EXHIBIT 4.02
CALCULATION AGENCY AGREEMENT
CALCULATION AGENCY AGREEMENT, dated as of December 26, 2001 (the
"Agreement"), between ▇▇▇▇▇▇ Brothers Holdings Inc. (the "Company") and ▇▇▇▇▇▇
Brothers Inc., as Calculation Agent.
WHEREAS, the Company has authorized the issuance of up to $19,550,000
aggregate principal amount of S&P 500(R) Index SUNS(R), Stock Upside Note
Securities(R) Due December 26, 2006 (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 at Stated
Maturity 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) whether adjustments to the Equity Return should be made, (c)
the Successor Index if publication of the Index is discontinued and (d) whether
a Market Disruption Event has occurred. The Calculation Agent shall notify the
Trustee of any such adjustment or any such Successor Index, 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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* "Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," "Standard & Poor's 500,"
and "500" are trademarks of ▇▇▇▇▇▇-▇▇▇▇, Inc. and have been licensed for
use by ▇▇▇▇▇▇ Brothers Holdings Inc. The notes, based on the performance of
the S&P 500(R) Index, are not sponsored, endorsed, sold or promoted by
Standard & Poor's and Standard & Poor's makes no representation regarding
the advisability of investing in the notes.
"Stock Upside Note Securities" and "SUNS" are trademarks of ▇▇▇▇▇▇ Brothers
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
Three World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (facsimile: (212)
▇▇▇-▇▇▇▇) (telephone: (▇▇▇) ▇▇▇-▇▇▇▇), Attention: Treasurer, with copies to (i)
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (facsimile: (201)
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▇▇▇-▇▇▇▇) (telephone: (▇▇▇) ▇▇▇-▇▇▇▇), Attention: Treasurer, (ii) ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇)
(telephone: (▇▇▇) ▇▇▇-▇▇▇▇), Attention: Corporate Secretary and (iii) ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇) (telephone:
(▇▇▇) ▇▇▇-▇▇▇▇), Attention: Corporate Secretary, (b) in the case of the
Calculation Agent, to it at Three World Financial Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇) (telephone: (212)
▇▇▇-▇▇▇▇), Attention: Equity Derivatives Trading, with a copy to ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (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 Agreement has been entered into as of the day and
year first above written.
▇▇▇▇▇▇ BROTHERS HOLDINGS INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ BROTHERS INC.,
as Calculation Agent
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
ANNEX A
1. The Index.
The Index is the S&P 500(R) Index, as calculated by S&P (the "Index").
2. Determination of the Maturity Payment Amount.
The Calculation Agent shall determine the amount payable at Stated Maturity
for each $1,000 principal amount of Securities (the "Maturity Payment Amount").
The Maturity Payment Amount shall equal the greater of (a) $1,000 and (b) the
Alternative Redemption Amount.
3. Discontinuance of the Index.
(a) If S&P discontinues publication of the Index and S&P 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 Calculation Agent shall calculate the Maturity
Payment Amount pursuant to Section 2 hereof by reference to the index level of
such Successor Index at the Close of Trading on the NYSE, AMEX, Nasdaq or the
relevant exchange or market for the Successor Index on the Final Calculation
Date.
(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 S&P discontinues publication of the Index prior to, and such
discontinuance is continuing on, the Calculation Date and the Calculation Agent
determines that no Successor Index is available at such time, then, on such
date, the Calculation Agent shall determine the index to be used in computing
the Maturity Payment Amount. The Maturity Payment Amount shall 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 organized U.S. exchange or trading system.
4. Alteration of Method of Calculation.
If at any time the method of calculating the Index or a Successor Index, or
the Closing 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 value 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 in New
York City on the Calculation Date, 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, and calculate the Maturity Payment Amount with reference to the Index or
such Successor Index, as adjusted. Accordingly, 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
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split in the index), then the Calculation Agent shall 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, if such split had not occurred).
5. Definitions.
Set forth below are the terms used in the Agreement and in this Annex A.
"Agreement" shall have the meaning set forth in the preamble to this
Agreement.
"AMEX" shall mean the American Stock Exchange.
"Alternative Redemption Amount" shall mean, with respect to each $1,000
principal amount of Securities, the product of:
(i) $1,000; and
( Final Index Initial Index )
( Level - Level )
(ii) 1 + (0.66 x ----------------------------------- )
( Initial Index Level ).
"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, Nasdaq or
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 Maturity Payment Amount, which term shall, unless the context otherwise
requires, include its successors and assigns. The initial Calculation Agent
shall be ▇▇▇▇▇▇ Brothers Inc.
"Calculation Date" shall mean three Business Days prior to December 26,
2006; provided, that if a Market Disruption Event occurs on such day, then the
Calculation Date shall be the next following Business Day on which no Market
Disruption Event occurs.
"Close of Trading" shall mean 4:00 p.m., New York City time.
"Closing Level" shall mean the last reported level of the Index or the
Successor Index, as the case may be, at 4:00 p.m., New York City time, as
reported by S&P or the publisher of the Successor Index, as the case may be.
"Company" shall have the meaning set forth in the preamble to this
Agreement.
"Final Index Level" shall equal the Closing Level of the Index or a
Successor Index, as the case may be, on the Calculation Day.
"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 1,139.93, the Closing Level of the Index
on December 20, 2001.
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"Market Disruption Event", on any day, shall mean any of the following
events as determined by the Calculation Agent:
(i) A suspension, absence or material limitation of trading in 20% of
more of the underlying stocks which then comprise the Index or any
Successor Index, as the case may be, has occurred on that day, in each
case, for more than two hours of trading or during the one-half hour period
preceding the Close of Trading on the primary organized U.S. exchange or
trading system on which such stocks are traded or, in the case of a common
stock not listed or quoted in the United States, on the primary exchange,
trading system or market for that security. Limitations on trading during
significant market fluctuations imposed pursuant to NYSE Rule 80B or any
applicable rule or regulation enacted or promulgated by the NYSE, any other
exchange, trading system or market, any other self regulatory organization
or the Securities and Exchange Commission of similar scope or as a
replacement for Rule 80B, may be considered material. Notwithstanding the
first sentence of this paragraph, a Market Disruption Event for a security
traded on a bulletin board means a suspension, absence or material
limitation of trading of that security for more than two hours or during
the one hour period preceding 4:00 p.m., New York City time.
(ii) A suspension, absence or material limitation has occurred on that
day, in each case, for more than two hours of trading or during the
one-half hour period preceding the Close of Trading in options contracts
related to the Index or any Successor Index, as the case may be, whether by
reason of movements in price exceeding levels permitted by an exchange,
trading system or market on which such options contracts are traded or
otherwise.
(iii) Information is unavailable on that date, through a recognized
system of public dissemination of transaction information, for more than
two hours of trading or during the one-half hour period preceding the Close
of Trading, of accurate price, volume or related information in respect of
20% or more of the underlying stocks which then comprise the Index or any
Successor Index, as the case may be, or in respect of options contracts
related to the Index or any Successor Index, as the case may be, in each
case traded on any major U.S. exchange or trading system or in the case of
securities of a non-U.S. issuer, traded on the primary non-U.S. exchange,
trading system or market.
For purposes of determining whether a Market Disruption Event has
occurred:
(i) a limitation on the hours or number of days of trading shall not
constitute a Market Disruption Event if it results from an announced change
in the regular business hours of the relevant exchange, trading system or
market;
(ii) any suspension in trading in an options contract on the Index or
any Successor Index, as the case may be, by a major securities exchange,
trading system or market by reason of (a) a price change violating limits
set by such securities market, (b) an imbalance of orders relating to those
contracts, or (c) a disparity in bid and ask quotes relating to those
contracts, shall constitute a Market Disruption Event notwithstanding that
the suspension or material limitation is less than two hours;
(iii) a suspension or material limitation on an exchange, trading
system or in a market shall include a suspension or material limitation of
trading by one class of
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investors provided that the suspension continues for more than two hours of
trading or during the last one-half hour period preceding the Close of
Trading on the relevant exchange, trading system or market but shall not
include any time when the relevant exchange, trading system or market is
closed for trading as part of that exchange's, trading system's or market's
regularly scheduled business hours; and
(iv) "Trading systems" include bulletin board services.
"Maturity Payment Amount" shall have the meaning set forth in Section 2 of
this Annex A.
"Nasdaq" shall mean The Nasdaq Stock Market, Inc.
"NYSE" shall mean the New York Stock Exchange.
"S&P" shall mean Standard & Poor's, a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.
"Stated Maturity" shall mean December 26, 2006; provided, that if the
Calculation Date is delayed as a result of the occurrence of the Market
Disruption Event, the Stated Maturity shall be the third Business Day following
the Calculation Date.
"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.