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CALCULATION AGENCY AGREEMENT
CALCULATION AGENCY AGREEMENT, dated as of April 29, 2003
(the "Agreement"), between Lehman Brothers Holdings Inc. (the "Company") and
Lehman Brothers Inc., as Calculation Agent.
WHEREAS, the Company has authorized the issuance of up to
$8,452,500 aggregate principal amount of The Dow Jones Industrial AverageSM
SUNS(R), Stock Upside Note Securities Due April 29, 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 Lehman
Brothers Inc. as Calculation Agent and Lehman 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) the
determination of whether adjustments to the Closing Level should be
made, (c) the determination of the Adjusted Final Index Level, (d) the
determination of the Successor Index 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.
* "Dow Jones" and "Dow Jones Industrial Average" are servicemarks of Dow
Jones & Company, Inc. and have been licensed for use by Lehman Brothers
Holdings Inc. The Securities, based on the performance of the Dow Jones
Industrial Average, are not sponsored, endorsed, sold or promoted by
Dow Jones, and Dow Jones makes no representation regarding the
advisability of investing in the Securities.
"Stock Upside Note Securities" and "SUNS" are trademarks of Lehman
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
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