EXHIBIT 4.02
CALCULATION AGENCY AGREEMENT
CALCULATION AGENCY AGREEMENT, dated as of October 13, 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
$57,500,000 aggregate principal amount of Equity Income Notes Due
October 13,
2015, Linked to the S&P 500(R) Index (SPX) (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 amount, if
any,
due on the Interest Payment Date, the Calculation Agent shall
determine
such Interest Payment Amount and notify the Trustee of its
determination. The Calculation Agent shall also determine (a) the
Successor Index if publication of the Index is discontinued, (b)
the
Closing Index Level if no Successor Index is available or if
S&P or the
publisher of any Successor Index, as the case may be, fails to
calculate and publish a Closing Index Level on any date, (c)
adjustments to the Index, Successor Index or Closing Index Level
thereof 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
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* "Standard & Poor's," "S&P," "S&P 500," "Standard
& Poor's 500," and
"500" are trademarks of McGraw-Hill, Inc. and have been licensed
for
use by Lehman Brothers Holdings Inc. The notes, linked to the
performance of the S&P 500 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.
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the Calculation Agent, fairly represent the level of the Index, or
Successor Index, as the case may be, had such changes or
modifications
not been made and (d) 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 1301 Avenue of the
Americas, New York, New York 10019 (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 Der
