LOAN ORIGINATION AND SALE AGREEMENT

 

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                                                                  EXHIBIT 10.100

 

                                                                  EXECUTION COPY

 

                              PRIVATE LOAN PROGRAM

                       LOAN ORIGINATION AND SALE AGREEMENT

 

      This Private Loan Program Origination and Sale Agreement (the "Agreement")

is made and entered into as of this 28th day of July, 2005, by and among

Richland State Bank, a South Dakota State Bank (the "Bank"); Richland Loan

Processing Center, Inc., a South Dakota corporation and wholly owned subsidiary

of the Bank ("RLPC"); UICI, a Delaware corporation ("UICI"); and UICI Funding

Corp. 2, a Delaware corporation and wholly owned subsidiary of UICI ("UFC2").

 

RECITALS:

 

      A.     The Bank is an FDIC-insured bank, chartered by the State of South

            Dakota, authorized to originate and make loans throughout the United

            States.

 

      B.     Under UICI's former College First Alternative Loan program, The MEGA

             Life and Health Insurance Company ("MEGA") and Mid-West National

            Life Insurance Company of Tennessee ("Mid-West") (each a wholly

            owned subsidiary of UICI) formerly offered an interest-sensitive

            whole life insurance product that was in certain cases issued with a

            child term rider, pursuant to which MEGA or Mid-West, as the case

            may be, committed to provide private student loans to help fund the

            named child's higher education if certain restrictions and

            qualifications are satisfied.

 

      C.     While UICI has terminated its College First Alternative Loan

            program, there remain outstanding in-force insurance policies

            previously issued under the College First Alternative Loan program

            by MEGA or Mid-West, pursuant to which MEGA or Mid-West, as the case

            may be, has had and continues to have a commitment to make available

            Private Loans (as defined below) to Eligible Borrowers (as defined

            below).

 

      D.     RLPC provides services in connection with the review, approval and

            disbursement of the Private Loans.

 

      E.     UFC2 desires to purchase the Private Loans funded by the Bank and

             originated by RLPC under the terms of this Agreement.

 

AGREEMENT:

 

      In consideration of the foregoing Recitals, the following mutual and

respective covenants and agreements of the parties, and for other valuable

consideration, the receipt and sufficiency of which are acknowledged, on and as

of the Effective Date the parties agree as follows:

 

      1.     Definitions. Unless otherwise defined herein, capitalized terms

shall have the meanings set forth below:

 

            "Approved Private Loan Program" means a program for making Private

Loans that are not FFEL loans to or for the benefit of students for certain

higher education expenses (as certified by an Eligible Institution) that has

been approved by UICI and/or its designee and UFC2 and identified in the College

First Alternative Loan Program Manual.

 

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            "Approved Program Fees" means the loan fees, including any

guarantee, origination, insurance, or reserve fund fees or prepaid finance

charges, charged to Eligible Borrowers and deducted from one or more

disbursements.

 

            "Confidential Information" means "non-public personal financial

information" (as such term is defined in the Gramm-Leach-Bliley Act and/or the

regulations implementing the provisions of that Act) and other

personally-identifiable information relating to Borrowers. Information made

available to the general public shall not be considered Confidential

Information.

 

            "Effective Date" means July 28, 2005.

 

            "Eligible Borrower" means an Eligible Student or other qualified

individual who meets the Program Eligibility Requirements relating to an obligor

of a Program Loan.

 

            "Eligible Institution" means an institution of higher education that

meets the Program Eligibility Requirements relating to an educational

institution participating in the Program.

 

            "Eligible Student" means a student attending an Eligible Institution

who meets the Program Eligibility Requirements relating to a student receiving

financial assistance under the Program.

 

            "Loan Application and Promissory Note" or "Note" means the form of

the application and promissory note that meets the Program Eligibility

Requirements to be executed and delivered by each Eligible Borrower in order to

obtain a Program Loan, as such forms are set forth in the Program Manual.

 

            "Private Loan" means an education loan that is not a Federal Family

Education Loan (FFEL) made to a student or parent of a dependent student, but

which is offered pursuant to the College First Alternative Loan Program Manual.

 

            "College First Alternative Loan Program Manual" or "Program Manual"

means the document setting forth the requirements, documents, processing

procedures and other information relating to the Program and the Program Loans,

as amended or supplemented from time to time.

 

            "Processing Procedures" means the procedures for processing the

review, approval or disapproval and disbursement of Program Loans, as set forth

in the Program Manual.

 

             "Program" means the CFLD Private Loan Programs as described in the

Program Manual.

 

            "Program Eligibility Requirements" means all of the terms and

conditions of a Program Loan as set forth in the Program Manual, including

eligibility criteria for borrowers, schools, and students, and all requirements

that must be met in order for a prospective borrower to qualify for and receive

a Program Loan, including, but not limited to, meeting the Underwriting Criteria

required under the Program.

 

            "Program Loan" means a Private Loan made to an Eligible Borrower for

the purpose of financing part or all of the educational expenses of an Eligible

Student at an Eligible Institution that is made under the CFLD Private Loan

Program.

 

             "Program Manual" means the College First Alternative Loan Program

Manual.

 

                                      -2-

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            "Program Materials" means all promissory notes, documents, and

materials used in connection with the performance of the parties' obligations

under this Agreement, including without limitation, applications, disclosures

required by the Rules, and all other materials with the exception of Advertising

Materials.

 

            "Purchaser" means UFC2 or UFC2s' designated nominee or assignee.

 

            "Regulatory Authority" means the Federal Deposit Insurance

Corporation and any local, state, or federal regulatory authority having

jurisdiction or exercising regulatory authority or similar oversight with

respect to Bank, RLPC, MEGA, Mid-West, UFC2, or Servicers.

 

            "Rules" means all local, state, and federal statutes or ordinances

applicable to the acts of Bank, RLPC, MEGA, Mid-West, UFC2, or any Servicer as

they may relate to the Program; any order, decision, injunction, or similar

pronouncement of any court, tribunal, or arbitration panel issued with respect

to Bank, RLPC, MEGA, Mid-West, UFC2, or any Servicer in connection with this

Agreement; and any regulations, policy statements, and any similar pronouncement

of any regulatory authority having jurisdiction with respect to the acts of

Bank, RLPC, MEGA, Mid-West, UFC2, or any third party service provider as they

relate to the Program.

 

            "Servicer" means the servicing entity designated by UFC2 to service

the Program Loans on behalf of the Purchaser.

 

            "Underwriting Criteria" means the requirements for determining the

creditworthiness of one or more Eligible Borrowers for purposes of qualifying

for a Program Loan, as set forth in the Program Manual.

 

      2.     Program Materials.

 

      a.     UICI (or its designees) will be responsible for the development of

            all Program Materials used in connection with the CFLD Private Loan

            Programs and shall bear all costs thereof. All Program Materials

            shall be subject to and must receive the prior written approval of

            Bank, which approval shall not be unreasonably withheld. UICI agrees

            not to use or disseminate any Program Materials unless such

             materials have been approved in advance by Bank in writing. UICI

            shall pay all reasonable attorneys' fees associated with Bank's

            review of the Program Materials. Bank may at any time retract or

            modify any approval previously given by it with respect to any

            Program Materials if Bank reasonably determines that such action is

            necessary in order to remain in compliance with any applicable Rules

            or for the safe and sound operation of Bank.

 

      b.     Neither UICI nor MEGA nor Mid-West shall have authority to use any

            trade names, trademarks, or service marks of Bank or RLPC except by

            means of any Program Materials approved by Bank pursuant to this

            section.

 

      c.     UICI (or its designees) will also be responsible for the preparation

            and distribution of all Program Materials relating to the approval

            and origination of the Program Loans including, without limitation,

             the Loan Application and Promissory Note, and shall bear all costs

            thereof. Such information and Program Materials will comply with the

            Program Eligibility Requirements and shall include a copy of the

            Bank's privacy policy.

 

                                      -3-

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      3.     Loan Review and Approval Procedures.

 

      a.     The Bank, through RLPC, will review the information provided for

            each Program Loan for completeness and accept or reject each

            application for a Program Loan in accordance with the Program

            Eligibility Requirements, the Program Manual and this Agreement.

 

      b.     Upon receipt of a Loan Application and Promissory Note from an

            Eligible Institution, RLPC and Bank will take the following actions:

 

            (1)    RLPC will review the data for completeness according to the

                  Underwriting Criteria and other standards for the loan

                  application review process set forth in the Program Manual,

                  and will review the Loan Application and Promissory Note to

                  ensure that it has been properly filled out and executed.

 

            (2)    If any necessary data or signature(s) are absent, RLPC will

                  deal directly with the applicant or the educational

                  institution as necessary or appropriate to secure complete

                  data and/or signatures. (The term "applicant" in this

                  Agreement refers to all co-applicants.) RLPC will inquire of

                  the applicant as to all missing data, in most cases not more

                  than five (5) days after receipt of the incomplete

                  application.

 

            (3)    The underwriting information provided to RLPC shall include a

                  certification by the Eligible Institution (the "School

                  Certification") certifying that the student Borrower is

                  currently enrolled at such Eligible Institution in a qualified

                  course of study for the requisite minimum hours. Loans

                  underwritten using "Alternative Certification" methods will be

                  processed in accordance with the "Alternative Certification"

                  procedures as outlined in the Program Manual.

 

            (4)    Within five (5) business days after all necessary data have

                  been received by RLPC, Bank will approve or reject the

                  application. Such decision will be made in accordance with the

                  Program Eligibility Requirements.

 

            (5)    RLPC will notify the applicant of the Bank's decision in

                  accordance with applicable law, including but not limited to

                   the Equal Credit Opportunity Act and Regulation B thereunder.

 

            (6)    Upon Bank's approval of a Loan Application and Promissory

                  Note, the Bank will disburse the Loan proceeds as set forth in

                  Section 4 hereof.

 

            (7)    Bank will collect all Approved Program Fees out of the Program

                  Loan proceeds and shall distribute such to UFC2 at least

                  monthly.

 

            (8)    After the initial disbursement of the Program Loan, RLPC will

                  hold and retain the signed Loan Application and Promissory

                  Note and all required disclosures and documents on behalf of

                  and as custodian for the Bank.

 

      c.     RLPC's duties shall also include the following: Truth-in-Lending

            disclosures; privacy policy disclosures pursuant to the

            Gramm-Leach-Bliley Act (15 U.S.C. 6801 et seq.) and regulations

            thereunder on behalf of the Bank and the Purchaser (if required by

            law); and any account reconciliation and loan balance adjustment

            credited or paid to the appropriate party.

 

                                      -4-

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      4.     Loan Origination and Disbursement Procedures.

 

      a.     The Bank will originate and fund all Program Loans that are approved

            by Bank, including the funding of the initial disbursement (the

            "Initial Disbursement") and any subsequent disbursements (the

            "Subsequent Disbursements") under each Program Loan. The Bank will

            not be required to originate and fund any Program Loan that RLPC or

            the Bank determines does not meet the Program Eligibility

            Requirements or rejects for any other reason authorized under this

            Agreement.

 

      b.     In the event that UFC2 fails or refuses to purchase any Program Loan

            that meets the Program Eligibility Requirements and the terms of

            this Agreement, the Bank shall not be obligated to fund any new

            Program Loans commencing on the date of such failure or refusal.

            However, if, prior to UFC2's failure or refusal to purchase any such

            Program Loans, the Bank has made a commitment to a Borrower to fund

            subsequent disbursements, the subsequent disbursements shall not be

            considered a new Program Loan for purposes of this section and the

            Bank shall remain bound by the commitment to fund any subsequent

             disbursements regardless of UFC2's purchase of the loan.

 

      c.     The Bank's origination and funding of the Initial Disbursement of

            each Approved Loan shall be accomplished either by submission of a

            check drawn on the Bank or by electronic funds transfer of such

            funds, in each case to the Eligible Institution in which the student

            borrower is enrolled.

 

      d.     Each Eligible Institution will then make the first disbursement of

            Loan proceeds to or for the benefit of each Borrower in accordance

            with the terms of the Loan Application and Promissory Note executed

            by the Borrower. Provided that the Bank has transmitted the loan

            proceeds in accordance with the applicable Loan Application and

            Promissory Note, the Bank will not be liable for (i) any

            disbursement by any Eligible Institution to any Eligible Borrower,

            or (ii) any disbursement by the Bank to any Eligible Institution.

 

      e.     Any refunds of previously disbursed Program Loans will be

            transmitted by the respective Eligible Institution to RLPC for

            posting to the Borrower's account, and then forwarded to the Bank.

            Upon receipt by the Bank, such funds will be remitted to UFC2 in the

            form of an adjustment in the next sale from the Bank to UFC2.

 

      f.     Most Program Loans require additional Subsequent Disbursements

            following the Initial Disbursement and prior to subsequent semesters

            or quarters of each applicable school academic year. Subject to

            approval by Bank and RLPC of an applicable School Certification, the

            Bank will make Subsequent Disbursements to or for the benefit of the

            Eligible Borrower on the applicable disbursement dates.

 

      5.     Loan Sale and Assignment Procedures.

 

      a.     From time to time (but no less frequently than once every 60 days)

            the Bank may request UFC2 to purchase all Program Loans originated

            and disbursed by the Bank during the term of this Agreement without

            recourse. UFC2 agrees to purchase any such Program Loan in

            accordance with the terms of this Section 5.

 

      b.     Upon requesting UFC2 to purchase Program Loans in accordance with

            this Agreement, the Bank shall cause RLPC to send UFC2 a detailed

            list of Program Loans for purchase, such list to include information

            regarding any credit overrides which have taken place.

 

                                      -5-

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            RLPC shall only include those Program Loans on the list that, to its

            knowledge, are valid Program Loans and for which RLPC has all

            necessary documentation to support their validity. RLPC certifies to

            UFC2 that each Program Loan on the list is a valid loan.

 

      c.     UFC2 will transfer the funds for the purchase of each Program Loan

            and Subsequent Disbursement on the first business day following the

            date UFC2 receives the list of certified Program Loans and

            Subsequent Disbursements for purchase from RLPC. The Bank will

            retain the right and obligation to make any Subsequent Disbursement.

 

      d.     The purchase price for the Initial Disbursement of each Program Loan

            shall be an amount equal to the sum of (i) outstanding principal

            amount of such Program Loan (including all Approved Program Fees

             with respect thereto) and (ii) accrued interest on such Program Loan

            to the date of purchase (the "Purchase Price"), and the Purchase

            Price shall be paid by transfer of immediately available funds to

            the Bank in the aggregate amount of the Purchase Price for all

            Program Loans then being purchased.

 

      e.     Upon purchase of the Initial Disbursement of a Program Loan, the

            ownership of such Program Loan shall be assigned by the Bank without

             recourse to UFC2, except as otherwise stated in the Program Manual,

            on behalf of the Purchaser, by execution and delivery by the Bank of

            a "Loan Assignment" substantially in the form attached to and

            incorporated in this Agreement as Exhibit "1", setting forth the

            Borrower, the School and the disbursed amount of each Program Loan,

            and a "Bill of Sale", substantially in the form attached to and

            incorporated in this Agreement as Exhibit "2". A duly authorized

            officer of the Bank will execute the Loan Assignment and Bill of

            Sale and send such Loan Assignment and Bill of Sale to UFC2.

 

      f.     The Bank will provide a copy of the executed Loan Assignment to

             RLPC, receipt of which will authorize RLPC to forward the Promissory

            Note and supporting documentation to the Servicer designated by

            UFC2. RLPC shall move the loans to the Servicer designated by UFC2

            within ten (10) business days of receipt of the Loan Assignment and

            shall make certain that the Loan Application and Promissory Note,

            Disclosures and all supporting documentation are delivered to the

            Servicer within fifteen (15) days of receipt of the Loan Assignment.

 

      g.     If necessary, RLPC will execute and deliver a bailment agreement and

            such other documents reasonably requested by UFC2 to perfect the

            Security Interest of the Purchaser in the Program Loans after the

            purchase thereof and prior to the Program Loans being transferred to

            the Servicer.

 

      h.     The Bank will sell the portion of each Program Loan represented by

            each Subsequent Disbursement and receive payment of the Purchase

            Price for each Subsequent Disbursement from UFC2 in the same manner

            as payments are made in connection with the Initial Disbursement.

            Upon receipt of such payment, the Bank will execute an "Assignment

            of Subsequent Disbursements" substantially in the form attached

            hereto and incorporated in this Agreement as Exhibit "3".

 

      i.     The Bank agrees to promptly forward to RLPC or to the Servicer, as

            applicable, any payments or communications received at any time

            relating to each Program Loan, including, but not limited to, change

            of address, change of school status, or notice of bankruptcy, death,

            or disability.

 

                                       -6-

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      j.     In the event UFC2 shall fail to purchase any Program Loan from Bank

            following the Initial Disbursement, UICI shall carry out UFC2's

            obligations herein, including the obligation to purchase the loan

            from Bank for the Purchase Price. In the event UFC2 shall fail to

            purchase any Subsequent Disbursement made by Bank, Bank shall give

            UFC2 two (2) days' notice of said default. If UFC2 fails to purchase

            the Subsequent Disbursement within said notice period, UICI shall

            pay the Bank the Purchase Price owed with respect to said Subsequent

            Disbursement and UFC2 shall immediately sell the program loan upon

            which the Subsequent Disbursement was made back to Bank. The

            repurchase price paid by Bank to UFC2 shall be an amount equal to

            the remaining unpaid principal balance and accrued interest upon the

            Program Loan, less any attorneys' fees and costs incurred by Bank in

            enforcing UFC2's duty to sell the Program Loan back to Bank (the

            "Repurchase Price"). Upon receipt of the Repurchase Price, UFC2

            shall immediately assign the loan back to Bank and forward the

            original Promissory Note, Collateral Agreement and supporting

            documentation to Bank. Upon receipt of the Promissory Note and

            UFC2's assignment, UICI or its designee agrees to purchase the

            Program Loan from Bank. The price paid by UICI for the purchase of

            the Program Loan shall be equal to the Repurchase Price paid by Bank

            to UFC2. For purposes of this paragraph, UICI may allow a designee

            of its choosing to carry out its obligations stated herein. UICI's

            designation of a third party designee shall not, however, relieve

            UICI of any of its obligations set forth in this paragraph except to

            the extent the same are performed by said designee.

 

      6.     Fees.

 

      a.     Underwriting Fee. In consideration of RLPC's loan application review

            and underwriting, reporting and cancellation services, UFC2 will pay

            to RLPC as an underwriting fee (the "Underwriting Fee") the amount

            of one and one-half percent (1.5%) of the original principal amount

            of each disbursed Loan. The Underwriting Fee shall be paid to RLPC

            at the time and in the manner as set forth in the Program Manual.

 

       b.     Legal Fees and Programming Costs. All legal fees and programming

            costs incurred by the Bank and RLPC for the administration of the

            CFLD Program will be passed-through and paid by UFC2 at the time the

            expenses are incurred, so long as any programming costs are

            reasonable and are pre-approved by UFC2.

 

      7.     Representations, Warranties and Covenants of Bank. As of the

Effective Date, and as of the date of sale of each disbursement of each Program

Loan to the Purchaser, the Bank represents, warrants and covenants to UFC2 and

UICI as follows:

 

      a.     The Bank is a state banking corporation duly organized, validly

            existing and in good standing under the laws of the State of South

             Dakota.

 

      b.     All actions necessary to lawfully and properly perform this

            Agreement have been or will be undertaken by the directors and

            officers of the Bank.

 

      c.     This Agreement is the valid and binding agreement of the Bank,

            enforceable against the Bank in accordance with its terms, except as

            such enforceability may be limited by applicable bankruptcy,

            insolvency, moratorium, reorganization or similar laws in effect

             which affect the enforcement of creditors' rights generally and by

            equitable limitations on the availability of specific remedies.

 

                                      -7-

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      d.     The Bank is duly authorized in the State of South Dakota to

            originate Loans to the Borrowers who meet the requirements

            established in the Program Manual. The Program Loans will be

            originated and disbursed by the Bank in accordance with applicable

            law, and will be enforceable under the laws of South Dakota in

            accordance with their terms. The Bank makes no representation or

            warranty as to the choice of law rules which may be applied by a

            court of competent jurisdiction.

 

       e.     The Bank possesses all necessary qualifications and licenses to

            enter into the Program Loans and any consent or approval of any

            federal or state banking or regulatory authorities for the making or

            performance of the Agreement has been obtained.

 

      f.     There is no action or proceeding pending or threatened against the

            Bank before any court or administrative agency, nor any existing

            order of any court or administrative agency, that could reasonably

            have a material adverse effect on the Bank's ability to perform its

            obligations under the Agreement.

 

      g.     Each Program Loan is a valid loan that (i) meets the Program

            Eligibility Requirements, as defined in the Program Manual; and (ii)

            has not been satisfied, subordinated or rescinded, and no right of

            rescission, set-off, counterclaim or defense exists or to the Bank's

            knowledge has been asserted with respect to such Program Loan.

 

      h.     The Bank has complete and unrestricted right and authority to sell,

            convey, assign, transfer and deliver to the Purchaser all of the

            Program Loans being sold to the Purchaser pursuant to this

             Agreement, provided that such sale shall be without any recourse to

            the Bank and without any representation or warranty on the part of

            the Bank, whether expressed or implied, except as set forth in this

            Agreement.

 

       i.     The Bank is the sole owner and holder of each Program Loan to be

            purchased and upon sale of such Program Loan the Purchaser will

            receive full right, title, and interest therein, free and clear of

            any liens, pledges or encumbrances.

 

      j.     All right, title and interest of the Bank in and to the Program

            Loans and rights in connection with the Program Loans to be assigned

            by the Bank to Purchaser under this Agreement will be validly

             conveyed and assigned by the Bank to the Purchaser by delivery of

            the Notes, together with the Loan Assignment and Assignment of

            Subsequent Disbursements, pursuant to Section 4.

 

      k.     Each Program Loan shall comply at the time it is originated and on

            the date it is sold to Purchaser hereunder, in all material respects

            with all requirements of applicable federal law and regulations

            thereunder and South Dakota's usury laws.

 

      l.     All agents and representatives acting on behalf of the Bank have

            full power and authority to perform any and all acts necessary to

            the execution, performance and completion of this Agreement.

 

      m.     On the initial payment date of the Purchase Price for the first

            disbursement of each Program Loan (as set forth in Section 4), the

            first installment of proceeds of that Program Loan will have been

            fully disbursed; on the payment date for the sale of any Subsequent

            Disbursement, the portion of Loan proceeds representing such

            Subsequent Disbursement will have been fully disbursed.

 

                                      -8-

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      n.     Bank has taken all necessary actions to approve the credit criteria

            applicable to the Program Loans and has approved all loans which are

            to be disbursed.

 

      o.     The Bank represents and warrants that at all times during the term

            of this Agreement and, to the extent necessary for the protection of

            Confidential Information or the integrity of any data to which the

            Bank may have had access during the term of this Agreement, at all

            times after the termination of this Agreement, the Bank shall comply

            with all applicable privacy laws pertaining to the Confidential

            Information. Such laws shall include, by way of example but not of

            limitation: the Right to Financial Privacy Act (12 USC Section 3401

            et seq.); the FinanciaL Services Modernization Act, also known as

            the Gramm-Leach-Bliley Act (15 USC Section 6801 et seq.;

            implementing regulations available at 12 CFR Section 40.18.); the

            Electronic Signatures in Global and National Commerce Act (E-Sign

            Act) (Public Law 106-229); the Electronic Communications Privacy Act

            (18 USC Section 2701 et seq.); the Fair Credit Reporting Act (15 USC

            Section 1681 et seq.); and tHE Family Education Rights and Privacy

            Act (20 USC Section 1232g); and the Privacy Act of 1974 (5 USC

            Section 552a). The Bank will comply in all respects with any

            requests by any governmental entity with jurisdiction to enforce

            such privacy laws by providing access to the Bank's information,

            allowing inspections of its records, and in all other respects.

 

      8.     Representations, Warranties and Covenants of UFC2. As of the

Effective Date and as of the date of each purchase of Program Loans by UFC2,

UFC2 represents, warrants and covenants to the Bank as follows:

 

      a.     UFC2 is a Delaware corporation duly organized, validly existing and

            in go