CALCULATION AGENCY AGREEMENT
CALCULATION AGENCY AGREEMENT, dated as of September 10, 2003
(the "Agreement"), between ▇▇▇▇▇▇ Brothers Holdings Inc. (the "Company") and
▇▇▇▇▇▇ Brothers Inc., as Calculation Agent.
WHEREAS, the Company has authorized the issuance of up to
$12,429,200 aggregate principal amount of Nikkei 225 Index SUNS(R), Stock Upside
Note Securities Due June 10, 2010 (the "Securities")*;
WHEREAS, the Securities will be issued under an Indenture,
dated as of September 1, 1987, between the Company and Citibank, N.A., as
Trustee (the "Trustee"), as supplemented and amended by supplemental indentures
dated as of November 25, 1987, November 27, 1990, September 13, 1991, October 4,
1993, October 1, 1995, and June 26, 1997, and incorporating Standard Multiple
Series Indenture Provisions dated July 30, 1987, as amended November 16, 1987
(collectively, the "Indenture"); and
WHEREAS, the Company requests the Calculation Agent to perform
certain services described herein in connection with the Securities;
NOW THEREFORE, the Company and the Calculation Agent agree as
follows:
1. Appointment of Agent. The Company hereby appoints ▇▇▇▇▇▇
Brothers Inc. as Calculation Agent and ▇▇▇▇▇▇ Brothers Inc. hereby
accepts such appointment as the Company's agent for the purpose of
performing the services hereinafter described upon the terms and
subject to the conditions hereinafter mentioned.
2. Calculations and Information Provided. In response to a
request made by the Trustee for a determination of the Maturity Payment
Amount due on the Stated Maturity Date of the Securities, the
Calculation Agent shall determine such Maturity Payment Amount and
notify the Trustee of its determination. The Calculation Agent shall
also be responsible for (a) the determination of the Maturity Payment
Amount, (b) the determination of whether adjustments to the Closing
Level should be made, (c) the determination of the Final Index Level,
(d) the determination of the Successor Index or Final Index Level if
publication of the Index is discontinued and (e) the determination of
whether a Market Disruption Event has occurred. The Calculation Agent
shall notify the Trustee of all such determinations and any such
adjustment or if a Market Disruption Event has occurred. Annex A hereto
sets forth the procedures the Calculation Agent will use to determine
the information described in this Section 2.
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* "Nikkei," "Nikkei Stock Average" and "Nikkei 225" are the service marks of
Nihon Keizai Shimbun, Inc. ("NKS"). The Securities, based on the
performance of the Nikkei Stock Average, are not sponsored, endorsed, or
promoted by NKS.
"Stock Upside Note Securities" and "SUNS" are trademarks of ▇▇▇▇▇▇ Brothers
Inc., a wholly-owned subsidiary of ▇▇▇▇▇▇ Brothers Holdings Inc.
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3. Calculations. Any calculation or determination by the
Calculation Agent pursuant hereto shall (in the absence of manifest
error) be final and binding. Any calculation made by the Calculation
Agent hereunder shall, at the Trustee's request, be made available at
the Corporate Trust Office.
4. Fees and Expenses. The Calculation Agent shall be entitled
to reasonable compensation for all services rendered by it as agreed to
between the Calculation Agent and the Company.
5. Terms and Conditions. The Calculation Agent accepts its
obligations herein set out upon the terms and conditions hereof,
including the following, to all of which the Company agrees:
(a) in acting under this Agreement, the Calculation Agent is
acting solely as an independent expert of the Company and does not
assume any obligation toward, or any relationship of agency or trust
for or with, any of the holders of the Securities;
(b) unless otherwise specifically provided herein, any order,
certificate, notice, request, direction or other communication from the
Company or the Trustee made or given under any provision of this
Agreement shall be sufficient if signed by any person who the
Calculation Agent reasonably believes to be a duly authorized officer
or attorney-in-fact of the Company or the Trustee, as the case may be;
(c) the Calculation Agent shall be obliged to perform only
such duties as are set out specifically herein and any duties
necessarily incidental thereto;
(d) the Calculation Agent, whether acting for itself or in any
other capacity, may become the owner or pledgee of Securities with the
same rights as it would have had if it were not acting hereunder as
Calculation Agent; and
(e) the Calculation Agent shall incur no liability hereunder
except for loss sustained by reason of its gross negligence or wilful
misconduct.
6. Resignation; Removal; Successor. (a) The Calculation Agent
may at any time resign by giving written notice to the Company of such
intention on its part, specifying the date on which its desired
resignation shall become effective, subject to the appointment of a
successor Calculation Agent and acceptance of such appointment by such
successor Calculation Agent, as hereinafter provided. The Calculation
Agent hereunder may be removed at any time by the filing with it of an
instrument in writing signed by or on behalf of the Company and
specifying such removal and the date when it shall become effective.
Such resignation or removal shall take effect upon the appointment by
the Company, as hereinafter provided, of a successor Calculation Agent
and the acceptance of such appointment by such successor Calculation
Agent. In the event a successor Calculation Agent has not been
appointed and has not accepted its duties within 90 days of the
Calculation Agent's notice of resignation, the Calculation Agent may
apply to any court of competent jurisdiction for the designation of a
successor Calculation Agent.
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(b) In case at any time the Calculation Agent shall resign, or
shall be removed, or shall become incapable of acting, or shall be
adjudged bankrupt or insolvent, or make an assignment for the benefit
of its creditors or consent to the appointment of a receiver or
custodian of all or any substantial part of its property, or shall
admit in writing its inability to pay or meet its debts as they mature,
or if a receiver or custodian of it or all or any substantial part of
its property shall be appointed, or if any public officer shall have
taken charge or control of the Calculation Agent or of its property or
affairs, for the purpose of rehabilitation, conservation or
liquidation, a successor Calculation Agent shall be appointed by the
Company by an instrument in writing, filed with the successor
Calculation Agent. Upon the appointment as aforesaid of a successor
Calculation Agent and acceptance by the latter of such appointment, the
Calculation Agent so superseded shall cease to be Calculation Agent
hereunder.
(c) Any successor Calculation Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor, to the Company and
to the Trustee an instrument accepting such appointment hereunder and
agreeing to be bound by the terms hereof, and thereupon such successor
Calculation Agent, without any further act, deed or conveyance, shall
become vested with all the authority, rights, powers, trusts,
immunities, duties and obligations of such predecessor with like effect
as if originally named as Calculation Agent hereunder, and such
predecessor, upon payment of its charges and disbursements then unpaid,
shall thereupon become obligated to transfer, deliver and pay over, and
such successor Calculation Agent shall be entitled to receive, all
moneys, securities and other property on deposit with or held by such
predecessor, as Calculation Agent hereunder.
(d) Any corporation into which the Calculation Agent hereunder
may be merged or converted or any corporation with which the
Calculation Agent may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Calculation
Agent shall be a party, or any corporation to which the Calculation
Agent shall sell or otherwise transfer all or substantially all of the
assets and business of the Calculation Agent shall be the successor
Calculation Agent under this Agreement without the execution or filing
of any paper or any further act on the part of any of the parties
hereto.
7. Certain Definitions. Terms not otherwise defined herein or
in Annex A hereto are used herein as defined in the Indenture or the
Securities.
8. Indemnification. The Company will indemnify the Calculation
Agent against any losses or liability which it may incur or sustain in
connection with its appointment or the exercise of its powers and
duties hereunder except such as may result from the gross negligence or
wilful misconduct of the Calculation Agent or any of its agents or
employees. The Calculation Agent shall incur no liability and shall be
indemnified and held harmless by the Company for or in respect of any
action taken or suffered to be taken in good faith by the Calculation
Agent in reliance upon written instructions from the Company.
9. Notices. Any notice required to be given hereunder shall be
delivered in person, sent (unless otherwise specified in this
Agreement) by letter, telex or facsimile transmission or communicated
by telephone (confirmed in a writing dispatched within two Business
Days), (a) in the case of the Company, to it at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇) (telephone: (212)
526-7000), Attention: Treasurer, with a copy to ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇) (telephone: (212)
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526-7000), Attention: Corporate Secretary, (b) in the case of the
Calculation Agent, to it at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇) (telephone: (▇▇▇) ▇▇▇-▇▇▇▇),
Attention: Equity Derivatives Trading and (c) in the case of the
Trustee, to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(facsimile: (▇▇▇) ▇▇▇-▇▇▇▇) (telephone: (▇▇▇) ▇▇▇-▇▇▇▇), Attention:
Corporate Trust Department or, in any case, to any other address or
number of which the party receiving notice shall have notified the
party giving such notice in writing. Any notice hereunder given by
telex, facsimile or letter shall be deemed to be served when in the
ordinary course of transmission or post, as the case may be, it would
be received.
10. Governing Law. This Agreement shall be governed by and
continued in accordance with the laws of the State of New York.
11. Counterparts. This Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and
the same agreement.
12. Benefit of Agreement. This Agreement is solely for the
benefit of the parties hereto and their successors and assigns, and no
other person shall acquire or have any rights under or by virtue
hereof.
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IN WITNESS WHEREOF, this Calculation Agency Agreement has been
entered into as of the day and year first above written.
▇▇▇▇▇▇ BROTHERS HOLDINGS INC.
By:__/s/ ▇▇▇▇▇▇ Budde_______
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ BROTHERS INC.,
as Calculation Agent
By:__/s/ ▇▇▇▇▇▇ Budde________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
ANNEX A
1. The Index.
The Index is the Nikkei Stock Average, as calculated,
published and disseminated by Nihon Keizai Shimbun, Inc. (the "Index").
The Index measures the composite price performance of selected
Japanese stocks. The Index is currently based on 225 underlying stocks trading
on the Tokyo Stock Exchange (the "TSE") and represents a broad cross-section of
Japanese industry. All 225 of the stocks underlying the Index are stocks listed
in the First Section of the TSE. Stocks listed in the First Section are among
the most actively traded stocks on the TSE. As of September 5, 2003, the 225
companies included in the Index were divided into six sector categories:
Technology, Financials, Consumer Goods, Materials, Capital Goods/Others and
Transportation and Utilities.
2. Determination of the Maturity Payment Amount.
The Calculation Agent shall determine (i) the Final Index
Level and (ii) the amount payable on the Stated Maturity Date for each $1,000
principal amount of Securities (the "Maturity Payment Amount").
The Maturity Payment Amount, for each $1,000 principal amount
of Securities, shall be equal to the greater of (a) $1,000 and (b) the
Alternative Redemption Amount
3. Discontinuance of the Index.
(a) If Nihon Keizai Shimbun, Inc. ("NKS") discontinues publication of the
Index and NKS or another entity publishes a successor or substitute index (the
"Successor Index") that the Calculation Agent determines, in its sole
discretion, to be comparable to the discontinued Index, then the Final Index
Level will be determined by reference to the level of such Successor Index at
the Close of Trading on the TSE or the relevant exchange or market for the
Successor Index on the date the Final Index Level is to be determined.
(b) Upon any selection by the Calculation Agent of a Successor Index, the
Company shall promptly give notice to the holders of the Securities.
(c) If NKS discontinues publication of the Index prior to, and such
discontinuance is continuing on, the date the Final Index Level is to be
determined and the Calculation Agent determines that no Successor Index is
available at such time, or if NKS fails to calculate and announce a Closing
Level for the Index on the date the Final Index Level is to be determined, then,
on such date, the Calculation Agent will determine the Final Index Level to be
used in computing the Alternative Redemption Amount. The Final Index Level will
be computed by the Calculation Agent in accordance with the formula for and
method of calculating the Index last in effect prior to such discontinuance,
using the Closing Level (or, if trading in the relevant securities has been
materially suspended or materially limited, its good faith estimate of the
Closing Level that would have prevailed but for such suspension or limitation)
at the close of the principal trading session on such date of each security most
recently comprising the Index on the primary exchange or trading system on which
such securities trade.
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4. Alteration of Method of Calculation.
If at any time the method of calculating the Index or a
Successor Index, or the Final Index Level thereof, is changed in a material
respect, or if the Index or a Successor Index is in any other way modified so
that such index does not, in the opinion of the Calculation Agent, fairly
represent the level of the Index or such Successor Index had such changes or
modifications not been made, then, from and after such time, the Calculation
Agent will, at the Close of Trading of the primary exchange or quotation system
on which each security comprising the Index or such Successor Index is traded on
the date the Final Index Level is to be determined, make such calculations and
adjustments as, in the good faith judgment of the Calculation Agent, may be
necessary in order to arrive at a level of a stock index comparable to the Index
or such Successor Index, as the case may be, as if such changes or modifications
had not been made. The Calculation Agent will calculate the Final Index Level
and the Alternative Redemption Amount with reference to the Index or such
Successor Index, as adjusted.
If the method of calculating the Index or a Successor Index is
modified so that the level of such index is a fraction of what it would have
been if it had not been modified (for example, due to a split in the index),
then the Calculation Agent will adjust such index in order to arrive at a level
of the Index or such Successor Index as if it had not been modified (for
example, as if such split had not occurred).
5. Definitions.
Set forth below are definitions of the terms used in the
Agreement and in this Annex A.
"Agreement" shall have the meaning set forth in the preamble to this
Agreement.
"Alternative Redemption Amount" shall mean, with respect to each $1,000
principal amount of Securities, the product of (a) $1,000 and (b) the Final
Index Level, divided by the Initial Index Level.
"AMEX" shall mean the American Stock Exchange LLC.
"Business Day", notwithstanding any provision in the Indenture, shall
mean any day that is not a Saturday, a Sunday or a day on which the NYSE, the
Nasdaq or the AMEX is not open for trading or banking institutions or trust
companies in the City of New York are authorized or obligated by law or
executive order to close.
"Calculation Agent" shall mean the person that has entered into an
agreement with the Company providing for, among other things, the determination
of the Final Index Level and the Maturity Payment Amount, which term shall,
unless the context otherwise requires, include its successors and assigns. The
initial Calculation Agent shall be ▇▇▇▇▇▇ Brothers Inc.
"Close of Trading" shall mean, in respect of any primary exchange or
quotation system, the scheduled weekday closing time on a day on which the
primary exchange or quotation system is scheduled to be open for trading for its
respective regular trading session, without regard to after hours or any other
trading outside of the regular trading session hours.
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"Closing Level" shall mean, with respect to any day, the official
closing level of the Index or any Successor Index on such day, as reported by
NKS or the publisher of the Successor Index.
"Company" shall have the meaning set forth in the preamble to this
Agreement.
"Exchange Business Day" shall mean any day on which the TSE, or the
relevant exchange for any Successor Index, is scheduled to be open for its
regular trading session.
"Final Index Level" shall mean the Closing Level on the Valuation Date.
"Indenture" shall have the meaning set forth in the preamble to this
Agreement.
"Index" shall have the meaning set forth in Section 1 of this Annex A.
"Initial Index Level" shall mean 10,650.77, the Closing Level on
September 5, 2003.
"Market Disruption Event" on any day, shall mean, with respect to the
Index or any Successor Index, the occurrence of any of the following events, as
determined by the Calculation Agent in its sole discretion:
(i) A material suspension of or limitation imposed on trading
relating to the securities that then comprise 20% or more of the Index
or any Successor Index by the primary exchange or quotation system on
which those securities are traded, at any time during the one-hour
period that ends at the Close of Trading on such day, whether by reason
of movements in price exceeding limits permitted by that primary
exchange or quotation system or otherwise.
(ii) A material suspension of or limitation imposed on trading
in futures or options contracts relating to the Index or any Successor
Index by the primary exchange or quotation system on which those
futures or options contracts are traded, at any time during the
one-hour period that ends at the Close of Trading on such day, whether
by reason of movements in price exceeding limits permitted by that
primary exchange or quotation system or otherwise.
(iii) Any event, other than an early closure, that disrupts or
impairs the ability of market participants in general to effect
transactions in, or obtain market values for, the securities that then
comprise 20% or more of the Index or any Successor Index on the primary
exchange or quotation system on which those securities are traded at
any time during the one-hour period that ends at the Close of Trading
on such day.
(iv) Any event, other than an early closure, that disrupts or
impairs the ability of market participants in general to effect
transactions in, or obtain market values for, futures or options
contracts relating to the Index or any Successor Index on the primary
exchange or quotation system on which those futures or options
contracts are traded at any time during the one-hour period that ends
at the Close of Trading on such day.
(v) The closure of the primary exchange or quotation system on
which securities that then comprise 20% or more of the Index or any
Successor Index are traded or on which futures or options contracts
relating to the Index or any Successor Index are traded prior to its
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scheduled closing time unless the earlier closing time is announced by
the primary exchange or quotation system at least one hour prior to the
earlier of (1) the actual closing time for the regular trading session
on the primary exchange or quotation system and (2) the submission
deadline for orders to be entered into the primary exchange or
quotation system for execution at the Close of Trading on such day.
(vi) The Company, or any of its affiliates, is unable, after
using commercially reasonable efforts to unwind or dispose of, or
realize, recover or remit the proceeds, of any transactions or assets
it deems necessary to hedge the equity price risk of entering into and
performing its obligations with respect to the Securities.
For purposes of determining whether a Market Disruption Event
has occurred the relevant percentage contribution of a security to the
level of the Index or any Successor Index will be based on a comparison
of (x) the portion of the level of the index attributable to that
security and (y) the overall level of the index, in each case
immediately before the occurrence of the Market Disruption Event.
"Maturity Payment Amount" shall have the meaning set forth in Section 2
of this Annex A.
"Nasdaq" shall mean The Nasdaq Stock Market, Inc.
"NKS" shall have the meaning set forth in Section 3(a) of this Annex A.
"NYSE" shall mean The New York Stock Exchange, Inc.
"Securities" shall have the meaning set forth in the preamble to this
Agreement.
"Stated Maturity Date" shall mean June 10, 2010 (or if June 10, 2010 is
not a Business Day, on the next succeeding Business Day); provided, that if a
Market Disruption Event occurs on the Valuation Date, the Stated Maturity Date
shall be the third Business Day following the date the Final Index Level is
determined.
"Successor Index" shall have the meaning set forth in Section 3(a) of
this Annex A.
"Trustee" shall have the meaning set forth in the preamble to this
Agreement.
"TSE" shall have the meaning set forth in Section 1 of this Annex A.
"Valuation Date" shall mean June 7, 2010; provided, that if such day is
not an Exchange Business Day, the Valuation Date shall mean the next succeeding
Exchange Business Day; provided further, that if a Market Disruption Event
occurs on such date, the Valuation Date will be the next succeeding Exchange
Business Day on which no Market Disruption Event occurs.