CALCULATION AGENCY AGREEMENT
CALCULATION AGENCY AGREEMENT, dated as of May 20, 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
$31,625,000 aggregate principal amount of Nasdaq-100 Index(R) Rebound RANGERSSM,
Rebound Risk AdjustiNG Equity Range SecuritiesSM Notes Due May 20, 2007 (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 or the Redemption
Amount due upon redemption of the Securities, the Calculation Agent
shall determine such Maturity Payment Amount or Redemption 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) adjustments to the
Closing Level and (c) the determination of 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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* The Nasdaq-100(R), Nasdaq-100 Index(R), and Nasdaq(R) are trade or
servicemarks of The Nasdaq Stock Market, Inc. (which with its
affiliates are the "Nasdaq Corporations") and are licensed for use by
the Company. The Securities have not been passed on by the Nasdaq
Corporations as to their legality or suitability. The Securities are
not issued, endorsed, sold, or promoted by the Nasdaq Corporations. THE
NASDAQ CORPORATIONS MAKE NO WARRANTIES AND BEAR NO LIABILITY WITH
RESPECT TO THE SECURITIES.
RANGERS is a servicemark and Risk AdjustiNG Equity Range Securities is
a servicemark of Xxxxxx 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
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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
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
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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
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.
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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/ Xxxxxx Budde_______
Name: Xxxxxx Xxxxx
Title: Vice President
XXXXXX BROTHERS INC.,
as Calculation Agent
By:__/s/ Xxxxxx Budde________
Name: Xxxxxx Xxxxx
Title: Vice President
ANNEX A
1. The Index.
The Index is the Nasdaq-100 Index(R), as calculated by Nasdaq
(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 be the following:
If the Ending Index Level of the Index on the Final Valuation
Date is greater than or equal to 1,162.93, $1,310.
If the Ending Index Level of the Index on the Final Valuation
Date is less than 1,162.93, the lesser of:
(a) $1,000; and
(b) $1,000 x ( Ending Index Level + 0.20 )
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1,162.93
3. Determination of the Redemption Amount
If the Ending Index Level of the Index on any Annual
Observation Date is greater than or equal to 1,162.93, the Calculation Agent
shall determine the amount payable upon redemption for each $1,000 principal
amount of Securities (the "Redemption Amount").
The Redemption Amount shall be the following:
If the Ending Index Level of the Index on any Annual
Observation Date is greater than or equal to 1,162.93:
$1000 + ($77.50 x Years Outstanding)
4. Discontinuance of the Index.
(a) If Nasdaq discontinues publication of the Index and Nasdaq 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
calculate the Maturity Payment Amount pursuant to Section 2 hereof or the
Redemption Amount pursuant to Section 3 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 Valuation Date
or any Annual Observation Date, as the case may be.
(b) Upon any selection by the Calculation Agent of a Successor Index, the
Company shall promptly give notice to the holders of the Securities.
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(c) If Nasdaq discontinues publication of the Index prior to, and such
discontinuance is continuing on, any Annual Observation Date or the Final
Valuation 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 Redemption Amount or the
Maturity Payment Amount, as the case may be. The Redemption Amount and 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.
5. 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 any Annual Observation Date or the Final
Valuation 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 Redemption Amount or the Maturity Payment Amount, as the case may
be, 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).
6. 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.
"Annual Observation Date" shall mean each of May 17, 2004, May
16, 2005 and May 15, 2006; provided, that if a Market Disruption Event occurs on
any such day, then such Annual Observation Date shall be 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, 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.
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"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 and the Redemption 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, with respect to any day, 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 the Close of Trading, as
reported by Nasdaq, the publisher of the Successor Index or the primary exchange
on which any such security then trades, as the case may be.
"Company" shall have the meaning set forth in the preamble to
this Agreement.
"Ending Index Level" shall equal the Closing Level on the
Final Valuation Date or any Annual Observation Date, as the case may be.
"Final Valuation Date" shall mean May 16, 2007; provided, that
if a Market Disruption Event occurs on such day, then the Final Valuation Date
shall be the next following Business Day on which no Market Disruption Event
occurs.
"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:
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(i) A suspension, absence or material limitation of trading in
20% or more of the underlying securities 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 securities 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 such
security. Limitations on trading during significant market fluctuations
imposed pursuant to the rules of any primary organized U.S. exchange or
trading system similar 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 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 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 related to the Index, or any Successor 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% 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 investors provided that the
suspension continues for more than two hours of trading or during the
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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, Inc.
"Redemption Amount" shall have the meaning set forth in
Section 2 of this Annex A.
"Stated Maturity" shall mean May 20, 2007 (or if May 20, 2007
is not a Business Day, on the next Business Day); provided, that if a Market
Disruption Event occurs on the Final Valuation Date, the Stated Maturity shall
be the third Business Day following the date that the Ending Index Level on the
postponed Final Valuation Date 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.
"Years Outstanding" shall mean the number of full years
elapsed since the date on which the Securities were first offered for sale.
