Doral Bank NY
and
MRU Lending, Inc.
LOAN SALE AGREEMENT
Dated as of July 25, 2005
TABLE OF CONTENTS
Page
1. DEFINITIONS..........................................................1
2. PURCHASE OF LOANS; PAYMENT TO BANK...................................1
3. OWNERSHIP OF LOANS; SERVICING........................................2
4. GENERAL REPRESENTATIONS AND WARRANTIES OF BANK.......................3
5. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF BANK....................4
6. REPRESENTATIONS AND WARRANTIES OF MRU................................4
7. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF MRU.......................5
8. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF BANK......................6
9. TERM AND TERMINATION.................................................6
10. CONFIDENTIALITY......................................................8
11. INDEMNIFICATION......................................................9
12. ASSIGNMENT..........................................................11
13. THIRD PARTY BENEFICIARIES...........................................11
14. NOTICES.............................................................11
15. RELATIONSHIP OF PARTIES.............................................11
16. RETENTION OF RECORDS................................................11
17. FORCE MAJEURE.......................................................12
18. AGREEMENT SUBJECT TO APPLICABLE LAWS................................12
19. EXPENSES............................................................12
20. EXAMINATION.........................................................13
21. INSPECTION..........................................................13
22. GOVERNING LAW.......................................................13
23. MANNER OF PAYMENTS..................................................13
24. REFERRALS...........................................................13
25. ENTIRE AGREEMENT....................................................13
26. AMENDMENT AND WAIVER................................................13
27. SEVERABILITY........................................................13
28. INTERPRETATION......................................................14
29. ARBITRATION.........................................................14
30. HEADINGS............................................................15
31. COUNTERPARTS........................................................15
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THIS LOAN SALE AGREEMENT (this "Agreement"), dated as of _________, _____
("Effective Date"), is made by and between [Doral Bank NY], a federal savings
bank having its principal location 000 Xxxx Xxxxxx Xxxxx, Xxx Xxxx, XX 00000
("Bank"), and MRU Lending, Inc., a Delaware corporation, having its principal
location at 1114 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
("MRU").
WHEREAS, Bank and MRU have entered into a Loan Program Agreement pursuant
to which Bank provides student loans to consumers; and
WHEREAS, Bank desires to sell to MRU and MRU desires to purchase from
Bank, the loans originated by Bank pursuant to the Loan Program Agreement.
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, Bank and MRU agree as follows:
1. Definitions. The terms used in this Agreement shall be defined as set forth
in Schedule 1.
2. Purchase of Loans; Payment to Bank.
(a) Bank hereby agrees to sell, transfer, assign, set-over, and
otherwise convey to MRU without recourse ( except as expressly
provided herein) and with servicing released: (i) all Loans and
Receivables generated by Bank during the term of this Agreement. All
of the foregoing shall be in accordance with the procedures set
forth in this Section 2. In consideration for Bank's Agreement to
sell, transfer, assign, set-over and convey to MRU all Receivables
and all Loans generated by Bank during the term of this Agreement,
MRU shall pay to Bank on each Closing Date, the sum of (i) the
Purchase Price in accordance with subsection 2(b) below, and (ii)
all fees due to X.X. Xxxxxx Trust Company, National Association (the
"Custodian").
(b) By 1:00 p.m. New York Time on the Closing Date, MRU shall pay to
Bank the aggregate of the Purchase Price for the Receivables and
Loans identified on the Funding Statement. MRU shall make the
payment required by this Section 2(b) by ACH or wire transfer of
federal funds to an account designated by Bank at an institution
designated by Bank. Prior to the first Closing Date, Bank shall
provide to MRU the name of the designated institution and the
designated bank account name and number.
(c) To the extent that such materials are in Bank's possession, upon
MRU's request, Bank agrees to cause to be delivered to MRU or MRU's
designated custodian at MRU's cost, Loan files on all Loans
purchased by MRU pursuant to this Agreement through the preceding
Business Day. Such Loan files will include the application for the
Loan, the Loan Agreement, the Truth-in-Lending Statement, the
Promissory Note, Uniform Commercial Code financing statements,
confirmation of delivery of the Loan Agreement to the Borrower, and
such other materials as MRU may reasonably require (all of which may
be in electronic form).
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(d) Bank agrees to execute a Limited Power of Attorney-in-Fact, in a
form satisfactory to MRU's designated custodian, namely XX Xxxxxx
Chase, providing for the ability to assign Loans and any other
related documents as may be required to complete the loan
transaction with the Borrower.
(e) Bank shall execute and file such financing statements and cause to
be executed and 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 in the Loans and
Receivables and the proceeds thereof. Bank shall deliver (or cause
to be delivered) to MRU file-stamped copies of, or filing receipts
for, any document filed as provided above, as soon as available
following such filing.
(f) During such time as Bank owns the Loans, MRU shall ensure that all
refunds, adjustments and credits provided by Borrowers that receive
Loan proceeds shall be disbursed to Bank within three (3) Business
Days after the refund, adjustments or credit is made by the School
to MRU. Bank hereby assigns to MRU with respect to each Loan and
Receivable purchased pursuant to this Agreement, all of Bank's
rights to any such refunds, credits or adjustments and the interest
accruing on each of such Loan and Receivable.
(g) Within five (5) days after the end of each calendar month, MRU shall
pay Bank a fee equal to ten-one hundredths of one percent (0.10%) of
the principal amount of the Loans funded by Bank during the previous
month. MRU shall make any such payments by ACH or intrabank funds
transfer to the account designated by Bank in accordance with
Section 2(b).
3. Ownership of Loans; Servicing. On and after each Closing Date, MRU shall be
the sole owner for all purposes (e.g., tax, accounting and legal) of the Loans
and Receivables purchased from Bank on such date and shall be entitled to all of
the rights, privileges, and remedies applicable to said ownership interest. Bank
agrees to make entries on its books and records to clearly indicate the sale of
the Loans and Receivables as of each Closing Date. Bank does not assume and
shall not have any liability to MRU for the repayment of any Loans or
Receivables; provided that the Bank shall promptly forward any Loan payments
that it receives to a bank account designated for this purpose by MRU. Bank
shall forward such Loan payments via ACH transfer. Bank hereby agrees and
acknowledges that any such Loan payments so received by Bank shall be held in
trust for MRU. MRU shall be responsible for servicing loans either directly or
through a sub-servicer. Pennsylvania Higher Education Assistance Authority
("PHEAA") shall service the Loans for so long as Bank owns the Loans, as
sub-servicer to MRU.
4. General Representations and Warranties of Bank. Bank herby represents and
warrants as of the Effective Date of this Agreement that:
(a) Bank is a federal savings bank, duly organized, validly existing
under the laws of the USA 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 Loans 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 Bank 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 Bank is a
party;
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(b) 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 Bank, have been obtained (other
than those required to be made to or obtained from Borrowers);
(c) This Agreement constitutes a legal, valid, and binding obligation of
Bank, enforceable against Bank 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,
(including the rights and obligations of receivers and conservators
under federal law, which may affect the enforcement of creditor's
rights in general, and (ii) as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or
in equity);
(d) There are no proceedings or investigations pending or, to the best
knowledge of Bank, threatened against Bank (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the
consummation by Bank of any of the transactions contemplated by this
Agreement, (iii) seeking any determination or ruling that, in the
reasonable judgment of Bank, would materially and adversely affect
the validity or enforceability of this Agreement;
(e) Bank is not Insolvent;
(f) The execution, delivery and performance of this Agreement by Bank
comply with all Applicable law.
The representations and warranties set forth in this Section 4 shall
survive the sale, transfer and assignment of the Loans to MRU pursuant to this
Agreement and, with the exception of those representations and warranties
contained in subsection 4(d), shall be made continuously throughout the term of
this Agreement. In the event that any investigation or proceeding of the nature
described in subsection 4(d) is instituted or threatened against Bank, Bank
shall promptly notify MRU of such pending of threatened investigation or
proceeding.
5. Additional Representations and Warranties of Bank. Bank hereby represents and
warrants that, as of the Effective Date or such other date as specified below in
a specific representation:
(a) As of each Closing Date, each Receivable and Loan transferred to MRU
on such date was originated by Bank and constitutes a valid sale,
transfer, assignment, set-over and conveyance to MRU of all of
Bank's right, title, and interest in and to such Receivable and
Loan;
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(b) As of each Closing Date, Bank was the legal and beneficial owner of
all right, title and interest in and to each Receivable and Loan,
and no Receivable or Loan was subject to any lien or encumbrance,
immediately prior to the transfer of the Receivable or Loan to MRU
pursuant hereto;
(c) Bank shall maintain its records in a manner to clearly and
unambiguously reflect the ownership of MRU in each of the
Receivables and Loans transferred hereunder; and
(d) As of the Closing Date, with respect to each Receivable and Loan:
(i) Bank has done nothing that would alter the terms and conditions
or the amount of the Loan; and (ii) there is no restriction on
Bank's authority to assign the Receivable or Loan.
The representations and warranties set forth in this Section 5 shall
survive the sale, transfer and assignment of the Receivables and Loans to MRU
pursuant to this Agreement.
6. Representations and Warranties of MRU. MRU hereby represents and warrants to
Bank, as of the Effective Date that:
(a) MRU is a Delaware corporation, duly organized and validly existing
in good standing under the laws of Delaware, and has full power and
authority to execute, deliver and perform its obligations under this
Agreement; the execution, delivery, and performance of this
Agreement have been duly authorized, and are not and will not be in
conflict with and do not violate the terms of the articles or bylaws
of MRU, 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 MRU is a party;
(b) All approvals, authorizations, licenses, registrations, consents,
and other actions by, notices to, and filings with any Person
required to be obtained for the execution, delivery, and performance
of this Agreement by MRU, have been obtained;
(c) This Agreement constitutes a legal, valid, and binding obligation of
MRU, enforceable against MRU 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,
including the rights and obligations or receivers and conservators
under federal law which may affect the enforcement of creditors'
rights in general, and (ii) as such enforceability may be limited by
general principles of equity (whether considered in a suit at law or
in equity);
(d) There are no proceedings or investigations pending or, to the best
knowledge of MRU threatened against MRU (i) asserting the invalidity
of this Agreement, (ii) seeking to prevent the consummation by MRU
of any of the transactions contemplated by this Agreement, (iii)
seeking any determination or ruling that, in the reasonable judgment
of MRU, would materially and adversely affect the performance by MRU
of its obligations under this Agreement, or (iv) seeking any
determination or ruling that would materially and adversely affect
the validity or enforceability of this Agreement;
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(e) MRU is not Insolvent; and
(f) The execution, delivery and performance of this Agreement by MRU
comply with Applicable Laws.
The representations and warranties set forth in this Section 6 shall
survive the sale, transfer and assignment of the Loans to MRU pursuant to this
Agreement and, with the exception of those representations and warranties
contained in subsection 6(d), shall be made continuously throughout the term of
this Agreement. In the event that any investigation or proceeding of the nature
described in subsection 6(d) is instituted or threatened against MRU, MRU shall
promptly notify Bank of such pending or threatened investigation or proceeding.
7. Conditions Precedent to the Obligations of MRU. The obligations of MRU under
this Agreement are subject to the satisfaction of the following conditions
precedent on or prior to each Closing Date:
(a) As of each Closing Date, no action or proceeding shall have been
instituted or threatened against MRU or Bank to prevent or restrain
the consummation of the transactions contemplated hereby, and, on
each Closing Date, there shall be no injunction, decree, or similar
restraint prevent or restraining such consummation;
(b) The representations and warranties of Bank set forth in Sections 4
and 5 shall be true and correct in all material respects on each
Closing Date as though made on and as of such date; and
(c) The obligations of Bank set forth in this Agreement to be performed
on or before each Closing Date shall have been performed in all
material respects as of such date by Bank.
The Parties agree that, upon payment by MRU to Bank of the Purchase Price
on any Closing Date, title to the Receivables and Loans acquired by MRU on such
day shall vest in MRU, whether or not the foregoing conditions precedent to such
Purchase were in fact satisfied and any Party's sole remedy for damages on
account of failure to satisfy such conditions precedent shall be limited to
indemnification as provided in Section 11.
8. Conditions Precedent to the Obligations of Bank. The obligations of Bank in
this Agreement are subject to the satisfaction of the following conditions
precedent on or prior to each Closing Date:
(a) As of each Closing Date, no action or proceeding shall have been
instituted or threatened against MRU or Bank to prevent or restrain
the consummation of the transactions contemplated hereby, and, on
each Closing Date, there shall be no injunction, decree, or similar
restraint preventing or restraining such consummation; and
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(b) The representations and warranties of MRU in the Program Documents
shall be true and correct in all material respects on each Closing
Date as though made on and as of such date.
The Parties agree that, upon payment by MRU to Bank of the Purchase Price
on any Closing Date, title to the Loans acquired by MRU shall vest in MRU
whether or not the foregoing conditions precedent to such Purchase were in fact
satisfied and any Party's sole remedy for damages on account of failure to
satisfy such conditions precedent shall be limited to indemnification as
provided in Section 11.
9. Term and Termination.
(a) This Agreement shall have an initial term of thirty-six (36) months
from the Effective Date (the "Initial Term") and shall renew
automatically up to two (2) times for successive additional terms of
twelve (12) months each (each a "Renewal Term"), unless either Party
provides notice of non-renewal to the other Party at least thirty
(30) days prior to the end of the Initial Term or any Renewal Term
or this Agreement is earlier terminated in accordance with the
provisions hereof.
(b) Both Bank and MRU shall have the right to terminate this Agreement
without cause on ninety (90) days' prior written notice to the Bank.
(c) During the Initial Term and any Renewal Term of this Agreement, Bank
may terminate this Agreement immediately upon written notice to MRU
if MRU defaults on its obligation to make a payment to Bank as
provided in Section 2 hereof. Bank shall not have the right to
terminate this Agreement without cause, except in the manner
provided in subsection (9)(a) above.
(d) A Party shall have a right to terminate this Agreement immediately
upon written notice to the other Party in any of the following
circumstances ("with cause"):
(1) any representation or warranty made by the other Party in
this Agreement shall be incorrect in any material respect and shall
not have been corrected within thirty (30) Business Days after
written notice thereof has been given to such other Party;
(2) the other Party shall default in the performance of any
obligation or undertaking under this Agreement and such default
shall continue for thirty (30) Business Days after written notice
thereof has been given to such other Party;
(3) the other Party shall commence a voluntary case or other
proceeding seeking liquidation, reorganization, or other relief with
respect to itself or its debts under any bankruptcy, insolvency,
receivership, conservatorship or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver,
liquidator, conservator, custodian, or other similar official of it
or any substantial part of its property, or shall consent to any
such relief or to the appointment of a trustee, receiver,
liquidator, conservator, custodian, or other similar official or to
any involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or
shall fail generally to pay its debts as they become due, or shall
take any corporate action to authorize any of the foregoing;
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(4) an involuntary case or other proceeding, whether pursuant
to banking regulations or otherwise, shall be commenced against the
other Party seeking liquidation, reorganization, or other relief
with respect to it or its debts under any bankruptcy, insolvency,
receivership, conservatorship or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver,
liquidator, conservator, custodian, or other similar official of it
or any substantial part of its property; or an order for relief
shall be entered against either Party under the federal bankruptcy
laws as now or hereafter in effect; or
(5) either Party has terminated the Loan Sale Agreement and
any applicable notice period provided therein shall have expired.
(e) Except for immediate termination provided under subsection (d)(3) or
(4) above, either Party shall have the right to terminate this
Agreement upon five (5) days' written notice to the other Party if
an order of a court of competent jurisdiction, or finding by a
Regulatory Authority, has the effect of restricting or prohibiting
the activities contemplated by this Agreement.
(f) The termination of this Agreement either in part or in whole shall
not discharge any Party from any obligation incurred prior to such
termination, including any obligation with respect to Loans sold
prior to such termination. No termination nor rejection or failure
to assume the executory obligations of this Agreement in the
bankruptcy or receivership of either Party shall be deemed to impair
or affect the obligations pertaining to any executed sale or
executed obligations, including, without limitation, pre-termination
breaches of representations and warranties by either Party and
pertaining to the obligations that expressly survive termination of
this agreement.
(g) If, following the termination of this Agreement by Bank, either
Party exercises the right to terminate the Loan Program Agreement
based on the termination of this Agreement, MRU shall purchase any
Loans originated by Bank under the Loan Program Agreement prior to
and on the date of termination of the Loan Program Agreement that
have not already been purchased by MRU and any other Loans
originated in accordance with the provisions of Section 13(f) of the
Loan Program Agreement.
(h) The terms of this Section 9 shall survive the expiration or earlier
termination of this Agreement.
10. Confidentiality.
(a) Each Party agrees that Confidential Information of the other Party
shall be used by such Party solely in the performance of its
obligations and exercise of its rights pursuant to the Program
Documents. Except as required by Applicable Laws or legal process,
neither Party (the "Restricted Party") shall disclose Confidential
Information of the other Party to third parties; provided, however,
that the Restricted Party may disclose Confidential Information of
the other Party (i) to the Restricted Party's Affiliates, agents,
representatives or subcontractors for the sole purpose of fulfilling
the Restricted Party's obligations under this Agreement (as long as
the Restricted Party exercises reasonable efforts to prohibit any
further disclosure by its Affiliates, agents, representatives or
subcontractors), (ii) to the Restricted Party's auditors,
accountants and other professional advisors, or to a Regulatory
Authority or (iii) to any other third party as mutually agreed in
writing by the Parties.
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(b) A Party's Confidential Information shall not include information
that:
(1) is generally available to the public;
(2) has become publicly known, without fault on the part of
the Party who now seeks to disclose such information (the
"Disclosing Party"), subsequent to the Disclosing Party acquiring
the information;
(3) was otherwise known by, or available to, the Disclosing
Party prior to entering into this Agreement; or
(4) becomes available to the Disclosing Party on a
non-confidential basis from a Person, other than a Party to this
Agreement, who is not known by the Disclosing Party to be bound by a
confidentiality agreement with the non-Disclosing Party or otherwise
prohibited from transmitting the information to the Disclosing
Party.
(c) Upon written request or upon the termination of this Agreement, each
Party shall, within thirty (30) days, return to the other Party all
Confidential Information of the other Party in its possession that
is in written form, including by way of example, but not limited to,
reports, plans, and manuals; provided, however, that either Party
may maintain in its possession all such Confidential Information of
the other Party required to be maintained under Applicable Laws
relating to the retention of records for the period of time required
thereunder.
(d) In the event that a Restricted Party is requested or required in any
legal proceeding to disclose any Confidential Information of the
other Party, the Restricted Party will provide the other Party with
prompt notice of such request(s) so that the other Party may seek an
appropriate protective order or other appropriate remedy and/or
waive the Restricted Party's compliance with the provisions of this
Agreement. In the event that the other Party does not seek such a
protective order or other remedy, or such protective order or other
remedy is not obtained, or the other Party grants a waiver
hereunder, the Restricted Party may furnish that portion (and only
that portion) of the Confidential Information of the other Party
which the Restricted Party is legally compelled to disclose and will
exercise such efforts to obtain reasonable assurance that
confidential treatment will be accorded any Confidential Information
of the other Party so furnished as the Restricted Party would
exercise in assuring the confidentiality of any of its own
confidential information.
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(e) The terms of this Section 10 shall survive the expiration or earlier
termination of this Agreement.
11. Indemnification.
(a) Bank agrees to indemnify and hold harmless MRU and its Affiliates,
and the officers, directors, employees, representatives,
shareholders, agents and attorneys of such entities (the "MRU
Indemnified Parties") from and against any and all claims, actions,
liability, judgments, damages, costs and expenses, including
reasonable attorneys' fees, that may arise from (i) gross
negligence, willful misconduct or breach of any of Bank's
obligations or undertakings under this Agreement by Bank or its
agents or representatives, or (ii) a violation by Bank or its agents
or representatives of any New York or federal banking law
specifically applicable to Bank's participation in the Program or
(iii) failure of the Bank to convey good and marketable title to
each Loan and Receivable hereunder, free of liens and encumbrances.
(b) MRU agrees to indemnify and hold harmless Bank and its Affiliates,
and the officers, directors, employees, representatives,
shareholders, agents and attorneys of such entities (the "Bank
Indemnified Parties") from and against any and all claims, actions,
liability, judgments, damages, costs and expenses, including
reasonable attorneys' fees, that may arise from (i) gross
negligence, willful misconduct or breach of any of MRU's obligations
or undertakings under this Agreement by MRU or its agents or
representatives, or (ii) a violation by MRU or its agents or
representatives of any New York or federal banking law, applicable
to MRU.
(c) The MRU Indemnified Parties and the Bank Indemnified Parties are
sometimes referred to herein as the "Indemnified Parties," and MRU
or Bank, as an indemnitor hereunder, is sometimes referred to herein
as the "Indemnifying Party."
(d) Any Indemnified Party seeking indemnification hereunder shall
promptly notify the Indemnifying Party, in writing, of any notice
received by the Indemnified Party of the assertion by any third
party of any claim or of the commencement by any third party of any
legal or regulatory proceeding, arbitration or action, against the
Indemnified Party with respect to which the Indemnifying Party is or
may be obligated to provide indemnification (an "Indemnifiable
Claim"), specifying in reasonable detail the nature of the claim,
and, if known, the amount, or an estimate of the amount, of the
claim, provided that failure to promptly give such notice shall only
limit the liability of the Indemnifying Party to the extent of the
actual prejudice, if any, suffered by such Indemnifying Party as a
result of such failure. The Indemnified Party shall provide to the
Indemnifying Party as promptly as practicable thereafter information
and documentation reasonably requested by such Indemnifying Party to
defend against the claim asserted.
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(e) The Indemnifying Party shall have thirty (30) days after receipt of
any notification of an Indemnifiable Claim (a "Claim Notice") to
undertake, conduct and control, through counsel of its own choosing,
and at its own expense, the settlement or defense thereof, and the
Indemnified Party shall cooperate with the Indemnifying Party in
connection therewith if such cooperation is so requested and the
request is reasonable. If the Indemnifying Party assumes
responsibility for the settlement or defense of any such claim, (i)
the Indemnifying Party shall permit the Indemnified Party to
participate in such settlement or defense through counsel chosen by
the Indemnified Party (subject to the consent of the Indemnifying
Party, which consent shall not be unreasonably withheld); provided
that, other than in the event of a conflict of interest requiring
the retention of separate counsel, the fees and expenses of such
counsel shall not be borne by the Indemnifying Party; and (ii) the
Indemnifying Party shall not settle any Indemnifiable Claim without
the Indemnified Party's consent, which consent shall not be
unreasonably withheld or delayed for any reason if the settlement
involves only the payment of money, and which consent may be
withheld for any reason if the settlement involves more than the
payment of money, including any admission by the Indemnified Party.
As long as the Indemnifying Party is contesting any such
Indemnifiable Claim in good faith, the Indemnified Party shall not
pay or settle such claim without the Indemnifying Party's consent,
which consent shall not be unreasonably withheld.
(f) If the Indemnifying Party does not notify the Indemnified Party
within thirty (30) days after receipt of the Claim Notice that it
elects to undertake the defense of the Indemnifiable Claim described
therein, the Indemnified Party shall have the right, upon written
notice to the Indemnifying Party, to contest, settle or compromise
the Indemnifiable Claim in the exercise of its reasonable
discretion; provided that the Indemnified Party shall notify the
Indemnifying Party of any compromise or settlement of any such
Indemnifiable Claim. No action taken by the Indemnified Party
pursuant to this subsection 11(f) shall deprive the Indemnified
Party of its rights to indemnification pursuant to this Section 11.
(g) The terms of this Section 11 shall survive the expiration or earlier
termination of this Agreement.
12. Assignment. This Agreement and the rights and obligations created under it
shall be binding upon and inure solely to the benefit of the Parties and their
respective successors, and permitted assigns. Neither Party shall be entitled to
assign or transfer any interest under this Agreement without the prior written
consent of the other Party; provided that, MRU may not assign this Agreement to
any Affiliate without Bank's prior written consent, which consent shall not be
unreasonably witheld. No assignment under this section shall relieve a Party of
its obligations under this Agreement occurring prior to such transfer.
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13. Third Party Beneficiaries. Nothing contained herein shall be construed as
creating a third-party beneficiary relationship between either Party and any
other Person.
14. Notices. All notices and other communications that are required or may be
given in connection with this Agreement shall be in writing and shall be deemed
received (i) on the day delivered, if delivered by hand; (ii) on the day
transmitted, if transmitted by facsimile or e-mail with receipt confirmed; or
(iii) three (3) Business Days after the date of mailing to the other Party, if
mailed first-class postage prepaid, at the following address, or such other
address as either Party shall specify in a notice to the other:
To Bank: Doral Bank NY
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
To MRU: MRU Lending, Inc.
1114 Avenue of the Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: _Vishal Garg________________________
E-mail Address: ________________
Telephone: (000) 000-0000_______________
Facsimile: (000) 000-0000_______________
15. Relationship of Parties. Bank and MRU agree that in performing their
responsibilities pursuant to this Agreement, they are in the position of
independent contractors. This Agreement is not intended to create, nor does it
create and shall not be construed to create, a relationship of partner to joint
venturer or any association for profit between and among Bank and XXX.
00. Retention of Records. Any Records with respect to Loans purchased by MRU
pursuant hereto retained by Bank shall be held as custodian for the account of
MRU as owner thereof. Bank shall provide copies of Records to MRU upon
reasonable request of MRU.
17. Force Majeure. If any Party shall be unable to carry out the whole or any
part of its obligations under this Agreement by reason of a Force Majeure Event,
then the performance of the obligations under this Agreement of such Party as
they are affected by such cause shall be excused during the continuance of the
inability so caused, except that should such inability not be remedied within
thirty (30) days after the date of such cause, the Party not so affected may at
any time after the expiration of such thirty (30) day period, during the
continuance of such inability, terminate this Agreement on giving written notice
to the other Party and without payment of a termination fee or other penalty. To
the extent that the Party not affected by a Force Majeure Event is unable to
carry out the whole or any part of its obligations under this Agreement,
including the payment obligation under Section 2(f), because a prerequisite
obligation of the Party so affected has not been performed, the Party not
affected by a Force Majeuere Event also is excused from such performance during
such period. A "Force Majeure Event" as used in this Agreement shall mean an
event that is not reasonably within the control of the affected Party or its
subcontractors (including, but not limited to, acts of God, acts of governmental
authorities, strikes, war, riot, acts of terrorism, and any other causes of such
nature), and which by exercise of reasonable due diligence, such affected Party
or its subcontractors could not reasonably have been expected to avoid, overcome
or obtain, or cause to be obtained, a commercially reasonable substitute
therefore. No Party shall be relieved of its obligations hereunder if its
failure of performance is due to removable or remediable causes which such Party
fails to remove or remedy using commercially reasonable efforts within a
reasonable time period. Either Party rendered unable to fulfill any of its
obligations under this Agreement by reason of a Force Majeure Event shall give
prompt notice of such fact to the other Party, followed by written confirmation
of notice, and shall exercise due diligence to remove such inability with all
reasonable dispatch.
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18. Agreement Subject to Applicable Laws. If (a) either Party has been advised
by legal counsel of a change in Applicable Laws or any judicial decision of a
court having jurisdiction over such Party or any interpretation of a Regulatory
Authority that, in the view of such legal counsel, would have a materially
adverse effect on the rights or obligations of such Party under this Agreement
or the financial condition of such Party, (b) either Party shall receive a
lawful written request of any Regulatory Authority having jurisdiction over such
Party, including any letter or directive of any kind from any such Regulatory
Authority, that prohibits or restricts such Party from carrying out its
obligations under this Agreement, or (c) either Party has been advised by legal
counsel that there is a material risk that such Party's or the other Party's
continued performance under this Agreement would violate Applicable Laws, then
the Parties shall meet and consider in good faith any modifications, changes or
additions to the Program or the Program Documents that may be necessary to
eliminate such result. Notwithstanding any other provision of the Program
Documents, including Section 9 hereof, if the Parties are unable to reach
agreement regarding modifications, changes or additions to the Program or the
Program Documents within ten (10) Business Days after the Parties initially
meet, either Party may terminate this Agreement upon five (5) Business Days'
prior written notice to the other Party. A Party may suspend performance of its
obligations under this Agreement, or require the other Party to suspend its
performance of its obligations under this Agreement, if any event described in
subsections 18(a), (b) or (c) above occurs.
19. Expenses. Each Party shall bear the costs and expenses of performing its
obligations under this Agreement, unless expressly provided otherwise in the
Program Documents. Each Party shall be responsible for payment of any federal,
state, or local taxes or assessments associated with the performance of its
obligations under this Agreement and for compliance with all filing,
registration and other requirements with regard thereto.
20. Examination. Each Party agrees to submit to any examination that may be
required by a Regulatory Authority having jurisdiction over the other Party,
during regular business hours and upon reasonable prior notice and to otherwise
provide reasonable cooperation to the other party in responding to such
Regulatory Authorities's inquiries and requests relating to the Program.
21. Inspection. Each Party, upon reasonable notice from the other Party, agrees
to submit to an inspection of its books, records, accounts, and facilities
relevant to the Program, from time to time, during regular business hours
subject, in the case of Bank, to the duty of confidentiality it owes to its
customers and banking secrecy and confidentiality requirements otherwise
applicable under Applicable laws. All expenses of inspection shall be borne by
the Party conducting the inspection. Bank agrees that it shall provide to, or
cause to be provided to, MRU such access as is necessary to perform a daily
reconciliation of deposits and disbursements in the performance of its duties
under the Program Documents. MRU shall store all documentation and electronic
data related to its participation in the soliciting and processing of Loans and
shall make such documentation and data available during any inspection by Bank
or its designee.
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22. Governing Law. Except as preempted or controlled by federal law, this
Agreement shall be interpreted and construed in accordance with the laws of the
State of New York, without giving effect to the rules, policies, or principles
thereof with respect to conflicts of laws.
23. Manner of Payments. Unless the manner of payment is expressly provided
herein, all payments under this Agreement shall be made by ACH transfer to the
bank accounts designated by the respective Parties. Notwithstanding anything to
the contrary contained herein, neither Party shall fail to make any payment
required of it under this Agreement as a result of a breach or alleged breach by
the other Party of any of its obligations under this Agreement or any other
agreement, provided that the making of any payment hereunder shall not
constitute a waiver by the Party making the payment of any rights it may have
under the Program Documents or by law.
24. Referrals. Neither Party has agreed to pay any fee or commission to any
agent, broker, finder, or other person for or on account of such person's
services rendered in connection with this Agreement that would give rise to any
valid claim against the other Party for any commission, finder's fee or like
payment.
25. Entire Agreement. The Program Documents, including exhibits, constitute the
entire agreement between the Parties with respect to the subject matter thereof,
and supersede any prior or contemporaneous negotiations or oral or written
agreements with regard to the same subject matter.
26. Amendment and Waiver. This Agreement may be amended only by a written
instrument signed by each of the Parties. The failure of a Party to require the
performance of any term of this Agreement or the waiver by a Party of any
default under this Agreement shall not prevent a subsequent enforcement of such
term and shall not be deemed a waiver of any subsequent breach. All waivers must
be in writing and signed by the Party against whom the waiver is to be enforced.
27. Severability. Any provision of this Agreement which is deemed invalid,
illegal or unenforceable in any jurisdiction, shall, as to that jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining portions hereof in such jurisdiction
or rendering such provision or any other provision of this Agreement invalid,
illegal, or unenforceable in any other jurisdiction.
28. Interpretation. The Parties acknowledge that each Party and its counsel have
reviewed and revised this Agreement and that the normal rule of construction to
the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Agreement or any amendments
thereto, and the same shall be construed neither for nor against either Party,
but shall be given a reasonable interpretation in accordance with the plain
meaning of its terms and the intent of the Parties.
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29. Arbitration.
(a) The Parties agree to resolve all disputes arising under or relating
to this Agreement by the following alternate dispute resolution
process: (a) the Parties agree to seek a fair and prompt negotiated
resolution within fifteen (15) Business Days of notice of a dispute
provided by one Party to the other Party, or such longer period of
time mutually agreed by the Parties; and (b) if the Parties do not
reach a mutually satisfactory resolution within the foregoing
period, the dispute shall be resolved by binding arbitration
conducted in accordance with the American Arbitration Association
("AAA") Commercial Arbitration Rules in effect on the date hereof,
as modified in this Agreement. The arbitrator selected shall
determine whether a claim arises out of or is related to this
Agreement. The Parties confirm that by agreeing to this alternate
dispute resolution process, they intend to give up their right to
have any dispute arising under or relating to this Agreement decided
in court by a judge or jury.
(b) Any arbitration initiated under this Section 29 shall be conducted
in New York, New York.
(c) Under any arbitration initiated under this Section 29, each Party
shall select an arbitrator, and the arbitrators selected by both
Parties shall select a third arbitrator who shall conduct the
arbitration between the Parties. Each of the arbitrators shall be an
attorney with at least fifteen (15) years experience in commercial
law.
(d) The arbitrators shall take such steps as may be necessary to hold a
private hearing within one hundred twenty (120) calendar days of the
initial demand for arbitration and to conclude the hearing within
three (3) calendar days, and the arbitrators' decision, which shall
be in writing, shall be made not later than fourteen (14) calendar
days after the hearing. The Parties have included these time limits
in order to expedite the proceeding, but they are not
jurisdictional, and the arbitrators may for good cause afford or
permit reasonable extensions or delays, which shall not affect the
validity of the award. The written decision of the arbitrators shall
contain a brief statement of the claim(s) determined, the award made
on each claim and the reasons for the disposition of each claim. The
arbitrators may not award punitive, consequential or incidental
damages in any arbitration initiated hereunder. Absent fraud,
collusion or willful misconduct by the arbitrators, the award shall
be final and judgment may be entered in any court having
jurisdiction thereof.
(e) In making the decision and award, the arbitrator shall apply
substantive federal and New York law, as applicable. All statutes of
limitations which would otherwise be applicable shall apply to any
arbitration proceeding hereunder.
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(f) The terms of this Section 29 shall survive the expiration or earlier
termination of this Agreement.
30. Headings. Captions and headings in this Agreement are for convenience only
and are not to be deemed part of this Agreement.
31. Counterparts. This Agreement may be executed and delivered by the Parties in
any number of counterparts, and by different parties on separate counterparts,
each of which counterpart shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized officers as of the date first written above.
[BANK]
By: _______________________
Title: ______________________
By: _______________________
Title: ______________________
MRU Lending, Inc.
By: _______________________
Title: ______________________
By: _______________________
Title: ______________________
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Schedule 1
Definitions
(a) "ACH" means Automated Clearinghouse.
(b) "Affiliate" means, with respect to a Party, a Person who directly or
indirectly controls, is controlled by or under common control with the
Party. For the purpose of this definition, the term "control" (including
with correlative meanings, the term controlling, controlled by and under
common control with) means the power to direct the management or policies
of such Person, directly or indirectly, through the ownership of
twenty-five percent (25%) or more of a class of voting securities of such
Person.
(c) "MRU Indemnified Parties" shall have the meaning set forth in Section
11(a).
(d) "Applicable Law" means all federal, state and local laws, statutes,
regulations and orders applicable to a Party or relating or affecting any
aspect of the Program, and all requirements of any Regulatory Authority
having jurisdiction over a Party, as any such laws, statutes, regulations,
orders and requirements may be amended and in effect from time to time
during the term of this Agreement.
(e) "Applicant" has the meaning assigned to such term in Schedule 1 of the
Loan Program Agreement.
(f) "Bank Indemnified Parties" shall have the meaning set forth in Section
11(b).
(g) "Borrower" means a Person to whom Bank has made a Loan and/or who is
liable, jointly or severally, for amounts owing with respect to such Loan.
(h) "Business Day" means any day, other than (i) a Saturday or Sunday, or (ii)
a day on which banking institutions in New York are authorized or
obligated by law or executive order to be closed.
(i) "Claim Notice" shall have the meaning set forth in Section 11(e).
(j) "Closing Date" means each date on which MRU pays Bank the Purchase Price
for a Receivable or Loan and, pursuant to Section 2 hereof, acquires such
Receivable or Loan from Bank. The Closing Date shall occur no sooner than
2 days after the Funding Date.
(k) "Confidential Information" means the terms and conditions of this
Agreement, and any proprietary information or non-public information of a
Party, including a Party's proprietary marketing plans and objectives.
(l) "Credit Policy" has the meaning assigned to such term in Schedule 1 of the
Loan Program Agreement.
(m) "Disclosing Party" shall have the meaning set forth in Section 10(b)(2).
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(n) "Effective Date: shall have the meaning set forth in the introductory
paragraph of this Agreement.
(o) "Force Majeure Event" shall have the meaning set forth in Section 17.
(p) "Funding Amount" has the meaning assigned to such term in Schedule 1 of
the Loan Program Agreement.
(q) "Funding Date" means, , with respect to each Funding Statement, the date
on which Bank disburses the Loan proceeds as provided on such Funding
Statement and in accordance with such Funding Statement..
(r) "Funding Statement" has the meaning assigned to such term in Schedule 1 of
the Loan Program Agreement.
(s) "Indemnifiable Claim" shall have the meaning set forth in Section 11(d).
(t) "Insolvent" means the failure to pay debts in the ordinary course of
business, the inability to pay its debts as they come due or the condition
whereby the sum of an entity's debts is greater than the sum of its
assets.
(u) "Loan" means a closed-end consumer installment loan originated by Bank
pursuant to the Loan Program Agreement for the purpose of financing a
Borrower's cost of higher education, including specifically, but not
limited to, tuition and related expenses. For purposes of this Agreement,
each Loan includes, without limitation, all rights of Bank to payment
under the applicable Loan Agreement with such Borrower.
(v) "Loan Agreement" means the document containing the terms and conditions of
a Loan including all disclosures required by Applicable Law.
(w) "Loan Program Agreement" means that Loan Program Agreement dated as of
_____________,____, between MRU and Bank pursuant to which the Parties
agreed to promote and operate a student loan program.
(x) "Losses" shall have the meaning set forth in Section 11(a).
(y) "Party" means either MRU or Bank and "Parties" means MRU and Bank.
(z) "Person" means any legal person, including any individual, corporation,
limited liability company, partnership, joint venture, association, joint
stock company, trust, unincorporated organization, governmental entity, or
other entity of similar nature.
(aa) "Program" means the consumer student loan program to be offered by Bank to
Borrowers pursuant to the Loan Program Agreement.
(bb) "Program Year" means the twelve (12)-month period commencing on the
Effective Date, and each anniversary of the Effective Date.
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(cc) "Program Documents" means the Loan Program Agreement and this Agreement.
(dd) "Purchase Price" means the principal amount and any accrued interest of
each Loan and Receivable.
(ee) "Receivable" means, with respect to any Borrower, any right to payment
from or on behalf of any Borrower in respect of any Loan, and includes any
existing, as well as the right to payment of any future, finance charges,
late fees, returned check fees and any and all other fees and charges and
other obligations of such Borrower with respect to such Loan. Each
Receivable includes, without limitation, all rights of Bank to payment
under the Loan Agreement with such Borrower.
(ff) "Records" means any Loan Agreements, applications, change-of-terms
notices, credit files, credit bureau reports, transaction data, records,
or other documentation (including computer tapes, magnetic files, and
information in any other format).
(gg) "Regulatory Authority" means any federal, state or local regulatory agency
or other governmental agency or authority having jurisdiction over a Party
and, in the case of Bank, shall include, but not be limited to, the
Federal Deposit Insurance Corporation.
(hh) "Restricted Party" shall have the meaning set forth in Section 10(a).
(ii) "School" means universities, colleges and other institutions of higher
learning to which Loan proceeds are delivered at the request of a
Borrower.
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