Document:

Exhibit 4.01

 

	
  CUSIP NO. 52517PB26

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  REGISTERED

  	
   

  	
  PRINCIPAL AMOUNT: $7,395,000

  
	
  No. R-1

  	
   

  	
   

  

 

LEHMAN BROTHERS HOLDINGS INC.

 

MEDIUM-TERM NOTE, SERIES H

 

PRINCIPAL PROTECTED USD-ASIAN BASKET
FX-LINKED NOTE
DUE AUGUST 31, 2007

 

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY OR A NOMINEE OF THE DEPOSITORY. 
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., 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.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
NOTES IN CERTIFICATED FORM (A “CERTIFICATED NOTE”), THIS GLOBAL SECURITY MAY NOT
BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.

 

 

LEHMAN BROTHERS HOLDINGS INC., a corporation duly
organized and existing under the laws of the State of Delaware (herein called
the “Company,” which term includes any successor corporation under the
Indenture referred to on the reverse hereof), for value received, hereby
promises to pay to CEDE & Co., or registered assigns, on the Stated
Maturity Date, an amount equal to the Repayment Amount.  The Notes do not bear interest. No payments
on the Notes will be made until the Stated Maturity Date.

 

The “Stated Maturity Date” is August 31, 2007, or
if such day is not a Business Day, on the next following Business Day, provided
that if the Valuation Date for any Basket Currency is postponed as described
below, then the Maturity Date will be two Business Days following the latest
postponed Valuation Date.

 

The Repayment Amount, for each $1 principal amount of
the Notes represented hereby, is the amount equal to the sum of (a) $1 plus (b) the Additional Amount.

 

The “Additional Amount”, for each $1 principal amount
of the Notes represented hereby, equals 125% times the greater of (i) zero
and (ii) the difference between the Final Basket Value minus the Initial
Basket Value.

 

The “Initial Basket Value” equals $1.

 

The “Basket Currencies” are the Indian Rupee (INR), Japanese Yen (JPY),
Korean won (KRW), Thai Baht (THB), Taiwanese Dollar (TWD) and Chinese Yuan
(CNY).

 

The “Final Basket Value”
equals the sum of:

 

(i) a quotient, the numerator of which
is 7.8570 and the denominator of which is the Final Currency Value for INR plus

 

(ii) a quotient, the numerator of which
is 19.8000 and the denominator of which is the Final Currency Value for JPY plus

 

(iii) a quotient, the numerator of which
is 185.1300 and the denominator of which is the Final Currency Value for KRW plus

 

(iv) a quotient, the numerator of which
is 7.3746 and the denominator of which is the Final Currency Value for THB plus

 

(v) a quotient, the numerator of which
is 5.7852 and the denominator of which is the Final Currency Value for TWD plus

 

(vi) a quotient, the numerator of which
is 0.810120 and the denominator of which is the Final Currency Value for CNY.

 

The “Final
Currency Value” of each Basket Currency equals the spot exchange rate
between the applicable Basket Currency and the U.S. Dollar expressed as the
amount of Basket Currency per U.S. Dollar for customary settlement in the
interbank market for each Basket Currency on the Valuation Date, as reported by
Reuters on the applicable page, or any substitute page, and at the approximate
time set forth in the following table:

 

2

 

	
  Basket

  Currency

  	
   

  	
  Reuters Page

  	
   

  	
  Rate

  	
   

  	
  Applicable

  Currency

  Business Day

  
	
  INR

  	
   

  	
  RBIB

  	
   

  	
  Daily spot rate reported as Reference Rate 1USD = RS

  	
   

  	
  Bombay

  
	
  JPY

  	
   

  	
  JPNU

  	
   

  	
  Average of the bid and ask spot rates reported under
  the heading “DLR” at 3:00 p.m., Tokyo time

  	
   

  	
  Tokyo

  
	
  KRW

  	
   

  	
  KFTC01

  	
   

  	
  Daily spot rate reported under the heading “MAR”

  	
   

  	
  Seoul

  
	
  THB

  	
   

  	
  ABSIRFIX01

  	
   

  	
  Daily spot rate reported under the heading “THB”

  	
   

  	
  Singapore

  
	
  TWD

  	
   

  	
  TAIFX1

  	
   

  	
  Reported under the heading “Spot” as of 11:00 a.m.,
  Taipei time

  	
   

  	
  Taipei

  
	
  CNY

  	
   

  	
  SAEC

  	
   

  	
  Daily spot rate reported under the heading “USDCNY”

  	
   

  	
  Beijing

  

 

The “Valuation
Date” is, with respect to any Basket Currency, the latest Currency Business Day
for that Basket Currency that is at least two Business Days prior to August 31,
2007, subject to postponement in the event of a Market Disruption Event.

 

A “Currency Business Day” is, with
respect to any Basket Currency, any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which commercial banks are
authorized or required by law, regulation or executive order to close
(including for dealings in foreign exchange in accordance with the practice of
the foreign exchange market) in the city listed above under “Applicable
Currency Business Day” for that Basket Currency.

 

A
“Business Day”, notwithstanding any provision in the Indenture, is any day that
is not is not a Saturday or Sunday and that is not a day on which banking
institutions in New York City generally are authorized or obligated by law or
executive order to be closed.

 

If no spot quotation
is available for a Basket Currency from the applicable Reuters page described
under “Final Currency Value” above or there occurs an event that generally
makes it impossible to convert any of the Basket Currencies into U.S. dollars
through customary legal channels, or to obtain a firm quote of any of the
exchange rates between the Basket Currencies and the U.S. dollar on the
Valuation Date, that, in the good faith determination of the Calculation Agent,
affects the valuation of the Final Basket Value or the Company’s ability or any
similarly situated party to hedge its exposure or to unwind all or a material
portion of a hedge with respect to this Note (“Market Disruption Event”), then
the Valuation Date for that Basket Currency will be postponed to the next
succeeding Currency Business Day for that Basket Currency; provided, that if the Final Currency Value
for any Basket Currency is not capable of calculation as of the next succeeding
Currency Business Day because of an occurring or continuing Market Disruption
Event, the Calculation Agent will determine the Final Currency Value for that
Basket Currency taking into consideration all available information that in
good faith it deems relevant.

 

Except
as provided below, the Repayment Amount may, at the option of the Company, be
made by check mailed to the person entitled thereto at such person’s address as
it appears on the registry books of the Company.

 

3

 

Payment
of the Repayment Amount will be made in immediately available funds upon
surrender of this Note at the corporate trust office or agency of the Trustee
(or any duly appointed Paying Agent) maintained for that purpose in the Borough
of Manhattan, New York City (the “Corporate Trust Office”), provided that this
Note is presented to the Trustee (or any such Paying Agent) in time for the
Trustee (or any such Paying Agent) to make such payments in such funds in
accordance with its normal procedures.

 

The
Company will pay any administrative costs imposed by banks in making payments
in immediately available funds, but any tax, assessment or governmental charge
imposed upon payments hereunder, including, without limitation, any withholding
tax, will be borne by the Holder hereof.

 

References
herein to “U.S. dollars” or “U.S.$” or “$” are to the coin or currency of the
United States as at the time of payment is legal tender for the payment of
public and private debts.

 

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

 

This
Note shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been signed by the Trustee
under the Indenture.

 

4

 

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

 

	
  Dated: August 31,
  2005

  	
   

  
	
   

  	
   

  
	
  [SEAL]

  	
  LEHMAN BROTHERS
  HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

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

 

	
  CITIBANK, N.A.

  	
   

  	
   

  
	
    as
  Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized
  Officer

  	
   

  	
   

  
					

 

5

 

[REVERSE OF NOTE]

 

 

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTES, SERIES H

PRINCIPAL PROTECTED USD-ASIAN BASKET
FX-LINKED NOTE
DUE AUGUST 31, 2007

 

Section 1.  General.  This Note is one of a duly authorized series
of Notes of the Company designated as the Medium-Term Notes, Series H,
Principal Protected USD-Asian Basket FX-Linked Note (herein called the “Notes”).  The
Notes are one of an indefinite number of series of debt securities of the
Company (collectively, the “Securities”) issued or issuable under and pursuant
to an indenture dated as of September 1, 1987, as amended and supplemented
(the “Indenture”), duly executed and delivered by the Company and Citibank,
N.A., as Trustee (herein called the “Trustee”), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the holders of the Securities.  The separate series of Securities may be
issued in various aggregate principal amounts, may mature at different times,
may bear interest (if any) at different rates, may be subject to different
redemption provisions or repurchase rights (if any), may be subject to
different sinking, purchase or analogous funds (if any), may be subject to
different covenants and Events of Default and may otherwise vary as in the
Indenture provided.

 

Section 2.  Principal Amount for Indenture Purposes.  For the purpose of determining whether
Holders of the requisite amount of Notes of this series outstanding under the
Indenture have made a demand, given a notice or waiver or taken any other
action, the principal amount of this Note will be deemed to be the principal
amount of this Note then outstanding.

 

Section 3.  Modification and Waivers.  The Indenture contains provisions permitting
the Company and the Trustee, with the consent of the Holders of not less than 66-2/3%
in aggregate principal amount of each series of the Securities at the time
Outstanding to be affected, evidenced as in the Indenture provided, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the
Securities of all such series; provided, however, that no such supplemental
indenture shall, among other things, (i) change the fixed maturity of any
Security, or reduce the Repayment Amount or the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon or reduce any
premium or other amount payable on redemption, or make the Repayment Amount or
the principal amount thereof, premium or other amount payable, if any, or
interest thereon payable in any coin or currency other than that hereinabove
provided, without the consent of the Holder of each Security so affected, or (ii) change
the place of payment on any Security, or impair the right to institute suit for
payment on any Security, or reduce the aforesaid percentage of Securities, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Security so affected.  It is also provided in the Indenture that,
prior to any declaration accelerating the maturity of any series of Securities,
the holders of a majority in aggregate principal amount of the Securities of
such series

 

 

Outstanding may on behalf
of the holders of all the Securities of such series waive any past default or
Event of Default under the Indenture with respect to such series and its
consequences, except a default in the payment of interest, if any, on the
Repayment Amount or the principal amount, or premium, if any, on any of the
Securities of such series, or in the payment of any sinking fund installment or
analogous obligation with respect to Securities of such series.  Any such consent or waiver by the Holder of this
Note shall be conclusive and binding upon such Holder and upon all future
holders and owners of this Note and any Notes of this series which may be
issued in exchange or substitution herefor, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes of this series.

 

Section 4.  Obligations Unconditional.  No reference herein to the Indenture and no
provisions of this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
Repayment Amount or the principal amount on this Note at the place, at the
respective times, at the rate, and in the coin or currency herein prescribed.

 

Section 5.  Defeasance.  The Indenture contains provisions for the
discharge of the Indenture and defeasance at any time of the indebtedness on
this Note upon compliance by the Company with certain conditions set forth
therein, which provisions apply to this Note.

 

Section 6.  Authorized Form and Denominations.  The Notes of this series are issuable in
registered form, without coupons.  Each
Note will be issued initially as either a Global Security or a Certificated
Note, at the option of the Company, in denominations of $10,000 or whole
multiples of $5,000, either at the office or agency to be designated and
maintained by the Company for such purpose in the Borough of Manhattan, New
York City, pursuant to the provisions of the Indenture or at any of such other
offices or agencies as may be designated and maintained by the Company for such
purpose pursuant to the provisions of the Indenture, and in the manner and
subject to the limitations provided in the Indenture, but without the payment
of any service charge, except for any tax or other governmental charges imposed
in connection therewith.  Notes of this
series are exchangeable for a like aggregate principal amount of Notes of this
series of a different authorized denomination, except that Global Securities
will not be exchangeable for Certificated Notes of this series.

 

Section 7.  Registration of Transfer.  As provided in the Indenture and subject to
certain limitations as therein set forth, the transfer of this Note is
registrable in the Security Register, upon surrender of this Note for
registration of transfer, at the Corporate Trust Office or agency in a Place of
Payment for this Note, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar
requiring such written instrument of transfer duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more
new Notes of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

 

If at
any time the Depository notifies the Company that it is unwilling or unable to
continue as Depository or if at any time the Depository shall no longer be
eligible under the Indenture, the Company shall appoint a successor
Depository.  If a successor Depository
for the Notes of this series is not appointed by the Company within 90 days
after the Company receives such notice or becomes aware of such ineligibility,
the Company will issue, and the Trustee will

 

 

authenticate and deliver,
Notes of this series in definitive form in an aggregate principal amount equal
to the principal amount of this Note.

 

No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith.

 

Prior
to due presentment of this Note for registration of transfer, the Company, the
Trustee and any agent of the Company or the Trustee may treat the person in
whose name this Note is registered as the owner hereof for all purposes, and
neither the Company nor the Trustee nor any agent of the Company or of the
Trustee shall be affected by any notice to the contrary.

 

Section 8.  Events of Default.  If an Event of Default with respect to Notes
of this series shall occur and be continuing, the amount declared due and
payable upon any acceleration of the Notes will be determined by the
Calculation Agent and will equal the Repayment Amount calculated as though the
maturity of the Notes were the date of early repayment in the manner and with
the effect provided in the Indenture. 
The amount payable to the Holder hereof upon any acceleration permitted
under the Indenture will be equal to the Repayment Amount calculated as though
the date to which the maturity has been accelerated were the Stated Maturity
Date as determined by the Calculation Agent.

 

Section 9.  No Recourse Against Certain Persons.  No recourse for the payment of the Repayment
Amount or for any claim based hereon or otherwise in respect hereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
the Indenture or any Indenture supplemental thereto or in any Note, or because
of the creation of any indebtedness represented thereby, shall be had against
any incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.

 

Section 10.  Tax Treatment.  The Company agrees, and by acceptance of
beneficial ownership interest in the Notes of this series, each Holder of such
Notes will be deemed to have agreed, for United States federal income tax
purposes, (i) to treat the Notes of this series as indebtedness that is
subject to Treas. Reg. Sec. 1.1275-4 (the “Contingent Payment Regulations”) and
(ii) to be bound by the Company’s determination of the “comparable yield”
and “projected payment schedule,” within the meaning of the Contingent Payment
Regulations, with respect to the Notes of this series.

 

Section 11.  Defined
Terms.  All terms used but not
defined in this Note are used herein as defined in the Indenture.

 

Section 12.  GOVERNING LAW.  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.Exhibit 4.02

 

CALCULATION
AGENCY AGREEMENT

 

CALCULATION AGENCY AGREEMENT, dated as of August 31,
2005 (this “Agreement”), between Lehman Brothers Holdings Inc. (the “Company”)
and Lehman Brothers International (Europe), as Calculation Agent.

 

WHEREAS, the Company proposes to issue and sell its
Principal Protected USD-Asian Basket FX-Linked Notes (the “Notes”) from time to time;

 

WHEREAS, the terms of the Notes are described in a
pricing supplement (in connection with the performance by the Calculation Agent
of its services hereunder with respect to the Notes, the pricing supplement
relating to the Notes is referred to herein as the “relevant Pricing
Supplement”) to the prospectus supplement dated May 18, 2005 and the
prospectus dated May 18, 2005;

 

WHEREAS, the Notes will be issued under an Indenture,
dated as of September 1, 1987, between the Company and Citibank, N.A., as
Trustee (the “Trustee”), as supplemented and amended by supplemental
indentures dated as of November 25, 1987, November 27, 1990, September 13,
1991, October 4, 1993, October 1, 1995, and June 26, 1997, and
incorporating Standard Multiple Series Indenture Provisions dated July 30,
1987, as amended November 16, 1987 (collectively, the “Indenture”);
and

 

WHEREAS, the Company requests the Calculation Agent to
perform certain services described herein in connection with the Notes;

 

NOW THEREFORE, the Company and the Calculation Agent
agree as follows:

 

1.             Appointment
of Agent.  The Company hereby
appoints Lehman Brothers International (Europe) as Calculation Agent and Lehman
Brothers International (Europe) hereby accepts such appointment as the Company’s
agent for the purpose of performing the services hereinafter described upon the
terms and subject to the conditions hereinafter mentioned.

 

2.             Calculations
and Information Provided.  In
response to a request made by the Trustee for a determination of the Repayment
Amount with respect to any series of the Notes, the Calculation Agent shall
determine the Repayment Amount (as set forth below) on the Valuation Date (as
defined below) in accordance with the terms of the Notes and this Agreement and
notify the Trustee of its determination. 
In addition, the Calculation Agent shall also be responsible for
determining each of the following items for the Notes, to the extent
applicable:

 

(a)           whether a Market
Disruption Event (as defined below) has occurred;

 

(b)           the applicable
Valuation Date for any Basket Currency; and

 

(c)           any other
calculation, determination or adjustment specified as being made by the Calculation
Agent in this Agreement, the relevant Pricing Supplement or the Notes.

 

 

3.             Calculations.  Any calculation or determination by the
Calculation Agent pursuant hereto shall be made at the sole discretion of the
Calculation Agent and shall (in the absence of manifest error) be final and
binding.  Any calculation made by the
Calculation Agent hereunder shall, at the Trustee’s request, be made available
at the Corporate Trust Office. The procedures the Calculation Agent will use to
determine the information described herein with respect to the Notes is set
forth as follows:

 

(a)           On
the Valuation Date, the Calculation Agent shall calculate the Repayment Amount
for the Notes. The Repayment Amount, for each $1 principal amount of the Notes,
is the amount equal to the sum of (a) $1 plus
(b) the Additional Amount.

 

(i)            The
“Additional Amount”, for each $1 principal amount of the Notes, equals
125% times the greater of (i) zero and (ii) the difference between
the Final Basket Value minus the Initial Basket Value.

 

(ii)           The
“Initial Basket Value” equals $1.

 

(iii)          The
“Final Basket Value” equals the sum of:

 

a.               a
quotient, the numerator of which is 7.8570 and the denominator of which is the
Final Currency Value for Indian Rupee (“INR”) plus

 

b.              a quotient, the
numerator of which is 19.8000 and the denominator of which is the Final
Currency Value for Japanese Yen (“JPY”) plus

 

c.               a
quotient, the numerator of which is 185.1300 and the denominator of which is
the Final Currency Value for Korean Won (“KRW”) plus

 

d.              a
quotient, the numerator of which is 7.3746 and the denominator of which is the
Final Currency Value for Thai Baht (“TWD”) plus

 

e.               a
quotient, the numerator of which is 5.7852 and the denominator of which is the
Final Currency Value for Taiwanese Dollar (“TWD”) plus

 

f.                  a
quotient, the numerator of which is 0.810120 and the denominator of which is
the Final Currency Value for Chinese Yuan (“CNY”).

 

(iv)          The
“Final Currency Value” equals the value of each Basket
Currency represented by the spot exchange rate between the applicable Basket
Currency and the U.S. Dollar expressed as the amount of Basket Currency per
U.S. Dollar for customary settlement in the interbank market for each Basket
Currency on the Valuation Date, as reported by Reuters on the applicable page,
or any substitute page, and at the approximate time set forth in the following
table:

 

2

 

	
  Basket

  Currency

  	
   

  	
  Reuters Page

  	
   

  	
  Rate

  	
   

  	
  Applicable

  Currency

  Business Day

  
	
  INR

  	
   

  	
  RBIB

  	
   

  	
  Daily spot rate reported as Reference Rate 1USD = RS

  	
   

  	
  Bombay

  
	
  JPY

  	
   

  	
  JPNU

  	
   

  	
  Average of the bid and ask spot rates reported under the heading
  “DLR” at 3:00 p.m., Tokyo time

  	
   

  	
  Tokyo

  
	
  KRW

  	
   

  	
  KFTC01

  	
   

  	
  Daily spot rate reported under the heading “MAR”

  	
   

  	
  Seoul

  
	
  THB

  	
   

  	
  ABSIRFIX01

  	
   

  	
  Daily spot rate reported under the heading “THB”

  	
   

  	
  Singapore

  
	
  TWD

  	
   

  	
  TAIFX1

  	
   

  	
  Reported under the heading “Spot” as of 11:00 a.m., Taipei time

  	
   

  	
  Taipei

  
	
  CNY

  	
   

  	
  SAEC

  	
   

  	
  Daily spot rate reported under the heading “USDCNY”

  	
   

  	
  Beijing

  

 

The “Valuation Date” is, with respect
to any Basket Currency, the latest Currency Business Day for that Basket
Currency that is at least two Business Days prior to August 31, 2007,
subject to postponement in the event of a Market Disruption Event.

 

A
“Currency Business Day” is, with
respect to any Basket Currency, any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which commercial banks are
authorized or required by law, regulation or executive order to close
(including for dealings in foreign exchange in accordance with the practice of
the foreign exchange market) in the city listed above under “Applicable
Currency Business Day” for that Basket Currency.

 

A “Business Day”, notwithstanding any
provision in the Indenture, is any day that is not is not a Saturday or Sunday
and that is not a day on which banking institutions in New York City generally
are authorized or obligated by law or executive order to be closed.

 

(b)           If no spot quotation is available
for a Basket Currency from the applicable Reuters page described under “Final
Currency Value” above or there occurs an event that generally makes it
impossible to convert any of the Basket Currencies into U.S. dollars through
customary legal channels, or to obtain a firm quote of any of the exchange
rates between the Basket Currencies and the U.S. dollar on the Valuation Date,
that, in the good faith determination of the Calculation Agent, affects the
valuation of the Final Basket Value or the Company’s ability or any similarly
situated party to hedge its exposure or to unwind all or a material portion of
a hedge with respect to this Note (“Market Disruption Event”), then the
Valuation Date for that Basket Currency will be postponed to the next
succeeding Currency Business Day for that Basket Currency;
provided, that if the Final Currency Value for any Basket Currency is not
capable of calculation as of the next succeeding Currency Business Day because
of an occurring or continuing Market Disruption Event, the Calculation Agent
will determine the Final Currency Value for that Basket Currency taking into
consideration all available information that in good faith it deems relevant.

 

(c)           The
Calculation Agent shall notify the Trustee of all such calculations,
determinations and adjustment or if a Market Disruption Event with respect to a
series of Notes has occurred.

 

3

 

4.             Fees
and Expenses.  The Calculation Agent
shall be entitled to reasonable compensation for all services rendered by it as
agreed to between the Calculation Agent and the Company.

 

5.             Terms
and Conditions.  The Calculation
Agent accepts its obligations herein set out upon the terms and conditions
hereof, including the following, to all of which the Company agrees:

 

(a)           in acting under this
Agreement, the Calculation Agent is acting solely as an independent expert and
not as an agent of the Company and does not assume any obligation toward, or
any relationship of agency or trust for or with, any of the holders of the
Notes;

 

(b)           unless otherwise
specifically provided herein, any order, certificate, notice, request,
direction or other communication from the Company or the Trustee made or given
under any provision of this Agreement shall be sufficient if signed by any
person who the Calculation Agent reasonably believes to be a duly authorized
officer or attorney-in-fact of the Company or the Trustee, as the case may be;

 

(c)           the Calculation
Agent shall be obliged to perform only such duties as are set out specifically
herein and any duties necessarily incidental thereto;

 

(d)           the Calculation
Agent, whether acting for itself or in any other capacity, may become the owner
or pledgee of Notes with the same rights as it would have had if it were not
acting hereunder as Calculation Agent; and

 

(e)           the Calculation
Agent shall incur no liability hereunder except for loss sustained by reason of
its gross negligence or wilful misconduct.

 

6.             Resignation;
Removal; Successor.  (a)  The
Calculation Agent may at any time resign by giving written notice to the
Company of such intention on its part, specifying the date on which its desired
resignation shall become effective, subject to the appointment of a successor
Calculation Agent and acceptance of such appointment by such successor
Calculation Agent, as hereinafter provided. 
The Calculation Agent hereunder may be removed at any time by the filing
with it of an instrument in writing signed by or on behalf of the Company and
specifying such removal and the date when it shall become effective.  Such resignation or removal shall take effect
upon the appointment by the Company, as hereinafter provided, of a successor
Calculation Agent and the acceptance of such appointment by such successor
Calculation Agent.  In the event a
successor Calculation Agent has not been appointed and has not accepted its
duties within 90 days of the Calculation Agent’s notice of resignation, the
Calculation Agent may apply to any court of competent jurisdiction for the
designation of a successor Calculation Agent.

 

(b)           In
case at any time the Calculation Agent shall resign, or shall be removed, or
shall become incapable of acting, or shall be adjudged bankrupt or insolvent,
or make an assignment for the benefit of its creditors or consent to the
appointment of a receiver or custodian of all or any substantial part of its
property, or shall admit in writing its inability to pay or meet its debts as
they mature, or if a receiver or custodian of it or all or any substantial part
of its property shall be appointed, or if any public officer shall have taken
charge or control of the 

 

4

 

Calculation
Agent or of its property or affairs, for the purpose of rehabilitation,
conservation or liquidation, a successor Calculation Agent shall be appointed
by the Company by an instrument in writing, filed with the successor
Calculation Agent.  Upon the appointment
as aforesaid of a successor Calculation Agent and acceptance by the latter of
such appointment, the Calculation Agent so superseded shall cease to be
Calculation Agent hereunder.

 

(c)           Any
successor Calculation Agent appointed hereunder shall execute, acknowledge and
deliver to its predecessor, to the Company and to the Trustee an instrument
accepting such appointment hereunder and agreeing to be bound by the terms
hereof, and thereupon such successor Calculation Agent, without any further
act, deed or conveyance, shall become vested with all the authority, rights,
powers, trusts, immunities, duties and obligations of such predecessor with
like effect as if originally named as Calculation Agent hereunder, and such
predecessor, upon payment of its charges and disbursements then unpaid, shall
thereupon become obligated to transfer, deliver and pay over, and such
successor Calculation Agent shall be entitled to receive, all moneys, securities
and other property on deposit with or held by such predecessor, as Calculation
Agent hereunder.

 

(d)           Any
corporation into which the Calculation Agent hereunder may be merged or
converted or any corporation with which the Calculation Agent may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Calculation Agent shall be a party, or any corporation to which the
Calculation Agent shall sell or otherwise transfer all or substantially all of
the assets and business of the Calculation Agent shall be the successor
Calculation Agent under this Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto.

 

7.             Certain
Definitions.  Capitalized terms not
otherwise defined herein are used herein as defined in the Notes or, if not
defined in the Notes, as defined in the Indenture.

 

8.             Indemnification.  The Company will indemnify the Calculation
Agent against any losses or liability which it may incur or sustain in
connection with its appointment or the exercise of its powers and duties
hereunder except such as may result from the gross negligence or wilful
misconduct of the Calculation Agent or any of its agents or employees.  The Calculation Agent shall incur no
liability and shall be indemnified and held harmless by the Company for or in
respect of any action taken or suffered to be taken in good faith by the
Calculation Agent in reliance upon written instructions from the Company.

 

9.             Notices.  Any notice required to be given hereunder
shall be delivered in person, sent (unless otherwise specified in this
Agreement) by letter, telex or facsimile transmission or communicated by
telephone (confirmed in a writing dispatched within two Business Days), (a) in
the case of the Company, to it at 745 Seventh Avenue, New York, New York 10019
(facsimile: (646) 758-3204) (telephone: (212) 526-7000), Attention: Treasurer,
with a copy to 399 Park Avenue, New York, New York 10022 (facsimile: (212) 526-0357)
(telephone: (212) 526-7000), Attention: Corporate Secretary, (b) in the
case of the Calculation Agent, to it at Lehman Brothers International (Europe),
25 Bank Street, London E14 5LE, England (facsimile: (44 20 7102 2049)
(telephone: 44 20 7102 2443), Attention: Calculation Agent and (c) in the
case of the Trustee, to it at 111 Wall Street, 5th Floor, New York, New York
10043 (facsimile: (212) 657-3836) (telephone: 
(212) 657-7805), Attention: Corporate Trust Department or, in any case,
to any other address or number of which the party receiving notice shall have
notified the party giving such notice in writing.  Any notice hereunder given by telex, 

 

5

 

facsimile
or letter shall be deemed to be served when in the ordinary course of
transmission or post, as the case may be, it would be received.

 

10.           GOVERNING
LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONTINUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

11.           Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.

 

12.           Benefit
of Agreement.  This Agreement is
solely for the benefit of the parties hereto and their successors and assigns,
and no other person shall acquire or have any rights under or by virtue hereof.

 

6

 

IN WITNESS WHEREOF, this Agreement has been entered
into as of the day and year first above written.

 

 

	
   

  	
  LEHMAN BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LEHMAN BROTHERS INTERNATIONAL (EUROPE),

  
	
   

  	
    as Calculation Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
					

 

7

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