Exhibit 10.54
EXECUTION COPY
INDEMNITY AGREEMENT
AGREEMENT dated as of January 29, 2003, among Banc of America
Securities LLC and Deutsche Bank Securities Inc. (the "Representatives") on
behalf of the other underwriters listed on Schedule A to the Underwriting
Agreement referred to below (each an "Underwriter" and collectively, with the
Representatives, the "Underwriters") and Nelnet Loan Services, Inc., a Nebraska
corporation (the "Company").
WHEREAS, the Representatives have entered into an underwriting
agreement dated January 29, 2003 (the "Underwriting Agreement") with Nelnet
Student Loan Funding, LLC, a Delaware limited liability company ("Nelnet
Funding"), pursuant to which Nelnet Funding has agreed to cause Nelnet Student
Loan Trust 2003-1, a Delaware statutory trust (the "Issuer"), to sell, and the
Underwriters have agreed to purchase, subject to the conditions set forth in the
Underwriting Agreement, the Issuer's Student Loan Asset-Backed Notes (the
"Notes"), which Notes are being offered for sale by the Underwriters pursuant to
a Prospectus dated January 17, 2003 and a Prospectus Supplement dated January
30, 2003 (collectively, the "Prospectus"), included as part of the Issuer's
Registration Statement on Form S-3 (Registration No. 333-82280) (the
"Registration Statement"); and
WHEREAS, the Notes will be secured by, among other things, a pool of
Financed Eligible Loans that will be master serviced by Nelnet, Inc. pursuant to
a Master Servicing Agreement dated as of January 1, 2003 (the "Servicing
Agreement") among the Issuer, Nelnet, Inc., as master servicer and
administrator, and Nelnet Funding;
WHEREAS, the parties hereto wish to set forth their understanding
concerning certain matters relating to indemnification and contribution;
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows.
1. DEFINED TERMS. Capitalized terms used herein but not otherwise
defined shall have the respective meanings set forth in the Underwriting
Agreement.
2. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, and each person, if any, who controls an Underwriter
within the meaning of either Section 15 of the Securities Act of 1933
(the "1933 Act") or Section 20 of the Securities Exchange Act of 1934
(the "1934 Act") from and against any and all losses, claims, damages,
liabilities and expenses arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement, the Prospectus, or in any amendment or
supplement thereto, or any preliminary prospectus, or arising out of or
based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not
misleading, except to the extent Nelnet Funding is not obligated to
indemnify the Underwriters pursuant to Section 5 (a) of the
Underwriting Agreement. The foregoing indemnity agreement shall be in
addition to any liability which the Company may otherwise have.
(b) If any action, suit or proceeding shall be brought
against an Underwriter or any person controlling an Underwriter in
respect of which indemnity may be sought against the Company, the
applicable Underwriter or such controlling person shall promptly
notify the parties against whom indemnification is being sought (the
"indemnifying parties"), but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party under Sections 2(a) and 2(c) hereof except to the
extent that the indemnifying party is materially prejudiced by such
omission, and in no event shall the omission so to notify relieve the
indemnifying party from any liability which it may otherwise have. In
case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein and, to the
extent that it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying
party). The applicable Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action, suit or
proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or
such controlling person unless (i) the indemnifying parties have agreed
in writing to pay such fees and expenses, (ii) the indemnifying parties
have failed to assume the defense and employ counsel, or (iii) the
named parties to any such action, suit or proceeding (including any
impleaded parties) include both such Underwriter or such controlling
person and the indemnifying parties and such Underwriter or such
controlling person shall have been advised by its counsel that there
may be one or more legal defenses available to it which are different
from or additional to or in conflict with those available to the
indemnifying parties and in the reasonable judgment of such counsel it
is advisable for such Underwriter or such controlling person to employ
separate counsel (in which case the indemnifying party shall not have
the right to assume the defense of such action, suit or proceeding on
behalf of such Underwriter or such controlling person). It is
understood, however, that the indemnifying parties shall, in connection
with any one such action, suit or proceeding or separate but
substantially similar or related actions, suits or proceedings in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of only
one separate firm of attorneys (in addition to any local counsel) at
any time for an Underwriter and controlling persons not having actual
or potential differing interests with such Underwriter or among
themselves, which firm shall be designated in writing by such
Underwriter, and that all such fees and expenses shall be reimbursed on
a monthly basis as provided in paragraph (a) hereof. An indemnifying
party will not, without the prior written consent of the indemnified
party, settle or compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each
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indemnified party from all liability arising out of such claim, action,
suit or proceeding and does not include a statement as to, or an
admission of, fault, culpability or a failure to act by or on behalf of
an indemnified party.
(c) If the indemnification provided for in this Agreement
is unavailable to an indemnified party under paragraph (a) hereof in
respect of any losses, claims, damages, liabilities or expenses
referred to therein, then an indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or expenses (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on
the one hand and the applicable Underwriter on the other hand from the
sale of the Notes, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the Company on the one
hand and the applicable Underwriter on the other in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the
one hand and the applicable Underwriter on the other shall be deemed to
be in the same proportion as the total gross proceeds from the sale of
the Notes bear to the total underwriting discounts and commissions
received by the applicable Underwriter in connection with the sale of
the Notes. The relative fault of the Company on the one hand and the
applicable Underwriter on the other hand shall be determined by
reference to, among other things, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(d) The Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Agreement
were determined by a pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations
referred to in paragraph (c) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in paragraph (c) above shall be
deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party
in connection with defending any such action, suit or proceeding.
Notwithstanding the provisions of this Agreement, no Underwriter shall
be required to contribute any amount in excess of the amount by which
the total underwriting discounts and commissions received by such
Underwriter with respect to the Notes underwritten by such Underwriter
exceed the sum of the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission and the amount of any
damages such Underwriter has been required to pay under the
Underwriting Agreement. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx)
shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
(e) Any losses, claims, damages, liabilities or expenses
for which an indemnified party is entitled to indemnification or
contribution under this Agreement shall be paid by the indemnifying
party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred. The indemnity and contribution
agreements
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contained in this Agreement shall remain operative and in full force
and effect, regardless of (i) any investigation made by or on behalf of
the Underwriters, or any person controlling it or its directors or
officers, (ii) acceptance of any Notes and payment therefor hereunder,
and (iii) any termination of this Agreement and the Underwriting
Agreement. A successor to an Underwriter, the Company or any person
controlling any of them or their respective directors or officers,
shall be entitled to the benefits of the indemnity, contribution and
reimbursement agreements contained in this Agreement.
3. NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed, by
registered or certified mail, return receipt requested, or, if by other means,
when received by the other parties at the address set forth for such parties in
the Underwriting Agreement (in the case of the Underwriters) or the Servicing
Agreement (in the case of the Company), or such other address as may hereafter
be furnished to the other parties by like notice. Any such demand, notice or
communication hereunder shall be deemed to have been received on the date
delivered to or received at the premises of the addressee (as evidenced, in the
case of registered or certified mail, by the date noted on the return receipt).
4. COUNTERPARTS. For the purpose of facilitating proving this
Agreement, and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts. Each counterparts shall be deemed to be an
original, and all such counterparts shall constitute one and the same
instrument.
5. GOVERNING LAW. The Agreement shall be construed in accordance
with the laws of the State of New York and the obligations, rights and remedies
of the parties hereunder shall be determined in accordance with the laws of the
State of New York, except to the extent preempted by Federal Law.
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IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respected officers thereunto duly authorize as of the
date first above written.
NELNET LOAN SERVICES, INC.
By /s/ Xxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
Title: Senior vice President
BANC OF AMERICA SECURITIES LLC,
acting on behalf of itself and as Representative
of the Underwriters
By /s/ Xxxxxxxxxxx X. Xxxxx
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Name: Xxxxxxxxxxx X. Xxxxx
Title: Managing Directors
DEUTSCHE BANK SECURITIES INC.,
acting on behalf of itself and as Representative
of the Underwriters
By /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Vice President
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