Exhibit 4.09


 


LEHMAN
BROTHERS HOLDINGS INC.


 


AND


 


U.S. BANK
NATIONAL ASSOCIATION


 


as Trustee


 


ELEVENTH
SUPPLEMENTAL INDENTURE


 


Dated as of
May 17, 2007


 

















 


THIS ELEVENTH SUPPLEMENTAL INDENTURE, dated
as of May 17, 2007, is between LEHMAN BROTHERS HOLDINGS INC., a corporation
duly organized and existing under the laws of the State of Delaware (the “Company”),
and U.S. BANK NATIONAL ASSOCIATION, a national banking association duly
organized and existing under the laws of the United States of America, acting as
Trustee under the Indenture referred to below(the “Trustee”), as supplemented
hereby for purposes of the Junior Subordinated Debentures (as defined below).


 


W  I  T  N  E  S  S  E  T  H


 


WHEREAS, the Company has duly authorized the
execution and delivery of an Indenture dated as of February 1, 1996 (the “Indenture”),
as amended and supplemented, to provide for the issuance from time to time of
its unsecured notes or other evidences of indebtedness to be issued in one or
more series (the “Securities”), as in the Indenture provided, up to such
principal amount or amounts as may from time to time be authorized in or
pursuant to one or more resolutions of the Board of Directors;


 


WHEREAS, the Company shall (i) issue a series
of Securities entitled the “5.707% Remarketable Junior Subordinated Debentures
due 2043” (the “Junior Subordinated Debentures”) to Lehman Brothers Holdings
Trust VII, a Delaware statutory trust (the “Trust”) in exchange for the trust
preferred securities of the Trust (the "Trust Preferred Securities")
and the trust common securities of the Trust (the "Trust Common
Securities") and (ii) offer the Trust Preferred Securities to the public
as part of the Normal MCAPS (as defined below);


 


WHEREAS, the Trust Preferred Securities and
Junior Subordinated Debentures will be subject to Remarketing in connection
with which certain terms of the Junior Subordinated Debentures and, as a
consequence, certain terms of the Junior Subordinated Debentures may be
changed, all in accordance with the procedures to be set forth in a Remarketing
Agreement, to be entered into prior to the first Remarketing (as amended or
supplemented from time to time, the  “Remarketing
Agreement”), among the Company, U.S. Bank National Association, as property
trustee of the Trust, and the remarketing agent named in the Remarketing
Agreement (including any successor or replacement, the “Remarketing Agent”);


 


WHEREAS, the Company has duly authorized the
execution and delivery of this Eleventh Supplemental Indenture in order to
provide for certain supplements to the Indenture which shall only be applicable
to the Junior Subordinated Debentures; and


 


WHEREAS, all acts and things necessary to
make this Eleventh Supplemental Indenture a valid agreement of the Company
according to its terms have been done and performed, and the execution and
delivery of this Eleventh Supplemental Indenture have in all respects been duly
authorized.


 


NOW, THEREFORE, in consideration of the
premises, of the purchase and acceptance of the Junior Subordinated Debentures
by the Holders thereof, and of the sum of one 


 

















 


dollar duly
paid to it by the Trustee at the execution and delivery of these presents, the
receipt whereof is hereby acknowledged, the Company covenants and agrees with
the Trustee to supplement the Indenture, only for purposes of the Junior
Subordinated Debentures, as follows:


 


SECTION
1.   GENERAL TERMS AND CONDITIONS OF THE JUNIOR SUBORDINATED
DEBENTURES


 


1.1           Designation, Principal Amount and
Terms.     There is hereby authorized
and established pursuant to Section 301 of the Indenture a series of Securities
designated the “5.707% Remarketable Junior Subordinated Debentures due 2043” of
the Company. The Junior Subordinated Debentures shall be issued initially in an
aggregate principal amount of $1,000,001,000, and shall have the terms provided
for herein, including those set forth in Exhibit
A  hereto. The Company may
create and issue additional notes ranking pari passu in
right of payment to the Junior Subordinated Debentures and otherwise with the
same terms as the Junior Subordinated Debentures other than the Issue Date,
Issue Price and the payment of additional interest accruing prior to the Issue
Date of such notes, which notes shall form a single series with the Junior
Subordinated Debentures. No such additional notes shall be issued if an Event
of Default has occurred with respect to the Junior Subordinated Debentures.


 


1.2           Optional Redemption. Pursuant
to Section 1101 of the Indenture, the Company may elect to redeem the
outstanding Junior Subordinated Debentures, in whole or in part, at any time on
or after May 31, 2016, at a Redemption Price equal to the 100% of the principal
amount of the Junior Subordinated Debentures to be redeemed plus accrued and
unpaid interest, including deferred interest (if any), on the Junior
Subordinated Debentures to be redeemed to the applicable Redemption Date.


 


In connection with a Remarketing, the Company
may change the date after which it may redeem the Junior Subordinated
Debentures to a later date or change the Redemption Price in accordance with
Section 2.


 


1.3           Special Event Redemption. If,
at any time prior to the Stock Purchase Date, a Special Event shall occur and
be continuing, the Company may, within 90 days following the occurrence of such
Special Event, elect to redeem the Junior Subordinated Debentures in whole (but
not in part), upon not less than 30 or more than 60 day’s notice, at a
Redemption Price equal to (i) in the case of a redemption after the occurrence
of a Tax Event or a Rating Agency Event, the greater of (A) 100% of the
principal amount of the Junior Subordinated Debentures to be redeemed plus
accrued and unpaid interest, including deferred interest (if any), and (B) the
Make-Whole Redemption Price and (ii) in the case of a redemption after the
occurrence of a Capital Treatment Event, 100% of the principal amount of the
Junior Subordinated Debentures to be redeemed plus accrued and unpaid interest,
including deferred interest (if any), to the Redemption Date.


 


The Junior Subordinated Debentures shall not
be subject to the right of redemption specified in Section 1102 of the
Indenture. In addition, the Junior Subordinated Debentures shall not be subject
to any sinking fund payments.


 


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1.4           Notices
of Defaults. So long as any Junior Subordinated Debentures are held by or
on behalf of the Trust, the Trustee shall provide to the holders of the Normal
MCAPS, Trust Preferred Securities, Trust Common Securities and Treasury MCAPS
such notices as it shall from time to time provide under Section 602 of the
Indenture. In addition, the Trustee shall provide to the holders of the Normal
MCAPS, Trust Preferred Securities, Trust Common Securities and Treasury MCAPS
notice of any Event of Default or event that, with the giving of notice or
lapse of time, or both, would become an Event of Default with respect to the
Junior Subordinated Debentures within 30 days after the actual knowledge of a
Responsible Officer of the Trustee of such Event of Default or other event.


 


1.5           Global Debentures; Adjustments of
Global Debentures.


 


(a)           The Junior Subordinated Debentures
shall be issued initially in fully registered, definitive form in the name of
the Property Trustee, in its capacity as such.


 


(b)           At any time on or after the
occurrence of an Early Termination Event, the Junior Subordinated Debentures in
definitive form may be presented to the Securities Registrar for exchange for
one or more global Debentures in an aggregate principal amount equal to the
aggregate principal amount of the Junior Subordinated Debentures so presented
(a “Global Debenture”), to be registered in the name of the Depositary, or its
nominee, and delivered to the Depositary for crediting to the accounts of its
participants pursuant to the instructions of the Regular Trustees. The Company
upon any such presentation shall execute one or more Global Debentures in such
aggregate principal amount and deliver the same to the Trustee for
authentication and delivery in accordance with the Indenture. The Trustee, upon
receipt of such Global Debentures, together with an Officers’ Certificate
requesting authentication, will authenticate such Global Debentures and deliver
them to the Securities Registrar, as custodian for the Depositary. Payments on
the Junior Subordinated Debentures issued as Global Debentures will be made to
the Depositary.


 


1.6           Deferral of Interest; Payment
Restrictions


 


(a)           The Company shall have the right at
any time, on one or more occasions, so long as an Event of Default has not
occurred and is not continuing under the Indenture, to defer payment of
interest on the Junior Subordinated Debentures, for up to 10 consecutive
semi-annual Interest Periods (or the equivalent thereof, if the Interest
Periods are not then semi-annual) or until June 2, 2014, if later, with respect
to each deferral period (each an “Deferral Period”), during which Deferral
Periods the Company shall have the right to make partial payments of interest
on any Interest Payment Date, and at the end of which the Company shall pay all
interest then accrued and unpaid (together with Additional Interest thereon to
the extent permitted by applicable law); provided that no Deferral Period shall
extend beyond the Stated Maturity of the principal of this Debenture. Prior to
the termination of any such Deferral Period, the Company may further extend the
interest payment period, provided that no Deferral Period shall exceed 10
consecutive semi-annual Interest Periods (or the equivalent thereof if this
Debenture is not then bearing interest semi-annually) or until June 2, 2014, if
later, or extend beyond the Stated Maturity of the principal of this Debenture.
Upon the termination of any such Deferral Period and upon the payment of all
accrued and unpaid interest then due, the Company may elect to begin a new
Deferral Period, subject to the above requirements. Subject to the last 


 


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sentence of this paragraph, no interest shall
be due and payable during an Deferral Period except at the end thereof. No
Deferral Period shall end on a date other than an Interest Payment Date. The
Company shall give the Trustee and the Paying Agent notice of its election to
begin or extend any Deferral Period at least ten Business Days prior to the
date on which interest on the Debentures would be payable but for the election
to begin or extend such Deferral Period. The Trustee or its designee shall give
notice of the Company’s election to begin or extend any Deferral Period to the
Holders of the Debentures to the Regular Trustees and to the holders of the
Treasury MCAPS, and if such election is made prior to the Stock Purchase Date
or, if earlier, the Remarketing Settlement Date, to the holders of the Normal
MCAPS. If an Deferral Period is in effect on the Stock Purchase Date and there
is a Failed Remarketing, then the Company will pay the Holder the deferred
interest on the Stock Purchase Date in additional subordinated notes (“Additional
Subordinated Notes”) that (i) have a principal amount equal to the aggregate
amount of deferred interest as of the Stock Purchase Date, (ii) mature on the
later of June 2, 2014 and five years after the commencement of such Deferral
Period, (iii) bear interest at a rate per annum equal to the rate of interest
originally in effect on the Debentures, (iv) are subordinate and rank junior in
right of payment and upon liquidation to all of the Company’s Senior Debt on
the same basis as the Debentures and (v) are redeemable by the Company at any
time prior to their stated maturity and the restrictions set forth in the first
sentence of this paragraph shall remain in effect until the Company has paid in
full all amounts outstanding under such notes.


 


(b)           The
Company hereby covenants that if (A) the Company extends any Interest Period or
the payment of interest under the Junior Subordinated Debentures is deferred,
(B) the Company has paid deferred interest in the form of Additional
Subordinated Notes and not yet repaid all outstanding amount on such Additional
Subordinated Notes, (C) an Event of Default or any event that, with the giving
of notice or the lapse of time or both, would be an Event of Default, has
occurred of which the Company has actual knowledge and for which the Company
has not taken reasonable steps cure or (D) the Junior Subordinated Notes are
beneficially owned by the Trust and the Company shall be in default relating to
its obligations under the Guarantee, then, during such period the Company shall
not, nor shall permit any subsidiary to: 
(1) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any capital
stock of the Company; (2) make any payment of principal, interest or premium,
if any, on or repay, repurchase or redeem any of the Company’s debt securities
that rank on a parity with (“Parity Debt Securities”) or junior in interest to
the Debentures, except that in connection with a Failed Remarketing, the
Company may pay interest on the Additional Subordinated Notes; or (3) make any
guarantee payments with respect to any guarantee of the Company of the debt
securities of any subsidiary of the Company if such guarantee ranks on a parity
with (“Parity Guarantees”) or junior in interest to the Debentures; provided,
however, that the following shall be permitted: 
(a) dividends or distributions in the form of common stock of the
Company; (b) payments under the Trust Guarantee (as such term is defined in the
Declaration of Trust); (c) any declaration of a dividend in connection with the
implementation of a stockholders’ rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto; (d) purchases of common stock related to the issuance of
common stock or rights under any of the Company’s benefit plans; (e) payments
of interest on any of Parity Debt Securities or payments under any Parity
Guarantees in respect of interest payments on debt securities of any subsidiary
of the Company, in each case ratably and in proportion to the respective amount
of (x) accrued and unpaid interest on such Parity Debt Securities or guaranteed
by such Parity 


 


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Guarantees, on the one hand, and (y)
accumulated and unpaid distributions (including compounded amounts) on the
Trust Preferred Securities, on the other hand and (f) pay interest on the
Junior Subordinated Debentures in Additional Subordinated Notes in connection
with a Failed Remarketing.


 


1.7           Alternative Payment Mechanism


 


(a)           The Company covenants and agrees with
each Holder of the Junior Subordinated Debentures that if it defers payment of interest on any Interest Payment Date on
or prior to the Stock Purchase Date, commencing with the date two years after
the beginning of such Deferral Period, the Company shall, subject to the
occurrence of a Supervisory Event and except to the extent that the Company is
required to pay deferred interest by the issuance of Additional Subordinated
Notes, pay such deferred interest only out of Eligible Proceeds, that it shall
notify the SEC if this covenant is applicable, and, subject to the approval of
the SEC, that it shall continuously use its Commercially Reasonable Efforts to
sell Qualifying APM Securities not later than the termination of such Deferral
Period in an amount so that the net proceeds of such sale, when applied to such
deferred payments of interest, will cause such unpaid deferred interest
payments to be paid in full and (unless the SEC instructs otherwise) apply the
proceeds of such sale to pay the deferred amounts (provided that the Company shall not in any event be required
to pay interest on the Junior Subordinated Debentures at the time when the
payment of such interest would violate the terms of any senior or pari passu securities issued by the Company or any
Subsidiary); provided, however, that the foregoing covenant shall
not apply with respect to any interest on the Junior Subordinated Debentures
that is deferred and unpaid as of the date of a consummation of any business
combination where, immediately following its consummation, over 50% of the
surviving entity’s voting stock is owned by the shareholders of the other party
to the business combination. The surviving entity in such business combination
may pay deferred interest with any available funds on such next interest
payment date following the date of the consummation of the business combination
(or, if later, at anytime within 90 days following the date of such
consummation). For the avoidance of doubt, the Company’s failure to raise sufficient
Eligible Proceeds or its use of other sources to fund such deferred interest
payments upon the occurrence of a Supervisory Event, by itself, shall not
constitute an Event of Default under the Indenture. In addition, if the Company
sells Qualifying APM Securities pursuant to this Section 1.7 but a Supervisory
Event arises from the SEC disapproving the use of the proceeds to pay deferred
interest, the Company’s use of the proceeds for other purposes while continuing
to defer interest, by itself, shall not constitute an Event Default under the
Indenture. The Company may pay current interest with any available funds at any
time.


 


(b)           If, due to a Market Disruption Event
or otherwise, the Company is able to raise some, but not all, Eligible Proceeds
necessary to pay all deferred interest (including compounded interest thereon)
on any Interest Payment Date, Holders of the Junior Subordinated Debentures
shall receive their pro rata share of the Eligible Proceeds. Notwithstanding
Section 1.7(a), if the Company is required to conduct a sale of Qualifying
APM Securities in order to pay amounts due and payable under any instruments or
other securities that rank pari passu
as to interest or distributions with the Junior Subordinated Debentures, then
the Company shall apply such proceeds to deferred interest payments on the
Junior Subordinated Debentures, on the one hand, and such other pari passu securities, on the other hand,
on a ratable basis in 


 


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proportion to the total amounts of interest
that are due on the Junior Subordinated Debentures and such securities before
the Company shall be relieved of its obligation to conduct the sale of
Qualifying APM Securities and apply the proceeds thereof to such securities.


 


(c)           If the Company issues Additional
Subordinated Notes in respect of deferred interest payments as set forth in
Section 1.6(a) hereof or in respect of deferred contract payments pursuant to
Section 6.7(c) of the Stock Purchase Contract Agreement, Section 1.7(a) will
apply to the payment of interest on and principal of these Additional
Subordinated Notes except that references to termination of the Deferral Period
shall instead be to the maturity date of the Additional Subordinated Notes.


 


(d)           Notwithstanding anything to the
contrary in the Indenture, if the Company has failed to comply with its
obligations under this Indenture, including under this Section 1.7, then a
Holder of Trust Preferred Securities may directly institute a proceeding
against the Company for enforcement of such obligation.


 


(e)           The Company shall provide written
notice to the Trustee once the Alternative payment Mechanism covenant under
this Section 1.7 is applicable and certify that it will perform its obligations
as required under this Section 1.7. The Company shall also provide written
notification to the Trustee at least 5 Business Days prior to any Interest
Payment Date on which it makes payments of deferred interest pursuant to this
Section 1.7 specifying the amount of Eligible Proceeds to be paid to the
Trustee and applied to pay deferred interest (including Additional Interest
therein), specifying the application of such Eligible Proceeds to deferred
interest (including Additional Interest thereon) remaining outstanding as of such
Interest Payment Date. The Trustee shall be permitted to rely on such notices
and certifications without requiring any additional due diligence or
investigation into the performance of the Company of its obligations under this
Section 1.7.


 


1.8           Payment of Trust Costs and
Expenses


 


The Company shall,
for so long as the Trust is in existence, agree to pay all debts and
obligations (other than with respect to the securities issued by the Trust) and
all costs and expenses of the Trust (including, but not limited to, all costs
and expenses relating to the organization of the Trust, the fees and expenses
of the trustees and all costs and expenses relating to the operation of the
Trust) and to pay any and all taxes, duties, assessments or governmental
charges of whatever nature (other than withholding taxes) imposed on the Trust
by the United States, or any other taxing authority, so that the net amounts
received and retained by the Trust after paying such expenses will be equal to
the amounts the Trust would have received had no such costs or expenses been
incurred by or imposed on the Trust. The foregoing obligations of the Company
are for the benefit of, and shall be enforceable by, any Person to whom any
such debts, obligations, costs, expenses and taxes are owed (each, a “Creditor”)
whether or not such Creditor has received notice thereof. Any such Creditor may
enforce such obligations of the Company directly against the company, and the
Company irrevocably waives any right or remedy to require that any such Creditor
take any action against the Trust or any other Person before proceeding against
the Company.


 


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SECTION
2.   REMARKETING AND RATE RESET PROCEDURES


 


2.1           Company Elections in Connection
with Remarketing.  


 


In connection with Remarketings, the Company
shall have the right hereunder, subject to Section 2.2(a), without the consent
of any Holder of the Junior Subordinated Debentures, to change certain terms of
the Junior Subordinated Debentures as provided below in this Section 2.1. By
not later than the 21st day prior to the first day of each Remarketing Period,
the Company will specify the following information or decisions in a notice to
the Remarketing Agent, the Collateral Agent, the Property Trustee (on behalf of
the Trust) and the Trustee (clauses (a) through (e) applying only if the
Remarketing is Successful and clause (f) applying only in the case of a Failed
Remarketing):


 


(a)           whether the Stated Maturity Date will
remain at June 1, 2043 or will be changed to an earlier date (specifying such
date if applicable); provided that the Stated Maturity Date may not be changed
to a date earlier than the later of (i) May 31, 2016 and (ii) if the
Remarketing Settlement Date occurs during an Deferral Period, the fifth
anniversary of the first day of such Deferral Period;


 


(b)           whether to change the date after
which the Junior Subordinated Debentures will be redeemable at the Company’s
option and the redemption price or prices; provided that no redemption date for
the Junior Subordinated Debentures may be earlier than the later of (i) May 31,
2016 and (ii) if the Remarketing Settlement Date occurs during an Deferral
Period, the fifth anniversary of the first day of such Deferral Period; and
provided, further, that no redemption price may be less than the principal plus
accrued and unpaid interest (including Additional Interest) on the Junior
Subordinated Debentures;


 


(c)           whether, in connection with an Early
Remarketing that is not the first scheduled Remarketing, the Company is
exercising its right to cause the subordination provisions in the Indenture to
cease to apply to the Junior Subordinated Debentures, if the Remarketing is
Successful, from and after the Remarketing Settlement Date and if so, whether
it also elects that the Junior Subordinated Debentures shall no longer be
subject to the interest deferral provisions of the Indenture;


 


(d)           whether the Junior Subordinated
Debentures will be remarketed as fixed rate debentures or floating rate
debentures; if the Junior Subordinated Debentures will be remarketed as
floating rate debentures, the applicable index and the interest payment dates
and manner of calculation of interest on the Junior Subordinated Debentures,
which the Company may change to correspond with the market conventions
applicable to notes bearing interest at rates based on the applicable index;
and


 


(e)           whether following a Failed
Remarketing:


 


(i)            the
Stated Maturity Date will remain at June 1, 2043 or will be changed to an
earlier date, which date shall not be earlier than May 31, 2016 (specifying
such date if applicable); and


 


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(ii)           the
date after which the Junior Subordinated Debentures will be redeemable at the
Company’s option will be changed (which date shall not be earlier than May 31,
2016) and the redemption price or prices provided that no redemption price may
be less than the principal plus accrued and unpaid interest, including deferred
interest (if any).


 


provided that
if the Failed Remarketing occurs during an Deferral Period any changed Stated
Maturity Date of the Junior Subordinated Debentures determined pursuant to
clause (i) or early redemption date determined pursuant to clause (ii) may not
be earlier than the fifth anniversary of the first day of such Deferral Period.


 


Any such elections made by the Company
pursuant to clauses (a) through (e) shall, upon successful completion of a
Remarketing, automatically apply and come into effect in respect of the Junior
Subordinated Debentures as of the Remarketing Settlement Date and any such
elections made by the Company pursuant to clause (f) in connection with a
Failed Remarketing shall come into effect in respect of the Junior Subordinated
Debentures upon the announcement by the Company that the Final Remarketing is a
Failed Remarketing.


 


2.2           Reset of Interest Rate in
Connection with Remarketings and Related Changes in Terms.


 


(a)           As part of and in connection with
each Remarketing, the Remarketing Agent shall determine the Reset Rate or Reset
Spread on the Junior Subordinated Debentures, subject to Sections 2.2(b)
through (e), pursuant to the Remarketing Agreement and in accordance with the
other provisions of this Section 2, that will apply to all Junior Subordinated
Debentures (whether or not sold in the Remarketing) if such Remarketing is
Successful for each Interest Period or portion thereof commencing on or after
such Remarketing Settlement Date, subject to the following provisions and
limitations:


 


(i)            in
connection with a Remarketing that is not a Final Remarketing, (A) if the
Junior Subordinated Debentures are remarketed as fixed rate debentures, the
Reset Rate may not exceed the Fixed Rate Reset Cap and (B) if the Junior
Subordinated Debentures are remarketed as floating rate debentures, the Reset
Spread may not exceed the Floating Rate Reset Cap;


 


(ii)           the
interest rate on the Junior Subordinated Debentures may not at any time be less
than 0% per annum; and


 


(iii)          the
terms of the Junior Subordinated Debentures set forth in the Remarketing shall
not be permitted to have any provision to the extent such provision would have
caused the Junior Subordinated Debentures to be contingent payment debt
instruments under U.S. Treasury Regulations Section 1.1275-4 upon initial
issuance.


 


(b)           If the Remarketing has been
determined to be Successful in accordance with Section 2.4(a), by approximately
4:30 P.M., New York City time, on the date of such Successful Remarketing, the
Remarketing Agent shall notify the Company, the Collateral Agent, the Property
Trustee (on behalf of the Trust) and the Trustee that the Remarketing was 


 


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Successful and the Reset Rate or Reset Spread
determined as part of such Remarketing in accordance with this Section 2.


 


(c)           If a Remarketing is Successful, then
commencing with the related Remarketing Settlement Date the interest rate on
the Junior Subordinated Debentures shall be reset to the rate determined in
accordance with this Section 2 pursuant to such Remarketing and the other
changes, if any, in the terms of the Junior Subordinated Debentures as notified
by the Company pursuant to Section 2.1, shall become effective in accordance
with this Section 2.


 


(d)           If a Remarketing other than the Final
Remarketing is not Successful:


 


(i)            no
Trust Preferred Securities will be sold in such Remarketing;


 


(ii)           the
interest rate of the Junior Subordinated Debentures will remain unchanged
unless and until it is reset pursuant to a subsequent Remarketing in accordance
with this Section 2;


 


(iii)          the
other changes, if any, in the terms of the Junior Subordinated Debentures, as
notified by the Company pursuant to Section 2.1, shall not become effective;
and


 


(iv)          the
Company and the Remarketing Agent shall attempt another Remarketing during the
next Remarketing Period.


 


(e)           Upon the occurrence of a Failed
Remarketing:


 


(i)            no
Junior Subordinated Debentures will be sold in such Remarketing and no further
attempts at Remarketing shall be made;


 


(ii)           the
interest rate will be reset to a quarterly floating rate equal to 3-Month LIBOR
plus 0.84%, payable in arrears;


 


(iii)          the
other changes, if any, in the terms of the Junior Subordinated Debentures as
notified by the Company pursuant to clauses (a) through (e) of the second
sentence of Section 2.1, shall not become effective; and


 


(iv)          the
Stated Maturity Date and early redemption date for the Junior Subordinated
Debentures will change in accordance with clause (f) of the second sentence of
Section 2.1, as applicable.


 


2.3           Early Remarketing.


 


If an Early Remarketing Event occurs prior to
the Stock Purchase Date, the Remarketing Periods shall be the five Business Day
periods commencing on the seventh Business Day prior to the next February 28,
May 31, August 31 or November 30, or if any such day is not a Business Day, the
preceding Business Day, that is at least 30 days after the occurrence of such
Early Remarketing Event and concluding with the earlier to occur of the fifth
such date and a Successful Remarketing.


 


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An “Early Remarketing Event”
shall occur if on any 20th day prior to a Distribution Payment Date
(each, a “Calculation Date”), both of the
following conditions exist:


 


•                  the Trailing Two
Quarters Consolidated Net Income Amount is zero or a negative amount for the
two fiscal quarter period ending on the last day of the Company’s fiscal
quarter that is two fiscal quarters prior to the most recently completed fiscal
quarter before that Calculation Date; and


 


•                  the Tangible
Common Stockholders’ Equity Amount as of the end of the Company’s most recently
completed fiscal quarter before that Calculation Date and as of the end of the
Company’s fiscal quarter that is two fiscal quarters before the Company’s most
recently completed fiscal quarter before that Calculation Date has declined in
each case by 10% or more as compared to the Tangible Common Stockholders’
Equity Amount at the end of the Company’s fiscal quarter ending six quarters
prior to the Company’s most recently completed fiscal quarter before that
Calculation Date.


 


All financial terms used in this Section 2.3
shall be determined in accordance with GAAP as applied to and reflected in the
Company’s consolidated financial statements as of the relevant dates, except
(i) that the Company’s common stockholders’ equity and consolidated net income
at any date and for any period shall be adjusted to exclude extraordinary
items, unusual items and infrequently occurring items as defined in Accounting
Principles Bulletin 30, goodwill impairment as defined in Financial Accounting
Standards Board Statements of Financial Accounting Standards No. 142 and
amounts relating to discontinued operations as defined in Financial Accounting
Standards Board Statements of Financial Accounting Standards No. 144 and (ii) as
provided in the next sentence. If because of a change in GAAP that results in a
cumulative effect of a change in accounting principle or a restatement, either
(i) the Company’s consolidated net income is higher or lower than it would have
been absent such change, then, for purposes of calculating the calculations
described in this Section 2.3, commencing with the fiscal quarter for which
such changes in GAAP becomes effective, such consolidated net income shall be
calculated on a pro forma basis as if such changes had not occurred; or (ii)
the Tangible Common Stockholders’ Equity Amount as of a fiscal quarter end is
higher or lower than it would have been absent such change, then, for purposes
of the calculations described in this Section 2.3 the Tangible Common
Stockholders’ Equity Amount shall be calculated on a pro forma basis as if such
change had not occurred.


 


If at any relevant date or for any relevant
period the Company is not a reporting company under the Exchange Act, then for
any such relevant date and period the Company shall prepare and post on its
website the consolidated financial statements that the Company would have been
required to file with the Commission had the Company continued to be a
reporting company under the Exchange Act, in each case on or before the dates
that the Company would have been required to file such financial statements had
the Company continued to be an “accelerated filer” within the meaning of Rule
12b-2 under the Exchange Act.


 


2.4           Remarketing Procedures


 


The Company will
conduct the Remarketing of the Trust Preferred Securities in accordance with
the Remarketing procedures set forth herein and in Section 13.5 of the 


 


10

















 


Declaration of Trust. If at any time the
Trust Preferred Securities are no longer outstanding and the Junior
Subordinated Debentures instead of the Trust Preferred Securities are being
remarketed, the Remarketing procedures set forth in Section 13.5 of the
Declaration of Trust shall apply to such Remarketing of Junior Subordinated
Debentures as if they were set forth herein, provided that references in such
Section to the Trust Preferred Securities shall be deemed to refer to the
Junior Subordinated Debentures.


 


SECTION
3.   AMENDMENTS TO THE INDENTURE


 


3.1           Amendment to Section 101 of the
Indenture. Section 101 of the Indenture is hereby amended solely with
respect to the Junior Subordinated Debentures by adding the following new
definitions thereto, in the appropriate alphabetical sequence:


 


“Additional Interest” means the interest, if any, that shall
accrue on any interest on the Junior Subordinated Debentures the payment of
which has been deferred by the Company pursuant to the provisions hereof, which
interest shall accrue at the applicable rate then borne by the Junior
Subordinated Debentures.


 


“Additional Subordinated Notes” has the meaning specified in
Section 1.6(a).


 


“Adjusted Treasury Rate” means the semi-annual equivalent
yield to maturity of a Reference Security whose price, expressed as a percentage
of its principal amount, is equal to the Comparable Treasury Price.


 


“Capital Treatment Event” means the Company’s determination
that, based on the opinion of counsel experienced in such matters (who may be
an employee of the Company or any of its affiliates or subsidiaries), as a
result of any amendment to, clarification of or change (including any announced
prospective change) in applicable laws or regulations or official
interpretations thereof or policies with respect thereto; or any official administrative
pronouncement or action or threatened challenge or judicial decision
interpreting or applying such laws or regulations, which amendment,
clarification, change, pronouncement, action or decision is effective or
announced on or after May 17, 2007, there is more than an insubstantial
increase in the risk that the MCAPS or Preferred Stock will not constitute
equivalent “Tier 1” capital under the capital adequacy guidelines of the SEC
for consolidated supervisory entities such as the Company and its subsidiaries.


 


“Collateral Agent” means The Bank of New York, as Collateral
Agent under the Collateral Agreement until a successor Collateral Agent shall
have become such pursuant to the applicable provisions of the Collateral
Agreement, and thereafter “Collateral Agent” shall mean the Person who is then
the Collateral Agent thereunder.


 


“Collateral Agreement” means the Collateral Agreement, dated
as of May 17, 2007, among the Company, the Trust (acting through the Property
Trustee), the Collateral Agent, the Securities Intermediary and the Securities
Registrar.


 


11

















 


“Commercially Reasonable Efforts” by the
Company to sell Qualifying APM Securities means commercially reasonable efforts
to complete the offer and sale of Qualifying APM Securities to third parties
that are not affiliates of the Company in public offerings or private
placements; provided that the
Company shall be deemed to have used such Commercially Reasonable Efforts if a
Market Disruption Event occurs and for so long as it continues regardless of
whether the Company makes any offers or sales during such period.


 


“Common Stock” means the Company’s common stock (including
treasury shares of common stock), common stock issued pursuant to any dividend reinvestment
plan or the Company’s employee benefit plans, a security of the Company’s,
ranking upon liquidation, dissolution or winding up junior to Qualifying
Preferred Stock and pari passu with the Company’s common stock that tracks the
performance of, or relates to the results of, a business, unit or division of
the Company, and any securities issued in exchange therefore in connection with
a merger, consolidation, binding share exchange, business combination,  recapitalization or other similar event.


 


“Comparable Treasury Price” means the average of the bid and
asked prices for the Reference Security as of 5:00 p.m. on the third Business
Day before the applicable Redemption Date, as provided by the Reference
Dealers. If the Company obtains more than three Reference Dealer quotations,
the Company shall eliminate the highest and the lowest Reference Dealer
quotations and then calculate the average of the remaining Reference Dealer
quotations. If the Company obtains three or fewer Reference Dealer quotations,
the Company shall calculate the average of all the Reference Dealer quotations
and not eliminate any quotations.


 


“Current Stock Market Price” means, with respect to the
Company’s common stock on any date, (i) the closing sale price per share (or if
no closing sale price is reported, the average of the bid and ask prices or, if
more than one in either case, the average of the average bid and the average
ask prices) on that date as reported in composite transactions by the New York
Stock Exchange or, (ii) if the Company’s common stock is not then listed on the
New York Stock Exchange, as reported by the principal U.S. securities exchange
on which the Company’s common stock is traded or quoted on the relevant date
or, (iii) if the Company’s common stock is not listed on any U.S. securities
exchange on the relevant date, the last quoted bid price for the Company’s
common stock in the over-the-counter market on the relevant date as reported by
the National Quotation Bureau or similar organization, or (iv) if the Company’s
common stock is not so quoted, the average of the mid-point of the last bid and
ask prices for the Company’s common stock on the relevant date from each of at
least three nationally recognized independent investment banking firms selected
by the Company for this purpose.


 


“Declaration of Trust” means the Amended and Restated
Declaration of Trust, dated as of May 17, 2007, among the Company, as Sponsor,
the Property Trustee, 


 


12

















 


the Delaware
Trustee, the Regular Trustees (each as named therein) and the several Holders
of the Trust Securities.


 


“Early Remarketing Event” has the meaning specified in
Section 2.3.


 


“Early Termination Event” means the dissolution of the Trust
and the distribution of the Junior Subordinated Debentures held by or on behalf
of the Trust to the holders of the Trust Securities in accordance with Section
8.2 of the Declaration of Trust.


 


“Eligible Proceeds” means, for each relevant Interest Payment
Date, the net proceeds (after underwriters’ or placement agents’ fees,
commissions or discounts and other expenses relating to the issuance or sale)
the Company has received during the 180-day period prior to such Interest
Payment Date from the issuance or sale of Qualifying APM Securities to persons
that are not the Company’s Subsidiaries.


 


“Failed Remarketing” means a Final Remarketing that is not
Successful.


 


“Final Remarketing” means (i) a Remarketing for a settlement
date on May 31, 2013 (or if such day is not a Business Day, the immediately
succeeding Business Day) or (ii) in the case of an Early Remarketing, the fifth
scheduled Remarketing.


 


“Fixed Rate Reset Cap”, as of any Remarketing Settlement
Date, means the prevailing market yield, as determined by the Remarketing
Agent, of the benchmark U.S. treasury security having a remaining maturity that
most closely corresponds to the period from such date until the earliest date
on which the Junior Subordinated Debentures may be redeemed at the option of
the Company in the event of a Successful Remarketing, plus 350 basis points, or
3.50%, per annum.


 


“Floating Rate Reset Cap” means 300 basis points, or 3.00%,
per annum.


 


“Guarantee Agreement” means the Guarantee Agreement between
the Company, as Guarantor and U.S. Bank National Association, as Guarantee
Trustee named thereunder, dated as of May 17, 2007.


 


“Intent-Based Replacement Disclosure” means, as to any
Qualifying Preferred Stock that the Company has publicly stated its intention,
either in the prospectus or other offering document under which such Qualifying
Preferred Stock was initially offered for sale or in filings with the SEC made
by the Company under the Exchange Act prior to or contemporaneously with the
issuance of such securities, that the Company, to the extent the Qualifying
Preferred Stock provides it with equity credit, will repay, redeem or purchase
such Qualifying Preferred Stock only with the proceeds of replacement capital
securities that have terms and provisions at the time of repayment, redemption
or purchase that are as or more equity-like than the Qualifying Preferred Stock
then being repaid, 


 


13

















 


redeemed or
purchased, raised within 180 days prior to the applicable repayment, redemption
or purchase date.


 


“Interest Period” means the period from and including the
most recent Interest Payment Date to which interest has been paid or duly made
available for payment (or May 17, 2007 if no interest has been paid or been
duly made available for payment) to, but excluding, the next succeeding
Interest Payment Date or, if earlier, then the Stated Maturity Date of the
Junior Subordinated Debentures.


 


“LIBOR”, with respect to an Interest Period, means the rate
(expressed as a percentage per annum) for deposits in U.S. dollars for a
three-month period that appears on Reuters Page LIBOR01 as of 11:00 a.m.
(London time) on the second London Business Day immediately preceding the first
day of such interest period.


 


If LIBOR
cannot be determined as described above, the Company will select four major
banks in the London interbank market. The Company will request that the
principal London offices of those four selected banks provide their offered
quotations to prime banks in the London interbank market at approximately 11:00
a.m., London time, on the second London Business Day immediately preceding the
first day of such interest period. These quotations will be for deposits in
U.S. dollars for a three-month period. Offered quotations must be based on a
principal amount equal to an amount that is representative of a single
transaction in U.S. dollars in the market at the time.


 


If two or more
quotations are provided, LIBOR for the interest period will be the arithmetic
mean of the quotations. If fewer than two quotations are provided, the Company
will select three major banks in New York City and will then determine LIBOR
for the interest period as the arithmetic mean of rates quoted by those three
major banks in New York City to leading European banks at approximately 3:00
p.m., New York City time, on the second London Business Day immediately
preceding the first day of such interest period. The rates quoted will be for
loans in U.S. dollars, for a three-month period. Rates quoted must be based on
a principal amount equal to an amount that is representative of a single
transaction in U.S. dollars in the market at the time. If fewer than three New
York City banks selected by the Company are quoting rates, LIBOR for the
applicable period will be the same as for the immediately preceding interest
period.


 


“London Business Day” means a day other than a Saturday or
Sunday on which dealings in deposits in U.S. dollars are transacted, or with
respect to any future date are expected to be transacted, in the London
interbank market.


 


“Make-Whole Redemption Price” means the sum of the present
values of the scheduled payments of principal and interest that would have
accrued from the Redemption Date to May 31, 2012 on the Junior Subordinated
Debentures being redeemed (assuming they are redeemed at par on such date),
discounted to the Redemption Date on a semi-annual basis (assuming a 360-day
year consisting of 


 


14

















 


twelve 30-day
months) at a discount rate equal to the Adjusted Treasury Rate plus a spread of
0.50%, plus accrued and unpaid interest to the Redemption Date.


 


“Market Disruption Event” means, with respect to the issuance
or sale of Qualifying APM Securities pursuant to Section 1.7, the occurrence or
existence of any of the following events or sets of circumstances:


 


(i) The
Company would be required to obtain the consent or approval of the Company’s
stockholders or a regulatory body (including, without limitation, any
securities exchange) or governmental authority to issue or sell Qualifying APM
Securities pursuant to Section 1.7 and such consent or approval has not yet
been obtained notwithstanding the Company’s commercially reasonable efforts to
obtain such consent or approval;


 


(ii) Trading
in securities generally, or in shares of the Company’s Qualifying APM
Securities specifically, on the New York Stock Exchange or any other national
securities exchange or in the over-the-counter market on which the Company’s
Qualifying APM Securities are then listed or traded shall have been suspended
or the settlement of such trading generally shall have been materially
disrupted or minimum prices shall have been established on any such exchange or
market by the SEC, by the relevant exchange or by any other regulatory body or
governmental agency having jurisdiction such that trading in the Company’s
Qualifying APM Securities shall have been materially disrupted or ceased;


 


(iii) A
banking moratorium shall have been declared by the federal or state authorities
of the United States such that market trading in the Qualifying APM Securities
has been disrupted or ceased;


 


(iv) A
material disruption shall have occurred in commercial banking or securities
settlement or clearance services in the United States such that market trading
in the Qualifying APM Securities has been disrupted or ceased;


 


(v) The United
States shall have become engaged in hostilities, there shall have been an
escalation in hostilities involving the United States, there shall have been a
declaration of a national emergency or war by the United States or there shall
have occurred any other national or international calamity or crisis such that
market trading in the Qualifying APM Securities has been disrupted or ceased;


 


(vi) There
shall have occurred such a material adverse change in general domestic or
international economic, political or financial conditions, including without
limitation as a result of terrorist activities, or the effect of international
conditions on the financial markets in the United States shall be such that
trading in the Qualifying APM Securities shall have been disrupted or ceased;


 


(vii) An event
occurs and is continuing as a result of which the offering document for such
offer and sale of Qualifying APM Securities would, in the reasonable judgment
of the Company, contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to 


 


15

















 


make the
statements therein not misleading and either (x) the disclosure of that event
at such time, in the reasonable judgment of the Company, is not otherwise
required by law and would have a material adverse effect on the business of the
Company or (y) the disclosure relates to a previously undisclosed proposed or
pending material business transaction, provided that no single suspension
period contemplated by this clause (vii) shall exceed 90 consecutive days and
multiple suspension periods contemplated by this clause (vii) shall not exceed
an aggregate of 180 days in any 360-day period; or


 


(viii) The
Company reasonably believes that the offering document for such offer and sale
of Qualifying APM Securities would not be in compliance with a rule or
regulation of the SEC (for reasons other than those referred to in clause (vii)
above), and the Company determines it is unable to comply with such rule or
regulation or such compliance is unduly burdensome, provided that no single
suspension period contemplated by this clause (viii) shall exceed 90
consecutive days and multiple suspension periods contemplated by this clause
(viii) shall not exceed an aggregate of 180 days in any 360-day period.


 


“MCAPS” means each of the Normal MCAPS and the Treasury
MCAPS.


 


“Normal MCAPS” has
the meaning specified in the Stock Purchase Contract Agreement.


 


“Other Financial Obligations” has the meaning specified in
Section 1401.


 


“Paying Agent”, when used with respect to the Junior
Subordinated Debentures, U.S. Bank National Association or any other Person
authorized by the Company to pay the principal of (and premium, if any) or
interest on any Securities on behalf of the Company.


 


“Paying Agent Office” means the office of the applicable
Paying Agent at which at any particular time its corporate agency business
shall principally be administered in a Place of Payment, which office at the
date hereof in the case of U.S. Bank National Association, in its capacity as
Paying Agent with respect to the Junior Subordinated Debentures under this
Supplemental Indenture, is located at One Federal Street, 3rd Floor,
Boston, MA 02110, Attn: Corporate Trust Services.


 


“Permitted Remedies”
means, with respect to any securities, one or more of the following remedies:
(i) rights in favor of the holders of such securities permitting such holders
to elect one or more directors of the issuer (including any such rights
required by the listing requirements of any stock or securities exchange on
which such securities may be listed or traded); and (ii) complete or partial
prohibitions preventing the issuer from paying distributions on or purchasing
common stock or other securities that rank pari passu with
or junior as to distributions to such 


 


16

















 


securities for so long as distributions on
such securities, including unpaid distributions, remain unpaid.


 


“Preferred Stock” means the Non-Cumulative Perpetual
Preferred Stock, Series H, $100,000 liquidation preference per share, of the
Company.


 


“Qualifying APM Securities” means Common Stock, Qualifying
Preferred Stock and Qualifying Warrants.


 


“Qualifying Preferred Stock” means the Company’s
non-cumulative perpetual preferred stock that ranks pari passu
with or junior to all of the Company’s other preferred stock, is perpetual and
(a) is subject to a replacement capital covenant substantially similar to the
Replacement Capital Covenant or a “Qualifying Capital Replacement Covenant”, as
such term is defined in the Replacement Capital Covenant or (b) is subject to
both (i) mandatory suspension of dividends in the event the Company breaches
certain financial metrics specified within the offering documents for such
Preferred Stock and (ii) Intent-Based Replacement Disclosure. Additionally, in
both (a) and (b) above the transaction documents for such Preferred Stock shall
provide for no remedies as a consequence of non-payment of distributions other
than Permitted Remedies.


 


“Qualifying Warrants” means any net share settled warrants to
purchase Common Stock that (1) have an exercise price greater than the Current
Stock Market Price of Common Stock, and (2) that the Company is not entitled to
redeem for cash and the holders of which are not entitled to require the
Company to purchase for cash in any circumstances.


 


“Quotation Agent” means Lehman Brothers Inc. or its
successor.


 


“Rating Agency Event” means a change by any nationally
recognized statistical rating organization within the meaning of Rule 15c3-1
under the Exchange Act that currently publishes a rating for the Company (in
this definition, a “rating agency”)
to its equity credit criteria for securities such as the MCAPS or the Preferred
Stock, as such criteria is in effect on May 17, 2007 (in this definition, the “current criteria”), which change results in (i) the length
of time for which such current criteria is scheduled to be in effect is shortened
with respect to the MCAPS or the Preferred Stock, or (ii) a lower equity credit
being given to the MCAPS or the Preferred Stock as of the date of such change
than the equity credit that would have been assigned to the MCAPS or the
Preferred Stock as of the date of such change by such rating agency pursuant to
its current criteria.


 


“Reference Dealers” means the Quotation Agent and two or more
other primary U.S. Government securities dealers in New York City appointed by
the Company. If the Quotation Agent is no longer a primary U.S. Government
securities dealer, 


 


17

















 


the Company
shall substitute another primary U.S. Government securities dealer in its place
as a Reference Dealer. All determinations made by the Quotation Agent shall be
made in good faith and in a commercially reasonable manner by the Quotation
Agent and, absent a determination of a manifest error, shall be conclusive for
all purposes and binding on the Company, the Holders and beneficial owners of
the Junior Subordinated Notes.


 


“Reference Security” means a United States Treasury security
which has a maturity comparable to the remaining maturity of the Securities at
the applicable Redemption Date which would be used in accordance with customary
financial practice to price new issues of corporate debt securities with a
maturity comparable to the remaining maturity of the Subordinated Notes at the
applicable Redemption Date, all as determined in the sole discretion of the
Quotation Agent.


 


“Regular Trustee” means, in respect of the Trust, Barrett S.
DiPaolo, Andrew Yeung and James Killerlane, each an individual identified as a “Regular
Trustee” in the Declaration of Trust, solely in such individual’s capacity as
Regular Trustee of the Trust under the Declaration of Trust and not in such
individual’s individual capacity, or any successor Regular Trustee appointed as
therein provided.


 


“Remarketing” means a remarketing of Trust Preferred
Securities and Junior Subordinated Debentures pursuant to Section 2 and the
Remarketing Agreement.


 


“Remarketing Period” means the five Business Day Period
beginning on the seventh Business Day preceding each of May 31, 2012 and August
31, 2012, November 30, 2012, February 28, 2013, and May 31, 2013 (or if any such
day is not a Business Day, the preceding Business Day) until the settlement of
a Successful Remarketing, or if an Early Settlement Event shall have occurred,
each of the periods determined in accordance with Section 2.3.


 


“Remarketing Settlement Date” means the May 31 August 31,
February 28 or November 30 following a Successful Remarketing or, if such day
is not a Business Day, the preceding Business Day.


 


“Replacement Capital Covenant” means the Replacement Capital
Covenant, dated as of May 17, 2007, by the Company, as the same may be amended
or supplemented from time to time in accordance with the provisions thereof.


 


“Reset Rate” means, if the Junior Subordinated Debentures are
remarketed as fixed rate debentures, the rate of interest on the Junior Subordinated
Debentures, if any, set in a Remarketing, as specified in Section 2.2(a).


 


“Reset Spread” means, if the Junior Subordinated Debentures
are remarketed as floating rate debentures, the spread, if any, set in a
Remarketing, as specified in Section 2.2(a).


 


“Responsible Officer” means, when used with respect to U.S.
Bank National Association in its capacity as Paying Agent, any officer within
the Corporate 


 


18

















 


Trust
Department (or any successor department, unit or division of U.S. Bank National
Association) assigned to the Paying Agent Office of U.S. Bank National
Association, in its capacity as Paying Agent, who has direct responsibility for
the administration of the Paying Agent functions of the Indenture and this
Supplemental Indenture.


 


“Reuters Page LIBOR01” means the display so designated on the
Reuters 3000 Xtra (or such other page as may replace that page on that service,
or such other service as may be nominated as the information vendor, for the
purpose of displaying rates or prices comparable to the London Interbank
Offered rate for U.S. dollar deposits).


 


“SEC” means the U.S. Securities and Exchange Commission.


 


“Securities Intermediary” The Bank of New York, as Securities
Intermediary under the Collateral Agreement until a successor Securities
Intermediary shall have become such pursuant to the applicable provisions of
the Collateral Agreement, and thereafter “Securities Intermediary” shall mean
the Person who is then the Securities Intermediary thereunder.


 


“Securities Registrar Office” means the office of the
applicable Securities Registrar at which at any particular time its corporate
agency business shall principally be administered, which office at the date
hereof in the case of U.S. Bank National Association, in its capacity as
Securities Registrar under the Indenture, is located at One Federal Street, 3rd
Floor, Boston, MA 02110m Attn: Corporate Trust and Serivces.


 


“Securities Act” means the Securities Act of 1933 (or any
successor statute), as it may be amended from time to time.


 


“Special Event” means either a Tax Event, a Capital Treatment
Event or a Rating Agency Event.


 


“Stock Purchase Contract Agreement” means the Stock Purchase
Contract Agreement, dated as of May 17, 2007 between the Company and U.S. Bank
National Association as Stock Purchase Contract Agent.


 


“Stock Purchase Date” means the date on which the Company
issues the Preferred Stock.


 


“Successful” has the meaning specified in the Declaration of
Trust.


 


“Supervisory Event” means, with respect to the issuance or
sale of Qualifying APM Securities pursuant to Section 1.6, that the Company
shall have notified the SEC of its intention and affirmatively requested SEC
approval both (1) to sell Qualifying APM Securities and  (2) to
apply the net proceeds of such sale to pay deferred interest on the Junior
Subordinated Debentures, and the Company has been notified that the SEC
disapproves of either action mentioned in that notice. 


 


19

















 


A Supervisory
Event shall cease on the business day following the earlier to occur of (a) the
fifth anniversary of the commencement of any deferral period (or, if later, May
31, 2014), or (b) the day on which the SEC notifies the Company in writing that
it no longer disapproves of the Company’s intention to both (i) issue or sell
Qualifying APM Securities and (ii) apply the net proceeds from such sale to pay
deferred interest on the Junior Subordinated Debentures.


 


“Tangible Common Stockholders’ Equity Amount” means, as of
any quarter end and subject to the adjustments permitted by Section 2.3 hereof,
the Company’s common stockholders’ equity minus identifiable
intangible assets and goodwill, in each case as reflected on the Company’s
consolidated GAAP balance sheet as of such quarter end.


 


“Tax Event” means that the Company shall have requested and
received an opinion of nationally recognized independent tax counsel
experienced in such matters to the effect that there has been a Tax Action (as
defined below) that relates to any of the events described in (i) through (iii)
below and that there is more than an insubstantial increase in the risk that
(i) the Trust is, or will be, subject to United States federal income tax with
respect to income accrued or received on the Junior Subordinated Debentures,
(ii) the Trust is, or will be, subject to more than a de minimis amount of
other taxes, duties or other governmental charges or (iii) interest payable by
any issuer (including the Company) with respect to the Junior Subordinated
Debentures issued by such issuer is not, or will not be, deductible by such
issuer for United States federal income tax purposes. “Tax Action”
means (a) an amendment to, change in or announced proposed change in the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (b) a judicial
decision interpreting, applying or clarifying such laws or regulations,
(c) an administrative pronouncement or action that represents an official
position (including a clarification of an official position) of the
governmental authority or regulatory body making such administrative
pronouncement or taking such action, or (d) a threatened challenge
asserted in connection with an audit of the Company or any of its subsidiaries
or the Trust or a threatened challenge asserted in writing against any other
taxpayer that has raised capital through the issuance of securities that are
substantially similar to the Junior Subordinated Debentures or the MCAPS, the
Trust Preferred Securities and the Preferred Stock, which amendment or change
is adopted or which decision, pronouncement or proposed change is announced or
which action, clarification or challenge occurs on or after May 17, 2007.


 


“Trailing Two Quarters Consolidated Net Income Amount” means,
as of the last day of any fiscal quarter, the sum of the Company’s consolidated
net income for the two fiscal quarters ending as of the last day of such fiscal
quarter.


 


“Treasury MCAPS” has the meaning specified in the Stock
Purchase Contract Agreement.


 


20

















 


“Trust” has the meaning specified in the recitals hereto.


 


“Trust Preferred Securities” has the meaning specified in the
recitals hereto.


 


“Unsuccessful” has the meaning specified in the Declaration
of Trust.


 


3.2           Amendment
to Section 501 of the Indenture. Solely with respect to the Junior
Subordinated Debentures, (i) clauses (2), (3) (4) and (7) of
Section 501 of the Indenture shall not apply and (ii) clause (1) of
Section 501 of the Indenture is replaced with the following:


 


(1) failure to pay interest for 30 days after
deferral for 10 or more consecutive semiannual Interest  Periods or the equivalent thereof, in the
event that Interest Periods are other than semiannual provided such failure
occurs on or after June 2, 2014.


 


3.3           Amendment
to Section 502 of the Indenture. Solely with respect to the Junior
Subordinated Debentures, Section 502 of the Indenture is amended to add the
following at the end of the first paragraph thereof:


 


“; provided
that, in the case of Debentures issued to and held by the Trust, or any trustee
thereof or agent therefor, if upon an Event of Default, the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Debentures
fails to declare the entire principal of all the Debentures to be immediately
due and payable, the holders of at least 25% in aggregate liquidation amount of
the Trust Preferred Securities then outstanding, acting together as a single class,
shall have such right by a notice in writing to the Company and the Trustee;
provided further that, in the case of Debentures issued to and held by the
Trust, or any trustee thereof or agent therefor, if upon an Event of Default,
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debentures fails to declare the entire principal of all the
Debentures to be immediately due and payable, any holder of the Trust Preferred
Securities shall have the right to institute a suit directly against the
Company for enforcement  of payment to
such holder of principal and interest (including any Additional Interest) on
the Junior Subordinated Debentures having a principal amount equal to the aggregate
liquidation amount of such Trust Preferred Securities held by such holder. Upon
any such declaration, such amount of the principal of and the accrued but
unpaid interest on all the Debentures shall become immediately due and payable,
provided that the payment of principal on the Debentures shall remain
subordinated to the extent provided in Article Fourteen of the Base Indenture
except to the extent otherwise determined in connection with an Early
Remarketing. Upon payment (i) of the amount of principal so declared due and
payable and (ii) of interest on any overdue principal and overdue interest (in
each case to the extent that the payment of such interest shall be legally
enforceable), all of the Company’s obligations in respect of the payment of the
principal of and interest (including Additional Interest), if any, on this
Debenture shall terminate.


 


3.4           Amendment
to Section 513 of the Indenture. Solely with respect to the Junior
Subordinated Debentures, Section 513 of the Indenture is amended to add the
following at the end thereof:


 


21

















 


“For purposes of this
Section 513, if the Junior Subordinated Debentures are held by the Trust, the
consent of not less than a 25% of the aggregate liquidation amount of the
securities issued by the Trust shall be required in order to waive such
default.”


 


3.5           Amendment
to Section 902 of the Indenture. Solely with respect to the Junior
Subordinated Debentures, Section 902 of the Indenture is amended to (i) deleted
the period at the end of paragraph (5) and add “;” at the end of Section 902(5)
and create new Section 902(6):


 


(6)  conform the terms of this Indenture to the
terms of the Junior Subordinated Debentures as set forth in the Prospectus
dated May 8, 2007 of the Trust and the Company relating to the MCAPS (the “Prospectus”);
provided, however, that in connection with such amendment, the Company shall
deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, in
each case confirming that such amendment has the effect of conforming the terms
of this Indenture to the terms of the Junior Subordinated Debentures as set
forth in the Prospectus.”


 


and
(ii) add the following at the end of Section 902:


 


“For purposes of this
Section 902, if the Junior Subordinated Debentures are held by the Trust, the
consent of not less than 662/3% of the aggregate
liquidation amount of the securities issued by the Trust shall be required in
order for such supplemental indenture to be effective.”


 


3.6           Amendment
to Section 1005 of the Indenture. Solely with respect to the Junior
Subordinated Debentures, Section 1005 shall not apply.


 


3.7           Amendment
to Section 1007 of the Indenture. Solely with respect to the Junior
Subordinated Debentures, Section 1007 of the Indenture is amended to add the
following at the end thereof:


 


“For purposes of this
Section 1007, if the Junior Subordinated Debentures are held by the Trust, the
consent, including, without limitation, the consent of the Holders obtained in
connection with a tender or an exchange offer, of not less than 25% in aggregate
liquidation amount of the securities issued by the Trust shall be required in
order to waive a covenant.”


 


3.8           Amendment to Section 1401 of the
Indenture. Solely with respect to the Junior Subordinated Debentures,
Section 1401 of the Indenture is hereby amended by deleting Section 1401 in its
entirety and inserting in lieu thereof the following:


 


“Section 1401.                                            Junior Subordinated Debentures Subordinated to Senior Debt and Other
Financial Obligations


 


The Company agrees, and each Holder of the Junior Subordinated
Debentures  and related coupons by his acceptance
thereof likewise agrees, that the payment of the principal of (and premium, if
any) and interest, if any, on the 


 


22

















 


Junior
Subordinated Debentures and related coupons is subordinated, to the extent and
in the manner provided in this Article 14, to the prior payment in full when
due of the principal of (and premium, if any) and interest, if any, on (i) all
Junior Subordinated Debentures and (ii) under the circumstances described in
Section 1412, Other Financial Obligations.


 


For purposes of this Article 14, “Senior Debt” means all obligations
(whether now outstanding or hereafter created, assumed or incurred) for the
payment of which the Company is responsible or liable as obligor, guarantor or
otherwise in respect of all principal of (and premium, if any) and interest if
any (including any interest, if any, accruing subsequent to the commencement of
a proceeding in bankruptcy by or against the Company) on (i) any indebtedness
for money borrowed or evidenced by bonds, notes, debentures or similar
instruments, (ii) indebtedness under capitalized leases, (iii) any indebtedness
representing the deferred and unpaid purchase price of any property or business,
(iv) indebtedness for money borrowed by another person that the Company
guarantees, and (v) all deferrals, renewals, extensions and refundings of any
such indebtedness or obligation; provided,
that the following shall not constitute Senior Debt:  (a) indebtedness which is expressly made
equal in right of payment with the Junior Subordinated Debentures or
subordinate and subject in right of payment to the Junior Subordinated
Debentures and (b) indebtedness for goods or materials purchased in the ordinary
course of business or for services obtained in the ordinary course of business
or indebtedness consisting of trade payables.


 


For purposes of this Article 14, “Other Financial Obligations” means
all obligations (whether now outstanding or hereafter created, assumed or
incurred) for the payment of which the Company is responsible or liable as
obligor, guarantor or otherwise in respect of all principal of (and premium, if
any) and interest if any (including any interest, if any, accruing subsequent
to the commencement of a proceeding in bankruptcy by or against the Company) in
respect to derivative products (including without limitation, interest and
foreign exchange rate contracts, commodity contracts and similar arrangements)
except any such obligations that are expressly stated to have the same rank as
or not to be senior to the Junior Subordinated Debentures.


 


This Article 14 shall constitute a continuing offer to all persons who,
in reliance upon such provisions, become holders of, or continue to hold, Senior
Debt and Other Financial Obligations, and such provisions are made for the
benefit of the holders of Senior Debt and Other Financial Obligations, and such
holders and/or each of them may enforce such provisions.”


 


SECTION
4.   ADDITIONAL PROVISION


 


Solely with respect to the Junior
Subordinated Debentures, the following Section is added to the Indenture:


 


23

















 


Section 1412.         Company Election to End
Subordination.


 


The Company
may elect, at any time effective on or after the Remarketing Settlement Date in
connection with an Early Remarketing of the Trust Preferred Securities and,
accordingly, the Junior Subordinated Debentures that is not the first scheduled
Remarketing, that its obligations under the Junior Subordinated Debentures
shall cease to be subordinated obligations, in which case the provisions of
Article Fourteen of the Indenture and, if the Company so elects, the provisions
regarding deferral of payment of interest on the Junior Subordinated Debentures,
shall thereafter no longer apply to the Junior Subordinated Debentures. The
Company shall give the Trustee and each Paying Agent notice of any such
election not later than the effective time, and shall promptly issue a press
release through Bloomberg Business News or other reasonable means of
distribution.


 


SECTION
5.   MISCELLANEOUS


 


5.1           Debenture. Attached hereto as
Exhibit A is a form of the Junior Subordinated Debenture.


 


5.2           Separability. In case any
provision in this Eleventh Supplemental Indenture shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.


 


5.3           Continuance of Indenture. This
Eleventh Supplemental Indenture supplements the Indenture and shall be a part
of and subject to all the terms thereof. The Indenture, as supplemented by this
Eleventh Supplemental Indenture, shall continue in full force and effect.


 


5.4           The Trustee. The Trustee shall
not be responsible in any manner for or in respect of the validity or
sufficiency of this Eleventh Supplemental Indenture, or for or in respect of
the recitals contained herein, all of which recitals are made by the Company
solely.


 


5.5           Governing Law. This Eleventh
Supplemental Indenture shall be governed by and construed in accordance with
the laws of the State of New York.


 


5.6           Defined Terms. All capitalized
terms used in this Eleventh Supplemental Indenture which are defined in the
Indenture, but not otherwise defined herein, shall have the same meanings
assigned to them in the Indenture.


 


5.7           Counterparts. This Eleventh
Supplemental Indenture may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.


 


5.8           Tax Treatment. The Company and
the Holders of the Junior Subordinated Debentures agree to treat the Junior
Subordinated Debentures as indebtedness of the Company for all purposes.


 


24

















 


IN WITNESS WHEREOF, Lehman Brothers Holdings
Inc. has caused this Eleventh Supplemental Indenture to be signed and
acknowledge by one of its Vice Presidents, and U.S. Bank National Association,
as Trustee, has caused this Eleventh Supplemental Indenture to be signed as of
the day and year first above written.


 


	
   

  	
  LEHMAN BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ BARRETT S. DIPAOLO

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  U.S. BANK NATIONAL ASSOCIATION, as 

  Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ EARL DENNISON

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  



 


25

















EXHIBIT A


 


[FORM OF FACE OF DEBENTURE]


 


	
  No. D-

  	
   

  	
  $1,000,001,000

  



 


LEHMAN BROTHERS HOLDINGS
INC.


 


5.707% REMARKETABLE JUNIOR
SUBORDINATED DEBENTURES  DUE
2043


 


Lehman Brothers Holdings Inc., a corporation duly
organized and existing under the laws of the State of Delaware (herein referred
to as the “Company”), for value received, hereby promises to pay to U.S. BANK
NATIONAL ASSOCIATION, as Property Trustee (the “Property Trustee”), or
registered assigns, at the office or agency of the Company in the Borough of
Manhattan, the City of New York, the principal sum of ONE BILLION AND ONE
THOUSAND DOLLARS ($1,000,001,000) on June 1, 2043 or such earlier date as may
be specified by the Company following a Remarketing, in such coin or currency
of the United States of America as at the time of payment shall be legal tender
for the payment of public and private debts, and to pay interest on said
principal sum at said office or agency, in like coin or currency, at the rate
per annum of 5.707%, subject to reset as set forth below, until the principal
hereof becomes due and payable, and on any overdue principal and (to the extent
that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the same rate per annum during the period in
which such principal is overdue, compounded semi-annually, to the registered
holder of this Debenture, until payment of said principal sum has been made or
duly provided for.


 


The Stated Maturity of the Debenture shall be June
1, 2043 or such earlier date as may be specified by the Company following a
Remarketing. Interest on this Debenture (computed as set forth herein) shall be
payable semi-annually (subject to deferral as set forth herein) in arrears on
May 31 and November 30 of each year (each an “Interest Payment Date”),
commencing November 30, 2007 from the Interest Payment Date next preceding the
date of this Debenture to which interest has been paid or duly provided for or
such other dates as may be specified by the Company following a Remarketing.
Interest on this Debenture shall be payable to the holder in whose name the
Debenture is registered at the close of business on the applicable Record Date.
The Record Date for any Interest Payment Date for the Debenture will be the
date, whether or not a Business Day, 15 calendar days immediately preceding the
Interest Payment Date. Notwithstanding the foregoing, any Interest Payment Date
that would otherwise be a day that is not a Business Day shall instead be the
next succeeding Business Day, and no additional interest shall accrue as a
result of such delayed payment. Interest on the Debenture shall be computed on
the basis of a 360-day year of twelve 30-day months.


 

















 


REFERENCE IS MADE TO THE FURTHER PROVISIONS OF THIS
DEBENTURE SET FORTH ON THE REVERSE HEREOF. SUCH FURTHER PROVISIONS SHALL FOR
ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE.


 


This Debenture shall not be valid or become
obligatory for any purpose until the certificate of authentication hereon shall
have been signed by the Trustee under the Indenture referred to on the reverse
hereof.


 

















 


IN WITNESS WHEREOF, LEHMAN BROTHERS HOLDINGS INC.
has caused this instrument to be signed by its Chairman of the Board, its Vice
Chairman, its President, its Chief Financial Officer, one of its Vice
Presidents or its Treasurer by manual or facsimile signature under its
corporate seal, attested by its Secretary or one of its Assistant Secretaries
by manual or facsimile signature.


 


 


	
   

  	
  LEHMAN BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  
	
   

  
	
  Attest:

  
	
   

  
	
   

  
	
   

  	
   

  
	
  Name:

  
	
  Title:

  
					



 


 


TRUSTEE’S CERTIFICATE OF
AUTHENTICATION


 


This is one of the Securities of the series
designated therein referred to in the within-mentioned Indenture.


 


Dated:


 


	
   

  	
  U.S. BANK NATIONAL ASSOCIATION,

  
	
   

  	
  as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  



 

















 


[FORM OF REVERSE OF
DEBENTURE]


 


(Reverse of Debenture)


 


LEHMAN BROTHERS HOLDINGS
INC.


 


5.707% REMARKETABLE JUNIOR
SUBORDINATED DEBENTURE DUE 2043


 


This Debenture is one of a duly authorized series of
Securities of the Company designated as the 5.707% Remarketable Junior
Subordinated Debentures due 2043 of the Company (herein called the “Debentures”),
limited (except as otherwise provided in the Indenture referred to below) in
aggregate principal amount to $1,000,001,000. The Debentures are one of an
indefinite number of series of debt securities of the Company (herein
collectively called the “Securities”), issued or issuable under and pursuant to
an indenture, dated as of February 1, 1996, as amended and supplemented from
time to time and as amended and supplemented with respect to the Debentures
herein by the Eleventh
Supplemental Indenture dated as of May 17, 2007 between the Company and U.S. Bank
National Association, as Trustee (herein called the “Trustee”) (as so amended
and supplemented, the “Indenture”), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Debentures. The separate series of
Securities may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different redemption provisions or repayment or repurchase rights (if any),
may be subject to different sinking, purchase or analogous funds (if any), may
be subject to different covenants and Events of Default, as defined in the
Indenture, and may otherwise vary as provided in the Indenture.


 


Payment of the principal of and interest on this
Debenture is, to the extent provided in the Indenture, subordinated and subject
in right of payment to the prior payment in full when due of the principal of
(and premium, if any) and interest, if any, on all Senior Debt, as defined in
the Indenture and this Debenture is issued subject to the provisions of the
Indenture with respect thereto. Each registered holder of this Debenture, by accepting
the same, (a) agrees to and shall be bound by such provisions, (b) authorizes
and expressly directs the Trustee on his or her behalf to take such action as
may be necessary or appropriate to effectuate the subordination so provided and
(c) appoints the Trustee as his or her attorney-in-fact for any and all such
purposes. Each registered holder hereof, by his or her acceptance hereof,
hereby waives all notice of the acceptance of the subordination provisions
contained herein and in the Indenture by each holder of Senior Debt, whether
now outstanding or hereafter incurred, and waives reliance by each such holder
upon said provisions.


 


As provided in the Indenture and subject to certain
limitations therein set forth, the Company may at its option redeem the
Debentures in whole or from time to time in part at any time on or after May
31, 2016. In connection with a Remarketing, the Company may change the 


 

















 


date
after which it may redeem the Junior Subordinated Debentures to a later date or
change the Redemption Price in accordance with Section 2 of the Indenture.


 


As provided in
the Indenture and subject to certain conditions therein set forth, if prior to
May 31, 2016 a Tax Event or a Rating Agency Event shall occur and be
continuing, the Company may, at any time within 90 days following the
occurrence of such Event, redeem the Debentures, in whole but not in part, at a
Redemption Price equal to the greater of (A) 100% of the principal amount
thereof, plus accrued and unpaid interest thereon, including deferred interest
(if any), to the Redemption Date and (B) the Make Whole Redemption Price. In
the event of the occurrence and continuation of a Capital Treatment Event prior
to May 16, 2016, in certain circumstances the Company may redeem the
Debentures, in whole but not in part, at any time within 90 days following the
occurrence of such Capital Treatment Event at 100% of the principal amount
thereof, plus accrued and unpaid interest thereon, including deferred interest
(if any), to the Redemption Date. Any redemption of the Debentures will be
subject to receipt of prior approval of the SEC, if required. In addition, any
redemption of the Debentures prior to the Stock Purchase Date will be subject
to the Replacement Capital Covenant. The Debentures are not subject to a
sinking fund.


 


In connection
with the Remarketing of the Trust Preferred Securities, the Company may change
the stated Maturity Date, the date after which this Debenture may be redeemed
in whole or in part prior to the Stated Maturity Date at the option of the
Company, the rate of interest payable on this Debenture, the Interest Payment
Dates, the manner of calculating interest on this Debenture and certain other
provisions of the Debentures, all as set forth in the Indenture and without the
consent of any Holder of this Debenture.


 


The Company
shall have the right at any time, on one or more occasions, so long as an Event
of Default has not occurred and is not continuing under the Indenture, to defer
payment of interest on this Debenture as set forth in the Indenture. If the
Company defers the payment of interest under the Junior Subordinated Debentures
or extends any interest period, then Company and its subsidiaries will be
restricted from making certain payments as set forth in the Indenture.


 


As provided in
the Indenture and subject to certain limitations therein set forth, in case an
Event of Default with respect to the Debentures shall have occurred and be
continuing, the principal hereof may be declared, and upon such declaration
shall become due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture. The omission by the Company to pay
interest during an Deferral Period (as defined below) as permitted hereby shall
not constitute an Event of Default under Section 501 of the Indenture.


 


The Indenture
contains provisions permitting the Company and the Trustee, with the consent of
the holders of not less than 662/3% in aggregate principal amount of each series of the
Securities at the time Outstanding to be affected (each series voting as a
class), evidenced as provided in the Indenture, to execute supplemental
indentures adding any provisions to, or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental indenture or
modifying in any manner the rights of the holders of the Securities of all such
series; provided, however, that no such supplemental indenture shall, among
other things, (i) change the fixed maturity of any Security, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon or reduce any premium payable 


 

















 


on redemption, or make the
principal thereof, or premium, if any, or interest thereon payable in any coin
or currency other than that hereinabove provided, or amend the Indenture to
modify its provisions relating to the subordination of each Security in a
manner adverse to the holder thereof, without the consent of the holder of each
Security so affected, or (ii) change the place of payment on any Security, or
impair the right to institute suit for payment on any Security, or reduce the
aforesaid percentage of Securities, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of each Security so affected. It is also provided in the Indenture that, prior
to any declaration accelerating the maturity of any series of Securities, the
holders of a majority in aggregate principal amount of the Securities of such
series Outstanding may on behalf of the holders of all the Securities of such
series waive any past default or Event of Default under the Indenture with
respect to such series and its consequences, except a default in the payment of
interest, if any, on or the principal of, or premium, if any, on any of the
Securities of such series. Any such consent or waiver by the holder of this
Debenture shall be conclusive and binding upon such holder and upon all future
holders and owners of this Debenture and any Debentures which may be issued in
exchange or substitution herefor, irrespective of whether or not any notation
thereof is made upon this Debenture or such other Debentures. In addition, if
the Debentures are held by the Trust, the consent of not less than 662/3% of the aggregate liquidation
amount of the securities issued by the Trust shall be required in order for
such supplemental indenture to be effective.


 


As provided in
and subject to the provisions of the Indenture, if an Event of Default with
respect to the Debentures at the time Outstanding occurs and is continuing,
then in every such case, unless the principal of all of the Debentures shall
have already become due and payable, the Trustee or the Holders of not less
than 25% in principal amount of the Outstanding Debentures may declare the
principal amount of all the Debentures to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount shall become immediately due
and payable; provided that, in the case of Debentures issued to and held by the
Trust, or any trustee thereof or agent therefor, if upon an Event of Default,
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Debentures fails to declare the entire principal of all the
Debentures to be immediately due and payable, the holders of at least 25% in
aggregate liquidation amount of the Trust Preferred Securities then
outstanding, acting together as a single class, shall have such right by a
notice in writing to the Company and the Trustee. Upon any such declaration,
such amount of the principal of and the accrued but unpaid interest on all the
Debentures shall become immediately due and payable, provided that the payment
of principal on the Debentures shall remain subordinated to the extent provided
in Article Fourteen of the Base Indenture except to the extent otherwise
determined in connection with an Early Remarketing. Upon payment (i) of the
amount of principal so declared due and payable and (ii) of interest on any
overdue principal and overdue interest (in each case to the extent that the
payment of such interest shall be legally enforceable), all of the Company’s
obligations in respect of the payment of the principal of and interest (including
Additional Interest), if any, on this Debenture shall terminate.


 


No reference herein to the Indenture and no
provisions of this Debenture or of the Indenture shall alter or impair the
obligations of the Company, which is absolute and unconditional, to pay the
principal and interest of this Debenture at the place, at the time and in the
coin or currency herein prescribed.


 

















 


The Company
may omit to comply with any term, provision or condition set forth in Section
801 of the Indenture, and any such omission with respect to such Section shall
not be an Event of Default, in each case with respect to the Debentures,
provided that the conditions of Section 1009 of the Indenture have been
satisfied.


 


The covenant
set forth in Section 1005 of the Indenture shall not apply to the Debentures.


 


Notwithstanding the provisions of Section 401(a)(B)
of the Indenture, the Company may satisfy and discharge the entire indebtedness
on all the Debentures as provided therein only when the Debentures are by their
terms due and payable within one year.


 


The Company, the Trustee, and any agent of the
Company or of the Trustee may deem and treat the registered holder hereof as
the absolute owner of this Debenture (whether or not this Debenture shall be
overdue and notwithstanding any notation of ownership or other writing hereon),
for the purpose of receiving payment hereof, or on account hereof, and for all
other purposes, and neither the Company nor the Trustee nor any agent of the
Company or of the Trustee shall be affected by any notice to the contrary. All
such payments made to or upon the order of such registered holder shall, to the
extent of the sum or sums paid, effectually satisfy and discharge liability for
moneys payable on this Debenture.


 


The Debentures are issuable in registered form
without coupons in denominations of $1,000 and any multiple of $1,000. At the
option of the holders thereof, either at the office or agency to be designated
and maintained by the Company for such purpose in the Borough of Manhattan, The
City of New York, pursuant to the provisions of the Indenture or at any of such
other offices or agencies as may be designated and maintained by the Company
for such purpose pursuant to the provisions of the Indenture, and in the manner
and subject to the limitations provided in the Indenture, but without the
payment of any service charge, except for any tax or other governmental charges
imposed in connection therewith, Debentures may be exchanged for an equal
aggregate principal amount of Debentures of like tenor and of other authorized
denominations.


 


As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of this Debenture is registrable in
the Security Register, upon surrender of this Debenture for registration of
transfer at the office or agency of the Company in any place where the
principal of this Debenture is payable, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the holder hereof or such holder’s
attorney duly authorized in writing, and thereupon one or more new Debentures
of this series of like tenor and of authorized denominations and for the same
aggregate principal amount will be issued to the designated transferee or
transferees.


 


No recourse for the payment of the principal of or
the interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Debenture, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, officer or
director as such, past, present or future, of the Company or of any successor
corporation, either directly or 


 

















 


through the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law or by the
enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.


 


The Company
and, by its acceptance of this Debenture or a beneficial interest therein, the
Holder of, and any Person that acquires a beneficial interest in, this
Debenture agree to treat for United States Federal income tax purposes (i) the
Debentures as indebtedness of the company, and (ii) the stated interest on the
Debentures as ordinary interest income that is includible in the Holder’s or
beneficial owner’s gross income at the time the interest is paid or accrued in
accordance with the Holder’s or beneficial owner’s regular method of tax
accounting, and otherwise to treat the Debentures as described in the
Prospectus.


 


THE INDENTURE AND THE DEBENTURES SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.


 


All items used in this Debenture which are defined
in the Indenture shall have the meanings assigned to them in the Indenture.


 


The following abbreviations, when used in the inscription on the face
of the within Debenture, shall be construed as though they were written out in
full according to applicable laws or regulations:


 


	
   

  	
  TEN COM –

  	
  as tenants in common

  
	
   

  	
   

  	
   

  
	
   

  	
  TEN ENT –

  	
  as tenants by their entireties

  
	
   

  	
   

  	
   

  
	
   

  	
  JT TEN –

  	
  as joint tenants with right of survivorship and
  not as tenants in common

  



 


UNIF GIFT MIN ACT  –                         
Custodian                    
under Uniform Gifts to


 


(Cust)     (Minor)


 


Minors Act                      


 


(State)


 


Additional abbreviations may also be used though not in the above list.


 


 

















 


ASSIGNMENT


 


FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto


 


	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  



 


 


(Please insert social security or other identifying
number of Assignee)


 


	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  



 


(Name and address of Assignee, including zip code,
must be printed or typewritten.)


 


the within Debenture, and all rights thereunder,
hereby irrevocably constituting and appointing


 


	
   

  
	
   

  
	
   

  
	
   

  



 


                             
to transfer the said Debenture on the books of the Company, with full power of
substitution in the premises.


 


	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NOTICE: The signature to this assignment must
  correspond 

  
	
   

  	
   

  	
  with the name as it appears upon the face of the
  within Debenture in

  
	
   

  	
   

  	
  every particular, without alteration or
  enlargement or any change 

  



 


whatever.


 


	
  Signature(s) Guaranteed:

  	
   

  	
   

  



 


THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND
CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE GUARANTEE
PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.