EXHIBIT 99.2
MASTER SERVICING AGREEMENT
This Master Servicing Agreement (the "Agreement") entered into and
effective as of the 1st day of July, 2005, by and among National Education Loan
Network, 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 2005-3, a
Delaware statutory trust ("Trust"), and Nelnet Student Loan Funding, LLC, a
Delaware limited liability company ("NSLF").
WHEREAS, Nelnet, Inc. ("Nelnet") and other subservicing agents as
approved by the Trust in writing from time to time (each, a "Subservicer" and
collectively, the "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, 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, 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 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 July
1, 2005; 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 July 1, 2005, between Zions
First National Bank, as indenture trustee (the "Trustee") and eligible lender
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 July 1, 2005
(the "Trust Agreement"), between NSLF and Xxxxx Fargo Delaware Trust Company, as
Delaware Trustee, (ii) early termination after material default by the Master
Servicer as provided for in Section 16 hereof, or (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. 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 computer program are trade secrets of, proprietary to, and
owned exclusively by the Master Servicer. 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 Subservicers 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. The 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 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 the appropriate
Guarantor.
(i) Subservicers shall provide data as required by any 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
Education Loan servicing activities, the Master Servicer may rely on, without
independently verifying, all data entries, manipulations and representations
provided to the 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 the Master Servicer electronically, via the internet or
otherwise, and that the 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 the 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 and the Subservicers'
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). The 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 Subservicers 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 Nelnet or the Subservicers), for and in consideration
of the services performed by the Master Servicer and Subservicers
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 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 due
from the Trust 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. Any future additional fees provided for
under this Section 9(b) due from the Trust 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
5
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 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 at least 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 Nelnet's 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 Nelnet's programs conveyed in confidence by the Master
Servicer or Nelnet 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 Nelnet 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 Nelnet.
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 a Guarantor regarding the Trust's or NSLF's
Education Loans, assignment of claims to the 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 any
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 a Subservicer 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 such Subservicer 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 a Guarantor,
the Master Servicer shall cause the Subservicer 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 Subservicer 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
Subservicer. 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 Subservicer. For any subrogated
Education Loan for which the guarantee is fully reinstated by Guarantor,
the Trust or NSLF, as applicable, shall pay such Subservicer 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 Subservicer shall terminate. In such event, the Master Servicer
agrees to cause the Subservicer to perform such further acts as shall be
necessary or appropriate to reconvey the Education Loan to the Trust or
NSLF. In the event that the Subservicer fails or refuses to purchase an
Education Loan in accordance with the provisions set forth above for a
period of thirty (30) days or more, the Master Servicer shall purchase
such Education Loan in the manner described above, and thereupon the
Master Servicer shall have all rights and duties that the Subservicer
would have otherwise had with respect to such Education Loan as set
forth in this Section 15 if the Subservicer had so purchased such
Education Loan. 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
7
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.
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, the 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 Registered
Owners 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
Registered Owners of not less than 25% of the Highest Priority
Obligations as provided above, a successor master servicer appointed by
the Registered Owners 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 Registered Owners of a
majority of the Highest Priority Obligations, in the case of any Master
8
Servicer default which does not adversely affect the Trustee 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.
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.
9
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.
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 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.
10
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.
27.4 The intent of this Section 27 is to assure that every Education
Loan subserviced by Nelnet will remain with Nelnet, for servicing for the life
of the loan.
28. REMOVAL FEE. Should the Trust or NSLF 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 without the
prior written consent of the Master Servicer.
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.
11
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.
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
Xxxxx Fargo Delaware Trust Company, not in its individual capacity, but solely
in its capacity as Delaware Trustee, and in no event shall Xxxxx Fargo Delaware
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 Master
Servicing Agreement as of the date first written above.
National Education Loan Network, Inc., Nelnet Student Loan Trust 2005-3,
a Nevada corporation, as Master Servicer a Delaware Statutory Trust
By: Xxxxx Fargo Delaware Trust
Company, not in its individual
capacity, but solely as Delaware
Trustee
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxx Xxxxxxx Xxxxxx
------------------------------- -----------------------------------
Name: Xxxxx X. Xxxxxx Name: Xxx Xxxxxxx Xxxxxx
Title: Chief Financial Officer/Executive -----------------------------------
Director (Please print)
Title: Vice President
-----------------------------------
National Education Loan Network, Inc., Nelnet Student Loan Funding, LLC, a
a Nevada corporation, as Administrator Delaware limited liability 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 Officer/Executive Title: Vice President
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.
7. Condition of the hard copy file documentation.
14
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
