CALCULATION AGENCY AGREEMENT
CALCULATION AGENCY AGREEMENT, dated as of March 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
$4,600,000
aggregate principal amount of RAPIDS(SM), Return Accelerated
PortfolIo Debt
Securities Due September 3, 2006 (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 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, any Successor
Index or the
Closing Index Level 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
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* "RAPIDS" is a service mark of Lehman Brothers Inc.
"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 Securities, 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 Securities.
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that it does not, in the opinion of the Calculation Agent,
fairly
represent the level of the Index or such Successor Index,
as the case
may be, had such changes or modifications not been made,
(d) whether a
Market Disruption Event has occurred and (f) any other
calculation,
determination or adjustment specified as being made by the
Calculation
Agent in this Agreement. 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 be at the sole
discretion of
the Calculation Agent and, in the absence of manifest
error, be
conclusive for all purposes 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
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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
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
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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. 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 transmissi
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