Exhibit 4.2
U.S. BANCORP
Medium-Term Notes, Series K (Subordinated)
Officers' Certificate and Company Order
Pursuant to the Indenture dated as of October 1, 1991, as amended by a
First Supplemental Indenture dated as of April 1, 1993 (as so amended, the
"Indenture"), between U.S. Bancorp (the "Company") and Citibank, N.A., as
Trustee (the "Trustee"), resolutions adopted by the Company's Board of Directors
on October 15, 1997, 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 K 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.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in the Indenture.
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.
A. Establishment of Series pursuant to Section 301 of Indenture.
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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 K (Subordinated)" (referred to herein as the "Notes").
(2) There shall be no limitation on the aggregate principal amount of
the Notes of such series, however, unless otherwise specified in an
Authentication Certificate (as defined in Section C below), the aggregate
principal amount of the Notes of such series to be issued pursuant to this
Officers' Certificate is limited to $1,000,000,000 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)
as such amount may be reduced by the issuance of other series of the Securities.
If so specified in an Authentication Certificate, such $1,000,000,000 limit
shall be increased to up to $2,124,000,000.
(3) Interest will be payable to the person in whose name a Note (or
any predecessor Note) 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 Business Day (as
defined below), 9 months or more from its date of issue as specified in such
Note and in the applicable Authentication Certificate; 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. Unless otherwise authorized by or pursuant to
a resolution of the Board of Directors of the Company, no Series K Note will
mature less than 1 year and 1 day from its date of issue. If the Maturity Date
specified in the applicable Authentication Certificate for any Note is a day
that is not a Business Day, principal will be paid on the next succeeding
Business Day with the same force and effect as if made on such specified
Maturity Date, except that, in the case of a LIBOR Note, if such Business Day is
in the next succeeding calendar month, such Maturity Date shall be the
immediately preceding Business Day. "Business Day" means (a) unless otherwise
specified in the applicable Authentication Certificate with respect to any Note,
any day that is not a Saturday or Sunday and that in the City of New York is not
a day on which banking institutions generally are authorized or obligated by law
or executive order to close, in addition, with respect to LIBOR Notes is a day
in 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 interest rate formulas, which may be
adjusted by a Spread and/or Spread Multiplier (each as defined below), and, if
so specified in the applicable Authentication Certificate with respect to one or
more Interest Periods (as defined below), one or more fixed rates (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 Authentication
Certificate. Any Floating Rate Note may also have either or both of the
following as set forth in the applicable Authentication Certificate: (i) a
maximum interest rate limitation, or ceiling, on the rate of interest which may
accrue during any Interest Period; and (ii) a minimum interest rate limitation,
or floor, on the rate of interest which may accrue during any Interest Period.
The applicable Authentication Certificate may designate any of the following
interest rate formulas as applicable to one or more Interest Periods on each
Floating Rate Note: (a) the Commercial Paper Rate, in which case such Note will
be a "Commercial Paper Rate Note" with respect to such Interest Period or
Interest Periods; (b) the Federal Funds Rate, in which case such Note will be a
"Federal Funds Rate Note" with respect to such Interest Period or Interest
Periods; (c) LIBOR, in which case such Note will be a "LIBOR Note" with respect
to such
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Interest Period or Interest Periods; (d) the Prime Rate, in which case
such Note will be a "Prime Rate Note" with respect to such Interest Period or
Interest Periods; (e) the Eleventh District Cost of Funds Rate, in which case
such Note will be an "Eleventh District Cost of Funds Rate Note" with respect to
such Interest Period or Interest Periods; (f) the CD Rate, in which case such
Note will be a "CD Rate Note" with respect to such Interest Period or Interest
Periods; (g) the Treasury Rate, in which case such Note will be a "Treasury Rate
Note" with respect to such Interest Period or Interest Periods; (h) the J.J.
Kenny Rate, in which case such Note will be a "J.J. Kenny Rate Note" with
respect to such Interest Period or Interest Periods; (i) the CMT Rate, in which
case such Note will be a " CMT Rate Note" with respect to such Interest Period
or Interest Periods; or (j) one or more other interest rate formulas.
The interest rate on each Floating Rate Note for each Interest Period
will be determined by reference to (i) the applicable interest rate formula
specified in the applicable Authentication Certificate for such Interest Period,
plus or minus the applicable Spread, if any, or multiplied by the applicable
Spread Multiplier, if any, or (ii) the applicable fixed rate per annum specified
in the applicable Authentication Certificate for such Interest Period. The
"Spread" is the number of basis points specified in the applicable
Authentication Certificate as being applicable to such Floating Rate Note for
such Interest Period, and the "Spread Multiplier" is the percentage specified in
the applicable Authentication Certificate as being applicable to such Floating
Rate Note for such Interest Period.
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
(as defined below) to which interest on such Note (or any predecessor Note) has
been paid or duly provided for (i) at the fixed rate per annum applicable to the
related Interest Period or Interest Periods, or (ii) at a rate per annum
determined pursuant to the interest rate formula applicable to the related
Interest Period, in each case as specified therein and in the applicable
Authentication Certificate, 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 interest rate formulas 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 Authentication Certificate, 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".
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The interest rate on a Note for any Interest Period 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.
The applicable Authentication Certificate 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 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 interest rate formula for any Interest Period is based
(the "Index Maturity"), the Spread and/or Spread Multiplier, the Interest
Determination Dates (as defined below), the Interest Reset Dates (as defined
below) and any minimum or maximum interest rate limitations); and (iv) whether
such Note is an Original Issue Discount Note.
Fixed Rate Notes
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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 Authentication Certificate. Unless otherwise specified in the
applicable Authentication Certificate, 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 fifteenth day (whether or not a Business Day) of the month next preceding
each Interest Payment Date. Unless otherwise specified in the applicable
Authentication Certificate, 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.
Floating Rate Notes
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The Interest Payment Dates for the Floating Rate Notes shall be as
specified in such Notes and in the applicable Authentication Certificate, and,
unless otherwise specified in the applicable Authentication Certificate, the
Regular Record Dates for the Floating 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 Authentication Certificate 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 (other
than Eleventh District Cost of Funds Rate Notes) with a daily, weekly or monthly
Interest Reset Date, on the third Wednesday of each month or on the third
Wednesday of March, June, September and December of each year; in the case of
Eleventh District Cost of Funds Rate Notes
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(all of which reset monthly), on the first Business Day of each month or on the
first Business Day of March, June, September and December of each year, all as
specified in the applicable Authentication Certificate; 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 Authentication Certificate; 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
Authentication Certificate, and in each case at maturity or upon redemption. In
the event that any Interest Payment Date or any applicable Redemption Date for
any Floating 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,
except that, in the case of a LIBOR Note, if such Business Day is in the next
succeeding calendar month, such Interest Payment Date or Redemption 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 (the date on which each
such reset occurs, an "Interest Reset Date"), as specified in the applicable
Authentication Certificate. Unless otherwise specified in the applicable
Authentication Certificate, 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 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 (other than Eleventh District Cost of Funds Rate Notes) which are
reset monthly, the third Wednesday of each month; in the case of Eleventh
District Cost of Funds Rate Notes (all of which reset monthly), the first
Business Day 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
Authentication Certificate; 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 Authentication Certificate.
Unless otherwise specified in the applicable Authentication
Certificate, the interest rate determined with respect to any Interest
Determination Date will become effective on and as of the next succeeding
Interest Reset Date; provided, however, that 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
Authentication Certificate. 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, except that in
the case of a LIBOR Note, if such Business Day is in the next succeeding
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calendar month, such Interest Reset Date shall be the immediately preceding
Business Day.
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 Authentication Certificate, the Interest Determination Date
pertaining to any Interest Reset Date for a Commercial Paper Rate Note, a
Federal Funds Rate Note, a LIBOR Note, a Prime Rate Note, a CD Rate Note, a J.J.
Kenny Rate Note or a CMT Rate Note (the "Commercial Paper Interest Determination
Date", the "Federal Funds Interest Determination Date", the "LIBOR Interest
Determination Date", the "Prime Interest Determination Date", the "CD Interest
Determination Date", the "J.J. Kenny Interest Determination Date" and the "CMT
Interest Determination Date", respectively) will be the second Business Day
prior to such Interest Reset Date. Unless otherwise specified in the applicable
Authentication Certificate, the Interest Determination Date pertaining to an
Interest Reset Date for an Eleventh District Cost of Funds Rate Note (the
"Eleventh District Cost of Funds Interest Determination Date") will be the last
day of the month of the District Bank (as defined below) preceding the Interest
Reset Date on which the District Bank is open for business and publishes the
Index (as defined below). Unless otherwise specified in the applicable
Authentication Certificate, the Interest Determination Date pertaining to an
Interest Reset Date for a Treasury Rate Note (the "Treasury Interest
Determination Date") will be the day of the week on which Treasury bills would
normally be auctioned in the week in which such Interest Reset Date falls. 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. 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 Interest Rate Bases 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 Interest Rate Basis is determinable.
Unless otherwise specified in the applicable Authentication
Certificate, interest payments on an Interest Payment Date for a Floating Rate
Note will include interest accrued from, and including, the next preceding
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) to, but excluding, such
Interest Payment Date (each such interest accrual period, an "Interest Period").
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
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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 Authentication Certificate, the interest factor for each such day
shall be computed by dividing the per annum interest rate applicable to such day
by 360 in the case of Commercial Paper Rate Notes, Federal Funds Rate Notes,
LIBOR Notes, Prime Rate Notes, Eleventh District Cost of Funds Rate Notes, CD
Rate Notes and J.J. Kenny 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 pertaining to the
next preceding Interest Reset Date, subject in either case to any maximum or
minimum interest rate limitation referred to above or in the applicable
Authentication Certificate.
Unless otherwise specified in the applicable Authentication
Certificate, 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 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 be conclusive and binding. Unless otherwise
specified in the applicable Authentication Certificate, 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 next
succeeding Business Day, and (ii) the Business Day immediately preceding the
applicable Interest Payment Date or Maturity, as the case may be.
Unless otherwise specified in the applicable Authentication
Certificate, 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) being rounded to 9.87655% (or .0987655)
and 9.876544% (or .09876544) being 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 being rounded to .09876546 and
.098765454 being rounded to .09876545); and all dollar amounts used in or
resulting from such calculations on Floating Rate
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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
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at the interest rates (calculated with reference to the Commercial Paper Rate
and the Spread or Spread Multiplier, if any) specified in the Commercial Paper
Rate Notes and in the applicable Authentication Certificate.
Unless otherwise specified in the applicable Authentication
Certificate, "Commercial Paper Rate" means, with respect to 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 above as such rate is released by the Board of Governors of the
Federal Reserve System as reported on page 133 (or other applicable page) of
Telerate Data Service, under the heading "Dealer Commercial Paper." If by 3:00
p.m., New York City time, on the Calculation Date (as defined below) pertaining
to such Commercial Paper Interest Determination Date such rate is not so
reported on Telerate Data Service, then the Commercial Paper Rate shall be the
Money Market Yield of the rate on that Commercial Paper Interest Determination
Date for commercial paper having such Index Maturity designated in the
applicable Authentication Certificate as published by the Federal Reserve Bank
of New York in its daily statistical release, "Composite 3:30 p.m. Quotations
for U.S. Government Securities" (or any successor publication published by the
Federal Reserve Bank of New York) ("Composite Quotations") under the heading
"Commercial Paper -- Non-Financial." If by 3:00 p.m., New York City time, on
such Calculation Date such rate is not so published in Composite Quotations, the
Commercial Paper Rate for that Commercial Paper Interest Determination Date
shall be calculated by the Calculation Agent and shall be the Money Market Yield
of the arithmetic mean of the offered rates of three leading dealers of
commercial paper in the City of New York selected by the Calculation Agent as
of 11:00 a.m., New York City time, on that Commercial Paper Interest
Determination Date, for commercial paper having such Index Maturity specified in
the applicable Authentication Certificate placed for an industrial issuer whose
bond rating is "AA," or the equivalent, from a nationally recognized securities
rating agency; provided, however, that if fewer than three dealers selected as
aforesaid by the Calculation Agent are quoting as specified in this sentence,
the Commercial Paper Rate determined as of such Commercial Paper Interest
Determination Date will remain the Commercial Paper Rate in effect on such
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
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360 - (D x M)
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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 interest is being
calculated.
Federal Funds Rate. Federal Funds Rate Notes will bear interest at
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the interest rates (calculated with reference to the Federal Funds Rate and the
Spread or Spread Multiplier, if any) specified in the Federal Funds Rate Notes
and in the applicable Authentication Certificate.
Unless otherwise specified in the applicable Authentication
Certificate, "Federal Funds Rate" means, with respect to any Federal Funds
Interest Determination Date, the rate on that day for Federal Funds released by
the Board of Governors of the Federal Reserve System as reported on page 120 (or
other applicable page) of the Telerate Data Service, under the heading "Fed
Funds Effective" or, if not so reported on the Telerate Data Service by 3:00
p.m., New York City time, on the Calculation Date pertaining to such Federal
Funds Interest Determination Date, the Federal Funds Rate will be the rate on
such Federal Funds Interest Determination Date as published in Composite
Quotations under the heading "Federal Funds/Effective Rate". If such rate is
not so published by 3:00 p.m., New York City time, on the Calculation Date
pertaining to such Federal Funds Interest Determination Date, the Federal Funds
Rate for such Federal Funds Interest Determination Date will be calculated by
the Calculation Agent and will be the arithmetic mean of the rates for the last
transaction in overnight Federal Funds arranged by three leading dealers of
Federal Funds transactions in the City of New York selected by the Calculation
Agent as of 3:00 p.m., New York City time, on such Federal Funds Interest
Determination Date; provided, however, that if fewer than three dealers selected
as aforesaid by the Calculation Agent are quoting as specified in this sentence,
the Federal Funds Rate will remain the Federal Funds Rate in effect on such
Federal Funds Interest Determination Date.
LIBOR. LIBOR Notes will bear interest at the interest rates
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(calculated with reference to LIBOR and the Spread or Spread Multiplier, if any)
specified in the LIBOR Notes and in the applicable Authentication Certificate.
Unless otherwise specified in the applicable Authentication
Certificate, LIBOR will be determined by the Calculation Agent in accordance
with the following provisions:
(i) With respect to a LIBOR Interest Determination Date, LIBOR will
be determined on the basis of the offered rates for deposits in United
States dollars having the Index Maturity designated in the applicable
Authentication Certificate, commencing on the second Business Day
immediately following that LIBOR Interest Determination Date, that appears
as of 11:00 a.m. London time on such LIBOR Interest Determination Date on
page 3750 (or other applicable page) of the Telerate Data Service, or such
other service or services as may be nominated by the British Bankers'
Association
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for the purpose of displaying London interbank offered rates for U.S. dollar
deposits. If no rate is reported by the Telerate Data Service, then LIBOR in
respect of that LIBOR Interest Determination Date will be determined as
described in (ii) below.
(ii) With respect to a LIBOR Interest Determination Date on which no
rate is reported by the Telerate Data Service as specified in (i) above,
LIBOR will be determined on the basis of the rates at which deposits in
United States dollars are offered by four major banks in the London
interbank market selected by the Calculation Agent (the "Reference Banks")
at approximately 11:00 a.m., London time, on that LIBOR Interest
Determination Date to prime banks in the London interbank market having the
Index Maturity designated in the applicable Authentication Certificate
commencing on the second Business Day immediately following such LIBOR
Interest Determination Date and in a principal amount, not less than United
States $1,000,000, that, in the judgment of the Calculation Agent, is
representative for a single transaction in such market at such time. The
Calculation Agent will request the principal London office of each of such
Reference Banks to provide a quotation of its rate. If at least two such
quotations are provided, LIBOR in respect of that LIBOR Interest
Determination Date will be the arithmetic mean of such quotations. If fewer
than two quotations are provided, LIBOR in respect of that LIBOR Interest
Determination Date will be the arithmetic mean of the rates quoted by three
major banks in the City of New York selected by the Calculation Agent at
approximately 11:00 a.m., New York City time, on that LIBOR Interest
Determination Date for loans in United States dollars to leading European
banks, having the Index Maturity specified in the applicable Authentication
Certificate, commencing on the second Business Day immediately following
that LIBOR Interest Determination Date and in a principal amount, not less
than United States $1,000,000, that, in the judgment of the Calculation
Agent, is representative for a single transaction in such market at such
time; provided, however, that if fewer than three banks in the City of New
York selected as aforesaid by the Calculation Agent are quoting as specified
in this sentence, LIBOR with respect to such LIBOR Interest Determination
Date will remain LIBOR in effect on such LIBOR Interest Determination Date.
Prime Rate. Prime Rate Notes will bear interest at the interest rates
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(calculated with reference to the Prime Rate and the Spread or Spread
Multiplier, if any) specified in the Prime Rate Notes and in the applicable
Authentication Certificate.
Unless otherwise specified in the applicable Authentication
Certificate, "Prime Rate" means, with respect to any Prime Interest
Determination Date, the arithmetic mean of the prime rates or base rates for
commercial loans quoted on the basis of the actual number of days in the year
divided by a 360-day year as of the close of business on such Prime Interest
Determination Date by three major money center
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banks in the City of New York selected by the Calculation Agent (after
consultation with the Company). If fewer than three quotations are provided, the
Prime Rate shall be calculated by the Calculation Agent and shall be determined
as the arithmetic mean on the basis of the prime rates or base rates for
commercial loans quoted in the City of New York on such date by three substitute
banks or trust companies organized and doing business under the laws of the
United States, or any State thereof, having total equity capital of at least
$500,000,000 and being subject to supervision or examination by a federal or
state authority, selected by the Calculation Agent (after consultation with the
Company); provided, however, that if fewer than three banks or trust companies
selected as aforesaid by the Calculation Agent are quoting as specified in this
sentence, the Prime Rate will remain the Prime Rate in effect on such Prime
Interest Determination Date.
Eleventh District Cost of Funds Rate. Eleventh District Cost of Funds
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Rate Notes will bear interest at the interest rates (calculated with reference
to the Eleventh District Cost of Funds Rate and the Spread or Spread Multiplier,
if any, specified in the Eleventh District Cost of Funds Rate Notes and in the
applicable Authentication Certificate.
Unless otherwise indicated in the applicable Authentication
Certificate, "Eleventh District Cost of Funds Rate" means, with respect to any
Eleventh District Cost of Funds Interest Determination Date, the monthly
weighted average cost of funds for the calendar month immediately preceding the
month in which such Eleventh District Cost of Funds Interest Determination Date
falls, as reported on page 7058 (or other applicable page) of the Telerate Data
Service, under the heading "11th District" as of 11:00 A.M. San Francisco time,
on such Eleventh District Cost of Funds Interest Determination Date. If such
rate is not so reported on the Telerate Data Service on any related Eleventh
District Cost of Funds Interest Determination Date, the Eleventh District Cost
of Funds Rate for such Eleventh District Cost of Funds Interest Determination
Date shall be the monthly weighted average cost of funds paid by member
institutions of the Eleventh Federal Home Loan Bank District that was most
recently announced (the "Index") by the Federal Home Loan Bank of San Francisco
(the "District Bank") as such cost of funds for the calendar month immediately
preceding the date of such announcement. If the District Bank fails to announce
such rate for the calendar month immediately preceding such Eleventh District
Cost of Funds Interest Determination Date, then the Eleventh District Cost of
Funds Rate determined as of such Eleventh District Cost of Funds Interest
Determination Date will be the Eleventh District Cost of Funds Rate in effect on
such Eleventh District Cost of Funds Interest Determination Date.
CD Rate. CD Rate Notes will bear interest at the interest rates
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(calculated with reference to the CD Rate and the Spread or Spread Multiplier,
if any) specified in the CD Rate Notes and in the applicable Authentication
Certificate.
Unless otherwise specified in the applicable Authentication
Certificate, "CD Rate" means, with respect to any CD Interest Determination
Date, the rate on
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such date for negotiable certificates of deposit having the Index Maturity
specified in the applicable Authentication Certificate as such rate is released
by the Board of Governors of the Federal Reserve System as reported on page 120
(or other applicable page) of the Telerate Data Service, under the heading
"Certs of Deposit". If by 3:00 p.m., New York City time, on the Calculation Date
pertaining to such CD Interest Determination Date such rate is not so reported
on the Telerate Data Service, then the CD Rate shall be the rate on such CD
Interest Determination Date for negotiable certificates of deposit of the Index
Maturity designated in the applicable Authentication Certificate as published in
Composite Quotations under the heading "Certificates of Deposit". If by 3:00
p.m., New York City time, on such Calculation Date such rate is not so published
in Composite Quotations, the CD Rate for that CD Interest Determination Date
shall be calculated by the Calculation Agent and shall be the arithmetic mean of
the secondary market offered rates as of 3:00 p.m., New York City time, on such
CD Interest Determination Date, of three leading nonbank dealers in negotiable
United States dollar certificates of deposit in the City of New York selected by
the Calculation Agent for negotiable certificates of deposit of major United
States money market banks which are then rated A-1+ by Standard & Poor's Ratings
Group and P-1 by Moody's Investors Service with a remaining maturity closest to
the Index Maturity specified in the applicable Authentication Certificate in
denominations of $5,000,000; provided, however, that if fewer than three dealers
selected as aforesaid by the Calculation Agent are quoting as specified in this
sentence, the CD Rate will remain the CD Rate in effect on such 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 or Spread
Multiplier, if any) specified in the Treasury Rate Notes and in the applicable
Authentication Certificate.
Unless otherwise specified in the applicable Authentication
Certificate, "Treasury Rate" means, with respect to 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 Authentication Certificate as such rate is released by the Board
of Governors of the Federal Reserve System as reported on page 56 or 57 (or
other applicable page) of the Telerate Data Service, under the heading "Avge
Invest Yield" or, if not so reported on the Telerate Data Service by 3:00 p.m.,
New York City time, on the Calculation Date pertaining to such Treasury Interest
Determination Date, such rate 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 "U.S. Government
Securities--Treasury Bills--auction average (investment)" or, if not so
published in H.15 (519) by 3:00 p.m., New York City time, on the Calculation
Date pertaining to such Treasury Interest Determination Date, the auction
average rate (expressed as a bond equivalent on the basis of a year of 365 or
366 days, as applicable, and applied on a daily basis) as otherwise announced by
the United States Department of the Treasury. In the event that the results of
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the auction of Treasury bills having the Index Maturity designated in the
applicable Authentication Certificate are not otherwise reported as provided
above by 3:00 p.m., New York City time, on such Calculation Date or no such
auction is held in a particular week, then the Treasury Rate shall be calculated
by the Calculation Agent and shall 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 such Treasury Interest Determination Date,
of three leading primary United States government securities dealers selected by
the Calculation Agent for the issue of Treasury bills with a remaining maturity
closest to the Index Maturity designated in the applicable Authentication
Certificate; provided, however, that if fewer than three dealers selected as
aforesaid by the Calculation Agent are quoting as specified in this sentence,
the Treasury Rate with respect to such Treasury Interest Determination Date will
remain the Treasury Rate in effect on such Treasury Interest Determination Date.
J. J. Kenny Rate. J. J. Kenny Rate Notes will bear interest at the
----------------
interest rates (calculated with reference to the J. J. Kenny Rate and the Spread
or Spread Multiplier, if any) specified in the J. J. Kenny Rate Note and in the
applicable Authentication Certificate.
Unless otherwise specified in the applicable Authentication
Certificate, "J. J. Kenny Rate" means, with respect to any J. J. Kenny Interest
Determination Date, the rate in the high grade weekly index (the "Weekly Index")
on such date made available by Kenny Information Systems ("Kenny") to the
Calculation Agent. The Weekly Index is, and shall be, based upon 30-day yield
evaluations at par of bonds, the interest of which is exempt from Federal income
taxation under the Internal Revenue Code of 1986, as amended, of not less than
five high grade component issuers selected by Kenny which shall include, without
limitation, issuers of general obligation bonds. The specific issuers included
among the component issuers may be changed from time to time by Kenny in its
discretion. The bonds on which the Weekly Index is based shall not include any
bonds on which the interest is subject to a minimum tax or similar tax under the
Internal Revenue Code of 1986, as amended, unless all tax-exempt bonds are
subject to such tax. In the event Kenny ceases to make available such Weekly
Index, a successor indexing agent will be selected by the Calculation Agent,
such index to reflect the prevailing rate for bonds rated in the highest short-
term rating category by Moody's Investors Service, Inc. and Standard & Poor's
Ratings Group in respect of issuers most closely resembling the high grade
component issuers selected by Kenny for its Weekly Index, the interest on which
is (A) variable on a weekly basis, (B) exempt from Federal income taxation under
the Internal Revenue Code of 1986, as amended, and (C) not subject to a minimum
tax or similar tax under the Internal Revenue of Code of 1986, as amended,
unless all tax-exempt bonds are subject to such tax. If such successor indexing
agent is not available, the rate for the J. J. Kenny Interest Determination Date
shall be 67% of the rate determined if the Treasury Rate option had been
originally selected.
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CMT Rate. CMT Rate Notes will bear interest at the interest rates
--------
(calculated with reference to the CMT Rate and the Spread or Spread Multiplier,
if any) specified in the CMT Rate Note and in the applicable Authentication
Certificate.
Unless otherwise specified in the applicable Authentication
Certificate, "CMT Rate" means, with respect to any CMT Interest Determination
Date, the rate reported for the applicable Index Maturity on page 7055 (or other
applicable page) of the Telerate Data 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," for the applicable CMT Interest Determination
Date. If such rate is not so available by 3:00 p.m., New York City time, on the
applicable Calculation Date, then the CMT Rate for such CMT Interest
Determination Date shall be calculated by the Calculation Agent and shall 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 (each, a "Reference Dealer") selected by the Calculation Agent, 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 the Calculation Agent is not able to obtain such
quotations from at least three such Reference Dealers, the CMT Rate will remain
the CMT Rate then in effect on such CMT Interest Determination Date.
Zero Coupon Notes
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The specific terms of any Zero Coupon Notes will be set forth in the
applicable Authentication Certificate.
(6) Unless otherwise specified in the applicable Authentication
Certificate, 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 entitled thereto as it appears on the
registry books 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 Authentication Certificate, 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
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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 Authentication Certificate, the
Notes will be redeemable at the option of the Company on the date or dates prior
to maturity specified in the applicable Authentication Certificate at the price
or prices specified in the applicable Authentication Certificate (unless
otherwise specified in such Authentication Certificate, expressed as a
percentage of the principal amount of such Note or, in the case of Zero Coupon
Notes or certain interest bearing Notes issued as Original Issue Discount Notes
(as specified in the applicable Authentication Certificate), as a 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 Authentication Certificate, 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 Authentication
Certificate, 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 Authentication
Certificate, Notes of such series, other than Foreign Currency Notes (as defined
below), may be issued only in fully registered form and the authorized
denomination of the Notes of such series shall be $1,000 and any integral
multiple of $1,000 in excess thereof. Foreign Currency Notes will be issued in
the denominations specified in the applicable Authentication Certificate.
(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
Authentication Certificate ("Foreign Currency Notes").
(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 Authentication
Certificate, the Notes shall be subject to the events of default specified in
Section 501, paragraphs (1) through (2), of the Indenture.
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(13) The portion of the principal amount of the Notes, other than
Original Issue Discount Notes (including 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
Authentication Certificate, 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 Authentication Certificate) upon any
acceleration of the maturity thereof will be the Amortized Face Amount (as
defined below) thereof, and the amount payable to the holder of such Original
Issue Discount Note upon any redemption thereof will be the applicable
percentage of the Amortized Face Amount thereof specified in the applicable
Authentication Certificate, in each case as determined by the Company plus, 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, but 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 Authentication Certificate. The term "Stated
Yield" of such Original Issue Discount Note means the "Yield to Maturity"
specified on the face of such Original Issue Discount Note and in the applicable
Authentication Certificate 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 Authentication Certificate, to the stated
maturity thereof based on its Issue Price and principal amount payable at the
stated 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 Authentication
Certificate. Unless otherwise specified in the applicable Authentication
Certificate, 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
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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) The Notes shall be subject to the subordination provisions
contained in Article Thirteen of the Indenture.
(16) Subject to the terms of the Indenture and the resolutions
and authorizations 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 Authentication Certificate.
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 Authentication Certificate (which Authentication
Certificate 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 an Authentication Certificate Supplemental
to this Officers' Certificate and Company Order, in substantially the form
attached as Exhibit F hereto (an "Authentication Certificate"), setting forth
the information specified or contemplated therein for the particular Notes to be
authenticated and issued. At least one officer signing each Authentication
Certificate shall be an Authorized Officer as defined in the resolutions
referred to in the first paragraph hereof.
D. Other Matters.
-------------
The applicable Authentication Certificate 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 are true and correct copies of
resolutions duly adopted by the Board of Directors of the Company at a meeting
duly called and
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held on October 15, 1997, at which a quorum was present and acting throughout,
and of an authorization dated October 15, 1997, duly executed by the Chief
Financial Officer of the Company, designating certain additional Authorized
Officers pursuant to the resolutions adopted October 15, 1997; such resolutions
and authorization have not been further amended, modified or rescinded and
remain in full force and effect; and such resolutions and authorizations are the
only resolutions and authorization adopted by the Company's Board of Directors
or any committee thereof or by any Authorized Officers relating to the offering
and sale of the Notes.
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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 and
the authorization duly executed by the Chief Financial Officer 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: March 30, 1998
U.S. BANCORP
By /s/ David Grandstrand *
-------------------------
And /s/ Kenneth Nelson **
------------------------
- ------------
* 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.
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