Common use of Obligations of Trustee and the Trustor Clause in Contracts

Obligations of Trustee and the Trustor. (a) With respect to each Series of Certificates, the Trustee has no obligation with respect to the Bonds or any Liquidity Agreement except as expressly provided in the Agreement. (b) If the State Partnership Factors shall have been adopted, the Trustor (but no other Holder of Certificates) shall be liable without limitation for all debts and obligations of, and claims against, the Trust (other than those referred to in Section 13 below); provided that the Trustor shall not be responsible for the payment to Holders of Certificates of any amount which represents, directly or indirectly, principal, interest or premium with respect to the Bonds or the Purchase Price. (c) If the State Partnership Factors shall not have been adopted, the Trustor shall not be liable for the debts and obligations of, or any claims against, the Trust, except that the Trustor shall be liable for penalties imposed on the Trust and other costs of the Trust arising from any failure to duly and timely file tax returns or information reports (including the abbreviated form 1065 referred to in Section 10 of the Series Trust Agreement). Section 10. Election under Revenue Procedure 2003-84. (1) The Election. (a) The Trust is making an election (the “Monthly Closing Election”) under Revenue Procedure 2003-84, effective as of the later of the date the Trust has more than one owner for tax purposes and the date the Trust has more than a de minimis amount of assets (the “Start-Up Date”). This election is binding on all present and future Holders and Beneficial Owners of Certificates, and other persons treated as partners in the Trust for federal income tax purposes and each of their nominees (each, a “Partner” for this purpose) and each Partner, by acceptance of its Certificate or interest therein, is deemed to consent to this election. (b) The Trust shall not have any income producing assets and shall not earn any income prior to its Start-Up Date. The Trust shall not file a tax return for the period prior to the Start-Up Date. (c) Notwithstanding Section 2.5(b) of the Standard Terms, the Trust shall not (and no person is authorized on behalf of the Trust to) elect to be an association taxable as a corporation for federal income tax purposes nor make an election under section 761(a) of the Code to be excluded from subchapter K of chapter 1 of the Code. (d) Section 2.5(e) of the Standard Terms is hereby replaced in its entirety with the following: For purposes of maintaining capital accounts and all income tax purposes, including the Trust’s deemed closing of its books at the end of each calendar month under Treasury Regulation § 1.706-1(c)(2) that is required by section 6 of Revenue Procedure 2003-84, the Trust’s tax-exempt income, taxable income, gain, loss, deduction, and credit will be allocated as for federal income tax and applicable state and local franchise and income tax purposes as follows: (i) Interest on the Bonds (including accrued original issue discount) for any period shall be allocated: (1) first, to the Holders of Variable Certificates, an amount equal to accrued interest distributable for such period on the Variable Certificates at the Variable Certificates Rate, and (2) second, to the Holders of the Related Inverse Certificates, the remaining interest on the Bonds; (ii) Gain on the sale or redemption of the Bonds of any Maturity shall be allocated: (1) to the extent any gain on the sale of such Bonds is treated as ordinary income under Section 1276 of the Code, 100% to the Holders of the Related Inverse Certificates, (2) to the extent any gain on the sale or deemed sale of such Maturity of Bonds is required to be shared with the Holders of the Variable Certificates pursuant to this Agreement, to the Holders of the Variable Certificates that share in the distribution of such amounts, and (3) to the extent of the balance of all other gain, to the Holders of the Related Inverse Certificates; (iii) Loss recognized on the sale of the Bonds of any Maturity shall be allocated 100% to the Holders of the Related Inverse Certificates (except to the extent the loss is borne economically by other Partners in which case it will be allocated to that extent to such other Partners); (iv) Unrecognized loss on any in-kind distribution of the Bonds of any Maturity shall be allocated to the Holders of Variable Certificates and Related Inverse Certificates in a manner that reflects their respective interests in the Trust and the Bonds, their shares of the Bonds distributed, and the effects on their respective interests of such distribution (taking account of all facts and circumstances); and (v) All expenses of the Trust (including all Amortized Premium on the Bonds to the extent treated as a separate item of expense of the Trust) shall be allocated 100% to the Holders of the Related Inverse Certificates. (vi) All of the allocations set out above are intended to be made in accordance with section 704(b) of the Code. If allocation of the Trust’s tax-exempt income, taxable income, gain, loss, deduction, and credits provided above would not be in accordance with section 704(b) of the Code, then allocations shall be made in a manner that is in accordance with section 704(b) of the Code. If the Trustor believes in its sole judgment that such other allocations are required it shall promptly give notice to Holders (or, in the case of Certificates held by a regulated investment company (as defined in Section 851(a) of the Code) (each, a “RIC”) with respect to which an election is in place for a manager (the “Electing Manager”) to be responsible for collecting, retaining, and providing beneficial ownership information to the Internal Revenue Service (the “IRS”), the Trustor shall promptly give notice to the Electing Manager).