Document:

Exhibit 4.04

 

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. R-1

  	
   

  	
  Number of
  Preferred Securities: 12,000,000

  
	
  CUSIP No.
  52520B 20 6

  	
   

  	
   

  

 

Certificate
Evidencing Preferred Securities

of

Lehman Brothers Holdings Capital Trust IV

6.375%
Preferred Securities, Series L

(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 12,000,000 preferred securities of the
Trust representing undivided beneficial ownership interests in the assets of
the Trust designated the 6.375% Preferred Securities, Series L (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.

 

2

 

IN WITNESS WHEREOF, the
Trust has executed this certificate this 31st day of October, 2003.

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

  	
   

  

 

 

3Exhibit 4.05

 

 

GUARANTEE AGREEMENT

 

Lehman Brothers Holdings Capital Trust IV

 

Dated as of October 31, 2003

 

 

 

CROSS REFERENCE TABLE*

 

	
  Section of
  Trust

  	
   

  	
  Section of

  
	
  Indenture
  Act of

  	
   

  	
  Guarantee

  
	
  1939, as
  amended

  	
   

  	
  Agreement

  
	
   

  	
   

  	
   

  
	
  310(a)

  	
   

  	
  4.1(a)

  
	
  310(b)

  	
   

  	
  2.8; 4.1(c)

  
	
  310(c)

  	
   

  	
  Inapplicable

  
	
  311(a)

  	
   

  	
  2.2(b)

  
	
  311(b)

  	
   

  	
  2.2(b)

  
	
  311(c)

  	
   

  	
  Inapplicable

  
	
  312(a)

  	
   

  	
  2.2(a); 2.9

  
	
  312(b)

  	
   

  	
  2.2(b); 2.9

  
	
  312(c)

  	
   

  	
  2.9

  
	
  313(a)

  	
   

  	
  2.3

  
	
  313(b)

  	
   

  	
  2.3

  
	
  313(c)

  	
   

  	
  2.3

  
	
  313(d)

  	
   

  	
  2.3

  
	
  314(a)

  	
   

  	
  2.4

  
	
  314(b)

  	
   

  	
  Inapplicable

  
	
  314(c)

  	
   

  	
  2.5

  
	
  314(d)

  	
   

  	
  Inapplicable

  
	
  314(e)

  	
   

  	
  2.5

  
	
  314(f)

  	
   

  	
  Inapplicable

  
	
  315(a)

  	
   

  	
  3.1(d);
  3.2(a)

  
	
  315(b)

  	
   

  	
  2.7(a)

  
	
  315(c)

  	
   

  	
  3.1(c)

  
	
  315(d)

  	
   

  	
  3.1(d)

  
	
  316(a)

  	
   

  	
  2.6; 5.4(a)

  
	
  316(b)

  	
   

  	
  5.3

  
	
  316(c)

  	
   

  	
  Inapplicable

  
	
  317(a)

  	
   

  	
  2.10

  
	
  317(b)

  	
   

  	
  Inapplicable

  
	
  318(a)

  	
   

  	
  2.1(b)

  

 

 

	
  *

  	
   

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

  

 

 

i

 

 

TABLE OF CONTENTS

 

	
  SECTION 1
  INTERPRETATION AND DEFINITIONS

  	
   

  
	
  1.1.

  	
  Interpretation
  and Definitions

  	
   

  
	
  SECTION 2 TRUST INDENTURE
  ACT

  	
   

  
	
  2.1.

  	
  Trust Indenture
  Act; Application

  	
   

  
	
  2.2.

  	
  Lists of Holders
  of Securities

  	
   

  
	
  2.3.

  	
  Reports by
  Guarantee Trustee

  	
   

  
	
  2.4.

  	
  Periodic Reports
  to Guarantee Trustee

  	
   

  
	
  2.5.

  	
  Evidence of
  Compliance with Conditions Precedent

  	
   

  
	
  2.6.

  	
  Guarantee Event
  of Default; Waiver

  	
   

  
	
  2.7.

  	
  Guarantee Event
  of Default; Notice

  	
   

  
	
  2.8.

  	
  Conflicting
  Interests

  	
   

  
	
  2.9.

  	
  Disclosure of
  Information

  	
   

  
	
  2.10.

  	
  Guarantee
  Trustee May File Proofs of Claim

  	
   

  
	
  SECTION
  3 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE

  	
   

  
	
  3.1.

  	
  Powers and
  Duties of Guarantee Trustee

  	
   

  
	
  3.2.

  	
  Certain Rights
  of Guarantee Trustee.

  	
   

  
	
  3.3.

  	
  Not Responsible
  for Recitals or Issuance of Guarantee

  	
   

  
	
  SECTION 4 GUARANTEE TRUSTEE

  	
   

  
	
  4.1.

  	
  Guarantee
  Trustee; Eligibility

  	
   

  
	
  4.2.

  	
  Appointment,
  Removal and Resignation of Guarantee Trustee

  	
   

  
	
  SECTION 5 GUARANTEE

  	
   

  
	
  5.1.

  	
  Guarantee

  	
   

  
	
  5.2.

  	
  Waiver of Notice
  and Demand

  	
   

  

 

 

ii

 

	
  5.3.

  	
  Obligations Not
  Affected

  	
   

  
	
  5.4.

  	
  Rights of
  Holders

  	
   

  
	
  5.5.

  	
  Guarantee of
  Payment

  	
   

  
	
  5.6.

  	
  Subrogation

  	
   

  
	
  5.7.

  	
  Independent
  Obligations

  	
   

  
	
  SECTION 6 LIMITATION OF
  TRANSACTIONS; SUBORDINATION

  	
   

  
	
  6.1.

  	
  Limitation of
  Transactions

  	
   

  
	
  6.2.

  	
  Ranking

  	
   

  
	
  6.3.

  	
  Subordination of
  Common Securities

  	
   

  
	
  SECTION 7 TERMINATION

  	
   

  
	
  7.1.

  	
  Termination

  	
   

  
	
  SECTION 8 INDEMNIFICATION

  	
   

  
	
  8.1.

  	
  Exculpation

  	
   

  
	
  8.2.

  	
  Indemnification

  	
   

  
	
  SECTION 9 MISCELLANEOUS

  	
   

  
	
  9.1.

  	
  Successors and
  Assigns

  	
   

  
	
  9.2.

  	
  Amendments

  	
   

  
	
  9.3.

  	
  Notices

  	
   

  
	
  9.4.

  	
  Benefit

  	
   

  
	
  9.5.

  	
  Governing Law

  	
   

  

 

 

iii

 

GUARANTEE AGREEMENT

 

 

 

This GUARANTEE AGREEMENT (the “Guarantee”), dated as of October 31,
2003, is executed and delivered by Lehman Brothers Holdings Inc., a Delaware
corporation (the “Guarantor”), and JPMorgan Chase Bank, as trustee (the
“Guarantee Trustee”), for the benefit of the Holders (as defined herein) from
time to time of the Securities (as defined herein) of Lehman Brothers Holdings
Capital Trust IV, a Delaware statutory trust (the “Trust”).

 

W I T N E S S E T H :

 

 

WHEREAS,
pursuant to the Declaration (as defined herein), the Trust may initially issue
an unlimited amount of preferred securities, having a liquidation amount of $25
per security and designated the 6.375% Preferred Securities of the Trust,
Series L  (the “Preferred Securities”),
and common securities, having a liquidation amount of $25 per security and
designated the 6.375% Common Securities of the Trust (the “Common Securities”
and, together with the Preferred Securities, the “Securities”);

 

WHEREAS, as
incentive for the Holders to purchase the Securities, the Guarantor desires
irrevocably and unconditionally to agree, to the extent set forth in this
Guarantee, to pay to the Holders of the Securities the Guarantee Payments (as
defined herein) and to make certain other payments on the terms and conditions
set forth herein; and that if a Trust Enforcement Event (as defined herein) has
occurred and is continuing, the rights of holders of the Common Securities to
receive Guarantee Payments under this Guarantee are subordinated to the rights
of Holders of Preferred Securities to receive Guarantee Payments under this
Guarantee.

 

NOW,
THEREFORE, in consideration of the purchase by each Holder of Securities, which
purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor
executes and delivers this Guarantee for the benefit of the Holders.

 

 

SECTION 1

INTERPRETATION AND DEFINITIONS

 

1.1           Interpretation and Definitions.  In this Guarantee, unless the context
otherwise requires:

(a)           capitalized terms used in this
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.1;

(b)           a term defined anywhere in this
Guarantee has the same meaning throughout;

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

 

 

(d)           all references in this Guarantee to
Articles, Sections and Recitals are to Articles, Sections and Recitals of this
Guarantee, unless otherwise specified;

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

(f)            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; and

(g)           the following terms have the
following meanings:

“Affiliate” has the same
meaning as given to that term in Rule 405 of the Securities Act of 1933, as
amended, or any successor rule thereunder.

“Business Day” has the
meaning specified in the Declaration.

“Common Securities” has the
meaning specified in the Recitals hereto.

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

“Covered Person” means a
Holder or beneficial owner of Securities.

“Debentures” means the
series of subordinated deferrable interest debentures to be issued by the
Guarantor designated the 6.375% Subordinated Deferrable Interest Debentures due
October 2052 held by the Property Trustee (as defined in the Declaration) of
the Trust.

“Declaration” means the
Amended and Restated Declaration of Trust, dated as of October 31, 2003, as
amended, modified or supplemented from time to time, among the trustees of the
Trust named therein, the Guarantor, as sponsor, and the Holders, from time to
time, of undivided beneficial ownership interests in the assets of the Trust.

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

“Guarantee Event of Default”
means a default by the Guarantor on any of its payment or other obligations
under this Guarantee.

“Guarantee Payments” means
the following payments or distributions, without duplication, with respect to
the Securities, to the extent not paid by or on behalf of the Trust:  (i) any accumulated and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Securities to the extent the Trust has sufficient funds available therefor
at the time, (ii) the redemption price, including all accumulated and unpaid
Distributions to the date of redemption, with respect to any Securities called
for redemption by the Trust, to the extent the Trust shall have sufficient
funds available therefor at the time or (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of the Trust (other than in connection
with the 

 

2

 

distribution
of Debentures to the Holders in exchange for Securities as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation amount and all
accumulated and unpaid Distributions on the Securities to the date of payment,
to the extent the Trust has sufficient funds available therefor and (b) the
amount of assets of the Trust remaining available for distribution to Holders
in liquidation of the Trust (in either case, the “Liquidation Distribution”).

“Guarantee Trustee” means
JPMorgan Chase Bank, until a Successor Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Guarantee and
thereafter means each such Successor Guarantee Trustee.

“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 percentage
of Preferred Securities have given any request, notice, consent or waiver
hereunder, “Holder” shall not include the Guarantor or any Affiliate of the
Guarantor or any other obligor on the Preferred Securities; and provided
further, that in determining whether the Holders of the requisite liquidation
amount of Preferred Securities have voted on any matter provided for in this
Guarantee, 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 Certificates (as defined in the Declaration), the term “Holders”
shall mean the holder of the Global Certificate acting at the direction of the
Beneficial Owners (as defined in the Declaration).

“Indemnified Person” means
the Guarantee Trustee, any Affiliate of the Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Guarantee Trustee.

“Indenture” means the
Indenture, dated as of February 1, 1996, between the Guarantor and JPMorgan
Chase Bank (formerly known as The Chase Manhattan Bank and prior thereto as
Chemical Bank), as trustee, as amended and supplemented by the First
Supplemental Indenture dated as of February 1, 1996, and by any other indenture
supplemental thereto pursuant to which the Debentures are to be issued to the
Property Trustee (as defined in the Declaration) of the Trust.

“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. 
In determining whether the Holders of the requisite amount of Securities
have voted, Securities which are owned by the Guarantor or any Affiliate of the
Guarantor or any other obligor on the Securities shall be disregarded for the
purpose of any such determination.

“Officers’ Certificate”
means, with respect to any Person, a certificate signed on behalf of such
Person by two Authorized Officers (as defined in the Declaration) of such
Person.  

 

3

 

Any
Officers’ Certificate delivered with respect to compliance with a condition or
covenant provided for in this Guarantee 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.

 

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

“Redemption Price” has the
meaning specified in the Declaration.

“Responsible Officer” means,
with respect to the Guarantee Trustee, any officer with direct responsibility
for the administration of this Guarantee 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.

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

“Successor Guarantee
Trustee” means a successor Guarantee Trustee possessing the qualifications to
act as Guarantee Trustee under Section 4.1.

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

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

 

4

 

SECTION 2

TRUST INDENTURE ACT

 

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

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

2.2.          Lists of Holders of Securities.  (a) 
The Guarantor shall provide the Guarantee Trustee (i) except while the
Preferred Securities are represented by one or more Global Securities at least
one Business Day prior to the date for payment of Distributions, a list, in
such form as the Guarantee 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
Guarantor of a written request from the Guarantee Trustee for a List of Holders
as of a date no more than 15 days before such List of Holders is given to the
Guarantee Trustee; provided that the Guarantor shall not 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 Guarantee Trustee by the
Guarantor.  The Guarantee Trustee shall
preserve, in as current a form as is reasonably practicable, all information
contained in Lists of Holders given to it, provided that the Guarantee Trustee
may destroy any List of Holders previously given to it on receipt of a new List
of Holders.

(b)           The Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.

2.3.          Reports by Guarantee Trustee.  Within 60 days after May 15 of each year
(commencing with the year of the first anniversary of the issuance of the
Securities), the Guarantee Trustee shall provide to the Holders of the
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 Guarantee Trustee
shall also comply with the requirements of Section 313(d) of the Trust Indenture
Act.

2.4.          Periodic Reports to Guarantee Trustee.  The Guarantor shall provide to the Guarantee
Trustee such documents, reports and information as required by Section 314(a)
(if any) of the Trust Indenture Act and the compliance certificate required by
Section 314(a) of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314(a) of the Trust Indenture Act.

2.5.          Evidence of Compliance with
Conditions Precedent.  The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Guarantee 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.

 

 

5

 

2.6.          Guarantee Event of Default; Waiver.  The Holders of a Majority in Liquidation
Amount of the Securities may, by vote or written consent, on behalf of the
Holders of all of the Securities, waive any past Guarantee Event of Default and
its consequences.  Upon such waiver, any
such Guarantee Event of Default shall cease to exist, and any Guarantee Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Guarantee, but no such waiver shall extend to any subsequent or
other default or Guarantee Event of Default or impair any right consequent
thereon.

2.7.          Guarantee Event of Default; Notice.  (a)  The
Guarantee Trustee shall, within 90 days after the occurrence of a Guarantee
Event of Default, transmit by mail, first class postage prepaid, to the Holders
of the Securities, notices of all Guarantee Events of Default actually known to
a Responsible Officer of the Guarantee Trustee, unless such defaults have been
cured before the giving of such notice; provided, that the Guarantee Trustee
shall be protected in withholding such notice if and so long as a Responsible
Officer of the Guarantee Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Securities.

(b)            The Guarantee Trustee shall not be deemed to have
knowledge of any Guarantee Event of Default unless the Guarantee Trustee shall
have received written notice thereof or a Responsible Officer of the Guarantee
Trustee charged with the administration of the Declaration shall have obtained
actual knowledge thereof.

2.8.          Conflicting Interests.  The Declaration shall be deemed to be
specifically described in this Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.  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
Holdings 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 Holdings 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 for the benefit of the holders identified therein of Lehman
Brothers Holdings Capital Trust III and (D) this Guarantee 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 

 

6

 

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, as initial Property Trustee and Chase Manhattan Bank USA,
National Association, as initial Delaware Trustee and (D) the Declaration.

2.9.          Disclosure of Information.  The disclosure of information as to the
names and addresses of the Holders of the 
Securities in accordance with Section 312 of the Trust Indenture Act,
regardless of the source from which such information was derived, shall not be
deemed to be a violation of any existing law, or any law hereafter enacted
which does not specifically refer to Section 312 of the Trust Indenture Act,
nor shall the Guarantee Trustee be held accountable by reason of mailing any
material pursuant to a request made under Section 312(b) of the Trust Indenture
Act.

2.10.        Guarantee Trustee May File Proofs of
Claim.  Upon the occurrence of a
Guarantee Event of Default, the Guarantee Trustee is hereby authorized to (a)
recover judgment, in its own name and as trustee of an express trust, against
the Guarantor for the whole amount of any Guarantee Payments remaining unpaid
and (b) file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have its claims and those of the Holders of
the Securities allowed in any judicial proceedings relative to the Guarantor,
its creditors or its property.

SECTION 3

POWERS, DUTIES AND RIGHTS OF

GUARANTEE TRUSTEE

 

3.1.          Powers and Duties of Guarantee Trustee.

(a)           This Guarantee shall be held by the
Guarantee Trustee on behalf of the Trust for the benefit of the Holders of the
Securities, and the Guarantee Trustee shall not transfer this Guarantee to any
Person except a Holder of Securities exercising his or her rights pursuant to
Section 5.4(b) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee.  The right, title and interest
of the Guarantee Trustee in and to this Guarantee shall automatically vest in
any Successor Guarantee Trustee, and such vesting and succession of title shall
be effective whether or not conveyance documents have been executed and
delivered pursuant to the appointment of such Successor Guarantee Trustee.

(b)           If a Guarantee Event of Default
actually known to a Responsible Officer of the Guarantee Trustee has occurred
and is continuing, the Guarantee Trustee shall enforce this Guarantee for the
benefit of the Holders of the Securities.

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

 

7

 

(d)           No provision of this Guarantee shall
be construed to relieve the Guarantee 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 any
Guarantee Event of Default and after the curing or waiving of all such
Guarantee Events of Default that may have occurred:

(A)                              the duties and
obligations of the Guarantee Trustee shall be determined solely by the express provisions
of this Guarantee, and the Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in
this Guarantee, and no implied covenants or obligations shall be read into this
Guarantee against the Guarantee Trustee; and

(B)                                in the absence
of bad faith on the part of the Guarantee Trustee, the Guarantee 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
Guarantee Trustee and conforming to the requirements of this Guarantee; but in
the case of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Guarantee;

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

(iii)          the Guarantee Trustee shall not be
liable with respect to any action taken or omitted to be taken by it 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 Guarantee
Trustee, or exercising any trust or power conferred upon the Guarantee Trustee
under this Guarantee; and

(iv)          no provision of this Guarantee shall
require the Guarantee 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 the Guarantee Trustee shall
have reasonable grounds for believing that 

 

8

 

the repayment of such funds or
liability is not reasonably assured to it under the terms of this Guarantee or
if the Guarantee Trustee shall have reasonable grounds for believing that an
indemnity, reasonably satisfactory to the Guarantee Trustee, against such risk
or liability is not reasonably assured to it under the terms of this Guarantee.

3.2.          Certain Rights of Guarantee Trustee.

(a)           Subject to the provisions of Section
3.1:

(i)            The Guarantee 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 Guarantor
contemplated by this Guarantee shall be sufficiently evidenced by an Officers’
Certificate;

(iii)          Whenever, in the administration of
this Guarantee, the Guarantee Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting any action
hereunder, the Guarantee 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 Guarantor;

(iv)          The Guarantee Trustee shall have no
duty to see to any recording, filing or registration or any instrument (or any
rerecording, refiling or re-registration thereof);

(v)           The Guarantee Trustee may consult
with counsel, and the advice or opinion of such counsel with respect to legal
matters 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 Guarantor or any of its Affiliates
and may include any of its employees. 
The Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Guarantee from any court of
competent jurisdiction;

(vi)          The Guarantee Trustee shall be under
no obligation to exercise any of the rights or powers vested in it by this Guarantee
at the request or direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Guarantee Trustee, against the costs, expenses (including
attorneys’ fees and expenses and the expenses of the Guarantee 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 Guarantee Trustee; provided, that 

 

9

 

nothing contained in this
Section 3.2(a)(vi) shall be taken to relieve the Guarantee Trustee, upon the
occurrence of a Guarantee Event of Default, of its obligation to exercise the
rights and powers vested in it by this Guarantee;

(vii)         The Guarantee 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 Guarantee Trustee, in its
discretion, may make such further inquiry or investigation into such facts or
matters as it may see fit;

(viii)        The Guarantee Trustee may execute any of
the trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the Guarantee
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;

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

(x)            Whenever in the administration of
this Guarantee the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any other
action hereunder, the Guarantee Trustee (i) may request written instructions
from the Holders of a Majority in Liquidation Amount of the Securities, (ii)
may refrain from enforcing such remedy or right or taking such other action
until such written instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such written instructions.

(b)           No provision of this Guarantee shall
be deemed to impose any duty or obligation on the Guarantee 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
Guarantee Trustee shall be unqualified or incompetent to act 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 Guarantee Trustee shall be
construed to be a duty.

3.3.          Not Responsible for Recitals or Issuance
of Guarantee.  The recitals
contained in this Guarantee shall be taken as the statements of the Guarantor,
and the Guarantee Trustee does not assume any responsibility for their
correctness.  The Guarantee Trustee
makes no representations as to the validity or sufficiency of this Guarantee.

 

10

 

SECTION 4

GUARANTEE TRUSTEE

 

4.1.          Guarantee Trustee; Eligibility.

(a)           There shall be at all times a
Guarantee Trustee which shall:

(i)            not be an Affiliate of the
Guarantor; 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 Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, 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 4.1(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.

(b)           If at any time the Guarantee Trustee
shall cease to be eligible to so act under Section 4.1(a), the Guarantee
Trustee shall immediately resign in the manner and with the effect set out in
Section 4.2(c).

(c)           If the Guarantee Trustee has or shall
acquire any “conflicting interest” within the meaning of Section 310(b) of the
Trust Indenture Act, the Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.

4.2.          Appointment, Removal and Resignation of
Guarantee Trustee.

(a)           Subject to Section 4.2(b), unless a
Guarantee Event of Default shall have occurred and be continuing, the Guarantee
Trustee may be appointed or removed with or without cause at any time by the
Guarantor.

(b)           The Guarantee Trustee shall not be
removed in accordance with Section 4.2(a) until a Successor Guarantee Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Guarantee Trustee and delivered to the Guarantor.

(c)           The Guarantee Trustee appointed to
office shall hold such office until a Successor Guarantee Trustee shall have
been appointed or until its removal or resignation.  The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which resignation shall not
take effect until a Successor 

 

11

 

Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed
by such Successor Guarantee Trustee and delivered to the Guarantor and the
resigning Guarantee Trustee.

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

(e)           No Guarantee Trustee shall be liable
for the acts or omissions to act of any Successor Guarantee Trustee.

(f)            Upon termination of this Guarantee
or removal or resignation of the Guarantee Trustee pursuant to this Section
4.2, the Guarantor shall pay to the Guarantee Trustee all amounts owing for
fees and reimbursement of expenses which have accrued to the date of such
termination, removal or resignation.

SECTION 5

GUARANTEE

 

5.1.          Guarantee.

The Guarantor
irrevocably and unconditionally agrees to pay in full to the Holders the
Guarantee Payments (without duplication of amounts theretofore paid by the
Trust), as and when due, regardless of any defense, right of set-off or
counterclaim that the Trust may have or assert.  The Guarantor’s obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Guarantor to the
Holders or by causing the Trust to pay such amounts to the Holders.  Notwithstanding anything to the contrary
herein, the Guarantor retains all of its rights under the Indenture to
(i) extend the interest payment period on the Debentures and the Guarantor
shall not be obligated hereunder to make any Guarantee Payments during any Extension
Period (as defined in the certificate evidencing the Debentures) with respect
to the Distributions (as defined in the Declaration) on the Securities and
(ii) change the maturity date of the Debentures to the extent permitted by
the Indenture.

 

5.2.          Waiver of Notice and Demand.

The Guarantor hereby waives notice of
acceptance of this Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceeding first
against the Trust or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.

 

 

12

 

5.3.          Obligations Not Affected.

The
obligations, covenants, agreements and duties of the Guarantor under this
Guarantee shall be absolute and unconditional and shall remain in full force
and effect until the entire liquidation amount of all outstanding Securities
shall have been paid and such obligation shall in no way be affected or
impaired by reason of the happening from time to time of any event, including
without limitation, the following, whether or not with notice to, or the
consent of, the Guarantor:

 

(a)           The release or waiver, by operation
of law or otherwise, of the performance or observance by the Trust of any
express or implied agreement, covenant, term or condition relating to the
Securities to be performed or observed by the Trust;

(b)           The extension of time for the payment
by the Trust of all or any portion of the Distributions, Redemption Price,
Liquidation Distribution or any other sums payable under the terms of the
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with the Securities (other than an
extension of time for payment of Distributions, Redemption Price, Liquidation
Distribution or other sum payable that results from the extension of any
interest payment period on the Debentures or any change to the maturity date of
the Debentures permitted by the Indenture);

(c)           Any failure, omission, delay or lack
of diligence on the part of the Property Trustee or the Holders to enforce,
assert or exercise any right, privilege, power or remedy conferred on the
Property Trustee or the Holders pursuant to the terms of the Securities, or any
action on the part of the Trust granting indulgence or extension of any kind;

(d)           The voluntary or involuntary
liquidation, dissolution, sale of any collateral, receivership, insolvency,
bankruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other similar
proceedings affecting, the Trust or any of the assets of the Trust;

(e)           Any invalidity of, or defect or
deficiency in, the Securities;

(f)            The settlement or compromise of any
obligation guaranteed hereby or hereby incurred; or

(g)           Any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense of a
guarantor, it being the intent of this Section 5.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and all
circumstances.

There shall be
no obligation of the Guarantee Trustee or the Holders to give notice to, or
obtain consent of the Guarantor or any other Person with respect to the
happening of any of the foregoing.

 

 

13

 

No setoff,
counterclaim, reduction or diminution of any obligation, or any defense of any
kind or nature that the Guarantor has or may have against any Holder shall be
available hereunder to the Guarantor against such Holder to reduce the payments
to it under this Guarantee.

 

5.4.          Rights of Holders.

(a)           The Holders of at least a Majority in
Liquidation Amount of the Securities have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee or to direct the exercise of any
trust or power conferred upon the Guarantee Trustee under this Guarantee.

(b)           If the Guarantee Trustee fails to
enforce this Guarantee, then any Holder of Securities may, subject to the
subordination provisions of Section 6.2, institute a legal proceeding directly
against the Guarantor to enforce the Guarantee Trustee’s rights under this
Guarantee without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity.  In addition, if the Guarantor has failed to make a Guarantee
Payment, a Holder of Securities may, subject to the subordination provisions of
Section 6.2, directly institute a proceeding against the Guarantor for
enforcement of the Guarantee for such payment to the Holder of the Securities
of the principal of or interest on the Debentures on or after the respective
due dates specified in the Debentures, and the amount of the payment will be
based on the Holder’s pro rata share of the amount due and owing on all of the
Securities.  The Guarantor hereby waives
any right or remedy to require that any action on this Guarantee be brought
first against the Trust or any other person or entity before proceeding
directly against the Guarantor.

5.5.          Guarantee of Payment.

This Guarantee
creates a guarantee of payment and not of collection.

 

5.6.          Subrogation.

The Guarantor
shall be subrogated to all (if any) rights of the Holders of Securities against
the Trust in respect of any amounts paid to such Holders by the Guarantor under
this Guarantee; provided, however, that the Guarantor shall not (except to the
extent required by mandatory provisions of law) be entitled to enforce or
exercise any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under
this Guarantee, if at the time of any such payment, any amounts are due and
unpaid under this Guarantee.  If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay over
such amount to the Guarantee Trustee for the benefit of the Holders.

 

5.7.          Independent Obligations.

The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Trust with respect to the Securities, and that the Guarantor shall be
liable as principal and as debtor hereunder to make Guarantee Payments pursuant
to the terms of this Guarantee notwithstanding the occurrence of any event
referred to in subsections 5.3(a) through 5.3(g), inclusive, hereof.

 

 

14

 

SECTION 6

LIMITATION OF TRANSACTIONS; SUBORDINATION

 

6.1.          Limitation of Transactions.

So long as any
Securities remain outstanding, if (i) there shall have occurred an event of
default under the Indenture with respect to the Debentures, (ii) there shall be
a Guarantee Event of Default or (iii) the Guarantor shall have given notice of
its election of an Extension Period as provided in the certificate evidencing
the Debentures and shall not have rescinded such notice, or such Extension
Period or any extension thereof shall be continuing, then the Guarantor shall
not, and shall not permit any subsidiary of the Guarantor, 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 Guarantor’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 Guarantor that rank on a parity
with or junior in interest to the Debentures or make any guarantee payments
with respect to any guarantee by the Guarantor of the debt securities of any
subsidiary of the Guarantor if such guarantee ranks on a parity with or junior
in interest to the Debentures (other than (a) dividends or distributions in
common stock of the Guarantor, (b) payments under this Guarantee, (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 Guarantor’s benefit plans).

 

6.2.          Ranking.

This Guarantee
will constitute an unsecured obligation of the Guarantor and will rank (i) subordinate
and junior in right of payment to all other liabilities of the Guarantor, (ii)
on a parity with the most senior preferred or preference stock now or hereafter
issued by the Guarantor and with any guarantee now or hereafter entered into by
the Guarantor in respect of any preferred securities of any Affiliate of the
Guarantor and (iii) senior to the Guarantor’s common stock.  In addition, at all times such obligations
will be structurally subordinated to the liabilities and obligations of the Guarantor’s
subsidiaries.

 

6.3.          Subordination of Common Securities 

If a Trust
Enforcement Event has occurred and is continuing under the Declaration, the
rights of the holders of the Common Securities to receive Guarantee Payments
hereunder shall be subordinated to the rights of the Holders of the Preferred
Securities to receive Guarantee Payments under this Guarantee.

 

 

15

 

SECTION 7

TERMINATION

 

7.1.          Termination.

This Guarantee
shall terminate upon (i) full payment of the Redemption Price of all of
the Securities, (ii) distribution of the Debentures to the Holders of all
of the Securities or (iii) full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Trust.  Notwithstanding the foregoing, this
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder of Securities must restore payment of any sums
paid under the Securities or under this Guarantee.

 

SECTION 8

INDEMNIFICATION

 

8.1.          Exculpation.

(a)           No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Guarantor or
any Covered Person for any loss, damage, liability, expense or claim incurred
by reason of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Guarantee and in a manner that
such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Guarantee 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 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 Guarantor and upon
such information, opinions, reports or statements presented to the Guarantor 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 Guarantor, 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.

8.2.          Indemnification.

The Guarantor agrees to indemnify each
Indemnified Person for, and to hold each 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 8.2
shall survive the termination of this Guarantee.

 

 

16

 

SECTION 9

MISCELLANEOUS

 

9.1.          Successors and Assigns.

All guarantees and agreements contained in
this Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Securities then outstanding.

 

9.2.          Amendments.

Except with
respect to any changes that do not materially adversely affect the rights of
the Holders (in which case no consent of the Holders will be required), this
Guarantee may not be amended without the prior approval of the Holders of not
less than 66-2/3% of the aggregate liquidation amount of the Securities.  The provisions of Section 11.2 of the
Declaration with respect to meetings of, and action by written consent of, the
Holders of the Securities apply to the giving of such approval.

 

9.3.          Notices.

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

 

(a)           If given to the Guarantee Trustee, at
the Guarantee Trustee’s mailing address set forth below (or such other address
as the Guarantee Trustee may give notice of to the Guarantor and the Holders of
the Securities):

JPMorgan
Chase Bank

4 New York Plaza

15th Floor

New York, New York  10004

Attention:  Institutional Trust Services

Facsimile: (212) 623-6274

 

(b)           If given to the Guarantor, at the
Guarantor’s mailing addresses set forth below (or such other address as the
Guarantor may give notice of to the Guarantee Trustee and the Holders of the
Securities):

Lehman
Brothers Holdings Inc.

399 Park Avenue

New York, New York  10022

Attention: Corporate Counsel

Facsimile:  (212) 526-0339

 

17

 

(c)           If given to any Holder of Securities,
at the address set forth on the books and records 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.

 

9.4.          Benefit.

This Guarantee is solely for the benefit of
the Holders of the Securities and, subject to Section 3.1(a), is not separately
transferable from the Securities.

 

9.5.          Governing Law.

THIS GUARANTEE
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.

 

 

18

 

IN WITNESS
WHEREOF, this Guarantee is executed as of the day and year first above written.

 

	
   

  	
  LEHMAN
  BROTHERS HOLDINGS INC.,

  
	
   

  	
  as Guarantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Barrett S.
  DiPaolo

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN
  CHASE BANK

  
	
   

  	
  as Guarantee
  Trustee

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized
  Officer

  

 

 

 

19

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