CALCULATION AGENCY AGREEMENT
CALCULATION AGENCY AGREEMENT, dated as of May 27, 2003 (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
$40,250,000 aggregate principal amount of 0.25% Notes Due May 27, 2008,
Performance Linked to a Basket of Two Indices (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 at Stated Maturity of the Securities, the Redemption Payment
Amount and the Repurchase Payment Amount, the Calculation Agent shall
determine such Payment Amount and notify the Trustee of its
determination. The Calculation Agent shall also be responsible for (a)
the determination of the Closing Level of the Basket, (b) whether
adjustments to the Component Indices should be made, (c) the
determination of the Successor Index if publication of a Component
Index is discontinued and (d) whether a Market Disruption Event has
occurred. The Calculation Agent shall notify the Trustee of 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.
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.
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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.
(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.
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(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 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 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
(facsimile: (000) 000-0000) (telephone: (000) 000-0000), 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.
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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.
XXXXXX BROTHERS HOLDINGS INC.
By:__/s/ Xxxxx Corrigan______
Name: Xxxxx Xxxxxxxx
Title: Vice President
XXXXXX BROTHERS INC.,
as Calculation Agent
By:___/s/ Xxxxx Corrigan_____
Name: Xxxxx Xxxxxxxx
Title: Vice President
ANNEX A
1. The Component Indices.
The "Component Indices" shall mean the Nasdaq Biotechnology Index, as
calculated by Nasdaq, and the Dow Xxxxx U.S. Total Market Healthcare Index, as
calculated by Dow Xxxxx (each, a "Component Index").
2. Determination of the Payment Amount.
The Calculation Agent shall determine the Payment Amount payable for
each Security.
The amount payable at Stated Maturity for each $1,000 principal amount
of Securities (the "Maturity Payment Amount") shall equal (i) the greater of (a)
$1,000 and (b) the Alternative Redemption Amount and (ii) any accrued but unpaid
interest through but excluding the Stated Maturity. The amount payable upon a
Redemption of each $1,000 principal amount of Securities (the "Redemption
Payment Amount") shall equal (i) the greater of (a) $1,000 and (b) the
Alternative Redemption Amount and (ii) any accrued but unpaid interest through
but excluding the Non-Delaying Event Redemption Date or, if a Delaying Event
occurs, through the Delaying Event Redemption Date. The amount payable upon a
Repurchase of each $1,000 principal amount of Securities (the "Repurchase
Payment Amount") shall equal (i) the Alternative Redemption Amount and (ii) any
accrued but unpaid interest through the Non-Delaying Event Repurchase Date or,
if a Delaying Event occurs, through but excluding the Delaying Event Repurchase
Date.
The Closing Level of the Basket used to calculate the Alternative
Redemption Amount shall be determined by the Calculation Agent.
3. Discontinuance of the Index.
If Nasdaq or Dow Xxxxx discontinue publication of either Component
Index and Nasdaq, Dow Xxxxx 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 Component Index, then the Calculation Agent shall calculate the
Maturity Payment Amount, Redemption Payment Amount or the Repurchase 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 date that any Ending
Level is to be determined for any Component Index.
Upon any selection by the Calculation Agent of a Successor Index, the
Company shall promptly give notice to the holders of the Securities.
If Nasdaq or Dow Xxxxx discontinue publication of either Component
Index prior to, and such discontinuance is continuing on, the date that any
Ending Level is to be determined for any Component Index 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 Redemption Payment Amount, Repurchase Payment Amount or the
Maturity Payment Amount, as the case may be. The Redemption Payment Amount,
Repurchase Payment Amount and the Maturity Payment Amount shall be computed by
the Calculation Agent in accordance with the formula for and method of
calculating the Component Index last in effect prior to such discontinuance,
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using the Ending Level (or, if trading in the relevant securities has been
materially suspended or materially limited, its good faith estimate of the
Ending 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 Component 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 a Component Index or a
Successor Index for such Component Index, or the Ending Level thereof, is
changed in a material respect, or if the Component Index or a Successor Index
for such Component Index is in any other way modified so that such Component
Index does not, in the opinion of the Calculation Agent, fairly represent the
value of the Component 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 date that any Ending
Level is to be determined for any Component Index, 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
Component Index or such Successor Index, as the case may be, as if such changes
or modifications had not been made, and calculate the Redemption Payment Amount,
Repurchase Payment Amount or the Maturity Payment Amount, as the case may be,
with reference to the Component Index or such Successor Index, as adjusted.
Accordingly, if the method of calculating the Component 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 Component 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.
"Alternative Redemption Amount" shall mean the product of (a)
$1,000 and (b) the Closing Level of the Basket on the relevant Payment
Determination Date, divided by 128.061.
"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 Closing Level of the Basket and the Payment Amount, which
term shall, unless the context otherwise requires, include its successors and
assigns. The initial Calculation Agent shall be Xxxxxx Brothers Inc.
"Calculation Day" shall mean (a) five Business Days prior to
(i) for payment at Stated Maturity, May 27, 2008 or (ii) for a payment upon a
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Repurchase, the Non-Delaying Event Repurchase Date or (b) for payment upon a
Redemption, the date the Redemption Notice is given in accordance with the
Indenture.
"Closing Level of the Basket", when used with respect to any
Payment Determination Date, shall equal the sum of (a) the Ending Level of the
Nasdaq Biotechnology Index multiplied by 0.109112 and (b) Ending Level of the
Dow Xxxxx U.S. Total Market Healthcare Index multiplied by 0.130129.
"Close of Trading" shall mean 4:00 p.m., New York City time.
"Company" shall have the meaning set forth in the preamble to
this Agreement.
"Component Indices" are defined in Section 1 of this Annex A.
"Delaying Event" shall mean a Market Disruption Event for a
Component Index occurs on the relevant Calculation Day.
"Delaying Event Redemption Date" shall mean, if a Delaying
Event occurs on the Calculation Day for a Redemption, the later of (a) the
Non-Delaying Event Redemption Date and (b) five Business Days after the Payment
Determination Date thereof.
"Delaying Event Repurchase Date" shall mean, if a Delaying
Event occurs on the Calculation Day for a Repurchase, five Business Days after
the Payment Determination Date thereof.
"Dow Xxxxx" shall mean Dow Xxxxx & Company, Inc.
"Ending Level" shall mean, with respect to a Component Index
on any day, the last reported level of the Component Index, the Successor Index
for the Component Index or any security which is a component of any such index,
as the case may be, at the Close of Trading for such day, as reported by Nasdaq,
Dow Xxxxx, the publisher of the Successor Index or the primary exchange on which
any such security then trades, as the case may be.
"Indenture" shall have the meaning set forth in the preamble
to this Agreement.
"Market Disruption Event" with respect to a Component Index
means any of the following events as determined by the Calculation Agent:
(i) A suspension, absence or material limitation of trading in 20% of the
underlying stocks which then comprise such Component Index or any Successor
Index for such Component Index 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, if such stocks are not listed or quoted in the United
States, on the primary exchange, trading system or market for such stocks.
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
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for a security traded on a bulletin board means a suspension, absence or
material limitation of trading of such 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 such Component Index or any Successor Index for such Component
Index, whether by reason of movements in price exceeding levels
permitted by an exchange, trading system or market on which such
options contracts related to such Component Index or any Successor
Index for such Component Index 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% of the underlying stocks which then comprise the Component Index
or any Successor Index for such Component Index or in respect of
options contracts related to such Component Index or any Successor
Index for such Component Index, 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, the primary non-U.S. exchange, trading system or market.
(iv) It has become (i) impracticable for Xxxxxx Brothers Holdings or its
affiliates to (A) acquire, establish, re-establish, substitute, maintain, unwind
or dispose of any transactions or assets that Xxxxxx Brothers Holdings deems
necessary to hedge the equity price risk of entering into and performing its
obligations with respect to the notes or (B) realize, recover or remit the
proceeds of any such transactions or assets or (ii) impossible for Xxxxxx
Brothers Holdings or its affiliates to perform any activities mentioned in (A)
or (B) above or to borrow any assets in connection with hedging Xxxxxx Brothers
Holdings' obligations under the Securities without any increase in costs above
the anticipated costs of such borrowing.
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 option contract on a Component Index or
any Successor Index for such Component Index 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 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
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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, Inc.
"Non-Delaying Event Redemption Date" shall mean the date set
forth in the Redemption Notice, which date shall not be less than 30 nor more
than 60 days after the date of the Redemption Notice.
"Non-Delaying Event Repurchase Date" shall mean the eighth
Business Day following the Business Day on which the Company receives notice of
a Repurchase from a Holder.
"Payment Amount" shall mean the Maturity Payment Amount, the
Redemption Payment Amount or the Repurchase Payment Amount, as the case may be.
"Payment Determination Date" shall mean the relevant
Calculation Day, unless a Delaying Event occurs with respect to such Payment
Determination Date, in which case the first Business Day after the Calculation
Day on which the Ending Levels of the Component Indices that have been subject
to a Delaying Event have been determined.
"Redemption" shall mean the option of the Company to redeem,
at any time on or after May 19, 2004, in whole or from time to time in part, the
Securities.
"Redemption Notice" shall mean the notice of Redemption mailed
to the Holders.
"Repurchase" shall mean the option of a beneficial holder to
elect to require the Company to repurchase, at any time until eight Business
Days prior to May 27, 2008, in whole or from time to time in part, such holder's
Securities.
"Stated Maturity" shall mean May 27, 2008, or if a Delaying
Event occurs, the fifth Business Day after the Payment Determination Date on
which the Closing Level of the Basket has been determined.
"Successor Index" shall have the meaning set forth in Section
3 of this Annex A.
"Trustee" shall have the meaning set forth in the preamble to
this Agreement.
