EXHIBIT 1.2
PRICING AGREEMENT
DEUTSCHE BANK SECURITIES INC.
00 XXXX 00xx XXXXXX
XXX XXXX, XXX XXXX 00000
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
4 WORLD FINANCIAL CENTER, 10th FLOOR
000 XXXXX XXXXXX
XXX XXXX, XXX XXXX 00000
AND
XXXXXX XXXXXXX & CO. INCORPORATED
0000 XXXXXXXX, 0xx XXXXX
XXX XXXX, XXX XXXX 00000
AS REPRESENTATIVES OF THE SEVERAL
UNDERWRITERS NAMED ON SCHEDULE I HERETO
January 24, 2003
Ladies and Gentlemen:
SLM Funding LLC, a Delaware limited liabilty company (the "Company"),
and the Student Loan Marketing Association, a corporation formed under the laws
of the United States ("Xxxxxx Mae"), propose, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated January 24,
2003 (the "Underwriting Agreement"), between the Company and Xxxxxx Xxx, on the
one hand, and Deutsche Bank Securities Inc., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated and Xxxxxx Xxxxxxx & Co. Incorporated, on the other hand,
that the Company will cause the trust (the "Trust") formed pursuant to the Trust
Agreement dated as of January 1, 2003 between the Company and Chase Manhattan
Bank USA, National Association, as trustee (the "Eligible Lender Trustee"), to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the Student Loan-Backed Notes (the "Notes") specified in
Schedule II hereto (the "Designated Securities"). The Notes will be issued and
secured pursuant to the Indenture, dated as of January 1, 2003 (the
"Indenture"), between The Bank of New York, as trustee (the "Indenture
Trustee").
Except as modified pursuant to Schedule II hereto, each of the
provisions of the Underwriting Agreement is incorporated herein by reference in
its entirety, and shall be deemed to be a part of this Agreement to the same
extent as if such provisions had been set forth in full herein; and each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Pricing Agreement, except that each
representation and
warranty which refers to the Prospectus in Section 2 of the Underwriting
Agreement shall be deemed to be a representation or warranty as of the date of
the Underwriting Agreement in relation to the Prospectus (as therein defined),
and also a representation and warranty as of the date of this Pricing Agreement
in relation to the Prospectus as amended or supplemented relating to the
Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined.
The Representatives designated to act on behalf of the Representatives
and on behalf of each of the Underwriters of the Designated Securities pursuant
to Section 12 of the Underwriting Agreement and the address of the
Representatives referred to in such Section 12 are set forth at the end of
Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form to be delivered to you is proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
cause the Trust to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Trust, at
the time and place and at the purchase price to the Underwriters set forth in
Schedule II hereto, the amount of Designated Securities set forth opposite the
name of such Underwriter in Schedule I hereto, less the amount of Designated
Securities covered by Delayed Delivery Contracts, if any, as may be specified in
Schedule II.
During the period beginning from the date of this Pricing Agreement
for the Designated Securities and continuing to and including January 31, 2003,
the Company agrees, and Xxxxxx Xxx agrees that it will cause the Company, not
to, and not to permit any affiliated entity to, offer, sell, contract to sell or
otherwise dispose of, any securities (other than the Designated Securities)
evidencing an ownership in, or any securities (other than the related Notes)
collateralized by, Student Loans, without the prior written consent of the
Representatives.
Each Underwriter represents and agrees that (a) it has not offered or
sold and will not offer or sell any Notes to persons in the United Kingdom prior
to the expiration of the period of six months from the issue date of the Notes
except to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995; (b) it has only communicated
or caused to be communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in investment activity, with
the meaning of section 21 of the Financial Services and Markets Act 2000 (the
"FSMA"), received by it in connection with the issue or sale
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of any notes in circumstances in which section 21(1) of the FSMA does not apply
to the issuer; and (c) it has complied and will comply with all applicable
provisions of the FSMA with respect to anything done by it in relation to the
Notes in, from or otherwise involving the United Kingdom.
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If the foregoing is in accordance with your understanding, please sign
and return to us seven counterparts hereof, and upon acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the Underwriters
and the Company and Xxxxxx Mae. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is or will be pursuant to the
authority set forth in a form of Agreement among Underwriters, the form of which
shall be submitted to the Company and Xxxxxx Xxx for examination upon request,
but without warranty on the part of the Representatives as to the authority of
the signers thereof.
Very truly yours,
SLM FUNDING LLC
By: //s// XXXX X. XXXXXX
Name: Xxxx X. Xxxxxx
Title: Vice President
STUDENT LOAN MARKETING ASSOCIATION
By: //s// XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
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Accepted as of the date hereof:
DEUSTCHE BANK SECURITIES INC.
By: //s// XXXX XXX XXXXXX
Name: Xxxx Xxx Xxxxxx
Title: Managing Director
By: //s// XXXX XXXXXXXX
Name: Xxxx Xxxxxxxx
Title: Director
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By: //s// XXXXXXXX X. XXXX
Name: Xxxxxxxx X. Xxxx
Title: Authorized Signatory
XXXXXX XXXXXXX & CO. INCORPORATED
By: //s// XXXXXX X. FRIEND
Name: Xxxxxx X. Friend
Title: Managing Director
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SCHEDULE I
AMOUNT OF DESIGNATED SECURITIES TO BE PURCHASED
UNDERWRITER CLASS A-1 CLASS A-2 CLASS A-3 CLASS A-4 CLASS B
Deutsche Bank Securities Inc. $ 70,666,000 $ 77,000,000 $ 70,333,000 $ 65,666,000 $ 20,760,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx $ 70,666,000 $ 77,000,000 $ 70,333,000 $ 65,666,000 $ 20,760,000
Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated $ 70,668,000 $ 77,000,000 $ 70,334,000 $ 65,668,000 $ 20,760,000
TOTAL $ 212,000,000 $ 231,000,000 $ 211,000,000 $ 197,000,000 $ 62,280,000
============= ============= ============= ============= ============
SCHEDULE II
TITLE OF EACH CLASS OF DESIGNATED SECURITIES:
Floating Rate Class A-1 Student Loan-Backed Notes
(for purposes of this Schedule II, "Class A-1")
Floating Rate Class A-2 Student Loan-Backed Notes
(for purposes of this Schedule II, "Class A-2")
Floating Rate Class A-3 Student Loan-Backed Notes
(for purposes of this Schedule II, "Class A-3")
Floating Rate Class A-4 Student Loan-Backed Notes
(for purposes of this Schedule II, "Class A-4")
Floating Rate Class B Student Loan-Backed Notes
(for purposes of this Schedule II, "Class B")
AGGREGATE PRINCIPAL AMOUNT OF EACH CLASS:
Class A-1: $212,000,000
Class A-2: $231,000,000
Class A-3: $211,000,000
Class A-4: $197,000,000
Class B: $ 62,280,000
PRICE TO PUBLIC OF EACH CLASS:
Class A-1: 100.00%
Class A-2: 100.00%
Class A-3: 100.00%
Class A-4: 100.00%
Class B: 100.00%
PURCHASE PRICE BY UNDERWRITERS OF EACH CLASS:
Class A-1: 99.830%
Class A-2: 99.800%
Class A-3: 99.775%
Class A-4: 99.750%
Class B: 99.600%
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE: Same Day Funds
INDENTURE: Indenture, dated as of January 1, 2003, among The Bank of
New York, as Indenture Trustee, the SLM Student Loan Trust 2003-1, and Chase
Manhattan Bank USA, National Association, as Eligible Lender Trustee.
MATURITY:
Class A-1: June 2010 Distribution Date
Class A-2: June 2013 Distribution Date
Class A-3: December 2015 Distribution Date
Class A-4: September 2017 Distribution Date
Class B: June 2037 Distribution Date
INTEREST RATE:
Class A-1: 3-month LIBOR* plus 0.02%
Class A-2: 3-month LIBOR* plus 0.04%
Class A-3: 3-month LIBOR* plus 0.11%
Class A-4: 3-month LIBOR* plus 0.19%
Class B: 3-month LIBOR* plus 0.60%
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* As to initial Accrual Period; thereafter, Three-month LIBOR.
FORM OF DESIGNATED SECURITIES: Book-Entry (DTC)
TIME OF DELIVERY: January 31, 2003
CLOSING LOCATION FOR DELIVERY OF DESIGNATED SECURITIES:
Student Loan Marketing Association
00000 Xxxxxx Xxx Xxxxx
Xxxxxx, XX 00000
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NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Address for Notices, etc.: Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
4 World Financial Center, 10th Floor
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxx
MODIFICATIONS TO UNDERWRITING AGREEMENT (SOLELY FOR PURPOSES OF THIS
PRICING AGREEMENT):
1. The following sentence is hereby added to the end of the second
paragraph of the Underwriting Agreement:
In addition, the Trust will enter into an interest rate cap
agreement (the "INTEREST RATE CAP AGREEMENT") with Student Loan Marketing
Association and a swap agreement (the "INITIAL SWAP AGREEMENT, together
with the Interest Rate Cap Agreement, the "SWAP AGREEMENTS" with Xxxxxx
Xxxxxxx Capital Services Inc. (together, with the Student Loan Marketing
Association, the "SWAP COUNTERPARTIES").
2. The following paragraph is hereby added to Section 7 of the
Underwriting Agreement:
(n) The Swap Agreements shall have been entered into by the Trust
and the Swap Counterparties, and the Underwriters shall have received a
copy, addressed to them or on which they are otherwise entitled to rely, of
each opinion of counsel required to be delivered thereunder at or before
the Time of Delivery, and a copy of each certificate required to be
delivered thereunder at or before the Time of Delivery.
3. Section 7(l) of the Underwriting Agreement is hereby modified as
follows:
At the Time of Delivery, the aggregate principal amount of the
Underwriters' Securities as specified in the related
Pricing Agreement for the
Designated Securities shall have been sold by the Company to the Underwriters,
and the aggregate amount of the related Certificates, if any, as specified in
the related underwriting agreement for such Certificates shall have been sold by
the Company to the underwriters specified in such underwriting agreement, and at
the Time of Delivery for the Reset Rate Notes, as defined in the Purchase
Agreement dated the date hereof among the Underwriters as "Initial Purchasers,"
the Company and Xxxxxx Mae the aggregate principal amount of the Reset Rate
Notes as specified in Schedule I to such Purchase Agreement shall have been sold
by the Company to the Initial Purchasers.
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