Execution
Copy
MRU Holdings, Inc.
and
MRU ABS II LLC
TRANSFER AND CONTRIBUTION
AGREEMENT
Dated as of July 10, 2008
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CONTRIBUTION OF
STUDENT LOANS
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OWNERSHIP OF
CONTRIBUTED STUDENT LOANS; INTENDED CHARACTERIZATION; GRANT OF
SECURITY INTEREST
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GENERAL
REPRESENTATIONS AND WARRANTIES OF TRANSFEROR
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ADDITIONAL
REPRESENTATIONS AND WARRANTIES OF TRANSFEROR
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REPRESENTATIONS
AND WARRANTIES OF MRU ABS
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THIRD PARTY
BENEFICIARIES
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THIS TRANSFER AND CONTRIBUTION AGREEMENT (this
“Agreement”), dated as of July 10, 2008, is made by and
between MRU Holdings, Inc., a Delaware corporation having its
principal location at 590 Madison Avenue,13th Floor New York, New
York 10022 (“Transferor”), and MRU ABS II LLC, a
Delaware limited liability company, having its principal location
at 590 Madison Avenue, 13th Floor, Suite 200, New York, New York
10022 (“MRU ABS”).
WHEREAS, Transferor has agreed to transfer and
convey to MRU ABS, and MRU ABS has agreed to accept from
Transferor, on any Transfer Date, certain Student Loans on the
terms set forth herein. The term “Transfer Date”, for
purposes of this Agreement, refers to the Closing Date and each
subsequent date no later than September 30, 2008 selected by the
Transferor.
NOW, THEREFORE, in consideration of the
foregoing and the terms, conditions and mutual covenants and
agreements herein contained, and for good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, Transferor and MRU ABS agree as follows:
1.
Definitions
. The terms used in this Agreement
shall be defined as set forth herein and on Schedule 1
hereto. Capitalized terms which are not defined herein shall have
the meaning set forth in that certain Indenture, dated as of July
1, 2008 (the “Indenture”), by and between MRU Student
Loan Trust 2008-A, as issuer (the “Issuer”), and The
Bank of New York Mellon Trust Company, National Association, as
indenture trustee (the “Indenture Trustee”).
2.
Contribution of Student
Loans .
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Subject to the
terms and conditions of this Agreement, on each Transfer Date
Transferor agrees to contribute to the capital of, and transfer,
assign, and otherwise convey to, MRU ABS, without recourse (except
to the extent specifically provided herein), and MRU ABS hereby
agrees to accept and acquire, all right, title and interest of
Transferor in and to the Student Loans identified on Schedule
2 to this Agreement (the “Contributed Student
Loans”). For each Transfer Date, the Transferor shall prepare
a revised Schedule 2 showing the additional Contributed
Student Loans to be transferred to MRU ABS on such Transfer Date,
and thereafter until further revised pursuant to this Section
2(a) such revised Schedule 2 shall be in
effect.
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Transferor
agrees to cause to be delivered to MRU ABS or MRU ABS’s
designated custodian at MRU ABS’s cost, the Student Loan
Files of all Contributed Student Loans.
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Transferor
shall file any necessary Uniform Commercial Code financing
statements, and cause to be filed such continuation statements, all
in such manner and in such places as may be required by law fully
to preserve, maintain and protect the interest of MRU ABS in the
Contributed Student Loans and the proceeds thereof. Transferor
shall deliver (or cause to be delivered) to MRU ABS file-stamped
copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
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Transferor
hereby assigns to MRU ABS with respect to each Contributed Student
Loan conveyed to MRU ABS pursuant to this Agreement, all of
Transferor’s rights to any refunds, credits or adjustments
and the interest accruing on each such Contributed Student
Loan.
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3.
(a) Ownership of Contributed Student
Loans . On and after each
Transfer Date, MRU ABS shall be the sole owner for all purposes (
e.g. , tax, accounting and legal) of the Contributed
Student Loans contributed by Transferor on such date and shall be
entitled to all of the rights, privileges, and remedies applicable
to said ownership interest. Transferor agrees to make entries on
its books and records to clearly indicate the contribution of such
Contributed Student Loans as of each Transfer Date. Transferor does
not assume and shall not have any liability to MRU ABS for the
repayment of any such Contributed Student Loans; provided that the
Transferor shall promptly forward any payments on any such
Contributed Student Loans that it receives to a bank account
designated for this purpose by MRU ABS. Transferor shall forward
such payments on any Contributed Student Loans via wire transfer.
Transferor hereby agrees and acknowledges that any such payments on
any such Contributed Student Loans so received by Transferor shall
be held in trust for MRU ABS.
(b)
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.
4.
General Representations and
Warranties of Transferor . Transferor hereby represents and warrants as
of each Transfer Date that:
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Transferor is a
Delaware corporation, duly organized, validly existing and in good
standing under the laws of Delaware and has full corporate power
and authority to execute, deliver, and perform its obligations
under this Agreement; the execution, delivery and performance of
this Agreement and the transfer of the Contributed Student Loans on
the related Transfer Date have been and will continue to be duly
authorized and are not and will not be in conflict with and do not
violate the terms of the charter or bylaws of Transferor and will
not result in a breach of or constitute a default under, or require
any consent under, any indenture, loan or agreement to which
Transferor is a party.
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All approvals,
authorizations, licenses, registrations, consents, and other
actions by, notices to, and filings with, any Person that may be
required in connection with the execution, delivery, and
performance of this Agreement by Transferor, have been
obtained.
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This Agreement
constitutes a legal, valid, and binding obligation of Transferor,
enforceable against Transferor in accordance with its terms, except
(i) as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, receivership,
conservatorship or other similar laws now or hereafter in effect,
and (ii) as such enforceability may be limited by general
principles of equity (whether considered in a suit at law or in
equity).
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There are no
proceedings or investigations pending or, to the best knowledge of
Transferor, threatened against Transferor (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the
consummation by Transferor of any of the transactions contemplated
by this Agreement, (iii) seeking any determination or ruling that,
in the reasonable judgment of Transferor, would materially and
adversely affect the validity or enforceability of this
Agreement.
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Both before and
after giving effect to the transfer (pursuant to Section 2) of
Contributed Student Loans on such Transfer Date, Transferor is not
insolvent or undercapitalized and the Transferor is not undertaking
such transfer with the intent to incur debts beyond its ability to
pay as such debts mature nor with the intent to hinder, delay or
defraud any present or future creditor.
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The execution,
delivery and performance of this Agreement by Transferor comply
with all Applicable Law.
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The representations and warranties set forth in
this Section 4 shall survive the contribution and transfer
of the Contributed Student Loans to MRU ABS pursuant to this
Agreement.
5.
Additional Representations and
Warranties of Transferor . Transferor hereby represents and warrants
that, as of the relevant Transfer Date:
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Each
Contributed Student Loan transferred to MRU ABS on such Transfer
Date was originated by an Originating Lender, and this Agreement
constitutes a valid transfer, assignment, set-over and conveyance
to MRU ABS of all of Transferor’s right, title, and interest
in and to such Contributed Student Loan.
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Transferor
shall maintain its records in a manner to clearly and unambiguously
reflect the ownership of MRU ABS in each of the Contributed Student
Loans transferred hereunder on such Transfer Date.
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With respect to
each Contributed Student Loan transferred hereunder on such
Transfer Date: (i) Transferor has done nothing that would alter the
terms and conditions or the amount of such Contributed Student
Loan; and (ii) there is no restriction on Transferor’s
authority to assign such Contributed Student Loan on such Transfer
Date.
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For each
Contributed Student Loan transferred pursuant to this Agreement on
such Transfer Date:
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(1) each such Contributed Student Loan is fully
enforceable;
(2) the amount of the unpaid principal balance of
each Contributed Student Loan is due and owing, and no
counterclaim, offset, defense or right to rescission exists with
respect to any such Contributed Student Loan which can be asserted
and maintained or which, with notice, lapse of time, or the
occurrence or failure to occur of any act or event, could be
asserted and maintained by the Borrower against the owner of the
Contributed Student Loan;
(3) each such Contributed Student Loan (A) was
originated in the United States of America, its territories, its
possessions or other areas subject to its jurisdiction by an
Originating Lender in the ordinary course of its business to an
eligible Borrower under applicable law and (B) provides or, when
the payment schedule with respect thereto is determined, will
provide for payments on a periodic basis that fully amortize the
principal amount of such Contributed Student Loan by its maturity,
as such maturity may be modified in accordance with any applicable
deferral or forbearance periods granted in accordance with
applicable laws and restrictions;
(4) each Contributed Student Loan is denominated
and payable only in U.S. Dollars;
(5) each Borrower is a U.S. citizen or has a valid
social security number or has a co-borrower who is a U.S. citizen
or permanent resident;
(6) each Contributed Student Loan was made in
compliance with all applicable state and federal laws, rules and
regulations, including, without limitation, all applicable
nondiscrimination, truth-in-lending, consumer credit and usury
laws;
(7) each Contributed Student Loan is evidenced by
an executed promissory note, which note is a valid and binding
obligation of the Borrower, enforceable by or on behalf of the
holder thereof in accordance with its terms, subject to bankruptcy,
insolvency and other laws relating to or affecting creditors’
rights;
(8) no fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Contributed
Student Loan has taken place on the part of any Person, including,
without limitation, the Borrower, unless Transferor
demonstr
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