Document:

exv10w3

 

EXHIBIT 10.3

AMENDMENT NO. 5

TO

AGREEMENT FOR INVENTORY FINANCING

     This Amendment No. 5 (“Amendment”) to the Agreement for Inventory Financing is made as of
February 28, 2005 by and among IBM Credit LLC, a Delaware limited liability company,
formerly IBM Credit Corporation (“IBM Credit”), Business Supplies Distributors Holdings,
LLC, a limited liability company duly organized under the laws of the state of Delaware
(“Holdings”), Supplies Distributors, Inc. (formerly known as BSD Acquisition Corp.), a
corporation duly organized under the laws of the state of Delaware (“Borrower”), Priority
Fulfillment Services, Inc., a corporation duly organized under the laws of the state of
Delaware (“PFS”) and PFSweb, Inc., a corporation duly organized under the laws of the
state of Delaware (“PFSweb”) (Borrower, Holdings, PFS, PFSweb, and any other entity that executes
this Agreement or any Other Document, including without limitation all Guarantors, are each
individually referred to as a “Loan Party” and collectively referred to as “Loan Parties”).

RECITALS:

     A. Each Loan Party and IBM Credit have entered into that certain Agreement for Inventory
Financing dated as of March 29, 2002 (as amended, supplemented or otherwise modified from time to
time, the “Agreement”); and

     B. The parties have agreed to modify the Agreement as more specifically set forth
below, upon and subject to the terms and conditions set forth herein.

AGREEMENT

     NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, Borrower, the other
Loan Parties and IBM Credit hereby agree as follows:

     Section 1. Definitions. All capitalized terms not otherwise defined herein shall have
the respective meanings set forth in the Agreement.

Section 2. Amendment.

     Subject to the satisfaction of the conditions precedents set forth in Section 3 hereof,
the Agreement is hereby amended as follows:

     A. Section 1 of the Agreement is hereby amended by amending the definition of
“Termination Date” to read in its entirety as follows:

     “ ‘Termination Date’: shall mean March 31, 2006 or such other date as IBM Credit and
the Borrower may agree to from time to time in writing.”

     B. Agreement is further hereby amended by amending by deleting Section 8.6 in its
entirety and substituting, in lieu thereof, the following:

“8.6. Restricted Payments. Borrower will not, directly or indirectly
make any of the following payments (“Restricted Payments”) without prior written
consent from IBM Credit, which shall not be unreasonably delayed or denied: (i)
declare or pay any dividend (other than dividends payable solely in common stock of
Borrower) on, or make any payment on account of, or set apart assets for a sinking
or other analogous fund for, the purchase, redemption, defeasance, retirement or
other acquisition of, any shares of any class of capital stock of Borrower or any
warrants, options or rights to purchase any such capital stock or Equity Interests,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or

Page 1 of 3

 

property or in obligations of Borrower; or (ii) make any optional payment or
prepayment on or redemption (including, without limitation, by making payments to a
sinking or analogous fund) or repurchase of any Indebtedness (other than the
Obligations), provided, however, that Borrower (a) may in the ordinary
course administration thereof make payments on the revolving loans made by Congress
pursuant to the Congress Credit Agreement, except as permitted by the Amended and
Restated Notes Payable Subordination Agreement and (b) may in fiscal year 2005 pay
cash dividends not to exceed the aggregate of One Million Dollars ($1,000,000.00)
plus the United States Dollar equivalent of dividends the Borrower receives in
fiscal year 2005 from BSD Europe.”

Section 3. Conditions of Effectiveness of Amendment. This Amendment shall become
effective upon the receipt by IBM Credit of this Amendment that shall have been authorized,
executed and delivered by each of the parties hereto and IBM Credit shall have received a copy of
such fully executed Amendment.

Section 4. Representations and Warranties. Each Loan Party makes to IBM Credit the
following representations and warranties all of which are material and are made to induce IBM
Credit to enter into this Amendment.

Section 4.1 Accuracy and Completeness of Warranties and Representations. All
representations made by the Loan Party in the Agreement were true and accurate and complete in
every respect as of the date made, and, as amended by this Amendment, all representations made by
the Loan Party in the Agreement are true, accurate and complete in every material respect as of the
date hereof, and do not fail to disclose any material fact necessary to make representations not
misleading.

Section 4.2 Violation of Other Agreements and Consent. The execution and delivery of
this Amendment and the performance and observance of the covenants to be performed and observed
hereunder (a) do not violate or cause any Loan Party not to be in compliance with the terms of any
agreement to which such Loan Party is a party, and (b) require the consent of any Person.

Section 4.3 Litigation. Except as has been disclosed by the Loan Party to IBM Credit in
writing, there is no litigation, proceeding, investigation or labor dispute pending or threatened
against any Loan Party, which, if adversely determined, would materially adversely affect the Loan
Party’s ability to perform such Loan Party’s obligations under the Agreement and the other
documents, instruments and agreements executed in connection therewith or pursuant hereto.

Section 4.4 Enforceability of Amendment. This Amendment has been duly authorized,
executed and delivered by each Loan Party and is enforceable against each Loan Party in accordance
with its terms.

Section 5. Ratification of Agreement. Except as specifically amended hereby, all of the provisions
of the Agreement shall remain unamended and in full force and effect. Each Loan Party hereby
ratifies, confirms and agrees that the Agreement, as amended hereby, represents a valid and
enforceable obligation of such Loan Party, and is not subject to any claims, offsets or defenses.

Section 6. Ratification of Guaranty and Notes Payable Subordination Agreement. Each of
Holdings, PFSweb and PFS hereby ratify and confirm their respective guaranties in favor of IBM
Credit and agree that such guaranties remain in full force and effect and that the term
“Liabilities”, as used therein include, without limitation the indebtedness liabilities and
obligations of the Borrower under the Agreement as amended hereby.

Section 7. Governing Law. This Amendment shall be governed by and interpreted in
accordance with the laws which govern the Agreement.

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Section 8. Counterparts. This Amendment may be executed in any number of counterparts,
each of which shall be an original and all of which shall constitute one agreement.

     IN WITNESS WHEREOF, each Loan Party has read this entire Amendment, and has caused
its authorized representatives to execute this Amendment and has caused its corporate seal, if any,
to be affixed hereto as of the date first written above.

	 	 	 	 	 
	IBM Credit LLC	 	Supplies Distributors, Inc.
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 	 	 
	[PLEASE PRINT NAME & TITLE]	 	[PLEASE PRINT NAME & TITLE]
	 
	 	 	 	 
	 	 	Priority Fulfillment Services, Inc.
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 	 	 
	 	 	[PLEASE PRINT NAME & TITLE]
	 
	 	 	 	 
	 	 	PFSweb, Inc.
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 	 	 	 	 
	 	 	 
	 	 	[PLEASE PRINT NAME & TITLE]
	 
	 	 	 	 
	 	 	Business Supplies Distributors Holdings, LLC,
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	 
	

	 	 	 	as Managing Member
	 	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	[PLEASE PRINT NAME & TITLE]

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EXHIBIT 4.1

U.S. BANCORP

Medium-Term Notes, Series P (Senior)

Officers’ Certificate and Company Order

     Pursuant to the Indenture dated as of October 1, 1991, (the “Indenture”),
between U.S. Bancorp (the “Company”) and Citibank, N.A., as Trustee (the
“Trustee”), and resolutions adopted by the Company’s Board of Directors on
April 19, 2005, this Officers’ Certificate and Company Order is being delivered
to the Trustee to establish the terms of a series of Securities in accordance
with Section 301 of the Indenture, to establish the forms of the Securities of
such series in accordance with Section 201 of the Indenture, and to establish
the procedures for the authentication and delivery of specific Securities from
time to time pursuant to Section 303 of the Indenture. This Officers’
Certificate and Company Order shall be treated for all purposes under the
Indenture as a supplemental indenture thereto.

     All conditions precedent provided for in the Indenture relating to the
establishment of (i) a series of Securities, (ii) the forms of such series of
Securities, and (iii) the procedures for the authentication and delivery of
such series of Securities have been complied with.

     Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to them in the Indenture.

     A. Establishment of Series pursuant to Section 301 of Indenture.

     There is hereby established pursuant to Section 301 of the Indenture a
series of Securities which shall have the following terms:

     (1) The Securities of such series shall bear the title “Medium-Term Notes,
Series P (Senior)” (referred to herein as the “Notes”).

     (2) The aggregate principal amount of the Notes of such series to be
issued pursuant to this Officers’ Certificate is limited to $5,000,000,000 or
the equivalent thereof in foreign currencies or foreign currency units (except
for Notes authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Notes of such series pursuant to Section
304, 305, 306, 906 or 1107 of the Indenture and except for any Notes which,
pursuant to Section 303 of the Indenture, are deemed never to have been
authenticated and delivered thereunder).

     (3) Interest will be payable to the person in whose name a Note (or one or
more predecessor Notes) is registered at the close of business on the Regular
Record Date (as defined below) next preceding each Interest Payment Date (as
defined below); provided,

 

 

however, that interest payable at maturity or upon redemption will be
payable to the person to whom principal shall be payable.

     (4) Each Note within such series shall mature on a date 9 months or more
from its date of issue as specified in such Note and in the applicable Pricing
Supplement; provided, however, that no Commercial Paper Rate Note (as defined
below) shall mature less than 9 months and 1 day from its date of issue. If
the Maturity Date or Redemption Date specified in the applicable Pricing
Supplement for any Note is a day that is not a Business Day, principal will be
paid on the next day that is a Business Day with the same force and effect as
if made on such specified Maturity Date or Redemption Date, as applicable.
With respect to the Notes of this series, “Business Day” means, and unless the
applicable Pricing Supplement specifies otherwise, any day that is not a
Saturday or Sunday and that is not a day that banking institutions in New York
City are generally authorized or obligated by law or executive order to close.
For LIBOR Notes issued in U.S. dollars, a Business Day, with respect to any
payment, is any day that is not a Saturday or Sunday and that is not a day that
banking institutions in New York City are generally authorized or obligated by
law or executive order to close, and is also a London Business Day, and with
respect to an Interest Determination Date, is a London Business Day. For Notes
denominated in a specified currency other than euro, the term Business Day
means any day that is not a Saturday or Sunday and that is not a day that
banking institutions in New York City are generally authorized or obligated by
law or executive order to close, and is also a day on which commercial banks
and foreign exchange markets settle payments in the principal financial center
of the country of the relevant specified currency (if other than The City of
New York). For Notes denominated in euro, the term Business Day means any day
that is not a Saturday or Sunday, and is also a day on which the Trans-European
Automated Real Time Gross Settlement Express Transfer System is operating (a
“TARGET Business Day”).

     Unless otherwise specified in the applicable Pricing Supplement, the
principal financial center of any country for the purpose of the foregoing
definition is as provided in the 2000 ISDA Definitions, as amended and updated
from time to time, published by the International Swaps and Derivatives
Association, Inc.

     “London Business Day” means any day on which dealings in U.S. dollars are
transacted in the London interbank market.

     (5) Each Note within such series that bears interest will bear interest at
either (a) a fixed rate (the “Fixed Rate Notes”) or (b) a floating rate
determined by reference to one or more base rates, which may be adjusted by a
Spread and/or Spread Multiplier (each as defined below) (the “Floating Rate
Notes”). Notes within such series may also be issued as “Zero Coupon Notes”
which do not provide for any periodic payments of interest. Notes may be issued
as Original Issue Discount Notes at a discount from the principal amount
thereof due at the stated maturity as specified in the applicable Pricing
Supplement. Any Floating Rate Note may also have either or both of the
following as set forth in the applicable Pricing Supplement: (i) a maximum
interest rate limitation, or ceiling, on the rate at which interest will accrue
during any Interest Reset Period (as defined below); and (ii) a minimum
interest rate limitation, or floor, on the rate at which interest will accrue
during any Interest Reset Period. The interest rate on a Note will in no event
be higher than the maximum rate permitted by New York law as the same may be
modified by United States law of general application. Under present New York
law, the

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maximum rate of interest is 25% per annum on a simple interest basis. This
limit may not apply to Notes in which $2,500,000 or more has been invested. The
applicable Pricing Supplement may designate any of the following base rates
(“Base Rates”) as applicable to each Floating Rate Note: (a) the Commercial
Paper Rate, in which case such Note will be a “Commercial Paper Rate Note”; (b)
EURIBOR, in which case such note will be a “EURIBOR Note”; (c) the Federal
Funds Rate, in which case such Note will be a “Federal Funds Rate Note”; (d)
LIBOR, in which case such Note will be a “LIBOR Note”; (e) the Prime Rate, in
which case such Note will be a “Prime Rate Note”; (f) the CD Rate, in which
case such Note will be a “CD Rate Note”; (g) the Treasury Rate, in which case
such Note will be a “Treasury Rate Note”; (h) the CMT Rate, in which case such
Note will be a “ CMT Rate Note”; or (i) one or more other Base Rates.

     The interest rate on each Floating Rate Note for each Interest Period will
be determined by reference to (i) the applicable Base Rates specified in the
applicable Pricing Supplement for such Interest Period, plus or minus the
applicable Spread, if any, or multiplied by the applicable Spread Multiplier,
if any. The “Spread” is the number of basis points, each one-hundredth of a
percentage point, specified in the applicable Pricing Supplement to be added or
subtracted from the Base Rate for a Floating Rate Note. For example, if a Note
bears interest at LIBOR plus one basis point, or .01%, and the Calculation
Agent (as defined below) determines that LIBOR is 5.00% per annum, the Note
will bear interest at 5.01 % per annum until the next Interest Reset Date (as
defined below). The “Spread Multiplier” is the percentage specified in the
applicable Pricing Supplement to be applied to the Base Rate for a Floating
Rate Note. For example, if a Note bears interest at 90% of LIBOR, and the
Calculation Agent determines that LIBOR is 5.00% per annum, the Note will bear
interest at 4.50% per annum until the next Interest Reset Date.

     Each Note that bears interest will bear interest from and including its
date of issue or from and including the most recent Interest Payment Date to
which interest on such Note (or one or more predecessor Notes) has been paid or
duly provided for (i) at the fixed rate per annum applicable to the related
Interest Period, or (ii) at a rate per annum determined pursuant to the Base
Rates applicable to the related Interest Period or Interest Periods, in each
case as specified therein and in the applicable Pricing Supplement, until the
principal thereof is paid or made available for payment. Interest will be
payable on each Interest Payment Date and at maturity or upon redemption. The
first payment of interest on any Note originally issued after a Regular Record
Date and on or before an Interest Payment Date will be made on the Interest
Payment Date following the next succeeding Regular Record Date to the
registered holder on such next succeeding Regular Record Date. Interest rates
and Base Rates are subject to change by the Company from time to time but no
such change will affect any Note theretofore issued or which the Company has
agreed to issue. Unless otherwise specified in the applicable Pricing
Supplement, the “Interest Payment Dates” and the “Regular Record Dates” for
Fixed Rate Notes shall be as described below under “Fixed Rate Notes” and the
“Interest Payment Dates” and the “Regular Record Dates” for Floating Rate Notes
shall be as described below under “Floating Rate Notes”.

     The applicable Pricing Supplement will specify: (i) the issue price,
Interest Payment Dates and Regular Record Dates; (ii) with respect to any Fixed
Rate Note, the interest rate; (iii) with respect to any Floating Rate Note, the
Initial Interest Rate (as defined below), the

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method (which may vary from Interest Period to Interest Period) of
calculating the interest rate applicable to each Interest Period (including, if
applicable, the fixed rate per annum applicable to one or more Interest
Periods, the period to maturity of any instrument on which the Base Rate for
any Interest Period is predicated (the “Index Maturity”), the Spread and/or
Spread Multiplier, the Interest Determination Dates (as defined below), the
Interest Reset Dates and any minimum or maximum interest rate limitations);
(iv) whether such Note is an Original Issue Discount Note; and (v) any other
terms related to interest on the Notes.

Fixed Rate Notes

     Each Fixed Rate Note, whether or not issued as an Original Issue Discount
Note, will bear interest at the annual rate specified therein and in the
applicable Pricing Supplement. Unless otherwise specified in the applicable
Pricing Supplement, the Interest Payment Dates for the Fixed Rate Notes will be
on February 1 and August 1 of each year and at maturity or upon redemption and
the Regular Record Dates for the Fixed Rate Notes will be on the day (whether
or not a Business Day) fifteen calendar days preceding each Interest Payment
Date. Unless otherwise specified in the applicable Pricing Supplement, interest
payments for Fixed Rate Notes shall be the amount of interest accrued to, but
excluding, the relevant Interest Payment Date. Interest on Fixed Rate Notes
will be computed and paid on the basis of a 360-day year of twelve 30-day
months. In the event that any Interest Payment Date or any applicable
Redemption Date on a Fixed Rate Note is not a Business Day, such Interest
Payment Date or Redemption Date shall be postponed to the next day that is a
Business Day, and no interest will accrue for the period from and after the
scheduled Interest Payment Date or Redemption Date, as the case may be.

Floating Rate Notes

     Unless otherwise specified in the applicable Pricing Supplement and except
as provided below, interest on Floating Rate Notes will be payable on the
following Interest Payment Dates: in the case of Floating Rate Notes with a
daily, weekly or monthly Interest Reset Date, on the third Wednesday of each
month of each year; in the case of Floating Rate Notes with a quarterly
Interest Reset Date, on the third Wednesday of March, June, September and
December of each year; in the case of Floating Rate Notes with a semi-annual
Interest Reset Date, on the third Wednesday of the two months of each year
specified in the applicable Pricing Supplement; and in the case of Floating
Rate Notes with an annual Interest Reset Date, on the third Wednesday of the
month of each year specified in the applicable Pricing Supplement. Interest
will also be paid at maturity or upon redemption. Unless otherwise specified in
the applicable Pricing Supplement, the Regular Record Dates for the Floating
Rate Notes will be the day (whether or not a Business Day) fifteen calendar
days preceding each Interest Payment Date. In the event that any Interest
Payment Date for any Floating Rate Note is not a Business Day, such Interest
Payment Date shall be postponed to the next day that is a Business Day,
provided that, for LIBOR and EURIBOR notes, if such Business Day is in the next
succeeding calendar month, such Interest Payment Date shall be the immediately
preceding Business Day.

     The rate of interest on each Floating Rate Note will be reset daily,
weekly, monthly, quarterly, semi-annually or annually (such specified period,
an “Interest Reset Period”,

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and the date on which each such reset occurs, an “Interest Reset Date”),
as specified in the applicable Pricing Supplement. Unless otherwise specified
in the applicable Pricing Supplement, the Interest Reset Date will be as
follows: in the case of Floating Rate Notes which are reset daily, each
Business Day; in the case of Floating Rate Notes (other than Treasury Rate
Notes) which are reset weekly, the Wednesday of each week; in the case of
Floating Rate Notes that are Treasury Rate Notes which are reset weekly, the
Tuesday of each week (except if the auction date falls on a Tuesday, then the
next Business Day, as provided below); in the case of Floating Rate Notes which
are reset monthly, the third Wednesday of each month; in the case of Floating
Rate Notes which are reset quarterly, the third Wednesday of March, June,
September and December of each year; in the case of Floating Rate Notes which
are reset semi-annually, the third Wednesday of the two months of each year
specified in the applicable Pricing Supplement; and in the case of Floating
Rate Notes which are reset annually, the third Wednesday of the month of each
year specified in the applicable Pricing Supplement.

     The interest rate in effect from the date of issue to the first Interest
Reset Date with respect to a Floating Rate Note (the “Initial Interest Rate”)
will be as specified in the applicable Pricing Supplement. If any Interest
Reset Date for any Floating Rate Note would otherwise be a day that is not a
Business Day, such Interest Reset Date shall be postponed to the next day that
is a Business Day, provided that, for LIBOR and EURIBOR notes, if such Business
Day is in the next succeeding calendar month, such Interest Reset Date shall be
the immediately preceding Business Day.

     Unless otherwise specified in the applicable Pricing Supplement, the
interest rate determined with respect to any Interest Determination Date will
become effective on and as of the next succeeding Interest Reset Date. As used
herein, “Interest Determination Date” means the date as of which the interest
rate for a Floating Rate Note is to be calculated, to be effective as of the
following Interest Reset Date and calculated on the related Calculation Date
(as defined below). Unless otherwise specified in the applicable Pricing
Supplement, the Interest Determination Date pertaining to any Interest Reset
Date for a Commercial Paper Rate Note, a CD Rate Note or a CMT Rate Note (the
“Commercial Paper Interest Determination Date”, the “CD Interest Determination
Date”, and the “CMT Interest Determination Date,” respectively), will be the
second Business Day prior to such Interest Reset Date; for Federal Funds Rate
Notes and Prime Rate Notes, the Business Day immediately preceding the related
Interest Reset Date (the “Federal Funds Interest Determination Date” and the
“Prime Interest Determination Date”, respectively); for EURIBOR Notes, the
second TARGET Business Day before the Interest Reset Date (the “EURIBOR
Interest Determination Date”); and for LIBOR Notes, the second London Business
Day before the Interest Reset Date (the “LIBOR Interest Determination Date”).
Unless otherwise specified in the applicable Pricing Supplement, the Interest
Determination Date pertaining to an Interest Reset Date for a Treasury Rate
Note (the “Treasury Interest Determination Date”) will be the Business Day
(other than the Interest Reset Date) on which Treasury Bills (as defined below)
would normally be auctioned in the week in which such Interest Reset Date
falls. Treasury Bills are usually sold at auction on Monday of each week,
unless that day is a legal holiday, in which case the auction is usually held
on the following Tuesday, but the auction may be held on the preceding Friday.
If, as the result of a legal holiday, an auction is so held on the preceding
Friday, such Friday will be the Treasury Interest Determination Date pertaining
to the Interest Reset Date occurring in the next succeeding week.

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If an auction date shall fall on any Interest Reset Date for a Treasury
Rate Note, then such Interest Reset Date shall instead be the first Business
Day immediately following such auction date. The Interest Determination Date
pertaining to a Floating Rate Note the interest rate of which is determined by
reference to two or more Base Rates will be the latest Business Day which is at
least two Business Days prior to such Interest Reset Date for such Floating
Rate Note on which each such Base Rate is determinable.

     Unless otherwise specified in the applicable Pricing Supplement, interest
payments on an Interest Payment Date for a Floating Rate Note will include
interest accrued from, and including, the most recent Interest Payment Date to
which interest has been paid or duly provided for (or, from, and including, the
date of issue if no interest has been paid or duly provided for with respect to
such Floating Rate Note). Interest will accrue to, but excluding, the next
Interest Payment Date (each such interest accrual period, an “Interest
Period”), or if earlier the date on which the principal is paid or duly made
available for payment. Accrued interest from the date of issue or from the last
date to which interest has been paid or duly provided for to the date for which
interest is being calculated shall be calculated by multiplying the face amount
of a Floating Rate Note by the applicable accrued interest factor (the “Accrued
Interest Factor”). The Accrued Interest Factor shall be computed by adding
together the interest factors calculated for each day from the date of issue,
or from the last date to which interest has been paid or duly provided for to
the date for which accrued interest is being calculated. Unless otherwise
specified in the applicable Pricing Supplement, the interest factor for each
such day shall be computed by dividing the per annum interest rate, expressed
as a decimal, applicable to such day by 360 in the case of Commercial Paper
Rate Notes, Federal Funds Rate Notes, LIBOR Notes, EURIBOR Notes, Prime Rate
Notes, and CD Rate Notes, or by the actual number of days in the year in the
case of Treasury Rate Notes and CMT Rate Notes. The interest rate in effect on
each day will be (i) if such day is an Interest Reset Date, the interest rate
with respect to the Interest Determination Date pertaining to such Interest
Reset Date or (ii) if such day is not an Interest Reset Date, the interest rate
with respect to the Interest Determination Date relating to the next preceding
Interest Reset Date, subject in either case to any maximum or minimum interest
rate referred to above or in the applicable Pricing Supplement.

     Unless otherwise specified in the applicable Pricing Supplement, U.S. Bank
Trust National Association will be the “Calculation Agent”. On or before each
Calculation Date, the Calculation Agent will determine the interest rate as
described below and notify the Paying Agent. The Paying Agent will determine
the Accrued Interest Factor applicable to any such Floating Rate Note. The
Paying Agent will, upon the request of the holder of any Floating Rate Note,
provide the interest rate then in effect and the interest rate which will
become effective as a result of a determination made with respect to the most
recent Interest Determination Date with respect to such Floating Rate Note. The
determinations of interest rates made by the Calculation Agent shall, in the
absence of manifest error, be conclusive and binding, and neither the Trustee
nor the Paying Agent shall have the duty to verify determinations of interest
rates made by the Calculation Agent. The determinations of Accrued Interest
Factors made by the Paying Agent shall, in the absence of manifest error, be
conclusive and binding. Unless otherwise specified in the applicable Pricing
Supplement, the “Calculation Date”, if applicable, pertaining to any Interest
Determination Date on a Floating Rate Note will be the earlier of (i) the tenth
calendar day after such Interest Determination Date, or, if any such day is not
a Business Day, the

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following Business Day, and (ii) the Business Day before the applicable
Interest Payment Date, Redemption Date or Maturity Date, as the case may be.

     Unless otherwise specified in the applicable Pricing Supplement, all
percentages resulting from any calculation on Floating Rate Notes will be
rounded, if necessary, to the nearest one hundred-thousandth of one percentage
point, with five one-millionths of one percentage point rounded upward (e.g.,
9.876545% (or .09876545) will be rounded to 9.87655% (or .0987655) and
9.876544% (or .09876544) will be rounded to 9.87654% (or .0987654)); all
calculations of the Accrued Interest Factor for any day on Floating Rate Notes
will be rounded, if necessary, to the nearest one hundred-millionth, with five
one-billionths rounded upward (e.g. .098765455 will be rounded to .09876546 and
        .098765454 will be rounded to .09876545); and all dollar amounts used in or
resulting from such calculations on Floating Rate Notes will be rounded to the
nearest cent (with one-half cent being rounded upward).

     Commercial Paper Rate. Commercial Paper Rate Notes will bear
interest at the interest rates (calculated with reference to the Commercial
Paper Rate and the Spread and/or Spread Multiplier, if any) specified in the
Commercial Paper Rate Notes and in the applicable Pricing Supplement.
Commercial Paper Rate Notes will be subject to the minimum interest rate and
maximum interest rate, if any.

     Unless otherwise specified in the applicable Pricing Supplement,
“Commercial Paper Rate” means, for any Commercial Paper Interest Determination
Date, the Money Market Yield (calculated as described below) of the rate on
that date for commercial paper having the Index Maturity specified in the
applicable Pricing Supplement as published in “Statistical Release H.15(519),
Selected Interest Rates” or any successor publication of the Board of Governors
of the Federal Reserve System (“H.15 (519)”) under the heading “Commercial
Paper — Nonfinancial.”

     The following procedures will be followed if the Commercial Paper Rate
cannot be determined as described above: (1) If the rate is not published by
3:00 p.m., New York City time, on the Calculation Date relating to the
Commercial Paper Interest Determination Date, then the Commercial Paper Rate
will be the Money Market Yield of the rate on the Commercial Paper Interest
Determination Date for commercial paper having the Index Maturity specified in
the applicable Pricing Supplement and published in the H.15(519) Daily Update,
available through the worldwide website of the Board of Governors of the
Federal Reserve System at
http://www.federalreserve.gov/releases/h15/update, or any successor site
or publication (“H.15 Daily Update”) under the heading “Commercial Paper -
Nonfinancial;” (2) If by 3:00 p.m., New York City time, on the Calculation Date
the rate is not published in either H.15(519) or the H.15 Daily Update, then
the Calculation Agent shall determine the Commercial Paper Rate to be the Money
Market Yield of the arithmetic mean of the offered rates as of 11:00 a.m., New
York City time, on the Commercial Paper Interest Determination Date, of three
leading dealers of commercial paper in The City of New York selected by the
Calculation Agent, after consultation with the Company, for commercial paper
having the Index Maturity specified in the applicable Pricing Supplement placed
for an industrial issuer whose bond rating is “AA,” or the equivalent, from a
nationally recognized securities rating agency; provided, however, that if the
dealers selected by the Calculation Agent are not quoting as described above in
this sentence, the

- 7 -

 

Commercial Paper Rate in effect immediately before the Commercial Paper
Interest Determination Date will not change and will remain the Commercial
Paper Rate in effect on the Commercial Paper Interest Determination Date.

     “Money Market Yield” shall be a yield calculated in accordance with the
following formula:

	 	 	 	 	 	 	 
	Money Market Yield =
	 	D x 360
	 	x
	 	100
	
	 	 	 	 	 	 
	
	 	360 — (D x M)	 	 	 	 

where “D” refers to the applicable per annum rate for the commercial
paper, quoted on a bank discount basis and expressed as a decimal, and
“M” refers to the actual number of days in the Interest Period for which
the interest is being calculated.

     EURIBOR Rate. EURIBOR Notes will bear interest at the interest
rates (calculated with reference to EURIBOR and the Spread and/or Spread
Multiplier, if any) specified in the EURIBOR Notes and in the applicable
Pricing Supplement. EURIBOR Notes will be subject to the minimum interest rate
and maximum interest rate, if any.

     Unless otherwise specified in the applicable Pricing Supplement, EURIBOR
means a base rate equal to the interest rate for deposits in euros designated
as “EURIBOR” and sponsored jointly by the European Banking Federation and ACI -
the Financial Market Association or any company established by the joint
sponsors for the interest rate for any EURIBOR Note determined by the
Calculation Agent for each Determination Date in accordance with the following
provisions: (1) For any EURIBOR Interest Payment Date, EURIBOR will be the
offered rate for deposits in euros having the Index Maturity specified in the
applicable Pricing Supplement, beginning on the second euro Business Day after
the relevant Interest Determination Date, as that rate appears on Telerate Page
248 as of 11:00 a.m., Brussels time, on the relevant Interest Determination
Date; (2) If the rate described above does not appear on Telerate Page 248,
EURIBOR will be determined on the basis of the rates, at approximately 11:00
a.m., Brussels time, on the relevant Interest Determination date, at which
deposits of the following kind are offered to prime banks in the euro-zone
interbank market by the principal euro-zone office of each of four major banks
in that market selected by the Calculation Agent, after consultation with the
Company: euro deposits having the relevant Index Maturity, beginning on the
relevant Interest Reset Date, and in a representative amount. The Calculation
Agent will request the principal euro-zone office of each of these banks to
provide a quotation of its rate. If at least two quotations are provided,
EURIBOR for the relevant Interest Determination Date will be the arithmetic
mean of the quotations; (3) If fewer than two quotations are provided as
described above, EURIBOR for the relevant Interest Determination Date will be
the arithmetic mean of the rates for loans of the following kind to leading
euro-zone banks quoted, at approximately 11:00 a.m., Brussels time on that
Interest Determination Date, by three major banks in the euro-zone selected by
the Calculation Agent, after consultation with the Company: loans of euros
having the relevant index maturity, beginning on the relevant interest reset
date, and in a representative amount; provided, however, that if fewer than
three banks selected by the Calculation Agent are quoting as described above,
EURIBOR in effect immediately before the new Interest Period will not change
and will remain the EURIBOR in

- 8 -

 

effect on such EURIBOR new Interest Period. If the initial Base Rate has
been in effect for the prior Interest Period, however, it will remain in effect
for the new Interest Period.

     Federal Funds Rate. Federal Funds Rate Notes will bear interest at
the interest rates (calculated with reference to the Federal Funds Rate and the
Spread and/or Spread Multiplier, if any) specified in the Federal Funds Rate
Notes and in the applicable Pricing Supplement. Federal Funds Rate Notes will
be subject to the minimum interest rate and maximum interest rate, if any.

     Unless otherwise specified in the applicable Pricing Supplement, “Federal
Funds Rate” means, for any Federal Funds Interest Determination Date, the rate
on that date for Federal Funds as published in H.15(519) under the heading
“Federal Funds (Effective)” as displayed on Moneyline Telerate, Inc., or any
successor service, on page 120, or any other page that may replace the
applicable page on that service, which is commonly referred to as “Telerate
Page 120.” The following procedures will be followed if the Federal Funds Rate
cannot be determined as described above: (1) If the above rate is not published
by 3:00 p.m., New York City time, on the Calculation Date for the Federal Funds
Interest Determination Date, the Federal Funds Rate will be the rate published
in the H.15 Daily Update under the heading “Federal Funds (Effective);” (2) If
neither of the above rates is published by 3:00 p.m., New York City time, on
the Calculation Date for the Federal Funds Interest Determination Date, the
Calculation Agent will determine the Federal Funds Rate to be the arithmetic
mean of the rates for the last transaction in overnight U.S. dollar Federal
Funds arranged by three leading dealers of Federal Funds transactions in The
City of New York selected by the Calculation Agent, after consultation with the
Company, as of 3:00 p.m., New York City time, on such Federal Funds Interest
Determination Date; provided, however, that if the dealers selected by the
Calculation Agent are not quoting as specified above in this sentence, the
Federal Funds Rate in effect immediately before the Federal Funds Interest
Determination Date will not change and will remain the Federal Funds Rate in
effect on the Federal Funds Interest Determination Date.

     LIBOR. LIBOR Notes will bear interest at the interest rates
(calculated with reference to LIBOR and the Spread and/or Spread Multiplier, if
any) specified in the LIBOR Notes and in the applicable Pricing Supplement.
LIBOR Notes will be subject to the minimum interest rate and maximum interest
rate, if any.

     Unless otherwise specified in the applicable Pricing Supplement, LIBOR
will be determined by the Calculation Agent for each Interest Determination
Date in accordance with the following provisions: (1) For any LIBOR Interest
Determination Date, LIBOR will be the rate for deposits in U.S. dollars having
the Index Maturity specified in the applicable Pricing Supplement, on the
second London Business Day before the LIBOR Interest Reset Date, that is
displayed on Moneyline Telerate, Inc., or any other successor service, as of
11:00 a.m., London time, on page 3750, or any other page as may replace the
applicable page on that service, which is commonly referred to as “Telerate
Page 3750;” (2) If no rate appears, the Calculation Agent will request that the
principal London offices of each of four major banks in the London interbank
market, selected by the Calculation Agent, after consultation with the Company,
at approximately 11:00 a.m., London time, on the LIBOR Interest Determination
Date provide the Calculation Agent with their offered quotation for deposits in
U.S. dollars having the Index Maturity designated in the applicable Pricing
Supplement on the second Business Day before the

- 9 -

 

LIBOR Interest Reset Date, and in a principal amount that in the judgment
of the Calculation Agent, is representative of a single transaction in the
market at that time. If at least two quotations are provided, LIBOR for the
LIBOR Interest Determination Date will be the arithmetic mean of those
quotations; (3) If fewer than two quotations are provided, LIBOR will be
determined for the applicable LIBOR Interest Determination Date as the
arithmetic mean of the rates quoted at approximately 11:00 a.m., New York City
time, by three major banks in The City of New York selected by the Calculation
Agent, after consultation with the Company, for loans in U.S. dollars to
leading European banks, having the Index Maturity specified in the applicable
Pricing Supplement, on the second London Business Day before the LIBOR Interest
Reset Date and in a principal amount that, in the judgment of the Calculation
Agent, is representative of a single transaction in the market at that time;
provided, however, that if the banks so selected by the Calculation Agent are
not quoting as specified above in this sentence, LIBOR in effect immediately
before the LIBOR Interest Determination Date will not change and will remain
the LIBOR in effect on such LIBOR Interest Determination Date.

     Prime Rate. Prime Rate Notes will bear interest at the interest
rates (calculated with reference to the Prime Rate and the Spread and/or Spread
Multiplier, if any) specified in the prime Rate Notes and in the applicable
Pricing Supplement. Prime Rate Notes will be subject to the minimum interest
rate and maximum interest rate, if any.

     Unless otherwise specified in the applicable Pricing Supplement, “Prime
Rate” means, for any Prime Interest Determination Date, the rate on that date
as published in H.15(519) under the Heading “Bank Prime Loan.” The following
procedures will be followed if the Prime Rate cannot be determined as described
in the previous sentence: (1) If the rate is not published prior to 9:00 a.m.,
New York City time, on the Calculation Date, then the Prime Rate will be the
rate on that Prime Interest Determination Date as published in the H.15 Daily
Update under the heading “Bank Prime Loan;” (2) If the rate is not published
prior to 3:00 p.m., New York City time, on the Calculation Date in either
H.15(519) or the H.15 Daily Update, then the Calculation Agent will determine
the Prime Rate to be the arithmetic mean of the prime rates quoted on the basis
of the actual number of days in the year divided by 360 as of the close of
business on that Prime Interest Determination Date by at least three major
banks in The City of New York selected by the Calculation Agent, after
consultation with the Company, provided, however, that if the banks selected
are not quoting as specified above in this sentence, the Prime Rate will remain
the Prime Rate for the immediately preceding Interest Reset Period, or if there
was no Interest Reset Period, the rate of interest payable will be the Initial
Interest Rate.

     CD Rate. CD Rate Notes will bear interest at the interest rates
(calculated with reference to the CD Rate and the Spread and/or Spread
Multiplier, if any) specified in the CD Rate Notes and in the applicable
Pricing Supplement. CD Rate Notes will be subject to the minimum interest rate
and maximum interest rate, if any.

     Unless otherwise specified in the applicable Pricing Supplement, “CD Rate”
means, for any CD Interest Determination Date, the rate on that date for
negotiable certificates of deposit having the Index Maturity specified in the
applicable Pricing Supplement as this rate is published in H.15(519) under the
heading “CDs (secondary market).” The following procedures will be followed if
the CD Rate cannot be determined as described above: (1) If by 3:00 p.m.,

- 10 -

 

New York City time, on the Calculation Date related to the CD Interest
Determination Date, this rate is not published in H.15(519), then the CD Rate
shall be the rate on the CD Interest Determination Date for negotiable
certificates of deposit of the Index Maturity specified in the applicable
Pricing Supplement and published in the H.15 Daily Update under the heading
“CDs (secondary market);” (2) If by 3:00 p.m., New York City time, on the
Calculation Date, the rate is not published in either H.15(519) or the H.15
Daily Update, the Calculation Agent will calculate the CD Rate to be the
arithmetic mean of the secondary market offered rates as of 3:00 p.m., New York
City time, on the CD Interest Determination Date, of three leading non-bank
dealers in negotiable U.S. dollar certificates of deposit in The City of New
York selected by the Calculation Agent, after consultation with the Company,
for negotiable certificates of deposit of major U.S. money market banks which
are then rated A-1+ by Standard & Poor’s Ratings Group and P-1 by Moody’s
Investor Service, and with a remaining maturity closest to the Index Maturity
specified in the applicable Pricing Supplement in denominations of $5,000,000;
provided, however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as described above in this sentence, the CD Rate in
effect immediately before that CD Interest Determination Date will not change
and will remain the CD Rate in effect on that CD Interest Determination Date.

     Treasury Rate. Treasury Rate Notes will bear interest at the
interest rates (calculated with reference to the Treasury Rate and the Spread
and/or Spread Multiplier, if any) specified in the Treasury Rate Notes and in
the applicable Pricing Supplement. Treasury Rate Notes will be subject to the
minimum interest rate and maximum interest rate, if any.

     Unless otherwise specified in the applicable Pricing Supplement, “Treasury
Rate” means, for any Treasury Interest Determination Date, the rate for the
most recent auction of direct obligations of the United States (“Treasury
Bills”) having the Index Maturity specified in the applicable Pricing
Supplement as this rate is displayed on Moneyline Telerate, Inc., or any
successor service under the caption “Investment Rate” on page 56 or 57, or
other page as may replace the applicable page on that service, which is
commonly referred to as “Telerate Page 56” or “Telerate Page 57,” as the case
may be, or if not published on Moneyline Telerate, Inc., by 3:00 p.m., New York
City time, on the Calculation Date for the Treasury Interest Determination
Date, the rate published in the H.15 Daily Update under the heading “U.S.
Government Securities/Treasury Bills/Auction High.” The following procedures
will be followed if the Treasury Rate cannot be determined as described above:
(1) If not published in H.15(519) by 3:00 p.m., New York City time, on the
Calculation Date for the Treasury Interest Determination Date, the Treasury
Rate will be the bond equivalent yield of the auction rate of the applicable
Treasury Bills on the Treasury Interest Determination Date as announced by the
U.S. Department of the Treasury; (2) If by 3:00 p.m., New York City time on the
Calculation Date, the results of the auction of Treasury Bills having the Index
Maturity designated in the applicable Pricing Supplement are not otherwise as
provided in the applicable Pricing Supplement or if no auction is held in a
particular week, then the Calculation Agent will calculate the Treasury Rate to
be a Yield to Maturity (expressed as a bond equivalent on the basis of a year
of 365 or 366 days, as applicable, and applied on a daily basis) of the
arithmetic mean of the secondary market bid rates, as of 3:30 p.m., New York
City time, on the Treasury Interest Determination Date, of three leading
primary United States government securities dealers selected by the Calculation
Agent, after consultation with the Company, for the issue of Treasury Bills
with a remaining

- 11 -

 

maturity closest to the Index Maturity specified in the applicable Pricing
Supplement; provided, however, that if the dealers selected by the Calculation
Agent are not quoting as described above in this sentence, the Treasury Rate in
effect immediately before the Treasury Interest Determination Date will not
change and will remain the Treasury Rate in effect on such Treasury Interest
Determination Date.

     The “bond equivalent yield” means a yield (expressed as a percentage)
calculated in accordance with the following formula

	 	 	 	 	 	 	 
	bond equivalent yield =
	 	D x N
	 	x
	 	100
	
	 	 	 	 	 	 
	
	 	360 — (D x M)	 	 	 	 

Where “D” refers to the applicable per annum rate for Treasury Bills quoted on
a bank discount basis and expressed as a decimal, “N” refers to 365 or 366, as
the case may be, and “M” refers to the actual number of days in the applicable
Interest Reset Period.

     CMT Rate. CMT Rate Notes will bear interest at the interest rates
(calculated with reference to the CMT Rate and the Spread and/or Spread
Multiplier, if any) specified in the CMT Rate Note and in the applicable
Pricing Supplement. CMT Rate Notes will be subject to the minimum interest
rate and maximum interest rate, if any.

     Unless otherwise specified in the applicable Pricing Supplement, “CMT
Rate” means, for any CMT Interest Determination Date, the rate reported on
Moneyline Telerate, Inc., or any successor service, under the heading “Daily
Treasury Constant Maturities and Money Markets/Federal Reserve Board Release
H.15 Monday’s Approx. 3:45 p.m. EDT,” on page 7051, or any other page as may
replace the applicable page of that service, which is commonly referred to as
“Telerate Page 7051”. The following procedures will be followed if the CMT
Rate cannot be determined as described above: If the CMT Rate is not available
by 3:00 p.m., New York City time, on the Calculation Date pertaining to such
CMT Interest Determination Date, the Calculation Agent will calculate the CMT
Rate for the CMT Interest Determination Date which will be the bond equivalent
yield to maturity of the arithmetic mean of the secondary market bid rates, as
of 3:00 p.m., New York City time, on the applicable CMT Interest Determination
Date, reported, according to their written records, by three leading primary
United States government securities dealers in The City of New York (the
“Reference Dealers”) selected by the Calculation Agent, after consultation with
the Company, for the most recently issued direct noncallable fixed rate
Treasury Bills with an original maturity approximately equal to the applicable
Index Maturity; provided, however, that if fewer than three Reference Dealers
selected by the Calculation Agent are quoting as described above in this
sentence, the CMT Rate in effect immediately before the CMT Interest
Determination Date will not change and will remain the CMT Rate then in effect
on such CMT Interest Determination Date.

Zero Coupon Notes

     The specific terms of any Zero Coupon Notes will be set forth in the
applicable Pricing Supplement.

- 12 -

 

     (6) Unless otherwise specified in the applicable Pricing Supplement,
principal of (and premium, if any) and interest (if any) on the Notes will be
payable, and, except as provided in Section 305 of the Indenture with respect
to any Global Security (as defined below) representing Book-Entry Notes (as
defined below), the transfer of the Notes will be registrable and Notes will be
exchangeable for Notes bearing identical terms and provisions at the corporate
trust office of U.S. Bank Trust National Association (the “Paying Agent”), in
The City of New York, New York, provided that payments of interest with respect
to any Certificated Note (as defined below), other than interest at maturity or
upon redemption, may be made at the option of the Company by check mailed to
the address of the person or entity entitled thereto as it appears on the
security register of the Company at the close of business on the Regular Record
Date corresponding to the relevant Interest Payment Date. Unless otherwise
specified in the applicable Pricing Supplement, holders of $10,000,000 or more
in aggregate principal amount of Certificated Notes shall be entitled to
receive payments of interest, other than interest at maturity or upon
redemption, by wire transfer of immediately available funds, if appropriate
wire transfer instructions have been given to the Paying Agent in writing not
later than the Regular Record Date prior to the applicable Interest Payment
Date.

     (7) If so specified in the applicable Pricing Supplement, the Notes will
be redeemable at the option of the Company on the date or dates prior to
maturity specified in the applicable Pricing Supplement at the price or prices
specified in the applicable Pricing Supplement (unless otherwise specified in
such Pricing Supplement, in the case of Notes other than Zero Coupon Notes or
certain interest bearing notes issued as Original Issue Discount Notes,
expressed as a specified percentage of the principal amount of such Note,
together with accrued interest, if any, to the date of redemption stated in the
applicable Pricing Supplement. Unless otherwise specified in the applicable
Pricing Supplement, in the case of Zero Coupon Notes or certain interest
bearing Notes issued as Original Issue Discount Notes (as specified in the
applicable Pricing Supplement), as a specified percentage of the Amortized Face
Amount (as defined below) of such Note (as described in paragraph (13) below),
together with accrued interest, if any, to the date of redemption (or, in the
case of any interest bearing Note issued as an Original Issue Discount Note,
any accrued but unpaid “qualified stated interest” payments (as specified in
Paragraph (13) below)). Unless otherwise specified in the applicable Pricing
Supplement, the Company may redeem any of the Notes which are redeemable and
remain outstanding either in whole or from time to time in part upon the terms
and conditions set forth in Article XI of the Indenture.

     (8) Unless otherwise specified in the applicable Pricing Supplement, the
Company shall not be obligated to redeem or purchase any Notes of such series
pursuant to any sinking fund or analogous provisions or at the option of any
Holder.

     (9) Unless otherwise specified in the applicable Pricing Supplement, Notes
of such series may be issued only in fully registered form. Unless otherwise
specified in the applicable Pricing Supplement, the authorized denomination of
the Notes of such series other than Foreign Currency Notes (as defined below),
shall be $1,000 or any amount in excess of $1,000 which is an integral multiple
of $1,000. Foreign Currency Notes will be issued in the denominations specified
in the applicable Pricing Supplement.

- 13 -

 

     (10) The Notes may be denominated, and payments of principal of and
interest on the Notes will be made, in United States dollars or in such foreign
currencies or foreign currency units as may be specified in the applicable
Pricing Supplement (“Foreign Currency Notes”). In the case of a Note having a
Specified Currency other than U.S. dollars, the principal of that Note in U.S.
dollars will be based on the bid quoted by the exchange rate agent as of 11:00
a.m., London time, on the date of original issuance of such Note, for the
purchase of U.S. dollars with the Specified Currency for settlement of the
aggregate amount of the Specified Currency. If this bid quotation is not
available, the exchange rate agent will obtain a bid quotation from a leading
foreign exchange bank in London or New York City selected by the exchange rate
agent for this purchase.

     (11) Except as otherwise described in Paragraph (5) above and Paragraph
(13) below, the amount of payments of principal of and any premium or interest
on the Notes will not be determined with reference to an index.

     (12) Unless otherwise specified in the applicable Pricing Supplement, the
Notes shall be subject to the events of default specified in Section 501,
paragraphs (1) through (7), of the Indenture.

     (13) The portion of the principal amount of the Notes, other than Original
Issue Discount Notes (including any Zero Coupon Notes), which shall be payable
upon declaration of acceleration of maturity thereof shall not be other than
the principal amount thereof. Unless otherwise specified in the applicable
Pricing Supplement, the portion of the principal amount of Zero Coupon Notes
and certain interest bearing Notes issued as Original Issue Discount Notes (as
specified in the applicable Pricing Supplement) upon any acceleration of the
maturity thereof will be the Amortized Face Amount and in the case of an
interest-bearing note issued as an Original Issue Discount Note, any accrued
but unpaid qualified stated interest payments. Unless otherwise specified in
the applicable Pricing Supplement, the amount payable to the holder of such
Original Issue Discount Note upon any redemption thereof will be the applicable
specified percentage of the Amortized Face Amount thereof specified in the
applicable Pricing Supplement, and in the case of any interest bearing Note
issued as an Original Issue Discount Note, any accrued but unpaid “qualified
stated interest” payments (as defined in the Treasury Regulations regarding
original issue discount issued by the Treasury Department (the “Regulations”)).
The “Amortized Face Amount” of an Original Issue Discount Note is equal to the
sum of (i) the Issue Price (as defined below) of such Original Issue Discount
Note and (ii) that portion of the difference between the Issue Price and the
principal amount of such original Issue Discount Note that has been amortized
at the Stated Yield (as defined below) of such Original Issue Discount Note
(computed in accordance with Section 1272(a)(4) of the Internal Revenue Code of
1986, as amended, and Section 1.1275-1(b) of the Regulations, in each case as
in effect on the issue date of such Original Issue Discount Note) at the date
as of which the Amortized Face Amount is calculated. In no event can the
Amortized Face Amount exceed the principal amount of such Note due at the
stated maturity thereof. As used in the preceding sentence, the term “Issue
Price” means the principal amount of such Original Issue Discount Note due at
the stated maturity thereof less the “Original Issue Discount” of such Original
Issue Discount Note specified on the face thereof and in the applicable Pricing
Supplement. The term “Stated Yield” of such Original Issue Discount Note means
the “Yield to Maturity” specified on

- 14 -

 

the face of such Original Issue Discount Note and in the applicable
Pricing Supplement for the period from the Original Issue Date of such Original
Issue Discount Note, as specified on the face of such Original Issue Discount
Note and in the applicable Pricing Supplement, to the stated maturity thereof
based on its Issue Price and stated redemption price at maturity thereof.

     (14) Each Note will be represented by either a global security (a “Global
Security”) registered in the name of a nominee of the Depository (each such
Note represented by a Global Security being herein referred to as a “Book-Entry
Note”) or a certificate issued in definitive registered form, without coupons
(a “Certificated Note”), as set forth in the applicable Pricing Supplement.
Unless otherwise specified in the applicable Pricing Supplement, The Depository
Trust Company will act as Depositary. Except as provided in Section 305 of the
Indenture, Book-Entry Notes will not be issuable in certificated form and will
not be exchangeable or transferable. So long as the Depositary or its nominee
is the registered holder of any Global Security, the Depositary or its nominee,
as the case may be, will be considered the sole Holder of the Book-Entry Note
or Notes represented by such Global Security for all purposes under the
Indenture and the Notes.

     (15) Subject to the terms of the Indenture and the resolutions and
authorization referred to in the first paragraph hereof, the Notes shall have
such other terms (which may be in addition to or different from the terms set
forth herein) as are specified in the applicable Pricing Supplement.

     B. Establishment of Note Forms pursuant to Section 201 of
Indenture.

     It is hereby established pursuant to Section 201 of the Indenture that the
Global Securities representing Book-Entry Notes shall be substantially in the
forms attached as Exhibits A, B, C and D hereto, unless a different form is
provided in the applicable Pricing Supplement (which Pricing Supplement shall
be an “Officers’ Certificate” satisfying the requirements of Section 201 of the
Indenture).

     C. Establishment or Procedures for Authentication of Notes Pursuant to
Section 303 of Indenture.

     It is hereby ordered pursuant to Section 303 of the Indenture that Notes
may be authenticated by the Trustee and issued in accordance with the
Administrative Procedures attached hereto as Exhibit E and upon receipt by the
Trustee (including by facsimile) of a Pricing Supplement to this Officers’
Certificate and Company Order, in substantially the form attached as Exhibit F
hereto (a “Pricing Supplement”), setting forth the information specified or
contemplated therein for the particular Notes to be authenticated and issued.
At least one officer signing each Pricing Supplement shall be an Authorized
Officer as defined in the resolutions referred to in the first paragraph
hereof.

     D. Other Matters.

- 15 -

 

The applicable Pricing Supplement shall specify any agent of the Company
designated for the purpose of delivering, for cancellation by the Trustee
pursuant to Section 309 of the Indenture, Notes which have not been issued and
sold by the Company.

     Attached as Exhibit G hereto is a true and correct copy of resolutions
duly adopted by the Board of Directors of the Company on April 19, 2005, such
resolutions have not been further amended, modified or rescinded and remain in
full force and effect; and such resolutions are the only resolutions adopted by
the Company’s Board of Directors or by any Authorized Officers relating to the
offering and sale of the Notes.

[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]

- 16 -

 

     The undersigned have read the pertinent sections of the Indenture
including the related definitions contained therein. The undersigned have
examined the resolutions adopted by the Board of Directors of the Company. In
the opinion of the undersigned, the undersigned have made such examination or
investigation as is necessary to enable the undersigned to express an informed
opinion as to whether or not the conditions precedent to the establishment of
(i) a series of Securities, (ii) the forms of such Securities and (iii) the
procedures for authentication of such series of Securities, contained in the
Indenture have been complied with. In the opinion of the undersigned, such
conditions have been complied with.

Dated: May 12, 2005

	 	 	 	 	 
	 	U.S. BANCORP

 	 
	 	By     /s/ Daryl N. Bible *
 	 
	 	Name:  	Daryl N. Bible 	 
	 	Title:  	Executive Vice President and
Treasurer 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                                   By    /s/ Kenneth D. Nelson **
 	 
	 	Name:  	Kenneth D. Nelson 	 
	 	Title:  	Senior Vice President 	 
	 

	*	 	To be signed by the Treasurer or any Assistant Treasurer or Senior Vice
President designated as an Authorized Officer.
	 
	**	 	To be signed by a Vice President.

- 17 -

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