Exhibit 10.33
ALTERNATIVE LOAN PARTICIPATION AGREEMENT
This Alternative Loan Participation Agreement (the "Agreement") is made
and entered into effective as of this 29 day of June, 2001, by and between
NELnet, Inc., a Nevada corporation (the "Participant") and Union Bank and Trust
Company, a Nebraska banking corporation (the "Lender").
WHEREAS, Lender is engaged in or will be engaged in a program of
originating or acquiring and servicing beneficial interests in unsecured loans
("ASLs") to borrowers for educational purposes, and such ASLs are not and will
not be made, guaranteed or insured pursuant to the Higher Education Act of 1965,
as amended;
WHEREAS, Lender has engaged or will engage UNIPAC Service Corporation
and/or InTuition, Inc. (collectively, the "Subservicer") to assist Lender in
servicing the ASLs;
WHEREAS, Participant wishes to purchase from Lender a participation
interest in certain ASLs and Lender wishes to sell to Participant a
participation interest in ASLs under the terms and conditions as set forth
herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, Participant and Lender do hereby agree as follows:
1. Sale of Participation Interests in ASLs.
A. Participant shall purchase from Lender and Lender
shall sell, transfer and convey to Participant an undivided 100.0%
participation interest in and to such ASLs which are in compliance with
the representations and warranties given by Lender in this Agreement,
and which comply with Participant's underwriting criteria at the time
of Purchase, with an aggregate unpaid principal balance of up to such
limit as may be mutually agreed upon by the parties from time to time.
Participation interests in ASLs which do not comply with Participant's
internal underwriting criteria, as modified from time to time in
Participant's sole discretion, shall not be subject to purchase; Lender
shall make available to Participant information as Participant may
reasonably request in order to enable Participant to make credit
decisions with respect to ASLs. Lender shall make such transfer and
shall keep its interest in the ASLs free and clear of all security
interests, liens or encumbrances of any nature whatsoever, provided,
however, the Participant acknowledges that First National Bank
Northeast holds legal title to the underlying promissory note
evidencing the ASL. The purchase price for such participation interests
shall be the amount equal to 100% of outstanding principal balance plus
100% of accrued and unpaid interest on the ASL being participated. The
purchase price shall be paid in immediately available funds.
B. The sale and purchase of the loan participations
under this Agreement shall be without recourse against Lender. Lender
and Participant acknowledge and agree that this Agreement results in a
pro rata sharing of credit risk proportionate to the respective
interests of Lender and Participant in the ASLs, both before and after
any default with respect to the ASLs.
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2. Participation Certificates. The ASLs are evidenced by
promissory notes which have been prepared and approved by Lender. The originals
of such promissory notes shall be kept in the physical custody and possession of
the Subservicer for purposes of servicing. On the date of the first sale of a
participation interest with respect to a portfolio of ASLs, or thereafter as
mutually agreed to by the parties, Lender shall execute and deliver (or shall
cause to be executed and delivered) to Participant a master participation
certificate substantially in the form marked as Exhibit "A," attached hereto and
incorporated herein by this reference, evidencing a participating equitable
ownership interest in the ASLs in that particular portfolio. Lender shall
deliver or cause to be delivered to Participant, in addition to the executed
original of Exhibit "A," a schedule of the ASLs identifying such loans
comprising the portfolio.
3. Decisions Concerning the ASLs. After purchase of the
participation interest pursuant to this Agreement, all actions and decisions
concerning the ASLs, including without limitation the day-to-day administration
and servicing of the ASLs, shall be made by Participant and such decisions shall
be binding on Lender. Servicing of the ASLs shall be performed by the
Subservicer on behalf of Lender and Participant, and Lender shall pay to the
Subservicer all costs of servicing the ASLs during the term of this Agreement.
All servicing reports generated by the Subservicer with respect to the ASLs
shall be available to Participant, and all payments received by Lender or the
Subservicer with respect to the ASLs shall be forwarded promptly to Participant
or its designee, less the servicing fee as set forth in Section 4(a) hereof.
4. Payments and Accounting to Participant: Records.
(a) Lender, through the Subservicer, shall account and
deliver promptly to Participant in accordance with its percentage
interest in the ASLs for all sums of interest paid upon the ASLs by
borrowers thereon and for all other sums of income received by Lender
on account of the ASLs, such as payments of interest made by any
insurer or guarantor on account of ASLs or the interest portion of
proceeds of any sale or other disposition of the ASLs, less a servicing
fee in an amount (to be received by Lender on a quarterly basis or as
otherwise mutually agreed to be paid from payments of income with
respect to the ASLs or from capitalized interest in respect thereof)
equal to the product of the aggregate average outstanding principal
balances of ASLs covered by the Participation Certificate multiplied by
the rate of 100 basis points (1.0%) per annum. Any portion of interest
to which Participant is entitled and which is capitalized with respect
to ASLs covered by the participation certificate shall commensurately
increase Participant's beneficial ownership of the outstanding
principal balance on such ASLs. Participant shall have a right to an
accounting of all funds received by Lender in connection with the ASLs.
Within a reasonable time following execution of this Agreement, Lender
shall transfer to Participant the balance of all loan service costs
charges collected with respect to the ASLs (less withdrawals for
losses).
(b) Lender, through its agent, the Subservicer, will
maintain customary books and records relating to the ASLs, which shall
be made available to Participant at all reasonable times for the
purpose of inspection, and copies of any of Lender's records relating
to the ASLs shall be furnished to Participant at Participant's request.
(c) To the extent not already available to Participant,
Lender, through the Subservicer, shall provide to Participant, promptly
after Lender receives or obtains any information in Lender's
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possession as to the accrual status of, and principal and interest
payments with respect to, the ASLs, together with any information as to
default of borrowers on such ASLs.
5. Representations and Warranties.
(a) Lender makes no representations or warranties, whether
expressed or implied, to Participant, as to the collectability of the
ASLs or the continued solvency of the borrowers on ASLs. Lender does
represent and warrant to Participant as follows:
(1) This Agreement has been duly authorized, executed and
delivered by Lender and constitutes a legal, valid
and binding obligation.
(2) The Agreement was made in compliance with all
applicable local, State and federal laws, rules and
regulations.
(3) Lender has and its officers acting on its behalf
have, full legal authority to engage in the
transactions contemplated by the Agreement, the
execution and delivery of the Agreement, the
consummation of the transactions herein contemplated
and compliance with the terms, conditions and
provisions of the Agreement do not and will not
conflict with or result in a breach of any of the
terms, conditions or provisions of the charter,
articles or bylaws of Lender or any agreement or
instrument to which Lender is a party to or bound by
any agreement or instrument or a default thereunder.
Lender is not a party to or bound by any agreement or
instrument or subject to any charter or other
corporation restriction or judgment, order, writ,
injunction, decree, law, rule or regulation which may
materially and adversely affect the ability of Lender
enforceable against it in accordance with its terms,
and no consent, approval or authorization of any
government or governmental body, including without
limitation, the Federal Savings and Loan Insurance
Corporation, the Federal Deposit Insurance
Corporation, the Comptroller of the Currency, the
Board of governors of the Federal Reserve System or
any state bank regulatory agency, is required in
connection with the consummation of the transactions
herein contemplated.
(4) Lender is duly organized, validly existing and in
good standing under the laws of the state of Nebraska
and has the power and authority to own its assets and
carry on its business as now being conducted.
(5) At the time of origination, each ASL has been duly
executed and delivered and constitutes the legal,
valid and binding obligtions of the maker thereof,
enforceable in accordance with its terms.
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(b) Participant represents and warrants to Lender as follows:
(1) This Agreement has been duly authorized, executed and
delivered by Participant and constitutes a legal,
valid and binding obligation.
(2) The Agreement was made in compliance with all
applicable local, State and federal laws, rules and
regulations.
(3) Participant has and its officers acting on its behalf
have, full legal authority to engage in the
transactions contemplated by the Agreement, the
execution and delivery of the Agreement, the
consummation of the transactions herein contemplated
and compliance with the terms, conditions and
provisions of the Agreement do not and will not
conflict with or result in a breach of any of the
terms, conditions or provisions of the charter,
articles or bylaws of Participant or any agreement or
instrument to which Participant is a party to or
bound by any agreement or instrument or a default
thereunder. Participation is not a party to or bound
by any agreement or instrument or subject to any
charter or other corporation restriction or judgment,
order, writ, injunction, decree, law, rule or
regulation which may materially and adversely affect
the ability of Participant enforceable against it in
accordance with its terms, and no consent, approval
or authorization of any government or governmental
body, including without limitation, the Federal
Savings and Loan Insurance Corporation, the Federal
Deposit Insurance Corporation, the Comptroller of the
Currency, the Board of governors of the Federal
Reserve System or any state bank regulatory agency,
is required in connection with the consummation of
the transactions herein contemplated.
(4) Participant is duly organized, validly existing and
in good standing under the laws of the State of
Nevada and has the power and authority to own its
assets and carry on its business as now being
conducted.
(c) If any representation or warranty contained in Section 5(a)(5)
hereof shall prove to have been materially incorrect, then Lender shall
repurchase the participation interest in such ASL upon the request of
Participant by paying to Participant the then outstanding principal balance of
such ASL plus accrued and unpaid interest thereon and any other amounts as may
be necessary to make the Participant whole.
6. Term. The term of this Agreement shall continue until the
earlier of (i) thirty (30) days following notice of termination of this
Agreement by either party, or (ii) the ASLs participated hereunder are paid in
full or as the parties may otherwise mutually agree. Upon termination of the
participation, Lender shall have the option, without the obligation, to purchase
the participation back from NELnet and the purchase price therefor shall be
100.0% of the then outstanding aggregate principal balances and accrued and
unpaid interest with respect to all remaining ASLs participated pursuant to this
Agreement.
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7. Miscellaneous Provisions.
A. Neither this Agreement nor any term hereof may be
changed, waived, discharged, modified or terminated orally, unless by
an instrument in writing signed by both of the parties hereto. This
Agreement may be terminated by either party hereto upon thirty (30)
days prior written notice sent to the other party.
B. The headings in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof.
C. All of the terms, covenants and conditions herein
contained shall inure to the benefit of, and be binding upon, the
parties hereto and their respective successors and assigns.
D. Notices under this Agreement shall be in writing
unless otherwise permitted hereby, and if in writing, may be personally
delivered or sent by United States mail, sufficient postage prepaid, or
by telecopy or facsimile, to the respective parties at the following
addresses:
Lender:
Union Bank and Trust Company
0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 Attention: Xxx Xxxxxxxxxx
Telephone: 402/ 000-0000
Facsimile: 402/ 483-8286
Participant:
NELnet, Inc.
000 Xxxxx 00xx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Phone: 402/ 000-0000
Facsimile: 402/ 458-2399
E. This Agreement shall not be construed to create a
partnership or joint venture between Lender and Participant.
The transaction evidenced by this Agreement is a loan
participation transaction, and advances made by Participant to
Lender from time to time for Participant's purchase of
participation interests shall not constitute loans to Lender.
Participant's interest in the ASLs is an ownership interest,
not a security interest.
F. If any one or more of the covenants or agreements or
portion thereof provided in this Agreement on the part of Participant
or Lender to be performed should be determined by a court of competent
jurisdiction to be contrary to law, then such covenant or covenants, or
such agreement or agreements, or such portions thereof, shall be deemed
severable from the remaining
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covenants and agreements provided in this Agreement and the invalidity
thereof shall in no way affect the validity of the other provisions of
this Agreement hereunder and under any applicable provisions of law.
G. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Nebraska.
H. Any of the ASLs participated pursuant to this
Agreement may be transferred, subparticipated, pledged, exchanged or
otherwise disposed of in such a manner as Participant deems proper in
its sole discretion.
Executed as of the day and year first above written.
Union Bank and Trust Company, Lender NELnet, Inc., Participant
By: /s/ Xxxxx Xxxxxxxxx By: /s/ Xxx Xxxx
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Title: President Title: President
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PARTICIPATION CERTIFICATE
Pursuant to that certain Alternative Loan Participation Agreement (the
"Agreement") dated June 29, 2001, by and between Union Bank and Trust Company
("Lender") and NELnet, Inc. ("Participant"), Lender hereby issues and delivers
this Participation Certificate to evidence Participant's participation interests
in student assistance loans which are identified by the schedule marked as
Exhibit "A," attached hereto and incorporated herein by this reference, which
loans or participation interests therein are owned by Lender and are serviced
and designated a separate account, in accordance with the Agreement. This
Participation Certificate shall be governed, in all respects, by the Agreement,
the terms of which are incorporated herein by this reference as if fully stated
herein.
Dated as of the 29 day of June, 2001.
Union Bank and Trust Company
By: /s/ Xxxxx Xxxxxxxxx
-----------------------------
Title: President
Accepted as of the same date set forth above:
NELnet, Inc.
By: /s/ Xxx Xxxx
-----------------------------
Title: President
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