EXHIBIT 1.2
PRICING AGREEMENT
Xxxxxxx, Xxxxx & Co.
Banc of America Securities LLC
As Representatives of the several
Underwriters named in Schedule I hereto
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
April 6, 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 April 6, 2001 (the "UNDERWRITING AGREEMENT"), between the
Company on the one hand and Xxxxxxx, Xxxxx & Co. and Banc of America Securities
LLC 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, SACHS & CO.
/s/ XXXXXXX, XXXXX & CO.
-----------------------------------------
Xxxxxxx, Sachs & Co.
On behalf of each of the Underwriters
SCHEDULE I
PRINCIPAL
AMOUNT OF
DESIGNATED
SECURITIES
TO BE
UNDERWRITER PURCHASED
----------- -----------
Xxxxxxx, Xxxxx & Co. ................................................................. $92,000,000
Banc of America Securities LLC........................................................ 23,000,000
------------
Total...............................................................
$115,000,000
============
SCHEDULE II
TITLE OF DESIGNATED SECURITIES:
Senior Notes due February 18, 2003
AGGREGATE PRINCIPAL AMOUNT:
$115,000,000
AGGREGATE PRINCIPAL AMOUNT CURRENTLY OUTSTANDING:
$500,000,000
PRICE TO PUBLIC:
100.0223% of the principal amount of the Designated Securities, plus
accrued interest from Xxxxx 00, 0000
XXXXXXXX PRICE BY UNDERWRITERS:
99.7723% of the principal amount of the Designated Securities, plus
accrued interest from March 16, 2001
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), April 11, 2001
INDENTURE:
Indenture dated as of October 1, 2000, Second Supplemental Indenture
dated February 27, 2001 and First Amendment to Second Supplemental
Indenture dated April 11, 2001, each between USA Education, Inc. and
The Chase Manhattan Bank, as trustee
MATURITY:
February 18, 2003
INTEREST RATE:
For the period applicable to the June 18, 2001 interest payment date,
5.30%. Thereafter, three-month LIBOR, as determined on the second
business day before the applicable accrual period, plus 0.28%, except
that the last payment of interest will be based upon a two-month LIBOR,
as determined on the second business day before the applicable accrual
period, plus 0.28%.
Interest on the Designated Securities will accrue from March 16, 2001.
INTEREST PAYMENT DATES:
Quarterly on March 16, June 16, September 16 and December 16 of each
year, except that last payment of interest will be made on February 18,
2003.
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, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx, Xxxxx & Co. shall be entitled to execute documents and
instruments on behalf of the Representatives and the Underwriters
OTHER TERMS:
None.