Common use of Measure of Liability Clause in Contracts

Measure of Liability. Neither Fannie Mae nor any of the directors, officers, employees or agents of Fannie Mae shall be under any liability for any action taken or for refraining from the taking of any action in good faith pursuant to the terms of this Trust Agreement or for errors in judgment; provided, however, that this provision shall not protect Fannie Mae or any such person against any liability for action or inaction by reason of willful misfeasance, bad faith or gross negligence, or by reason of willful disregard of obligations and duties. Fannie Mae shall have no obligation to appear in, prosecute or defend any legal action which is not incidental to its duties under this Trust Agreement and which in its opinion may involve it in expense or liability; provided, however, that Fannie Mae in its discretion may undertake any such legal action which it may deem necessary or desirable in the interests of Certificateholders. In the event that Fannie Mae in its discretion so determines to undertake any such legal action, Fannie Mae for its own account shall pay and defray the expense of any such action, including attorneys’ fees. Such expense, and any liability to Fannie Mae resulting from any such legal action, shall not be reimbursable to Fannie Mae out of the Trust Fund.