CALCULATION AGENCY AGREEMENT
CALCULATION AGENCY AGREEMENT, dated as of February 3,
2005 (the
"Agreement"), between Lehman Brothers Holdings Inc. (the "Company")
and Lehman
Brothers Inc., as Calculation Agent.
WHEREAS, the Company has authorized the issuance of up to
$19,550,000
aggregate principal amount of Index-Plus Notes Due August 3, 2010,
Linked to a
Basket of Four Stock 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
Lehman
Brothers Inc., as Calculation Agent, and Lehman Brothers Inc.
hereby accepts
such appointment as the Company's agent for the purpose of
performing the
services hereinafter described upon the terms and subject to the
conditions
hereinafter mentioned.
2. Calculations and Information Provided. In response
to a request
made by the Trustee for a determination of the Maturity Payment
Amount due 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 determine (a) the
Successor
Index if publication of a Component Index is discontinued, (b) the
Weight of
each remaining Component Index if no Successor Index is available
or if the
publisher of such Component Index or Successor Index, as the case
may be, fails
to calculate and publish a Closing Index Level on any date, (c)
adjustments to a
Component Index, Successor Index or the Closing Index Level if the
method of
calculating any of these items changes in a material respect or if
a Component
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 level of
such
Component Index, or
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* Each Component Index is a trademark of the sponsor of
such Component
Index and has been licensed for use by Lehman Brothers
Holdings Inc.
The Securities, linked to the performance of the
Component Indices,
are not sponsored, endorsed, sold or promoted by the
sponsors of the
Component Indices and the sponsors of the Component
Indices make no
representation regarding the advisability of investing in
the
Securities.
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Successor Index, as the case may be, had such changes or
modifications not been
made, (d) adjustments to the Threshold Level, if required in order
to reflect
adjustments made in a Component Index or Successor Index and (e)
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 745 Seventh Avenue, New York, New York 10019
(facsimile: (646)
758-3204) (telephone: (212) 526-7000), Attention: Treasurer, with a
copy to 399
Park Avenue, New York, New York 10022 (facsimile: (212) 526-0357)
(telephone:
(212) 526-7000), Attention: Corporate Secretary, (b) in the case of
the
Calculation Agent, to it at 745 Seventh Avenue, New York, New York
10019
(facsimile: (646) 758-4942) (telephone: (212) 526-7000), Attention:
Equity
Derivatives Trading and (c) in the case of the Trustee, to it at
388 Greenwich
Street, 14th Floor, New Y
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