Heter Iska
By resolution adopted by the management of Cross River Bank, currently located at 885 Teaneck Road, Teaneck, NJ, 07666, the undersigned, Cross River Bank on behalf of itself and its subsidiaries (“Investing Partner” or “Bank”), of this General Iska Agreement (“General Iska Agreement”), hereby acknowledges and agrees on behalf of its Jewish shareholders, that any transaction or agreement in which the Investing Partner engages in (including but not limited to, transactions with individuals or companies that lend funds to the Bank or its agents, or individual or companies that borrow funds from the Bank or its agents, in all forms of credit or deposits, including any obligations, guarantees, mortgages, savings, issuance of shares, any types of stock transactions, any activity or fees arising from any brokerage or escrow transactions) that would violate the Jewish laws of usury, (hereinafter, “Ribbis”), shall be deemed as an “Iska” partnership, subject to the following terms. Capitalized terms used but otherwise not defined herein shall have the meaning ascribed in accordance with Jewish law.
In exchange for any funds advanced, or funds that Halacha considers or will consider in the future, as if it were advanced to, or by, the undersigned parties in a manner that would violate Ribbis, such transaction shall be structured as an Iska, and the sums so delivered shall be used by the Managing Partner of such funds (the “Managing Partner”) for business investment purposes. The Managing Partner shall invest the sums delivered to purchase or invest in such property or merchandise or other assets as the Managing Partner deems beneficial for the generating of profits. All profits and losses shall be shared equally between the Investing Partner and Managing Partner. The Managing Partner must verify any claim of loss through the testimony of two Halachically acceptable witnesses in an Orthodox Jewish court of law. Any claim regarding the amount of profits generated by the joint venture must be verified with a solemn oath, administered by an Orthodox Jewish court of law . In addition, the Investing Partner may demand full access to all legal records, documents, financial statements or receipts that the Investing Partner deems necessary to verify the claims of the Managing Partner.
In the event of a claim of loss or a lack of profit, (i) the Managing Partner shall provide written notice of such claimed loss or lack of profit (a “Notice”) to the Investing Partner within thirty days of the end of the month in which such claimed loss or lack of profit occurs; and (ii) the Investing Partner may demand a full and immediate payment of the remaining balance of this Iska.
The Managing Partner shall have complete authority to manage this investment and shall manage the Iska partnership in the manner deemed most beneficial to the Investing Partner. The Managing Partner shall be paid one dollar as a management fee for his/her services during the term of the Iska. The share of the Investor shall be reduced by the sum of such management fee which shall be retained by the Recipient for his services during the term of the partnership, whether or not there are any profits. Under no circumstances will the Investing Partner be responsible for any losses above the funds advanced.
It is agreed that if the Managing Partner pays the amount equal to the principal, fees, points, penalties, interest, plus any other payments called for by any agreement or other document signed by the two parties, asper the payment schedule of said agreement or document, as payment for the Investing Partner’s share of profits, the Investing Partner shall waive his right to demand verification of the results of the investment. However, any future payments made to avoid providing such verification shall remain consistent with the applicable transaction document. Any additional profits shall belong solely to the Managing Partner. These payments include the management fee mentioned above.
In the event the Managing Partner does not provide a Notice as required hereunder then the Managing Partner may not claim a loss or lack of profit for such time period, and the presumption shall be that the investment made with the monies described hereinabove continues to generate a profit and such monies shall continue to be invested by the Managing Partner.
In the event that: (i) the Managing Partner does not make the monthly payments as required under the applicable transaction documents; or (ii) a covenant or other provision tied to a default interest rate is triggered, the presumption shall be that the investment made with the monies described hereinabove are generating profits equal to the applicable interest rate set forth in the transaction documents, and such monies shall continue to be invested by the Managing Partner.
Any payments made that are not justified by this General Iska Agreement shall reduce the principal balance of this Iska. In addition, futurepayments shall beincreased accordingly to compensate forany discrepancy such that all future payments are consistent with the applicable transaction document.
The Bank may obtain funding from parties not subject to the Laws of Ribbis via the sale or assignment of the transaction documents or a portion thereof. Provided there is no Iska loss prior to said sale, and conditioned on the Company not purchasing the Heter Iska/loan back at any future time, the funds shall be deemed to have been received on behalf of the Managing Partner, and consequently, the Iska shall be considered redeemed by the Managing Partner, and this General Iska Agreement heretofore will have no effect, and Managing Partner shall be obligated to the purchaser or assignee pursuant to the terms and conditions specified in the transaction documents, including being obligated to pay all amounts owed under such transaction documents.
This General Iska Agreement shall apply to any applicable transaction document to which the undersigned is a party, regardless of whether there is any reference to this General Iska Agreement. The use of the term “loan” or “interest” in any applicable transaction document to which the undersigned is a party, should not be interpreted as an unconditional interest payment but interpreted and understood as an Iska in accordance with the terms and conditions of this General Iska Agreement. In the event of any conflict between the terms of this General Iska Agreement and the terms of any other agreement signed by the undersigned here to relating to the subject matter hereof, the terms of this General Iska Agreement shall prevail.
This General Iska Agreement is entered into with the intention of being enforced solely in Beis Din (as defined below) as stated herein and is not (a) enforceable by a federal, state, or other local court of the U.S.; or (b) to be used as evidence outside of Beis Din.
Any disputes between the parties to this document that may arise as result from their agreement to this document will be adjudicated by the Rabbinical Court Eitz Chaim of the Business Halacha Institute with address of 1937 Ocean Ave Brooklyn NY 11230, or such other similar established Beis Din as selected by the Bank (the “Beis Din”).
The foregoing was decided by the management of the Bank with an absolute decision which is binding as per the powers and authority of the management on behalf of the shareholders. This resolution and obligation is binding like any other bylaw of the Bank. No manager or teller, present or future, shall be authorized to lend or borrow, to obligate the Bank, or to accept an obligation, in a manner that violates or may violate Ribbis or Avak Ribbis. The management of the Bank hereby affirms that this General Iska Agreement is legally binding. The management of the Bank hereby authorizes anyone executing documents on behalf of the Bank to execute and incorporate a specific Iska based on this contract, upon the request of a client.
It is specifically agreed that even if, for any reason, the Managing Partner or the Bank is unaware of this Heter Iska, or is ignorant of the entire concept of a Heter Iska, the transaction shall be an Iska as defined by this contract. This is because in accordance with the above resolution, the Bank will not engage in any monetary transactions that are not consistent with Torah and the Rabbinic enactments, and anyone dealing with the Bank does business according to its rules, which requires transactions to be in accordance with this Heter Iska.
From the day this document is executed by the Bank, all transactions shall be exclusively according to the terms of this General Iska Agreement. This General Iska Agreement has beenexecuted in aneffectivemanner and with a proper Kinyan in a manner consistent affecting a halachic legal transfer and is not an “Asmachta.”
The following signature, as authorized by the management of the Bank, is to confirm and to effect a Kinyan on this General Iska Agreement, here in Teaneck, New Jersey on the 31st day of August, 2023.