Document:

Exhibit 4.03

 

AMENDED
AND RESTATED DECLARATION OF TRUST

 

Lehman
Brothers Holdings Capital Trust V

 

Dated
as of April 22, 2004

 

 

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
April 22, 2004, 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
V (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 April 22, 2004, 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 Exhibit 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 V” 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)(1) 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,
(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 (E) the Guarantee Agreement,
dated as of April 22, 2004, 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 V 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, (D) the Amended and Restated
Declaration of Trust, dated as of October 31, 2003, by and among Lehman
Brothers Holdings Inc., the Regular Trustees named therein, JPMorgan Chase Bank
(formerly known as The Chase Manhattan

 

29

 

Bank), as initial Property
Trustee and Chase Manhattan Bank USA, National Association, as initial Delaware
Trustee and (E) this Agreement.

 

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

 

30

 

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:

 

(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.

 

31

 

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 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.

 

32

 

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, 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 four hundred million dollars ($400,000,000) 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 6.00% Preferred
Securities, Series M (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 twelve million three hundred seventy-one thousand one hundred
fifty dollars ($12,371,150) 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 6.00% Common Securities (the “Common Securities” and, together with the
Preferred Securities, the “Securities”). 
The

 

33

 

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.

 

(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).

 

34

 

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 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 6.00% 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 22, April 22, July 22 and October 22, commencing
July 22, 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 6.00% 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 6.00% per annum (“Compounded Distributions”).  “Distributions” shall mean ordinary
cumulative distributions together with any Compounded Distributions.  

 

35

 

(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 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

 

36

 

equal to accumulated and
unpaid distributions on, such Securities until such certificates are presented
to the Sponsor or its agent for transfer or reissuance.

 

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

 

37

 

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 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

 

38

 

equal to the percentage
required under the Indenture may direct the Property Trustee to give such
consent to take such action.

 

(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

 

39

 

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 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,

 

40

 

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 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.

 

41

 

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 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

 

42

 

other governmental charge
that may be imposed in connection with any registration of transfer or exchange
of Securities.

 

(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

 

43

 

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 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 V 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

 

44

 

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 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.

 

45

 

ARTICLE 8

 

DISSOLUTION AND TERMINATION OF TRUST

 

SECTION 8.1.  
Dissolution and Termination of Trust.

 

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

 

(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, at the direction and expense of the Sponsor, 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

 

46

 

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 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

 

47

 

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.

 

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

 

48

 

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.

 

(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

 

49

 

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 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

 

50

 

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 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.

 

51

 

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.

 

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

 

52

 

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,
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.

 

53

 

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 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;

 

54

 

(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 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;

 

55

 

(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 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

 

56

 

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 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:

 

57

 

(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
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.

 

58

 

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:

 

(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.

 

59

 

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.

 

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 V

 

6.00% Preferred Securities

(liquidation amount $25 per Preferred Security)

 

Lehman Brothers Holdings Capital Trust V, 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 6.00% 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 April 22, 2004 (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 V

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  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 V

 

Common Securities

(liquidation amount $25 per Common Security)

 

Lehman
Brothers Holdings Capital Trust V, 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 6.00% 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 April 22, 2004
(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 V

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:   Regular Trustee

  

 

2Exhibit 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: 16,000,000

  

CUSIP No. 52520E200

 

Certificate Evidencing Preferred Securities

of

Lehman Brothers Holdings Capital Trust V

 

6.00% Preferred Securities, Series M

(liquidation amount $25 per Preferred Security)

 

Lehman Brothers Holdings Capital Trust V, 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 16,000,000
preferred securities of the Trust representing undivided beneficial ownership
interests in the assets of the Trust designated the 6.00% 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 April 22, 2004 (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 22nd
day of April, 2004.

 

	
   

  	
  LEHMAN BROTHERS HOLDINGS

    CAPITAL TRUST V

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  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

  

 

3

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