EXHIBIT 99.2
MASTER SERVICING AGREEMENT
This Master Servicing Agreement (the "Agreement") entered into and
effective as of the 1st day of September, 2004, by and among National Education
Loan Network, Inc., f/k/a Nelnet, Inc., a Nevada corporation, acting as Master
Servicer (in its capacity as such, the "Master Servicer") and acting as
Administrator (acting in its capacity as such, the "Administrator"), Nelnet
Student Loan Trust 2004-4, a Delaware statutory trust ("Trust") and Nelnet
Student Loan Funding, LLC, a Delaware limited liability company ("NSLF").
WHEREAS, Nelnet, Inc., formerly known as Nelnet Loan Services, Inc.
("Nelnet") and other subservicing agents as approved by the Trust in writing
from time to time (collectively, "Subservicers"), as subservicing agents, are in
the business of servicing loans which are made and guaranteed in accordance with
the provisions of the Higher Education Act of 1965, as amended (the "Education
Act") (references hereinafter to the "Education Act" include rules and
regulations promulgated thereunder as in effect from time to time); and
WHEREAS, Subservicers have developed and/or have available to them the
systems and services to enable them to process and service Education Loans in
accordance with the Education Act, and those guarantee agencies as are
satisfactory to Subservicers ("Guarantor(s)"); and
WHEREAS, Subservicers have developed and/or have available to them the
systems and services to enable them to process and service Education Loans in
accordance with the Rules and Regulations (the "Regulations") promulgated by
Guarantor (references hereinafter to the "Regulations" include Rules and
Regulations promulgated thereunder as in effect from time to time); and
WHEREAS, the Trust and NSLF, by and through their respective eligible
lender trustees, acquire student loans made and guaranteed under the Education
Act ("Education Loans"); and
WHEREAS, the Trust and NSLF desire to retain the Master Servicer to (i)
retain Nelnet to process and service certain of the Education Loans and for
Nelnet to act as subservicer under the terms of that certain Nelnet, Inc.
Subservicing Agreement between the Master Servicer and Nelnet, dated as of
September 1, 2004; and (ii) cause certain other subservicing agents which are a
servicer to process and service certain of the Education Loans under
subservicing agreements which may be entered into hereafter between the Master
Servicer and such subservicing agents.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties agree as follows:
1. Definitions. Capitalized terms which are not otherwise defined in
this Agreement shall have the meanings ascribed thereto in that certain
Indenture of Trust (the "Indenture"), dated as of September 1, 2004, between
Zions First National Bank, as trustee (the "Trustee"), and the Trust.
1
2. Term.
2.1 The term of this Agreement shall continue until the earlier of (i)
termination of the Indenture and the Trust Agreement, dated as of September 1,
2004 (the "Trust Agreement"), between NSLF and Wilmington Trust Company, as
Delaware Trustee, (ii) early termination after material default by the Master
Servicer as provided for in Section 16 hereof, and (iii) the Education Loans
serviced under this Agreement are paid in full.
2.2 Upon the termination of this Agreement, the Master Servicer shall
turn over to the Trust or NSLF, as applicable, all Education Loan files complete
with all information contained therein and all current computer information on
the Education Loans under service pursuant to this Agreement in such form or
fashion as the Trust or NSLF, as applicable, shall reasonably specify. The
Master Servicer, the Trust and NSLF specifically agree that the format used to
transfer the Trust's or NSLF's data contains confidential and proprietary trade
secret information which is the exclusive property of the Master Servicer and/or
any Subservicer. The Master Servicer makes no claim to the specific data
contained in any printout given to the Trust, NSLF or the Administrator and
recognizes that said data is the exclusive property of the Trust or NSLF. The
Master Servicer, the Trust and NSLF agree, however, that all aspects of the
underlying computer program, algorithms, methods of processing, specific design
and layout, report format, and the unique processing techniques and interactions
of the various aspects of the Master Servicer's and/or any Subservicer's
computer program are trade secrets of, proprietary to, and owned exclusively by
the Master Servicer and/or any Subservicer. At such deconversion, a minimum fee
of $12.00 per account transferred off of the Subservicer's servicing system plus
any other reasonable expenses incurred in connection with the transfer of such
files and other information shall be paid by the Trust or NSLF, as applicable;
provided however, that in the event deconversion results from early termination
of this Agreement under Section 16 hereof due to the breach by the Master
Servicer, the Trust or NSLF, as applicable, shall pay only the actual expenses
incurred in connection with the transfer of such files and other information.
The confidentiality provisions of this paragraph shall survive any termination
or expiration of this Agreement.
3. Delivery of Completed Education Loans for Servicing and Collection.
Subject to the Master Servicer's scheduling requirements, the Trust or NSLF may
from time to time deliver or cause to be delivered to the Master Servicer
Education Loans with respect to which loan processing has been completed and
loan proceeds have been fully disbursed to the student/parent borrowers prior to
the date of delivery ("Converted Education Loans") to be serviced pursuant to
the terms of this Agreement. The Trust or NSLF shall transmit to the Master
Servicer all such loan documentation as required by the Master Servicer to
enable it to service the Converted Education Loans as provided herein (the "Loan
Documentation"). Upon receipt of the Loan Documentation, the Master Servicer
shall cause the Subservicer to verify only the presence of the promissory note,
the original Borrower application and proof of disbursement. The Master Servicer
is willing to use reasonable efforts to identify previous servicing errors or
omissions in this process, if requested by the Trust or NSLF, for a fee to be
mutually agreed upon following the Master Servicer's review of the portfolio.
However, the Master Servicer shall not be liable or responsible for the
consequences of any errors it does or does not detect in such file review, nor
for missing or incorrect documentation at conversion. Master Servicer is
agreeable to the conversion of delinquent Education Loans to its system for
servicing. If an Education Loan is 180 days or more past due, however, the
Master Servicer will not be responsible for any Guarantor claim rejects or
interest denials due to untimely guarantee claim filing.
2
4. Servicing of Converted Education Loans. Upon acceptance of any
Converted Education Loan into the Master Servicer's computer system and after
the sale date (if applicable) of the Converted Education Loan to the Trust or
NSLF, the Master Servicer shall cause the Subservicers to service such Education
Loan in accordance with the Education Act, the Regulations, and in accordance
with the provisions of this Agreement, including the following:
(a) Subservicers will service the Education Loans in such a manner as
to maintain the guarantee thereon in full force at all times, subject to Section
15 hereof.
(b) Subservicers shall prepare and mail directly to the student/parent
borrower all required statements, notices, disclosures and demands.
(c) Subservicers shall retain records of contacts, follow-ups,
collection efforts and correspondence regarding each Education Loan.
(d) Subservicers shall provide accounting for all transactions related
to individual Education Loans, including, but not limited to, accounting for all
payments of principal and interest upon such Education Loans from the conversion
date to the Subservicers' system.
(e) Subservicers shall process all deferments and forbearances.
(f) Subservicers shall process all address changes and update address
changes accordingly.
(g) Subservicers shall retain all documents received by the Master
Servicer, the Trust, NSLF or the Administrator pertaining to each Education
Loan, in accordance with the filing requirements set forth in the most current
"Common Manual - Unified Student Loan Policy." Such retention may be on magnetic
tape, microfilm, laser disk or other similar medium.
(h) When necessary and allowable by the Education Act, Subservicers
shall take all steps necessary to file a claim for loss with Guarantor.
(i) Subservicers shall provide data as required by Guarantor.
(j) Subservicers shall provide such other services as Subservicers
customarily provide and deem appropriate.
(k) The Master Servicer, the Trust and NSLF agree that upon delivery of
the original promissory notes relating to the Education Loans to the
Subservicers as Custodians pursuant to the applicable Custodian Agreement, that
each shall and does relinquish all power and control over such promissory notes,
subject to responsibilities of the Master Servicer under this Agreement.
3
5. System Updates. The Trust and NSLF agree that in the course of its
Master Servicer's Education Loan servicing activities, Master Servicer may rely
on, without independently verifying, all data entries, manipulations and
representations provided to Master Servicer by the Trust, NSLF, the
Administrator, eligible institutions and borrowers with respect to the Education
Loans, including but not limited to, eligible institutions/borrower
certification, eligibility, enrollment, and eligible institution or borrower
demographics, including data entries provided to Master Servicer electronically,
via the internet or otherwise, and that Master Servicer shall have no liability
for incorrect information or the consequences thereof, which is provided by the
Trust, NSLF, the Administrator, eligible institutions or borrowers.
6. Cure Servicing. At the request of the Trust or NSLF, the Master
Servicer agrees to cause the Subservicers to perform additional servicing
activities not required under the terms of this Agreement for those Education
Loans transferred to Master Servicer as Converted Education Loans which have not
been previously serviced in accordance with the Education Act and Regulations,
and which require additional servicing activity to attempt to maintain or
reinstate the loans' principal and interest guarantee from the Guarantor ("Cure
Procedures"). The Master Servicer shall cause the Subservicers, utilizing Cure
Procedures approved by the Guarantor, to use the Subservicers' best efforts to
cure all defects caused by the Trust or NSLF. The Master Servicer makes no
representation or warranty that the guarantee on each Education Loan will be
reinstated regardless of the Subservicers following the Cure Procedures as
approved by the Guarantor. The Trust and NSLF agree to pay the Master Servicer
those fees for Cure Procedures described in Schedule A under the topic entitled
"Additional Servicing Activity".
7. Portfolios Subject to Rejection by the Master Servicer. The Trust
and NSLF acknowledge that certain loan portfolio types pose a risk of financial
hardship for the Master Servicer and Subservicers to service under this
Agreement. The Master Servicer may in its discretion, prior to placing such
loans in the Subservicers' system, reject certain loans or loan portfolios
("Rejected Loans"). The Master Servicer shall provide the Trust, NSLF and the
Administrator with reasonable advance notice as to any Rejected Loans which the
Master Servicer declines to place on Master Servicer's system. The Master
Servicer shall have no right to reject or decline loans after the loans are
transferred to the Master Servicer's and the Subservicers' system.
8. Reports to the Trust or NSLF. On or before the 15th day of each
month (or by the 15th day following quarter end, as applicable), unless some
other time is provided herein, the Master Servicer shall cause the Subservicers
to prepare and deliver to the Trust, NSLF, if applicable, the Administrator and
the Trustee (upon Trustee's request), or to such other person as the Trust or
NSLF may designate, the following reports with respect to activity during the
preceding month:
(a) Daily Monetary Transaction Summary;
(b) Daily Lender Advice Report;
4
(c) Daily Transaction Journal;
(d) Daily Transaction Detail;
(e) Total Interest Report;
(f) Total Principal Report;
(g) Delinquency Detail;
(h) Claims Delinquency Detail;
(i) Computation of interest and Special Allowance Payments (currently
reported on ED Form 799). Master Servicer will also report all pertinent
information to the Department of Education on ED Form 799 (or such successor
report as may be applicable);
(j) ED Form 799 Supporting Reports: Total Principal Report; Part II
Origination/Lender Fees; Part III, IV Interest Benefits and Special Allowance
Report; Part III, IV Prior Quarter Subsidized Interest and Special Allowance;
Part V Changes in Loan Principal; Part VI Loan Portfolio Analysis.
The Trust, NSLF, if applicable, and the Administrator shall receive at
no cost one copy of each of the foregoing reports. The Master Servicer will
cause the Subservicer to provide extra copies at the request of the Trust, the
Administrator or NSLF. The Trust or NSLF, if applicable, shall reimburse the
Master Servicer for the cost in producing such extra copies.
9. Service Fee to the Master Servicer.
(a) Servicing Fees. The Trust or NSLF, if applicable, shall pay to the
Master Servicer, on or before the 25th day of each month, or within fifteen (15)
days of billing statement (which may be sent either by the Master Servicer or
the Subservicer), for and in consideration of the services performed by the
Master Servicer and Subservicer hereunder for the preceding month, the fee
provided for in Schedule A of this Agreement ("Servicing Fee"). In the event
Servicing Fees are not paid within thirty (30) days of the billing statement,
the Trust agrees that the Master Servicer will have the following rights to (a)
impose a late charge of one and one-half percent (1 1/2%) per month against the
entire outstanding balance of the past due Servicing Fee including any prior
late charge; and (b) terminate services without notice if nonpayment persists
for sixty (60) days from billing or more. The Servicing Fee and related charges
shall be paid only from the Trust Estate and only to the extent moneys are
available as provided for under the terms of the Indenture.
(b) Carryover Servicing Fees. The late fees described in 9(a) above and
any future additional fees provided for under this Section 9(b) shall be
referred to collectively as "Carryover Servicing Fees," and payment of such
Carryover Servicing Fees shall be deferred during any time that funds are not
available and sufficient to pay the same pursuant to the terms of the Indenture.
The parties agree that should Master Servicer be required to make material
changes to its current servicing practices or servicing system due to changes to
the Education Act, Regulations, and/or business environment, or to other costs
beyond the Master Servicer's control, including but not limited to postal fees,
the Master Servicer may renegotiate the Servicing Fees with the Trust to
5
reasonably reflect those increased costs at any time during the term of this
Agreement and that any additional fees imposed as a result of such renegotiation
shall be Carryover Servicing Fees. The Servicing Fee shall be subject to
renegotiation every three years, subject to the renegotiated fees meeting
approval of the Rating Agencies and any increase in the Servicing Fee as a
result of such renegotiation being deemed Carryover Servicing Fees. In the event
the parties cannot agree to new fees for each three year period, then either
party may terminate this Agreement upon 90 days written notice to the other.
10. Loan Payments. Student/parent borrowers will make all loan payments
to a third party lockbox established by the Subservicers. All cash receipts will
be remitted once a week to the Trustee for deposit into the Collection Fund. All
late fees collected by the Subservicers from student/parent borrowers shall be
remitted to the Trustee once a week for deposit into the Collection Fund as
well.
11. Disclosure of Information. All data, information, records,
correspondence, reports or other documentation received by the Master Servicer
or Subservicers pursuant to this Agreement from the Trust, the Administrator,
NSLF or the school which the student attended or from the student/parent
borrower, or prepared and maintained by the Master Servicer or Subservicers in
the course of its activities under this Agreement shall be released or divulged
only to the Trust, the Administrator, NSLF and the Trustee, or with respect to
information or documents relating to a particular student/parent borrower, to
that student/parent borrower, or to such other parties as the Master Servicer or
Subservicers may be directed in writing by the Trust, the Administrator, NSLF or
such student/parent borrower.
12. Intellectual Property Protection. Notwithstanding anything in this
Agreement to the contrary, it is the express intention of the parties to this
Agreement that all right, title and interest of whatever nature in the Master
Servicer's and/or Subservicers' user manuals, training materials, all computer
programs, routines, structures, layout, report formats, together with all
subsequent versions, enhancements and supplements to said programs, all
copyright rights (including both source and object code) and all oral or written
information relating to the Master Servicer's and/or Subservicers' programs
conveyed in confidence by the Master Servicer or Subservicers to the Trust, NSLF
or the Administrator pursuant to this Agreement which is not generally known to
the public and which give the Master Servicer or Subservicers an advantage over
their respective competitors who do not know or use such information
(hereinafter collectively referred to as "Trade Secrets"), and all other forms
of intellectual property of whatever nature is and shall remain the sole and
exclusive property of the Master Servicer and/or Subservicers.
13. Inquiries. The Master Servicer shall answer or shall cause the
Subservicers to answer all inquiries received by it pertaining to Education
Loans, school status or refunds, and the Trust, NSLF and the Administrator shall
cooperate to the extent necessary to gather the information needed to answer
such inquiries. Such inquiries may be referred to the school which the Student
Borrower attended or is attending, if necessary. Neither the Master Servicer nor
Subservicers shall have any responsibility for any disputes between
student/parent borrowers and schools regarding tuition, registration,
attendance, or quality of education/training.
6
14. Agent Authorization. The Trust and NSLF hereby authorize the Master
Servicer and Subservicers to act on behalf of and as the Trust's and NSLF's
agent, respectively, in the servicing of the Education Loans. Such authorization
will include but not be limited to all correspondence and liaison necessary with
Guarantor regarding the Trust's or NSLF's Education Loans, assignment of claims
to Guarantor and any or all other communications, correspondence, signatures or
other acts appropriate to service the Trust's or NSLF's Education Loans in
accordance with the Education Act and/or Regulations.
15. Liability of the Master Servicer and Subservicers. The Master
Servicer and the Subservicers assume no responsibility or liability for failure
of the Trust or NSLF to exercise reasonable care or due diligence and the
results thereof, in making or servicing an Education Loan prior to placing of
the Education Loan on Master Servicer's system and prior to the date the Trust
or NSLF holds ownership of the Education Loan. The Master Servicer and
Subservicers also assume no liability for the failure of any student/parent
borrower to repay his or her loan, nor the failure of the United States
government to pay any principal, interest, subsidy or special allowance, nor for
the failure of Guarantor to make payment of any principal and/or interest on any
of the Trust's or NSLF's Education Loans. The Master Servicer and Subservicers
shall not be responsible for consequences of unreasonable acts of any Guarantor.
In the event Subservicers shall take any action or fail to take any action which
causes any Education Loan in the Trust's or NSLF's portfolio to be denied the
benefit of any applicable guarantee, the Master Servicer and Subservicers shall
have a reasonable time to cause the benefits of the guarantee to be reinstated.
If the guarantee is not reinstated within twelve (12) months of denial by
Guarantor, the Master Servicer shall cause the Subservicers to pay the Trust or
NSLF an amount equal to the outstanding principal balance plus all accrued
interest and other fees due on the Education Loan to the date of purchase, less
the amount subject to the risk sharing under the Education Act and Regulations,
and thereupon the Subservicers shall be subrogated to all rights of the Trust
and NSLF respecting the applicable Education Loan, including without limitation
the right to collect on the Education Loan, the right to federal subsidies, and
agency authorization to litigate in accordance with the Subrogation Agreement
with the Subservicers. In such event, the Trust or NSLF agrees to perform such
further applicable acts as shall be necessary or appropriate to subrogate the
Education Loan to the Subservicers. For any subrogated Education Loan for which
the guarantee is fully reinstated by Guarantor, the Trust or NSLF, as
applicable, shall pay the Subservicers an amount equal to the then outstanding
principal balance plus all accrued interest due thereon, less the amount subject
to the risk sharing under the Education Act and Regulations, whereupon the
subrogation rights of the Subservicers shall terminate. In such event, the
Master Servicer agrees to cause the Subservicers to perform such further acts as
shall be necessary or appropriate to reconvey the Education Loan to the Trust or
NSLF. It is hereby acknowledged that the Master Servicer shall not be performing
any of the servicing activities described in this Agreement, and that the
Subservicers shall be responsible for performance of all such servicing duties.
As such, the Master Servicer shall have no liability of any nature whatsoever
arising out of or in connection with this Agreement for any negligent or
wrongful act or omission on the part of the Subservicers; provided, however,
that the Master Servicer hereby assigns, transfers and sets over unto the Trust
or NSLF, as applicable, all of the Master Servicer's rights and remedies against
the Subservicers as they pertain to the Trust's or NSLF's Education Loans.
7
16. Termination Option. If at any time during the term of this
Agreement any party refuses or fails to perform in a material fashion any
portion of this Agreement, and fails or refuses to correct said action or lack
of action within thirty (30) days after receipt of written notice, the other
party may, upon thirty (30) days written notice, terminate this Agreement.
Without limiting the generality of the foregoing sentence, the following shall
be deemed a failure or refusal to perform in a material fashion: (i) failure by
any Subservicer to make deposits to the Trustee of payments received with
respect to the Education Loans, (ii) failure or refusal to perform in any
material fashion any portion of this Agreement, including any failure to perform
or observe in any material respect any covenants or agreements contained herein,
or (iii) becoming subject to an event of bankruptcy. An event of bankruptcy
shall mean the commencement of a voluntary case or other proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or
other similar law, or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official, making a general assignment
for the benefit of creditors, declaring a moratorium with respect to one's debts
or failure to generally pay one's debts as they become due, or the commencement
of an involuntary case or other proceeding seeking liquidation, reorganization
or other relief under any bankruptcy, insolvency or other similar law, or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official, provided such action is not dismissed within 60 days. If any
default occurs as the result of the failure or refusal of a Subservicer to
perform, Master Servicer shall have the right, without any obligation, to cure
or correct such default of such Subservicer within thirty (30) days after
receipt of notice. If at any time the Master Servicer defaults by failure or
refusal to perform in a material fashion and such default remains unremedied
within thirty (30) days after receipt of written notice, then the Trustee or the
holders of not less than 25% of the Highest Priority Obligations may terminate
all the rights and obligations of Master Servicer upon thirty (30) days' written
notice. Following termination by the Trustee or the holders of not less than 25%
of the Highest Priority Obligations as provided above, a successor master
servicer appointed by the holders of not less than 25% of the Highest Priority
Obligations or the Trustee, or the Trustee itself, shall succeed to all the
responsibilities, duties and liabilities of Master Servicer under this Agreement
and will be entitled to similar compensation arrangements, upon receipt of a
Rating Confirmation; such compensation may not be greater than the servicing
fees to Master Servicer pursuant to this Agreement, unless such compensation
will not result in a downgrading or withdrawal of the then ratings of the Notes.
If the Trustee is unable or unwilling to act as successor to the Master
Servicer, the Trustee may appoint, or petition a court of competent jurisdiction
for appointment of, a successor whose regular business includes the servicing of
Education Loans. The holders of a majority of the Highest Priority Obligations,
in the case of any Master Servicer default which does not adversely affect the
Trustee or the holders of a majority of the Highest Priority Obligations may, on
behalf of all Noteholders, waive any default by the Master Servicer hereunder,
except a default in making any required deposits to or payments from any of the
funds established under the Indenture. No waiver will impact the Noteholders'
rights as to subsequent defaults. Failure to service an Education Loan in
accordance with the Education Act and Regulations, even if such failure results
in such Education Loan being denied the benefit of any applicable guarantee,
shall not be a material breach of this Agreement so long as the guarantee on
such affected Education Loan is reinstated or the Master Servicer and/or
Subservicers pay the Trust or NSLF the outstanding principal balance and all
accrued interest thereon, less the amount (if any) subject to risk sharing under
the Education Act and Regulations, all in accordance with Section 15 hereof.
8
17. Indemnification. The Trust and NSLF shall indemnify and hold the
Master Servicer and/or Subservicers harmless from and against all claims,
liabilities, losses, damages, costs and expenses (including reasonable
attorney's fees) asserted against or incurred by the Master Servicer and/or
Subservicers as a result of the Master Servicer and/or Subservicers complying
with any instruction or directive by the Trust, NLSF or the Administrator, and
the Master Servicer and/or Subservicers shall in like manner indemnify the Trust
and NSLF for any miscompliance with any such instruction or directive by the
Master Servicer and/or Subservicers. The Trust and NSLF shall further indemnify
and hold the Master Servicer and/or Subservicers harmless from and against all
claims, liabilities, losses, damages, costs and expenses (including reasonable
attorney's fees) asserted against or incurred by the Master Servicer and/or
Subservicers as a result of actions not the fault of or not caused by a
negligent act of the Master Servicer and/or Subservicers, and their respective
agents or employees, including all claims, liabilities, losses, damages and
costs caused by or the fault of the Trust or NSLF, a prior holder, owner or NSLF
or the Trust, a prior servicer or any other party connected in any manner to the
loan or loans resulting in the claim, liability, loss, damage or cost. All
obligations of the Trust shall be subject to the provisions, including the
priority of payments, set forth in the Indenture.
18. Statute of Limitations. Any action for the breach of any provisions
of this Agreement shall be commenced within one (1) year after the Education
Loan leaves the Master Servicer's servicing system.
19. Governing Law. This Agreement is executed and delivered within the
State of Colorado, and the parties hereto agree that it shall be construed,
interpreted and applied in accordance with the laws of that State, and that the
courts and authorities within the State of Colorado shall have sole jurisdiction
and venue over all controversies which may arise with respect to the execution,
interpretation and compliance with this Agreement.
20. Changes In Writing. This Agreement, including this provision
hereof, shall not be modified or changed in any manner except only by a writing
signed by all parties hereto.
21. Severability. In the event a court of competent jurisdiction finds
any of the provisions of this Agreement to be so overly broad as to be
unenforceable or invalid for any other reason, it is the parties' intent that
such invalid provisions be reduced in scope or eliminated by the court, but only
to the extent deemed necessary by the court to render the provisions of this
Agreement reasonable and enforceable.
22. Persons Bound. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their legal representatives, heirs,
successors and assigns.
23. Assignment. This Agreement shall not be assigned by either party
without the prior written consent of the other party which consent shall not be
unreasonably withheld; provided, however, that the Trust or NSLF may assign this
Agreement to the Trustee subject to the terms of Section 32 hereof, and the
Master Servicer may delegate the services required to be performed under this
Agreement or assign this Agreement to Subservicers. Any such delegation or
assignment of this Agreement to Subservicers, other than to Nelnet, may be made
only (i) upon notice to the Rating Agencies, and (ii) if the Subservicer is not
an Affiliate of the Master Servicer, upon receipt of a Rating Confirmation.
9
24. Mutual Release. Each of the parties to this Agreement releases the
other party from any and all claims, or causes of the other arising from any
event or transaction occurring prior to the execution of this Agreement. This
release is an independent covenant between the parties, and will survive any
termination of this Agreement.
25. Titles. The titles used in this Agreement are intended for
convenience and reference only. They are not intended and shall not be construed
to be a substantive part of this Agreement or in any other way to affect the
validity, construction or effect of any of the provisions of this Agreement.
26. Waiver. The waiver or failure of either party to exercise in any
respect any right provided for herein shall not be deemed a waiver of any
further right hereunder.
27. Continuity of Loan Servicing.
27.1 Other than Education Loans sold by the Trustee pursuant to Section
10.04 of the Indenture, the Trust hereby agrees that it will use its best
efforts to ensure that all Education Loans acquired, held, or sold by the Trust
under the Education Act and subject to this Agreement will remain with the
Master Servicer for the full term of this Agreement.
27.2 In the event the Trust desires to sell any of its Education Loans
(other than pursuant to Section 10.04 of the Indenture), the Trust will first
attempt to sell the Education Loans to an eligible lender maintaining an
agreement with the applicable Subservicer, in order for the sale to cause no
disruption in service, or change in Subservicer for the Borrower. Other than
Education Loans sold pursuant to Section 10.04 of the Indenture, should the
Trust (or the Trustee) decide to sell its Education Loans to an eligible lender
or holder which does not maintain an agreement with the Subservicers and does
not plan to have the Education Loans serviced by the applicable Subservicer, the
Master Servicer is hereby granted the right to arrange for the purchase of such
Education Loans by an eligible lender or holder maintaining an agreement with
the applicable Subservicer. Such purchase must be arranged within thirty (30)
days following the notice by the Trust or the Administrator of an intent to sell
such Education Loans, which notice must include sufficient information with
respect to the Education Loans to be sold. The Master Servicer has the right to
arrange for the sale of such Education Loans, provided the Master Servicer is
able to arrange for the sale of the Education Loans offering the same terms
secured by the Trust in its efforts to sell such Education Loans, subject to the
continuing servicing rights granted to the Subservicers.
27.3 Sections 27.1 and 27.2 do not apply in the event of the Master
Servicer's breach or default hereunder, or with respect to a sale of the
Education Loan to a holder of other loans for the same borrower.
10
27.4 The intent of this Section 27 is to assure that every Education
Loan will remain with the Subservicers for servicing for the life of the loan.
28. Removal Fee. Should the Trust remove any of its Education Loans
from a Subservicer's system prior to a scheduled termination or breach of this
Agreement, the Trust agrees to pay to the Master Servicer a removal fee of
Fifteen Dollars ($15.00) per loan transferred off such Subservicer's computer
system, this removal fee shall be in addition to those charges described in
Section 2.2 of this Agreement, and in addition to damages arising from a breach
of Section 27 hereof.
29. Force Majeure. The foregoing provisions of this Agreement are
subject to the following limitation: If by reason of a force majeure the Master
Servicer and/or Subservicers are unable in whole or in part to carry out any
agreement on its part herein contained, the Master Servicer and Subservicers
shall not be deemed in default during the continuance of such inability. The
term "force majeure" as used herein shall mean, without limitation, the
following: acts of God, strikes, lockouts, or other industrial disturbances;
acts of public enemies; order or restraint of any kind of the government of the
United States of America or of the State of Colorado or City of Aurora or any of
their departments, agencies or officials, or any civil or military authority;
insurrections; riots; landslides; earthquakes; fires; storms; droughts; floods;
explosions; breakage or accident to machinery, equipment, transmission pipes or
canals; or any other cause or event not reasonably within the control of the
Master Servicer and/or Subservicers.
30. Hiring. The Trust and NSLF agree that during the term of this
Agreement and any extensions or renewals thereof, and for one year thereafter,
neither the Trust nor NSLF shall solicit for hire, or knowingly allow its
employees to solicit for hire, any employees of the Master Servicer and
Subservicers without the prior written consent of the Master Servicer or
Subservicers, respectively.
31. Entire Agreement. This is the entire and exclusive statement of the
agreement between the parties, which supersedes and merges all prior proposals,
understandings and all other agreements oral and written, between the parties
relating to this Agreement.
32. Trustee as Third Party Beneficiary. This Agreement has been made
and entered into not only for the benefit of the Master Servicer, the Trust and
NSLF but also for the benefit of the Trustee in connection with the financing of
Eligible Loans, and upon assignment by the Trust to the Trustee, its provisions
may be enforced not only by the parties to this Agreement but by the Trustee.
The foregoing creates a permissive right on behalf of the Trustee and the
Trustee shall be under no duties or obligations hereunder.
This Agreement shall inure to the benefit of the Trustee and its
successors and assigns. Without limiting the generality of the foregoing, all
representations, covenants and agreements in this Agreement which expressly
confer rights upon the Trustee shall be for the benefit of and run directly to,
the Trustee, and the Trustee shall be entitled to rely on and enforce such
representations, covenants and agreements to the same extent as if it were a
party hereto. The foregoing creates a permissive right on behalf of the Trustee,
and the Trustee shall be under no duties or obligations hereunder.
11
If there is an Event of Default under the Indenture, the Trustee
forecloses on its security interest on the Education Loans, and the Trustee
seeks to become a party to this Agreement under this Section 32, then the
Trustee shall assume all duties and obligations of the Trust hereunder, in
accordance with and subject to the Indenture.
33. Servicing for NSLF. The Master Servicer agrees to perform all
covenants, duties and obligations of the Master Servicer as set forth in this
Agreement with respect to Education Loans owned by or on behalf of NSLF (or its
eligible lender trustee) and NSLF agrees to perform all covenants, duties and
obligations of the Trust as set forth in this Agreement with respect to such
Education Loans, all under the terms and conditions contained in this Agreement.
34. Limitation of Liability of Delaware Trustee. Notwithstanding
anything contained herein to the contrary, this Agreement has been executed by
Wilmington Trust Company, not in its individual capacity, but solely in its
capacity as Delaware Trustee, and in no event shall Wilmington Trust Company in
its individual capacity or any beneficial owner of the Trust have any liability
for the representations, warranties, covenants, agreements or other obligations
of the Trust hereunder, as to all of which recourse shall be had solely to the
assets of the Trust.
35. No Petition. The Master Servicer will not at any time institute
against the Trust any bankruptcy proceeding under any United States federal or
state bankruptcy or similar law in connection with any obligations of the Trust
under this Agreement.
[REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
12
IN WITNESS WHEREFORE, the parties hereto have executed this Agreement as
of the date first written above.
National Education Loan Network, Nelnet Student Loan Trust 2004-4,
f/k/a Nelnet, Inc., a Nevada a Delaware Statutory Trust
corporation, as Master Servicer
By: Wilmington Trust Company, not
in its individual capacity, but
solely as Delaware Trustee
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxxxx
------------------------------- -----------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxx X. Xxxxxxxx
Title: Chief Financial -----------------------------
Officer/Executive Director (Please print)
Title: Financial Services Officer
National Education Loan Network, Inc., Nelnet Student Loan Funding, LLC,
f/k/a Nelnet, Inc., a a Delaware limited liability
Nevada corporation, as Administrator company
By: Nelnet Student Loan Funding
Management Corporation as
Manager and Special Member
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxxx
------------------------------- ---------------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxxxxx
Title: Chief Financial Title: Vice President
Officer/Executive Director
13
SCHEDULE "A"
A. Loan Origination Fee (Where Applicable).
Six Dollars ($6.00) per loan for Xxxxxxxx, SLS and PLUS loan.
Fifty-five Dollars ($55.00) per loan for Consolidated loans (if
applicable). In addition, reimbursement for costs in the event a credit
evaluation of the borrower is to be performed by the Master Servicer.
B. Conversion Fee.
Five Dollars ($5.00) per account acquired by the Trust and added to the
Subservicer Servicing System during the period of time the borrower is
in school. For periods of time other than when the borrower is in
school, the fee will be Ten Dollars ($10.00) per account. There shall
be no charge for loans already on the Master Servicer's full servicing
system.
Notwithstanding the foregoing, should any portfolio present an
"Extraordinary Conversion", requiring additional conversion services
materially beyond that customarily provided for a normal acquisition of
Education Loans, then the Trust agrees to pay a conversion fee mutually
agreed to between the Trust and the Master Servicer.
For purposes of this Agreement, whether a portfolio presents an
Extraordinary Conversion shall be determined after the data analysis
and file review, have been conducted of the portfolio by the Master
Servicer. Factors to consider in determining whether a portfolio
presents an Extraordinary Conversion are as follows:
1. Unprocessed data.
2. Degree to which the conversion may be automated versus manual.
3. Integrity of the documentation. Are the files complete? Does the
data match the file content?
4. The Trust adherence to its obligations and delivery schedules.
5. Presence of backlogged processing in the portfolio.
6. Whether prior servicing had substantial noncompliance with the
Education Act and Regulations.
14
7. Condition of the hard copy file documentation.
After consideration of the foregoing factors, the Trust and the Master
Servicer agree to come to mutual agreement at the beginning and once
again at the end of the conversion of a particular portfolio as to
whether they need to negotiate a mutually agreeable conversion fee.
C. Internal Transfers. Transfers from one customer identification number
to a different customer identification number will be One Dollar and
Fifty Cents ($1.50) per account transferred.
D. Monthly Servicing Fee - GSL (Xxxxxxxx) Loans in School, Grace,
Deferment or Forebearance Status.
0.90% annualized, plus Carry-Over Servicing Fees
E. Monthly Servicing Fee - GSL (Xxxxxxxx, PLUS, SLS) Loans in Repayment
Status.
0.90% annualized plus Carry-Over Servicing Fees
F. Consolidated Loans.
0.50% annualized, plus Carry-Over Servicing Fees
G. Billing for Servicing Fees.
The full monthly servicing fee shall be paid commencing with the
calendar month an account is disbursed on or converted to the
Subservicer system.
H. Additional Servicing Activity.
Thirty-five Dollars ($35.00) per Education Loan referred for such cure
services, plus ten percent (10%) of all sums made eligible for
reinstatement of guarantee (including principal, interest and special
allowance) as a result of successful performance of the Cure Procedures
required by Guarantor. (This fee shall not apply to loans that have
lost their guarantee due to an error or omission of the Master
Servicer.)
I. Minimum Monthly Fee.
There will be a minimum monthly fee of Seven Hundred and Fifty Dollars
($750.00) per month.
J. Removal Fee. Loans transferred off the Subservicer Servicing System
prior to termination of this Agreement will be assessed a fee of
Fifteen Dollars ($15.00) per account.
K. Deconversion Fee. Loans transferred off the Subservicer Servicing
System on or after termination of this Agreement will be assessed a fee
of Twelve Dollars ($12.00) per account.
15
L. Reconciliation of Guarantee Billing.
Eighty cents ($.80) per account for the first disbursement.
M. PLUS (or Other Loan) Loan Credit Checks. Fees for obtaining a credit
bureau report and evaluation will be Two Dollars and Fifty Cents
($2.50) per loan application. An additional fee of Fifty Cents ($.50)
will be charged for those applications in which written authorization
must first be obtained prior to pulling a credit bureau report.
N. Other Services
For services requested by the Trust that are beyond the scope of those
described in this Agreement, the fees shall be assessed as follow:
(1) Supplies Cost Plus 15%
(2) Training $40.00 per hour
(3) Programming $70.00 per hour
(4) Consulting $80.00 per hour
Projects and services of this type shall be provided only after request
by the Trust and after time and total cost estimate is provided by the
Master Servicer.
O. Legal Opinions
Cost plus five percent (5%).
16
