administration Agreement), stating that (i) a review of the activities of the
Servicer during the preceding 12-month period ended March 31 (or, if applicable, such shorter period in the case of the first such
Officer’s Certificate) and of its performance under this Agreement has been made under such officer’s supervision,
and (ii) to the best of such officer’s knowledge, based on such review, the Servicer has fulfilled all its obligations under
this Agreement throughout such period in all material respects, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature and status thereof.


 


(b)          The
Servicer shall deliver to the Trustees and the Administrator, promptly after having obtained knowledge thereof, an Officer’s
Certificate (which the Administrator shall make available to each Rating Agency pursuant to Section 1.02(c) of the Administration
Agreement) specifying the nature and status of any event which with the giving of notice or lapse of time, or both, would become
a Servicer Default.


 


Section 3.12.         Assessment
of Compliance and Annual Accountants’ Report.


 


(a)          On
or before ninety (90) days after the end of each fiscal year for which a report on Form 10-K is required to be filed with the Commission
by or on behalf of the Issuer, commencing with the fiscal year ended March 31, 2019, the Servicer shall:


 


(i)          deliver
to the Issuer, the Owner Trustee and the Administrator a report (which the Administrator shall make available to each Rating Agency
pursuant to Section 1.02(c) of the Administration Agreement) regarding the Servicer’s assessment of compliance with the Servicing
Criteria during the immediately preceding calendar year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item
1122 of Regulation AB. Such report shall be addressed to the Issuer and signed by an authorized officer of the Servicer, and shall
address each of the Servicing Criteria specified in Exhibit D hereto delivered to the Issuer and the Administrator concurrently
with the execution of this Agreement;


 


(ii)         deliver
to the Issuer, the Owner Trustee and the Administrator a report of a registered public accounting firm reasonably acceptable to
the Issuer and the Administrator that attests to, and reports on, the assessment of compliance made by the Servicer and delivered
pursuant to the preceding paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X
under the Securities Act and the Exchange Act;


 


(iii)        use
its best efforts to cause each Subservicer and each Subcontractor determined by the Servicer to be “participating in the
servicing function” within the meaning of Item 1122 of Regulation AB, to deliver to the Issuer and the Administrator an assessment
of compliance and accountants’ attestation as and when provided in paragraphs (i) and (ii) of this Section;


 




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(iv)         use
its best efforts to cause each Subservicer and Subcontractor determined by the Servicer to be a “servicer” within the
meaning of Item 1108(a)(2)(i) through (iii) of Regulation AB, to deliver to the Issuer, the Owner Trustee and the Administrator
a statement of compliance as and when provided in Section 3.11(a); and


 


(v)          deliver
to the Issuer, the Owner Trustee and the Administrator and any other Person that will be responsible for signing the certification
(a “Sarbanes Certification”) required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to Section
302 of the Sarbanes-Oxley Act of 2002) on behalf of an asset-backed issuer with respect to a securitization transaction a certification
in the form attached hereto as Exhibit C.


 


The Servicer acknowledges that the parties identified in clause
(a)(v) above may rely on the certification provided by the Servicer pursuant to such clause in signing a Sarbanes Certification
and filing such with the Commission. The Administrator, acting on behalf of the Issuer, will not request delivery of a certification
under clause (a)(v) above unless the Depositor is required under the Exchange Act to file an annual report on Form 10-K
with respect to an Issuer whose asset pool includes the Receivables.


 


(b)          Each
assessment of compliance provided by a Subservicer pursuant to Section 3.12(a)(iii) shall address each of the Servicing
Criteria specified on a certification to be delivered to the Servicer, Issuer, the Owner Trustee and the Administrator on or prior
to the date of such appointment. An assessment of compliance provided by a Subcontractor pursuant to Section 3.12(a)(iii)
need not address any elements of the Servicing Criteria other than those specified by the Servicer and the Issuer on the date of
such appointment.


 


Section 3.13.         Access
to Certain Documentation and Information Regarding Receivables. At the request of the RPA Seller, the Servicer shall provide
to the Trustees and the Asset Representations Reviewer reasonable access to the documentation regarding the Receivables including,
but not limited to, any information required to be provided by the Servicer pursuant to Section 2.03 of the Receivables Purchase
Agreement. The Servicer shall provide such access to any Securityholder only in such cases where a Securityholder is required by
applicable statutes or regulations to review such documentation. In each case, such access shall be afforded without charge but
only upon reasonable request and during normal business hours at the respective offices of the Servicer. Nothing in this Section
shall derogate from the obligation of the Servicer to observe any applicable law prohibiting disclosure of information regarding
the Obligors, and the failure of the Servicer to provide access as provided in this Section as a result of such obligation shall
not constitute a breach of this Section.


 


Section 3.14.         [Reserved].


 


Section 3.15.         Reports
to Securityholders and Rating Agencies.


 




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(a)          At
the expense of the Issuer, the Indenture Trustee shall provide to any Note Owner, and the Owner Trustee shall provide to any Certificateholder,
who so requests in writing a copy of (i) any Servicer’s Certificate, (ii) any annual statement as to compliance described
in Section 3.1l(a), (iii) any assessment of compliance and annual accountants’ report described in Section 3.12,
(iv) any statement to Securityholders pursuant to Section 4.10, (v) the Trust Agreement, (vi) the Indenture or (vii) this
Agreement (without Exhibits). In addition, such statements may be posted by the Indenture Trustee on its website at http://www.sf.citidirect.com.
The Indenture Trustee or the Owner Trustee, as applicable, may require such Securityholder or Note Owner to pay a reasonable sum
to cover the cost of the Trustee’s complying with such request.


 


(b)          The
Servicer shall forward to the Administrator a copy of each (i) Servicer’s Certificate, (ii) annual statement as to compliance
described in Section 3.11(a), (iii) Officer’s Certificate of the Servicer described in Section 3.11(b), (iv)
any assessment of compliance and annual accountants’ report pursuant to Section 3.12, (v) statement to Securityholders
pursuant to Section 4.10 and (vi) other report it may receive pursuant to this Agreement, the Trust Agreement or the Indenture;
and in the case of each of (i) through (vi), the Administrator shall make a copy available to each Rating Agency in accordance
with Section 1.02(c) of the Administration Agreement.


 


Section 3.16.         Appointment
of Subservicer or Subcontractor.


 


(a)          The
Servicer may at any time appoint a subservicer to perform all or any portion of its obligations as Servicer hereunder if the Administrator
and the Indenture Trustee has received ten (10) days prior written notice of the Servicer’s intention to do so and such appointment
has satisfied the Rating Agency Condition; provided, however, that the Servicer shall remain obligated and be liable
to the Issuer, the Owner Trustee, the Delaware Trustee, the Indenture Trustee, the Certificateholders and the Noteholders for the
servicing and administering of the Receivables in accordance with the provisions hereof without diminution of such obligation and
liability by virtue of the appointment of such subservicer and to the same extent and under the same terms and conditions as if
the Servicer alone were servicing and administering the Receivables. The fees and expenses of the subservicer shall be as agreed
between the Servicer and its subservicer from time to time, and none of the Issuer, the Owner Trustee, the Delaware Trustee, the
Indenture Trustee, the Certificateholders or the Noteholders shall have any responsibility therefor.


 


(b)          The
Servicer shall cause any Subservicer used by the Servicer (or by any Subservicer) for the benefit of the Issuer to comply with
the reporting and compliance provisions of this Agreement to the same extent as if such Subservicer were the Servicer, and to provide
the information required with respect to such Subservicer as is required to file all required reports with the Commission. The
Servicer shall be responsible for obtaining from each Subservicer and delivering to the Issuer and the Administrator any servicer
compliance statement required to be delivered by such Subservicer under Section 3.11, any assessment of compliance and attestation
required to be delivered by such Subservicer under Section 3.12 and any certification required to be delivered to the Person
that will be responsible for signing the Sarbanes Certification under Section 3.12(a)(iv) as and when required to be delivered.


 




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(c)          The
Servicer shall promptly upon request provide to the Issuer or the Administrator, acting on behalf of the Issuer, a written description
(in form and substance satisfactory to the Issuer and the Administrator) of the role and function of each Subcontractor utilized
by the Servicer or any Subservicer, specifying (i) the identity of each such Subcontractor, (ii) which, if any, of such Subcontractors
are “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, and (iii) which, if
any, elements of the Servicing Criteria will be addressed in assessments of compliance provided by each Subcontractor identified
pursuant to clause (ii) of this paragraph.


 


As a condition to the utilization of any
Subcontractor determined to be “participating in the servicing function” within the meaning of Item 1122 of Regulation
AB, the Servicer shall cause any such Subcontractor used by the Servicer (or by any Subservicer) for the benefit of the Issuer
and the Depositor to comply with the reporting and compliance provisions of Section 3.12(a) of this Agreement to the same
extent as if such Subcontractor were the Servicer. The Servicer shall be responsible for obtaining from each Subcontractor and
delivering to the Issuer and the Administrator any assessment of compliance and attestation required to be delivered by such Subcontractor,
in each case as and when required to be delivered.


 


Section 3.17.         Information
to be Provided by the Servicer.


 


(a)          At
the request of the Administrator, acting on behalf of the Issuer, for the purpose of satisfying its reporting obligation under
the Exchange Act with respect to any class of asset-backed securities, the Servicer shall (or shall cause each Subservicer to)
(i) notify the Issuer and the Administrator in writing of any material litigation or governmental proceedings pending against the
Servicer or any Subservicer and (ii) provide to the Issuer and the Administrator a description of such proceedings.


 


(b)          As
a condition to the succession to the Servicer or any Subservicer as servicer or subservicer under this Agreement by any Person
(i) into which the Servicer or such Subservicer may be merged or consolidated, or (ii) which may be appointed as a successor to
the Servicer or any Subservicer, the Servicer shall provide to the Issuer, the Administrator and the Depositor, at least ten (10)
Business Days prior to the effective date of such succession or appointment, (x) written notice to the Issuer and the Administrator
of such succession or appointment and (y) in writing and in form and substance reasonably satisfactory to the Issuer and the Administrator,
all information reasonably requested by the Issuer or the Administrator, acting on behalf of the Issuer, in order to comply with
its reporting obligation under Item 6.02 of Form 8-K with respect to any class of asset-backed securities.


 


(c)          In
addition to such information as the Servicer, as servicer, is obligated to provide pursuant to other provisions of this Agreement,
if so requested by the Issuer or the Administrator, acting on behalf of the Issuer, the Servicer shall provide such information
regarding the performance or servicing of the Receivables as is reasonably required to facilitate preparation of distribution reports
in accordance with Item 1121 of Regulation AB. Such information shall be provided concurrently with the monthly reports otherwise
required to be delivered by the Servicer under this Agreement, commencing with the first such report due not less than ten (10)
Business Days following such request.


 




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Section 3.18.         Remedies.


 


(a)          The
Servicer shall be liable to the Issuer, the Administrator and the Depositor for any monetary damages incurred as a result of the
failure by the Servicer, any Subservicer or any Subcontractor to deliver any information, report, certification, attestation, accountants’
letter or other material when and as required under this Article III, including any failure by the Servicer to identify any Subcontractor
“participating in the servicing function” within the meaning of Item 1122 of Regulation AB, and shall reimburse the
applicable party for all costs reasonably incurred by each such party in order to obtain the information, report, certification,
accountants’ letter or other material not delivered as required by the Servicer, any Subservicer, or any Subcontractor.


 


(b)          The
Seller shall promptly reimburse the Issuer and the Administrator for all reasonable expenses incurred by the Issuer or Administrator
as such are incurred, in connection with the termination of the Servicer as servicer and the transfer of servicing of the Receivables
to a Successor Servicer. The provisions of this paragraph shall not limit whatever rights the Issuer or Administrator may have
under other provisions of this Agreement or otherwise, whether in equity or at law, such as an action for damages, specific performance
or injunctive relief.


 


ARTICLE
Four



DISTRIBUTIONS; RESERVE FUND;

STATEMENTS TO SECURITYHOLDERS


 


Section 4.01.         Establishment
of Accounts.


 


(a)          The
Servicer shall establish and maintain an Eligible Account with the Securities Intermediary in the name of the Indenture Trustee
for the benefit of (i) the Securityholders (the “Collection Account”), (ii) the Noteholders (the “Note Distribution
Account”), (iii) the Securityholders (the “Reserve Fund”) and (iv) the Securityholders (the “Yield Supplement
Account”), in each case, bearing a designation clearly indicating that the funds deposited therein are held for the benefit
of the related Securityholders. Except as otherwise provided in this Agreement, in the event that the Indenture Trustee is no longer
an Eligible Institution, the Servicer shall, with the assistance of the Indenture Trustee as necessary, cause the Accounts to be
moved to an Eligible Institution.


 


(b)          To
the extent permitted by applicable laws, rules and regulations, all amounts held in the Collection Account, the Reserve Fund and
the Yield Supplement Account shall be either invested by the Securities Intermediary in Eligible Investments selected in writing
by the Servicer or maintained in cash. No amounts held in the Note Distribution Account will be invested. Earnings on investment
of funds in the Collection Account (net of losses and investment expenses) shall be paid to the Servicer as part of the Supplemental
Servicing Fee and any losses and investment expenses shall be charged against the funds on deposit in the related Account.


 




    	 	14	 



     


    

 


(i)          Except
as otherwise provided in Section 4.01(b), the Indenture Trustee shall possess all right, title and interest in all funds
on deposit from time to time in the Accounts and in all proceeds thereof (including all income thereon) and all such funds, investments,
proceeds and income shall be part of the Owner Trust Estate. The Accounts shall be under the sole dominion and control of the Indenture
Trustee for the benefit of the Noteholders or the Securityholders, as the case may be.


 


(ii)         Notwithstanding
anything else contained herein, the Servicer agrees that the Reserve Fund, the Yield Supplement Account and the Collection Account
will be established only with an Eligible Institution which agrees substantially as follows: (A) it will comply with Entitlement
Orders related to such account issued by the Indenture Trustee without further consent by the Servicer or Issuer; (B) until termination
of this Agreement, it will not enter into any other agreement related to such account pursuant to which it agrees to comply with
Entitlement Orders of any Person other than the Indenture Trustee; (C) all Account Property delivered or credited to it in connection
with such account and all proceeds thereof will be promptly credited to such account; (D) it will treat all Account Property as
Financial Assets; and (E) all Account Property will be physically delivered (accompanied by any required endorsements) to, or credited
to an account in the name of, the Eligible Institution maintaining the related Account in accordance with such Eligible Institution’s
customary procedures such that such Eligible Institution establishes a Security Entitlement in favor of the Indenture Trustee with
respect thereto over which the Indenture Trustee (or such other Eligible Institution) has Control.


 


(iii)        The
Servicer shall have the power, revocable by the Indenture Trustee or by the Owner Trustee with the consent of the Indenture Trustee,
to instruct the Indenture Trustee to make withdrawals and payments from the Accounts for the purpose of permitting the Servicer
or the Owner Trustee to carry out its respective duties hereunder or under the Trust Agreement or permitting the Indenture Trustee
to carry out its duties under the Indenture.


 


Section 4.02.         Collections.


 


(a)          The
Servicer shall remit daily to the Collection Account all payments received from or on behalf of the Obligors on or in respect of
the Receivables and all Net Liquidation Proceeds within two (2) Business Days after receipt thereof, in each case, minus
(i) an amount equal to amounts previously deposited by the Servicer in the Collection Account but later determined by the Servicer
in its reasonable opinion to have resulted from mistaken deposits or postings, which amounts have not been previously reimbursed
to the Servicer, and (ii) any prepayment charge and other administrative fees and expenses or similar charges which shall be retained
by the Servicer and Supplemental Servicing Fees; provided, that any payments received in respect of an Obligor that are
not immediately identifiable as such, shall not be deemed “received” until such time as the Obligor is identified and
the payment is allocated as such, in accordance with the Servicer’s customary servicing practices.


 




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(b)          Notwithstanding
the provisions of clause (a) above and subject to and upon compliance with the terms and conditions set forth in this clause
(b), the Servicer may be permitted to make remittances of collections on a less frequent basis than that specified in clause (a)
above for so long as such terms and conditions are fulfilled. Accordingly, the Servicer will be permitted to remit collections
referred to in clause (a) above to the Collection Account in immediately available funds on each Deposit Date for so long
as (i) (A) the Servicer shall be AHFC, (B) no Servicer Default or Event of Default shall have occurred and be continuing and not
have been waived in accordance with the Basic Documents, and (C) (x) the Required Servicer Rating is satisfied, or (y) if the Required
Servicer Rating is not satisfied, the Servicer shall have provided the Trustees written confirmation from each Rating Agency that
the proposed alternative collections remittance schedule will not result in the reduction of withdrawal of the rating then assigned
to any Class of Notes. The Indenture Trustee shall not be deemed to have knowledge of any event or circumstance under clause
(i)(B) above that would require daily remittance by the Servicer to the Collection Account unless a Responsible Officer has
received notice of such event or circumstance from the Seller or the Servicer in an Officer’s Certificate, from Securityholders
as provided in Section 7.01. Notwithstanding the foregoing, immediately following (x) non-compliance with any of clause
(A), (B) or (C) above, or (y) the occurrence of an event specified in Section 7.01(c) (notwithstanding
any period of grace contained in such clause), the Servicer shall remit all collections referred to in clause (a) above
to the Collection Account on a daily basis within two (2) Business Days of receipt thereof in accordance with clause (a)
above. For purposes of this Article the phrase “payments made on behalf of Obligors” shall mean payments made by Persons
other than the Seller or the Servicer.


 


Section 4.03.         Application
of Collections. On each Payment Date, all collections for the related Collection Period shall be applied by the Servicer as
follows:


 


(a)          With
respect to each Receivable (other than an Administrative Receivable or a Warranty Receivable), payments made by or on behalf of
the Obligor which are not Supplemental Servicing Fees shall be applied first to reimburse the Servicer for Outstanding Advances
made with respect to such Receivable (each such payment, an “Overdue Payment”). Next, the amount of any payment in
excess of Supplemental Servicing Fees and Outstanding Advances with respect to such Receivable shall be applied to the Scheduled
Payment with respect to such Receivable. The amount of such payment remaining after the applications described in the two preceding
sentences shall be applied to prepay the principal balance of such Receivable.


 


(b)          With
respect to each Administrative Receivable and Warranty Receivable, payments made by or on behalf of the Obligor shall be applied
in the same manner. A Warranty Purchase Payment shall be applied to reduce Outstanding Advances and such Warranty Purchase Payment
or an Administrative Purchase Payment, as applicable, shall then be applied to the Scheduled Payment, in each case to the extent
that the payments by the Obligor shall be insufficient, and then to prepay the unpaid principal balance of such Receivable in full.


 




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Section 4.04.         Advances.


 


(a)          As
of the close of business on the last day of a Collection Period, if the payments during such Collection Period by or on behalf
of the Obligor on or in respect of a Receivable (other than an Administrative Receivable or a Warranty Receivable) after application
under Section 4.03(a) shall be less than the Scheduled Payment, whether as a result of any extension granted to the Obligor
or otherwise, then the Servicer may, at its option, advance to the Trust an amount equal to the product of the principal balance
of such Receivable as of the first day of such Collection Period and one-twelfth of its APR minus the amount of interest actually
received on such Receivable during such Collection Period (each, an “Advance”). If the calculation above results in
a negative number, an amount equal to such negative amount shall be paid to the Servicer in reimbursement of any Outstanding Advances
in respect of such Receivables. In addition, in the event that a Receivable becomes a Liquidated Receivable, the amount of accrued
and unpaid interest thereon (but not including interest for the current Collection Period) shall, up to the amount of Outstanding
Advances in respect of such Receivables in respect thereof, be withdrawn from the Collection Account and paid to the Servicer in
reimbursement of such Outstanding Advances. No Advances will be made with respect to the Principal Balance of Receivables or with
respect to Defaulted Receivables. Notwithstanding the foregoing, the Servicer shall not be required to make any Advance. On each
Deposit Date, the Servicer will deposit into the Collection Account an amount equal to all Advances to be made, at its option,
in respect of the related Collection Period.


 


(b)          The
Servicer shall be entitled to reimbursement for Outstanding Advances, without interest, with respect to a Receivable from the following
sources with respect to such Receivable: (i) subsequent payments made by or on behalf of the related Obligor, (ii) Liquidation
Proceeds, (iii) the Administrative Purchase Payment and (iv) the Warranty Purchase Payment.


 


(c)          To
the extent that during any Collection Period any funds described above in Section 4.04(b) with respect to a Receivable as
to which the Servicer previously has made an unreimbursed Advance are received by the Issuer or the Servicer, and the Servicer
determines that any Outstanding Advances (other than in respect of an interest shortfall due to an Excess Payment) with respect
to such Receivable are unlikely to be recovered from payments made on or with respect to such Receivable (each, a “Nonrecoverable
Advance”), then, on the related Payment Date, upon the Trustees’ receipt of the Servicer’s Certificate for such
Nonrecoverable Advance, the Indenture Trustee shall promptly remit to the Servicer from the Collection Account, (i) from Available
Interest an amount equal to the portion of such Nonrecoverable Advance allocable to interest and (ii) from Available Principal
an amount equal to the portion of such Nonrecoverable Advance allocable to principal, in each case without interest, in accordance
with Section 4.06(c)(i). In lieu of causing the Indenture Trustee to remit any such amounts or the amounts described in
clauses (i) through (iv) in Section 4.04(b), the Servicer may deduct such amounts from deposits otherwise
to be made into the Collection Account in accordance with Section 4.09.


 


Section 4.05.         Additional
Deposits.


 


(a)          The
following additional deposits shall be made to the Collection Account one (1) day prior to each Payment Date: (i) the RPA Seller
shall remit the aggregate Warranty Purchase Payments with respect to Warranty Receivables pursuant to Section 2.04 and (ii)
the Servicer shall remit (A) any extension fee charged in connection with the extension of a Receivable pursuant to Section
3.02, (B) the aggregate Advances pursuant to Section 4.04(a), (C) the aggregate Administrative Purchase Payments with
respect to Administrative Receivables pursuant to Section 3.08, and (D) the amount required upon the optional purchase of
all Receivables by the Servicer or any successor to the Servicer pursuant to Section 8.01.


 


(b)          [Reserved]


 




    	 	17	 



     


    

 


(c)          All
deposits required to be made in respect of a Collection Period pursuant to this Section by the Seller or the Servicer, as the case
may be, may be made in the form of a single deposit and shall be made in immediately available funds, on the related Deposit Date.


 


Section 4.06.         Distributions.


 


(a)          On
each Deposit Date, the Indenture Trustee shall cause to be made (or request the Servicer to make, as applicable) the transfer and
distribution in immediately available funds, from the Yield Supplement Account to the Collection Account, an amount equal to the
Yield Supplement Withdrawal Amount, if any, for such Payment Date.


 


(b)          On
each Determination Date, the Servicer shall (i) calculate all amounts required to be deposited in the Note Distribution Account
and the Certificate Distribution Account and (ii) make all distributions on the related Payment Date.


 


(c)          On
each Payment Date, the Servicer shall instruct the Indenture Trustee in writing (based on the information contained in the Servicer’s
Certificate delivered on the related Determination Date pursuant to Section 3.10) to make the following deposits and distributions
for receipt by the Servicer or deposit in the applicable account, to the extent of the Available Amount, in the following order
of priority:


 


(i)          to
the Servicer, Nonrecoverable Advances;


 


(ii)         to
the Servicer, the Total Servicing Fee (including any unpaid Total Servicing Fees from one or more prior Collection Periods);


 


(iii)        on
a pro rata basis, to the Indenture Trustee, the Delaware Trustee and the Owner Trustee, any accrued and unpaid Trust Fees and Expenses,
in each case to the extent such fees and expenses have not been previously paid by the Sponsor, until the Notes have been paid
in full, the annual amount paid to the Trustees out of the Available Amount allocation as described in this clause (iii)
shall not exceed $100,000 while notes remain outstanding, so long as an Event of Default has not occurred;


 


(iv)         to
the Asset Representations Reviewer, any accrued and unpaid Asset Representations Reviewer Fees and Expenses, in each case to the
extent such fees and expenses have not been previously paid by the Sponsor, in its capacity as Administrator, until the Notes have
been paid in full, the annual amount paid to the Asset Representations Reviewer out of the Available Amount allocation as described
in this clause (iv) shall not exceed $150,000 while notes remain outstanding, so long as an Event of Default has not occurred;


 


(v)          on
a pro rata basis, to the Note Distribution Account, the Note Interest Distributable Amount to be distributed to the holders of
the Notes at their respective Interest Rates;


 


(vi)         to
the Note Distribution Account, the Note Principal Distributable Amount;


 




    	 	18	 



     


    

 


(vii)        to
the Certificate Distribution Account, the Certificate Interest Distributable Amount to be distributed to Certificateholders;


 


(viii)      after
the Notes have been paid in full, to the Certificate Distribution Account, the Certificate Principal Distributable Amount;


 


(ix)         to
the Reserve Fund, the amount, if any, necessary to reinstate the balance in the Reserve Fund up to the Specified Reserve Fund Balance;


 


(x)          on
a pro rata basis, to the Indenture Trustee, the Delaware Trustee and the Owner Trustee, any accrued and unpaid Trust Fees and Expenses
remaining after application of the payments described in clause (iii) above;


 


(xi)         to
the Asset Representations Reviewer, any accrued and unpaid Asset Representations Reviewer Fees and Expenses remaining after application
of the payments described in clause (iv) above; and


 


(xii)        to
the Depositor, any Available Amount remaining (after giving effect to the reduction in the Available Amount described in clauses
(i) through (xi) above.


 


Notwithstanding that the Notes have been
paid in full, the Indenture Trustee shall continue to maintain the Collection Account hereunder until the Pool Balance has been
reduced to zero.


 


Section 4.07.         Reserve
Fund.


 


(a)          On
the Closing Date, the Seller will deposit the Reserve Fund Initial Deposit into the Reserve Fund from the net proceeds of the sale
of the Notes. The Reserve Fund shall be the property of the Issuer subject to the rights of the Indenture Trustee in the Reserve
Fund Property.


 


(b)          In
the event that the Note Distributable Amount exceeds the sum of the amounts deposited into the Note Distribution Account pursuant
to Sections 4.06(c)(v) and (vi) on each Payment Date (or, if the Reserve Fund is not maintained by the Indenture
Trustee, on the related Deposit Date), the Indenture Trustee (based on information contained in the Servicer’s Certificate
delivered on the related Determination Date pursuant to Section 3.10) shall cause an amount equal to the lesser of (A) the
amount on deposit in the Reserve Fund and (B) the amount by which the Note Distributable Amount exceeds the sum of the amounts
in the Note Distribution Account, to be deposited from the Reserve Account into the Note Distribution Account in immediately available
funds in the amounts set forth in the Servicer’s Certificate for such Payment Date; provided that such amount shall be applied
first, to the payment of interest due on the Notes to the extent, if any, that the amount deposited pursuant to Section 4.06(c)(v)
is not sufficient to cover such payment of interest and, second, to the payment of principal of the Notes.


 




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(c)          In
the event that the Certificate Distributable Amount exceeds the sum of the amounts deposited into the Certificate Distribution
Account pursuant to Sections 4.06(c)(vii) and (viii) on each Payment Date (or, if the Reserve Fund is not maintained
by the Indenture Trustee, on the related Deposit Date), the Indenture Trustee shall cause an amount equal to the lesser of (A)
the amount on deposit in the Reserve Fund and (B) the amount by which the Certificate Distributable Amount exceeds the sum of the
amounts in the Certificate Distribution Account, to be deposited into the Certificate Distribution Account in immediately available
funds in the amounts set forth in the Servicer’s Certificate for such Payment Date; provided that such amount shall be applied
first, to the payment of interest due on the Certificates to the extent, if any, that the amount deposited pursuant to Section
4.06(c)(vii) is not sufficient to cover such payment of interest and, second, to the payment of principal of the Certificates.


 


(d)          On
each Payment Date (or, if the Reserve Fund is not maintained by the Indenture Trustee, on the related Deposit Date), all interest
and other income (net of losses and investment expenses) on funds on deposit in the Reserve Fund shall upon the written direction
of the Servicer, be paid to the Seller to the extent that the funds therein exceed the Specified Reserve Fund Balance. Upon any
distribution to the Seller of amounts in excess of the Specified Reserve Fund Balance, the Noteholders will not have any rights
in, or claims to, such amounts.


 


Section 4.08.         Yield
Supplement Account. On the Closing Date, the Seller will deposit the Yield Supplement Account Deposit to the Yield Supplement
Account from the net proceeds of the sale of the Notes. The Yield Supplement Account shall be the property of the Issuer subject
to the rights of the Indenture Trustee for the benefit of the Securityholders.


 


Section 4.09.         Net
Deposits. For so long as AHFC shall be the Servicer, the Servicer and the Indenture Trustee may make any remittances pursuant
to this Article net of amounts to be distributed by the applicable recipient to such remitting party. Nonetheless, each such party
shall account in writing for all of the above described remittances and distributions as if the amounts were deposited and/or transferred
separately.


 


Section 4.10.         Statements
to Securityholders.


 


(a)          On
each Payment Date, the Servicer shall provide to the Owner Trustee to furnish to each Certificateholder of record and to the Indenture
Trustee to make available to each Noteholder of record (by posting on its website at http://www.sf.citidirect.com) the Servicer’s
Certificate furnished pursuant to Section 3.10 hereof.


 


(b)          Within
the prescribed period of time for tax reporting purposes after the end of each calendar year during the term of the Issuer, but
not later than the latest date permitted by law, the related Trustee shall, upon written request, mail to each Person who at any
time during such calendar year shall have been a Securityholder, a statement, prepared by the Servicer, containing certain information
for such calendar year or, in the event such Person shall have been a Securityholder during a portion of such calendar year, for
the applicable portion of such year, for the purposes of such Securityholder’s preparation of federal income tax returns.
In addition, the Servicer shall furnish to the Trustees for distribution to such Person at such time any other information necessary
under applicable law for the preparation of such income tax returns.


 




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ARTICLE
Five



THE SELLER


 


Section 5.01.         Representations
of Seller. The Seller makes the following representations on which the Issuer is deemed to have relied in acquiring the Receivables.
The representations speak as of the execution and delivery of this Agreement, and shall survive the sale of the Receivables to
the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture.


 


(a)          Organization
and Good Standing. The Seller has been duly organized and is validly existing as a limited liability company in good standing
under the laws of the State of Delaware, and had at all relevant times, and has, power, authority and legal right to acquire, own
and sell the Receivables and to perform its obligations under and consummate the transactions contemplated by the Basic Documents.


 


(b)          Due
Qualification. The Seller is duly qualified to do business as a foreign limited liability company in good standing, and has
obtained all necessary licenses and approvals in each jurisdiction where any such failure to do so would materially and adversely
affect the Seller’s ability to perform its obligations under and consummate the transactions contemplated by the Basic Documents.


 


(c)          Power
and Authority. The Seller has the power and authority to execute and deliver this Agreement and to carry out its terms, the
Seller has full power and authority to sell and assign the property to be sold and assigned to and deposited with the Issuer and
has duly authorized such sale and assignment by all necessary corporate action; and the execution, delivery and performance of
this Agreement has been duly authorized by the Seller by all necessary corporate action.


 


(d)          Valid
Sale; Binding Obligation. This Agreement evidences a valid sale, transfer and assignment of the Receivables, enforceable against
creditors of and purchasers from the Seller, and constitutes a legal, valid and binding obligation of the Seller enforceable in
accordance with its terms, except as enforceability may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium
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
Violation. The execution, delivery and performance by the Seller of this Agreement and the consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms of this Agreement does not conflict with, result in any breach
of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the certificate
of formation or limited liability company agreement of the Seller, or conflict with or violate any of the material terms or provisions
of, or constitute (with or without notice or lapse of time) a default under, any indenture, agreement or other instrument to which
the Seller is a party or by which it shall be bound; nor result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument (other than this Agreement); nor, to the Seller’s
knowledge, violate any law or any order, rule or regulation applicable to the Seller of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having jurisdiction over the Seller or its properties, which
breach, default, conflict, lien or violation would have a material adverse effect on the earnings, business affairs or business
prospects of the Seller.


 




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(f)          No
Proceedings. There are no proceedings or investigations pending or, to the Seller’s knowledge, threatened, before any
court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Seller or its
properties: (i) asserting the invalidity of this Agreement or any other Basic Document, (ii) seeking to prevent the issuance of
the Securities or the consummation of any of the transactions contemplated by the Basic Documents, (iii) seeking any determination
or ruling that might materially and adversely affect the performance by the Seller of its obligations under, or the validity or
enforceability of, the Basic Documents or the Securities or (iv) relating to the Seller and which might adversely affect the federal
income tax attributes of the Securities.


 


Section 5.02.         Liability
of Seller; Indemnities. The Seller shall be liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement, which obligations shall include the following:


 


(a)          The
Seller shall indemnify, defend and hold harmless the Issuer, the Trustees and the Servicer and any of the officers, directors,
employees and agents of the Issuer, the Owner Trustee, the Delaware Trustee and the Indenture Trustee from and against (i) any
taxes that may at any time be asserted against any such Person with respect to the transactions contemplated herein and in the
other Basic Documents, including any sales, gross receipts, general corporation, tangible personal property, privilege or license
taxes (but, in the case of the Issuer, not including any taxes asserted with respect to, and as of the date of, the sale of the
Receivables to the Issuer or the issuance and original sale of the Securities, or asserted with respect to ownership of the Receivables,
or federal or other income taxes arising out of distributions on the Securities) and costs and expenses in defending against the
same, (ii) any loss, liability or expense (including any reasonable legal fees and expenses incurred by the Trustees in connection
with the enforcement of any indemnification or other obligation of the Issuer) incurred by reason of (x) the Seller’s willful
misfeasance, bad faith or negligence in the performance of its duties under this Agreement, or by reason of reckless disregard
of its obligations and duties under this Agreement and (y) the Seller’s or the Issuer’s violation of federal or state
securities laws in connection with the offering and sale of the Securities.


 


(b)          The
Seller shall indemnify, defend and hold harmless the Trustees and their respective officers, directors, employees and agents from
and against all costs, expenses, losses, claims, damages and liabilities (including any reasonable legal fees and expenses incurred
by the Trustees in connection with the enforcement of any indemnification or other obligation of the Issuer) arising out of or
incurred in connection with the acceptance or performance of the trusts and duties herein and contained in the Trust Agreement,
in the case of the Owner Trustee and the Delaware Trustee, and contained in the Indenture, in the case of the Indenture Trustee,
except to the extent that such cost, expense, loss, claim, damage or liability: (i) in the case of the Owner Trustee or the Delaware
Trustee, shall be due to the willful misfeasance, bad faith or gross negligence (except for errors in judgment) of the Owner Trustee
or the Delaware Trustee or shall arise from the breach by the Owner Trustee or the Delaware Trustee of any of its representations
or warranties set forth in Section 7.03 of the Trust Agreement or (ii) in the case of the Indenture Trustee, shall be due
to the willful misfeasance, bad faith or negligence of the Indenture Trustee or shall arise from the breach by the Indenture Trustee
of any of its representations or warranties set forth in Section 6.13 of the Indenture.


 




    	 	22	 



     


    

 


(c)          The
Seller shall pay any and all taxes levied or assessed upon all or any part of the Owner Trust Estate.


 


Indemnification under this Section shall
survive the resignation or removal of the Owner Trustee, the Delaware Trustee or the Indenture Trustee, as the case may be, and
the termination of this Agreement and shall include reasonable fees and expenses of counsel and expenses of litigation. If the
Seller shall have made any indemnity payments pursuant to this Section and the Person to or on behalf of whom such payments are
made thereafter shall collect any of such amounts from others, such Person shall promptly repay such amounts to the Seller, without
interest.


 


Section 5.03.         Merger,
Consolidation or Assumption of the Obligations of Seller; Certain Limitations. Any Person (i) into which the Seller may be
merged or consolidated, (ii) which may result from any merger, conversion or consolidation to which the Seller shall be a party
or (iii) which may succeed to all or substantially all of the business of the Seller, which Person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the Seller under this Agreement, shall be the successor to the
Seller under this Agreement without the execution or filing of any document or any further act on the part of any of the parties
to this Agreement, except that if the Seller in any of the foregoing cases is not the surviving entity, then the surviving entity
shall execute an agreement of assumption to perform every obligation of the Seller hereunder. The Seller shall satisfy the Rating
Agency Condition with respect to any merger, consolidation or succession pursuant to this Section.


 


Section 5.04.         Limitation
on Liability of Seller and Others. The Seller and any director, officer, employee or agent of the Seller may rely in good faith
on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person respecting any
matters arising hereunder. The Seller shall not be under any obligation to appear in, prosecute or defend any legal action that
shall not be incidental to its obligations under this Agreement, and that in its opinion may involve it in any expense or liability.


 


Section 5.05.         Seller
May Own Notes. The Seller and any Affiliate thereof may in its individual or any other capacity become the owner or pledgee
of Notes with the same rights as it would have if it were not the Seller or an Affiliate thereof, except as expressly provided
herein or in any other Basic Document.


 


ARTICLE
Six



THE SERVICER


 


Section 6.01.         Representations
of Servicer. The Servicer makes the following representations on which the Issuer is deemed to have relied in acquiring the
Receivables. The representations speak as of the execution and delivery of this Agreement and as of the Closing Date, and shall
survive the sale of the Receivables to the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture:


 




    	 	23	 



     


    

 


(a)          Organization
and Good Standing. The Servicer has been duly organized and is validly existing as a corporation in good standing under the
laws of the State of California, and had at all relevant times, and has, power, authority and legal right to acquire, own, sell
and service the Receivables and to hold the Receivable Files as custodian on behalf of the Issuer and to perform its obligations
under and consummate the transactions contemplated by the Basic Documents.


 


(b)          Due
Qualification. The Servicer is duly qualified to do business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in each jurisdiction where any such failure to do so would materially and adversely affect the
Servicer’s ability to perform its obligations under and consummate the transactions contemplated by the Basic Documents.


 


(c)          Power
and Authority. The Servicer has the power and authority to execute and deliver this Agreement and to carry out its terms; and
the execution, delivery and performance of this Agreement has been duly authorized by the Servicer by all necessary corporate action.


 


(d)          Binding
Obligation. This Agreement constitutes a legal, valid and binding obligation of the Servicer enforceable 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 in law.


 


(e)          No
Violation. The execution, delivery and performance by the Servicer of this Agreement and the execution, delivery and performance
by the Seller of this Agreement and the consummation of the transactions contemplated by this Agreement and the fulfillment of
the terms of this Agreement shall not conflict with, result in any breach of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time) a default under, the articles of incorporation or bylaws of the Servicer, or conflict
with or breach any of the material terms or provisions of, or constitute (with or without notice or lapse of time) a default under,
any indenture, agreement or other instrument to which the Servicer is a party or by which it shall be bound; nor result in the
creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument
(other than this Agreement); nor violate any law or, to the Servicer’s knowledge, any order, rule or regulation applicable
to the Servicer of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Servicer or its properties, which breach, default, conflict, Lien or violation would have a material
adverse effect on the earnings, business affairs or business prospects of the Servicer.


 




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(f)          No
Proceedings. There are no proceedings or investigations pending, or to the Servicer’s best knowledge, threatened, before
any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Servicer or
its properties: (i) asserting the invalidity of this Agreement or any other Basic Document, (ii) seeking to prevent the issuance
of the Securities or the consummation of any of the transactions contemplated by the Basic Documents, (iii) seeking any determination
or ruling that might materially and adversely affect the performance by the Servicer of its obligations under, or the validity
or enforceability of, the Basic Documents or the Securities or (iv) relating to the Servicer and which might adversely affect the
federal income tax attributes of the Securities.


 


(g)          Existence.
The Servicer is qualified to do business in each jurisdiction in which such qualification is necessary to protect the validity
and enforceability of the Indenture, the Notes, the Collateral (including any security interests therein) and each other instrument
or agreement included in the Owner Trust Estate.


 


Section 6.02.         Indemnities
of Servicer.


 


(a)          The
Servicer shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Servicer under
this Agreement. In this regard, the Servicer shall indemnify, defend and hold harmless the Issuer, the Trustees, the Securityholders
and the Seller and any of the officers, directors, employees and agents of the Issuer, the Owner Trustee, the Delaware Trustee
and the Indenture Trustee (each, an “Indemnified Party”) from and against any and all costs, expenses, losses,
damages, claims and liabilities (including any reasonable legal fees and expenses incurred by an Indemnified Party in connection
with the enforcement of any indemnification or other obligation of the Servicer) (i) arising out of or resulting from the use,
ownership or operation by the Servicer or any Affiliate thereof of a Financed Vehicle, and (ii) to the extent that such cost, expense,
loss, claim, damage or liability arose out of or was imposed upon any such Person through the negligence, willful misfeasance or
bad faith of the Servicer in the performance of its duties under this Agreement or by reason of reckless disregard of its obligations
and duties under this Agreement.


 


For purposes of this Section, in the event
of the termination of the rights and obligations of AHFC (or any successor thereto pursuant to Section 6.03) as Servicer
pursuant to Section 7.01, or a resignation by such Servicer pursuant to this Agreement, such Servicer shall be deemed to
be the Servicer pending appointment of a Successor Servicer (other than the Indenture Trustee) pursuant to Section 7.02.
For the avoidance of doubt, AHFC shall not be liable for any claims described in the first sentence of this Section which relate
to a date or period on or after the date on which AHFC is terminated or removed as the Servicer or which are cause by a successor
servicer.


 


(b)          Indemnification
under this Section shall survive the resignation or removal of the Owner Trustee, the Delaware Trustee or the Indenture Trustee,
as the case may be, or the termination of this Agreement and shall include reasonable fees and expenses of counsel and expenses
of litigation. If the Servicer shall have made any indemnity payments pursuant to this Section and the Person to or on behalf of
whom such payments are made thereafter collects any of such amounts from others, such Person shall promptly repay such amounts
to the Servicer, without interest.


 




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Section 6.03.         Merger,
Consolidation or Assumption of the Obligations of Servicer. Any corporation (i) into which the Servicer may be merged or consolidated,
(ii) which may result from any merger, conversion or consolidation to which the Servicer shall be a party or (iii) which may succeed
to all or substantially all of the business of the Servicer, which corporation in any of the foregoing cases executes an agreement
of assumption to perform every obligation of the Servicer under this Agreement, shall be the successor to the Servicer under this
Agreement without the execution or filing of any paper or any further act on the part of any of the parties to this Agreement.
The Servicer shall provide notice of any merger, consolidation or succession pursuant to this Section to the Trustees and the Administrator,
and in accordance with Section 1.02(c) of the Administration Agreement, the Administrator shall make such notice available to each
Rating Agency.


 


Section 6.04.         Limitation
on Liability of Servicer and Others. Neither the Servicer nor any of the directors, officers, employees or agents of the Servicer
shall be under any liability to the Issuer or any Securityholder, except as provided under this Agreement, for any action taken
or for refraining from the taking of any action pursuant to this Agreement or for errors in judgment; provided, however,
that this provision shall not protect the Servicer or any such person against any liability that would otherwise be imposed by
reason of willful misfeasance, bad faith or negligence in the performance of duties or by reason of reckless disregard of obligations
and duties under this Agreement. The Servicer and any director, officer, employee or agent of the Servicer may rely in good faith
on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising under this
Agreement.


 


Except as otherwise provided in this Agreement,
the Servicer shall not be under any obligation to appear in, prosecute or defend any legal action that shall not be incidental
to its duties to service the Receivables in accordance with this Agreement and that in its opinion may involve it in any expense
or liability; provided, however, that the Servicer may undertake any reasonable action that it may deem necessary
or desirable in respect of this Agreement and the other Basic Documents and the rights and duties of the parties to this Agreement
and the other Basic Documents and the interests of the Certificateholders under this Agreement and the Noteholders under the Indenture.
The legal expenses and costs of such action and any liability resulting therefrom will be expenses, costs and liabilities of the
Issuer.


 


Section 6.05.         AHFC
Not to Resign as Servicer. Subject to the provisions of Section 6.03, AHFC shall not resign from the obligations and
duties hereby imposed on it as Servicer under this Agreement except upon a determination that the performance of its duties under
this Agreement shall no longer be permissible under applicable law. Notice of any such determination permitting the resignation
of AHFC shall be communicated to the Trustees at the earliest practicable time (and, if such communication is not in writing, shall
be confirmed in writing at the earliest practicable time) and any such determination shall be evidenced by an Opinion of Counsel
to such effect delivered to the Trustees concurrently with or promptly after such notice. No such resignation shall become effective
until the Indenture Trustee or a Successor Servicer shall have (i) assumed the responsibilities and obligations of AHFC in accordance
with Section 7.02 and (ii) become the Administrator pursuant to Section 1.09 of the Administration Agreement.


 




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ARTICLE
Seven



SERVICER DEFAULTS


 


Section 7.01.         Servicer
Defaults. If any one of the following events (each, a “Servicer Default”) shall occur and be continuing:


 


(a)          any
failure by the Servicer to deliver to the related Trustee for deposit in any of the Accounts or the Certificate Distribution Account
any required payment or to direct the Indenture Trustee to make any required distributions therefrom, which failure continues unremedied
for a period of five (5) Business Days after discovery of such failure by an officer of the Servicer or after the date on which
written notice of such failure, requiring the same to be remedied, shall have been given (i) to the Servicer by the related Trustee
or (ii) to the Servicer and to the Trustees by the Noteholders, evidencing not less than 25% of the Outstanding Amount of the Notes;


 


(b)          failure
by the Servicer duly to observe or to perform in any material respect any other covenants or agreements of the Servicer set forth
in this Agreement or any other Basic Document, which failure shall (i) materially and adversely affect the rights of Certificateholders
or Noteholders and (ii) continue unremedied for a period of ninety (90) days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given (A) to the Servicer by the related Trustee or (B) to the Servicer, and
to the related Trustee by the Noteholders, evidencing not less than 25% of the Outstanding Amount of the Notes; or


 


(c)          the
occurrence of an Insolvency Event with respect to the Servicer;


 


provided, however, that (A) if any delay or failure
of performance referred to in clause (a) above shall have been caused by Force Majeure or other similar occurrences, the five (5)
Business Day grace period referred to in such clause (a) shall be extended for an additional sixty (60) days and (B) if any delay
or failure of performance referred to in clause (b) above shall have been caused by Force Majeure or other similar occurrences,
the ninety (90) day grace period referred to in such clause (b) shall be extended for an additional sixty (60) days.


 


then, and in each and every case, so long as the Servicer Default
shall not have been remedied, either the Noteholders evidencing not less than 25% of the Outstanding Amount of the Notes or the
Indenture Trustee, at the request or direction of the Noteholders evidencing not less than 25% of the Outstanding Amount of the
Notes (or, if the Notes have been paid in full and the Indenture has been discharged in accordance with its terms, by holders of
Certificates evidencing not less than 25% of the Percentage Interests), by notice then given in writing to the Servicer and the
Owner Trustee (and to the Indenture Trustee if given by the Noteholders) may terminate all the rights and obligations (other than
the obligations set forth in Section 6.02 that accrued on or prior to the effective date of the termination) of the Servicer
under this Agreement.


 




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On or after the date specified in such written
notice, all authority and power of the Servicer under this Agreement, whether with respect to the Notes, the Certificates or the
Receivables or otherwise, shall, without further action, pass to and be vested in the Indenture Trustee or such Successor Servicer
as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee and the Owner Trustee are hereby
authorized and empowered to execute and deliver, for the benefit of the predecessor Servicer, as attorney-in-fact or otherwise,
any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and endorsement of the Receivables and related documents,
or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer and the Trustees in effecting the termination
of the responsibilities and rights of the predecessor Servicer under this Agreement, including the transfer to the Successor Servicer
for administration by it of all cash amounts that shall at the time be held by the predecessor Servicer for deposit, or have been
deposited by the predecessor Servicer, in the Accounts or the Certificate Distribution Account or thereafter received with respect
to the Receivables that shall at that time by held by the predecessor Servicer. All reasonable costs and expenses (including servicer
conversion costs and attorneys’ fees) incurred in connection with transferring the Receivable Files to the Successor Servicer
and amending this Agreement to reflect such succession as Servicer pursuant to this Section shall be paid by the predecessor Servicer
upon presentation of reasonable documentation of such costs and expenses. Any costs or expenses incurred in connection with a Servicer
Default shall constitute an expense of administration under Title 11 of the United States Bankruptcy Code or any other applicable
Federal or State bankruptcy laws. Upon receipt of notice of the occurrence of a Servicer Default, the Indenture Trustee shall give
notice thereof to the Administrator, and in accordance with Section 1.02(c) of the Administration Agreement, the Administrator
shall make such notice available to each Rating Agency.


 


Section 7.02.         Appointment
of Successor Servicer.


 


(a)          Upon
the Servicer’s receipt of notice of termination pursuant to Section 7.01 or the Servicer’s resignation pursuant
to Section 6.05, the predecessor Servicer shall continue to perform its functions as Servicer under this Agreement, in the
case of termination, only until the date specified in such termination notice or, if no such date is specified in a notice of termination,
until receipt of such notice and, in the case of resignation, until the later of (i) the date forty-five (45) days from the delivery
to the Trustees of written notice of such resignation (or written confirmation of such notice) in accordance with the terms of
this Agreement and (ii) the date upon which the predecessor Servicer shall become unable to act as Servicer, as specified in the
notice of resignation and accompanying Opinion of Counsel. In the event of the Servicer’s termination hereunder, the Indenture
Trustee shall appoint a Successor Servicer, and the Successor Servicer shall accept its appointment (including its appointment
as Administrator under the Administration Agreement as set forth in Section 7.02(b)) by a written assumption in form acceptable
to the Trustees. In the event that a Successor Servicer has not been appointed at the time when the predecessor Servicer has ceased
to act as Servicer in accordance with this Section, the Indenture Trustee without further action shall automatically be appointed
the Successor Servicer and the Indenture Trustee shall be entitled to receive the Total Servicing Fee. Notwithstanding the above,
the Indenture Trustee shall, if it shall be legally unable or unwilling so to act, appoint or petition a court of competent jurisdiction
to appoint any established institution, having a net worth of not less than $50,000,000 and whose regular business shall include
the servicing of automobile receivables (including light-duty trucks), as the successor to the Servicer under this Agreement. In
no event shall the Successor Servicer be liable for the acts or omissions of any predecessor Servicer.


 




    	 	28	 



     


    

 


(b)          Upon
appointment, the Successor Servicer (including the Indenture Trustee acting as Successor Servicer) shall (i) be the successor in
all respects to the predecessor Servicer and shall be subject to all the responsibilities, duties and liabilities arising thereafter
relating thereto placed on the predecessor Servicer and shall be entitled to the Total Servicing Fee and all the rights granted
to the predecessor Servicer by the terms and provisions of this Agreement and (ii) become the Administrator pursuant to Section
1.09 of the Administration Agreement.


 


Section 7.03.         Notification
of Servicer Termination. Upon any termination of, or appointment of a successor to, the Servicer pursuant to this Article,
the Owner Trustee shall give prompt written notice thereof to Certificateholders, and the Indenture Trustee shall give prompt written
notice thereof to Noteholders and the Administrator (who shall make such notice available to each Rating Agency pursuant to Section
1.02(c) of the Administration Agreement).


 


Section 7.04.         Waiver
of Past Defaults. The Noteholders evidencing not less than a majority of the Outstanding Amount of the Notes or the Certificateholders
evidencing not less than a majority of the Percentage Interests (in the case of a default by the Servicer that does not adversely
affect the Indenture Trustee or the Noteholders or if all Notes have been paid in full and the Indenture Trustee has been discharged
in accordance with its terms) may, on behalf of all Securityholders waive in writing any default by the Servicer in the performance
of its obligations hereunder and its consequences, except a default in making any required deposits to or payments from any of
the Accounts or the Certificate Distribution Account in accordance with this Agreement or in respect of a covenant or provision
hereof that cannot be modified with the consent of each Securityholder. Upon any such waiver of a past default, such default shall
cease to exist, and any Servicer Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement.
No such waiver shall extend to any subsequent or other default or impair any right consequent thereto except to the extent expressly
so waived.


 


Section 7.05.         Repayment
of Advances. If a Successor Servicer replaces the Servicer, the predecessor Servicer shall be entitled to receive reimbursement
for all outstanding Advances made by the predecessor Servicer.


 


ARTICLE
Eight



TERMINATION


 


Section 8.01.         Optional
Purchase of All Receivables.


 


(a)          On
the Payment Date following the last day of any Collection Period as of which the Pool Balance is 10% or less of the Original Pool
Balance, the Servicer or any successor to the Servicer shall have the option to purchase the Owner Trust Estate, other than the
Accounts and the Certificate Distribution Account. To exercise such option, on the related Deposit Date the Servicer shall deposit
pursuant to Section 4.05(a) in the Collection Account an amount equal to the aggregate Administrative Purchase Payments
for the Receivables (including Defaulted Receivables) and shall succeed to all interests in and to the Issuer. Notwithstanding
the foregoing, the Servicer or any successor to the Servicer shall not be permitted to exercise such option if the amount to be
distributed to Securityholders on the related Payment Date would be less than the Note Distributable Amount and Certificate Distributable
Amount.


 




    	 	29	 



     


    

 


(b)          On
or prior to any optional purchase of the Owner Trust Estate as described in clause (a) above, the following shall be completed:


 


(i)          As
described in Article Nine of the Trust Agreement and Article X of the Indenture, notice of any termination of the Trust shall be
given by the Servicer to the Owner Trustee, the Delaware Trustee and the Indenture Trustee as soon as practicable after the Servicer
has received notice thereof, but no later than twenty-five (25) days prior to the date of such optional purchase, substantially
in the form attached hereto as Exhibit A;


 


(ii)         As
described in the Note Depository Agreement, notice of any termination of the Trust shall be given by the Indenture Trustee to DTC
as soon as practicable after the Indenture Trustee has received notice thereof from the Servicer, but no later than thirty (30)
days prior to the date of such optional purchase;


 


(iii)        As
described in Section 10.01 of the Indenture, notice of any termination of the Trust shall be given by the Indenture Trustee to
each Noteholder as soon as practicable after the Indenture Trustee has received notice thereof from the Servicer, but no later
than ten (10) days prior to the date of such optional purchase;


 


(iv)         As
described in Section 9.01(c) of the Trust Agreement, notice of any termination of the Trust shall be given by the Owner Trustee
to the Certificateholders within five (5) Business Days of receipt of notice of such termination by the Owner Trustee from the
Servicer, specifying the Payment Date upon which Certificateholders shall surrender their Trust Certificates to the Paying Agent
for payment of the final distribution and cancellation. The Owner Trustee shall give such notice to the Certificate Registrar (if
other than the Owner Trustee) and the Paying Agent (if other than the Owner Trustee) at the time such notice is given to Certificateholders;


 


(v)          Upon
receipt of notice of any termination of the Trust by the Certificateholder, the Certificateholder, or its affiliate, shall forward
the Trust Certificate to the Owner Trustee or the Paying Agent (if other than the Owner Trustee);


 


(vi)         As
described in Section 4.01 of the Indenture, AHFC shall deliver to the Indenture Trustee an Officer’s Certificate relating
to such optional purchase, substantially in the form attached hereto as Exhibit B;


 


(vii)        As
described in Section 4.01 of the Indenture, an Opinion of Counsel to AHFC shall be delivered to the Indenture Trustee and the Owner
Trustee stating that all conditions precedent relating to the satisfaction and discharge of the Indenture have been complied with;


 


(viii)      As
described in Section 9.01(e) of the Trust Agreement, upon termination of the Trust Estate, the Owner Trustee shall upon the direction
and at the expense of the Depositor cause the Certificate of Trust to be cancelled by filing a certificate of cancellation with
the Secretary of State in accordance with Section 3810 of the Statutory Trust Statute; and


 




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(ix)         Upon
termination of the Trust Estate, AHFC shall (1) file UCC termination statements and (2) cancel State licenses, as necessary.


 


(c)          Following
the satisfaction and discharge of the Indenture and the payment in full of the principal of and interest on the Notes, the Certificateholders
will succeed to the rights of the Noteholders hereunder and the Owner Trustee will succeed to the rights of the Indenture Trustee
pursuant to this Agreement.


 


ARTICLE
Nine



MISCELLANEOUS


 


Section 9.01.         Amendment.


 


(a)          Any
term or provision of this Agreement (including Appendix A) may be amended by the Seller and the Servicer without the consent of
any Securityholders, the Issuer or any other Person subject to the satisfaction of one of the following conditions:


 


(i)          the
Seller or the Servicer delivers an Opinion of Counsel to the Indenture Trustee to the effect that such amendment will not materially
and adversely affect the interests of any Noteholders; or


 


(ii)         the
Rating Agency Condition is satisfied with respect to such amendment and the Seller or the Servicer notifies the Indenture Trustee
in writing that the Rating Agency Condition is satisfied with respect to such amendment;


 


provided, that in the event that
any Trust Certificates are then held by anyone other than the Depositor or any of its Affiliates, this Agreement may only be amended
by the Seller and the Servicer if, in addition, (i) the Certificateholders evidencing a majority of the Certificate Balance
of the Trust Certificates consent to such amendment or (ii) such amendment shall not, as evidenced by an Officer’s Certificate
of the Seller or the Servicer or an Opinion of Counsel delivered to the Owner Trustee, materially and adversely affect the interests
of the Certificateholders.


 


(b)          This
Agreement (including Appendix A) may also be amended from time to time by the Seller and the Servicer, with the consent of the
Indenture Trustee, the written consent of the Noteholders evidencing not less than a majority of the Outstanding Amount of the
Notes and the written consent of the Certificateholders of outstanding Certificates evidencing not less than a majority of the
Percentage Interests, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Securityholders; provided, however, that no such
amendment shall (i) except as otherwise provided in Section 9.01(a) increase or reduce in any manner the amount of, or accelerate
or delay the timing of, collections of payments on Receivables or distributions that shall be required to be made for the benefit
of the Securityholders or (ii) reduce the aforesaid percentage of the Outstanding Amount of the Notes and the Percentage Interests,
the holders of which are required to consent to any such amendment, without the written consent of all of the Securityholders.


 




    	 	31	 



     


    

 


(c)          Any
term or provision of this Agreement (including Appendix A) may also be amended from time to time by the Seller and the Servicer,
for the purpose of conforming the terms of this Agreement to the description thereof in the Prospectus, without the consent of
any Securityholders, the Issuer or any other Person.


 


(d)          Promptly
after the execution of any such amendment, the Servicer shall furnish written notification of the substance of such amendment to
the Indenture Trustee and the Administrator (who shall make such notice available to each Rating Agency pursuant to Section 1.02(c)
of the Administration Agreement). It shall not be necessary for the consent of Securityholders pursuant to this Section to approve
the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the authorization of Certificateholders of the execution thereof
shall be subject to such reasonable requirements as the Owner Trustee may require.


 


(e)          Prior
to the execution of any amendment to this Agreement, the Trustees shall be entitled to receive and rely upon an Opinion of Counsel
stating that the execution of such amendment is authorized or permitted by this Agreement and the Opinion of Counsel referred to
in Section 9.02(g). No amendment that adversely affects the Trustees shall be effective without the prior written consent
of the party adversely affected. The Trustees may, but shall not be obligated to, enter into any such amendment which affects the
Owner Trustee’s, the Delaware Trustee’s or the Indenture Trustee’s, as applicable, own rights, duties or immunities
under this Agreement or otherwise.


 


Section 9.02.         Protection
of Title to Trust.


 


(a)          The
Seller shall execute and file such financing statements and cause to be executed and filed such continuation statements, all in
such manner and in such places as may be required by law fully to preserve, maintain and protect the interest of the Issuer and
of the Indenture Trustee in the Receivables and in the proceeds thereof. The Seller shall deliver (or cause to be delivered) to
the Trustees file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following
such filing.


 


(b)          Neither
the Seller nor the Servicer shall change its name, identity or corporate structure in any manner that would, could or might make
any financing statement or continuation statement filed in accordance with Section 9.02(a) seriously misleading within the
meaning of Section 9-507(c) of the UCC, unless it shall have given the Trustees at least thirty (30) days’ prior written
notice thereof and shall, within thirty (30) days of such change, execute and file the appropriate amendments to all previously
filed financing statements or continuation statements.


 


(c)          Each
of the Seller and the Servicer shall give the Trustees at least sixty (60) days’ prior written notice of any relocation of
its principal executive office if, as a result of such relocation, the applicable provisions of the UCC would require the filing
of any amendment of any previously filed financing or continuation statement or of any new financing statement and shall promptly
file any such amendment or new financing statement. The Servicer shall at all times maintain each office from which it shall service
Receivables, and its principal executive office, within the United States.


 




    	 	32	 



     


    

 


(d)          The
Servicer shall maintain accounts and records as to the Receivables accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of the Receivables, including payments and recoveries made and payments owing (and the nature
of each) and (ii) reconciliation between payments or recoveries on (or with respect to) the Receivables and the amounts from time
to time deposited in the Accounts.


 


(e)          The
Servicer shall maintain its computer systems so that, from and after the time of sale under this Agreement of the Receivables,
the Servicer’s master computer records (including any backup archives) that refer to a Receivable shall indicate clearly
the interest of the Issuer and the Indenture Trustee in such Receivable and that such Receivable is owned by the Issuer and has
been pledged to the Indenture Trustee. Indication of the Issuer’s and the Indenture Trustee’s interest in a Receivable
shall be deleted from or modified on the Servicer’s computer systems when, and only when, the related Receivable shall have
been paid in full or repurchased.


 


(f)          If
at any time the Seller or the Servicer shall propose to sell, grant a security interest in, or otherwise transfer any interest
in automobile receivables (including light-duty trucks) to any prospective purchaser, lender or other transferee, the Servicer
shall give to such prospective purchaser, lender or other transferee computer tapes, records or printouts (including any restored
from backup archives) that, if they shall refer in any manner whatsoever to any Receivable, shall indicate clearly that such Receivable
has been sold and is owned by the Issuer and has been pledged to the Indenture Trustee.


 


(g)          The
Servicer shall deliver to the Trustees:


 


(1)         promptly
after the execution and delivery of each amendment hereto, an Opinion of Counsel stating that, in the opinion of such counsel,
either (A) all financing statements and continuation statements have been executed and filed that are necessary to fully preserve
and protect the interest of the Trustees in the Receivables, and reciting the details of such filings or referring to prior Opinions
of Counsel in which such details are given, or (B) no such action shall be necessary to preserve and protect such interest; and


 


(2)         within
ninety (90) days after the beginning of each fiscal year of the Issuer beginning with the first fiscal year more than three months
after the Cutoff Date, an Opinion of Counsel, dated as of a date during such 90-day period, stating that, in the opinion of such
counsel, either (A) all financing statements and continuation statements have been filed that are necessary to create and continue
the interest of the Trustees in the Receivables, and reciting the details of such filings or referring to prior Opinions of Counsel
in which such details are given, or (B) no such action shall be necessary to perfect such security interest.


 


Each Opinion of Counsel referred to in clause
(1) or (2) above shall specify any action necessary (as of the date of such opinion) to be taken in the following year
to preserve and protect such interest.


 




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(h)          The
Seller shall, to the extent required by applicable law, cause the Notes to be registered with the Commission pursuant to Section
12(b) or Section 12(g) of the Exchange Act within the time periods specified in such sections.


 


Section 9.03.         Notices.
All demands, notices and communications under this Agreement shall be in writing, personally delivered or mailed by certified mail,
return receipt requested, or overnight delivery service, by facsimile or by electronic mail (if an address therefore has been provided
by the respective party in writing) and shall be deemed to have been duly given upon receipt by such party at the address set forth
on Schedule A to this Agreement or at such other address as shall be designated by written notice to the other parties.


 


Section 9.04.         Assignment.


 


(a)          Except
as provided in the remainder of this Section or as provided in Sections 5.03, 6.03 and 6.05, this Agreement
may not be assigned by the Seller or the Servicer without the prior written consent of Noteholders evidencing not less than a majority
of the Outstanding Amount of the Notes and Certificateholders evidencing not less than a majority of the Percentage Interests.
And as provided in the provisions of this Agreement concerning the resignation of the Servicer, this Agreement may not be assigned
by the Seller or the Servicer.


 


(b)          The
Seller hereby acknowledges and consents to the mortgage, pledge, assignment and grant of a security interest by the Issuer to the
Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders of all right, title and interest of the Issuer in,
to and under the Receivables and/or the assignment of any or all of the Issuer’s rights and obligations hereunder.


 


Section 9.05.         Limitations
on Rights of Others. The provisions of this Agreement are solely for the benefit of the Seller, the Servicer, the Issuer, the
Owner Trustee, the Certificateholders, the Indenture Trustee and the Noteholders, and nothing in this Agreement, whether express
or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Owner Trust Estate
or under or in respect of this Agreement or any covenants, conditions or provisions contained herein. The Owner Trustee and the
Delaware Trustee are third-party beneficiaries of certain Sections of this Agreement, including with respect to the Delaware Trustee,
Sections 2.07, 3.09, 3.16, 4.06, 5.02, 6.02, 8.01 and 9.01, and with respect
to the Owner Trustee, Sections 2.04, 2.07, 2.08, 3.08, 3.09, 3.15, 3.16, 4.06,
4.10, 5.02, 6.02, 7.01, 8.01, 9.01 and 9.11, and is entitled to the rights and
benefits thereof and may enforce the provisions as if it were a party hereto.


 


Section 9.06.         Severability.
If any one or more of the covenants, agreements, provisions or terms of this Agreement shall be for any reason whatsoever held
invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or enforceability of the other covenants, agreements,
provisions or terms of this Agreement.


 


Section 9.07.         Separate
Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.


 




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Section 9.08.         Headings.
The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.


 


Section 9.09.         Governing
Law; Submission to Jurisdiction; Waiver of Jury Trial. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.


 


Each of the parties hereto hereby submits
to the exclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State
court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby. Each of the parties hereto hereby further irrevocably waives any claim that any such courts lack jurisdiction
over such party, and agrees not to plead or claim, in any legal action or proceeding with respect to this Agreement in any of the
aforesaid courts, that any such court lacks jurisdiction over such party. Each of the parties hereto irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.


 


Each party hereto hereby waives, to the
fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any litigation directly or indirectly
arising out of, under or in connection with this agreement.


 


Section 9.10.         Nonpetition
Covenants.


 


(a)          Notwithstanding
any prior termination of this Agreement, the Servicer and the Seller shall not, prior to the date which is one year and one day
after the termination of this Agreement with respect to the Issuer, acquiesce, petition or otherwise invoke or cause the Issuer
to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer
under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or any substantial part of its property, or ordering the winding up or liquidation
of the affairs of the Issuer.


 


(b)          Notwithstanding
any prior termination of this Agreement, the Servicer shall not, prior to the date which is one year and one day after the termination
of this Agreement with respect to the Seller, acquiesce, petition or otherwise invoke or cause the Seller to invoke the process
of any court or government authority for the purpose of commencing or sustaining a case against the Seller under any federal or
state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Seller or any substantial part of its property, or ordering the winding up or liquidation of the
affairs of the Seller.


 




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Section 9.11.         Limitation
of Liability of Owner Trustee and Indenture Trustee.


 


(a)          Notwithstanding
anything contained herein to the contrary, this Agreement has been countersigned by The Bank of New York Mellon, not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in no event shall The Bank of New York Mellon, in its individual
capacity or, except as expressly provided in the Trust Agreement, The Bank of New York Mellon as Owner Trustee of the Issuer have
any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any
of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer. For all purposes of this Agreement, in the performance of its duties or obligations hereunder or in the performance
of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the
terms and provisions of Articles Six, Seven and Eight of the Trust Agreement as if specifically set forth herein.


 


(b)          Notwithstanding
anything contained herein to the contrary, this Agreement has been accepted by Citibank, N.A., not in its individual capacity but
solely as Indenture Trustee and in no event shall Citibank, N.A. have any liability for the representations, warranties, covenants,
agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant
hereto, as to all of which recourse shall be had solely to the assets of the Issuer.


 


Section 9.12.         Third-Party
Beneficiary. The Trustees and other indemnitees hereunder are third-party beneficiaries to this Agreement and are entitled
to the rights and benefits hereunder and may enforce the provisions hereof as if they were parties hereto.


 


Section 9.13.         Confidentiality.


 


The Issuer hereby agrees to hold and treat
all Confidential Information (as defined below) provided to it in connection with the offering of the Notes in confidence and in
accordance with this Section 9.13, and will implement and maintain safeguards to further assure the confidentiality of such
Confidential Information. Such Confidential Information will not, without the prior written consent of the Servicer, be disclosed
or used by the Issuer or by its subsidiaries or, affiliates, or its or their directors, officers, employees, agents or controlling
persons or agents or advisors (collectively, the “Information Recipients”) other than for the purposes of (i) structuring
the securitization transaction and facilitating the issuance of the Notes, or (ii) in connection with the performance of its required
due diligence on the Receivables. Disclosure that is not in violation of the Right to Financial Privacy Act of 1978, as amended,
the Gramm-Leach-Bliley Act of 1999, as amended, (the “G-L-B Act”) or other applicable law by the Issuer of any Confidential
Information at the request of its outside auditors or governmental regulatory authorities in connection with an examination of
the Issuer by any such authority or for the purposes specified in above shall not constitute a breach of its obligations under
this Section 9.13, and shall not require the prior consent of the Servicer.


 




    	 	36	 



     


    

 


As used herein, “Confidential Information”
means non-public personal information (as defined in the G-L-B Act and its enabling regulations issued by the Federal Trade Commission)
regarding obligors on the Receivables that is identified as such by the Servicer. Confidential Information shall not include information
which (i) is or becomes generally available to the public other than as a result of disclosure by the Issuer or any of its Information
Recipients; (ii) was available to the Issuer on a non-confidential basis from a person or entity other than the Servicer prior
to its disclosure to the Issuer; (iii) is requested to be disclosed by a governmental authority or related governmental, administrative,
or regulatory or self-regulatory agencies having or claiming authority to regulate or oversee any aspect of the Issuer’s
business or that of its affiliates or is otherwise required by law or by legal or regulatory process to be disclosed; (iv) becomes
available to the Issuer on a non-confidential basis from a person or entity other than the Servicer who, to the best knowledge
of the Issuer, is not otherwise bound by a confidentiality agreement with the Servicer, and is not otherwise prohibited from transmitting
the information to the Issuer; or (v) the Servicer provides written permission to the Issuer to release.


 


Section 9.14.         Federal
Tax Treatment. Notwithstanding anything to the contrary contained in this Agreement or any document delivered herewith, all
persons may disclose to any and all persons, without limitation of any kind, the federal income tax treatment of the Notes, any
fact relevant to understanding the federal tax treatment of the Notes, and all materials of any kind (including opinions or other
tax analyses) relating to such federal tax treatment.


 


Section 9.15.         Intent
of the Parties; Reasonableness.


 


The Seller, Servicer, Sponsor and Issuer
acknowledge and agree that the purpose of Article Three of this Agreement is to facilitate compliance by the Issuer and the Depositor
with the provisions of Regulation AB and related rules and regulations of the Commission.


 


None of the Sponsor, the Administrator nor
the Issuer shall exercise its right to request delivery of information or other performance under these provisions other than in
good faith, or for purposes other than compliance with the Securities Act, the Exchange Act and the rules and regulations of the
Commission thereunder (or the provision in a private offering of disclosure comparable to that required under the Securities Act).
The Servicer acknowledges that interpretations of the requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of
counsel, or otherwise, and agrees to comply with requests made by the Issuer or the Administrator in good faith for delivery of
information under these provisions on the basis of evolving interpretations of Regulation AB. In connection with this transaction,
the Servicer shall cooperate fully with the Administrator and the Issuer to deliver to the Administrator or Issuer, as applicable
(including any of its assignees or designees), any and all statements, reports, certifications, records and any other information
necessary in the good faith determination of the Issuer or the Administrator to permit the Issuer or Administrator (acting on behalf
of the Issuer) to comply with the provisions of Regulation AB, together with such disclosures relating to the Servicer, any Subservicer
and the Receivables, or the servicing of the Receivables, reasonably believed by the Issuer or the Administrator to be necessary
in order to effect such compliance.


 


The Issuer shall, and shall cause the Administrator
(including any of its assignees or designees) to cooperate with the Servicer by providing timely notice of requests for information
under these provisions and by reasonably limiting such requests to information required, in the reasonable judgment or the Issuer
or the Administrator, as applicable, to comply with Regulation AB.


 


Section 9.16.         Cooperation
with Voting. Each of the Sponsor, the Seller and the Issuer hereby acknowledges and agrees that it shall reasonably cooperate
with the Indenture Trustee to facilitate any vote by the Noteholders and Note Owners pursuant to terms of Section 7.05 of
the Indenture.


 




    	 	37	 



     


    

 


IN WITNESS WHEREOF, the parties hereto have
caused this Sale and Servicing Agreement to be duly executed by their respective officers as of the day and year first above written.


 


	 	HONDA AUTO RECEIVABLES 2018-4 OWNER TRUST
	 	 	 
	 	By:	THE BANK OF NEW YORK MELLON, not in  its individual capacity but solely as Owner  Trustee on behalf of the Trust
	 	 	 
	 	By:	/s/ Esther Antoine
	 	Name:	Esther Antoine
	 	Title:	Vice President
	 	 	 
	 	AMERICAN HONDA RECEIVABLES LLC, as Seller
	 	 	 
	 	By:	/s/ Paul C. Honda
	 	Name:	Paul C. Honda
	 	Title:	Treasurer
	 	 	 
	 	AMERICAN HONDA FINANCE CORPORATION, as Servicer
	 	 	 
	 	By:	/s/ Paul C. Honda
	 	Name:	Paul C. Honda
	 	Title:	Vice President and Assistant Secretary


 


Acknowledged and accepted as of the day

and year first above written:


 


Citibank, N.A.,

not in its individual capacity but solely as

Indenture Trustee


 


	By:  	/s/ Louis Piscitelli	 
	 	Name: Louis Piscitelli	 
	 	Title: Senior Trust Officer	 


 


 


HAROT 2018-4


Sale and Servicing Agreement



 




    	 	 S-1	




     


    

 


APPENDIX
A


 


		I.	Defined Terms



 


“61-Day Delinquent Receivables”
means, as of any date of determination, all Receivables outstanding and held by the Issuer (other than Receivables in repossession
and charged-off Receivables) that are 61 or more days delinquent as of such date (or, if such date is not the last day of a calendar
month, as of the last day of the calendar month immediately preceding such date), as determined in accordance with the Servicer’s
customary servicing practices.


 


“AAA” means the American
Arbitration Association.


 


“Accounts” means the
Collection Account, the Note Distribution 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.


 


“Act” shall have the
meaning specified in Section 11.03(a) of the Indenture.


 


“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.


 


“Administration Agreement”
means the Administration Agreement, dated as of the Closing Date, among the Administrator, the Issuer, the Depositor and the Indenture
Trustee, as amended or supplemented from time to time.


 


“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, 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 of the Sale and Servicing Agreement or which
the Servicer has elected to purchase pursuant to Section 8.01 of the Sale and Servicing Agreement.


 


“Advance” shall have
the meaning set forth in Section 4.04(a) of the Sale and Servicing Agreement.


 




    	 	App A-1	 



     


    

 


“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.


 


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


 


“AHR” means American
Honda Receivables LLC, and its successors.


 


“Amended and Restated Trust Agreement”
means the amended and restated trust agreement, dated as of the Closing Date, among American Honda Receivables LLC, as depositor,
the Owner Trustee and the Delaware Trustee.


 


“Amended Partnership Audit Rules”
means subchapter C of chapter 63 of subtitle F of the Code as amended by the Bipartisan Budget Act of 2015.


 


“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 automobile retail installment sale contracts.


 


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


 


“Applicants” shall have
the meaning specified in Section 3.07 of the Trust Agreement.


 


“Asset Representations Review”
means a review by the Asset Representations Reviewer as specified in the Asset Representations Review Agreement of all Subject
Receivables as of the first date on which the Review Conditions are satisfied for compliance with the representations and warranties
set forth in Section 2.03 of the Receivables Purchase Agreement.


 


“Asset Representations Review Agreement”
means the asset representations review agreement, dated as of the Closing Date, among the Issuer, the Sponsor, the Servicer and
the Asset Representations Reviewer.


 


“Asset Representations Reviewer”
means Clayton Fixed Income Services LLC.


 


“Asset Representations Reviewer
Fees and Expenses” means all accrued and unpaid Asset Representations Reviewer’s fees and any amounts due to the
Asset Representations Reviewer for reimbursement of expenses or in respect of indemnification to the extent not previously paid
to the Asset Representations Reviewer by the Servicer.


 




    	 	App A-2	 



     


    

 


“Authenticating Agent”
means the Owner Trustee or any authenticating agent appointed pursuant to Section 3.03 of the Trust Agreement.


 


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


 


“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 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, (b) Net Liquidation
Proceeds, (c) Advances made by the Servicer, if any, (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 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, (b) Net Liquidation
Proceeds, (c) Advances made by the Servicer, if any, (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
the Sale and Servicing Agreement, the Administration Agreement, the Asset Representations Review Agreement, the Indenture, the
Note Depository Agreement, the Receivables Purchase Agreement and the Trust Agreement, and any other documents or certificates
delivered in connection therewith as the same may be amended, supplemented or otherwise modified and in effect.


 




    	 	App A-3	 



     


    

 


“Basic Servicing Fee”
means the fee payable pursuant to Section 3.09 of the Sale and Servicing Agreement 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.


 


“Benefit Plan Investor”
means an “employee benefit plan” as defined in Section 3(3) of ERISA that is subject to Title I of ERISA, a “plan”
as defined in and subject to Section 4975 of the Code or an entity whose underlying assets include plan assets of any of the foregoing.


 


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


 


“Business Day” means
any day other than a Saturday or Sunday that is neither a legal holiday nor a day on which commercial banks are authorized or required
by law, regulation or executive order to close in New York City, Chicago, Illinois or Wilmington, Delaware.


 


“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”
means the account established and maintained as such pursuant to Section 5.01 of 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).


 




    	 	App A-4	 



     


    

 


“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 of Trust”
means the Certificate of Trust filed for the Issuer pursuant to Section 3810(a) of the Statutory Trust Statute, substantially in
the form of Exhibit A to the Initial Trust Agreement.


 


“Certificate Owner” means,
with respect to a Certificate, any Person who is the beneficial owner of such Certificate for U.S. federal income tax purposes.


 


“Certificate Percentage”
means (i) for each Payment Date until the Notes have been paid in full, 0%; and (ii) thereafter, 100%.


 


“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 of the Sale and Servicing Agreement,
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
0.00% per annum (computed on the basis of a 360-day year consisting of twelve 30-day months).


 


“Certificate Register”
and “Certificate Registrar” means the register maintained and the registrar (or any successor thereto) appointed
pursuant to Section 3.04 of the Trust Agreement.


 


“Certificateholder” means
a Person in whose name a Trust Certificate is registered.


 


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


 




    	 	App A-5	 



     


    

 


“Class A-1 Final Scheduled Payment
Date” means the December 2019 Payment Date.


 


“Class A-1 Interest Rate”
means 2.60000% per annum (computed on the basis of the actual number of days in the related Interest Accrual Period divided by
360).


 


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


 


“Class A-1 Notes” means
the Class A-1 2.60000% Asset Backed Notes, substantially in the form of Exhibit A to the Indenture.


 


“Class A-2 Final Scheduled Payment
Date” means the May 2021 Payment Date.


 


“Class A-2 Interest Rate”
means 2.98% per annum (computed on the basis of a 360-day year consisting of twelve 30-day months).


 


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


 


“Class A-2 Notes” means
the Class A-2 2.98% Asset Backed Notes, substantially in the form of Exhibit A to the Indenture.


 


“Class A-3 Final Scheduled Payment
Date” means the January 2023 Payment Date.


 


“Class A-3 Interest Rate”
means 3.16% per annum (computed on the basis of a 360-day year consisting of twelve 30-day months).


 


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


 


“Class A-3 Notes” means
the Class A-3 3.16% Asset Backed Notes, substantially in the form of Exhibit A to the Indenture.


 


“Class A-4 Final Scheduled Payment
Date” means the July 2025 Payment Date.


 


“Class A-4 Interest Rate”
means 3.30% per annum (computed on the basis of a 360-day year consisting of twelve 30-day months).


 


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


 


“Class A-4 Notes” means
the Class A-4 3.30% Asset Backed Notes, substantially in the form of Exhibit A to the Indenture.


 


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


 




    	 	App A-6	 



     


    

 


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


 


“Closing Date” means
November 28, 2018.


 


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


 


“Collateral” has the
meaning specified in the Granting Clause of the Indenture.


 


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


 


“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.


 


“Contract Rate” means,
with respect to a Receivable, the rate per annum at which interest accrues under the motor vehicle retail installment sales contract
or installment loan evidencing such Receivable. Such rate may be less than the “Annual Percentage Rate” disclosed in
the Receivable.


 


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


 


“Corporate Trust Office”
means (i) with respect to the Indenture Trustee, the 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 the address set
forth on Schedule A to the Sale and Servicing Agreement 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, the Seller and the Issuer) and (ii) with respect
to the Owner Trustee, the corporate trust office of the Owner Trustee located at the address set forth on Schedule A to the Sale
and Servicing Agreement, or at such other address as the Owner Trustee may designate by notice to the Owners and, the Depositor,
or the principal corporate trust office of any successor Owner Trustee at the address designated by such successor Owner Trustee
by notice to the Owners and the Depositor.


 


“Cutoff Date” means the
opening of business on November 1, 2018.


 


“Dealer” means the dealer
of automobiles 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.


 




    	 	App A-7	 



     


    

 


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


 


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


 


“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.


 


“Definitive Notes” shall
have the meaning specified in Section 2.11 of the Indenture.


 


“Delaware Trustee” means
BNY Mellon Trust of Delaware, as Delaware Trustee under the Trust Agreement.


 


“Delinquency Percentage”
means, for each Payment Date and the related preceding calendar month, an amount equal to the ratio (expressed as a percentage)
of (i) the aggregate Principal Balance of all 61-Day Delinquent Receivables as of the last day of calendar month immediately preceding
such Payment Date to (ii) the Pool Balance of all outstanding Receivables held by the Issuer as of the last day of such preceding
calendar month.


 


“Delinquency Trigger”
means, for any Payment Date and the related preceding calendar month, 4.80%.


 


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


 


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


 


“Determination Date”
means, with respect to any Payment Date, the 10th 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.


 


“Domestic Corporation”
means an entity that is treated as a corporation for U.S. federal income tax purposes and is a United States person under Section
7701(a)(30) of the Code.


 


“DTC” means The Depository
Trust Company, and its successors.


 




    	 	App A-8	 



     


    

 


“Eligible Account” means
either (A) a segregated deposit account or securities 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 (i) a federally insured depository institution or trust company (which may be the Owner Trustee, the Indenture Trustee or
any of their respective affiliates) organized under the laws of the United States, any state thereof, the District of Columbia
or the Commonwealth of Puerto Rico (or any domestic branch of a foreign bank whose deposits are federally insured, provided that
the foreign bank meets the requirements of Rule 13k-1(b)(1) under the Exchange Act (17 C.F.R. §240.1k-1(b)(1)) which at all
times has either (A) a short-term certificate of deposit rating of “P-1” by Moody’s and a short-term certificate
of deposit rating of “A-1” by S&P or a long-term deposit rating of “A” by S&P or (B) such
other rating that is acceptable to each Rating Agency, as evidenced by satisfaction of the Rating Agency Condition or (ii) the
corporate trust department of (A) the Indenture Trustee (B) the Owner Trustee, or (C) any other bank or depository institution
organized under the laws of the United States, any state thereof, the District of Columbia or the Commonwealth of Puerto Rico (or
any domestic branch of a foreign bank whose deposits are federally insured, provided that the foreign bank meets the requirements
of Rule 13k-1(b)(1) under the Exchange Act (17 C.F.R. §240.1k-1(b)(1)) that (x) is authorized under such laws to act as a
trustee or in any other fiduciary capacity, (y) will hold any Accounts as trust accounts and (z) has a rating that is otherwise
acceptable to the Rating Agencies, as evidenced by satisfaction of the Rating Agency Condition, such that the rating of the Indenture
Trustee, the Owner Trustee or any other bank would not in and of itself result in a qualification, downgrade or withdrawal of any
of the then-current ratings assigned thereby to the Notes (as evidenced by written notice to the Indenture Trustee, Owner Trustee
or any other bank).


 


“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)       any
mutual fund, money market fund, common trust fund or other pooled investment vehicle, that has the highest available credit rating
of each Rating Agency, that invests solely in any (or any combination) of the obligations described in clauses (i) and (ii) above;


 




    	 	App A-9	 



     


    

 


(iv)       securities
bearing interest or sold at a discount (including commercial paper) 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
a rating from each Rating Agency in the highest investment category granted thereby for such obligations or the commercial paper
or other short-term debt which is then rated has a rating from each Rating Agency in the highest investment category granted thereby
for such obligations;


 


(v)       certificates
of deposit, demand deposits, time deposits or bankers’ acceptances 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
category of credit rating of each Rating Agency for such obligations;


 


(vi)       certificates
of deposit issued by any bank, trust company, savings bank or other savings institution, having a rating in the highest investment
category from each of the Rating Agencies, and fully insured by the FDIC;


 


(vii)       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;


 


(viii)      any
mutual fund, money market fund, common trust fund or other pooled investment vehicle having a rating, at the time of such investment,
from each of the Rating Agencies rating in the highest investment category granted thereby (including, but not limited to funds
of which Citibank, N.A. or an affiliate thereof is the manager or financial advisor); and


 


(ix)        such
other investments acceptable to each Rating Agency, as evidenced by satisfaction of the Rating Agency Condition;


 


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 Reserve Fund, the Yield Supplement Account or the Collection 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.


 




    	 	App A-10	 



     


    

 


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 acceptable to each Rating Agency, as evidenced by satisfaction of the Rating Agency Condition.


 


“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.


 


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


 


“Event of Default” shall
have the meaning specified in Section 5.01 of the Indenture.


 


“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.


 


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


 


“Expenses” means all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and any and all reasonable out of pocket costs, expenses
and disbursements (including reasonable legal fees and expenses) of any kind and nature whatsoever.


 


“FATCA” means Sections
1471 through 1474 of the Code, as of the date hereof (or any amended or successor provisions that are substantially similar), any
current or future regulations or official interpretations thereunder or official interpretations thereof and any agreements entered
into pursuant to Section 1471(b)(1) of the Code, any published intergovernmental agreement entered into in connection with the
implementation of the foregoing and any fiscal or regulatory legislation, rules or official practices adopted pursuant to such
published intergovernmental agreement.


 


“FATCA Withholding Tax”
means any withholding or deduction required pursuant to FATCA.


 


“FDIC” means the Federal
Deposit Insurance Corporation.


 


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


 


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


 


“Final Scheduled Maturity Date”
means July 15, 2025.


 




    	 	App A-11	 



     


    

 


“Financed Vehicle” means,
with respect to any retail installment sale or conditional sale contract, the related new or used Honda or Acura automobile, 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.


 


“Force Majeure” means
acts beyond an entity’s control, including, but not limited to, acts of war or terrorism, civil or military disturbances,
nuclear or natural catastrophes, vandalism, sabotage, accidents, fires, floods, strikes, work stoppages, labor disputes, mechanical
breakdowns, shortages, acts of any unit of government or governmental agency, and interruptions, loss or malfunctions of utilities,
communications or computer (hardware and software) services, or any similar cause.


 


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


 


“Hague Securities Convention”
means the Hague Convention on the Law Applicable to Certain Rights in Respect of Securities held with an Intermediary (concluded
July 5, 2006).


 


“Honda Parties” shall
have the meaning specified in Section 7.02(e) of the Indenture.


 


“Honda Party” shall have
the meaning specified in Section 7.02(e) of the Indenture.


 


“Indenture” means the
indenture, dated as of the Closing Date between the Issuer and the Indenture Trustee.


 


“Indenture Trustee” means
Citibank, N.A., as indenture trustee under the Indenture, its successors in interest and any successor trustee under the Indenture.


 


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


 




    	 	App A-12	 



     


    

 


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


 


“Initial Trust Agreement”
means the trust agreement, dated October 2, 2018 among the Depositor, the Owner Trustee and the Delaware Trustee, pursuant to which
the Issuer was created.


 


“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.


 


“Interest Accrual Period”
means with respect to any Payment Date and (i) the Class A-1 Notes, the period from and including the immediately preceding Payment
Date (or, in the case of the first Payment Date, the Closing Date) to but excluding such Payment Date and (ii) the Class A-2 Notes,
the Class A-3 Notes and the Class A-4 Notes, the period from and including the 15th day of the prior month (or, in the
case of the first Payment Date, the Closing Date) to but excluding the 15th day of the month of such Payment Date.


 


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


 


“Investment Letter” means
a letter delivered in connection with the transfer of a Trust Certificate pursuant to Section 3.04(a) of the Trust Agreement, substantially
in the form of Exhibit C to the Trust Agreement.


 


“Investor” means a Noteholder
or Note Owner, as applicable.


 




    	 	App A-13	 



     


    

 


“Issuer” means Honda
Auto Receivables 2018-4 Owner Trust, a Delaware statutory trust, until a successor replaces it and, thereafter, means the successor
and, for purposes of any provision contained in the Indenture and required by the TIA, each other obligor on the Notes.


 


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


 


“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: 0.25%) 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.


 


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


 




    	 	App A-14	 



     


    

 


“Nonrecoverable Advance”
shall have the meaning specified in Section 4.04(c) of the Sale and Servicing Agreement.


 


“Non-Retained Notes”
shall mean any Notes that are not Retained Notes.


 


“Non-U.S. Person” means
any Person who is not (i) a citizen or resident of the United States who is a natural person, (ii) a corporation or partnership
(or an entity treated as a corporation or partnership) created or organized in or under the laws of the United States or any state
thereof, including the District of Columbia (unless, in the case of a partnership, Treasury Regulations are adopted that provide
otherwise), (iii) an estate, the income of which is subject to U.S. federal income taxation, regardless of its source, (iv) a trust,
if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more
United States persons (as defined in the Code and Treasury Regulations) have the authority to control all substantial decisions
of the trust; or (v) a trust that was in existence prior to August 20, 1996 and that, under Treasury Regulations, is eligible to
elect, and does validly elect, to be treated as a United States person (as defined in the Code and Treasury Regulations) despite
not meeting the requirements of clause (iv).


 


“Note Depository Agreement”
means the agreement dated as of the Closing Date, executed by the Issuer in favor of The Depository Trust Company, as the initial
Clearing Agency, relating to the Notes.


 


“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 of the Sale and Servicing Agreement.


 


“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.


 




    	 	App A-15	 



     


    

 


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


 


“Note Percentage” means
(i) for each Payment Date until the aggregate principal amount of each Class of Notes has been paid in full, 100%; and (ii) thereafter,
0%.


 


“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 of the Sale
and Servicing Agreement, 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.


 


“Note Register” and “Note
Registrar” shall have the respective meanings specified in Section 2.04 of the Indenture.


 


“Noteholder” means the
Person in whose name a Note is registered on the Note Register.


 


“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.


 




    	 	App A-16	 



     


    

 


“Officer’s Certificate”
means (i) with respect to the Seller or the Servicer, a certificate signed by the president, any vice president, the treasurer,
the secretary, the assistant secretary, or the compliance officer of the Seller or the Servicer, as the case may be, and delivered
to the Trustee or (ii) with respect to the Issuer, a certificate signed by any Authorized Officer of the Issuer, under the circumstances
described in, and otherwise complying with, the applicable requirements of Section 11.01 of the Indenture, and delivered to the
Indenture Trustee. Unless otherwise specified, any reference in the Indenture to an Officer’s Certificate shall be to an
Officer’s Certificate of the Issuer.


 


“Opinion of Counsel”
means (i) with respect to the Seller, the RPA Seller, the Servicer or the Depositor, a written opinion of counsel (who may be an
employee of or outside counsel to the Seller, the RPA Seller, the Servicer or the Depositor) or (ii) with respect to the Issuer,
one or more written opinions of counsel who may, except as otherwise expressly provided in the Indenture, be an employee of or
counsel to the Issuer and who shall be satisfactory to the Indenture Trustee, and which opinion or opinions shall be addressed
to the Indenture Trustee as Indenture Trustee, shall comply with any applicable requirements of Section 11.01 of the Indenture
and shall be in form and substance satisfactory to the Indenture Trustee.


 


“Original Certificate Balance”
means $29,689,345.94.


 


“Original Pool Balance”
means $1,187,584,345.94.


 


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


 


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


 


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


 


(iii)       Notes
cancelled or paid pursuant to Section 2.05 of the Indenture in exchange for or in lieu of which other Notes have been authenticated
and delivered pursuant to this Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are
held by a bona fide Protected Purchaser;


 


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


 




    	 	App A-17	 



     


    

 


“Outstanding Advances”
means, with respect to a Receivable and the last day of a Collection Period, the sum of all Advances, if any, 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)
of the Sale and Servicing Agreement 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
of the Sale and Servicing Agreement.


 


“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) of the Sale and Servicing Agreement.


 


“Owner Trust Estate”
means all right, title and interest of the Issuer in and to the property and rights assigned to the Issuer pursuant to Article
Two of the Sale and Servicing Agreement, all funds on deposit from time to time in the Accounts and the Certificate Distribution
Account, all other property of the Issuer from time to time, including any rights of the Owner Trustee and the Issuer pursuant
to the Sale and Servicing Agreement and the Administration Agreement and all proceeds of the foregoing.


 


“Owner Trustee” means
The Bank of New York Mellon, as owner trustee under the Trust Agreement, its successors in interest and any successor owner trustee
under the Trust Agreement.


 


“Paying Agent” means
(i) with respect to the Notes, the Indenture Trustee or any other Person that meets the eligibility standards for the Indenture
Trustee specified in Section 6.11 of the Indenture and is authorized by the Issuer to make payments to and distributions from the
Collection Account and the Note Distribution Account, including payments of principal of or interest on the Notes on behalf of
the Issuer and (ii) with respect to the Certificates, any paying agent or co-paying agent appointed pursuant to Section 3.09
of the Trust Agreement.


 


“Payment Date” means,
with respect to a Collection Period, the 15th calendar day of the next succeeding calendar month or, if such day is
not a Business Day, the next succeeding Business Day, commencing December 17, 2018.


 




    	 	App A-18	 



     


    

 


“Percentage Interest”
means, as to any Trust Certificate, (i) the original certificate balance for such Trust Certificate, as specified on the face thereof,
divided by (ii) the Original Certificate Balance; provided, that in determining whether the Holders of the requisite portion or
percentage of the Trust Certificates have given any request, demand, authorization, direction, notice, consent or waiver hereunder
or under any other Basic Document, Trust Certificates owned by the Issuer, any other obligor upon the Certificates, the Seller,
the Servicer or any Affiliate of any of the foregoing Persons shall be disregarded and deemed to be excluded from the Certificate
Balance (unless such Persons own 100% of the Trust Certificates), except that, in determining whether the Indenture Trustee and
Owner Trustee shall be protected in relying on any such request, demand, authorization, direction, notice, consent or waiver, only
Trust Certificates that a Responsible Officer of the Indenture Trustee and the Owner Trustee have actual knowledge of being so
owned shall be so disregarded. Trust Certificates so owned that have been pledged in good faith may be regarded as included in
the Certificate Balance if the pledgee establishes to the satisfaction of the Indenture Trustee or the Owner Trustee, as applicable,
the pledgee’s right so to act with respect to such Trust Certificates and that the pledgee is not the Issuer, any other obligor
upon the Trust Certificates, the Seller or any Affiliate of any of their respective Affiliates. Neither the Indenture Trustee nor
the Owner Trustee shall incur any liability to any person in determining whether a pledgee has the right to act with respect to
such Trust Certificates.


 


“Permitted Liens” means
(a) any liens created by the Basic Documents; (b) any liens for taxes not yet due and payable or the amount of which is being contested
in good faith by appropriate proceedings; and (c) any liens of mechanics, suppliers, vendors, materialmen, laborers, employees,
repairmen and other like liens securing obligations which are not due and payable or the amount or validity of which is being contested
in good faith by appropriate proceedings.


 


“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.


 


“Plan” means an “employee
benefit plan” as defined in Section 3(3) of ERISA whether or not subject to Title I of ERISA, a “plan” as defined
in Section 4975 of the Code, or an entity deemed to hold the plan assets of any of the foregoing.


 


“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.


 


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


 


“Principal Balance” means,
with respect to any Receivable as of any date, the Amount Financed minus the sum of the following amounts, without duplication:
(i) 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, (ii) any Warranty Purchase Payment or Administrative Purchase Payment with respect to such Receivable
allocable to principal and (iii) any Excess Payments or other payments applied to reduce the unpaid principal balance of such Receivable.


 




    	 	App A-19	 



     


    

 


“Principal Distributable Amount”
means, with respect to any Payment Date, the sum of the following amounts, without duplication: (i) 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 Excess Payments, received during such Collection Period, (iii) the Principal Balance of each
Receivable that became an Administrative Receivable or a Warranty Receivable during such Collection Period and (iv) the Principal
Balance of each Receivable that became a Defaulted Receivable during such Collection Period.


 


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


 


“Prospectus” means the
prospectus dated as of November 20, 2018.


 


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


 


“Purchaser” means American
Honda Receivables LLC, in its capacity as purchaser of the Receivables under the Receivables Purchase Agreement, and its successors
and assigns.


 


“Rating Agency” means
each of S&P and Moody’s.


 


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


 


“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 (whether tangible or electronic) specified in Section 2.02 of the Sale and Servicing Agreement.


 


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


 


“Receivables Purchase Price”
has the meaning set forth in Section 3.01 of the Receivables Purchase Agreement.


 


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


 




    	 	App A-20	 



     


    

 


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


 


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


 


“Regulation AB” means
Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1125, as such may be amended
from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting
releases (Asset Backed Securities, Securities Act Release No. 33 8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005) and the portions
of Asset-Backed Securities Disclosure and Registration, Securities Act Release No. 33-9638, 79 Fed. Reg. 57,184 (Sept. 24, 2014))
that are in effect on any specific date or by the staff of the Commission, or as may be provided by the Commission or its staff
from time to time.


 


“Repurchase Rules and Regulations”
shall have the meaning specified in Section 7.02(e) of the Indenture.


 


“Requesting Party” has
the meaning set forth in Section 5.14(a) of the Receivables Purchase Agreement.


 


“Required Rate” means
6.75%.


 


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


 


“Required Rating” means,
with respect to any entity, that such entity (or the parent of such entity) meets at all times the ratings criteria acceptable
to each Rating Agency rating the Notes, so as to preclude a downgrade of the Notes and/or credit watch of the Notes with negative
implications.


 


“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 “A-1” by S&P and “P-1” by Moody’s.


 


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


 


“Reserve Fund Initial Deposit”
means the initial deposit of cash in the amount of $2,968,960.86 made by or on behalf of the Seller into the Reserve Fund on the
Closing Date.


 




    	 	App A-21	 



     


    

 


“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 and the Securities Intermediary, 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 or person acting pursuant to a power of attorney
with direct responsibility for the administration of the Trust Agreement and the Basic Documents on behalf of the Owner Trustee.


 


“Retained Note” shall
mean any Notes held by the Issuer (or any other person treated as the same person as the Issuer for U.S. federal income tax purposes),
but only so long as such Notes are held by such entity, until such time as such Notes are transferred in accordance with the terms
and conditions of Section 2.04 of the Indenture.


 


“Review Conditions” means
(i) the Delinquency Percentage for any Payment Date exceeds the Delinquency Trigger for that Payment Date and (ii) the Noteholders
or Note Owners, as applicable, have voted, pursuant to Section 2.03(d) of the Receivables Purchase Agreement, to direct an Asset
Representations Review of the Subject Receivables.


 


“RPA Seller” means AHFC,
in its capacity as seller of the Receivables pursuant to the Receivables Purchase Agreement, and each successor thereto (in the
same capacity).


 


“Rule 144A Letter” means
a letter delivered in connection with the transfer of a Trust Certificate pursuant to Section 3.04(a) of the Trust Agreement, substantially
in the form attached hereto as Exhibit D to the Trust Agreement.


 


“S&P” means S&P
Global Ratings, a division of S&P Global, and any successor or successors thereto.


 


“Sale and Servicing Agreement”
means the Sale and Servicing Agreement, dated as of the Closing Date, among American Honda Receivables LLC, as seller, American
Honda Finance Corporation, as servicer, and the Issuer.


 


“Sarbanes Certification”
shall have the meaning specified in Section 3.12(a)(v) of the Sale and Servicing Agreement.


 


“Schedule of Receivables”
means the schedule of Receivables created by the RPA Seller and delivered to the Indenture Trustee promptly after the Closing Date,
at the address listed on Schedule A to the Sale and Servicing Agreement, as it may be amended from time to time.


 




    	 	App A-22	 



     


    

 


“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.


 


“Secretary of State”
means the Secretary of State of the State of Delaware.


 


“Section 385 Controlled Partnership”
shall have the meaning set forth in Treasury Regulation section 1.385-1(c)(1) for a “controlled partnership”.


 


“Section 385 Expanded Group”
shall have the meaning set forth in Treasury Regulation section 1.385-1(c)(4) for an “expanded group”.


 


“Securities” means the
Notes and the Trust Certificates.


 


“Securities Act” means
the Securities Act of 1933, as amended.


 


“Securities Intermediary”
means Citibank, N.A.


 


“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 AHR, in
its capacity as Seller of the Receivables under the Sale and Servicing Agreement, and each successor thereto (in the same capacity)
pursuant to Section 5.03 of the Sale and Servicing Agreement.


 


“Seller Certificate”
means a certificate of transfer delivered in connection with the transfer of a Trust Certificate pursuant to Section 3.04(a) of
the Trust Agreement, substantially in the form of Exhibit B to the Trust Agreement.


 


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


 


“Servicer Default” shall
have the meaning specified in Section 7.01 of the Sale and Servicing Agreement.


 


“Servicer’s Certificate”
shall have the meaning specified in Section 3.10 of the Sale and Servicing Agreement.


 


“Servicing Criteria”
means the “servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be amended from time to time.


 


“Servicing Fee Rate”
means 1.00% per annum.


 


“Similar Law” means a
law that is similar to the fiduciary or prohibited transaction provisions of Title I of ERISA or Section 4975 of the Code.


 




    	 	App A-23	 



     


    

 


“Specified Reserve Fund Balance”
means, on the Closing Date, $2,968,960.86, and with respect to any Payment Date, 0.25% of the initial aggregate principal balance
of the Receivables as of the Cutoff Date.


 


“Sponsor” means American
Honda Finance Corporation, in its capacity as sponsor under the Sale and Servicing Agreement, and any successor Sponsor thereunder.


 


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


 


“Statutory Trust Statute”
means Chapter 38 of Title 12 of the Delaware Code, 12 Del.C. § 3801 et seq., as the same may be amended from
time to time.


 


“Subcontractor” means
any vendor, subcontractor or other Person that is not responsible for the overall servicing (as “servicing” is commonly
understood by participants in the asset-backed securities market) of the Receivables but performs one or more discrete functions
identified in Item 1122(d) of Regulation AB with respect to the Receivables under the direction or authority of the Servicer or
a Subservicer; unless separate statements of compliance and assessment of compliance and accountant’s attestation of such
vendor, subcontractor or other Person are not required to be included in the Issuer’s Form 10-K as provided by Item 17.06
of the SEC Division of Corporation Finance’s Manual of Publicly Available Telephone Interpretations relating to Regulation
AB and Related Rules or such other rule or interpretation of Regulation AB from time to time in effect or other applicable rule
or regulation.


 


“Subject Receivables”
means, for any Asset Representations Review, all Receivables outstanding and held by the Issuer that are more than 60 days delinquent
as of the first day on which the Review Conditions are satisfied.


 


“Subservicer” means any
Person that services Receivables on behalf of the Servicer or any Subservicer and is responsible for the performance (whether directly
or through Subservicers or Subcontractors) of a substantial portion of the material servicing functions required to be performed
by the Servicer under this Agreement that are identified in Item 1122(d) of Regulation AB.


 


“Successor Servicer”
means any entity appointed as a successor to the Servicer pursuant to Section 7.02 of the Sale and Servicing Agreement.


 


“Supplemental Servicing Fee”
means any interest earned on investment of the monies on deposit in the Collection Account 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.


 


“Tax Information” means
information and/or properly completed and signed tax certifications sufficient to eliminate the imposition of or to determine the
amount of any withholding of tax, including FATCA Withholding Tax.


 


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


 




    	 	App A-24	 



     


    

 


“Treasury Regulations”
means regulations, including proposed or temporary regulations, promulgated under the Code. References herein to specific provisions
of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury
Regulations.


 


“Trust” means the Issuer.


 


“Trust Agreement” means
the Initial Trust Agreement.


 


“Trust Certificate” means
a certificate evidencing the beneficial interest of an Owner in the Trust, substantially in the form of Exhibit A to the Trust
Agreement.


 


“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.


 


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


 


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


 


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


 


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


 


“United States” means
the United States of America.


 


“United States Person”
means a United States person as defined in Section 7701(a)(30) of the Code.


 


“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 RPA Seller as of the end of the related Collection
Period, 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 RPA Seller is required to repurchase pursuant to Section 2.03(c) of the Receivables Purchase Agreement
or Section 2.04 of the Sale and Servicing Agreement.


 


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


 




    	 	App A-25	 



     


    

 


“Yield Supplement Account Deposit”
means the initial deposit of cash in the amount of $114,441,025.69 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.


 


		II.	Rules of Construction



 


For all purposes of any Basic Document,
except as otherwise expressly provided or unless the context otherwise requires, (i) terms used therein 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 that Basic Document as a whole and not to any particular part, article or section within such Basic
Document, (iii) references to a schedule, appendix or section such as “Section 1.01” and the like shall refer to the
applicable schedule, appendix or section of such Basic Document, (iv) the term “include” and all variations thereof
shall mean “include without limitation,” (v) the term “or” is not exclusive and shall include “and/or,”
(vi) words in the singular include the plural and words in the plural include the singular, (vii) unless “Business Days”
is specified, any reference to a number of days shall be a reference to that number of consecutive calendar days, (viii) any agreement,
instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means
such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements
or instruments) references to all attachments thereto and instruments incorporated therein, (ix) the term “proceeds”
shall have the meaning set forth in the applicable UCC and (x) accounting terms not defined in such Basic Document or in any such
certificate or other document, and accounting terms partly defined in such Basic Document 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.


 




    	 	App A-26	 



     


    





 


SCHEDULE
A


 


ADDRESSES FOR NOTICES


 


1.     If
to AHFC, in its individual capacity or as RPA Seller, Servicer, Sponsor or Administrator:


 


American Honda Finance Corporation


20800 Madrona Avenue


Torrance, CA 90503


Attention: Treasury Manager


 


2.     If
to AHR, in its individual capacity or as Seller or Depositor:


 


American Honda Receivables LLC


20800 Madrona Avenue


Torrance, CA 90503


Attention: Treasury Manager


 


3.     If
to the Issuer:


Honda Auto Receivables 2018-4


c/o The Bank of New York Mellon


240 Greenwich Street, Floor 7 West, New York, NY 10286


Attention: Asset Backed Securities Unit – Honda
Auto Receivables 2018-4


 


with a copy to:


 


American Honda Finance Corporation


20800 Madrona Avenue


Torrance, CA 90503


Attention: Treasury Manager


 


4.     If
to the Indenture Trustee, at the Corporate Trust Office of the Indenture Trustee, located at:


Citibank, N.A.


388 Greenwich Street


New York, New York 10013


Attention: HAROT 2018-4


Email: louis.a.piscitelli@citi.com


 


5.     If
to the Owner Trustee, at the Corporate Trust Office of the Owner Trustee, located at:


The Bank of New York Mellon


240 Greenwich Street, Floor 7 West, New York, NY 10286


Attention: Asset Backed Securities Unit – Honda
Auto Receivables 2018-4


 




    	 	 Sch A-1	 



     


    

 


6.     If
to the Delaware Trustee:


 


BNY Mellon Trust of Delaware


301 Bellevue Parkway, 3rd Floor


Wilmington, Delaware 19809, Attention: Corporate Trust
Administration


 


7.     If
to S&P:


 


S&P Global Ratings


55 Water Street, 40th Floor


New York, New York 10004


Attention: Auto ABS Surveillance Department


Email: servicer_reports@sandp.com


 


8.     If
to Moody’s:


 


Moody’s Investors Service, Inc.


7 World Trade Center, 25th Floor


New York, New York 10007


Attention: ABS/RMBS Monitoring Department


Email: ServicerReports@moodys.com


 




    	 	 Sch A-2	 



     


    

 


EXHIBIT A


 


FORM OF
REDEMPTION NOTICE


 


Via Federal Express


 


[DATE]


 


[ADDRESS]

[ADDRESS]


 


[ADDRESS]

[ADDRESS]


 


[ADDRESS]

[ADDRESS]


 


		Re:	Notice of Election to Purchase All Receivables

Honda Auto Receivables 2018-4 Owner Trust



 


Dear Sir/Madam,


 


Reference is made to the Sale and Servicing
Agreement, dated as of November 28, 2018 (“Sale and Servicing Agreement”), among American Honda Receivables LLC (“AHR”),
as Seller, American Honda Finance Corporation (“AHFC”), as Servicer, and Honda Auto Receivables 2018-4 Owner Trust
(the “Trust”). Pursuant to Section 8.01 of the Sale and Servicing Agreement, notice is hereby given that on [________]
(the “Redemption Date”), AHFC shall purchase the Owner Trust Estate.


 


Reference is made to the Indenture, dated
as of November 28, 2018 (“Indenture”), between the Trust and Citibank, N.A., as Indenture Trustee. Pursuant to Section
10.01 of the Indenture, notice is hereby given that on the Redemption Date, AHFC elects to have the Notes redeemed in exchange
for the Redemption Price.


 


On the Redemption Date, AHFC shall pay to
the Indenture Trustee all agreed upon amounts due, representing the Owner Trust Estate under the Sale and Servicing Agreement as
of such date. Pursuant to Section 8.04(b) of the Indenture, the Issuer hereby requests that on the Redemption Date, upon (i) the
redemption of the Notes pursuant to Section 10.01 of the Indenture and (ii) the delivery of the Officer’s Certificate and
Opinion of Counsel required by Section 8.04(b) of the Indenture, the Indenture Trustee release any remaining portion of the Owner
Trust Estate from the lien of the Indenture and release any funds on deposit in the Accounts in accordance with Section 8.04(b)
of the Indenture. Pursuant to Section 1.02(a) of the Administration Agreement dated as of November 28, 2018 among the Issuer, AHFC,
AHR and the Indenture Trustee, AHFC as Administrator is making this Issuer Request on behalf of the Issuer.


 




    	 	 A-1	 



     


    

 


After the purchase of the Owner Trust Estate
by AHFC on the Redemption Date, the Trust shall terminate in accordance with the terms of the Trust Agreement, and AHFC hereby
requests that the Owner Trustee (i) cancel the Certificate of Trust by filing a certificate of cancellation with the Secretary
of State (pursuant to Section 9.01(e) of the Amended and Restated Trust Agreement) and (ii) inform the Certificateholder of such
action and specify the date on which the Certificateholder shall surrender such Trust Certificates for final payment and cancellation,
pursuant to Section 9.01(c) of the Amended and Restated Trust Agreement.


 


In addition, AHFC requests that the Indenture
Trustee (i) provide notice to the Noteholders pursuant to Section 10.01 of the Indenture, which notice shall contain the information
required by Section 10.02 of the Indenture, and (ii) provide notice to DTC pursuant to item 6 in Schedule A of the DTC Letter of
Representations, dated as of November 28, 2018.


 


Terms having their initial letters capitalized
which are not otherwise defined herein have the meanings ascribed to them in the Sale and Servicing Agreement or the Indenture.


 


	 	Very Truly Yours,
	 	 
	 	American Honda Finance Corporation, as Servicer and Administrator
	 	 	 
	 	By:	 
	 	Name:	[__________]
	 	Title:	[__________]
	cc:       [Rating Agencies]	 	 


 




    	 	 A-2	 



     


    

 


EXHIBIT B


 


FORM
OF OFFICER’S CERTIFICATE

HONDA AUTO RECEIVABLES 2018-4 OWNER TRUST

Officer’s Certificate


 


Reference is hereby made to the Indenture
dated as of November 28, 2018 (the “Indenture”) between Honda Auto Receivables 2018-4 Owner Trust, as
Issuer (the “Issuer”), and Citibank, N.A., as Indenture Trustee (the “Indenture Trustee”),
and to the Sale and Servicing Agreement dated as of November 28, 2018 (the “Sale and Servicing Agreement”)
among the Issuer, American Honda Receivables LLC, as seller, and American Honda Finance Corporation, as servicer (in such capacity
the “Servicer”). Capitalized terms used and not otherwise defined herein have the meanings provided in
the Indenture.


 


In connection with the satisfaction and
discharge of the Indenture pursuant to Section 4.01 of the Indenture and the release of the Owner Trust Estate pursuant to Section
8.04 of the Indenture the undersigned certifies that:


 


1.          As
required by Section 8.01 of the Sale and Servicing Agreement and Section 10.01 of the Indenture:


 


a.     [___________]
(the “Redemption Date”) is a Payment Date following the last day of a Collection Period as of which the
aggregate Pool Balance was 10% or less of the Original Pool Balance.


 


b.    The
Servicer deposited into the Collection Account, and it is the undersigned’s understanding that the Indenture Trustee transferred
into the Note Distribution Account an amount equal to the Redemption Price. The deposit was made in immediately available funds
by 8:00 A.M., Los Angeles time on such Payment Date.


 


2.          Notice
of redemption of the Notes was delivered by the Servicer to the Indenture Trustee pursuant to Section 10.01 of the Indenture. Such
notice was furnished not later than the number of days prior to the Redemption Date required by Section 10.01 of the Indenture.


 


3.          The
Indenture and the Sale and Servicing Agreement have not been amended, modified, terminated or superseded and remain in full force
and effect.


 


4.          All
conditions precedent provided for in the Indenture to the satisfaction and discharge of the Indenture have been complied with,
and


 


5.          All
conditions precedent provided for in the Indenture to the release of the Owner Trust Estate pursuant to Section 8.04 of the Indenture
have been complied with.


 




    	 	 B-1	 



     


    

 


The undersigned has read or caused to be
read the applicable conditions and the definitions in the Indenture relating thereto, including without limitation Section 11.01
of the Indenture, and has obtained and reviewed copies of the notices, certificates and opinions referred to therein. With respect
to paragraphs 4 and 5, the undersigned has relied on the opinion of counsel of [_____________], dated [__________] to identify
the notices, certificates and opinions required to be delivered to satisfy the conditions set forth in the Indenture. In the opinion
of the undersigned, the undersigned has made such examination or investigation as is necessary to enable the undersigned to express
an informed opinion as to whether or not such conditions have been complied with. This Officer’s Certificate is also being
delivered to [____________] with the understanding that it will be relied upon with respect to paragraphs 1 through 3 and may be
attached to the legal opinion to be given by said firm on or about the date hereof in connection with the Servicer’s purchase
of the Owner Trust Estate pursuant to Section 8.01 of the Sale and Servicing Agreement.


 


This Officer’s Certificate is delivered
by an Authorized Officer of the Administrator pursuant to Section 1.02 of the Administration Agreement.


 


IN WITNESS WHEREOF, the undersigned has
executed this Officer’s Certificate as of the [___] day of [_______].


 


	 	AMERICAN HONDA FINANCE CORPORATION
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 


 




    	 	 B-2	 



     


    

 


EXHIBIT C


 


FORM OF
SARBANES CERTIFICATE


 


I, [____________], certify that:


 


1. I have reviewed this report on Form 10-K and all reports
on Form 10-D required to be filed in respect of the period covered by this report on Form 10-K of Honda Auto Receivables 2018-4
Owner Trust (the “Exchange Act periodic reports”);


 


2. Based on my knowledge, the Exchange Act periodic reports,
taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this report;


 


3. Based on my knowledge, all of the distribution, servicing
and other information required to be provided under Form 10-D for the period covered by this report is included in the Exchange
Act periodic reports;


 


4. I am responsible for reviewing the activities performed by
the servicer and based on my knowledge and the compliance review conducted in preparing the servicer compliance statement required
in this report under Item 1123 of Regulation AB, and except as disclosed in the Exchange Act periodic reports, the servicer has
fulfilled its obligations under the servicing agreement in all material respects; and


 


5. All of the reports on assessment of compliance with servicing
criteria for asset-backed securities and their related attestation reports on assessment of compliance with servicing criteria
for asset-backed securities required to be included in this report in accordance with Item 1122 of Regulation AB and Exchange Act
Rules 13a-18 and 15d-18 have been included as an exhibit to this report, except as otherwise disclosed in this report. Any material
instances of noncompliance described in such reports have been disclosed in this report on Form 10-K.


 


In giving the certifications above, I have reasonably relied
on information provided to me by the following unaffiliated parties: [_____________]


 


Date: [____________]


 


	 	By:	 
	 	Name:	[_________]
	 	Title:	[_________]


 




    	 	 C-1	 



     


    

 


EXHIBIT
D



SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE


 


The assessment of compliance to be delivered
by the Servicer, shall address, at a minimum, the criteria identified as below as “Applicable Servicing Criteria”:


 


	
        Reference
	Criteria	 
	 	General Servicing Considerations	 
	1122(d)(1)(i)	Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements.	X
	1122(d)(1)(ii)	If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities.	X
	1122(d)(1)(iii)	Any requirements in the transaction agreements to maintain a back-up servicer for the pool assets are maintained.	   
	1122(d)(1)(iv)	A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements.	   
	1122(d)(1)(v)	Aggregation of information, as applicable, is mathematically accurate and the information conveyed accurately reflects the information.	X
	 	Cash Collection and Administration	 
	1122(d)(2)(i)	Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days of receipt, or such other number of days specified in the transaction agreements.	X
	1122(d)(2)(ii)	Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel.	X
	1122(d)(2)(iii)	Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements.	X
	1122(d)(2)(iv)	The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of over-collateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements.	X
	1122(d)(2)(v)	Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 240.13K-1(b)(1) of this Chapter.	X
	1122(d)(2)(vi)	Unissued checks are safeguarded so as to prevent unauthorized access.	   
	1122(d)(2)(vii)	Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations: (A) are mathematically accurate; (B) are prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) are reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements.	X


 




    	 	 D-1	 



     


    

 


	Reference	Criteria	 
	 	Investor Remittances and Reporting 	 
	1122(d)(3)(i)	Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports: (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of pool assets serviced by the Servicer.	X
	1122(d)(3)(ii)	Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.	X
	1122(d)(3)(iii)	Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements.	X
	1122(d)(3)(iv)	Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements.	X
	 	Pool Asset Administration	 
	1122(d)(4)(i)	Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents.	X
	1122(d)(4)(ii)	Pool assets and related documents are safeguarded as required by the transaction agreements.	X
	1122(d)(4)(iii)	Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.	X
	1122(d)(4)(iv)	Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the applicable Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset documents.	X
	1122(d)(4)(v)	The Servicer’s records regarding the pool assets agree with the Servicer’s records with respect to an obligor’s unpaid principal balance.	X
	1122(d)(4)(vi)	Changes with respect to the terms or status of an obligor’s pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents.	X
	1122(d)(4)(vii)	Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements.	X
	1122(d)(4)(viii)	Records documenting collection efforts are maintained during the period a pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment).	X
	1122(d)(4)(ix)	Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents.	   
	1122(d)(4)(x)	Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s pool asset documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related pool asset, or such other number of days specified in the transaction agreements.	   


 




    	 	 D-2	 



     


    

 


	Reference	Criteria	 
	1122(d)(4)(xi)	Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements.	   
	1122(d)(4)(xii)	Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission.	   
	1122(d)(4)(xiii)	Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements.	   
	1122(d)(4)(xiv)	Delinquencies, charge-offs and uncollectable accounts are recognized and recorded in accordance with the transaction agreements.	X
	1122(d)(4)(xv)	Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of this Regulation AB, is maintained as set forth in the transaction agreements.	   


 




    	 	 D-3