Common use of Federal Income Tax Treatment of the Trust Clause in Contracts

Federal Income Tax Treatment of the Trust. (a) The Trust will be treated as a partnership (rather than disregarded as a separate entity) for federal income tax purposes. Therefore, the following provisions shall apply: (i) A separate capital account (a "Capital Account") shall be established and maintained for each Certificateholder by the Class R Certificateholder, in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv). No Certificateholder shall be entitled to interest on its Capital Account or any capital contribution made by such Certificateholder to the Trust. (ii) Upon termination of the Trust pursuant to Article VII, any amounts available for distribution to Certificateholders shall be distributed to the Certificateholders with positive Capital Account balances in accordance with such balances. For purposes of this Section 2.11, the Capital Account of each Certificateholder shall be determined after all adjustments made in accordance with this Section 2.11 resulting from the Trust's operations and from all sales and dispositions of all or any part of the assets of the Trust. Any distributions pursuant to this Section 2.11 shall be made by the end of the Taxable Year in which the termination occurs (or, if later, within 90 days after the date of the termination). (iii) No Certificateholder shall be required to restore any deficit balance in its Capital Account. Furthermore, no Certificateholder shall be liable for the return of the Capital Account of, or of any capital contribution made to the Trust by, another Certificateholder. (iv) Profit and loss of the Trust for each Taxable Year shall be allocated to the Certificateholders in accordance with their respective Percentage Interests. (vi) If a Certificateholder receives in any Taxable Year an adjustment, allocation, or distribution described in subparagraphs (4), (5), or (6) of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases a negative balance in such Certificateholder's Capital Account that exceeds the sum of such Certificateholder's shares of Trust Minimum Gain and Certificateholder Nonrecourse Debt Minimum Gain, as determined in accordance with Treasury Regulations Sections 1.704-2(g) and 1.704-2(i), such Certificateholder shall be allocated specially for such Taxable Year (and, if necessary, later Taxable Years) items of income and gain in an amount and manner sufficient to eliminate such negative Capital Account balance as quickly as possible as provided in Treasury Regulations Section 1.704-1(b)(2)(ii)(d). After the occurrence of an allocation of income or gain to a Certificateholder in accordance with this Section 6.01(c)(vi), to the extent permitted by Regulations Section 1.704-1(b), items of expense or loss shall be allocated to such Certificateholder in an amount necessary to offset the income or gain previously allocated to such Certificateholder under this Section 6.01(c)(vi). (vii) Loss shall not be allocated to a Certificateholder to the extent that such allocation would cause a deficit in such Certificateholder's Capital Account (after reduction to reflect the items described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of such Certificateholder's shares of Trust Minimum Gain and Certificateholder Nonrecourse Debt Minimum Gain. Any loss in excess of that limitation shall be allocated to all the Certificateholders in accordance with their respective Percentage Interests. After the occurrence of an allocation of loss to a Certificateholder in accordance with this Section 6.01(c)(vii), to the extent permitted by Treasury Regulations Section 1.704-1(b), profit shall be allocated to such Certificateholder in an amount necessary to offset the loss previously allocated to such Certificateholder under this Section 6.01(c)(vii). (viii) If a Certificateholder transfers any part or all of its Percentage Interest and the transferee is admitted as a Certificateholder as provided herein (a "Transferee Certificateholder"), the distributive shares of the various items of profit and loss allocable among the Certificateholders during such Taxable Year shall be allocated between the transferor and the Transferee Certificateholder (at the election of the Certificateholders (including the transferor, but excluding the Transferee Certificateholder)) either (i) as if the Taxable Year had ended on the date of the transfer or (ii) based on the number of days of such Taxable Year that each was a Certificateholder without regard to the results of Trust activities in the respective portions of such Taxable Year in which the transferor and Transferee Certificateholder were Certificateholders.

Federal Income Tax Treatment of the Trust. (a) The Transferor, the Owner Trustee and each Certificateholder, by accepting its Certificate, agree to treat the Class C Certificates as debt for U.S. federal, state and local income and franchise tax purposes. If, contrary to this treatment by the parties, the IRS determined that the Class C Certificates were properly characterized as equity interests in the Trust, or if there were ever more than one beneficial owner of the Class R Certificates, it is possible that the Trust will could be treated as a partnership for tax purposes. If the Trust were to be treated as a partnership (rather than disregarded as a separate entity) for federal income tax purposes. Therefore, purposes the following provisions shall apply: (i) A separate capital account (each, a "Capital Account") shall be established and maintained for each Certificateholder by the initial Class R Certificateholder, in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv). No Certificateholder shall be entitled to interest on its Capital Account or any capital contribution made by such Certificateholder to the Trust. For the avoidance of doubt, the initial amount in each Class C Certificateholder's Capital Account will be equal to $6,125,000. (ii) Distributions on the Class C and Class R Certificates shall be made in accordance with Sections 5.6 and 5.12 of the Sale and Servicing Agreement. Any distributions made to a Class C or Class R Certificateholder shall reduce the amount of such Certificateholder's Capital Account. (iii) Upon termination of the Trust pursuant to Article VIIVIII, any amounts available for distribution to Certificateholders shall be distributed to the Certificateholders with positive Capital Account balances in accordance with such balances; provided, however, that any amounts remaining in the Supplemental Enhancement Account shall first be paid pro rata to the Class C Certificateholders until the principal balance of the Class C Certificates are reduced to zero and all amounts due and owing to the Class C Certificateholders are paid in full. For purposes of this Section 2.11, the Capital Account of each Certificateholder shall be determined after all adjustments made in accordance with this Section 2.11 resulting from the Trust's operations and from all sales and dispositions of all or any part of the assets of the Trust. Any distributions pursuant to this Section 2.11 shall be made by the end of the Taxable Year in which the termination occurs (or, if later, within 90 days after the date of the termination). (iiiiv) No Certificateholder shall be required to restore any deficit balance in its Capital Account. Furthermore, no Certificateholder shall be liable for the return of the Capital Account of, or of any capital contribution made to the Trust by, another Certificateholder. (ivv) Profit and loss of the Trust for each Taxable Year shall be allocated to the Certificateholders in accordance with their respective Percentage Partnership Interests. (vivii) If a Certificateholder receives in any Taxable Year an adjustment, allocation, or distribution described in subparagraphs (4), (5), or (6) of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases a negative balance in such Certificateholder's Capital Account that exceeds the sum of such Certificateholder's shares of Trust Minimum Gain and Certificateholder Nonrecourse Debt Minimum Gain, as determined in accordance with Treasury Regulations Sections 1.704-2(g) and 1.704-2(i), such Certificateholder shall be allocated specially for such Taxable Year (and, if necessary, later Taxable Years) items of income and gain in an amount and manner sufficient to eliminate such negative Capital Account balance as quickly as possible as provided in Treasury Regulations Section 1.704-1(b)(2)(ii)(d). After the occurrence of an allocation of income or gain to a Certificateholder in accordance with this Section 6.01(c)(vi)2.11, to the extent permitted by Regulations Section 1.704-1(b), items of expense or loss shall be allocated to such Certificateholder in an amount necessary to offset the income or gain previously allocated to such Certificateholder under this Section 6.01(c)(vi)2.11. (viiviii) Loss shall not be allocated to a Certificateholder to the extent that such allocation would cause a deficit in such Certificateholder's Capital Account (after reduction to reflect the items described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of such Certificateholder's shares of Trust Minimum Gain and Certificateholder Nonrecourse Debt Minimum Gain. Any loss in excess of that limitation shall be allocated to all the Certificateholders in accordance with their respective Percentage Partnership Interests. After the occurrence of an allocation of loss to a Certificateholder in accordance with this Section 6.01(c)(vii2.11(a)(vii), to the extent permitted by Treasury Regulations Section 1.704-1(b), profit shall be allocated to such Certificateholder in an amount necessary to offset the loss previously allocated to such Certificateholder under this Section 6.01(c)(vii2.11(a)(vii). (viiiix) If a Certificateholder transfers any part or all of its Percentage Partnership Interest and the transferee is admitted as a Certificateholder as provided herein (a "Transferee Certificateholder"), the distributive shares of the various items of profit and loss allocable among the Certificateholders during such Taxable Year shall be allocated between the transferor and the Transferee Certificateholder (at the election of the Certificateholders (including the transferor, but excluding the Transferee Certificateholder)) either (i) as if the Taxable Year had ended on the date of the transfer or (ii) based on the number of days of such Taxable Year that each was a Certificateholder without regard to the results of Trust activities in the respective portions of such Taxable Year in which the transferor and Transferee Certificateholder were Certificateholders.

Federal Income Tax Treatment of the Trust. (a) The Transferor, the Owner Trustee and each Certificateholder, by accepting its Certificate, agree to treat the Class C Certificate as debt for U.S. federal, state and local income and franchise tax purposes. If, contrary to this treatment by the parties, the IRS determined that the Class C Certificate were properly characterized as equity interests in the Trust, or if there were ever more than one beneficial owner of the Class R Certificates, it is possible that the Trust will could be treated as a partnership for tax purposes. If the Trust were to be treated as a partnership (rather than disregarded as a separate entity) for federal income tax purposes. Therefore, purposes the following provisions shall apply: (i) A separate capital account (each, a "Capital Account") shall be established and maintained for each Certificateholder by the initial Class R Certificateholder, in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv). No Certificateholder shall be entitled to interest on its Capital Account or any capital contribution made by such Certificateholder to the Trust. For the avoidance of doubt, the initial amount in the Class C Certificateholder's Capital Account will be equal to $12,303,797. (ii) Distributions on the Class C and Class R Certificates shall be made in accordance with Sections 5.6 and 5.12 of the Sale and Servicing Agreement. Any distributions made to a Class C or Class R Certificateholder shall reduce the amount of such Certificateholder’s Capital Account. (iii) Upon termination of the Trust pursuant to Article VIIVIII, any amounts available for distribution to Certificateholders shall be distributed to the Certificateholders with positive Capital Account balances in accordance with such balances; provided, however, that any amounts remaining in the Supplemental Enhancement Account shall first be to the Class C Certificateholder until the principal balance of the Class C Certificate is reduced to zero and all amounts due and owing to the Class C Certificateholder are paid in full. For purposes of this Section 2.11, the Capital Account of each Certificateholder shall be determined after all adjustments made in accordance with this Section 2.11 resulting from the Trust's ’s operations and from all sales and dispositions of all or any part of the assets of the Trust. Any distributions pursuant to this Section 2.11 shall be made by the end of the Taxable Year in which the termination occurs (or, if later, within 90 days after the date of the termination). (iiiiv) No Certificateholder shall be required to restore any deficit balance in its Capital Account. Furthermore, no Certificateholder shall be liable for the return of the Capital Account of, or of any capital contribution made to the Trust by, another Certificateholder. (ivv) Profit and loss of the Trust for each Taxable Year shall be allocated to the Certificateholders in accordance with their respective Percentage Partnership Interests. (vi) Notwithstanding any provision to the contrary, (i) any expense of the Trust that is a "nonrecourse deduction" within the meaning of Treasury Regulations Section 1.704-2(b)(1) shall be allocated in accordance with the Certificateholders’ respective Partnership Interests, (ii) any expense of the Trust that is a "partner nonrecourse deduction" within the meaning of Treasury Regulations Section 1.704-2(i)(2) shall be allocated in accordance with Treasury Regulations Section 1.704-2(i)(1), (iii) if there is a net decrease in Trust Minimum Gain within the meaning of Treasury Regulations Section 1.704-2(f)(1) for any Taxable Year, items of gain and income shall be allocated among the Certificateholders in accordance with Treasury Regulations Section 1.704-2(f) and the ordering rules contained in Treasury Regulations Section 1.704-2(j), and (iv) if there is a net decrease in Nonrecourse Debt Minimum Gain within the meaning of Treasury Regulations Section 1.704-2(i)(4) for any Taxable Year, items of gain and income shall be allocated among the Certificateholders in accordance with Treasury Regulations Section 1.704-2(i)(4) and the ordering rules contained in Treasury Regulations Section 1.704-2(j). A Certificateholder’s "interest in partnership profits" for purposes of determining its share of the nonrecourse liabilities of the Trust within the meaning of Treasury Regulations Section 1.752-3(a)(3) shall be such Certificateholder’s Partnership Interest. (vii) If a Certificateholder receives in any Taxable Year an adjustment, allocation, or distribution described in subparagraphs (4), (5), or (6) of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases a negative balance in such Certificateholder's ’s Capital Account that exceeds the sum of such Certificateholder's ’s shares of Trust Minimum Gain and Certificateholder Nonrecourse Debt Minimum Gain, as determined in accordance with Treasury Regulations Sections 1.704-2(g) and 1.704-2(i), such Certificateholder shall be allocated specially for such Taxable Year (and, if necessary, later Taxable Years) items of income and gain in an amount and manner sufficient to eliminate such negative Capital Account balance as quickly as possible as provided in Treasury Regulations Section 1.704-1(b)(2)(ii)(d). After the occurrence of an allocation of income or gain to a Certificateholder in accordance with this Section 6.01(c)(vi)2.11, to the extent permitted by Regulations Section 1.704-1(b), items of expense or loss shall be allocated to such Certificateholder in an amount necessary to offset the income or gain previously allocated to such Certificateholder under this Section 6.01(c)(vi)2.11. (viiviii) Loss shall not be allocated to a Certificateholder to the extent that such allocation would cause a deficit in such Certificateholder's ’s Capital Account (after reduction to reflect the items described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of such Certificateholder's ’s shares of Trust Minimum Gain and Certificateholder Nonrecourse Debt Minimum Gain. Any loss in excess of that limitation shall be allocated to all the Certificateholders in accordance with their respective Percentage Partnership Interests. After the occurrence of an allocation of loss to a Certificateholder in accordance with this Section 6.01(c)(vii2.11(a)(vii), to the extent permitted by Treasury Regulations Section 1.704-1(b), profit shall be allocated to such Certificateholder in an amount necessary to offset the loss previously allocated to such Certificateholder under this Section 6.01(c)(vii2.11(a)(vii). (viiiix) If a Certificateholder transfers any part or all of its Percentage Partnership Interest and the transferee is admitted as a Certificateholder as provided herein (a "Transferee Certificateholder"), the distributive shares of the various items of profit and loss allocable among the Certificateholders during such Taxable Year shall be allocated between the transferor and the Transferee Certificateholder (at the election of the Certificateholders (including the transferor, but excluding the Transferee Certificateholder)) either (i) as if the Taxable Year had ended on the date of the transfer or (ii) based on the number of days of such Taxable Year that each was a Certificateholder without regard to the results of Trust activities in the respective portions of such Taxable Year in which the transferor and Transferee Certificateholder were Certificateholders. (x) Profit" and "loss" and any items of income, gain, expense or loss referred to in this Section 2.11 shall be determined in accordance with federal income tax accounting principles as modified by Treasury Regulations Section 1.704-1(b)(2)(iv), excepting that that profits and losses shall not include items of income, gain, and expense that are specially allocated pursuant to Sections 2.11(a)(v), 2.11(a)(vi) or 2.11(a)(vii) hereof. All allocations of income, profits, gains, expenses, and losses (and all items contained therein) for federal income tax purposes shall be identical to all allocations of such items set forth in this Section 2.11, except as otherwise required by Section 704(c) of the Code and Section 1.704-1(b)(4) of the Treasury Regulations. (xi) The taxable year of the Trust (the "Taxable Year") shall be the calendar year or such other taxable year as may be required by Section 706(b) of the Code. (xii) As provided in Section 5.7(c) of the Sale and Servicing Agreement, at the Servicer’s expense, the Tax Matters Partner shall (i) cause a firm of nationally recognized accountants to prepare, and file or cause to file such tax returns relating to the Trust (including a partnership information return, IRS Form 1065) as are required by applicable federal, state, and local law, (ii) cause such returns to be signed in the manner required by law, (iii) make such elections as may from time to time be required or appropriate under any applicable law so as to maintain the Trust’s classification as a partnership for tax purposes, (iv) prepare and deliver, or cause to be prepared and delivered, to the Certificateholders, no later than 120 days after the close of each Taxable Year (or no later than April l5th), a Schedule K-1, a copy of the Trust’s informational tax return (IRS Form 1065), and such other reports (collectively, the "Annual Tax Reports") setting forth in sufficient detail all such information and data with respect to the transactions effected by or involving the Trust during such Taxable Year as shall enable each Certificateholder to prepare its federal, state, and local income tax returns in accordance with the laws then prevailing, and (v) collect, or cause to be collected, any withholding tax with respect to income or distributions to Certificateholders. (xiii) The initial Class R Certificateholder (or if the Class R Certificate is no longer owned by the initial Class R Certificateholder, the Class R Certificateholder owning the largest percentage interest of the Class R Certificates) shall be designated as the tax matters partner for the Trust within the meaning of Section 6231(a)(7) of the Code (the "Tax Matters Partner"). The Tax Matters Partner shall have the right and obligation to take all actions authorized and required, respectively, by the Code for the Tax Matters Partner. The Tax Matters Partner shall have the right to retain professional assistance in respect of any audit or controversy proceeding initiated with respect to the Trust by the Internal Revenue Service or any state or local taxing authority, and except as provided in Section 2.11(xi), all expenses and fees incurred by the Tax Matters Partner on behalf of the Trust shall constitute expenses of the Trust. In the event the Tax Matters Partner receives notice of a final partnership adjustment under Section 6223(a)(2) of the Code, the Tax Matters Partner shall either (i) file a court petition for judicial review of such adjustment within the period provided under Section 6226(a) of the Code, a copy of which petition shall be mailed to all other Certificateholders on the date such petition is filed, or (ii) mail a written notice to all other Certificateholders, within such period, that describes the Tax Matters Partner’s reasons for determining not to file such a petition. (b) Except as otherwise provided in this Section 2.11, the Certificateholders shall instruct the Class R Certificateholder in writing as to whether to make any available election under the Code or any applicable state or local tax law on behalf of the Trust. However, neither the Owner Trustee nor any Certificateholder will, under any circumstances, and at any time, make an election on IRS Form 8832 or otherwise, to classify the Trust as an association taxable as a corporation for federal, state or any other applicable tax purpose. Further, neither the Owner Trustee nor any Certificateholder will, under any circumstances, and at any time, cause the Trust to engage in any activity which would cause the Trust to become an association (or publicly traded partnership) taxable as corporation for federal income tax purposes.

Federal Income Tax Treatment of the Trust. (a) The Trust will be treated as a partnership (rather than disregarded as a separate entity) for federal income tax purposes. Therefore, the following provisions shall apply: (i) A separate capital account (each, a "Capital Account") shall be established and maintained for each Certificateholder by the Class R Certificateholder, in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv). No Certificateholder shall be entitled to interest on its Capital Account or any capital contribution made by such Certificateholder to the Trust. For the avoidance of doubt, the initial amount in the Class C Certificateholder's Capital Account is equal to $7,954,545.45. (ii) Distributions on the Class C and Class R Certificates shall be made in accordance with Sections 5.6 and 5.12 of the Sale and Servicing Agreement. Any distributions made to the Class C or Class R Certificateholder shall reduce the amount of such Certificateholder's Capital Account. (iii) Upon termination of the Trust pursuant to Article VII, any amounts available for distribution to Certificateholders shall be distributed to the Certificateholders with positive Capital Account balances in accordance with such balances; provided, however, that any amounts remaining in the Supplemental Enhancement Account shall first be paid to the Class C Certificateholder until the principal balance of the Class C Certificate is reduced to zero and all amounts due and owing to the Class C Certificateholder are paid in full. For purposes of this Section 2.11, the Capital Account of each Certificateholder shall be determined after all adjustments made in accordance with this Section 2.11 resulting from the Trust's operations and from all sales and dispositions of all or any part of the assets of the Trust. Any distributions pursuant to this Section 2.11 shall be made by the end of the Taxable Year in which the termination occurs (or, if later, within 90 days after the date of the termination). (iiiiv) No Certificateholder shall be required to restore any deficit balance in its Capital Account. Furthermore, no Certificateholder shall be liable for the return of the Capital Account of, or of any capital contribution made to the Trust by, another Certificateholder. (ivv) Profit and loss of the Trust for each Taxable Year shall be allocated to the Certificateholders in accordance with their respective Percentage Partnership Interests. Section 1. 704-2(f)(1) for any Taxable Year, items of gain and income shall be allocated among the Certificateholders in accordance with Treasury Regulations Section 1.704-2(f) and the ordering rules contained in Treasury Regulations Section 1.704-2(j), and (viiv) if there is a net decrease in Nonrecourse Debt Minimum Gain within the meaning of Treasury Regulations Section 1.704-2(i)(4) for any Taxable Year, items of gain and income shall be allocated among the Certificateholders in accordance with Treasury Regulations Section 1.704-2(i)(4) and the ordering rules contained in Treasury Regulations Section 1.704-2(j). A Certificateholder's "interest in partnership profits" for purposes of determining its share of the nonrecourse liabilities of the Trust within the meaning of Treasury Regulations Section 1.752-3(a)(3) shall be such Certificateholder's Partnership Interest. (vii) If a Certificateholder receives in any Taxable Year an adjustment, allocation, or distribution described in subparagraphs (4), (5), or (6) of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases a negative balance in such Certificateholder's Capital Account that exceeds the sum of such Certificateholder's shares of Trust Minimum Gain and Certificateholder Nonrecourse Debt Minimum Gain, as determined in accordance with Treasury Regulations Sections 1.704-2(g) and 1.704-2(i), such Certificateholder shall be allocated specially for such Taxable Year (and, if necessary, later Taxable Years) items of income and gain in an amount and manner sufficient to eliminate such negative Capital Account balance as quickly as possible as provided in Treasury Regulations Section 1.704-1(b)(2)(ii)(d). After the occurrence of an allocation of income or gain to a Certificateholder in accordance with this Section 6.01(c)(vi)2.11, to the extent permitted by Regulations Section 1.704-1(b), items of expense or loss shall be allocated to such Certificateholder in an amount necessary to offset the income or gain previously allocated to such Certificateholder under this Section 6.01(c)(vi)2.11. (viiviii) Loss shall not be allocated to a Certificateholder to the extent that such allocation would cause a deficit in such Certificateholder's Capital Account (after reduction to reflect the items described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of such Certificateholder's shares of Trust Minimum Gain and Certificateholder Nonrecourse Debt Minimum Gain. Any loss in excess of that limitation shall be allocated to all the Certificateholders in accordance with their respective Percentage Partnership Interests. After the occurrence of an allocation of loss to a Certificateholder in accordance with this Section 6.01(c)(vii2.11(a)(vii), to the extent permitted by Treasury Regulations Section 1.704-1(b), profit shall be allocated to such Certificateholder in an amount necessary to offset the loss previously allocated to such Certificateholder under this Section 6.01(c)(vii2.11(a)(vii). (viiiix) If a Certificateholder transfers any part or all of its Percentage Partnership Interest and the transferee is admitted as a Certificateholder as provided herein (a "Transferee Certificateholder"), the distributive shares of the various items of profit and loss allocable among the Certificateholders during such Taxable Year shall be allocated between the transferor and the Transferee Certificateholder (at the election of the Certificateholders (including the transferor, but excluding the Transferee Certificateholder)) either (i) as if the Taxable Year had ended on the date of the transfer or (ii) based on the number of days of such Taxable Year that each was a Certificateholder without regard to the results of Trust activities in the respective portions of such Taxable Year in which the transferor and Transferee Certificateholder were Certificateholders.

Federal Income Tax Treatment of the Trust. (a) The Transferor, the Owner Trustee and each Certificateholder, by accepting its Certificate, agree to treat the Class C Certificate as debt for U.S. federal, state and local income and franchise tax purposes. If, contrary to this treatment by the parties, the IRS determined that the Class C Certificate were properly characterized as equity interests in the Trust, or if there were ever more than one beneficial owner of the Class R Certificates, it is possible that the Trust will could be treated as a partnership for tax purposes. If the Trust were to be treated as a partnership (rather than disregarded as a separate entity) for federal income tax purposes. Therefore, purposes the following provisions shall apply: (i) A separate capital account (each, a "Capital Account") shall be established and maintained for each Certificateholder by the initial Class R Certificateholder, in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv). No Certificateholder shall be entitled to interest on its Capital Account or any capital contribution made by such Certificateholder to the Trust. For the avoidance of doubt, the initial amount in the Class C Certificateholder's Capital Account will be equal to $15,750,000. (ii) Distributions on the Class C and Class R Certificates shall be made in accordance with Sections 5.6 and 5.12 of the Sale and Servicing Agreement. Any distributions made to a Class C or Class R Certificateholder shall reduce the amount of such Certificateholder's Capital Account. (iii) Upon termination of the Trust pursuant to Article VIIVIII, any amounts available for distribution to Certificateholders shall be distributed to the Certificateholders with positive Capital Account balances in accordance with such balances; provided, however, that any amounts remaining in the Supplemental Enhancement Account shall first be to the Class C Certificateholder until the principal balance of the Class C Certificate is reduced to zero and all amounts due and owing to the Class C Certificateholder are paid in full. For purposes of this Section 2.11, the Capital Account of each Certificateholder shall be determined after all adjustments made in accordance with this Section 2.11 resulting from the Trust's operations and from all sales and dispositions of all or any part of the assets of the Trust. Any distributions pursuant to this Section 2.11 shall be made by the end of the Taxable Year in which the termination occurs (or, if later, within 90 days after the date of the termination). (iiiiv) No Certificateholder shall be required to restore any deficit balance in its Capital Account. Furthermore, no Certificateholder shall be liable for the return of the Capital Account of, or of any capital contribution made to the Trust by, another Certificateholder. (ivv) Profit and loss of the Trust for each Taxable Year shall be allocated to the Certificateholders in accordance with their respective Percentage Partnership Interests. (vivii) If a Certificateholder receives in any Taxable Year an adjustment, allocation, or distribution described in subparagraphs (4), (5), or (6) of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases a negative balance in such Certificateholder's Capital Account that exceeds the sum of such Certificateholder's shares of Trust Minimum Gain and Certificateholder Nonrecourse Debt Minimum Gain, as determined in accordance with Treasury Regulations Sections 1.704-2(g) and 1.704-2(i), such Certificateholder shall be allocated specially for such Taxable Year (and, if necessary, later Taxable Years) items of income and gain in an amount and manner sufficient to eliminate such negative Capital Account balance as quickly as possible as provided in Treasury Regulations Section 1.704-1(b)(2)(ii)(d). After the occurrence of an allocation of income or gain to a Certificateholder in accordance with this Section 6.01(c)(vi)2.11, to the extent permitted by Regulations Section 1.704-1(b), items of expense or loss shall be allocated to such Certificateholder in an amount necessary to offset the income or gain previously allocated to such Certificateholder under this Section 6.01(c)(vi)2.11. (viiviii) Loss shall not be allocated to a Certificateholder to the extent that such allocation would cause a deficit in such Certificateholder's Capital Account (after reduction to reflect the items described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of such Certificateholder's shares of Trust Minimum Gain and Certificateholder Nonrecourse Debt Minimum Gain. Any loss in excess of that limitation shall be allocated to all the Certificateholders in accordance with their respective Percentage Partnership Interests. After the occurrence of an allocation of loss to a Certificateholder in accordance with this Section 6.01(c)(vii2.11(a)(vii), to the extent permitted by Treasury Regulations Section 1.704-1(b), profit shall be allocated to such Certificateholder in an amount necessary to offset the loss previously allocated to such Certificateholder under this Section 6.01(c)(vii2.11(a)(vii). (viiiix) If a Certificateholder transfers any part or all of its Percentage Partnership Interest and the transferee is admitted as a Certificateholder as provided herein (a "Transferee Certificateholder"), the distributive shares of the various items of profit and loss allocable among the Certificateholders during such Taxable Year shall be allocated between the transferor and the Transferee Certificateholder (at the election of the Certificateholders (including the transferor, but excluding the Transferee Certificateholder)) either (i) as if the Taxable Year had ended on the date of the transfer or (ii) based on the number of days of such Taxable Year that each was a Certificateholder without regard to the results of Trust activities in the respective portions of such Taxable Year in which the transferor and Transferee Certificateholder were Certificateholders.