SECOND SUPPLEMENTAL INDENTURE
between
USA EDUCATION, INC.
and
THE CHASE MANHATTAN BANK
Dated as of February 27, 2001
$500,000,000
SENIOR NOTES DUE FEBRUARY 18, 2003
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SECOND SUPPLEMENTAL INDENTURE, dated as of February 27, 2001 (the
"Supplemental Indenture"), between USA Education, Inc., a Delaware corporation
(the "Company"), and The Chase Manhattan Bank, as trustee (the "Trustee") under
the Indenture, dated as of October 1, 2000 between the Company and the Trustee
(the "Base Indenture" and, together with this Supplemental Indenture, the
"Indenture").
WHEREAS, the Company executed and delivered the Base Indenture to
the Trustee to provide for the future issuance of debentures, notes or other
evidences of indebtedness of the Company to be issued from time to time in one
or more series as might be determined by the Company under the Indenture, in an
unlimited aggregate principal amount which may be authenticated and delivered as
provided in the Base Indenture;
WHEREAS, pursuant to the terms of the Base Indenture, the Company
desires to provide for the establishment of a series of senior unsecured and
unsubordinated notes to be known as its Senior Notes due February 18, 2003, the
form and substance of such Notes and the terms, provisions and conditions
thereof to be set forth as provided in the Base Indenture and this Supplemental
Indenture;
WHEREAS, the Company has requested that the Trustee execute and
deliver this Supplemental Indenture; all requirements necessary to make this
Supplemental Indenture a valid instrument in accordance with its terms, and to
make the Notes, when executed by the Company and authenticated and delivered by
the Trustee, the valid obligations of the Company, have been performed; and the
execution and delivery of this Supplemental Indenture has been duly authorized
in all respects.
NOW THEREFORE, in consideration for the purchase and acceptance of
the Notes by the Holders thereof, and for the purpose of setting forth, as
provided in the Base Indenture, the form and substance of the Notes and the
terms, provisions and conditions thereof, the Company covenants and agrees with
the Trustee as follows:
ARTICLE 1
DEFINITIONS
1.1 Definition of Terms. Capitalized terms used and not otherwise defined
in this Supplemental Indenture (including the form of Global Note attached as
Exhibit A to this Supplemental Indenture, the terms of which are a part of this
Supplemental Indenture) have the meanings assigned to them below:
"Base Indenture" is defined in the introductory paragraph.
"Business Day" is defined in the Global Note.
"Company" is defined in the introductory paragraph.
"Company Order" is defined in the Base Indenture.
"Depositary" is defined in the Base Indenture.
"Eligible Instruments" is defined in the Base Indenture.
"Global Note" is defined in Section 2.3.
"Global Security" is defined in the Base Indenture.
"Holder" is defined in the Base Indenture.
"Indenture" is defined in the introductory paragraph.
"Interest Accrual Period" is defined in the Global Note.
"Interest Payment Date" is defined in the Global Note.
"LIBOR Business Day" is defined in the Global Note.
"LIBOR Determination Date" is defined in the Global Note.
"Notes" is defined in Section 2.1.
"Maturity Date" is defined in the Global Note.
"Paying Agent" is defined in the Base Indenture.
"Person" is defined in the Base Indenture.
"Registered Security" is defined in the Base Indenture.
"Registrar" is defined in the Base Indenture.
"Regular Record Date" is defined in the Global Note.
"Supplemental Indenture" is defined in the introductory paragraph.
"Three-month LIBOR" is defined in the Global Note.
"Trustee" is defined in the introductory paragraph.
"Two-month LIBOR" is defined in the Global Note.
1.2 Other Rules of Construction. For all purposes of this Supplemental
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
(a) capitalized terms used and not defined in this Supplemental
Indenture have the meanings assigned to them in the Base Indenture;
(b) capitalized terms defined in the Global Note have the meanings
assigned to them in the Global Note;
(c) all terms used in this Supplemental Indenture which are defined
in the Trust Indenture Act, whether directly or by reference therein, have the
meanings assigned to them in the Trust Indenture Act;
(d) "or" is not exclusive;
(e) words in the singular include the plural, and words in the
plural include the singular;
(f) a reference to a Section or Article is to a Section or Article
of this Supplemental Indenture;
(g) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Supplemental Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(h) headings are for convenience of reference only and do not affect
interpretation.
ARTICLE 2
TERMS AND CONDITIONS OF THE NOTES
2.1 Title of Securities. The title of the Securities is "Senior Notes due
February 18, 2003" (the "Notes").
2.2 Aggregate Principal Amount of Notes. The aggregate principal amount of
Notes that may be authenticated and delivered is $500,000,000. The Company is
entitled under Section 2.02(b) of the Base Indenture to reopen the Series of
Notes by offering additional Securities of such Series. Upon receipt of a
Company Order for the authentication and delivery of the Notes and satisfaction
of the requirements of Section 2.03 of the Base Indenture, the Trustee shall
authenticate Notes for original issuance in an aggregate principal amount of
$500,000,000.
2.3 Form of Notes. The Notes and the Trustee's Certificate of
Authentication to be endorsed on the Notes are to be substantially in the form
attached as Exhibit A to this Supplemental Indenture (the "Global Note").
2.4 Maturity Date. The entire outstanding principal of the Notes shall be
payable on the Maturity Date set forth on the face of the Global Note to Holders
as of the Regular Record Date immediately preceding the Maturity Date.
2.5 Interest. The rate of interest on the Notes for each Interest Accrual
Period after the first shall be Three-month LIBOR, plus the Spread set forth on
the face of the Global Note, except that the rate of interest on the Notes for
the final accrual period shall be Two-month LIBOR, plus the Spread set forth on
the face of the Global Note, in each case determined by the Trustee as set forth
in the Global Note. Interest shall accrue from the Original Issue Date set forth
on the face of the Global Note, and the interest rate for the first Interest
Accrual Period shall be as set forth in the Global Note. Interest is payable on
each Interest Payment Date to Holders as of each Regular Record Date, determined
as set forth in the Global Note. Interest shall be computed on the basis of a
360-day year and the actual number of days elapsed in the applicable Interest
Accrual Period. Upon each determination of Three-month LIBOR, the Trustee shall
forthwith notify the Company of such determination. The Trustee may appoint an
agent to determine Three-month LIBOR.
2.6 Record Date. Payments of interest and principal shall be made to
Holders on each Regular Record Date, determined as set forth in the Global Note.
2.7 Paying Agent. The Trustee shall be the Registrar and the Paying Agent
with respect to the Notes. Payments in respect of the Notes represented by
Global Securities (including principal and interest) shall be made in
immediately available funds as provided in the Global Note.
2.8 Registered Securities. The Notes shall be issuable only as Registered
Securities (without coupons) and as permanent Global Securities. The Notes shall
not be issuable in definitive form (other than in the name of the Depositary's
nominee) except under the circumstances described in Section 2.15 of the Base
Indenture. The Trustee shall act as transfer agent for the Notes.
2.9 Depositary. The Depositary for Notes in global form shall be The
Depository Trust Company. Beneficial interests in such Notes shall be held
through the Depositary.
2.10 Denomination. The Notes shall be issued in denominations of $1,000
and any integral multiple thereof. The Notes may be transferred or exchanged
only in minimum denominations of $1,000 and integral multiples of $1,000 in
excess thereof; and any attempted transfer, sale or other disposition of Notes
in a denomination of less than $1,000 shall be deemed to be void and of no legal
effect whatsoever.
2.11 Currency. Payments of the principal and interest on the Notes shall
be made in U.S. Dollars, and the Notes shall be denominated in U.S. Dollars.
2.12 Redemption. The Company shall have no option to redeem the Notes
prior to their maturity, nor shall they be repayable before the Maturity Date at
the option of any Holder.
2.13 Sinking Fund. The Notes shall not have the benefit of any sinking
fund.
2.14 Conversion. The Notes shall not be convertible or exchangeable into
any other class or series of securities.
2.15 Defeasance. The Company shall not be entitled to defease payments
under the Notes.
2.16. Priority. The Notes are senior unsecured obligations of the Company
and rank equally in right of payment with any other senior unsecured and
unsubordinated indebtedness that the Company may issue from time to time. The
Notes will rank senior to any subordinated indebtedness that the Company may
issue from time to time.
ARTICLE 3
TRUSTEE PAYMENTS
3.1. Establishment of Account; Investments. The Company hereby directs and
authorizes the Trustee to establish and maintain a debt service account to be
entitled the "USA Education, Inc. 2001-A Debt Service Account." All or a portion
of amounts paid to the Trustee by the Company pursuant to Section 2.05 of the
Base Indenture shall be deposited in the USA Education, Inc. 2001-A Debt Service
Account established for such purpose and shall be invested and reinvested by the
Trustee pursuant to written directions from the Company, which direction may be
in the form of a standing direction. Such investments may be in one or more
Eligible Instruments or Eligible Investments (defined below). Notwithstanding
the foregoing, no investment of any such amount may mature later than the
business day preceding the applicable payment date (or, in the case of an
investment in an obligation of the Trustee, no later than the applicable payment
date) and no such investment shall be sold prior to its maturity date. On each
payment date the Trustee shall withdraw any net reinvestment income and return
such amount to the Company. The Trustee shall have no obligation to invest and
reinvest any cash held in the USA Education Inc. 2001-A Debt Service Account in
the absence of timely and specific written investment direction from the
Company. In no event shall the Trustee be liable for the selection of
investments or for investment losses incurred thereon. The Trustee shall have no
liability in respect of losses incurred as a result of the liquidation of any
investment prior to its stated maturity or the failure of the Company to provide
timely written investment direction.
"Eligible Investments" means book-entry securities, negotiable instruments
or securities represented by instruments in bearer or registered form, with
respect to which the Trustee has taken delivery, which evidence: (a) direct
obligations of, and obligations fully guaranteed as to the full and timely
payment by, the United States of America; (b) demand deposits, time deposits or
certificates of deposit of any depository institution or trust company
incorporated under the laws of the United States of America or any State thereof
and subject to supervision and examination by Federal or State banking or
depository institution authorities, provided that at the time of the investment
or contractual commitment to invest therein, the commercial paper or other
short-term unsecured debt obligations (other than such obligations the rating of
which is based on the credit of a Person other than such depository institution
or trust company) thereof shall be rated "A-1+" by Standard & Poor's Credit
Market Services ("S&P") and "P-1" by Xxxxx'x Investors Service, Inc.
("Moody's"); (c) commercial paper that, at the time of the investment or
contractual commitment to invest therein, is rated "A-1" by S&P and "P-1" by
Moody's; (d) bankers' acceptances issued by any depository institution or trust
company referred to in (b) above; (e) repurchase obligations with respect to any
security pursuant to a written agreement that is a direct obligation of, or
fully guaranteed as to the full and timely payment by, the United States of
America or any agency or instrumentality thereof, the obligations of which are
backed by the full faith and credit of the United States of America, in either
case entered into with (i) a depository institution or trust company the
deposits of which are insured by the Federal Deposit Insurance Corporation and
whose commercial paper or other short-term unsecured debt obligations are rated
"A-1+" by S&P and "Aaa" by Moody's; and (f) money market mutual funds registered
under the Investment Company Act having a rating, at the time of such investment
from each of S&P and Moody's in the highest investment category granted thereby.
Any Eligible Investments may be purchased by or through the Trustee or any of
its Affiliates and shall include such securities issued by the Trustee or its
Affiliates.
ARTICLE 4
MISCELLANEOUS
4.1 Terms. The foregoing form and terms of the Notes have been established
in conformity with the provisions of the Base Indenture.
4.2 Ratification of Base Indenture; Supplemental Indenture Controls. The
Base Indenture, as supplemented by this Supplemental Indenture, is in all
respects ratified and confirmed, and this Supplemental Indenture shall be deemed
part of the Base Indenture in the manner and to the extent herein and therein
provided. The provisions of this Supplemental Indenture (including the Global
Note) shall supersede the provisions of the Base Indenture to the extent the
Base Indenture is inconsistent herewith.
4.3 Trustee Not Responsible for Recitals. The recitals in this
Supplemental Indenture are made by the Company and not by the Trustee, and the
Trustee assumes no responsibility for the correctness thereof. The Trustee makes
no representation as to the validity or sufficiency of this Supplemental
Indenture.
4.4 Governing Law. THIS SUPPLEMENTAL INDENTURE AND EACH NOTE SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER THE INTERNAL LAWS OF THE STATE OF NEW YORK,
AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF SAID STATE, WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES THEREOF.
4.5 Separability. In case any one or more of the provisions contained in
this Supplemental Indenture or in the Notes shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Supplemental
Indenture or of the Notes, but this Supplemental Indenture and the Notes shall
be construed as if such invalid or illegal or unenforceable provision had never
been contained herein or therein.
4.6 Counterparts. This Supplemental Indenture may be executed in any
number of counterparts each of which shall be an original; but such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the day and year set forth above.
USA EDUCATION, INC.
By: /s/ Xxxxxxx M. E. Xxxxxx
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Name: Xxxxxxx M. E. Xxxxxx
Title: authorized agent
THE CHASE MANHATTAN BANK, not in its
individual capacity, but solely as Trustee
By: /s/ Xxxxxxxx X. X. Xxxxx
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Name: Xxxxxxxx X. X. Xxxxx
Title: Vice President
EXHIBIT A
[FORM OF GLOBAL NOTE]
