Common use of Intended Characterization; Grant of Security Interest Clause in Contracts

Intended Characterization; Grant of Security Interest. It is the intention of the parties hereto that each transfer of Contributed Student Loans to be made pursuant to the terms hereof shall constitute an absolute transfer with the effect described in Section 3(a) by the Transferor to MRU ABS and not a loan secured by the Contributed Student Loans. In the event, however, that a court of competent jurisdiction were to hold that any such transfer constitutes a loan and not an absolute transfer, it is the intention of the parties hereto that the Transferor shall be deemed to have granted to MRU ABS as of the date hereof a first priority perfected security interest in all of the Transferor’s right, title and interest in, to and under the Contributed Student Loans and that with respect to such transfer, this Agreement shall constitute a security agreement under applicable law.