CALCULATION AGENCY AGREEMENT
CALCULATION AGENCY AGREEMENT, dated as of July 7, 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
$16,939,500
aggregate principal amount of Absolute Buffer Notes Due July 7,
2008, Linked to
the Dow Jones EURO STOXX 50(SM) Index (SX5E) (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
the Index is discontinued, (b) the Closing Index Level if no
Successor Index is
available or if STOXX 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
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*
"EURO STOXX" and "EURO STOXX 50" are trademarks of STOXX Limited
and
"Dow Jones EURO STOXX 50 Index" is a service mark of Dow Jones
&
Company, Inc. and have been licensed for use by the Company. The
Securities, linked to the performance of the Dow Jones EURO STOXX
50
Index, are not sponsored, endorsed, sold or promoted by STOXX
Limited
or Dow Jones & Company, Inc. and STOXX Limited and Dow Jones
&
Company, Inc. make no representation regarding the advisability of
investing in the Securities.
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modified so that it does not, in the opinion of 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, (d) adjustments to the
Threshold
Level, if required in order to reflect adjustments made in the
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
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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.
(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
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negligence or willful 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
