Exhibit 99.2
MASTER SERVICING AGREEMENT
This Master Servicing Agreement (the "Agreement") entered into and
effective as of the 1st day of July, 2003, by and among Nelnet, Inc., a Nevada
corporation, acting as Servicer (in its capacity as such, the "Servicer") and
acting as Administrator (acting in its capacity as such, the "Administrator"),
Nelnet Student Loan Trust 2003-2, a Delaware statutory trust ("Trust") and
Nelnet Student Loan Funding, LLC, a Delaware limited liability company ("NSLF").
WHEREAS, Nelnet Loan Services, Inc. ("Loan Services") 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 Servicer to (i) retain
Loan Services to process and service certain of the Education Loans and for Loan
Services to act as subservicer under the terms of that certain Nelnet Loan
Services, Inc. Subservicing Agreement between the Servicer and Loan Services,
dated as of July 1, 2003; 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 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, 2003, between Zions
First National Bank as Trustee (the "Trustee"), and the Trust.
2. Term.
2.1 The term of the Agreement shall continue until the earlier of (i)
termination of the Indenture and the Trust Agreement dated as of July 1, 2003
(the "Trust Agreement") between NSLF and Wilmington Trust Company, as Delaware
Trustee, (ii) early termination after material default by the Servicer as
provided for in Section 16 of this Agreement, and (iii) the Education Loans
serviced under this Agreement are paid in full.
2.2 Upon the termination of this Agreement, the 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 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 Servicer and/or any Subservicer. The
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 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 Servicer's
and/or any Subservicer's computer program are trade secrets of, proprietary to,
and owned exclusively by the 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 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 Servicer's scheduling requirements, the Trust or NSLF may from
time to time deliver or cause to be delivered to the 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 Servicer all such loan
documentation as required by the Servicer to enable it to service the Converted
Education Loans as provided herein (the "Loan Documentation"). Upon receipt of
the Loan Documentation, the Servicer shall cause the Subservicer to verify only
the presence of the promissory note, the original Borrower application and proof
of disbursement. The 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 Servicer's
review of the portfolio. However, the 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.
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 Servicer will not be responsible for any Guarantor claim rejects or
interest denials due to untimely guarantee claim filing.
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4. Servicing of Converted Education Loans. Upon acceptance of any
Converted Education Loan into the Servicer's computer system and after the sale
date (if applicable) of the Converted Education Loan to the Trust or NSLF, the
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
below.
(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 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 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 Servicer under this Agreement.
5. System Updates. The Trust and NSLF agree that in the course of its
Servicer's Education Loan servicing activities, Servicer may rely on, without
independently verifying, all data entries, manipulations and representations
provided to Servicer by the Trust, NSLF, the Administrator, Eligible
Institutions and Borrowers with respect to the Education Loans, including but
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not limited to, eligible Institutions/Borrower certification, eligibility,
enrollment, and Eligible Institution or Borrower demographics, including data
entries provided to Servicer electronically, via the internet or otherwise, and
that 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 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 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
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 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 Servicer those fees for Cure Services described
in Schedule A under the topic entitled "Additional Servicing Activity".
7. Portfolios Subject to Rejection by the Servicer. The Trust and NSLF
acknowledge that certain loan portfolio types pose a risk of financial hardship
for the Servicer and Subservicers to service under this Agreement. The Servicer
may in its discretion, prior to placing such loans in the Subservicers' system,
reject certain loans or loan portfolios ("Rejected Loans"). The Servicer shall
provide the Trust, NSLF and the Administrator with reasonable advance notice as
to any Rejected Loans which the Servicer declines to place on Servicer's system.
The Servicer shall have no right to reject or decline loans after the loans are
transferred to the 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 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;
(c) Daily Transaction Journal;
(d) Daily Transaction Detail;
(e) Total Interest Report;
(f) Total Principal Report;
(g) Delinquency Detail;
(h) Claims Delinquency Detail;
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(i) Computation of interest and Special Allowance Payments (currently
reported on ED Form 799). 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 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
Servicer for the cost in producing such extra copies.
9. Service Fee to the Servicer.
(a) Servicing Fees. The Trust or NSLF, if applicable, shall pay to the
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 Servicer or the
Subservicer), for and in consideration of the services performed by the 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 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 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 Servicer's control, including but not limited to postal fees, the
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 once a week to the Trustee for deposit into the Collection Fund. All
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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 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 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 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
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 Servicer's and/or Subservicers' programs conveyed in
confidence by the 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 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 Servicer and/or Subservicers.
13. Inquiries. The 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 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.
14. Agent Authorization. The Trust and NSLF hereby authorize the
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 Servicer and Subservicers. The 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
Servicer's system and prior to the date the Trust or NSLF holds ownership of the
Education Loan. The 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
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principal and/or interest on any of the Trust's or NSLF's Education Loans. The
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
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 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 Trust 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 principle balance plus all accrued interest
due thereon, less the amount subject to the Trust Risk Sharing under the
Education Act and Regulations, whereupon the subrogation rights of the
Subservicers shall terminate. In such event, the 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 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 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 Servicer hereby assigns, transfers and
sets over unto the Trust or NSLF, as applicable, all of the 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
the 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
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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, 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
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 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 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 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 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 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 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.
17. Indemnification. The Trust and NSLF shall indemnify and hold the
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 Servicer and/or Subservicers as a result of
the Servicer and/or Subservicers complying with any instruction or directive by
the Trust, NLSF or the Administrator, and the Servicer and/or Subservicers shall
in like manner indemnify the Trust and NSLF for any miscompliance with any such
instruction or directive by the Servicer. The Trust and NSLF shall further
indemnify and hold the 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 Servicer and/or
Subservicers as a result of actions not the fault of or not caused by a
negligent act of the 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 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
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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
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 Loan Services, may be made only
(i) upon notice to the Rating Agencies, and (ii) if the Subservicer is not an
Affiliate of the 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 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 Act and subject to this Agreement will remain with the 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
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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
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 Servicer has the right to arrange
for the sale of such Education Loans, provided the 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 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 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 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
Servicer and/or Subservicers are unable in whole or in part to carry out any
agreement on its part herein contained, the 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
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 Servicer and Subservicers
without the prior written consent of the 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.
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32. Trustee as Third Party Beneficiary. This Agreement has been made and
entered into not only for the benefit of the 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.
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 Servicer agrees to perform all covenants,
duties and obligations of the 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 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.]
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IN WITNESS WHEREFORE, the parties hereto have executed this Agreement as
of the date first written above.
Nelnet, Inc., a Nevada corporation, as Nelnet Student Loan Trust 2003-2, a
Servicer Delaware Statutory Trust
By: Wilmington Trust Company, not in
its individual capacity, but solely as
Delaware Trustee
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxxx Xxxxx
---------------------------------- -------------------------------------
Name: Xxxxx X. Xxxxxx Name: Xxxxxxxx Xxxxx
Title: Chief Financial Officer/Treasurer (Please print)
Title: Assistant Vice President
Nelnet, Inc., a Nevada corporation, as Nelnet Student Loan Funding, LLC, a
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/Treasurer Title: Vice President
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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 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 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 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 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.
After consideration of the foregoing factors, the Trust and the 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.
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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.
0.60% 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 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 ($12.00) per account.
L. Reconciliation of Guarantee Billing.
Eighty cents ($.80) per account for the first disbursement.
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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
Servicer.
O. Legal Opinions
Cost plus five percent (5%).
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