EXHIBIT 1.10
CALCULATION AGENCY AGREEMENT
CALCULATION AGENCY AGREEMENT, dated as of August 5, 2002 (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 $12,765,000
aggregate principal amount of S&P 500(R) Index SUNS(R), Stock Upside Note
Securities(R) Due August 5, 2008 (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 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 Closing Level of the Index 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.
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
-------- * "Standard & Poor's(R)," "S&P(R)," "S&P 500(R)," "Standard &
Poor's 500," and "500" are trademarks of XxXxxx-Xxxx, Inc. and have
been licensed for use by Xxxxxx 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 Xxxxxx
Brothers Inc.
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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.
(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
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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 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (facsimile: (000) 000-0000) (telephone: (000) 000-0000),
Attention: Treasurer, with a copy to 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (facsimile: (000) 000-0000) (telephone: (000) 000-0000),
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
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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.
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:__________________________
Name: Xxxxxx Xxxxx
Title: Vice President
XXXXXX BROTHERS INC.,
as Calculation Agent
By:__________________________
Name: Xxxxxx Xxxxx
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 date that any
subsequent Closing 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 S&P discontinues publication of the Index prior to, and such
discontinuance is continuing on, any date that a Closing Level is to be
determined and the Calculation Agent determines that no Successor Index is
available at such time, then, on such date, the Calculation Agent shall
determine each subsequent Closing Level to be used in computing the Maturity
Payment Amount. Each such Closing Level 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 each date that any Closing 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, and
calculate the Closing Level and the Maturity Payment Amount with reference to
the Index or
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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.
"Alternative Redemption Amount" shall mean, with respect to
each $1,000 principal amount of Securities, the product of:
(i) $1,000; and
(ii) 1 + 1.43 x Average Closing
( Index Level-- 885.08 )
------------------------
885.08
"Average Closing Index Level" shall mean the arithmetic
average of the Closing Levels of the Index on the 29th day of each of the 72
months (unless the month only has 28 days, in which case it will be the 28th day
of that month) after July 2002, starting from and including August 29, 2002 and
ending at and including July 29, 2008; provided, that if any such day is not a
Business Day, the Closing Level of the next following Business Day will be used;
provided further, that if a Market Disruption Event occurs on any such date, the
Calculation Agent will determine the Closing Level for such date by reference to
the Closing Level on the next following Business Day on which no Market
Disruption Event occurs.
"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 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 4:00 p.m., New York City time.
"Closing Level" shall mean the last reported level of the
Index, the Successor Index or any security which is a component of either such
index, as the case may be, at 4:00 p.m., New York City time, as reported by S&P,
the publisher of the Successor Index or the primary exchange on which any such
security then trades, as the case may be.
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"Company" shall have the meaning set forth in the preamble to
this Agreement.
"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.
"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% or 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)
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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 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 XxXxxx-Xxxx,
Inc.
"Stated Maturity" shall mean August 5, 2008; provided, that if
a Market Disruption Event occurs on July 29, 2008 (or if July 29, 2008 is not a
Business Day, on the next Business Day), the Stated Maturity shall be the third
Business Day following the date that the Closing Level for July 2008 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.
