Document:

Exhibit 4.02

 

No. D-1                                                                              $309,278,375

 

 

 

LEHMAN
BROTHERS HOLDINGS INC.

6.375% SUBORDINATED DEFERRABLE INTEREST DEBENTURE DUE OCTOBER 2052

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 JPMORGAN CHASE BANK,
as Property Trustee (the “Property Trustee”) for LEHMAN BROTHERS HOLDINGS
CAPITAL TRUST IV (the “Trust”), at the office or agency of the Company in the
Borough of Manhattan, the City of New York, the principal sum of THREE HUNDRED
NINE MILLION TWO HUNDRED SEVENTY-EIGHT THOUSAND THREE HUNDRED SEVENTY FIVE
dollars on October 31, 2052, 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 specified in
the title of this Debenture 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 quarterly, to the registered holder of this Debenture, until payment
of said principal sum has been made or duly provided for.  Interest on this Debenture, (computed as set
forth herein) shall be payable quarterly (subject to deferral as set forth
herein) in arrears on January 31, April 30, July 31 and October 31 of each year
(each an “Interest Payment Date”), commencing January 31, 2004, from the date
of this Debenture or the most recent Interest Payment Date to which interest
has been paid or duly provided for, unless the date hereof is a date to which
interest has been paid or duly provided for.

 

The interest so payable on any Interest Payment Date will, subject to
certain exceptions provided in the Indenture referred to on the reverse hereof,
be paid to the person in whose name this Debenture (or one or more Predecessor
Securities, as defined in said Indenture) is registered at the close of
business on the Business Day prior to the relevant Interest Payment Date (each
a “Regular Record Date”).  Interest may,
at the option of the Company, be paid by check mailed to the person entitled
thereto at such person’s address as it appears in the registry books of the
Company.

 

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, attested by its Secretary or one of
its Assistant Secretaries by manual or facsimile signature.

 

	
  .

  	
  LEHMAN
  BROTHERS HOLDINGS INC

  
	
   

  	
   

  
	
   

  	
  By:_____________________________

  
	
   

  	
  Name:
  Barrett S. DiPaolo

  
	
   

  	
  Title:
  Vice President

  

 

 

 

Attest:

 

	
  _____________________________

  	
   

  
	
  Name:
  Cindy Gregoire

  	
   

  
	
  Title: Assistant Secretary

  	
   

  

 

2

 

TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

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

 

Dated
October 31, 2003,

 

	
   

  	
  JPMORGAN
  CHASE BANK,

  
	
   

  	
     as
  Trustee

  
	
   

  	
   

  
	
   

  	
  By:
  _____________________________

  
	
   

  	
     Authorized
  Officer

  

 

 

3

 

 

 

(Reverse of Debenture)

 

LEHMAN
BROTHERS HOLDINGS INC.

6.375% SUBORDINATED DEFERRABLE INTEREST DEBENTURE DUE OCTOBER 2052

This Debenture is one of a duly authorized series of Debentures of the
Company designated as the 6.375% Subordinated Deferrable Interest Debentures
due October 2052 of the Company (herein called the “Debentures”).  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 (herein called the
“Indenture”), between the Company and JPMorgan Chase Bank, formerly known as
The Chase Manhattan Bank and prior thereto as Chemical Bank, as Trustee (herein
called the “Trustee”), 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, of the
Company 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.  Each registered
holder thereof, by his or her acceptance hereof, agrees to treat the Debentures
as indebtedness for all United States federal income tax purposes.

 

Subject to Article Eleven of the Indenture, at any time on or after
October 31, 2008 and prior to maturity, the Company shall have the right to
redeem this Debenture at the option of the Company, in whole or in part, at
100% of the principal amount of such Debentures, plus any accrued but unpaid
interest, to the Redemption Date.

 

If an Investment Company Event (as defined in the Amended and Restated
Declaration of Trust of the Trust, dated October 31, 2003 among the Company, as
Sponsor, the Trust, and the trustees of the Trust named thereto (the
“Declaration”) shall occur and be continuing, the 

 

 

 

Company
may, at any time within 90 days following the occurrence of such Investment
Company Event, redeem the Debentures, in whole but not in part, at a Redemption
Price equal to 100% of the principal amount thereof, plus accrued and unpaid
interest thereon to the Redemption Date. 
Subject to certain conditions described in the Indenture, in the event
of the occurrence and continuation of a Tax Event (as defined in the
Declaration), 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 a Tax Event at a Redemption Price equal to 100% of the aggregate principal
amount thereof, plus accrued and unpaid interest thereon to the Redemption
Date.  Any redemption pursuant to this
paragraph shall be made upon not less than 30 nor more than 60 days’ notice to
the Trustee and Holders of the Debentures. 
If less than all the Debentures are to be redeemed by the Company, the
Debentures to be redeemed will be selected by lot or by such other method as
the Trustee shall deem fair and appropriate. 
The Debentures are not subject to a sinking fund.

 

In the event of redemption of this Debenture in part only, a new
Debenture or Debentures of this series for the unredeemed portion hereof will
be issued in the name of the registered holder hereof upon the surrender hereof
at a Place of Payment (as defined in the Indenture).

 

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 Extension
Period (as defined below) as permitted hereby shall not constitute an Event of
Default under Section 501 of the Indenture. 
An “Event of Default” means any of those events set forth in Section 501
of the Indenture, and the event that, when the Property Trustee is the Holder
of the Debentures, the Trust shall have voluntarily or involuntarily dissolved,
wound–up its business or otherwise terminated its existence except in
connection with the (i) distribution of Debentures to holders of Preferred
Securities and Common Securities in liquidation of their interests in the
Trust, (ii) the redemption of all of the outstanding Preferred Securities and
Common Securities, or (iii) certain mergers, consolidations or amalgamation,
each as permitted by the Declaration.

 

If the Debentures are held by the Trust, the Company, as borrower,
hereby covenants to pay all debts and obligations (other than with respect to
the Preferred Securities and Common Securities of 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 of the Trust 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 United States 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 and the Property Trustee after
paying such debts, obligations, costs, expenses, taxes, duties, assessments, or
other governmental charges, will be equal to the amounts the Trust and the
Property Trustee would have received had no such debts, obligations, costs,
expenses, taxes, duties, assessments, or other governmental charges 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 

 

 

2

 

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.  The Company shall execute such additional
agreements as may be necessary or desirable to give full effect to the
foregoing.

 

The Company hereby covenants that, so long as any Preferred Securities
and Common Securities of the Trust remain outstanding, if (i) there shall have
occurred any Event of Default under the Indenture with respect to the
Debentures, (ii) the Company shall be in default with respect to its payment of
any obligations under its Guarantee (as defined in the Declaration) with
respect to the Trust or (iii) the Company shall have given notice of its
election of an Extension Period as provided herein and shall not have rescinded
such notice, or such Extension Period or any extension thereof shall be
continuing, then the Company will not, and will not permit any Subsidiary to,
(x) declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Company’s
capital stock or (y) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities of the Company that
rank on a parity with or junior in interest to this Debenture or make any
guarantee payments with respect to any guarantee by the Company of the debt
securities of any Subsidiary of the Company if such guarantee ranks on a parity
with or junior in interest to this Debenture (other than (a) dividends or
distributions in common stock of the Company, (b) payments under the Guarantee
made by the Company in respect of the Preferred Securities and Common Securities
of the Trust, (c) any declaration of a dividend in connection with the
implementation of a shareholders’ 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, and (d) purchases of common stock related to the issuance of
common stock or rights under any of the Company’s benefit plans).

 

The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than 66-2/3% 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 

 

3

 

 

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.

 

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 of this
Debenture at the place, at the time and in the coin or currency herein
prescribed.

 

The amount of interest payable for any period will be computed (i) for
any full 90-day quarterly interest payment period, on the basis of a 360-day
year of twelve 30-day months, (ii) for any period shorter than a full 90-day
quarterly interest payment period for which interest payments are computed, on
the basis of a 30-day month and (iii) for periods of less than a month, the
actual number of days elapsed per 30-day month.  In the event that any date on which interest is payable on this
Debenture is not a Business Day (as defined in the Indenture), then payment of
the amount payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on the original Interest
Payment Date, subject to certain rights of deferral described below.

 

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 extend any interest payment period on this Debenture for a period
(an “Extension Period”) not to exceed twenty consecutive quarterly interest
payment periods; provided that the date on which such Extension Period ends
must be on an Interest Payment Date and must be no later than March 15, 2052 or
any date on which any Debentures are fixed for redemption, and, as a
consequence, the quarterly interest payment on the Debentures would be deferred
(but would continue to accrue with interest thereon compounded quarterly at the
rate of interest on the Debentures, except to the extent payment of such
interest is prohibited by law) during any such Extension Period.  On the Interest Payment Date at the end of
each Extension Period, the Company shall pay all interest then accrued and
unpaid (compounded quarterly, at the rate of interest on the Debentures, except
to the extent payment of such interest is prohibited by law) to the date of
payment, to the persons in whose name the Debentures are registered on the
Regular Record Date immediately preceding the Interest Payment Date at the end
of such Extension Period.  The Company
shall give written notice to the Regular Trustees (as defined in the
Declaration), the Property Trustee and the Trustee of its election of such
Extension Period one Business Day before the earlier of (i) the next
succeeding date on which distributions on the Preferred Securities of the Trust
are payable or (ii) the date the Trust is required to give notice of the record
date or the date such distributions are payable to the New York Stock Exchange
or other applicable self–regulatory organization or to holders of the
Preferred Securities issued by the Trust, but in any event at least one
Business Day before such record date. 
During any Extension Period, the Company may continue to extend the
interest payment period by extending the Extension Period, on one or more
occasions 

 

 

4

 

 

by
giving notice as aforesaid; provided that such Extension Period, as extended,
must end on an Interest Payment Date and in no event shall the aggregate
Extension Period, as extended, exceed twenty consecutive quarterly interest
payment periods or extend beyond March 15, 2052 or any date on which any of the
Debentures are fixed for redemption.  No
interest shall be due and payable on the Debentures during an Extension Period
except at the end thereof.

 

                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 Debentures are issuable in registered form without coupons in
denominations of $25 and any multiple of $25. 
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.

 

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.

 

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.

 

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

 

5

 

 

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.

 

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.

 

 

6

 

 

______________________________________

 

 

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

       (Cut)                      (Minor)

                                              Minors
Act__________________

(State)

 

 

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

 

 

______________________________________

 

 

7

 

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.Exhibit 4.03

 

 

AMENDED AND RESTATED
DECLARATION OF TRUST

 

Lehman Brothers Holdings
Capital Trust IV

 

Dated as of
October 31, 2003

 

 

CROSS REFERENCE TABLE*

 

	
  Section of Trust

  Indenture Act of

  1939, as amended

  	
   

  	
  Page

  
	
   

  
	
  310(a)

  	
  Inapplicable

  
	
  310(b)

  	
  29

  
	
  310(c)

  	
  Inapplicable

  
	
  311(a)

  	
  9

  
	
  311(b)

  	
  9

  
	
  311(c)

  	
  Inapplicable

  
	
  312(a)

  	
  Inapplicable

  
	
  312(b)

  	
  9

  
	
  312(c)

  	
  Inapplicable

  
	
  313(a)

  	
  Inapplicable

  
	
  313(b)

  	
  Inapplicable

  
	
  313(c)

  	
  Inapplicable

  
	
  313(d)

  	
  9

  
	
  314(a)

  	
  14

  
	
  314(b)

  	
  Inapplicable

  
	
  314(c)

  	
  9

  
	
  314(d)

  	
  Inapplicable

  
	
  314(e)

  	
  Inapplicable

  
	
  314(f)

  	
  Inapplicable

  
	
  315(a)

  	
  Inapplicable

  
	
  315(b)

  	
  Inapplicable

  
	
  315(c)

  	
  Inapplicable

  
	
  315(d)

  	
  Inapplicable

  
	
  316(a)

  	
  9,10,11

  
	
  316(b)

  	
  Inapplicable

  
	
  316(c)

  	
  14

  
	
  317(a)

  	
  Inapplicable

  
	
  317(b)

  	
  18

  
	
  318(a)

  	
  Inapplicable

  
				

 

*                                         This
Cross-Reference Table does not constitute part of the Declaration and shall not
have any bearing upon the interpretation of any of its terms or provisions.

 

i

 

Table of Contents

 

	
  ARTICLE 1 INTERPRETATION AND DEFINITIONS

  
	
   

  	
   

  
	
   

  	
  SECTION 1.1.  
  Interpretation and Definitions.

  
	
   

  	
  Affiliate

  
	
   

  	
  Authorized Officer

  
	
   

  	
  Beneficial Owners

  
	
   

  	
  Business
  Day

  
	
   

  	
  Certificate

  
	
   

  	
  Certificate of Trust

  
	
   

  	
  Clearstream Banking

  
	
   

  	
  Closing
  Date

  
	
   

  	
  Code

  
	
   

  	
  Commission

  
	
   

  	
  Common Securities Holder

  
	
   

  	
  Common
  Security

  
	
   

  	
  Common Security Certificate

  
	
   

  	
  Corporate Trust Office

  
	
   

  	
  Covered
  Person

  
	
   

  	
  Debenture Issuer

  
	
   

  	
  Debenture Issuer
  Indemnified Person

  
	
   

  	
  Debenture Trustee

  
	
   

  	
  Debentures

  
	
   

  	
  Delaware Trustee

  
	
   

  	
  Depositary

  
	
   

  	
  Depositary Participant

  
	
   

  	
  Direct
  Action

  
	
   

  	
  Distribution

  
	
   

  	
  Euroclear

  
	
   

  	
  Exchange
  Act

  
	
   

  	
  Fiduciary Indemnified
  Person

  
	
   

  	
  Fiscal
  Year

  
	
   

  	
  Global
  Security

  
	
   

  	
  Guarantee

  
	
   

  	
  Holder

  
	
   

  	
  Indemnified Person

  
	
   

  	
  Indenture

  
	
   

  	
  Indenture Event of Default

  
	
   

  	
  Investment Company

  
	
   

  	
  Investment Company Act

  
	
   

  	
  Investment Company Event

  
	
   

  	
  Legal
  Action

  
	
   

  	
  List
  of Holders

  
	
   

  	
  Majority in Liquidation
  Amount

  

 

ii

 

	
   

  	
  New York Stock Exchange

  
	
   

  	
  Officers’ Certificate

  
	
   

  	
  Paying
  Agent

  
	
   

  	
  Payment
  Amount

  
	
   

  	
  Person

  
	
   

  	
  Preferred Security

  
	
   

  	
  Preferred Security
  Certificate

  
	
   

  	
  Property Account

  
	
   

  	
  Property Trustee

  
	
   

  	
  Pro Rata

  
	
   

  	
  Quorum

  
	
   

  	
  Redemption/Distribution
  Notice

  
	
   

  	
  Redemption Price

  
	
   

  	
  Regular
  Trustee

  
	
   

  	
  Related
  Party

  
	
   

  	
  Responsible Officer

  
	
   

  	
  Rule 3a-5

  
	
   

  	
  Securities

  
	
   

  	
  Securities
  Act

  
	
   

  	
  Special
  Event

  
	
   

  	
  Sponsor

  
	
   

  	
  Statutory Trust Act

  
	
   

  	
  Successor Delaware Trustee

  
	
   

  	
  Successor Entity

  
	
   

  	
  Successor Property Trustee

  
	
   

  	
  Successor Security

  
	
   

  	
  Super
  Majority

  
	
   

  	
  Tax Event

  
	
   

  	
  10% in Liquidation Amount

  
	
   

  	
  Treasury Regulations

  
	
   

  	
  Trust

  
	
   

  	
  Trust Enforcement Event

  
	
   

  	
  Trust Indenture Act

  
	
   

  	
  Trustee

  
	
   

  	
  U.S.
  Person

  
	
   

  	
   

  
	
  ARTICLE 2 TRUST INDENTURE ACT

  
	
   

  	
   

  
	
   

  	
  SECTION 2.1.  
  Trust Indenture Act; Application.

  
	
   

  	
  SECTION 2.2.  
  Lists of Holders of Securities.

  
	
   

  	
  SECTION 2.3.  
  Reports by the Property Trustee.

  
	
   

  	
  SECTION 2.4.  
  Periodic Reports to the Property Trustee.

  
	
   

  	
  SECTION 2.5.  
  Evidence of Compliance with Conditions Precedent.

  
	
   

  	
  SECTION 2.6.  
  Trust Enforcement Events; Waiver.

  
	
   

  	
  SECTION 2.7.  
  Trust Enforcement Event; Notice.

  

 

iii

 

	
  ARTICLE 3 ORGANIZATION

  
	
   

  	
   

  
	
   

  	
  SECTION 3.1.  
  Name and Organization.

  
	
   

  	
  SECTION 3.2.  
  Office.

  
	
   

  	
  SECTION 3.3.  
  Purpose.

  
	
   

  	
  SECTION 3.4.  
  Authority.

  
	
   

  	
  SECTION 3.5.  
  Title to Property of the Trust.

  
	
   

  	
  SECTION 3.6.  
  Powers and Duties of the Regular Trustees.

  
	
   

  	
  SECTION 3.7.  
  Prohibition of Actions by the Trust and the Trustees.

  
	
   

  	
  SECTION 3.8.  
  Powers and Duties of the Property Trustee.

  
	
   

  	
  SECTION 3.9.  
  Certain Duties and Responsibilities of the Property Trustee.

  
	
   

  	
  SECTION 3.10.  
  Certain Rights of Property Trustee.

  
	
   

  	
  SECTION 3.11.  
  Delaware Trustee.

  
	
   

  	
  SECTION 3.12.  
  Execution of Documents.

  
	
   

  	
  SECTION 3.13.  
  Not Responsible for Recitals or Issuance of Securities.

  
	
   

  	
  SECTION 3.14.  
  Duration of Trust.

  
	
   

  	
  SECTION 3.15.  
  Mergers.

  
	
   

  	
  SECTION 3.16.  
  Property Trustee May File Proofs of Claim.

  
	
   

  	
   

  
	
  ARTICLE 4 SPONSOR

  
	
   

  	
   

  
	
   

  	
  SECTION 4.1.  
  Responsibilities of the Sponsor.

  
	
   

  	
  SECTION 4.2.  
  Indemnification and Fees and Expenses of the Trustees.

  
	
   

  	
   

  
	
  ARTICLE 5 TRUST COMMON SECURITIES HOLDER

  
	
   

  	
   

  
	
   

  	
  SECTION 5.1.  
  Debenture Issuer’s Receipt of Common Securities.

  
	
   

  	
  SECTION 5.2.  
  Covenants of the Common Securities Holder.

  
	
   

  	
   

  
	
  ARTICLE 6 TRUSTEES

  
	
   

  	
   

  
	
   

  	
  SECTION 6.1.  
  Number of Trustees.

  
	
   

  	
  SECTION 6.2.  
  Delaware Trustee; Eligibility.

  
	
   

  	
  SECTION 6.3.  
  Property Trustee; Eligibility.

  
	
   

  	
  SECTION 6.4.  
  Qualifications of Regular Trustees and Delaware Trustee Generally.

  
	
   

  	
  SECTION 6.5.   Initial
  Regular Trustees.

  
	
   

  	
  SECTION 6.6.  
  Appointment, Removal and Resignation of Trustees.

  
	
   

  	
  SECTION 6.7.  
  Vacancies among Trustees.

  
	
   

  	
  SECTION 6.8.   Effect
  of Vacancies.

  
	
   

  	
  SECTION 6.9.  
  Meetings.

  
	
   

  	
  SECTION 6.10.  
  Delegation of Power.

  
	
   

  	
  SECTION 6.11.  
  Merger, Conversion, Consolidation or Succession to Business.

  
	
   

  	
   

  
	
  ARTICLE 7 TERMS OF SECURITIES

  
	
   

  	
   

  
	
   

  	
  SECTION 7.1.  
  General Provisions Regarding Securities.

  
	
   

  	
  SECTION 7.2.  
  Distributions.

  
	
   

  	
  SECTION 7.3.  
  Redemption of Securities.

  

 

iv

 

	
   

  	
  SECTION 7.4.  
  Redemption Procedures.

  
	
   

  	
  SECTION 7.5.   Voting
  Rights of Preferred Securities.

  
	
   

  	
  SECTION 7.6.   Voting
  Rights of Common Securities.

  
	
   

  	
  SECTION 7.7.   Paying
  Agent.

  
	
   

  	
  SECTION 7.8.   Listing.

  
	
   

  	
  SECTION 7.9.  
  Transfer of Securities.

  
	
   

  	
  SECTION 7.10.  
  Mutilated, Destroyed, Lost or Stolen Certificates.

  
	
   

  	
  SECTION 7.11.   Deemed
  Security Holders.

  
	
   

  	
  SECTION 7.12.   Global
  Securities.

  
	
   

  	
   

  
	
  ARTICLE 8 DISSOLUTION AND TERMINATION
  OF TRUST

  
	
   

  	
   

  
	
   

  	
  SECTION 8.1.  
  Dissolution and Termination of Trust.

  
	
   

  	
  SECTION 8.2.  
  Liquidation Distribution Upon Dissolution of the Trust.

  
	
   

  	
   

  
	
  ARTICLE 9 LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
  DELAWARE TRUSTEES OR OTHERS

  
	
   

  	
   

  
	
   

  	
  SECTION 9.1.  
  Liability.

  
	
   

  	
  SECTION 9.2.  
  Exculpation.

  
	
   

  	
  SECTION 9.3.   Fiduciary
  Duty.

  
	
   

  	
  SECTION 9.4.  
  Indemnification.

  
	
   

  	
  SECTION 9.5.   Outside
  Businesses.

  
	
   

  	
   

  
	
  ARTICLE 10 ACCOUNTING

  
	
   

  	
   

  
	
   

  	
  SECTION 10.1.   Fiscal
  Year.

  
	
   

  	
  SECTION 10.2.  
  Certain Accounting Matters.

  
	
   

  	
  SECTION 10.3.  
  Banking.

  
	
   

  	
  SECTION 10.4.  
  Withholding.

  
	
   

  	
   

  
	
  ARTICLE 11 AMENDMENTS AND MEETINGS

  
	
   

  	
   

  
	
   

  	
  SECTION 11.1.  
  Amendments.

  
	
   

  	
  SECTION 11.2.  
  Meetings of the Holders of Securities; Action by Written Consent.

  
	
   

  	
   

  
	
  ARTICLE 12 REPRESENTATIONS OF PROPERTY
  TRUSTEE AND DELAWARE TRUSTEE

  
	
   

  	
   

  
	
   

  	
  SECTION 12.1.  
  Representations and Warranties of the Property Trustee.

  
	
   

  	
  SECTION 12.2.  
  Representations and Warranties of the Delaware Trustee.

  
	
   

  	
   

  
	
  ARTICLE 13 MISCELLANEOUS

  
	
   

  	
   

  
	
   

  	
  SECTION 13.1.  
  Notices.

  
	
   

  	
  SECTION 13.2.  
  Governing Law.

  
	
   

  	
  SECTION 13.3.  
  Intention of the Parties.

  
	
   

  	
  SECTION 13.4.  
  Headings.

  

 

v

 

	
   

  	
  SECTION 13.5.  
  Successors and Assigns.

  
	
   

  	
  SECTION 13.6.  
  Partial Enforceability.

  
	
   

  	
  SECTION 13.7.  
  Counterparts.

  

 

vi

 

EXHIBITS

 

	
  Exhibit A

  	
   

  	
  Form of Preferred Security Certificate

  
	
  Exhibit B

  	
   

  	
  Form of Common Security Certificate

  

 

vii

 

AMENDED AND RESTATED
DECLARATION OF TRUST

 

THIS AMENDED AND
RESTATED DECLARATION OF TRUST (“Declaration”), dated as of October 31,
2003, by and among LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation, as
Sponsor, and Barrett DiPaolo, Jeffrey Welikson and Oliver Budde as the initial
Regular Trustees, JPMorgan Chase Bank, as the initial Property Trustee and
Chase Manhattan Bank USA, National Association, as the initial Delaware
Trustee, not in their individual capacities but solely as Trustees, and the
holders, from time to time, of undivided beneficial ownership interests in the
Trust to be issued pursuant to this Declaration.

 

WHEREAS, the
Trustees and the Sponsor established Lehman Brothers Holdings Capital Trust IV
(the “Trust”), a statutory trust under the Statutory Trust Act (as defined,
together with other capitalized terms, herein) pursuant to a Declaration of
Trust dated as of March 31, 1999 (the “Original Declaration”), and a
Certificate of Trust (the “Certificate of Trust”) filed with the Secretary of
State of the State of Delaware on April 1, 1999; and

 

WHEREAS, the sole
purpose of the Trust shall be to issue certain securities representing
undivided beneficial ownership interests in the assets of the Trust, in
exchange for the Debentures issued by the Debenture Issuer and to engage in
only those activities necessary or incidental thereto; and

 

WHEREAS, the
parties hereto, by this Declaration, amend and restate each and every term and
provision of the Original Declaration.

 

NOW, THEREFORE, it
being the intention of the parties hereto to continue the Trust as a statutory
trust under the Statutory Trust Act and that this Declaration constitute the
governing instrument of such statutory trust, the Trustees hereby declare that
all assets contributed to the Trust be held in trust for the benefit of the
Holders, from time to time, of the Securities representing undivided beneficial
ownership interests in the assets of the Trust issued hereunder, subject to the
provisions of this Declaration.

 

ARTICLE 1

 

INTERPRETATION AND DEFINITIONS

 

SECTION 1.1.  
Interpretation and Definitions.

 

Unless the context
otherwise requires:

 

(a)                                  capitalized terms used in this
Declaration but not defined in the preamble above have the meanings assigned to
them in this Section 1.1; a term defined anywhere in this Declaration has
the same meaning throughout;

 

(b)                                 all references to “the Declaration” or
“this Declaration” are to this Declaration as modified, supplemented or amended
from time to time;

 

 

(c)                                  all references in this Declaration to
Articles, Sections, Recitals and Exhibits are to Articles and Sections of, or
Recitals and Exhibits to, this Declaration unless otherwise specified;

 

(d)                                 unless otherwise defined in this
Declaration, a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration; and

 

(e)                                  a reference to the singular includes the
plural and vice versa and a reference to any masculine form of a term shall
include the feminine form of a term, as applicable.

 

(f)                                    the following terms have the following
meanings:

 

“Affiliate” has the same meaning as given to that term in
Rule 405 of the Securities Act or any successor rule thereunder.

 

“Authorized Officer” of a Person means any Person
that is authorized to bind such Person.

 

“Beneficial Owners” means, for Preferred Securities
represented by a Global Security, the Person who acquires an interest in the
Preferred Securities which is reflected on the records of the Depositary
through the Depositary Participants.

 

“Business Day” means any day, other than a Saturday or
Sunday, that is not a day on which banking institutions in the Borough of
Manhattan, The City of New York are authorized or required by law, regulation
or executive order to close.

 

“Certificate” means a Common Security Certificate or a
Preferred Security Certificate.

 

“Certificate of Trust” has the meaning specified in
the Recitals hereto.

 

“Clearstream Banking” means Clearstream Banking,
société anonyme, Luxembourg.

 

“Closing Date” means the date on which the Preferred
Securities are issued and sold.

 

“Code”
means the Internal Revenue Code of 1986, as amended from time to time, or any
successor legislation.  A reference to a
specific section of the Code refers not only to such specific
section but also to any corresponding provision of any federal tax statute
enacted after the date of this Declaration, as such specific section or
corresponding provision is in effect on the date of application of the
provisions of this Declaration containing such reference.

 

“Commission” means the Securities and Exchange Commission.

 

“Common Securities Holder” means Lehman
Brothers Holdings Inc., in its capacity as purchaser and holder of all of the
Common Securities issued by the Trust.

 

2

 

“Common Security” has the meaning specified in
Section 7.1(a)(ii).

 

“Common Security Certificate” means a
definitive certificate in fully registered form representing a Common Security,
substantially in the form of Exhibit B hereto.

 

“Corporate Trust Office” means the principal
office of the Property Trustee at which at any particular time its corporate
trust business shall be administered, which office at the date of execution of
this Declaration is located at 4 New York Plaza, 15th Floor, New
York, New York 10004.

 

“Covered Person” means (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the
Trust or (ii) the Trust’s Affiliates; and (b) any Holder.

 

“Debenture Issuer” means Lehman Brothers Holdings
Inc., in its capacity as issuer of the Debentures under the Indenture.

 

“Debenture Issuer Indemnified Person”
means (a) any Regular Trustee; (b) any Affiliate of any Regular Trustee; (c)
any officers, directors, shareholders, members, partners, employees,
representatives or agents of any Regular Trustee or any Affiliate thereof; or
(d) any officer, employee or agent of the Trust or its Affiliates.

 

“Debenture Trustee” means JPMorgan Chase Bank, in
its capacity as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.

 

“Debentures” means the series of debentures to be issued
by the Debenture Issuer under the Indenture and held by the Property Trustee.

 

“Delaware Trustee” has the meaning specified in
Section 6.2.

 

“Depositary” means, with respect to Securities issuable in
whole or in part in the form of one or more Global Securities, a clearing
agency registered under the Exchange Act that is designated to act as
Depositary for such Securities.

 

“Depositary Participant” means a member of, or
participant in, the Depositary.

 

“Direct Action” has the meaning specified in
Section 3.8(e).

 

“Distribution” means a distribution payable to Holders
of Securities in accordance with Section 7.2.

 

“Euroclear” means Euroclear Bank S.A./N.V., as operator of
the Euroclear System.

 

“Exchange Act” means the Securities Exchange Act of 1934,
as amended from time to time, or any successor legislation.

 

3

 

“Fiduciary Indemnified Person” has the
meaning set forth in Section 9.4(b).

 

“Fiscal Year” has the meaning specified in
Section 10.1.

 

“Global Security” means a fully registered, global
Preferred Security Certificate.

 

“Guarantee” means the Guarantee Agreement, dated as of
October 31, 2003, of the Sponsor in respect of the Securities.

 

“Holder”
means any holder of Securities, as registered on the books and records of the
Trust; provided, however, that in determining whether the Holders of the
requisite liquidation amount of Preferred Securities have voted on any matter
provided for in this Declaration, then for the purpose of such determination
only (and not for any other purpose hereunder), if the Preferred Securities
remain in the form of one or more Global Securities and if the Depositary which
is the holder of such Global Securities has sent an omnibus proxy to the Trust
assigning voting rights to Depositary Participants to whose accounts the
Preferred Securities are credited on the record date, the term “Holders” shall
mean such Depositary Participants acting at the direction of the Beneficial
Owners.

 

“Indemnified Person” means a Debenture Issuer
Indemnified Person or a Fiduciary Indemnified Person.

 

“Indenture” means the Indenture, dated as of
February 1, 1996, between the Debenture Issuer and JPMorgan Chase Bank, formerly known as The Chase
Manhattan Bank and prior thereto as Chemical Bank, as Trustee, and as amended
and supplemented by the First Supplemental Indenture thereto, dated as of
February 1, 1996, and by any other indenture supplement thereto pursuant
to which the Debentures are to be issued by the Property Trustee.

 

“Indenture Event of Default” has the meaning
given to the term “Event of Default” in the Indenture.

 

“Investment Company” means an investment company as
defined in the Investment Company Act and the regulations promulgated
thereunder.

 

“Investment Company Act” means the Investment
Company Act of 1940, as amended from time to time, or any successor
legislation.

 

“Investment Company Event” means the receipt
by the Trust of an opinion of a nationally recognized independent counsel, to
the effect that, as a result of the occurrence of a change in law or regulation
or a written change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority (a
“Change in 1940 Act Law”), there is more than an insubstantial risk that the
Trust is or will be considered an “investment company” that is required to be
registered under the Investment Company Act, which Change in 1940 Act Law
becomes effective on or after the Closing Date.

 

“Legal Action” has the meaning specified in
Section 3.6(g).

 

“List of Holders” has the meaning specified in
Section 2.2(a).

 

4

 

“Majority in Liquidation Amount” means,
except as provided in the terms of the Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities, voting together as a single
class, or, as the context may require, Holders of outstanding Preferred
Securities or Holders of outstanding Common Securities, voting separately as a
class, who are the record owners of more than 50% of the aggregate liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accumulated and unpaid Distributions to the date
upon which the voting percentages are determined) of all outstanding Securities
of the relevant class.

 

“New York Stock Exchange” means The New York
Stock Exchange, Inc. or any successor thereto.

 

“Officers’ Certificate” means, with respect to any
Person, a certificate signed on behalf of such Person by two Authorized
Officers of such Person.  Any Officers’
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:

 

(a)                                  a statement that each officer signing the
Officers’ Certificate has read the covenant or condition and the definitions
relating thereto;

 

(b)                                 a brief statement of the nature and scope
of the examination or investigation undertaken by each officer on behalf of
such Person in rendering the Officers’ Certificate;

 

(c)                                  a statement that each such officer has
made such examination or investigation as, in such officer’s opinion, is
necessary to enable such officer on behalf of such Person to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and

 

(d)                                 a statement as to whether, in the opinion
of each such officer acting on behalf of such Person, such condition or
covenant has been complied with; provided, that the term “Officers’
Certificate”, when used with reference to Regular Trustees who are natural
persons shall mean a certificate signed by two of the Regular Trustees which
otherwise satisfies the foregoing requirements.

 

“Paying Agent” has the meaning specified in
Section 3.8(h).

 

“Payment Amount” has the meaning specified in
Section 7.2(c).

 

“Person”
means a legal person, including any individual, corporation, estate,
partnership, joint venture, association, joint stock company, limited liability
company, trust, unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever nature.

 

“Preferred Security” has the meaning specified in
Section 7.1(a)(i).

 

“Preferred Security Certificate” means a
definitive certificate in fully registered form representing a Preferred
Security, substantially in the form of A.

 

5

 

“Property Account” has the meaning specified in
Section 3.8(c).

 

“Property Trustee” means the Trustee meeting the
eligibility requirements set forth in Section 6.3.

 

“Pro
Rata” means pro rata to each Holder of Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding.

 

“Quorum”
means a majority of the Regular Trustees or, if there are only two Regular
Trustees, both of them.

 

“Redemption/Distribution Notice” has the
meaning specified in Section 7.4(a).

 

“Redemption Price” means the amount for which the
Securities will be redeemed, which amount will equal (i) the redemption price
paid by the Debenture Issuer to repay or redeem, in whole or in part, the
Debentures held by the Trust which shall include accumulated and unpaid
Distributions on such Securities through the date of their redemption or (ii)
such lesser amount as will be received by the Trust in respect of the Debentures
so repaid or redeemed.

 

“Regular Trustee” means any Trustee other than the
Property Trustee and the Delaware Trustee.

 

“Related Party” means, with respect to the Sponsor, any
direct or wholly owned subsidiary of the Sponsor or any Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.

 

“Responsible Officer” means, with respect to the
Property Trustee, any officer with direct responsibility for the administration
of this Declaration and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of that
officer’s knowledge of and familiarity with the particular subject.

 

“Rule
3a-5” means Rule 3a-5 under the Investment Company Act or any successor rule
thereunder.

 

“Securities” means the Common Securities and the Preferred
Securities.

 

“Securities Act” means the Securities Act of 1933, as
amended from time to time, or any successor legislation.

 

“Special Event” means a Tax Event or an Investment Company
Event.

 

“Sponsor”
means Lehman Brothers Holdings Inc., a Delaware corporation, or any successor
entity in a merger, consolidation, amalgamation or replacement by or
conveyance, transfer or lease of its properties substantially as an entirety,
in its capacity as sponsor of the Trust.

 

6

 

“Statutory Trust Act” means Chapter 38 of Title 12
of the Delaware Code, 12 Del. Code Section 3801 et seq., as it may be
amended from time to time, or any successor legislation.

 

“Successor Delaware Trustee” has the meaning
specified in Section 6.6(b).

 

“Successor Entity” has the meaning specified in
Section 3.15(b).

 

“Successor Property Trustee” has the meaning
specified in Section 6.6(b).

 

“Successor Security” has the meaning specified in
Section 3.15(b)(i)(B).

 

“Super Majority” has the meaning specified in
Section 2.6(a)(ii).

 

“Tax Event” means the receipt by the Trust of an opinion of
independent tax counsel experienced in such matters, to the effect that, as a
result of (a) any 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, or (b) any official
administrative pronouncement, action or judicial decision interpreting or
applying such laws or regulations, which such amendment or change becomes
effective or proposed change, pronouncement, action or decision is announced on
or after the Closing Date, there is more than an insubstantial risk that (i)
the Trust is, or will be within 90 days of the date of such opinion, subject to
the United States federal income tax with respect to income received or accrued
on the Debentures, (ii) interest payable by the Debenture Issuer on the
Debentures is not, or within 90 days of the date of such opinion, will not be,
deductible by the Debenture Issuer, in whole or in part, for United States
federal income tax purposes, or (iii) the Trust is, or will be within 90 days
of the date of such opinion, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.

 

“10% in Liquidation Amount” means, except as provided
in the terms of the Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities, voting together as a single class, or, as
the context may require, Holders of outstanding Preferred Securities or Holders
of outstanding Common Securities, voting separately as a class, who are the
record owners of 10% or more of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant
class.

 

“Treasury Regulations” means the income tax
regulations, including temporary and proposed regulations, promulgated under
the Code by the United States Treasury, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).

 

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

 

“Trust Enforcement Event” in respect of the
Securities means an Indenture Event of Default has occurred and is continuing
in respect of the Debentures.

 

7

 

“Trust Indenture Act” means the Trust Indenture Act
of 1939, as amended from time to time, or any successor legislation.

 

“Trustee” or “Trustees” means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue as a trustee in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.

 

“U.S. Person “ means a United States person as defined in
Section 7701(a)(30) of the Code.

 

ARTICLE 2

 

TRUST INDENTURE
ACT

 

SECTION 2.1.  
Trust Indenture Act; Application.

 

(a)                                  This Declaration is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Declaration and shall, to the extent applicable, be governed by such
provisions.

 

(b)                                 The Property Trustee shall be the only
Trustee which is a Trustee for the purposes of the Trust Indenture Act.

 

(c)                                  If and to the extent that any provision
of this Declaration conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.

 

(d)                                 The application of the Trust Indenture
Act to this Declaration shall not affect the Trust’s classification as a
grantor trust for United States federal income tax purposes.

 

SECTION 2.2.  
Lists of Holders of Securities.

 

(a)                                  Each of the Sponsor and the Regular
Trustees on behalf of the Trust shall provide the Property Trustee (i), except
while the Preferred Securities are represented by one or more Global
Securities, at least five Business Days prior to the date for payment of
Distributions, a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Holders of the Securities (“List of
Holders”) as of the record date relating to the payment of such Distributions
and (ii) at any other time, within 30 days of receipt by the Trust of a
written request from the Property Trustee for a List of Holders as of a date no
more than 15 days before such List of Holders is given to the Property Trustee;
provided that neither the Sponsor nor the Regular Trustees on behalf of the
Trust shall be obligated to provide such List of Holders at any time the List
of Holders does not differ from the most recent List of Holders given to the
Property Trustee by the Sponsor and the Regular Trustees on behalf of the
Trust.  The Property Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it or which it receives in the capacity
as

 

8

 

Paying Agent (if
acting in such capacity), provided that the Property Trustee may destroy any
List of Holders previously given to it on receipt of a new List of Holders.

 

(b)                                 The Property Trustee shall comply with
its obligations under, and shall be entitled to the benefits of, Sections
311(a), 311(b) and 312(b) of the Trust Indenture Act.

 

SECTION 2.3.  
Reports by the Property Trustee.

 

Within 60 days
after May 15 of each year (commencing with the year of the first
anniversary of the issuance of the Preferred Securities), the Property Trustee
shall provide to the Holders of the Preferred Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in the form
and in the manner provided by Section 313 of the Trust Indenture Act.  The Property Trustee shall also comply with
the requirements of Section 313(d) of the Trust Indenture Act.

 

SECTION 2.4.  
Periodic Reports to the Property Trustee.

 

Each of the Sponsor
and the Regular Trustees on behalf of the Trust shall provide to the Property
Trustee such documents, reports and information as required by Section 314
of the Trust Indenture Act (if any) and the compliance certificate required by
Section 314 of the Trust Indenture Act in the form, in the manner and at
the times required by Section 314 of the Trust Indenture Act.

 

SECTION 2.5.  
Evidence of Compliance with Conditions Precedent.

 

Each of the Sponsor
and the Regular Trustees on behalf of the Trust shall provide to the Property
Trustee such evidence of compliance with any conditions precedent, if any, provided
for in this Declaration that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act.  Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) may be given in the form of an Officers’ Certificate.

 

SECTION 2.6.  
Trust Enforcement Events; Waiver.

 

(a)                                  The Holders of a Majority in Liquidation
Amount of the Preferred Securities may, by vote or written consent, on behalf
of the Holders of all of the Preferred Securities, waive any past Trust
Enforcement Event in respect of the Preferred Securities and its consequences,
provided that, if the underlying Indenture Event of Default:

 

(i)                                     is not waivable under the Indenture, the
Trust Enforcement Event under the Declaration shall also not be waivable; or

 

(ii)                                  requires the consent or vote of the
Holders of greater than a majority in principal amount of the Debentures (a
“Super Majority”) to be waived under the Indenture, the related Trust
Enforcement Event under the Declaration may only be waived by the vote or
written consent of the Holders of at least the proportion in liquidation amount
of the Preferred Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding.

 

9

 

The foregoing
provisions of this Section 2.6(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such
Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act.  Upon such waiver, any
such default shall cease to exist, and any Trust Enforcement Event with respect
to the Preferred Securities arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration and the Preferred Securities, but
no such waiver shall extend to any subsequent or other Trust Enforcement Event
with respect to the Preferred Securities or impair any right consequent
thereon.  Any waiver by the Holders of
the Preferred Securities of a Trust Enforcement Event with respect to the
Preferred Securities shall also be deemed to constitute a waiver by the Holders
of the Common Securities of any such Trust Enforcement Event with respect to
the Common Securities for all purposes of this Declaration without any further
act, vote, or consent of the Holders of the Common Securities.

 

(b)                                 The Holders of a Majority in Liquidation
Amount of the Common Securities may, by vote or written consent, on behalf of
the Holders of all of the Common Securities, waive any past Trust Enforcement
Event in respect of the Common Securities and its consequences, provided that,
if the underlying Indenture Event of Default:

 

(i)                                     is not waivable under the Indenture,
except where the Holders of the Common Securities are deemed to have waived
such Trust Enforcement Event under the Declaration as provided below in this
Section 2.6(b), the Trust Enforcement Event under the Declaration shall
also not be waivable; or

 

(ii)                                  requires the consent or vote of a Super
Majority to be waived under the Indenture, except where the Holders of the
Common Securities are deemed to have waived such Trust Enforcement Event under
the Declaration as provided below in this Section 2.6(b), the Trust
Enforcement Event under the Declaration may only be waived by the vote or
written consent of the Holders of at least the proportion in liquidation amount
of the Common Securities that the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding;

 

provided
further, each Holder of Common Securities will be deemed to have waived any
Trust Enforcement Event and all Trust Enforcement Events with respect to the
Common Securities and the consequences thereof until all Trust Enforcement
Events with respect to the Preferred Securities have been cured, waived or
otherwise eliminated, and until such Trust Enforcement Events with respect to
the Preferred Securities have been so cured, waived or otherwise eliminated,
the Property Trustee will be deemed to be acting solely on behalf of the
Holders of the Preferred Securities and only the Holders of the Preferred
Securities will have the right to direct the Property Trustee in accordance
with the terms of the Securities.  The
foregoing provisions of this Section 2.6(b) shall be in lieu of Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act.  Subject to the foregoing
provisions of this Section 2.6(b), upon such cure, waiver or other
elimination, any such default shall cease to exist and any Trust Enforcement
Event with respect to the Common Securities arising therefrom shall be deemed
to have been cured for every purpose of this Declaration, but no such waiver
shall extend to any subsequent or other

 

10

 

Trust
Enforcement Event with respect to the Common Securities or impair any right
consequent thereon.

 

(c)                                  A waiver of an Indenture Event of Default
by the Property Trustee at the direction of the Holders of the Preferred
Securities constitutes a waiver of the corresponding Trust Enforcement Event
with respect to the Preferred Securities under this Declaration.  The foregoing provisions of this
Section 2.6(c) shall be in lieu of Section 316(a)(1)(B) of the Trust
Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture Act is
hereby expressly excluded from this Declaration and the Securities, as
permitted by the Trust Indenture Act.

 

SECTION 2.7.  
Trust Enforcement Event; Notice.

 

(a)                                  The Property Trustee shall, within 90
days after the occurrence of a Trust Enforcement Event, transmit by mail, first
class postage prepaid, to the Holders of the Securities, notices of all
defaults with respect to the Securities actually known to a Responsible Officer
of the Property Trustee, unless such defaults have been cured before the giving
of such notice (the term “defaults” for the purposes of this
Section 2.7(a) being hereby defined to be an Indenture Event of Default,
not including any periods of grace provided for therein and irrespective of the
giving of any notice provided therein); provided that, except for a default in
the payment of principal of (or premium, if any) or interest on any of the
Debentures, the Property Trustee shall be protected in withholding such notice
if and so long as a Responsible Officer of the Property Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Securities.

 

(b)                                 The Property Trustee shall not be deemed
to have knowledge of any default except:

 

(i)                                     a default under Sections 501(1) and
501(2) of the Indenture; or

 

(ii)                                  any default as to which the Property
Trustee shall have received written notice or of which a Responsible Officer of
the Property Trustee charged with the administration of this Declaration shall
have actual knowledge.

 

ARTICLE 3

 

ORGANIZATION

 

SECTION 3.1.  
Name and Organization.

 

The Trust hereby
continued is named “Lehman Brothers Holdings Capital Trust IV” as such name may
be modified from time to time by the Regular Trustees following written notice
to the Holders of Securities, the Property Trustee and the Delaware
Trustee.  The Trust’s activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Regular Trustees.

 

11

 

SECTION 3.2.   Office.

 

The address of the
principal office of the Trust is c/o Lehman Brothers Holdings Inc., 745 Seventh
Avenue, New York, New York 10019.  On 10
Business Days’ written notice to the Holders of Securities, the Property
Trustee and the Delaware Trustee, the Regular Trustees may designate another
principal office.

 

SECTION 3.3.   Purpose.

 

The exclusive
purposes and functions of the Trust are (a) to issue Securities in exchange for
the Debentures, and (b) except as otherwise limited herein, to engage in only
those other activities necessary or incidental thereto.  The Trust shall not borrow money, issue debt
or reinvest proceeds derived from investments, pledge any of its assets or
otherwise undertake (or permit to be undertaken) any activity that would cause
the Trust to be classified as other than a grantor trust for United States
federal income tax purposes.

 

By the acceptance
of this Trust, the Trustees, the Sponsor, the Holders of the Preferred
Securities and Common Securities and the Preferred Securities Beneficial Owners
agree to treat the Trust as a grantor trust for United States federal income
tax purposes and not to take any position that is contrary to such
classification.

 

SECTION 3.4.   Authority.

 

Subject to the
limitations provided in this Declaration and to the specific duties of the Property
Trustee, the Regular Trustees shall have exclusive authority to carry out the
purposes of the Trust.  An action taken
by the Regular Trustees in accordance with their powers shall constitute the
act of and serve to bind the Trust and an action taken by the Property Trustee
on behalf of the Trust in accordance with its powers shall constitute the act
of and serve to bind the Trust.  In
dealing with the Trustees acting on behalf of the Trust, no Person shall be required
to inquire into the authority of the Trustees to bind the Trust.  Persons dealing with the Trust are entitled
to rely conclusively on the power and authority of the Trustees as set forth in
this Declaration.

 

(a)                                  Except as expressly set forth in this
Declaration and except if a meeting of the Regular Trustees is called with
respect to any matter over which the Regular Trustees have power to act, any
power of the Regular Trustees may be exercised by, or with the consent of, any
one such Regular Trustee.

 

(b)                                 Unless otherwise determined by the
Regular Trustees, and except as otherwise required by the Statutory Trust Act
or applicable law, any Regular Trustee is authorized to execute on behalf of
the Trust any documents which the Regular Trustees have the power and authority
to cause the Trust to execute pursuant to Section 3.6(b), provided, that
the registration statements referred to in Section 3.6(b)(ii), including
any amendments thereto, shall be signed by or on behalf of a majority of the
Regular Trustees; and

 

(c)                                  A Regular Trustee may, by power of
attorney consistent with applicable law, delegate to any other natural person
over the age of 21 his or her power for the purposes of signing any documents
which the Regular Trustees have power and authority to cause the Trust to
execute pursuant to Section 3.6; provided such person is a U.S. Person.

 

12

 

SECTION 3.5.  
Title to Property of the Trust.

 

Except as provided
in Section 3.8 with respect to the Debentures and the Property Account or
as otherwise provided in this Declaration, legal title to all assets of the
Trust shall be vested in the Trust.  The
Holders shall not have legal title to any part of the assets of the Trust, but
shall have an undivided beneficial ownership interest in the assets of the
Trust.

 

SECTION 3.6.  
Powers and Duties of the Regular Trustees.

 

The Regular
Trustees shall have the exclusive power, duty and authority to cause the Trust
to engage in the following activities:

 

(a)                                  to establish the terms and form of the
Preferred Securities and the Common Securities in the manner specified in
Section 7.1(a) and issue and exchange the Preferred Securities and the
Common Securities in accordance with this Declaration; provided, however, that
the Trust may issue no more than one series of Preferred Securities and no more
than one series of Common Securities; and provided further that there shall be
no interests in the Trust other than the Securities, and the issuance of
Securities shall be limited to a one-time, simultaneous issuance of both
Preferred Securities and Common Securities on the Closing Date;

 

(b)                                 in connection with the issue of the
Preferred Securities, at the direction of the Sponsor, to:

 

(i)                                     execute and file an application, prepared
by the Sponsor, to the New York Stock Exchange or any other national stock
exchange or the NASDAQ Stock Market for listing of any Preferred Securities,
the Guarantee and the Debentures;

 

(ii)                                  execute and file with the Commission one
or more registration statements on the applicable forms prepared by the
Sponsor, including any amendments thereto, pertaining to the Preferred
Securities, the Guarantee and the Debentures;

 

(iii)                               execute and file any documents prepared
by the Sponsor, or take any acts as determined by the Sponsor to be necessary,
in order to qualify or register all or part of the Preferred Securities in any
State in which the Sponsor has determined to qualify or register such Preferred
Securities for sale; and

 

(iv)                              negotiate the terms of and execute and
enter into an underwriting agreement and other related agreements providing for
the sale of the Preferred Securities;

 

(c)                                  to acquire the Debentures in exchange for
the Preferred Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to the Debentures to be held of record
in the name of the Property Trustee for the benefit of the Holders of the
Preferred Securities and the Holders of the Common Securities;

 

13

 

(d)                                 to give the Sponsor and the Property
Trustee prompt written notice of the occurrence of a Special Event; provided
that the Regular Trustees shall consult with the Sponsor and the Property
Trustee before taking or refraining from taking any action in relation to any
such Special Event;

 

(e)                                  to establish a record date with respect
to all actions to be taken hereunder that require a record date be established,
including and with respect to, for the purposes of Section 316(c) of the
Trust Indenture Act, Distributions, voting rights, redemptions and exchanges,
and to issue relevant notices to the Holders of Preferred Securities and
Holders of Common Securities as to such actions and applicable record dates;

 

(f)                                    to take all actions and perform such
duties as may be required of the Regular Trustees pursuant to the terms of this
Declaration and the Securities;

 

(g)                                 to bring or defend, pay, collect,
compromise, arbitrate, resort to legal action or otherwise adjust claims or
demands of or against the Trust (“Legal Action”), unless pursuant to
Section 3.8(e), the Property Trustee has the exclusive power to bring such
Legal Action;

 

(h)                                 subject to Section 6.10, to employ
or otherwise engage employees and agents (who may be designated as officers
with titles) and managers, contractors, advisors and consultants to conduct
only those services that the Regular Trustees have authority to conduct
directly, and to pay reasonable compensation for such services, provided such
delegates are U.S. Persons;

 

(i)                                     to cause the Trust to comply with the Trust’s
obligations under the Trust Indenture Act;

 

(j)                                     to give the certificate required by
Section 314(a)(4) of the Trust Indenture Act to the Property Trustee,
which certificate may be executed by any Regular Trustee;

 

(k)                                  to incur expenses that are necessary or
incidental to carry out any of the purposes of the Trust;

 

(l)                                     to act as, or appoint another Person to
act as, registrar and transfer agent for the Securities;

 

(m)                               to give prompt written notice to the
Holders of the Securities of any notice received from the Debenture Issuer of
its election to defer payments of interest on the Debentures by extending the
interest payment period under the Debentures as authorized by the Indenture;

 

(n)                                 to take all action that may be necessary
or appropriate for the preservation and the continuation of the Trust’s valid
existence, rights, franchises and privileges as a statutory trust under the
laws of the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of the
Preferred Securities and the Holders of the Common Securities or to enable the
Trust to effect the purposes for which the Trust was created;

 

14

 

(o)                                 to take any action, not inconsistent with
applicable law, that the Regular Trustees determine in their discretion to be
necessary or desirable in carrying out the purposes and functions of the Trust
as set out in Section 3.3 or the activities of the Trust as set out in
this Section 3.6, including, but not limited to:

 

(i)                                     causing the Trust not to be deemed to be
an Investment Company required to be registered under the Investment Company
Act;

 

(ii)                                  causing the Trust to be classified as a
grantor trust for United States federal income tax purposes; and

 

(iii)                               cooperating with the Debenture Issuer to
ensure that the Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes.

 

(p)                                 to take all action necessary to cause all
applicable tax returns and tax information reports that are required to be
filed with respect to the Trust to be duly prepared and filed by the Regular
Trustees, on behalf of the Trust; and

 

(q)                                 to execute all documents or instruments,
perform all duties and powers, and do all things for and on behalf of the Trust
in all matters necessary or incidental to the foregoing.

 

The Regular
Trustees shall exercise the powers set forth in this Section 3.6 in a
manner that is consistent with the purposes and functions of the Trust set out
in Section 3.3, and the Regular Trustees shall have no power to, and shall
not, take any action that is inconsistent with the purposes and functions of
the Trust set forth in Section 3.3.

 

Subject to this
Section 3.6, the Regular Trustees shall have none of the powers or the
authority of the Property Trustee set forth in Section 3.8.

 

Any expenses
incurred by the Regular Trustees pursuant to this Section 3.6 shall be
reimbursed by the Debenture Issuer.

 

SECTION 3.7.  
Prohibition of Actions by the Trust and the
Trustees.

 

(a)                                  The Trust shall not, and none of the
Trustees (including the Property Trustee) shall cause the Trust to, engage in
any activity other than as required or authorized by this Declaration.  In particular, the Trust shall not and none
of the Trustees (including the Property Trustee) shall cause the Trust to:

 

(i)                                     invest any proceeds received by the Trust
from holding the Debentures, but shall distribute all such proceeds to Holders
of Securities pursuant to the terms of this Declaration and of the Securities;

 

(ii)                                  acquire any assets other than as
expressly provided herein;

 

(iii)                               possess Trust property for other than a
Trust purpose;

 

15

 

(iv)                              make any loans or incur any indebtedness;

 

(v)                                 possess any power or otherwise act in
such a way as to vary the Trust assets;

 

(vi)                              possess any power or otherwise act in
such a way as to vary the terms of the Securities in any way whatsoever (except
to the extent expressly authorized in this Declaration or by the terms of the
Securities);

 

(vii)                           issue any securities or other evidences
of beneficial ownership of, or beneficial interest in, the Trust other than the
Securities;

 

(viii)                        other than as provided in this
Declaration or by the terms of the Securities, (A) direct the time, method and
place of exercising any trust or power conferred upon the Debenture Trustee
with respect to the Debentures, (B) waive any past default that is waivable
under the Indenture, (C) exercise any right to rescind or annul any declaration
that the principal of all the Debentures shall be due and payable, or (D)
consent to any amendment, modification or termination of the Indenture or the
Debentures where such consent shall be required unless the Trust shall have
received an opinion of counsel to the effect that such modification will not
cause more than an insubstantial risk that the Trust will be deemed an
Investment Company required to be registered under the Investment Company Act,
or the Trust will be classified as other than a grantor trust for United States
federal income tax purposes;

 

(ix)                                take any action inconsistent with the
status of the Trust as a grantor trust for United States federal income tax
purposes; or

 

(x)                                   revoke any action previously authorized
or approved by vote of the Holders of the Preferred Securities.

 

SECTION 3.8.  
Powers and Duties of the Property Trustee.

 

(a)                                  The legal title to the Debentures shall
be owned by and held of record in the name of the Property Trustee in trust for
the benefit of the Trust and the Holders of the Securities.  The right, title and interest of the
Property Trustee to the Debentures shall vest automatically in each Person who
may hereafter be appointed as Property Trustee in accordance with
Section 6.6.  Such vesting and
cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.

 

(b)                                 The Property Trustee shall not transfer
its right, title and interest in the Debentures to the Regular Trustees or to
the Delaware Trustee (if the Property Trustee does not also act as Delaware
Trustee).

 

(c)                                  The Property Trustee shall:

 

(i)                                     establish and maintain a segregated
non-interest bearing trust account (the “Property Account”) in the name of and
under the exclusive control

 

16

 

of the Property Trustee on behalf of the
Holders of the Securities and, upon the receipt of payments of funds made in
respect of the Debentures held by the Property Trustee, deposit such funds into
the Property Account and make payments to the Holders of the Preferred
Securities and Holders of the Common Securities from the Property Account in
accordance with Section 7.2.  Funds
in the Property Account shall be held uninvested until disbursed in accordance
with this Declaration.  The Property
Account shall be an account that is maintained with a banking institution the
rating on whose long-term unsecured indebtedness is at least equal to the rating
assigned to the Preferred Securities by a “nationally recognized statistical
rating organization”, within the meaning of Rule 436(g)(2) under the Securities
Act;

 

(ii)                                  engage in such ministerial activities as
shall be necessary or appropriate to effect the redemption of the Preferred
Securities and the Common Securities to the extent the Debentures are redeemed
or mature; and

 

(iii)                               upon written notice of distribution
issued by the Regular Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as so directed and as shall be necessary
or appropriate to effect the distribution of the Debentures to Holders of
Securities upon the occurrence of a Special Event.

 

(d)                                 The Property Trustee shall take all
actions and perform such duties as may be specifically required of the Property
Trustee pursuant to the terms of this Declaration and the Securities.

 

(e)                                  The Property Trustee shall take any Legal
Action which arises out of or in connection with a Trust Enforcement Event of
which a Responsible Officer of the Property Trustee has actual knowledge or the
Property Trustee’s duties and obligations under this Declaration or the Trust
Indenture Act; provided however, that if a Trust Enforcement Event has occurred
and is continuing and such event is attributable to the failure of the
Debenture Issuer to pay interest, principal or other required payments on the
Debentures on the date such interest, principal or other required payments are
otherwise payable (or in the case of redemption, on the redemption date), then
a Holder of Preferred Securities may directly institute a proceeding against
the Debenture Issuer for enforcement of payment to such Holder of the principal
of or interest on Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder (a “Direct
Action”) on or after the respective due date specified in the Debentures.

 

(f)                                    The Property Trustee shall continue to
serve as a Trustee until either:

 

(i)                                     the Trust has been completely liquidated
and the proceeds of the liquidation distributed to the Holders of Securities
pursuant to the terms of the Securities; or

 

(ii)                                  a Successor Property Trustee has been
appointed and has accepted that appointment in accordance with
Section 6.6.

 

17

 

(g)                                 The Property Trustee shall have the legal
power to exercise all of the rights, powers and privileges of a holder of
Debentures under the Indenture and, if a Trust Enforcement Event actually known
to a Responsible Officer of the Property Trustee occurs and is continuing, the
Property Trustee shall, for the benefit of Holders of the Securities, enforce
its rights as holder of the Debentures subject to the rights of the Holders
pursuant to the terms of such Securities.

 

(h)                                 The Property Trustee may authorize one or
more Persons (each, a “Paying Agent”) to pay Distributions, redemption payments
or liquidation payments on behalf of the Trust with respect to all Securities
and any such Paying Agent shall comply with Section 317(b) of the Trust
Indenture Act.  Any Paying Agent may be
removed by the Property Trustee at any time and a successor Paying Agent or
additional Paying Agents may be appointed at any time by the Property Trustee.

 

(i)                                     Subject to this Section 3.8, the
Property Trustee shall have none of the duties, liabilities, powers or the
authority of the Regular Trustees set forth in Section 3.6.

 

The Property
Trustee shall exercise the powers set forth in this Section 3.8 in a
manner that is consistent with the purposes and functions of the Trust set out
in Section 3.3, and the Property Trustee shall have no power to, and shall
not, take any action that is inconsistent with the purposes and functions of
the Trust set out in Section 3.3.

 

SECTION 3.9.  
Certain Duties and Responsibilities of the
Property Trustee.

 

(a)                                  The Property Trustee, before the
occurrence of any Trust Enforcement Event and after the curing of all Trust
Enforcement Events that may have occurred, shall undertake to perform only such
duties as are specifically set forth in this Declaration and no implied
covenants shall be read into this Declaration against the Property
Trustee.  In case a Trust Enforcement
Event has occurred (that has not been cured or waived pursuant to
Section 2.6) of which a Responsible Officer of the Property Trustee has
actual knowledge, the Property Trustee shall exercise such of the rights and
powers vested in it by this Declaration, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.

 

(b)                                 No provision of this Declaration shall be
construed to relieve the Property Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:

 

(i)                                     prior to the occurrence of a Trust
Enforcement Event and after the curing or waiving of all such Trust Enforcement
Events that may have occurred:

 

(A)                              the duties and obligations of the
Property Trustee shall be determined solely by the express provisions of this
Declaration and the Property Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in
this Declaration, and no

 

18

 

implied covenants or obligations shall be
read into this Declaration against the Property Trustee; and

 

(B)                                in the absence of bad faith on the part
of the Property Trustee, the Property Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Property Trustee and
conforming to the requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are specifically required
to be furnished to the Property Trustee, the Property Trustee shall be under a
duty to examine the same to determine whether or not they conform to the
requirements of this Declaration;

 

(ii)                                  the Property Trustee shall not be liable
for any error of judgment made in good faith by a Responsible Officer of the
Property Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;

 

(iii)                               the Property Trustee shall not be liable
with respect to any action taken or omitted to be taken by it without
negligence, in good faith in accordance with the direction of the Holders of
not less than a Majority in Liquidation Amount of the Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;

 

(iv)                              no provision of this Declaration shall
require the Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if it shall have reasonable grounds
for believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Declaration or indemnity reasonably
satisfactory to the Property Trustee against such risk or liability is not
reasonably assured to it;

 

(v)                                 the Property Trustee’s sole duty with
respect to the custody, safe-keeping and physical preservation of the
Debentures and the Property Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability afforded to
the Property Trustee under this Declaration and the Trust Indenture Act;

 

(vi)                              the Property Trustee shall have no duty
or liability for or with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;

 

19

 

(vii)                           the Property Trustee shall not be liable
for any interest on any money received by it except as it may otherwise agree
with the Sponsor.  Money held by the
Property Trustee need not be segregated from other funds held by it except in
relation to the Property Account maintained by the Property Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law; and

 

(viii)                        the Property Trustee shall not be
responsible for monitoring the compliance by the Regular Trustees or the
Sponsor with their respective duties under this Declaration, nor shall the
Property Trustee be liable for any default or misconduct of the Regular
Trustees or the Sponsor.

 

SECTION 3.10.  
Certain Rights of Property Trustee.

 

(a)                                  Subject to the provisions of
Section 3.9:

 

(i)                                     the Property Trustee may conclusively
rely and shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;

 

(ii)                                  any direction or act of the Sponsor or
the Regular Trustees contemplated by this Declaration shall be sufficiently
evidenced by an Officers’ Certificate;

 

(iii)                               whenever in the administration of this
Declaration, the Property Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers’ Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor or the Regular Trustees;

 

(iv)                              the Property Trustee shall have no duty
to see to any recording, filing or registration of any instrument (including
any financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;

 

(v)                                 the Property Trustee may consult with
counsel of its choice or other experts and the advice or opinion of such
counsel and experts with respect to legal matters or advice within the scope of
such experts’ area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with such advice or opinion, such counsel may
be counsel to the Sponsor or any of its Affiliates, and may include any of its
employees.  The Property Trustee shall
have

 

20

 

the right at any time to seek instructions
concerning the administration of this Declaration from any court of competent
jurisdiction;

 

(vi)                              the Property Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any Holder, unless such Holder shall
have provided to the Property Trustee security and indemnity, reasonably
satisfactory to the Property Trustee, against the costs, expenses (including attorneys’
fees and expenses and the expenses of the Property Trustee’s agents, nominees
or custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Property Trustee; provided that, nothing contained in this
Section 3.10(a) shall be taken to relieve the Property Trustee, upon the
occurrence of an Trust Enforcement Event, of its obligation to exercise the
rights and powers vested in it by this Declaration;

 

(vii)                           the Property Trustee shall not be bound
to make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit;

 

(viii)                        the Property Trustee may execute any of
the trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, custodians, nominees or attorneys and the Property
Trustee shall not be responsible for any misconduct or negligence on the part
of any agent or attorney appointed with due care by it hereunder; provided that
such agent, custodian, nominee or attorney is a U.S. person as defined in
Section 7701(a)(30) of the Code;

 

(ix)                                any action taken by the Property Trustee
or its agents hereunder shall bind the Trust and the Holders of the Securities,
and the signature of the Property Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third party shall be
required to inquire as to the authority of the Property Trustee to so act or as
to its compliance with any of the terms and provisions of this Declaration,
both of which shall be conclusively evidenced by the Property Trustee’s or its
agent’s taking such action;

 

(x)                                   whenever in the administration of this
Declaration the Property Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any other
action hereunder, the Property Trustee (i) may request instructions from the
Holders of the Securities which instructions may only be given by the Holders
of the same proportion in liquidation amount of the Securities as would be
entitled to direct the Property Trustee under the terms of the Securities in
respect of such remedy, right or action, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions

 

21

 

are received, and (iii)  shall be protected in conclusively relying
on or acting in or accordance with such instructions;

 

(xi)                                except as otherwise expressly provided by
this Declaration, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this Declaration;

 

(xii)                             the Property Trustee shall not be liable
for any action taken, suffered or omitted to be taken by it without negligence,
in good faith and reasonably believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Declaration;

 

(xiii)                          without prejudice to any other rights
available to the Property Trustee under applicable law, when the Property
Trustee incurs expenses or renders services in connection with a bankruptcy ,
such expenses (including the fees and expenses of its counsel) and the
compensation for such services are intended to constitute expenses of
administration under any bankruptcy law or law relating to creditors rights
generally;

 

(xiv)                         the Property Trustee shall not be charged
with knowledge of a Trust Enforcement Event unless a Responsible Officer of the
Property Trustee obtains actual knowledge of such event or the Property Trustee
receives written notice of such event from Holders holding more than a Majority
in Liquidation Amount of the Preferred Securities; and

 

(xv)                            any action taken by the Property Trustee
or its agents hereunder shall bind the Trust and the Holders of such
Securities, and the signature of the Property Trustee or one of its agents
shall by itself be sufficient and effective to perform any such action and no
third party shall be required to inquire as to the authority of the Property
Trustee to so act or as to its compliance with any of the terms and provisions
of this Declaration, both of which shall be conclusively evidenced by the
Property Trustee’s or its agent’s taking such action.

 

(b)                                 No provision of this Declaration shall be
deemed to impose any duty or obligation on the Property Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it, in any jurisdiction in which it shall be illegal, or in which
the Property Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts, or to exercise any such right,
power, duty or obligation.  No
permissive power or authority available to the Property Trustee shall be construed
to be a duty.

 

SECTION 3.11.  
Delaware Trustee.

 

Notwithstanding any
other provision of this Declaration other than Section 6.2, the Delaware
Trustee shall not be entitled to exercise any powers, nor shall the Delaware
Trustee have any of the duties and responsibilities of the Regular Trustees or
the Property Trustee described in this Declaration.  Except as set forth in Section 6.2, the Delaware Trustee
shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the

 

22

 

Statutory Trust
Act.  In the event the Delaware Trustee
shall at any time be required to take any action or perform any duty hereunder
with respect to the Trust, the Delaware Trustee shall be entitled to all of the
same rights as the Property Trustee listed in Section 3.9(b) and
Section 3.10.

 

SECTION 3.12.  
Execution of Documents.

 

Unless otherwise
determined by the Regular Trustees, and except as otherwise required by the
Statutory Trust Act, any Regular Trustee is authorized to execute on behalf of
the Trust any documents that the Regular Trustees have the power and authority
to execute pursuant to Section 3.6; provided that, the registration
statements referred to in Section 3.6(b)(ii), including any amendments
thereto, shall be signed by or on behalf of a majority of the Regular Trustees.

 

SECTION 3.13.  
Not Responsible for Recitals or Issuance of
Securities.

 

The recitals
contained in this Declaration and the Securities shall be taken as the
statements of the Sponsor, and the Trustees do not assume any responsibility
for their correctness.  The Trustees
make no representations as to the value or condition of the property of the
Trust or any part thereof.  The Trustees
make no representations as to the validity or sufficiency of this Declaration,
the Securities, the Debentures or the Indenture.

 

SECTION 3.14.  
Duration of Trust.

 

The Trust shall
exist until terminated pursuant to the provisions of Article 8 hereof.

 

SECTION 3.15.   Mergers.

 

(a)                                  The Trust may not consolidate,
amalgamate, merge with or into, or be replaced by, or convey, transfer or lease
its properties and assets substantially as an entirety to any corporation or
other body, except as described in Section 3.15(b) and (c).

 

(b)                                 The Trust may, at the request of the
Sponsor and with the consent of the Regular Trustees or, if there are more than
two, a majority of the Regular Trustees and without the consent of the Holders
of the Securities, the Delaware Trustee or the Property Trustee, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties substantially as an entirety to a trust organized as such under
the laws of any State; provided, that:

 

(i)                                     if the Trust is not the successor, such
successor entity (the “Successor Entity”) either:

 

(A)                              expressly assumes all of the obligations
of the Trust with respect to the Securities; or

 

(B)                                substitutes for the Preferred Securities
other securities having substantially the same terms as the Preferred
Securities (the “Successor Securities”) so long as the

 

23

 

Successor Securities rank the same as the
Preferred Securities rank in priority with respect to Distributions and
payments upon liquidation, redemption and otherwise;

 

(ii)                                  the Debenture Issuer expressly appoints a
trustee of such Successor Entity that possesses the same powers and duties as
the Property Trustee as the holder of the Debentures;

 

(iii)                               the Preferred Securities or any Successor
Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or with any other
or organization on which the Preferred Securities are then listed or quoted;

 

(iv)                              such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Preferred
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization;

 

(v)                                 such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the Holders of the Preferred Securities
(including any Successor Securities) in any material respect;

 

(vi)                              such Successor Entity has a purpose
identical to that of the Trust;

 

(vii)                           prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease the Sponsor has
received an opinion of independent counsel to the Trust experienced in such
matters to the effect that:

 

(A)                              such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the Holders of the Preferred Securities
(including any Successor Securities) in any material respect;

 

(B)                                following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease neither the Trust nor
the Successor Entity will be required to register as an Investment Company; and

 

(C)                                following such merger, consolidation,
amalgamation or replacement, the Trust (or the Successor Entity) will continue
to be classified as a grantor trust for United States federal income tax
purposes;

 

(viii)                        the Sponsor or any permitted successor or
assignee owns all of the Common Securities and guarantees the obligations of
such Successor Entity under

 

24

 

the Successor Securities at least to the
extent provided by the Securities Guarantee; and

 

(ix)                                such Successor Entity expressly assumes all
of the obligations of the Trust with respect to the Trustees.

 

(c)                                  Notwithstanding Section 3.15(b), the
Trust shall not, except with the consent of Holders of 100% in aggregate
liquidation amount of the Securities, consolidate, amalgamate, merge with or
into, or be replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to, any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it, if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or Successor Entity to be classified as other than a
grantor trust for United States federal income tax purposes and each Holder of
the Securities not to be treated as owning an undivided interest in the
Debentures.

 

SECTION 3.16.  
Property Trustee May File Proofs of
Claim.

 

In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial proceeding
relative to the Trust or any other obligor upon the Securities or the property
of the Trust or of such other obligor or their creditors, the Property Trustee
(irrespective of whether any Distributions on the Securities shall then be due
and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Property Trustee shall have made any demand on the
Trust for the payment of any past due Distributions) shall be entitled and
empowered, to the fullest extent permitted by law, by intervention in such
proceeding or otherwise:

 

(a)                                  to file and prove a claim for the whole
amount of any Distributions owing and unpaid in respect of the Securities (or,
if the Securities are original issue discount Securities, such portion of the
liquidation amount as may be specified in the terms of such Securities) and to
file such other papers or documents as may be necessary or advisable in order
to have the claims of the Property Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Property
Trustee, its and counsel) and of the Holders allowed in such judicial
proceeding, and

 

(b)                                 to collect and receive any moneys or
other property payable or deliverable on any such claims and to distribute the
same;

 

and
any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.

 

Nothing herein
contained shall be deemed to authorize the Property Trustee to authorize or
consent to or accept or adopt on behalf of any Holder any plan of
reorganization,

 

25

 

arrangement
adjustment or compensation affecting the Securities or the rights of any Holder
thereof or to authorize the Property Trustee to vote in respect of the claim of
any Holder in any such proceeding.

 

ARTICLE 4

 

SPONSOR

 

SECTION 4.1.  
Responsibilities of the Sponsor.

 

In connection with
the issue and sale of the Preferred Securities, the Sponsor shall have the
exclusive right and responsibility to engage in the following activities:

 

(a)                                  to prepare for filing by the Trust with
the Commission one or more registration statements on the applicable forms,
including any amendments thereto, pertaining to the Preferred Securities, the
Guarantee and the Debentures;

 

(b)                                 to determine the States in which to take
appropriate action to qualify or register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions which must be
taken by the Trust, and advise the Trust of actions it must take, and prepare
for execution and filing any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States;

 

(c)                                  to prepare for filing by the Trust an
application to the New York Stock Exchange or any other national stock exchange
or the NASDAQ Stock Market for listing upon notice of issuance of any Preferred
Securities, the Guarantee and the Debentures; and

 

(d)                                 to negotiate the terms of an underwriting
agreement and other related agreements providing for the sale of the Preferred
Securities.

 

SECTION 4.2.  
Indemnification and Fees and Expenses of the
Trustees.

 

(a)                                  The Sponsor, in its capacity as Debenture
Issuer, agrees to indemnify the Property Trustee and the Delaware Trustee for,
and to hold each of them harmless against, any loss, liability or expense
incurred without negligence or bad faith on the part of the Property Trustee or
the Delaware Trustee, as the case may be, arising out of or in connection with
the acceptance or administration of the trust or trusts hereunder, including
the costs and expenses of defending either of them against any claim or
liability in connection with the exercise or performance of any of their
respective powers or duties hereunder; the provisions of this Section 4.2
shall survive the resignation or removal of the Delaware Trustee or the
Property Trustee or the termination of this Declaration.

 

(b)                                 The Sponsor, in its capacity as Debenture
Issuer, has agreed to, and it shall promptly pay any taxes, duties or
governmental charges of whatsoever nature imposed on the Trust by the United
States or any other taxing authority.

 

26

 

(c)                                  The Sponsor, in its capacity as Debenture
Issuer, has agreed to pay to the Trust, and reimburse the Trust for, the full
amount of any costs, expenses or liabilities of the Trust, other than
obligations of the Trust to pay the holders of any Preferred Securities or
other similar interests in the Trust the amounts due such Holders pursuant to
the terms of the Preferred Securities or such other similar interests, as the
case may be. Such payment obligation includes any such costs, expenses or
liabilities of the Trust that are required by applicable law to be satisfied in
connection with a termination of such Trust.

 

ARTICLE 5

 

TRUST COMMON
SECURITIES HOLDER

 

SECTION 5.1.  
Debenture Issuer’s Receipt of Common
Securities.

 

On the Closing
Date, the Debenture Issuer will receive all of the Common Securities and all of
the Preferred Securities issued by the Trust in exchange for the Debentures
issued to the Trust by the Debenture Issuer. 
The Common Securities will be issued in an amount equal to at least 3%
of the capital of the Trust.

 

The aggregate
stated liquidation amount of Common Securities outstanding at any time shall
not be less than 3% of the capital of the Trust.

 

SECTION 5.2.  
Covenants of the Common Securities Holder.

 

For so long as the
Preferred Securities remain outstanding, the Common Securities Holder will
covenant (i) to maintain, directly or indirectly, 100% ownership of the Common
Securities, (ii) to cause the Trust to remain a statutory trust and not to
voluntarily dissolve, wind up, liquidate or be terminated, except as permitted
by this Declaration, (iii) to use its commercially reasonable efforts to ensure
that the Trust will not be an investment company for purposes of the Investment
Company Act, and (iv) to take no action which would be reasonably likely to
cause the Trust to be classified as other than a grantor trust for United
States federal income tax purposes.

 

ARTICLE 6

 

TRUSTEES

 

SECTION 6.1.  
Number of Trustees.

 

The number of
Trustees initially shall be five, and:

 

(a)                                  at any time before the issuance of any
Securities, the Sponsor may, by written instrument, increase or decrease the
number of Trustees;

 

(b)                                 after the issuance of any Securities, the
number of Trustees may be increased or decreased by vote of the Holders of a
Majority in Liquidation Amount of the

 

27

 

Common Securities
voting as a class at a meeting of the Holders of the Common Securities or by
written consent in lieu of such meeting; provided that the number of Trustees
shall be at least three; and provided further that all Trustees shall be U.S.
Persons and (1) the Delaware Trustee shall be (i) in the case of a natural
person, a person who is a resident of the State of Delaware or (ii) if not a
natural person, an entity which has its principal place of business in the
State of Delaware and otherwise meets the requirements of applicable law; (2) at
least one Regular Trustee is an employee or officer of, or is affiliated with,
the Sponsor; and (3) one Trustee shall be the Property Trustee for so long as
this Declaration is required to qualify as an indenture under the Trust
Indenture Act, and such Trustee may also serve as Delaware Trustee if it meets
the applicable requirements; and

 

(c)                                  at all times, either or both of the
Property Trustee or the Delaware Trustee must be (i) a bank as defined in
Section 581 of the Code or (ii) a U.S. government-owned agency or U.S.
government sponsored enterprise.

 

SECTION 6.2.  
Delaware Trustee; Eligibility.

 

If required by the
Statutory Trust Act, one Trustee (which may be the Property Trustee) (the
“Delaware Trustee”) shall be either:

 

(a)                                  a natural person who is a resident of the
State of Delaware; or

 

(b)                                 if not a natural person, an entity which
has its principal place of business in the State of Delaware, and otherwise
meets the requirements of applicable law,

 

provided
that, if the Property Trustee has its principal place of business in the State
of Delaware and otherwise meets the requirements of applicable law, then the
Property Trustee shall also be the Delaware Trustee and Section 3.11 shall
have no application.

 

SECTION 6.3.  
Property Trustee; Eligibility.

 

(a)                                  There shall at all times be one Trustee
(which may be the Delaware Trustee) which shall act as Property Trustee which
shall:

 

(i)                                     not be an Affiliate of the Sponsor; and

 

(ii)                                  be a corporation organized and doing
business under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a corporation or other
Person permitted by the Commission to act as an institutional trustee under the
Trust Indenture Act, authorized under such laws to exercise corporate trust
owners, having a combined capital and surplus of at least 50 million U.S.
dollars ($50,000,000), and subject to supervision or examination by federal,
State, Territorial or District of Columbia authority.  If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes of this
Section 6.3(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published.

 

28

 

(b)                                 If at any time the Property Trustee shall
cease to be eligible to so act under Section 6.3(a), the Property Trustee
shall immediately resign in the manner and with the effect set forth in
Section 6.6(c).

 

(c)                                  If the Property Trustee has or shall
acquire any “conflicting interest” within the meaning of Section 310(b) of
the Trust Indenture Act, the Property Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in Section 310(b) of the
Trust Indenture Act) shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.

 

(d)                                 The Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.

 

(e)                                  Nothing herein shall prevent the Trustee
from filing with the Commission the application referred to in the penultimate
paragraph of Section 310(b) of the Trust Indenture Act.  In determining whether the Trustee has a
conflicting interest as defined in Section 310(b) of the Trust Indenture
Act with respect to the Securities or the Guarantees in respect of such
Securities, there shall be excluded (i) all series of securities issued or
issuable under the Indenture, (ii) (A) the Guarantee Agreement, dated as of
January 26, 1999, executed and delivered by Lehman Brothers Holdings Inc.
and The Chase Manhattan Bank for the benefit of the holders identified therein
of Lehman Brothers Capital Trust I, (B) the Guarantee Agreement, dated as of
April 20, 1999, executed and delivered by Lehman Brothers Holdings Inc.
and The Chase Manhattan Bank for the benefit of the holders identified therein
of Lehman Brothers Capital Trust II, (C) the Guarantee Agreement, dated as of
March 17, 2003, executed and delivered by Lehman Brothers Holdings Inc.
and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank) for the
benefit of the holders identified therein of Lehman Brothers Capital Trust III
and (D) the Guarantee Agreement, dated as of October 31, 2003, executed
and delivered by Lehman Brothers Holdings Inc. and JPMorgan Chase Bank
(formerly known as The Chase Manhattan Bank) for the benefit of the holders
identified herein of Lehman Brothers Capital Trust IV and (iii) (A) the Amended
and Restated Declaration of Trust, dated as of January 26, 1999, by and
among Lehman Brothers Holdings Inc., the Regular Trustees named therein, The
Chase Manhattan Bank, as initial Property Trustee and Chase Manhattan Bank USA,
National Association, as initial Delaware Trustee, (B) the Amended and Restated
Declaration of Trust, dated as of April 20, 1999, by and among Lehman
Brothers Holdings Inc., the Regular Trustees named therein, The Chase Manhattan
Bank, as initial Property Trustee and Chase Manhattan Bank USA, National
Association, as initial Delaware Trustee, (C) the Amended and Restated
Declaration of Trust, dated as of March 17, 2003, by and among Lehman
Brothers Holdings Inc., the Regular Trustees named therein, JPMorgan Chase Bank
(formerly known as The Chase Manhattan Bank), as initial Property Trustee and
Chase Manhattan Bank USA, National Association, as initial Delaware Trustee and
(D) this Agreement.

 

29

 

SECTION 6.4.   Qualifications
of Regular Trustees and Delaware Trustee Generally.

 

Each Regular
Trustee and the Delaware Trustee (unless the Property Trustee also acts as
Delaware Trustee) shall be either a natural person who is at least 21 years of
age or a legal entity that shall act through one or more Authorized Officers.

 

SECTION 6.5.   Initial
Regular Trustees.

 

The initial Regular
Trustees shall be:

 

Barrett DiPaolo,
Jeffrey Welikson and Oliver Budde, the business address of all of whom is c/o
Lehman Brothers Holdings Inc., 745 Seventh Avenue, New York, New York 10019.

 

SECTION 6.6.   Appointment,
Removal and Resignation of Trustees.

 

(a)                                  Subject to Section 6.6(b), Trustees
may be appointed or removed without cause at any time:

 

(i)                                     until the issuance of any Securities, by
written instrument executed by the Sponsor;

 

(ii)                                  after the issuance of any Securities, by
vote of the Holders of a Majority in Liquidation Amount of the Common
Securities voting as a class at a meeting of the Holders of the Common
Securities; and

 

(iii)                               after the issuance of the Preferred
Securities and the occurrence of  an
Indenture Event of Default, by vote of the Holders of a majority in Liquidation
Amount of the Preferred Securities.

 

(b)                                 The Trustee that acts as Property Trustee
shall not be removed in accordance with Section 6.6(a) until a successor
Trustee possessing the qualifications to act as Property Trustee under
Section 6.3(a) (a “Successor Property Trustee”) has been appointed and has
accepted such appointment by written instrument executed by such Successor
Property Trustee and delivered to the Regular Trustees and the Sponsor.  The Trustee that acts as Delaware Trustee shall
not be removed in accordance with Section 6.6(a) until a successor Trustee
possessing the qualifications to act as Delaware Trustee under Sections 6.2 and
6.4 (a “Successor Delaware Trustee”) has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Regular Trustees and the Sponsor.

 

(c)                                  A Trustee appointed to office shall hold
office until his or its successor shall have been appointed, until his death or
its dissolution or until his or its removal or resignation.  Any Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing signed by
the Trustee and delivered to the Sponsor and the Trust, which resignation shall
take effect upon such delivery or upon such later date as is specified therein;
provided, however, that:

 

(i)                                     No such resignation of the Trustee that
acts as the Property Trustee shall be effective:

 

30

 

(A)                              until a Successor Property Trustee has
been appointed and has accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the Sponsor and the
resigning Property Trustee; or

 

(B)                                until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to the holders of
the Securities; and

 

(ii)                                  no such resignation of the Trustee that
acts as the Delaware Trustee shall be effective until a Successor Delaware
Trustee has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the Trust, the
Sponsor and the resigning Delaware Trustee.

 

(d)                                 The Holders of the Common Securities
shall use their best efforts to promptly appoint a Successor Delaware Trustee
or Successor Property Trustee, as the case may be, if the Property Trustee or
the Delaware Trustee delivers an instrument of resignation in accordance with
this Section 6.6.

 

(e)                                  If no Successor Property Trustee or
Successor Delaware Trustee, as the case may be, shall have been appointed and
accepted appointment as provided in this Section 6.6 within 60 days after
delivery to the Sponsor and the Trust of an instrument of resignation or
removal, the resigning or removed Property Trustee or Delaware Trustee, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee, as applicable.  Such court may thereupon, after prescribing
such notice, if any, as it may deem proper, appoint a Successor Property
Trustee or Successor Delaware Trustee, as the case may be.

 

(f)                                    No Property Trustee or Delaware Trustee
shall be liable for the acts or omissions to act of any Successor Property
Trustee or Successor Delaware Trustee, as the case may be.

 

SECTION 6.7.   Vacancies
among Trustees.

 

If a Trustee ceases
to hold office for any reason and the number of Trustees is not reduced
pursuant to Section 6.1, or if the number of Trustees is increased
pursuant to Section 6.1, a vacancy shall occur.  A resolution certifying the existence of such vacancy by the
Regular Trustees or, if there are more than two, a majority of the Regular
Trustees shall be conclusive evidence of the existence of such vacancy.  The vacancy shall be filled with a Trustee
appointed in accordance with Section 6.6.

 

SECTION 6.8.   Effect
of Vacancies.

 

The death,
resignation, retirement, removal, bankruptcy, dissolution, liquidation,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust.  Whenever a vacancy
in the number of Regular Trustees shall occur, until such vacancy is filled by
the appointment of a Regular Trustee in accordance with Section 6.6, the
Regular

 

31

 

Trustees in office, regardless
of their number, shall have all the powers granted to the Regular Trustees and
shall discharge all the duties imposed upon the Regular Trustees by this
Declaration.

 

SECTION 6.9.   Meetings.

 

If there is more
than one Regular Trustee, meetings of the Regular Trustees shall be held from
time to time upon the call of any Regular Trustee.  Regular meetings of the Regular Trustees may be held at a time
and place fixed by resolution of the Regular Trustees.  Notice of any in-person meetings of the
Regular Trustees shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than
48 hours before such meeting.  Notice of
any telephonic meetings of the Regular Trustees shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before a meeting.  Notices shall contain a brief statement of
the time, place and anticipated purposes of the meeting.  The presence (whether in person or by
telephone) of a Regular Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Regular Trustee attends a meeting for the
express purpose of objecting to the transaction of any activity on the ground
that the meeting has not been lawfully called or convened.  Unless provided otherwise in this
Declaration, any action of the Regular Trustees may be taken at a meeting by
vote of a majority of the Regular Trustees present (whether in person or by
telephone) and eligible to vote with respect to such matter, provided that a
Quorum is present, or without a meeting by the unanimous written consent of the
Regular Trustees.  In the event there is
only one Regular Trustee, any and all action of such Regular Trustee shall be
evidenced by a written consent of such Regular Trustee.

 

SECTION 6.10.   Delegation
of Power.

 

(a)                                  Any Regular Trustee may, by power of
attorney consistent with applicable law, delegate to any natural person over
the age of 21 his, her or its power for the purpose of executing any documents
contemplated in Section 3.6 or making any governmental filing; provided
that such person is a U.S. Person.

 

(b)                                 The Regular Trustees shall have power to
delegate from time to time to such of their number or to officers of the Trust
the doing of such things and the execution of such instruments either in the
name of the Trust or the names of the Regular Trustees or otherwise as the
Regular Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as set
forth herein and provided that such delegate is a U.S. Person.

 

SECTION 6.11.   Merger,
Conversion, Consolidation or Succession to Business.

 

Any corporation
into which the Property Trustee, the Delaware Trustee or any Regular Trustee
that is not a natural person may be merged or converted or with such Trustee
may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which such Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of such
Trustee shall be the successor of such Trustee hereunder,

 

32

 

provided such corporation shall
be otherwise qualified and eligible under this Article, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto.

 

ARTICLE 7

 

TERMS OF
SECURITIES

 

SECTION 7.1.   General
Provisions Regarding Securities.

 

(a)                                  The Regular Trustees shall on behalf of
the Trust issue one class of preferred securities representing undivided
beneficial ownership interests in the assets of the Trust and one class of
common securities representing undivided beneficial ownership interests in the
assets of the Trust.

 

(i)                                     Preferred Securities.  The Preferred Securities of the Trust
initially have an aggregate liquidation amount with respect to the assets of
the Trust of three hundred million dollars ($300,000,000) and a liquidation
amount with respect to the assets of the Trust of $25 per Preferred
Security.  The Preferred Securities are
hereby designated for identification purposes only as 6.375% Preferred
Securities, Series L (the “Preferred Securities”).  The Trust may, without the consent of the holders of the
Preferred Securities, create and issue additional Preferred Securities ranking
equally with the Preferred Securities and otherwise similar in all respects
except for the issue date, issue price and the payment of distribution accruing
prior to the issue date of such additional Preferred Securities.  Such further Preferred Securities, if any,
would be consolidated and form a single series with the Preferred Securities
provided that such issuance will not cause the Trust to be other than a grantor
trust.  No additional Preferred
Securities can be issued if an event of default has occurred with respect to
the Debentures.  The Preferred Security
Certificates evidencing the Preferred Securities shall be substantially in the
form of Exhibit A to this Declaration, with such changes and additions thereto
or deletions therefrom as may be required by ordinary usage, custom or practice
or to conform to the rules of any stock exchange on which the Preferred
Securities are listed or quoted.

 

(ii)                                  Common Securities.  The Common Securities of the Trust have an
aggregate liquidation amount with respect to the assets of the Trust of nine
million two hundred seventy-eight thousand three hundred seventy-five dollars
($9,278,375) and a liquidation amount with respect to the assets of the Trust
of $25 per Common Security.  The Common
Securities are hereby designated for identification purposes only as 6.375%
Common Securities (the “Common Securities” and, together with the Preferred
Securities, the “Securities”).  The
Common Security Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit B to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice.

 

33

 

(b)                                 Payment of Distributions on, and payment
of the Redemption Price upon a redemption of, the Preferred Securities and the
Common Securities, as applicable, shall be made Pro Rata based on the
liquidation amount of such Preferred Securities and Common Securities;
provided, however, that if on any date on which amounts payable on distribution
or redemption an Indenture Event of Default shall have occurred and be continuing,
no payment of any Distribution on, or Redemption Price of, any of the Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of such Common Securities, shall be made unless payment in
full in cash of all accumulated and unpaid Distributions on all of the
outstanding Preferred Securities for all Distribution periods terminating on or
prior thereto, or, in the case of amounts payable on redemption, the full
amount of the Redemption Price for all of the outstanding Preferred Securities
then called for redemption, shall have been made or provided for, and all funds
available to the Property Trustee shall first be applied to the payment in full
in cash of all Distributions on, or the Redemption Price of, the Preferred
Securities then due and payable.  The
Trust shall issue no securities or other interests in the assets of the Trust
other than the Preferred Securities and the Common Securities.

 

(c)                                  The Certificates shall be signed on
behalf of the Trust by a Regular Trustee. 
Such signature shall be the manual or facsimile signature of any present
or any future Regular Trustee.  In case
a Regular Trustee of the Trust who shall have signed any of the Certificates
shall cease to be such Regular Trustee before the Certificates so signed shall
be delivered by the Trust, such Certificates nevertheless may be delivered as
though the person who signed such Certificates had not ceased to be such
Regular Trustee; and any Certificate may be signed on behalf of the Trust by such
persons who, at the actual date of execution of such Certificate, shall be the
Regular Trustees of the Trust, although at the date of the execution and
delivery of the Declaration any such person was not such a Regular Trustee.  Certificates shall be printed, lithographed
or engraved or may be produced in any other manner as is reasonably acceptable
to the Regular Trustees, as evidenced by their execution thereof, and may have
such letters, numbers or other marks of identification or designation and such
legends or endorsements as the Regular Trustees may deem appropriate, or as may
be required to comply with any law or with any rule or regulation of any stock
exchange on which Securities may be listed, or to conform to usage.

 

A Certificate
representing Preferred Securities shall not be valid until authenticated by the
manual signature of an authorized officer of the Property Trustee.  Such signature shall be conclusive evidence
that such Certificate has been authenticated under this Declaration.

 

Upon a written
order of the Trust signed by one Regular Trustee, the Property Trustee shall
authenticate the Certificates representing Preferred Securities for original
issue.  The aggregate number of
Preferred Securities outstanding at any time shall not exceed the liquidation
amount set forth in Section 7.1(a)(i).

 

The Property
Trustee may appoint an authenticating agent acceptable to the Trust to
authenticate Certificates; provided such authenticating agent is a U.S.
Person.  An authenticating agent may
authenticate Certificates whenever the Property Trustee may do so.  Each reference in this Declaration to
authentication by the Property Trustee includes

 

34

 

authentication by such
agent.  An authenticating agent has the
same rights as the Property Trustee to deal with the Sponsor or an Affiliate of
the Sponsor.

 

(d)                                 The consideration received by the Trust
for the issuance of the Securities shall constitute a contribution to the
capital of the Trust and shall not constitute a loan to the Trust.

 

(e)                                  Upon issuance of the Securities as
provided in this Declaration, the Securities so issued shall be deemed to be
validly issued, fully paid and non-assessable beneficial ownership interests in
the assets of the Trust.

 

(f)                                    Every Person, by virtue of having become
a Holder or a Preferred Security Beneficial Owner in accordance with the terms
of this Declaration, shall be deemed to have expressly assented and agreed to
the terms of, and shall be bound by, this Declaration and the terms of the
Securities, the Guarantee, the Indenture and the Debentures.

 

(g)                                 The holders of the Securities shall have
no preemptive rights.

 

SECTION 7.2.   Distributions.

 

(a)                                  As owners of undivided beneficial
ownership interests in the Debentures, holders of Securities shall be entitled
to receive cumulative cash Distributions at the rate per annum of 6.375% of the
stated liquidation amount of $25 per Security. 
Pursuant to the Indenture, interest on the Debentures, and as a result,
distributions on the Securities payable for any period shall be computed on the
basis of a 360-day year of twelve 30-day months.  The amount of distributions payable for any period shorter than a
full quarterly distribution period shall be computed on the basis of a 30-day
month and for periods of less than a month, the actual number of days elapsed
per 30-day month.  Subject to
Section 7.1(b), Distributions shall be made on the Preferred Securities
and the Common Securities on a Pro Rata basis. 
Pursuant to the Indenture, interest on the Debentures, and as a result
distributions on the Securities shall, from the date of original issue, accrue
and be cumulative and shall be payable quarterly, in arrears, on each
January 31, April 30, July 31 and October 31, commencing
January 31, 2004, when, as and if available for payment, by the Property
Trustee, except as otherwise described below. 
Distributions are payable only to the extent that payments are made in
respect of the Debentures held by the Property Trustee and to the extent that
the Trust has funds available for the payment of such Distributions in the
Property Account.

 

(b)                                 Interest on the Debentures not paid on
the scheduled payment date will accrue and compound quarterly at the rate of
6.375% per annum and, as a result distributions on the Securities not paid on
the scheduled payment date will accumulate, and compound quarterly at a rate of
6.375% per annum (“Compounded Distributions”). 
“Distributions” shall mean ordinary cumulative distributions together
with any Compounded Distributions.

 

(c)                                  If and to the extent that the Debenture
Issuer makes a payment of interest, premium and/or principal on the Debentures
held by the Property Trustee (the amount of any such payment being a “Payment
Amount”), the Property Trustee shall and is directed, to the

 

35

 

extent funds are available for
that purpose, to make a Pro Rata distribution of the Payment Amount to Holders,
subject to Section 7.1(b).

 

(d)                                 Distributions on the Securities shall be
payable to the Holders thereof as they appear on the register of the Trust as
of the close of business on the relevant record dates.  While the Preferred Securities are
represented by one or more Global Securities, the relevant record dates shall
be the close of business on the Business Day next preceding such Distribution
payment date, unless a different regular record date is established or provided
for the corresponding interest payment date on the Debentures.  The relevant record dates for the Common
Securities shall be the same as for the Preferred Securities.  If the Preferred Securities shall not
continue to remain represented by one or more Global Securities, the relevant
record dates for the Preferred Securities shall be selected by the Regular
Trustees and shall be at least one Business Day prior to the relevant payment
dates.  At all times, the Distribution
payment dates shall correspond to the interest payment dates on the Debentures.  Distributions payable on any Securities that
are not punctually paid on any Distribution payment date, as a result of the
Debenture Issuer having failed to make a payment under the Debentures, shall
cease to be payable to the Person in whose name such Securities are registered
on the relevant record date, and such defaulted Distribution will instead be
payable to the Person in whose name such Securities are registered on the
special record date or other specified date determined in accordance with this
Declaration.  If any date on which
Distributions are payable on the Securities is not a Business Day, then payment
of the Distribution payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, with the same force and effect as if made on such
payment date.

 

(e)                                  In the event that there is any money or
other property held by or for the Trust that is not accounted for hereunder,
such property shall be distributed Pro Rata among the Holders of the
Securities.

 

SECTION 7.3.   Redemption
of Securities.

 

(a)                                  Upon the repayment or redemption, in
whole or in part, of the Debentures held by the Trust, whether at the stated
maturity of the Debentures or upon earlier redemption as provided in the
Indenture, the proceeds from such repayment or redemption shall be
simultaneously applied Pro Rata to redeem Securities having an aggregate liquidation
amount equal to the aggregate principal amount of the Debentures so repaid or
redeemed at the Redemption Price. 
Holders shall be given not less than 30 nor more than 60 days notice of
such redemption in accordance with Section 7.4.

 

(b)                                 On the date fixed for any distribution of
Debentures, upon dissolution of the Trust, (i) the Securities will no longer be
deemed to be outstanding and (ii) certificates representing Securities will be
deemed to represent the Debentures having an aggregate principal amount equal
to the stated liquidation amount of, and bearing accrued and unpaid
distributions equal to accumulated and unpaid distributions on, such Securities
until such certificates are presented to the Sponsor or its agent for transfer
or reissuance.

 

36

 

SECTION 7.4.   Redemption
Procedures.

 

(a)                                  Notice of any redemption of, or notice of
distribution of Debentures in exchange for, the Securities (a
“Redemption/Distribution Notice”), which notice shall be irrevocable, will be
given by the Trust by mail to each Holder of Securities to be redeemed or
exchanged not fewer than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will be the
date fixed for redemption of the Debentures. 
For purposes of the calculation of the date of redemption or exchange
and the dates on which notices are given pursuant to this Section 7.4(a),
a Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders of
Securities.  Each
Redemption/Distribution Notice shall be addressed to the Holders of Securities
at the address of each such Holder appearing in the register of the Trust.  No defect in the Redemption/Distribution
Notice or in the mailing of either thereof with respect to any Holder shall
affect the validity of the redemption or exchange proceedings with respect to
any other Holder.

 

(b)                                 If fewer than all the outstanding Securities
are to be so redeemed, the Common Securities and the Preferred Securities will
be redeemed Pro Rata (subject to Section 7.1(b)) and the Preferred
Securities to be redeemed will be redeemed as described in Section 7.4
below.  The Trust may not redeem the
Securities in part unless all accumulated and unpaid Distributions to the date
of redemption have been paid in full on all Securities then outstanding.  For all purposes of this Declaration, unless
the context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate, in the case of any Preferred Security
redeemed or to be redeemed only in part, to the portion of the aggregate
liquidation amount of Preferred Securities which has been or is to be redeemed.

 

(c)                                  Subject to the Trust’s fulfillment of the
notice requirements set forth in Section 7.4(a) above, if Securities are
to be redeemed, then (i) with respect to Preferred Securities represented by
one or more Global Securities, by 12:00 noon, New York City time, on the
redemption date (provided that the Debenture Issuer has paid the Property
Trustee a sufficient amount of cash in connection with the related redemption
or maturity of the Debentures), the Property Trustee will deposit irrevocably
with the Depositary or its nominee (or successor Clearing Agency or its
nominee) funds sufficient to pay the applicable Redemption Price with respect
to the Preferred Securities and will give the Depositary irrevocable
instructions and authority to pay the Redemption Price to the Holders of the
Preferred Securities and (ii) with respect to Securities not represented by one
or more Global Securities (provided that the Debenture Issuer has paid the
Property Trustee a sufficient amount of cash in connection with the related redemption
or maturity of the Debentures), the Paying Agent will pay the relevant
Redemption Price to the Holders of such Securities by check mailed to the
address of the relevant Holder appearing on the register of the Trust on the
redemption date.  If any date fixed for
redemption of Securities is not a Business Day, then payment of the Redemption
Price payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for redemption.  If payment of the Redemption Price in
respect of any Securities is not paid because the payment of the Redemption
Price on the Debentures is not made, interest will continue to

 

37

 

accrue on the Debentures, and,
as a result, Distributions on such Securities will continue to accumulate at
the then applicable rate from the original redemption date to the actual date
of payment, in which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the Redemption Price.  For these purposes, the applicable
Redemption Price shall not include Distributions which are being paid to
Holders who were Holders on a relevant record date.  If a Redemption/Distribution Notice shall have been given and
funds deposited or paid as required, then immediately prior to the close of
business on the date of such deposit or payment, Distributions will cease to
accumulate on the Securities called for redemption and all rights of Holders of
such Securities so called for redemption will cease, except the right of the
Holders to receive the Redemption Price, but without interest on such
Redemption Price, and from and after the date fixed for redemption, such
Securities will cease to be outstanding.

 

Neither the Regular
Trustees nor the Trust shall be required to register or cause to be registered
the transfer of any Securities that have been called for redemption, except in
the case of any Securities being redeemed in part, any portion thereof not to
be redeemed.

 

(d)                                 Subject to the foregoing and applicable
law (including, without limitation, United States federal securities laws), the
Debenture Issuer or its subsidiaries may at any time and from time to time
purchase outstanding Preferred Securities by tender, in the open market or by
private agreement.

 

SECTION 7.5.   Voting
Rights of Preferred Securities.

 

(a)                                  Except as provided under
Section 11.1 and this Article 7 and as otherwise required by the
Statutory Trust Act, the Trust Indenture Act and other applicable law, the
Holders of the Preferred Securities shall have no voting rights.

 

(b)                                 Subject to the requirement of the
Property Trustee obtaining a tax opinion in certain circumstances set forth in
Section 7.5(d) below, the Holders of a Majority in Liquidation Amount of
the Preferred Securities voting separately as a class have the right to direct
the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or to direct the exercise of any trust or
power conferred upon the Property Trustee under the Declaration, including the
right to direct the Property Trustee, as Holder of the Debentures, to (i)  exercise
the remedies available to it under the Indenture as a Holder of the Debentures;
(ii)  consent to any amendment or modification of the Indenture or the
Debentures where such consent shall be required or (iii) waive any past
default and its consequences that is waivable under Section 513 of the
Indenture; provided, however, that if an Indenture Event of Default has
occurred and is continuing, then the Holders of 25% of the aggregate
liquidation amount of the Preferred Securities may direct the Property Trustee
to declare the principal of and interest on the Debentures due and payable;
provided, further, that where a consent or action under the Indenture would
require the consent or act of the Holders of more than a majority of the
aggregate principal amount of Debentures affected thereby, only the Holders of
the percentage of the aggregate stated liquidation amount of the Preferred
Securities which is at least equal to the percentage required under the
Indenture may direct the Property Trustee to give such consent to take such
action.

 

38

 

(c)                                  If the Property Trustee fails to enforce
its rights under the Debentures after a Holder of Preferred Securities has made
a written request, such Holder of Preferred Securities may, to the extent
permitted by applicable law, institute a legal proceeding directly against the
Debenture Issuer to enforce the Property Trustee’s rights under the Indenture
without first instituting any legal proceeding against the Property Trustee or
any other person or entity.  In
addition, if a Trust Enforcement Event has occurred and is continuing and such
event is attributable to the failure of the Debenture Issuer to make any
interest, principal or other required payments when due under the Indenture,
then a Holder of Preferred Securities may directly institute a Direct Action
against the Debenture Issuer on or after the respective due date specified in
the Debentures.

 

(d)                                 The Property Trustee shall notify all
Holders of the Preferred Securities of any notice of any Indenture Event of
Default received from the Debenture Issuer with respect to the Debentures.  Such notice shall state that such Indenture
Event of Default also constitutes a Trust Enforcement Event.  Except with respect to directing the time,
method, and place of conducting a proceeding for a remedy, the Property Trustee
shall be under no obligation to take any of the actions described in clause
7.5(b)(i) and (ii) above unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that the Trust will not be classified as
an association or publicly traded partnership taxable as a corporation for
United States federal income tax purposes as a result of such action.

 

(e)                                  In the event the consent of the Property
Trustee, as the Holder of the Debentures, is required under the Indenture with
respect to any amendment or modification of the Indenture, the Property Trustee
shall request the direction of the Holders of the Securities with respect to
such amendment or modification and shall vote with respect to such amendment or
modification as directed by not less than 66-2/3% of the aggregate liquidation
amount of the Securities voting together as a single class; provided, however,
that where a consent under the Indenture would require the consent of the
Holders of more than 66-2/3% of the aggregate principal amount of the Debentures,
the Property Trustee may only give such consent at the direction of the Holders
of at least the same proportion in aggregate stated liquidation amount of the
Securities.  The Property Trustee shall
not take any such action in accordance with the directions of the Holders of
the Securities unless the Property Trustee has obtained an opinion of
independent tax counsel to the effect that the Trust will not be classified as
an association or publicly traded partnership taxable as a corporation for
United States federal income tax purposes as a result of such action.

 

(f)                                    A waiver of an Indenture Event of Default
with respect to the Debentures will constitute a waiver of the corresponding
Trust Enforcement Event.

 

(g)                                 Any required approval or direction of
Holders of Preferred Securities may be given at a separate meeting of Holders
of Preferred Securities convened for such purpose, at a meeting of all of the
Holders of Securities or pursuant to written consent.  The Regular Trustees shall cause a notice of any meeting at which
Holders of Preferred Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Preferred Securities. 
Each such notice shall include a statement setting forth the following
information: (i) the date of such meeting or the date by which such action is
to be taken; (ii) a description of any resolution proposed for adoption at

 

39

 

such meeting on which such
Holders are entitled to vote or of such matter upon which written consent is
sought; and (iii) instructions for the delivery of proxies or consents.

 

(h)                                 No vote or consent of the Holders of
Preferred Securities shall be required for the Trust to redeem and cancel
Preferred Securities or distribute Debentures in accordance with this
Declaration and the terms of the Securities.

 

(i)                                     Notwithstanding that Holders of Preferred
Securities are entitled to vote or consent under any of the circumstances
described above, any of the Securities that are owned at such time by the
Debenture Issuer, any Regular Trustee or any entity directly or indirectly
controlled by, or under direct or indirect common control with, the Debenture
Issuer or any Trustee, shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if such Securities were not
outstanding.

 

(j)                                     Subject to Section 7.5(k), Holders
of the Preferred Securities shall have no rights to appoint or remove the Trustees,
who may be appointed, removed or replaced solely by the Common Securities
Holder.

 

(k)                                  If an Indenture Event of Default has
occurred and is continuing, the Trustees may be removed at such time only by a
Majority in Liquidation Amount of the Preferred Securities.

 

SECTION 7.6.   Voting
Rights of Common Securities.

 

(a)                                  Except as provided under
Section 6.1(b), this Section 7.6 or Section 11.1 or as otherwise
required by the Statutory Trust Act, the Trust Indenture Act or other
applicable law or provided by the Declaration, the Holders of the Common
Securities will have no voting rights.

 

(b)                                 Subject to Section 7.5(k), the
Holders of the Common Securities shall be entitled, in accordance with
Article 6 of this Declaration, to vote to appoint, remove or replace any
Trustee or to increase or decrease the number of Trustees.

 

(c)                                  Subject to Section 2.6 and only
after all Trust Enforcement Events with respect to the Preferred Securities
have been cured, waived, or otherwise eliminated and subject to the requirement
of the Property Trustee obtaining a tax opinion in certain circumstances set
forth in this paragraph (c), the Holders of a Majority in Liquidation Amount of
the Common Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee, or
direct the exercise of any trust or power conferred upon the Property Trustee
under this Declaration, including the right to direct the Property Trustee, as
Holder of the Debentures, to (i) exercise the remedies available to it under
the Indenture as a Holder of the Debentures, (ii) consent to any amendment
or modification of the Indenture or the Debentures where such consent shall be
required or (iii) waive any past default and its consequences that is
waivable under Section 513 of the Indenture; provided, however, that where
a consent or action under the Indenture would require the consent or act of the
Holders of more than a majority of the aggregate principal amount of Debentures
affected thereby, only the Holders of the percentage of the aggregate stated
liquidation amount of the

 

40

 

Common Securities which is at
least equal to the percentage required under the Indenture may direct the Property
Trustee to have such consent or take such action.  Except with respect to directing the time, method, and place of
conducting a proceeding for a remedy, the Property Trustee shall be under no
obligation to take any of the actions described in clause 7.6(c)(i) and (ii)
above unless the Property Trustee has obtained an opinion of independent tax
counsel to the effect that, as a result of such action, for United States
federal income tax purposes the Trust will not be classified as other than a
grantor trust.

 

(d)                                 If the Property Trustee fails to enforce
its rights under the Debentures after a Holder of Common Securities has made a
written request, such Holder of Common Securities may, to the extent permitted
by applicable law, directly institute a legal proceeding directly against the
Debenture Issuer to enforce the Property Trustee’s rights under the Debentures
without first instituting any legal proceeding against the Property Trustee or
any other person or entity.

 

(e)                                  A waiver of an Indenture Event of Default
with respect to the Debentures will constitute a waiver of the corresponding
Trust Enforcement Event.

 

(f)                                    Any required approval or direction of
Holders of Common Securities may be given at a separate meeting of Holders of
Common Securities convened for such purpose, at a meeting of all of the Holders
of Securities or pursuant to written consent. 
The Regular Trustees will cause a notice of any meeting at which Holders
of Common Securities are entitled to vote, or of any matter on which action by
written consent of such Holders is to be taken, to be mailed to each Holder of
record of Common Securities.  Each such
notice will include a statement setting forth the following information: (i)
the date of such meeting or the date by which such action is to be taken; (ii)
a description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter upon which written consent
is sought; and (iii) instructions for the delivery of proxies or consents.

 

(g)                                 No vote or consent of the Holders of the
Common Securities will be required for the Trust to redeem and cancel Common
Securities or to distribute Debentures in accordance with the Declaration and
the terms of the Securities.

 

SECTION 7.7.   Paying
Agent.

 

In the event that
any Preferred Securities are not in book-entry only form, the Trust shall
maintain in the Borough of Manhattan, City of New York, State of New York, an
office or agency where the Preferred Securities may be presented for payment
(“Paying Agent”).  The Trust may appoint
the paying agent and may appoint one or more additional paying agents in such
other locations as it shall determine. 
The term “Paying Agent” includes any additional paying agent.  The Trust may change any Paying Agent
without prior notice to the Holders. 
The Trust shall notify the Property Trustee of the name and address of
any Paying Agent not a party to this Declaration.  If the Trust fails to appoint or maintain another entity as
Paying Agent, the Property Trustee shall act as such.  The Trust or any of its Affiliates may act as Paying Agent.  The Property Trustee shall initially act as
Paying Agent for the Securities.  In the
event the Property Trustee shall no longer be the Paying Agent, the Regular
Trustees shall appoint a successor (which shall be a bank or trust company
acceptable to the Debenture Issuer) to act as

 

41

 

Paying Agent.  The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days’ written notice to the Property Trustee and
the Debenture Issuer.

 

SECTION 7.8.   Listing.

 

The Sponsor shall
use its best efforts to cause the Preferred Securities to be listed for
quotation on the New York Stock Exchange.

 

SECTION 7.9.   Transfer
of Securities.

 

(a)                                  Securities may only be transferred, in
whole or in part, in accordance with the terms and conditions set forth in this
Declaration and in the terms of the Securities.  Any transfer or purported transfer of any Security not made in
accordance with this Declaration shall be null and void.

 

(b)                                 Subject to this Article 7, Preferred
Securities shall be freely transferable.

 

(c)                                  The Trust shall cause to be kept at the
Corporate Trust Office of the Property Trustee a register (the register
maintained in such office being herein sometimes referred to as the “Security
Register”) in which, subject to such reasonable regulations as it may
prescribe, the Trust shall provide for the registration of Preferred Securities
and of transfers of Preferred Securities. 
The Property Trustee is hereby appointed “Security Registrar” for the
purpose of registering Preferred Securities and transfers of Preferred
Securities as herein provided.

 

(d)                                 Upon surrender for registration of
transfer of any Security at an office or agency of the Trust designated for
such purpose, the Trust shall execute, and the Property Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denominations and of
a like aggregate principal amount.

 

(e)                                  At the option of the Holder, Securities
may be exchanged for other Securities of any authorized denominations and of a
like aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency.  Whenever
any Securities are so surrendered for exchange, the Trust shall execute, and in
the case of Preferred Securities the Property Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.

 

(f)                                    Every Security presented or surrendered
for registration of transfer or for exchange shall (if so required by the Trust
or the Property Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Trust and the Security
Registrar duly executed, by the Holder thereof or his attorney duly authorized
in writing.

 

(g)                                 No service charge shall be made for any
registration of transfer or exchange of Securities, but the Trust may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Securities.

 

42

 

(h)                                 If the Securities are to be redeemed in
part, the Trust shall not be required (A) to issue, register the transfer of or
exchange any Securities during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of any such
Securities selected for redemption under Section 7.4 and ending at the
close of business on the day of such mailing, or (B) to register the transfer
or exchange of any Security so selected for redemption in whole or in part,
except the unredeemed portion of any Security being redeemed in part.

 

SECTION 7.10.   Mutilated,
Destroyed, Lost or Stolen Certificates.

 

If:

 

(a)                                  any mutilated Certificates should be
surrendered to the Regular Trustees, or if the Regular Trustees shall receive
evidence to their satisfaction of the destruction, loss or theft of any
Certificate; and

 

(b)                                 there shall be delivered to the Regular
Trustees such security or indemnity as may be required by them to keep each of
the Trustees, the Sponsor and the Trust harmless, then, in the absence of
notice that such Certificate shall have been acquired by a protected purchaser,
any Regular Trustee on behalf of the Trust shall execute and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like denomination.  In connection with the issuance of any new Certificate under this
Section 7.10, each of the Trustees or the Regular Trustees may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. 
Any duplicate Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the relevant
Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.

 

SECTION 7.11.   Deemed
Security Holders.

 

The Trustees may
treat the Person in whose name any Certificate shall be registered on the
register of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust shall have actual or other notice thereof.

 

SECTION 7.12.   Global
Securities.

 

The Preferred
Securities may be issued in the form of one or more Global Securities.  If the Preferred Securities are to be issued
in the form of one or more Global Securities, then the Regular Trustee on
behalf of the Trust shall execute and the Property Trustee shall authenticate
and deliver one or more Global Securities that (i) shall represent and shall be
denominated in an amount equal to the aggregate liquidation amount of all of
the Preferred Securities to be issued in the form of Global Securities and not
yet cancelled, (ii) shall be registered in the name of the Depositary for such
Global Security or Preferred Securities or the nominee of such Depositary, and
(iii) shall be delivered by the Property Trustee to such

 

43

 

Depositary or pursuant to such
Depositary’s instructions.  Global
Securities shall bear a legend substantially to the following effect:

 

“This Preferred
Security is a Global Security within the meaning of the Declaration hereinafter
referred to and is registered in the name of The Depository Trust Company, a
New York corporation (the “Depositary”), or a nominee of the Depositary.  This Preferred Security is exchangeable for
Preferred Securities registered in the name of a person other than the
Depositary or its nominee only in the limited circumstances described in the
Declaration and no transfer of this Preferred Security (other than a transfer
of this Preferred Security as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary) may be registered except in limited circumstances.

 

Unless this Preferred
Security Certificate is presented by an authorized representative of the
Depositary to Lehman Brothers Holdings Capital Trust IV or its agent for
registration of transfer, exchange or payment, and any Preferred Security
Certificate issued is registered in the name of Cede & Co. or such other
name as registered by an authorized representative of the Depositary (and any
payment hereon is made to Cede & Co. or to such other entity as is
requested by an authorized representative of the Depositary), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.”

 

Preferred
Securities not represented by a Global Security issued in exchange for all or a
part of a Global Security pursuant to this Section 7.12 shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Property Trustee.  Upon execution and authentication, the Property Trustee shall
deliver such Preferred Securities not represented by a Global Security to the
Persons in whose names such definitive Preferred Securities are so registered.

 

At such time as all
interests in Global Securities have been redeemed, repurchased or cancelled,
such Global Securities shall be, upon receipt thereof, cancelled by the
Property Trustee in accordance with standing procedures of the Depositary.  At any time prior to such cancellation, if
any interest in Global Securities is exchanged for Preferred Securities not
represented by a Global Security, redeemed, cancelled or transferred to a
transferee who receives Preferred Securities not represented by a Global
Security therefor or any Preferred Security not represented by a Global
Security is exchanged or transferred for part of Global Securities, the
principal amount of such Global Securities shall, in accordance with the
standing procedures of the Depositary, be reduced or increased, as the case may
be, and an endorsement shall be made on such Global Securities by the Property
Trustee to reflect such reduction or increase.

 

The Trust and the
Property Trustee may for all purposes, including the making of payments due on
the Preferred Securities, deal with the Depositary as the authorized
representative of the Holders for the purposes of exercising the rights of
Holders hereunder.  The rights of the
owner of any beneficial interest in a Global Security shall be limited to those
established by law and agreements between such owners and depository
participants or Euroclear

 

44

 

and Clearstream Banking;
provided, that no such agreement shall give any rights to any Person against
the Trust or the Property Trustee without the written consent of the parties so
affected.  Multiple requests and
directions from and votes of the Depositary as holder of Preferred Securities
in global form with respect to any particular matter shall not be deemed
inconsistent to the extent they do not represent an amount of Preferred
Securities in excess of those held in the name of the Depositary or its
nominee.

 

If at any time the
Depositary for any Preferred Securities represented by one or more Global
Securities notifies the Trust that it is unwilling or unable to continue as
Depositary for such Preferred Securities or if at any time the Depositary for
such Preferred Securities shall no longer be eligible under this
Section 7.12, the Trust shall appoint a successor Depositary with respect
to such Preferred Securities.  If a
successor Depositary for such Preferred Securities is not appointed by the
Trust within 90 days after the Trust receives such notice or becomes aware of
such ineligibility, the Trust’s election that such Preferred Securities be
represented by one or more Global Securities shall no longer be effective and
the Trust shall execute, and the Property Trustee will authenticate and
deliver, Preferred Securities in definitive registered form, in any authorized denominations,
in an aggregate liquidation amount equal to the principal amount of the Global
Security or Preferred Securities representing such Preferred Securities in
exchange for such Global Security or Preferred Securities.

 

The Trust may at
any time and in its sole discretion determine that the Preferred Securities
issued in the form of one or more Global Securities shall no longer be
represented by a Global Security or Preferred Securities.  In such event the Trust shall execute, and
the Property Trustee, shall authenticate and deliver, Preferred Securities in
definitive registered form, in any authorized denominations, in an aggregate
liquidation amount equal to the principal amount of the Global Security or
Preferred Securities representing such Preferred Securities, in exchange for
such Global Security or Preferred Securities.

 

Notwithstanding any
other provisions of this Declaration (other than the provisions set forth in
Section 7.9), Global Securities may not be transferred as a whole except
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.

 

Interests of beneficial
owners in a Global Security may be transferred or exchanged for Preferred
Securities not represented by a Global Security and Preferred Securities not
represented by a Global Security may be transferred or exchange for Global
Securities in accordance with rules of the Depositary and the provisions of
Section 7.9.

 

ARTICLE 8

 

DISSOLUTION AND
TERMINATION OF TRUST

 

SECTION 8.1.   Dissolution
and Termination of Trust.

 

(a)                                  The Trust shall dissolve upon the
earliest of:

 

45

 

(i)                                     the bankruptcy of the Holder of the
Common Securities or the Sponsor;

 

(ii)                                  the filing of a certificate of
dissolution or its equivalent with respect to the Sponsor; the filing of a
certificate of cancellation with respect to the Trust after obtaining the
consent of the Holders of at least a Majority in Liquidation Amount of the
Securities to the filing of a certificate of cancellation with respect to the
Trust or the revocation of the Sponsor’s charter and the expiration of 90 days
after the date of revocation without a reinstatement thereof;

 

(iii)                               the entry of a decree of judicial
dissolution of the Sponsor or the Trust;

 

(iv)                              the time when all of the Securities shall
have been called for redemption and the amounts then due shall have been paid
to the Holders in accordance with the terms of the Securities;

 

(v)                                 upon the election of the Regular
Trustees, following the occurrence and continuation of a Special Event pursuant
to which the Trust shall have been dissolved in accordance with the terms of
the Securities, and all of the Debentures shall have been distributed to the
Holders of Securities in exchange for all of the Securities;

 

(vi)                              at the Sponsor’s election by notice and
direction to the Property Trustee to distribute the Debentures to the Holders
of the Securities in exchange for all of the Securities; provided that the
Sponsor shall give notice of such election to the Holders of the Securities at
least 10 Business Days prior to such dissolution; or

 

(vii)                           the time when all of the Regular Trustees
and the Sponsor shall have consented to dissolution of the Trust provided such
action is taken before the issuance of any Securities;

 

(b)                                 As soon as is practicable after the
occurrence of an event referred to in Section 8.1(a) and upon completion
of the winding up and liquidation of the Trust, the Trustees shall terminate
the Trust by filing a certificate of cancellation with the Secretary of State
of the State of Delaware.

 

(c)                                  The provisions of Section 4.2 and
Article 9 shall survive the termination of the Trust.

 

SECTION 8.2.   Liquidation
Distribution Upon Dissolution of the Trust.

 

(a)                                  In the event of any voluntary or
involuntary liquidation, dissolution, or winding-up of the Trust (each a
“Liquidation”), the Holders of the Securities on the date of the Liquidation
will be entitled to receive, out of the assets of the Trust available for
distribution to Holders of Securities after satisfaction of the Trusts’
liabilities to creditors, if any, distributions in cash or other immediately
available funds in an amount equal to the aggregate of the stated

 

46

 

liquidation amount of $25 per
Security plus accumulated and unpaid Distributions thereon to the date of
payment (such amount being the “Liquidation Distribution”), unless, in
connection with such Liquidation, Debentures in an aggregate stated principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the distribution rate of, and accrued and unpaid interest
equal to accumulated and unpaid Distributions on, such Securities shall be
distributed on a Pro Rata basis to the Holders of the Securities in
exchange for such Securities.

 

(b)                                 If, upon any such Liquidation, the
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by the Trust on the Securities
shall be paid on a Pro Rata basis.  The
Holders of the Common Securities will be entitled to receive distributions upon
any such Liquidation Pro Rata with the Holders of the Preferred Securities
except that if an Indenture Event of Default has occurred and is continuing,
the Preferred Securities shall have a preference over the Common Securities
with regard to such distributions as provided in Section 7.1(b).

 

ARTICLE 9

 

LIMITATION OF
LIABILITY OF

 

HOLDERS OF
SECURITIES, DELAWARE TRUSTEES OR OTHERS

 

SECTION 9.1.   Liability.

 

(a)                                  Except as expressly set forth in this
Declaration, the Guarantee and the terms of the Securities, the Sponsor:

 

(i)                                     shall not be personally liable for the
return of any portion of the capital contributions (or any return thereon) of
the Holders of the Securities which shall be made solely from assets of the
Trust; and

 

(ii)                                  shall not be required to pay to the Trust
or to any Holder of Securities any deficit upon dissolution of the Trust or
otherwise.

 

(b)                                 Pursuant to Section 3803(a) of the
Statutory Trust Act, the Holder of the Common Securities shall be entitled to
the same limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware; provided, however, the Holders of the Common Securities shall
be liable for all of the debts and obligations of the Trust (other than with
respect to the Securities) to the extent not satisfied out of the Trust’s
assets.

 

(c)                                  Pursuant to Section 3803(a) of the
Statutory Trust Act, the Holders of the Preferred Securities shall be entitled
to the same limitation of personal liability extended to stockholders of
private corporations for profit organized under the General Corporation Law of
the State of Delaware.

 

47

 

SECTION 9.2.   Exculpation.

 

(a)                                  No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Trust or any Covered
Person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for
any such loss, damage or claim incurred by reason of such Indemnified Person’s
gross negligence or willful misconduct with respect to such acts or omissions.

 

(b)                                 An Indemnified Person shall be fully
protected in relying in good faith upon the records of the Trust and upon such
information, opinions, reports or statements presented to the Trust by any
Person as to matters the Indemnified Person reasonably believes are within such
other Person’s professional or expert competence and who has been selected with
reasonable care by or on behalf of the Trust, including information, opinions,
reports or statements as to the value and amount of the assets, liabilities,
profits, losses or any other facts pertinent to the existence and amount of
assets from which Distributions to Holders of Securities might properly be
paid.

 

SECTION 9.3.   Fiduciary
Duty.

 

(a)                                  To the extent that, at law or in equity,
an Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or to an
other Covered Person for its good faith reliance on the provisions of this
Declaration.  The provisions of this
Declaration, to the extent that they restrict the duties and liabilities of an
Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture Act), are
agreed by the parties hereto to replace such other duties and liabilities of
such Indemnified Person.

 

(b)                                 Unless otherwise expressly provided
herein:

 

(i)                                     whenever a conflict of interest exists or
arises between any Covered Persons; or

 

(ii)                                  whenever this Declaration or any other
agreement contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and reasonable
to the Trust or any Holder of Securities,

 

the
Indemnified Person shall resolve such conflict of interest, take such action or
provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices and any applicable generally accepted accounting
practices or principles.  In the absence
of bad faith by the Indemnified Person, the resolution, action or term so made,
taken or provided by the Indemnified Person shall not constitute a breach of
this Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.

 

48

 

(c)                                  Whenever in this Declaration an
Indemnified Person is permitted or required to make a decision:

 

(i)                                     in its “discretion” or under a grant of
similar authority, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests, and shall
have no duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or

 

(ii)                                  in its “good faith” or under another
express standard, the Indemnified Person shall act under such express standard
and shall not be subject to any other or different standard imposed by this
Declaration or by applicable law.

 

SECTION 9.4.   Indemnification.  (a)

 

(i)                                     The Debenture Issuer shall indemnify, to
the full extent permitted by law, any Debenture Issuer Indemnified Person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Trust) by reason of the fact that he is or was a Debenture Issuer Indemnified
Person against expenses (including attorney fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. 
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the Debenture Issuer Indemnified Person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.

 

(ii)                                  The Debenture Issuer shall indemnify, to
the full extent permitted by law, any Debenture Issuer Indemnified Person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Trust to procure
a judgment in its favor by reason of the fact that he is or was a Debenture
Issuer Indemnified Person against expenses (including attorneys’ fees) actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust and except
that no such indemnification shall be made in respect of any claim, issue or
matter as to which such Debenture Issuer Indemnified Person shall have been
adjudged to be liable to the Trust unless and only to the extent that the Court
of Chancery of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability

 

49

 

but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for such
expenses which such Court of Chancery or such other court shall deem proper.

 

(iii)                               Any indemnification under paragraphs (i)
and (ii) of this Section 9.4(a) (unless ordered by a court) shall be made
by the Debenture Issuer only as authorized in the specific case upon a
determination that indemnification of the Debenture Issuer Indemnified Person
is proper in the circumstances because he has met the applicable standard of
conduct set forth in paragraphs (i) and (ii). 
Such determination shall be made (1) by the Regular Trustees by a
majority vote of a quorum consisting of such Regular Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested Regular
Trustees so directs, by independent legal counsel in a written opinion, or (3)
by the Common Security Holder of the Trust.

 

(iv)                              Expenses (including attorneys’ fees)
incurred by a Debenture Issuer Indemnified Person in defending a civil,
criminal, administrative or investigative action, suit or proceeding referred
to in paragraphs (i) and (ii) of this Section 9.4(a) shall be paid by the
Debenture Issuer in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Debenture
Issuer Indemnified Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Debenture Issuer as
authorized in this Section 9.4(a). 
Notwithstanding the foregoing, no advance shall be made by the Debenture
Issuer if a determination is reasonably and promptly made (i) by the Regular
Trustees by a majority vote of a quorum of disinterested Regular Trustees, (ii)
if such a quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested Regular Trustees so directs, by independent legal counsel in a
written opinion or (iii) the Common Security Holder of the Trust, that, based
upon the facts known to the Regular Trustees, counsel or the Common Security
Holder at the time such determination is made, such Debenture Issuer
Indemnified Person acted in bad faith or in a manner that such person did not
believe to be in or not opposed to the best interests of the Trust, or, with
respect to any criminal proceeding, that such Debenture Issuer Indemnified
Person believed or had reasonable cause to believe his conduct was unlawful.  In no event shall any advance be made in
instances where the Regular Trustees, independent legal counsel or Common
Security Holder reasonably determine that such person deliberately breached his
duty to the Trust or its Common or Preferred Security Holders.

 

(v)                                 The indemnification and advancement of
expenses provided by, or granted pursuant to, the other paragraphs of this
Section 9.4(a) shall not be deemed exclusive of any other rights to which
those seeking indemnification and advancement of expenses may be entitled under
any agreement, vote of stockholders or disinterested directors of the Debenture
Issuer or Preferred Security Holders of the Trust or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office.  All rights

 

50

 

to indemnification under this
Section 9.4(a) shall be deemed to be provided by a contract between the
Debenture Issuer and each Debenture Issuer Indemnified Person who serves in
such capacity at any time while this Section 9.4(a) is in effect.  Any repeal or modification of this
Section 9.4(a) shall not affect any rights or obligations then existing.

 

(vi)                              The Debenture Issuer or the Trust may
purchase and maintain insurance on behalf of any person who is or was a
Debenture Issuer Indemnified Person against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Debenture Issuer would have the power to indemnify him
against such liability under the provisions of this Section 9.4(a).

 

(vii)                           For purposes of this Section 9.4(a),
references to “the Trust” shall include, in addition to the resulting or
surviving entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person who is
or was a director, trustee, officer or employee of such constituent entity, or
is or was serving at the request of such constituent entity as a director,
trustee, officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 9.4(a) with respect to the
resulting or surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.

 

(viii)                        The indemnification and advancement of
expenses provided by, or granted pursuant to, this Section 9.4(a) shall,
unless otherwise provided when authorized or ratified, continue as to a person
who has ceased to be a Debenture Issuer Indemnified Person and shall inure to
the benefit of the heirs, executors and administrators of such a person.  The obligation to indemnify as set forth in
this Section 9.4(a) shall survive the resignation or removal of the
Delaware Trustee or the Property Trustee or the termination of this
Declaration.

 

(b)                                 The Debenture Issuer agrees to indemnify
the (i) Property Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the
Property Trustee or the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Property Trustee or the Delaware Trustee (each of the
Persons in (i) through (iv) being referred to as a “Fiduciary Indemnified
Person”) for, and to hold each Fiduciary Indemnified Person harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against or
investigating any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.  The obligation to indemnify as set forth in this
Section 9.4(b) shall survive the resignation and removal of the Delaware
Trustee or the Property Trustee and the satisfaction and discharge of this
Declaration.  In addition, the Debenture
Issuer has agreed in the Indenture to pay the fees and expenses of the Delaware
Trustee and the Property Trustee.

 

51

 

SECTION 9.5.   Outside
Businesses.

 

Any Covered Person,
the Sponsor, the Delaware Trustee and the Property Trustee may engage in or
possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the activities of the
Trust, and the Trust and the Holders of Securities shall have no rights by
virtue of this Declaration in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if
competitive with the activities of the Trust, shall not be deemed wrongful or
improper.  No Covered Person, the
Sponsor, the Delaware Trustee or the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee
and the Property Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. 
Any Covered Person, the Delaware Trustee and the Property Trustee may
engage or be interested in any financial or other transaction with the Sponsor
or any Affiliate of the Sponsor, or may act as depositary for, trustee or agent
for, or act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.

 

ARTICLE 10

 

ACCOUNTING

 

SECTION 10.1.   Fiscal
Year.

 

The fiscal year
(“Fiscal Year”) of the Trust shall be the calendar year, or such other year as
is required by the Code.

 

SECTION 10.2.   Certain
Accounting Matters.

 

(a)                                  At all times during the existence of the
Trust, the Regular Trustees shall keep, or cause to be kept, full books of
account, records and supporting documents, which shall reflect in reasonable
detail, each transaction of the Trust. 
The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied.  The Trust shall
use the accrual method of accounting for United States federal income tax purposes.  The books of account and the records of the
Trust shall be examined by and reported upon as of the end of each Fiscal Year
of the Trust by a firm of independent certified public accountants selected by
the Regular Trustees.

 

(b)                                 The Regular Trustees shall cause to be
prepared and delivered to each of the Holders of Securities, within 90 days
after the end of each Fiscal Year of the Trust, annual financial statements of
the Trust, including a balance sheet of the Trust as of the end of such Fiscal
Year, and the related statements of income or loss.

 

(c)                                  The Regular Trustees shall cause to be
duly prepared and delivered to each of the Holders of Securities, an annual
United States federal income tax information statement,

 

52

 

required by the Code,
containing such information with regard to the Securities held by each Holder
as is required by the Code and the Treasury Regulations.  Notwithstanding any right under the Code to
deliver any such statement at a later date, the Regular Trustees shall endeavor
to deliver all such statements within 30 days after the end of each Fiscal Year
of the Trust.

 

(d)                                 The Regular Trustees shall cause to be
duly prepared and filed with the appropriate taxing authority, an annual United
States federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax returns
required to be filed by the Regular Trustees on behalf of the Trust with any
state or local taxing authority.

 

SECTION 10.3.   Banking.

 

The Trust shall
maintain one or more bank accounts in the name and for the sole benefit of the
Trust; provided, however, that all payments of funds in respect of the
Debentures held by the Property Trustee shall be made directly to the Property
Account and no other funds of the Trust shall be deposited in the Property
Account.  The sole signatories for such
accounts shall be designated by the Regular Trustees; provided, however, that
the Property Trustee shall designate the signatories for the Property Account.

 

SECTION 10.4.   Withholding.

 

The Trust and the
Regular Trustees shall comply with all withholding requirements under United
States federal, state and local law. 
The Trust shall request, and the Holders shall provide to the Trust,
such forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms as
shall reasonably be requested by the Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations.  The Regular Trustees shall file required
forms with applicable jurisdictions and, unless an exemption from withholding
is properly established by a Holder, shall remit amounts withheld with respect
to the Holder to applicable jurisdictions. 
To the extent that the Trust is required to withhold and pay over any
amounts to any authority with respect to distributions or allocations to any
Holder, the amount withheld shall be deemed to be a distribution in the amount
of the withholding to the Holder.  In
the event of any claimed over withholding, Holders shall be limited to an
action against the applicable jurisdiction. 
If the amount required to be withheld was not withheld from actual
Distributions made, the Trust may reduce subsequent Distributions by the amount
of such withholding.

 

ARTICLE 11

 

AMENDMENTS AND
MEETINGS

 

SECTION 11.1.   Amendments.

 

(a)                                  Except as otherwise provided in this
Declaration or by any applicable terms of the Securities, this Declaration may
only be amended by a written instrument approved and executed by the
Sponsor and (i) the Regular Trustees (or, if there are more than two
Regular

 

53

 

Trustees, a majority of the
Regular Trustees) and (ii) the Property Trustee if the amendment affects
the rights, powers, duties, obligations or immunities of the Property Trustee;
and (iii) by the Delaware Trustee if the amendment affects the rights,
powers, duties, obligations or immunities of the Delaware Trustee.

 

(b)                                 No amendment shall be made, and any such
purported amendment shall be void and ineffective:

 

(i)                                     unless, in the case of any proposed
amendment, the Property Trustee shall have first received an Officers’
Certificate from each of the Trust and the Sponsor that such amendment is
permitted by, and conforms to, the terms of this Declaration (including the
terms of the Securities);

 

(ii)                                  unless, in the case of any proposed
amendment which affects the rights, powers, duties, obligations or immunities
of the Property Trustee, the Property Trustee shall have first received:

 

(A)                              an Officers’ Certificate from each of the
Trust and the Sponsor that such amendment is permitted by, and conforms to, the
terms of this Declaration (including the terms of the Securities) and that all
conditions precedent to the execution and delivery of such amendment have been
satisfied; and

 

(B)                                an opinion of counsel (who may be counsel
to the Sponsor or the Trust) that such amendment is permitted by, and conforms
to, the terms of this Declaration (including the terms of the Securities) and
that all conditions precedent to the execution and delivery of such amendment
have been satisfied; and

 

(iii)                               to the extent the result of such
amendment would be to:

 

(A)                              cause the Trust to be classified as other
than a grantor trust for United States federal income tax purposes;

 

(B)                                reduce or otherwise adversely affect the
powers of the Property Trustee in contravention of the Trust Indenture Act; or

 

(C)                                cause the Trust to be deemed to be an
Investment Company required to be registered under the Investment Company Act.

 

(c)                                  If the Trust has issued any Securities
that remain outstanding:

 

(i)                                     any amendment that would  (a) change the amount or timing of any
distribution of the Securities or otherwise adversely affect the amount of any

 

54

 

distribution required to be made in respect
of the Securities as of a specified date or (b) restrict the right of a Holder
of Securities to institute suit for the enforcement of any such payment on or
after such date, will entitle the Holders of such Securities, voting together
as a single class, to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of each of the Holders
of the Securities affected thereby; and

 

(ii)                                  any amendment that would (a) adversely
affect the powers,  preferences or
special rights of the Securities, whether by way of amendment to this
Declaration or otherwise or (b) result in the dissolution, winding-up or
termination of the Trust other than pursuant to the terms of this Declaration,
will entitle the holders of the Securities voting together as a single class to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of 66 2/3% of the Securities affected
thereby; provided that, if any amendment or proposal referred to in clause (a)
above would adversely affect only the Preferred Securities or the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal.

 

(d)                                 This Section 11.1 shall not be
amended without the consent of all of the Holders of the Securities.

 

(e)                                  Article 4 shall not be amended
without the consent of the Holders of a Majority in Liquidation Amount of the
Common Securities.

 

(f)                                    The rights of the Holders of the Common
Securities under Article 5 to increase or decrease the number of, and
appoint and remove Trustees shall not be amended without the consent of the
Holders of a Majority in Liquidation Amount of the Common Securities.

 

(g)                                 Notwithstanding Section 11.1(c),
this Declaration may be amended without the consent of the Holders of the
Securities, if such amendment does not 
adversely affect in any material respect the rights of the holders of
the Securities, to:

 

(i)                                     cure any ambiguity;

 

(ii)                                  correct or supplement any provision in
this Declaration that may be defective or inconsistent with any other provision
of this Declaration;

 

(iii)                               add to the covenants, restrictions or
obligations of the Sponsor;

 

(iv)                              conform to any change in Rule 3a-5 or
written change in interpretation or application of Rule 3a-5 by any legislative
body, court, government agency or regulatory authority; or

 

(v)                                 to modify, eliminate and add to any
provision of this Declaration to ensure that the Trust will be classified as a
grantor trust for United States federal income tax purposes at all times that
any Securities are outstanding or to ensure

 

55

 

that the Trust will not be required to
register as an Investment Company under the Investment Company Act.

 

SECTION 11.2.   Meetings
of the Holders of Securities; Action by Written Consent.

 

(a)                                  Meetings of the Holders of any class of
Securities may be called at any time by the Regular Trustees (or as provided in
the terms of the Securities) to consider and act on any matter on which Holders
of such class of Securities are entitled to act under the terms of this
Declaration, the terms of the Securities or the rules of any stock exchange on
which the Preferred Securities are listed or admitted for trading.  The Regular Trustees shall call a meeting of
the Holders of such class if directed to do so by the Holders of at least 10%
in Liquidation Amount of such class of Securities.  Such direction shall be given by delivering to the Regular
Trustees one or more calls in a writing stating that the signing Holders of
Securities wish to call a meeting and indicating the general or specific
purpose for which the meeting is to be called. 
Any Holders of Securities calling a meeting shall specify in writing the
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those Securities specified shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.

 

(b)                                 Except to the extent otherwise provided
in the terms of the Securities, the following provisions shall apply to
meetings of Holders of Securities:

 

(i)                                     notice of any such meeting shall be given
to all the Holders of Securities having a right to vote thereat at least 7 days
and not more than 60 days before the date of such meeting.  Whenever a vote, consent or approval of the
Holders of Securities is permitted or required under this Declaration or the
rules of any stock exchange on which the Preferred Securities are listed or
admitted for trading, such vote, consent or approval may be given at a meeting
of the Holders of Securities.  Any
action that may be taken at a meeting of the Holders of Securities may be taken
without a meeting if a consent in writing setting forth the action so taken is
signed by the Holders of Securities owning not less than the minimum amount of
Securities in liquidation amount that would be necessary to authorize or take
such action at a meeting at which all Holders of Securities having a right to
vote thereon were present and voting. 
Prompt notice of the taking of action without a meeting shall be given
to the Holders of Securities entitled to vote who have not consented in
writing.  The Regular Trustees may
specify that any written ballot submitted to the Security Holders for the
purpose of taking any action without a meeting shall be returned to the Trust
within the time specified by the Regular Trustees;

 

(ii)                                  each Holder of a Security may authorize
any Person to act for it by proxy on all matters in which a Holder of
Securities is entitled to participate, including waiving notice of any meeting,
or voting or participating at a meeting. 
No proxy shall be valid after the expiration of 11 months from the date
thereof unless otherwise provided in the proxy.  Every proxy shall be revocable at the pleasure of the Holder of
Securities executing such proxy.  Except
as otherwise

 

56

 

provided herein, all matters relating to the
giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation and the
Holders of the Securities were stockholders of a Delaware corporation;

 

(iii)                               each meeting of the Holders of the
Securities shall be conducted by the Regular Trustees or by such other Person
that the Regular Trustees may designate; and

 

(iv)                              unless the Statutory Trust Act, this
Declaration, the terms of the Securities, the Trust Indenture Act or the
listing rules of any stock exchange on which the Preferred Securities are then
listed for trading, otherwise provides, the Regular Trustees, in their sole
discretion, shall establish all other provisions relating to meetings of
Holders of Securities, including notice of the time, place or purpose of any
meeting at which any matter is to be voted on by any Holders of Securities,
waiver of any such notice, action by consent without a meeting, the
establishment of a record date, quorum requirements, voting in person or by
proxy or any other matter with respect to the exercise of any such right to
vote.

 

ARTICLE 12

 

REPRESENTATIONS OF
PROPERTY TRUSTEE

 

AND DELAWARE
TRUSTEE

 

SECTION 12.1.   Representations
and Warranties of the Property Trustee.

 

The Trustee that
acts as initial Property Trustee represents and warrants to the Trust and to
the Sponsor at the date of this Declaration, and each Successor Property
Trustee represents and warrants to the Trust and the Sponsor at the time of the
Successor Property Trustee’s acceptance of its appointment as Property Trustee
that:

 

(a)                                  the Property Trustee is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with trust power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of, this Declaration;

 

(b)                                 the Property Trustee satisfies the
requirements set forth in Section 6.3(a);

 

(c)                                  the execution, delivery and performance
by the Property Trustee of this Declaration have been duly authorized by all
necessary corporate action on the part of the Property Trustee.  This Declaration has been duly executed and
delivered by the Property Trustee, and it constitutes a legal, valid and
binding obligation of the Property Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency and other similar laws affecting creditors’ rights

 

57

 

generally and to general principles
of equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity or at
law);

 

(d)                                 the execution, delivery and performance
of this Declaration by the Property Trustee do not conflict with or constitute
a breach of the articles of association or incorporation, as the case may be,
or the by-laws (or other similar organizational documents) of the Property
Trustee; and

 

(e)                                  no consent, approval or authorization of,
or registration with or notice to, any State or federal banking authority is
required for the execution, delivery or performance by the Property Trustee of
this Declaration.

 

SECTION 12.2.   Representations
and Warranties of the Delaware Trustee.

 

The Trustee that
acts as initial Delaware Trustee represents and warrants to the Trust and to
the Sponsor at the date of this Declaration, and each Successor Delaware
Trustee represents and warrants to the Trust and the Sponsor at the time of the
Successor Delaware Trustee’s acceptance of its appointment as Delaware Trustee
that:

 

(a)                                  the Delaware Trustee satisfies the
requirements set forth in Section 6.2 and has the power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, this Declaration and, if it is not a natural person, is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization;

 

(b)                                 the Delaware Trustee has been authorized
to perform its obligations under the Certificate of Trust and this
Declaration.  This Declaration under
Delaware law constitutes a legal, valid and binding obligation of the Delaware
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency and other similar
laws affecting creditors’ rights generally and to general principles of equity
and the discretion of the court (regardless of whether the enforcement of such
remedies is considered in a proceeding in equity or at law); and

 

(c)                                  no consent, approval or authorization of,
or registration with or notice to, any State or federal banking authority is
required for the execution, delivery or performance by the Delaware Trustee of
this Declaration.

 

ARTICLE 13

 

MISCELLANEOUS

 

SECTION 13.1.   Notices.

 

All notices
provided for in this Declaration shall be in writing, duly signed by the party
giving such notice, and shall be delivered, telecopied or mailed by registered
or certified mail, as follows:

 

58

 

(a)                                  if given to the Trust, in care of the
Regular Trustees at the Trust’s mailing address set forth below (or such other
address as the Trust may give notice of to the Property Trustee, the Delaware
Trustee and the Holders of the Securities):

 

c/o
Lehman Brothers Holdings Inc.

399 Park Avenue

New York, New York  10022

Attention: Corporate Counsel

Facsimile: (212) 526-0339

 

(b)                                 if given to the Delaware Trustee, at the
mailing address set forth below (or such other address as the Delaware Trustee
may give notice of to the Regular Trustees, the Property Trustee and the
Holders of the Securities):

 

Chase
Manhattan Bank USA, National Association

500 Stanton Christiana Road

Bldg 4, 3rd Floor 

Newark, Delaware  19713

Attention: Institutional Trust Services

Facsimile:  (302) 552-6280

 

(c)                                  if given to the Property Trustee, at its
Corporate Trust Office (or such other address as the Property Trustee may give
notice of to the Regular Trustees, the Delaware Trustee and the Holders of the
Securities).

 

(d)                                 if given to the Holder of the Common
Securities, at the mailing address of the Sponsor set forth below (or such
other address as the Holder of the Common Securities may give notice of to the
Property Trustee, the Delaware Trustee and the Trust):

 

Lehman
Brothers Holdings Inc.

399 Park Avenue

New York, New York  10022

Attention: Corporate Counsel

Facsimile: (212) 526-0339

 

(e)                                  if given to any other Holder, at the
address set forth on the register of the Trust.

 

All
such notices shall be deemed to have been given when received in person,
telecopied with receipt confirmed or mailed by first class mail, postage
prepaid except that if a notice or other document is refused delivery or cannot
be delivered because of a changed address of which no notice was given, such
notice or other document shall be deemed to have been delivered on the date of
such refusal or inability to deliver.

 

SECTION 13.2.   Governing
Law.

 

This Declaration
and the rights of the parties hereunder shall be governed by and interpreted in
accordance with the laws of the State of Delaware.

 

59

 

SECTION 13.3.   Intention
of the Parties.

 

It is the intention
of the parties hereto that the Trust be classified for United States federal
income tax purposes as a grantor trust. 
The provisions of this Declaration shall be interpreted in a manner
consistent with such classification.

 

SECTION 13.4.   Headings.

 

Headings contained
in this Declaration are inserted for convenience of reference only and do not
affect the interpretation of this Declaration or any provision hereof.

 

SECTION 13.5.   Successors
and Assigns.

 

Whenever in this
Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants and
agreements in this Declaration by the Sponsor and the Trustees shall bind and
inure to the benefit of their respective successors and assigns, whether so
expressed.

 

SECTION 13.6.   Partial
Enforceability.

 

If any provision of
this Declaration, or the application of such provision to any Person or
circumstance, shall be held invalid, the remainder of this Declaration, or the
application of such provision to persons or circumstances other than those to
which it is held invalid, shall not be affected thereby.

 

SECTION 13.7.   Counterparts.

 

This Declaration
may contain more than one counterpart of the signature page and this
Declaration may be executed by the affixing of the signature of each of the
Trustees to one of such counterpart signature pages.  All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the signers
had signed a single signature page.

 

60

 

IN WITNESS WHEREOF,
the undersigned have caused these presents to be executed as of the day and
year first above written.

 

	
   

  	
  LEHMAN BROTHERS
  HOLDINGS INC.

  as Sponsor and as Common Securities Holder

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Barrett S. DiPaolo

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE
  BANK,

  as Property Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CHASE MANHATTAN
  BANK USA, NATIONAL

  ASSOCIATION,

  as Delaware Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Barrett DiPaolo, as
  Regular Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Jeffrey Welikson, as
  Regular Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Oliver Budde, as Regular
  Trustee

  
					

 

61

 

EXHIBIT A

 

[IF THE PREFERRED
SECURITY IS TO BE A GLOBAL SECURITY, INSERT THE FOLLOWING:  This Preferred Security is a Global Security
within the meaning of the Declaration hereinafter referred to and is registered
in the name of The Depository Trust Company, a New York corporation (the
“Depositary”), or a nominee of the Depositary. 
This Preferred Security is exchangeable for Preferred Securities
registered in the name of a person other than the Depositary or its nominee
only in the limited circumstances described in the Declaration and no transfer
of this Preferred Security (other than a transfer of this Preferred Security as
a whole by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.

 

Unless this
Preferred Security Certificate is presented by an authorized representative of
the Depositary to the issuer or its agent for registration of transfer,
exchange or payment, and any Preferred Security Certificate issued is
registered in the name of Cede & Co. or such other name as registered by an
authorized representative of the Depositary (and any payment hereon is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of the Depositary), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner
hereof, Cede & Co., has an interest herein.]

 

	
  Certificate No.

  	
  Number of Preferred Securities:

  
	
  CUSIP
  No.      

  	
   

  

 

Certificate Evidencing Preferred Securities

of

Lehman Brothers Holdings Capital Trust IV

 

6.375% Preferred Securities

(liquidation amount $25 per Preferred Security)

 

Lehman Brothers Holdings Capital Trust IV, a statutory trust formed
under the laws of the State of Delaware (the “Trust”), hereby certifies that
Cede & Co. (the “Holder”) is the registered owner of
               
preferred securities of the Trust representing undivided beneficial ownership
interests in the assets of the Trust designated the 6.375% Preferred Securities
(liquidation amount $25 per Preferred Security) (the “Preferred
Securities”).  The Preferred Securities
are transferable on the register of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer as provided in the Declaration (as defined
below).  The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Preferred Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust, dated as of October 31, 2003 (as the same may be amended from
time to time (the “Declaration”), among LEHMAN BROTHERS HOLDINGS INC., as
Sponsor, BARRETT DIPAOLO, JEFFREY WELIKSON and OLIVER BUDDE, as Regular Trustees,
JPMORGAN CHASE BANK as Property Trustee, CHASE MANHATTAN BANK USA, NATIONAL

 

 

ASSOCIATION,
as Delaware Trustee and the holders, from time to time, of undivided beneficial
ownership interests in assets of the Trust. 
Capitalized terms used herein but not defined shall have the meaning
given them in the Declaration.  The
Holder is entitled to the benefits of the Guarantee to the extent described
therein.  The Sponsor will provide a
copy of the Declaration, the Guarantee and the Indenture to a Holder without
charge upon written request to the Sponsor at its principal place of business.

 

Upon receipt of
this certificate, the Holder is bound by the Declaration and is entitled to the
benefits thereunder.

 

By acceptance, the
Holder agrees to treat, for United States federal, state and local income tax
purposes, the Debentures as indebtedness and the Preferred Securities as
evidence of undivided indirect beneficial ownership interests in the
Debentures.

 

IN WITNESS WHEREOF,
the Trust has executed this certificate this      day
of            ,
200  .

 

 

	
   

  	
  LEHMAN BROTHERS
  HOLDINGS

  CAPITAL TRUST IV

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: Regular Trustee

  
	
   

  	
   

  
	
  This
  is one of the Securities referred to in the within-mentioned Declaration.

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE
  BANK,

  as Property Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Officer

  

 

2

 

EXHIBIT B

 

THIS
CERTIFICATE IS NOT TRANSFERABLE

 

	
  Certificate No.

  	
  Number of Common Securities:

  

 

Certificate Evidencing Common Securities

of

Lehman Brothers Holdings Capital Trust IV

 

Common Securities

(liquidation amount $25 per Common Security)

 

Lehman Brothers
Holdings Capital Trust IV, a statutory trust formed under the laws of the State
of Delaware (the “Trust”), hereby certifies that LEHMAN BROTHERS HOLDINGS INC.
(the “Holder”) is the registered owner of
                      
common securities of the Trust representing an undivided beneficial ownership
interest in the assets of the Trust designated the 6.375% Common Securities
(liquidation amount $25 per Common Security) (the “Common Securities”).  The Common Securities are not transferable
and any attempted transfer thereof shall be void.  The designation, rights, privileges, restrictions, preferences
and other terms and provisions of the Common Securities represented hereby are
issued and shall in all respects be subject to the provisions of the Amended
and Restated Declaration of Trust of the Trust, dated as of October 31,
2003 (as the same may be amended from time to time, the “Declaration”), among
LEHMAN BROTHERS HOLDINGS INC. as Sponsor, BARRETT DIPAOLO, JEFFREY WELIKSON and
OLIVER BUDDE, as Regular Trustees, JPMORGAN CHASE BANK, as Property Trustee,
CHASE MANHATTAN BANK USA, NATIONAL ASSOCIATION, as Delaware Trustee and the
holders, from time to time, of undivided beneficial ownership interests in
assets of the Trust.  The Holder is
entitled to the benefits of the Guarantee to the extent described therein.  Capitalized terms used herein but not
defined shall have the meaning given them in the Declaration.  The Sponsor will provide a copy of the
Declaration, the Guarantee and the Indenture to the Holder without charge upon
written request to the Sponsor at its principal place of business.

 

Upon receipt of
this certificate, the Holder is bound by the Declaration and is entitled to the
benefits thereunder.

 

By acceptance, the
Holder agrees to treat, for United States federal income tax purposes, the
Debentures as indebtedness and the Common Securities as evidence of an
undivided indirect beneficial ownership interest in the Debentures.

 

 

IN WITNESS WHEREOF,
the Trust has executed this certificate this
        day of
              ,
200  .

 

	
   

  	
  LEHMAN BROTHERS HOLDINGS

  CAPITAL TRUST IV

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:  Regular
  Trustee

  

 

2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00057-of-00352.parquet"}]]