CALCULATION AGENCY AGREEMENT
CALCULATION AGENCY AGREEMENT, dated as of December 23, 2004
(the "Agreement"), between Xxxxxx Brothers Holdings Inc. (the "Company") and
Xxxxxx Brothers Inc., as Calculation Agent.
WHEREAS, the Company has authorized the issuance of up to
$6,900,000 aggregate principal amount of Index-Plus Notes Due December 23, 2009,
Performance Linked to Xxxxxxx 2000(R) Index (RTY) (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 Xxxxxx
Brothers Inc., as Calculation Agent, and Xxxxxx 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 Successor Index if
publication of the Index is discontinued, (b) the determination of the
Closing Index Level if no Successor Index is available or if Xxxxxxx or
the publisher of any Successor Index, as the case may be, fails to
calculate and announce a Closing Index Level on any date, (c)
adjustments to the Index, the Successor Index or the Closing Index
Level if the method of calculating any of these items changes in a
material respect or if the Index or Successor Index is in any other way
modified so that it does not, in the opinion of the Calculation Agent,
fairly represent the value of the Index, or Successor Index, as the
case may
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* Xxxxxxx 2000(R) Index is a trademark of Xxxxx Xxxxxxx Company
and has been licensed for use by Xxxxxx Brothers Holdings Inc.
The Securities, based on the performance of the Xxxxxxx 2000
Index, are not sponsored, endorsed, sold or promoted by Xxxxx
Xxxxxxx Company and Xxxxx Xxxxxxx Company makes no
representation regarding the advisability of investing in the
Securities.
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be, had such changes or modifications not been made, (d) adjustments to
the threshold level, if required in order to reflect adjustments made
in the Index or Successor Index and (e) the determination of whether a
Market Disruption Event has occurred. The Calculation Agent shall
notify the Trustee of all such adjustments 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.
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 whom 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 willful
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
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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.
(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
willful misconduct of the Calculation Agent or any of its agents or
employees.
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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 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (facsimile: (000) 000-0000) (telephone: (212)
526-7000), Attention: Treasurer, with a copy to 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (facsimile: (000) 000-0000) (telephone: (212)
526-7000), Attention: Corporate Secretary, (b) in the case of the
Calculation Agent, to it at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (facsimile: (000) 000-0000) (telephone: (000) 000-0000),
Attention: Equity Derivatives Trading and (c) in the case of the
Trustee, to it at 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 (facsimile: (000) 000-0000) (telephone: (000) 000-0000),
Attention: Agency and Trust, 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
construed 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.
IN WITNESS WHEREOF, this Calculation Agency Agreement has been
entered into as of the day and year first above written.
XXXXXX BROTHERS HOLDINGS INC.
By:
---------------------------------
Xxxxx Xxxxxxxx
Vice President
XXXXXX BROTHERS INC.,
as Calculation Agent
By:
---------------------------------
Xxxxx Xxxxxxxx
Vice President
[Calculation Agency Agreement]
ANNEX A
1. The Index.
The Index is the Xxxxxxx 2000 Index (the "Index"), as
calculated, published and disseminated by Xxxxx Xxxxxxx Company ("Xxxxxxx").
2. Determination of the Maturity Payment Amount.
The Calculation Agent shall, at the request of the Trustee,
determine the amount payable on the Stated Maturity Date for each $1,000
principal amount of Securities (the "Maturity Payment Amount").
The Maturity Payment Amount shall be the following:
o If the Final Index Level is greater than or equal to the
Initial Index Level, the sum of:
(1) $1,000; and
Final Index Initial Index
Upside Level - Level
(2) $1,000 x Participation x ---------------------------
Rate Initial Index Level
o If the Final Index Level is less than the Initial Index
Level and the Closing Index Level is at or above the
Threshold Level on all Exchange Business Days during the
Measurement Period, $1,000.
o If the Final Index Level is less than the Initial Index
Level and the Closing Index Level has fallen below the
Threshold Level on any Exchange Business Day during the
Measurement Period, the product of:
(1) $1,000; and
(2) Final Index Level
-------------------
Initial Index Level
3. Discontinuance of the Index.
(a) If Xxxxxxx discontinues publication of the Index and
Xxxxxxx or another entity publishes a successor or substitute index (the
"Successor Index") that the Calculation Agent determines, in its sole discretion
exercised in good faith, to be comparable to the discontinued Index, then the
Calculation Agent shall determine the Closing Index Level to be used for
purposes of (a) determining whether the Closing Index Level has fallen below the
threshold level on any Exchange Business Day during the measurement period and
(b) computing the Maturity Payment Amount by reference to the Closing Index
Level of such Successor Index on the date that the Final Index Level is to be
determined.
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(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 Xxxxxxx discontinues publication of the Index and the
Calculation Agent determines that no Successor Index is available at such time,
or if Xxxxxxx (or the publisher of any Successor Index) fails to calculate and
announce a Closing Index Level for the Index (or a Successor Index) on any date
when it would ordinarily do so in accordance with its customary practice, the
Calculation Agent will determine the Closing Index Level to be used for purposes
of (a) determining whether the Closing Index Level has fallen below the
threshold level on any Exchange Business Day during the measurement period and
(b) computing the amount payable on the Stated Maturity Date. In such
circumstances, the Closing Index Level will be computed by the Calculation Agent
in accordance with the formula for and method of calculating the Index (or any
Successor Index) last in effect prior to such discontinuance, using the Closing
Index Level (or, if trading in any of the relevant securities has been
materially suspended or materially limited, its good faith estimate of the
Closing Index 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 (or any Successor Index) on the
Relevant Exchange on which such Security trades.
4. Alteration of Method of Calculation.
If at any time the method of calculating the Index, any
Successor Index, or the Closing Index Level on any particular day, 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 of the Relevant Exchanges on which the
securities comprising the Index or such Successor Index traded on any date the
Closing 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 Closing Index Level on any
particular day and 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 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 LLC.
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"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 Xxxxxx Brothers Inc.
"Close of Trading" shall mean, in respect of any Relevant
Exchange, the scheduled weekday closing time on a day on which the Relevant
Exchange 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 sessions.
"Closing Index Level" shall mean, with respect to any day, in
the case of the Index or the Successor Index, the closing level of the Index or
the Successor Index, as the case may be, as reported by Xxxxxxx or the publisher
of the Successor Index, as the case may be, on such day or as determined by the
Calculation Agent pursuant to this Agreement.
"Company" shall have the meaning set forth in the preamble to
this Agreement.
"Exchange Business Day" shall mean any day on which the Index
or the Successor Index is announced by its publisher or is otherwise determined
by the Calculation Agent.
"Final Index Level" shall equal the Closing Index 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 equal 638.05, the Closing Index
Level on December 20, 2004.
"Market Disruption Event", with respect to the Index or any
Successor Index shall mean any of the following events has occurred on any day
as determined by the Calculation Agent in its sole discretion:
(1) 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 Relevant Exchanges 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 Relevant Exchange. 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, quotation system or market, any other
self regulatory organization or the Securities and
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Exchange Commission of similar scope or as a replacement for Rule 80B
may be considered material.
(2) 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 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 the exchanges or otherwise.
(3) 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 Relevant Exchanges
on which those securities are traded, at any time during the one hour
period that ends at the Close of Trading on such day.
(4) 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 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.
(5) The closure of the Relevant Exchanges 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 scheduled closing time unless
the earlier closing time is announced by the Relevant Exchanges at
least one hour prior to the earlier of (i) the actual closing time for
the regular trading session on the Relevant Exchanges and (ii) the
submission deadline for orders to be entered into the Relevant
Exchanges for execution at the Close of Trading on such day.
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.
"Measurement Period" shall mean the period from December 20,
2004 to and including the Valuation Date.
"Nasdaq" shall mean The Nasdaq Stock Market, Inc.
"NYSE" shall mean The New York Stock Exchange, Inc.
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"Relevant Exchange" shall mean, for each security (or any
combination thereof then included in the Index or any Successor Index), the
primary securities exchange, quotation system, including any bulletin board
service, or other market of trading for such security.
"Xxxxxxx" shall have the meaning set forth in Section 1 of
this Annex A.
"Securities" shall have the meaning set forth in the preamble
to this Agreement.
"Stated Maturity Date" shall mean December 23, 2009 (or if
December 23, 2009 is not a Business Day, on the next 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 that the Final
Index Level on the postponed Valuation Date is determined.
"Successor Index" shall have the meaning set forth in Section
3(a) of this Annex A.
"Threshold Level" shall mean 446.635, as it may be adjusted
from time to time by the Calculation Agent to the extent it believes
appropriate, in a manner consistent with the adjustments to the method of
calculation of the Index or a Successor Index described in Sections 3 and 4 of
this Annex A and under the circumstances described in Sections 3 and 4 of this
Annex A.
"Trustee" shall have the meaning set forth in the preamble to
this Agreement.
"Upside Participation Rate" shall mean 110%.
"Valuation Date" shall mean December 18, 2009; provided, that
if a Market Disruption Event occurs on such day, then the Valuation Date shall
be the next following Exchange Business Day on which no Market Disruption Event
occurs; provided, however, if a Market Disruption Event occurs on each of the
eight Exchange Business Days following the original scheduled Valuation Date,
then (a) that eighth Exchange Business Day shall be deemed the Valuation Date
and (b) the Calculation Agent shall determine the Final Index Level based upon
its good faith estimate of the value of the Index on that eighth Exchange
Business Day.
