Common use of Treatment of Ineligible Receivables Clause in Contracts

Treatment of Ineligible Receivables. 26.1 If it is found that the Trust Receivables are or has become the Ineligible Receivables, the Trustee may request the Settlor repurchase the Ineligible Receivables at its nominal value (the “Repurchase Price”) in accordance with a written instruction from the Agent, or, if all or a part of the Ineligible Receivables has already been extinguished due to assertion of grounds for defense by the Third Party Obligor (excluding defense based on the Set-off Treatment) or other reasons, the Trustee may request the Settlor pay the amount equivalent to all or a part of such Ineligible Receivables that has been extinguished. 26.2 The Trustee is not obliged to request the Settlor repurchase the Ineligible Receivables or pay the equivalent amount as described in Clause 26.1 and shall not be liable for indemnifying the Settlor or the Beneficiary for any Damages incurred by the Trust Property due to its failure to make such request, unless the Trustee has been instructed by the Agent under Clause 26.1. 26.3 The assignment of the Ineligible Receivables through repurchase thereof pursuant to Clause 26.1 shall become effective when the Settlor pays to the Trustee the Repurchase Price in full. The Trustee shall cooperate with the Settlor as necessary, to the extent possible for the Trustee, with respect to the perfection of the assignment of the Ineligible Receivables to the Settlor through repurchase thereof by the Settlor. 26.4 If the Settlor becomes aware that the Trust Receivables are or have become the Ineligible Receivables, it shall immediately notify the Trustee and the Agent. If the Trustee becomes aware that the Trust Receivables are or have become the Ineligible Receivables, it shall immediately notify the Beneficiary and the Agent. Provided, however, that the Trustee shall not be liable for indemnifying the Beneficiary and the Agent for the Damages arising due to its failure to give notice as provided for in this Clause 26.4, unless the Trustee intentionally fails to notify the Beneficiary and the Agent although it is aware that the Trust Receivables are or have become the Ineligible Receivables.