LOAN PURCHASE AGREEMENT

 

                                                                    EXHIBIT 99.1

 

 

 

                             LOAN PURCHASE AGREEMENT

 

        This Loan Purchase Agreement (the "Loan Purchase Agreement") made and

entered into as of this day of , 200 , by and between Nelnet Student Loan Trust

200 - , a Delaware statutory trust (the "Purchaser") acting by and through , not

individually but as eligible lender trustee (the "Trustee") under the Eligible

Lender Trust Agreement (as defined herein) and Nelnet Student Loan Funding, LLC,

a limited liability company organized and existing under the laws of the State

of Delaware and having its principal offices at 121 South 13th Street, Suite

201, in the city of Lincoln, County of Lancaster, State of Nebraska, acting by

and through , not individually, but as eligible lender trustee (the "Seller").

 

                              W I T N E S S E T H :

 

        WHEREAS, the Purchaser, by and through the Trustee, desires to purchase

from the Seller certain FFELP Loans (as defined below) to assist students in

obtaining a post-secondary education, title to which will be held by the Trustee

pursuant to the Eligible Lender Trust Agreement, and the Seller desires to sell

certain FFELP Loans to the Purchaser, title to which will be held by and through

the Trustee, in accordance with the terms and conditions of this Loan Purchase

Agreement.

 

        NOW, THEREFORE, in consideration of the premises and mutual covenants

herein contained, the parties agree as follows:

 

Section 1.   DEFINITIONS.

 

        "BORROWER" means the student or parent obligor under an Eligible Loan.

 

        "CERTIFICATE OF INSURANCE" means a certificate of federal loan insurance

issued with respect to an Eligible Loan by the Secretary of Education pursuant

to the provisions of the Higher Education Act.

 

        "CONTRACT OF INSURANCE" means an agreement between the Secretary of

Education and either the Trustee or the Seller providing for the insurance by

the Secretary of Education of the principal of and accrued interest on a FFELP

Loan to the maximum extent permitted under the Higher Education Act.

 

        "ELIGIBLE LENDER TRUST AGREEMENT" means the Eligible Lender Trust

Agreement dated as of , 200 , between the Trustee and the Purchaser, as the same

may be amended, modified, supplemented, restated or otherwise altered.

 

        "ELIGIBLE LOAN" means a FFELP Loan authorized to be acquired by the

Purchaser by and through the Trustee which (i) is either Insured or Guaranteed;

(ii) if such FFELP Loan is a subsidized Stafford loan, qualifies the holder

thereof to receive Interest Subsidy Payments and Special Allowance Payments; if

such FFELP Loan is a consolidation loan authorized under Section 428C of the

Higher Education Act, qualifies the holder thereof to receive Interest Subsidy

Payments and Special Allowance Payments to the extent applicable; and if such

 

 

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FFELP Loan is a PLUS loan authorized under Section 428B of the Higher Education

Act, a SLS loan authorized under Section 428A of the Higher Education Act, or an

unsubsidized Stafford loan authorized under Section 428H of the Higher Education

Act, such FFELP Loan qualifies the holder thereof to receive Special Allowance

Payments; (iii) complies with each representation and warranty with respect

thereto contained herein; and (iv) meets the other criteria set forth in the

Loan Purchase Regulations and is eligible for purchase under the terms of the

Financing Agreement.

 

        "FEDERAL CONTRACTS" means all agreements between a Guarantee Agency and

the Secretary of Education providing for the payment by the Secretary of

Education of amounts authorized to be paid pursuant to the Higher Education Act,

including, but not limited to, reimbursement of amounts paid or payable upon

defaulted Eligible Loans and other student loans insured or guaranteed by any

Guarantee Agency and federal interest subsidy payments and Special Allowance

Payments, if applicable, to holders of qualifying student loans guaranteed by

any Guarantee Agency.

 

        "FFELP LOANS" means those specific loans acquired by the Trustee, on

behalf of the Purchaser, from the Seller pursuant to this Loan Purchase

Agreement, inclusive of the promissory notes evidencing such loans and the

related documentation in connection with each thereof, which were originated

pursuant to the Federal Family Education Loan Program and the Higher Education

Act.

 

        "FINANCING AGREEMENT" means the Indenture of Trust, dated as of , 200 ,

by and between the Purchaser and the Indenture Trustee, as the same may be

amended, modified, supplemented, restated or otherwise altered, which is

utilized to finance the Purchaser's purchase of the FFELP Loans under this Loan

Purchase Agreement.

 

        "GUARANTEE" or "GUARANTEED" means, with respect to a FFELP Loan, the

guarantee by the Guarantee Agency, in accordance with the terms and conditions

of the Guarantee Agreement, of the principal of and accrued interest on the

FFELP Loan to the maximum extent permitted under the Higher Education Act on

FFELP Loans which have been originated, held and serviced in full compliance

with the Higher Education Act, and the coverage of the FFELP Loan by the Federal

Contracts providing, among other things, for reimbursement to the Guarantee

Agency for losses incurred by it on defaulted Eligible Loans guaranteed by it to

the extent of the maximum reimbursement allowed by the Federal Contracts.

 

        "GUARANTEE AGENCY" means a state agency or a private nonprofit

institution or organization which administers a Guarantee Program within a State

or any successors and assignees thereof administering the Guarantee Program

which has entered into a Guarantee Agreement with the Trustee on behalf of the

Purchaser.

 

        "GUARANTEE AGREEMENT" means the Federal Contracts, an agreement between

a Guarantee Agency and either the Trustee or the Seller providing for the

Guarantee by such Guarantee Agency of the principal of and accrued interest on

Eligible Loans to Borrowers, made or acquired by the Trustee or the Seller from

time to time, and any other similar guarantee or agreement issued by a Guarantee

Agency to the Purchaser or the Trustee pertaining to Financed Eligible Loans.

 

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        "GUARANTEED LOANS" means FFELP Loans that are Guaranteed.

 

        "GUARANTEE PROGRAM" means a Guarantee Agency's student loan guaranty

program pursuant to which such Guarantee Agency guarantees or insures student

loans.

 

        "HIGHER EDUCATION ACT" shall mean Title IV, Parts B, F and G, of the

Higher Education Act of 1965, as amended or supplemented and in effect from time

to time, or any successor enactment thereto, and all regulations promulgated

thereunder and any directives issued by the Secretary of Education.

 

        "INDENTURE TRUSTEE" means acting in its capacity as indenture trustee

under the Financing Agreement, and not in its individual capacity.

 

        "INSURANCE" or "INSURED" or "INSURING" means, with respect to a FFELP

Loan, the insuring by the Secretary of Education (as evidenced by a Certificate

of Insurance or other document or certification issued under the provisions of

the Higher Education Act) under the Higher Education Act of the principal of and

accrued interest on such FFELP Loan to the maximum extent permitted under the

Higher Education Act for FFELP Loans originated, held and serviced in full

compliance with the Higher Education Act.

 

        "INSURED LOANS" means FFELP Loans which are Insured.

 

        "INTEREST SUBSIDY PAYMENTS" means interest subsidy payments received

from the Secretary of Education pursuant to Section 428 of the Higher Education

Act or similar payments authorized by federal law or regulation.

 

        "LOAN PURCHASE AGREEMENT" means this Loan Purchase Agreement including

all exhibits and schedules attached hereto, and any addenda, supplements or

amendments hereto.

 

        "LOAN PURCHASE DATE" means the date as described in Section 2(b) hereof.

 

        "LOAN PURCHASE REGULATIONS" means the rules and regulations of the

Purchaser, as may be adopted by the Purchaser from time to time (with the

consent of any persons required under the terms of the Financing Agreement),

which pertain to the Program, which shall incorporate all requirements specified

in any indentures or other financing arrangements to which the Purchaser is

subject.

 

        "LOAN TRANSFER SCHEDULE" means a written schedule on a form provided by

the Purchaser or its servicing agent identifying the Borrower on the FFELP Loans

to be purchased hereunder.

 

        "MASTER NOTE" means a Master Promissory Note in the form mandated by

Section 432(m)(1)(D) of the Higher Education Act, as added by Pub. L. 105-244,

ss. 427,112 Stat. 1702 (1998) as amended by Public Law No: 106-554 (enacted

December 21, 2000) and as codified at 20 U.S.C. ss. 1082(m)(1).

 

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        "MPN LOAN" means a FFELP Loan evidenced by a Master Note.

 

        "PROGRAM" means the Purchaser's Eligible Loan acquisition program under

which the Trustee will acquire Eligible Loans to assist students in obtaining a

post-secondary education.

 

        "PURCHASER" means Nelnet Student Loan Trust 200 - , a Delaware statutory

trust.

 

        "SECRETARY OF EDUCATION" means the Commissioner of Education and the

Secretary of the United States Department of Education (who succeeded to the

functions of the Commissioner of Education pursuant to the Department of

Education Organization Act), or any officer, board, body, commission or agency

succeeding to the functions thereof under the Higher Education Act.

 

        "SELLER" means Nelnet Student Loan Funding, LLC, a Delaware limited

liability company, which is performing this Loan Purchase Agreement by and

through its eligible lender trustee which is an "eligible lender" under the

criteria established by the Higher Education Act that has received an eligible

lender designation by the Secretary of Education with respect to Insured Loans

or from a Guarantee Agency with respect to Guaranteed Loans, identified in the

introduction to this Loan Purchase Agreement, which is selling FFELP Loans to

the Purchaser hereunder.

 

        "SPECIAL ALLOWANCE PAYMENTS" means special allowance payments authorized

to be made by the Secretary of Education pursuant to Section 438 of the Higher

Education Act or similar allowances authorized from time to time by federal law

or regulation.

 

        "TRUSTEE" means acting in its capacity as eligible lender trustee under

the Eligible Lender Trust Agreement, and not in its individual capacity.

 

        Section 2.   PURCHASE OF FFELP LOANS.

 

               (a) Subject to the terms and conditions and in reliance upon the

        representations, warranties and agreements set forth herein, the Seller

        agrees to sell to the Trustee, acting on behalf of the Purchaser, and

         the Purchaser, acting by and through the Trustee under the Eligible

        Lender Trust Agreement on behalf of the Purchaser, agrees to buy from

        the Seller, a portfolio of FFELP Loans which are Eligible Loans in the

        aggregate unpaid principal amount as set forth in the Loan Transfer

        Addendum in the form set forth in Exhibit A hereto. Additional

        portfolios of FFELP Loans may be purchased from the Seller hereunder by

        the Purchaser by and through the Trustee from time to time in the

        future, if the parties hereto execute and deliver a subsequent Loan

        Transfer Addendum for each such purchase of a portfolio in the form set

        forth in Exhibit A hereto, reflecting the aggregate unpaid principal

         balance of Eligible Loans contained in such portfolio and the Loan

        Purchase Date, and if the Seller executes and delivers to the Purchaser

        all documents required under Section 4 hereof as of the applicable Loan

        Purchase Date. Any subsequent purchase of an additional portfolio of

        FFELP Loans shall be governed in all respects by this Loan Purchase

        Agreement together with the Loan Transfer Addendum pertaining to such

        portfolio. The Seller shall deliver a Loan Transfer Schedule to the

 

 

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        Purchaser, not less than five (5) days prior to the applicable Loan

        Purchase Date. Consummation of the sale of each FFELP Loan shall require

        execution and delivery to the Purchaser of the Seller's Closing

        Certificate in the form of Exhibit B hereto (and delivery of the

        documents described in Exhibit B hereto), the blanket endorsement and

        bill of sale as well as execution and delivery by the Seller in the

        forms set forth in Exhibits C and D hereto, respectively. It is the

        intention of the Seller that the transfer from the Seller to the Trustee

        on behalf of the Purchaser constitutes a true sale of the FFELP Loans

         hereunder and that neither the interest in nor title to the FFELP Loans

        shall become or be deemed property of the Seller for any purpose under

        applicable state or federal law.

 

               (b) Delivery and payment for the FFELP Loans shall take place at

        a location and on a date (the "Loan Purchase Date") to be specified by

        the Purchaser. The applicable Loan Purchase Date shall not be later than

        the date set forth in the Loan Transfer Addendum pertaining to such

        FFELP Loans.

 

               (c) Subject to the terms and conditions of this Loan Purchase

        Agreement, the Purchaser agrees to purchase the FFELP Loans by and

        through the Trustee at a price equal to 100.0% of the outstanding unpaid

        principal amount thereof on the Loan Purchase Date with proceeds from

        the obligations issued pursuant to the Financing Agreement, or such

        other amount agreed upon and specified in the Loan Transfer Addendum as

        set forth in Exhibit A. The Seller shall be responsible for reporting to

        the Secretary of Education and, if required by the provisions of the

        Higher Education Act, offsetting against Interest Subsidy Payments and

        Special Allowance Payments made to the Seller by the Secretary of

        Education the entire amount of any origination fee which is authorized

        to be charged by the Higher Education Act with respect to the FFELP

        Loans sold hereunder. Additionally, the Seller shall, as a condition to

        the purchase by the Purchaser of any FFELP Loan, be required to pay to

        the Purchaser on the Loan Purchase Date the amount of any such

        origination fee which has not at that time been used to offset such

        Special Allowance Payments or Interest Subsidy Payments, to the extent

        that the Special Allowance Payments or Interest Subsidy Payments

        received by the Trustee in connection with such FFELP Loans shall be

        affected. Seller shall continue due diligence servicing in compliance

        with the Higher Education Act, at Seller's cost, up to the applicable

        Loan Purchase Date; thereafter, servicing shall be paid for by, and

        shall be the responsibility of, the Purchaser.

 

                (d) Subject to the terms and conditions of this Loan Purchase

        Agreement, Seller shall sell to the Purchaser, by and through the

        Trustee, all Eligible Loans made to the same Borrower(s) which are held

        by or on behalf of Seller (serial loans).

 

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               (e) If Seller originates or purchases a FFELP Loan which is a

        consolidation loan under Section 428C of the Higher Education Act, and

        the proceeds of such consolidation loan are used to repay the principal

        and interest due on a FFELP Loan sold by Seller to the Purchaser

        hereunder, then Seller shall rebate the premiums paid by the Purchaser

        to Seller in connection with the purchase of said FFELP Loan by paying

        to the Purchaser an amount equal to the same percentage of the principal

        balance of said FFELP Loan then outstanding as was originally paid by

        the Purchaser therefor.

 

        Section 3.   REPRESENTATIONS, WARRANTIES, COVENANTS AND AGREEMENTS OF THE

SELLER.

 

               (a) With respect to FFELP Loans sold on a Loan Purchase Date, the

        Seller hereby makes the representations and warranties set forth in

        Exhibit E hereto as of such Loan Purchase Date. Each representation,

        warranty, certification, covenant and agreement contained in this Loan

        Purchase Agreement shall survive the applicable Loan Purchase Date.

 

               (b) The Seller shall not organize under the law of any

         jurisdiction other than the State under which it is organized as of the

        Date of Issuance (whether changing its jurisdiction of organization or

        organizing under an additional jurisdiction) without giving 30 days

        prior written notice of such action to the Purchaser. Before effecting

        such change, the Seller shall prepare and file in the appropriate filing

        office any financing statements or other statements necessary to

        continue the perfection of the Purchaser's interests in the FFELP Loans.

 

        Section 4. CONDITIONS OF PURCHASE. The Purchaser's obligation to

purchase and pay for the FFELP Loans hereunder by and through the Trustee as of

any applicable Loan Purchase Date shall be subject to each of the following

conditions precedent:

 

               (a) All representations, warranties and statements by or on

        behalf of the Seller contained in this Loan Purchase Agreement shall be

        true on the applicable Loan Purchase Date.

 

               (b) Any notification to or approval by the Secretary of Education

        or a Guarantee Agency required by the Higher Education Act or a

        Guarantee Agreement as a condition to the assignment of the FFELP Loans

        shall have been made or received and evidence thereof delivered to the

        Purchaser.

 

               (c) The entire interest of the Seller in each FFELP Loan shall

        have been duly assigned by endorsement in the form set forth in Exhibit

        C hereto, such endorsement to be without recourse except as provided in

        Section 6 hereof.

 

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               (d) Physical custody and possession of the FFELP Loans (including

        all information and documentation which is described in the Seller's

        Closing Certificate as specified in Exhibit B hereto) shall be

        transferred in the manner directed by the Purchaser.

 

               (e) The Purchaser shall receive an opinion of the Seller's

        counsel, dated as of the first Loan Purchase Date covering such first

        sale and any other sale of FFELP Loans, in form and substance

        satisfactory to the Purchaser and the Trustee to the effect that (i)

        this Loan Purchase Agreement has been duly authorized, executed and

        delivered by the Seller and constitutes the legal, valid, binding and

        enforceable obligation of the Seller, (ii) the blanket endorsement and

        bill of sale required by this Loan Purchase Agreement have been duly

        authorized, executed and delivered by the Seller, (iii) with respect to

        all Insured Loans being acquired, the applicable Contract of Insurance

        has been duly authorized, executed and delivered by the Seller, (iv)

        with respect to all Guaranteed Loans being acquired, the applicable

        Guarantee Agreement has been duly authorized, executed and delivered by

        the Seller, and (v) assuming the due execution and delivery thereof,

        each FFELP Loan constitutes the legal, valid and binding obligation of

        the Borrower (and of each endorser, if any) thereof, enforceable in

        accordance with its terms, (vi) to the knowledge of the Seller's

        counsel, the execution and delivery of this Loan Purchase Agreement, the

         consummation of the transactions therein contemplated and compliance

        with the terms, conditions and provisions of this Loan Purchase

        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 the Seller or any agreement or instrument to which the Seller

        is a party or by which it is bound or constitute a default thereunder,

        (vii) to the knowledge of the Seller's counsel, the Seller 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 the Seller to perform its obligations

        under this Loan Purchase Agreement, (viii) no consent, approval or

        authorization of any government or governmental body, including, without

        limitation, the Federal Deposit Insurance Corporation ("FDIC"), 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 contemplated in

        this Loan Purchase Agreement, (ix) this Loan Purchase Agreement shall

        constitute a security agreement under Nebraska law and shall be

        effective to create, in favor of the Purchaser, a perfected valid

        security interest in the FFELP Loans subject to no prior liens, (x) if

        the Purchaser and the Seller are affiliates, that if the Seller became a

        debtor under the United States Bankruptcy Code, 11 U.S.C. ss.ss. 101 et

        seq., as amended (the "Bankruptcy Code"), (1) Section 541(a)(1) of the

        Bankruptcy Code would not apply to deem the FFELP sold by the Seller to

        the Purchaser and the proceeds therefrom as property of the bankruptcy

        estate of the Seller and therefore (2) Section 362(a) of the bankruptcy

        Code would not apply to stay payment to the Purchaser or its assignees,

        (xi) if the Seller is the parent of the Purchaser, if the Seller became

        a debtor under the Bankruptcy Code, a court would not disregard the

 

 

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        separate identity of the Purchaser so that the assets of the Seller

        would be consolidated with and become a part of the Seller's bankruptcy

        estate, and (xii) if the Seller is a bank or savings association the

        deposits of which are insured by the FDIC (a "Bank") and the FDIC were

        appointed as receiver or conservator of such Bank, a court would not

        recharacterize the transfer and assignment of the FFELP Loans to the

        Borrower as a pledge to secure a borrowing rather than a sale of the

        FFELP Loans.

 

               (f) Delivery by the Seller to the Purchaser on or before the

        applicable Loan Purchase Date of the following documentation: Seller's

        Closing Certificate in the form of Exhibit B hereto; blanket endorsement

        in the form of Exhibit C hereto; bill of sale in the form of Exhibit D

        hereto; UCC-1 Financing Statements evidencing the transfer from the

        Seller to the Trustee on behalf of the Purchaser, and UCC lien searches

        sufficiently in advance of the Loan Purchase Date so as to permit review

        thereof by the Purchaser to its satisfaction, if either or both are

        requested by the Purchaser or a party to the Financing Agreement; and

        UCC termination statements or releases, if any, to the extent necessary

        to release any security interest granted by the Seller in any FFELP

        Loan.

 

               (g) Delivery by the Seller to the Purchaser, prior to the Loan

        Purchase Date, of a fully executed and completed Loan Transfer Addendum

        substantially in the form of Exhibit A hereto with respect to FFELP

        Loans referred to in the bill of sale, and delivery of a Loan Transfer

        Schedule as required in Section 2(a) hereof.

 

               (h) Adequate funds are available to the Purchaser to finance the

        purchase of FFELP Loans under this Loan Purchase Agreement.

 

               (i) Delivery by the Seller of a closing certificate dated as of

        the date of the first sale of FFELP Loans hereunder in form and

        substance satisfactory to the Purchaser and Trustee and a certificate

        dated as of the date of the first sale of FFELP Loans hereunder of the

        certificates attached to the true sale/non-consolidation opinion and the

        perfection opinion of         , each dated as of approximately    , 200   .

 

        Section 5.   REJECTION OF FFELP LOANS.

 

               (a) If (i) the Seller is unable to make or furnish the

        representations and warranties required to be made or furnished by it

        pursuant to this Loan Purchase Agreement as to a FFELP Loan or (ii) the

        Purchaser determines that the Seller is unable to fulfill one or more

        covenants or conditions of this Loan Purchase Agreement as to a FFELP

        Loan, or (iii) the Purchaser, in its reasonable judgment, deems that a

        FFELP Loan does not comply with the terms and conditions of this Loan

        Purchase Agreement or is not being delivered in compliance with such

        terms and conditions, or (iv) the Purchaser, in its reasonable judgment

        deems that a FFELP Loan is for any reason unacceptable to it, then the

         Purchaser, within thirty days of the Loan Purchase Date, may refuse to

        accept and pay for such FFELP Loan (or any substitute FFELP Loan offered

        by the Seller in lieu thereof).

 

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                (b) If the Purchaser rejects a FFELP Loan, any such FFELP Loan

        shall be returned to the Seller by registered mail (for repurchase

        pursuant to Section 6 hereof if the student loan has previously been

        purchased by the Purchaser), together with a letter identifying each

        returned FFELP Loan and stating the basis for its return. The Purchaser

        shall cause any FFELP Loan returned to the Seller which has been

        endorsed to the Trustee to be endorsed by the Trustee to the Seller in

        the form set forth in Exhibit F hereto.

 

        The liability of the Purchaser in connection with the loss of or damage

to any FFELP Loan to be returned to the Seller is limited to such loss