PRICING AGREEMENT
-----------------
Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Credit Suisse First Boston Corporation
As Representatives of the several
Underwriters named in Schedule I hereto
x/x Xxxxxxx Xxxxx & Xx.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
June 8, 2001
Ladies and Gentlemen:
USA Education, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein and in the Underwriting
Agreement, dated as of June 7, 2001 (the "Underwriting Agreement"), between the
Company on the one hand and Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx on the other hand, to issue and sell to the Underwriters named in Schedule
I hereto (the "Underwriters") the Securities specified in Schedule II hereto
(the "Designated Securities"). 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 heretofore delivered to you is now 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
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and each of the Representatives plus one for
each counsel 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. 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 for examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
USA EDUCATION, INC.
By: /s/ Xxxx X. Xxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxx
Title: Executive Vice President
and Chief Financial Officer
Accepted as of the date hereof:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Authorized Signatory
On behalf of each of the Underwriters
SCHEDULE I
PRINCIPAL
AMOUNT OF
DESIGNATED
SECURITIES
TO BE
UNDERWRITER PURCHASED
----------- ---------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ....................................... $253,000,000
Credit Suisse First Boston Corporation .................... $127,000,000
Total...................................................... $380,000,000
============
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
Senior Notes due June 16, 2004.
AGGREGATE PRINCIPAL AMOUNT:
$380,000,000.
PRICE TO PUBLIC:
100% of the principal amount of the Designated Securities.
PURCHASE PRICE BY UNDERWRITERS:
99.80% of the principal amount of the Designated Securities.
FORM OF DESIGNATED SECURITIES:
Book-entry only form represented by two global securities deposited with
The Depository Trust Company ("DTC") or its designated custodian, to be
made available for checking by the Representatives at least twenty-four
hours prior to the Time of Delivery.
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same day) funds.
TIME OF DELIVERY:
11:00 a.m. (New York City time), June 15, 2001.
INDENTURE:
Indenture, dated as of October 1, 2000, between USA Education, Inc. and
The Chase Manhattan Bank, as trustee, and Third Supplemental Indenture,
dated June 15, 2001, between USA Education, Inc. and The Chase Manhattan
Bank, as trustee.
MATURITY:
June 16, 2004.
INTEREST RATE:
Three-month LIBOR, as determined on the second business day before the
applicable accrual period, plus 0.28%.
Interest will accrue from the date of original issuance, June 15, 2001.
INTEREST PAYMENT DATES:
Quarterly on March 16, June 16, September 16 and December 16 of each year
(or if such date falls on a day which is not a business day, on the next
succeeding business day), with the first payment of interest to be made on
September 17, 2001.
REDEMPTION PROVISIONS:
No provisions for redemption.
SINKING FUND PROVISIONS:
No sinking fund provisions.
FLOATING RATE PROVISIONS:
Annual interest rate will be 0.28% over three-month LIBOR, as determined on
the second business day before the applicable accrual period.
DEFEASANCE PROVISIONS:
No defeasance provisions.
CLOSING LOCATION FOR DELIVERY OF DESIGNATED SECURITIES:
Offices of USA Education, Inc.
00000 Xxxxxx Xxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
ADDITIONAL CLOSING CONDITIONS:
None.
NAMES AND ADDRESSES OF REPRESENTATIVES:
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
World Financial Center
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Credit Suisse First Boston Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated shall be entitled to
execute documents and instruments on behalf of the Representatives and the
Underwriters.
OTHER TERMS:
None.
