Exhibit 99.2
MASTER SERVICING AGREEMENT
This Master Servicing Agreement (the "Agreement") entered into and
effective as of the 15th day of April, 2008, by and among National Education
Loan Network, Inc., a Nevada corporation, acting as master servicer (acting in
its capacity as such, the "Master Servicer") and acting as administrator (acting
in its capacity as such, the "Administrator"), Nelnet Student Loan Trust 2008-3,
a Delaware statutory trust ("Trust"), and Nelnet Student Loan Funding, LLC, a
Delaware limited liability company ("NSLF").
WHEREAS, Nelnet, Inc. ("Nelnet"), ▇▇▇▇▇▇ ▇▇▇ Servicing, a division of
▇▇▇▇▇▇ Mae, Inc. ("▇▇▇▇▇▇ ▇▇▇") 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, the 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, the 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 April
15, 2008; (ii) cause ▇▇▇▇▇▇ Mae to continue to process certain of the Education
Loans under the Servicing Agreement dated as of May 1, 1999, as amended or
supplemented, between ▇▇▇▇▇▇ ▇▇▇ (as successor to USA Group Loan Services, Inc.)
and Nelnet (as successor to InTuition, Inc.) and (iii) 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
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 April 15, 2008, between Zions
First National Bank, as indenture trustee (the "Trustee") and eligible lender
trustee, and the Trust.
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 April 11, 2008
(the "Trust Agreement"), between NSLF and M&T Trust Company of Delaware, 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.
3
(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.
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.
(a) MONTHLY REPORTS. 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:
4
(i) Daily Monetary Transaction Summary;
(ii) Daily Lender Advice Report;
(iii) Daily Transaction Journal;
(iv) Daily Transaction Detail;
(v) Total Interest Report;
(vi) Total Principal Report;
(vii) Delinquency Detail;
(viii) Claims Delinquency Detail;
(ix) Computation of interest and Special Allowance
Payments (currently reported on ED LaRS 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);
(x) ED LaRS 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;
(xi) Such other reports as become necessary to provide the
information required by Item 1121 of Regulation AB, promulgated by the
Securities and Exchange Commission.
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.
(b) ANNUAL REPORTS.
(i) OFFICER'S CERTIFICATE. On or before March 30 of each
year after the date of this Agreement, the Master Servicer shall provide
to the Trust or NSLF an officer's certificate of the Master Servicer
stating that (i) a review of the Master Servicer's activities during the
preceding 12-month period (or during the period of its performance under
this Master Servicing Agreement if shorter) and its performance under
this Master Servicing Agreement has been conducted under such officer's
supervision, and (ii) to the best of such officer's knowledge, based on
such review, the Master Servicer has fulfilled all of its obligations
under this Master Servicing Agreement in all material respects
throughout the period, or if there has been a failure to fulfill any
such obligation in any material respect, specifying each such failure
known to such officer and the nature and status thereof.
5
(ii) REGULATION AB REPORTS. For each year in which the
Trust is subject to the reporting obligations of the Securities Exchange
Act of 1934, the Master Servicer shall provide, and shall cause all
Subservicers to provide, annually to the Trust a report on assessment of
compliance with servicing requirements for asset-backed securities in
compliance with Item 1122 of Regulation AB promulgated by the Securities
and Exchange Commission.
(iii) ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS'
REPORTS. For each year in which the Trust is subject to the reporting
obligations of the Securities Exchange Act of 1934, the Master Servicer
shall provide, and shall cause all Subservicers to provide, on or before
March 30 of each year, a report and attestation in compliance with Item
1122(b) of Regulation AB, addressed to the Trust, relating to the
servicing of the Education Loans during the preceding calendar year (or,
in the case of the first such report, during the period from the date of
Issuance to December 31, 2008).
Each such report will also indicate that the firm is independent of the
Master Servicer or Subservicer within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public
Accountants.
(c) DELIVERY ADDRESS. All such monthly and annual reports as
described in Sections 8(a) and 8(b), to be furnished to the Trust, NSLF, if
applicable, and the Administrator, shall be sent or delivered to: Loan
Acquisitions and Compliance Department, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
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.
6
(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 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 to the Trustee for deposit into the Collection Fund within two (2)
Business Days following posting of such receipts. All late fees collected by the
Subservicers from student/parent borrowers shall be remitted to the Trustee,
within two (2) Business Days following posting of such late fees, 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.
7
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 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.
8
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 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.
9
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.
10
22. PERSONS BOUND. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their legal representatives, heirs, successors
and assigns.
23. ASSIGNMENT. This Agreement shall not be assigned by either party
without the prior written consent of the other party which consent shall not be
unreasonably withheld; provided, however, that the Trust or NSLF may assign this
Agreement to the Trustee subject to the terms of Section 32 hereof, and the
Master Servicer may delegate the services required to be performed under this
Agreement or assign this Agreement to Subservicers. Any such delegation or
assignment of this Agreement to Subservicers, other than to Nelnet, may be made
only (i) upon notice to the Rating Agencies, and (ii) if the Subservicer is not
an Affiliate of the Master Servicer, upon receipt of a Rating Confirmation.
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.
11
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.
12
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
M&T Trust Company of Delaware, not in its individual capacity, but solely in its
capacity as Delaware Trustee, and in no event shall M&T Trust Company of
Delaware 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.]
13
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 2008-3,
a Nevadacorporation, as Master Servicer a Delaware Statutory Trust
By: M&T Trust Company of Delaware,
not in its individual capacity,
but solely as Delaware Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------- ---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer --------------------------------
(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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------ -----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer Title: Assistant Vice President
14
SCHEDULE "A"
A. LOAN ORIGINATION FEE (Where Applicable).
Twenty-Five Dollars ($25.00) per loan for ▇▇▇▇▇▇▇▇, SLS and PLUS loan.
Seventy-five Dollars ($75.00) 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.
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.
15
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 - LOANS IN SCHOOL STATUS.
The lesser of (i) $2.25 per Borrower, subject to an annual increase for
inflation not to exceed 2% per annum, or (ii) 1/12 of 90 basis points
(0.90%) of the outstanding principal balance of serviced Loans; plus
Carry-Over Servicing Fees
E. MONTHLY SERVICING FEE - LOANS IN ANY STATUS OTHER THAN IN SCHOOL.
The lesser of (i) $3.25 per Borrower, subject to an annual increase for
inflation not to exceed 2% per annum, or (ii) 1/12 of 90 basis points
(0.90%) of the outstanding principal balance of serviced Loans; plus
Carry-Over Servicing Fees
F. ADDITIONAL CHARGES ON DELINQUENT LOANS.
In addition to the fees as set forth in (D) or (E) above, a monthly fee
of $2.25 per Borrower.
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 ($12.00) per account.
16
L. RECONCILIATION OF GUARANTEE BILLING.
Eighty cents ($.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%).
17