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

Intended Characterization; Grant of Security Interest. (a) It is the intention of the parties hereto that the conveyance by the Depositor of the Trust Estate to the Issuer shall constitute a purchase and sale of such Trust Estate and not a loan. In the event, however, that a court of competent jurisdiction were to hold that the transaction evidenced hereby constitutes a loan and not a purchase and sale, it is the intention of the parties hereto that this Agreement shall constitute a security agreement under applicable law, and that the Depositor shall be deemed to have granted and hereby, does grant to the Issuer, a first priority perfected security interest in all of the Depositor's right, title and interest in, to and under the Trust Estate to secure a loan in an amount equal to the purchase price of the Loans. (b) The Depositor and the Servicer shall take no action inconsistent with the Issuer's ownership of the Trust Estate and shall indicate or shall cause to be indicated in its records and records held on its behalf that ownership of each Loan and the assets in the Trust Estate are held by the Issuer. In addition, the Depositor and the Servicer shall respond to any inquiries from third parties with respect to ownership of a Loan or any other asset in the Trust Estate by stating that it is not the owner of such asset and that ownership of such Loan or other Trust Estate asset is held by the Issuer.