8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): May 17, 2007

LEHMAN BROTHERS HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

1-9466	13-3216325
(Commission File Number)	(IRS Employer Identification No.)
745 Seventh Avenue
New York, New York	10019
(Address of principal	(Zip Code)
executive offices)

Registrant’s telephone number, including area code:
(212) 526-7000

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 3.03 Material Modifications to Rights of Security Holders.

On May 17, 2007, Lehman Brothers Holdings Inc. (the “Company”) and Lehman Brothers Holdings Capital Trust VII (“Trust VII”) issued $1 billion aggregate stated amount of 5.857% Mandatory Capital Advantaged Preferred Securities (the “Fixed Rate MCAPS”) and the Company and Lehman Brothers Holdings Capital Trust VIII (“Trust VIII”) issued $500 million aggregate stated amount of Floating Rate Mandatory Capital Advantaged Preferred Securities (the “Floating Rate MCAPS” and together with the Fixed Rate MCAPS, the “MCAPS”). Each Fixed Rate MCAPS consists of (1) a contract to purchase one depositary share representing 1/100^th of a share of the Company’s Non-Cumulative Perpetual Preferred Stock, Series H, with a liquidation preference of $100,000 per share (the “Series H Preferred Stock”), and (2) a trust preferred security of Trust VII, which trust preferred security is fully and unconditionally guaranteed by the Company to the extent described in the Company’s and Trust VII’s prospectus supplement dated May 8, 2007. Each Floating Rate MCAPS consists of (1) a contract to purchase one depositary share representing 1/100^th of a share of the Company’s Non-Cumulative Perpetual Preferred Stock, Series I, with a liquidation preference of $100,000 per share (the “Series I Preferred Stock,” and together with the “Series H Preferred Stock,” the “Preferred Stock”), and (2) a trust preferred security of Trust VIII, which trust preferred security is fully and unconditionally guaranteed by the Company to the extent described in the Company’s and Trust VIII’s prospectus supplement dated May 8, 2007, as supplemented. The sole assets of Trust VII and Trust VIII are junior subordinated debentures issued by the Company.

Under the terms of the MCAPS, the ability of the Company to declare or pay dividends on, or purchase, redeem or otherwise acquire, shares of the Company’s capital stock and certain of its debt securities is subject to certain restrictions in the event the Company elects to defer interest on the junior subordinated debentures or contract payments on the stock purchase contracts referred to above, among other events, as set forth in the respective Supplemental Indentures and Stock Purchase Contract Agreements included as exhibits to this Current Report on Form 8-K.

In addition, upon issuance of the Preferred Stock, the ability of the Company to pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment on its common stock and on other preferred stock ranking on a parity with the Preferred Stock, will be subject to certain restrictions in the event that it does not declare dividends on the Preferred Stock during any dividend period. The terms of Preferred Stock are more fully described in the respective Certificates of Designations included as exhibits to this Current Report on Form 8-K.

Item 5.03 Amendments to Articles of Incorporation or Bylaws: Change in Fiscal Year.

On May 17, 2007, the Company filed the Certificate of Designations for the Series H Preferred Stock and the Certificate of Designations for the Series I Preferred Stock with the Secretary of State of the State of Delaware, establishing the terms of the Series H Preferred Stock and the Series I Preferred Stock, respectively. Copies of the Certificates of Designations are included as exhibits to this Current Report on Form 8-K.

Item 8.01 Other Events.

In connection with the issuance and sale of the MCAPS, the Company entered into Replacement Capital Covenants (the “RCCs”) pursuant to which the Company covenanted in favor of the holders of the Company’s Junior Subordinated Notes due 2054 underlying the 6.24% Preferred Securities, Series N, of Lehman Brothers Holdings Capital Trust VI to restrict its and its subsidiaries’ ability to redeem, repay or purchase the MCAPS and the Preferred Stock, as described more fully in the RCCs included as exhibits to this Current Report on Form 8-K.

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Also in connection with the offering, issuance and sale of the Fixed Rate MCAPS and the Floating Rate MCAPS, the Company is filing additional exhibits under the Registration Statement on Form S-3 of the Company, Trust VII and Trust VIII (File Nos. 333-134553, 333-134553-05 and 333-134553-04, respectively) as part of this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

3.01	Certificate of Designations of Lehman Brothers Holdings Inc. establishing the rights, preferences, privileges, qualifications, restrictions and limitations relating to the Non-Cumulative Perpetual Preferred Stock, Series H
3.02	Certificate of Designations of Lehman Brothers Holdings Inc. establishing the rights, preferences, privileges, qualifications, restrictions and limitations relating to the Non-Cumulative Perpetual Preferred Stock, Series I
4.01	Stock Purchase Contract Agreement, dated May 17, 2007, between the Company and U.S. Bank National Association (including the form of certificate representing the Fixed Rate MCAPS)
4.02	Stock Purchase Contract Agreement, dated May 17, 2007, between the Company and U.S. Bank National Association (including the form of certificate representing the Floating Rate MCAPS)
4.03	Collateral Agreement, dated May 17, 2007, among the Company, The Bank of New York and U.S. Bank National Association (Fixed Rate MCAPS)
4.04	Collateral Agreement, dated May 17, 2007, among the Company, The Bank of New York and U.S. Bank National Association (Floating Rate MCAPS)
4.05	Amended and Restated Declaration of Trust for Lehman Brothers Holdings Capital Trust VII, dated May 17, 2007, among the Company, as Sponsor, U.S. Bank National Association as Property Trustee, U.S. Bank Trust National Association as Delaware Trustee, the Regular Trustees and the holders of the Trust Securities (including the form of certificate representing the trust preferred securities)
4.06	Amended and Restated Declaration of Trust for Lehman Brothers Holdings Capital Trust VIII, dated May 17, 2007, among the Company as Sponsor, U.S. Bank National Association as Property Trustee U.S. Bank Trust National Association as Delaware Trustee, the Regular Trustees, and the holders of the Trust Securities (including the form of certificate representing the trust preferred securities)
4.07	Guarantee Agreement, dated May 17, 2007, between the Company and U.S. Bank National Association, for Lehman Brothers Holdings Capital Trust VII

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4.08	Guarantee Agreement, dated May 17, 2007, between the Company and U.S. Bank National Association, for Lehman Brothers Holdings Capital Trust VIII
4.09	Eleventh Supplemental Indenture between the Company and U.S. Bank National Association, dated as of May 17, 2007 (including the form of junior subordinated debenture)
4.10	Twelfth Supplemental Indenture between the Company and U.S. Bank National Association, dated as of May 17, 2007 (including the form of junior subordinated debenture)
4.11	Certificate of Amendment to Certificate of Trust of Lehman Brothers Holdings Capital Trust VII
4.12	Certificate of Amendment to Certificate of Trust of Lehman Brothers Holdings Capital Trust VIII
8.01	Tax Opinion of Simpson Thacher & Bartlett LLP
99.1	Replacement Capital Covenant dated May 17, 2007 (Fixed Rate MCAPS)
99.2	Replacement Capital Covenant dated May 17, 2007 (Floating Rate MCAPS)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LEHMAN BROTHERS HOLDINGS INC.
By:	/s/ Barrett S. DiPaolo
Barrett S. DiPaolo
Vice President

Date: May 23, 2007

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EXHIBIT INDEX

Exhibit No.	Exhibit
3.01	Certificate of Designations of Lehman Brothers Holdings Inc. establishing the rights, preferences, privileges, qualifications, restrictions and limitations relating to the Non-Cumulative Perpetual Preferred Stock, Series H
3.02	Certificate of Designations of Lehman Brothers Holdings Inc. establishing the rights, preferences, privileges, qualifications, restrictions and limitations relating to the Non-Cumulative Perpetual Preferred Stock, Series I
4.01	Stock Purchase Contract Agreement, dated May 17, 2007, between the Company and U.S. Bank National Association (including the form of certificate representing the Fixed Rate MCAPS)
4.02	Stock Purchase Contract Agreement, dated May 17, 2007, between the Company and U.S. Bank National Association (including the form of certificate representing the Floating Rate MCAPS)
4.03	Collateral Agreement, dated May 17, 2007, among the Company, The Bank of New York and U.S. Bank National Association (Fixed Rate MCAPS)
4.04	Collateral Agreement, dated May 17, 2007, among the Company, The Bank of New York and U.S. Bank National Association (Floating Rate MCAPS)
4.05	Amended and Restated Declaration of Trust for Lehman Brothers Holdings Capital Trust VII, dated May 17, 2007, among the Company, as Sponsor, U.S. Bank National Association as Property Trustee, U.S. Bank Trust National Association as Delaware Trustee, the Regular Trustees and the holders of the Trust Securities (including the form of certificate representing the trust preferred securities)
4.06	Amended and Restated Declaration of Trust for Lehman Brothers Holdings Capital Trust VIII, dated May 17, 2007, among the Company as Sponsor, U.S. Bank National Association as Property Trustee U.S. Bank Trust National Association as Delaware Trustee, the Regular Trustees, and the holders of the Trust Securities (including the form of certificate representing the trust preferred securities)
4.07	Guarantee Agreement, dated May 17, 2007, between the Company and U.S. Bank National Association, for Lehman Brothers Holdings Capital Trust VII
4.08	Guarantee Agreement, dated May 17, 2007, between the Company and U.S. Bank National Association, for Lehman Brothers Holdings Capital Trust VIII
4.09	Eleventh Supplemental Indenture between the Company and U.S. Bank National Association, dated as of May 17, 2007 (including the form of junior subordinated debenture)

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4.10	Twelfth Supplemental Indenture between the Company and U.S. Bank National Association, dated as of May 17, 2007 (including the form of junior subordinated debenture)
4.11	Certificate of Amendment to Certificate of Trust of Lehman Brothers Holdings Capital Trust VII
4.12	Certificate of Amendment to Certificate of Trust of Lehman Brothers Holdings Capital Trust VIII
8.01	Tax Opinion of Simpson Thacher & Bartlett LLP
99.1	Replacement Capital Covenant dated May 17, 2007 (Fixed Rate MCAPS)
99.2	Replacement Capital Covenant dated May 17, 2007 (Floating Rate MCAPS)

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EX-3.01

Exhibit 3.01

CERTIFICATE OF DESIGNATIONS, POWERS,
PREFERENCES AND RIGHTS
OF THE
NON-CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES H
($100,000.00 initial liquidation preference per share)

OF

LEHMAN BROTHERS HOLDINGS INC.

Pursuant to Section 151 of the
General Corporation Law of the State of Delaware

LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation (the “Corporation”), HEREBY CERTIFIES that the following resolution was duly adopted by the Executive Committee of the Board of Directors of the Corporation in accordance with Section 151(g) of the General Corporation Law of the State of Delaware pursuant to the authority conferred upon the Board of Directors of the Corporation by the provisions of the Restated Certificate of Incorporation of the Corporation and pursuant to the authority conferred upon the Executive Committee by the By-Laws of the Corporation and pursuant to the authority duly delegated thereto by the Board of Directors of the Corporation:

RESOLVED, that the Corporation be, and hereby is, authorized to issue a new series of its preferred stock, par value $1.00 per share, with a liquidation preference, in the aggregate, of up to $1,000,000,000.00 on the following terms, with the following designations, powers, preferences and rights:

1.Designation and Amount; Fractional Shares. The series of preferred stock shall be designated as the “Non-Cumulative Perpetual Preferred Stock, Series H” (the “Series H Preferred Stock”). The Series H Preferred Stock shall be perpetual and the authorized number of shares of Series H Preferred Stock shall be ten thousand (10,000.00) shares. The Series H Preferred Stock is issuable pursuant to the terms of stock purchase contracts issued by the Corporation on May 17, 2007.

2.Dividends. Holders of shares of Series H Preferred Stock shall be entitled to receive, only when, as and if declared by the Board or a duly authorized committee thereof out of funds of the Corporation legally available for payment, cash dividends at the Applicable Rate (as defined in Section 3). Declared dividends on the Series H Preferred Stock shall be payable from and including the later of May 31, 2012 and the date of initial issuance, quarterly on each February 28, May 31, August 31 and November 30; provided that if the Series H Preferred Stock is issued prior to May 31, 2012, declared dividends shall be payable semi-annually on each May 31 and November 30 through May 31, 2012 (each such date a “Dividend Payment Date”). If during the Floating Rate Period (as defined in Section 3) any date on which dividends would otherwise be payable shall not be a New York and London business day, then the Dividend

Payment Date will be the next succeeding New York and London business day, unless such day falls in the next calendar month, in which case the Dividend Payment Date will be the immediately preceding New York and London business day. “New York business day” means any day that is not a Saturday or Sunday and that, in New York City, is not a day on which banking institutions generally are authorized or obligated by law or executive order to be closed. “London business day” means any day other than a Saturday or a Sunday on which dealings in deposits in dollars are transacted, or with respect to any future date are expected to be transacted, in the London interbank market. If during the Fixed Rate Period (as defined in Section 3), if any, any date on which dividends would otherwise be payable shall not be a New York business day, then the Dividend Payment Date will be the next succeeding New York business day.

Dividends on Series H Preferred Stock shall not be cumulative; holders of Series H Preferred Stock shall not be entitled to receive any dividends not declared by the Board or a duly authorized committee thereof and no interest, or sum of money in lieu of interest, shall be payable in respect of any dividend not so declared.

Declared dividends shall be payable, in arrears, to holders of record as they appear on the stock books of the Corporation on each record date, which shall be the 15^th day of the month in which the related Dividend Payment Date occurs (each of which dates being a “Record Date”).

The term “Dividend Period” means the period from and including each Dividend Payment Date to but excluding the next succeeding Dividend Payment Date (other than the initial Dividend Period, which shall commence on and include the date of initial issuance of the Series H Preferred Stock and shall end on but exclude the next Dividend Payment Date), in each case as such Dividend Payment Date may have been postponed or accelerated as aforesaid. During the Floating Rate Period, dividends payable on the Series H Preferred Stock shall be computed on the basis of a 360-day year and the actual number of days elapsed. During the Fixed Rate Period, if any, dividends payable on the Series H Preferred Stock shall be computed on the basis of a 360-day year consisting of twelve 30-day months.

No dividends may be declared or paid or set apart for payment on any Parity Preferred Stock (as defined in Section 10) unless there shall also be or have been declared and paid or set apart for payment on the Series H Preferred Stock, dividends for the Dividend Period ending on or before the dividend payment date of such Parity Preferred Stock, ratably in proportion to the respective amounts of dividends (x) that have not been paid on the Series H Preferred Stock for such Dividend Period, on the one hand, and (y) accumulated and unpaid or payable on such Parity Preferred Stock (or, in the case of non-cumulative Parity Preferred Stock, that would be payable on such stock for the most recent dividend period for such stock if such dividends were declared in full), on the other hand.

Except as set forth in the preceding paragraph, unless full dividends on the Series H Preferred Stock have been declared and paid or set aside for payment for the most recently completed Dividend Period, no dividends (other than in common stock of the Corporation) may be paid or declared and set aside for payment or other distribution made upon the common stock or on any other stock of the Corporation ranking junior to or on a parity with the Series H Preferred Stock as to dividends, nor may any common stock or any other stock of the Corporation ranking junior to or on a parity with the Series H Preferred Stock as to dividends be

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redeemed, purchased or otherwise acquired for any consideration (or any payment be made to or available for a sinking fund for the redemption of any shares of such stock; provided, however, that any moneys theretofore deposited in any sinking fund with respect to any preferred stock of the Corporation in compliance with the provisions of such sinking fund may thereafter be applied to the purchase or redemption of such preferred stock in accordance with the terms of such sinking fund, regardless of whether at the time of such application full dividends upon shares of the Series H Preferred Stock for the most recently completed Dividend Period shall have been paid or declared and set apart for payment) by the Corporation; provided further that any such junior or parity stock or common stock may be (i) converted into or exchanged for stock of the Corporation ranking junior to the Series H Preferred Stock as to dividends or (ii) redeemed, purchased or otherwise acquired with the proceeds of a substantially contemporaneous sale of any such junior stock. The foregoing provision shall not restrict the ability of Lehman Brothers Inc., or any other affiliate of the Corporation, to engage in any market-making transactions in any such junior or parity stock or common stock in the ordinary course of business.

Notwithstanding the foregoing, dividends may be declared or paid or set apart for payment on any Parity Preferred Stock during any Dividend Restriction Period (as defined in Section 4).

3.Definition of Applicable Rate, etc. The “Applicable Rate” for any Dividend Period shall be (i) if the Series H Preferred Stock is issued prior to May 31, 2012, a rate per annum equal to 5.857% until May 31, 2012 (the “Fixed Rate Period”) and (ii) from and including the later of May 31, 2012 and the date of initial issuance (the “Floating Rate Period”), a rate per annum equal to the greater of (a) three-month LIBOR for the related Dividend Period plus 0.84% and (b) 4.00%. LIBOR, with respect to a Dividend Period, means the rate (expressed as a percentage per annum) for deposits in U.S. dollars for a three-month period that appears on Reuters Page LIBOR01 as of 11:00 a.m. (London time) on the second London business day immediately preceding the first day of such Dividend Period. The term “Reuters Page LIBOR01” means the display on the Reuters 3000 Xtra, or any successor service or page for the purpose of displaying the London interbank offered rates of major banks.

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

If two or more quotations are provided, LIBOR for the Dividend Period will be the arithmetic mean of the quotations. If fewer than two quotations are provided, the Corporation will select three major banks in New York City and will then determine LIBOR for the Dividend Period as the arithmetic mean of rates quoted by those three major banks in New York City to leading European banks at approximately 3:00 p.m., New York City time, on the second London business day immediately preceding the first day of such Dividend Period. The rates quoted will be for loans in U.S. dollars, for a three-month period. Rates quoted must be based on a principal

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amount equal to an amount that is representative of a single transaction in U.S. dollars in the market at the time. If fewer than three New York City banks selected by the Corporation are quoting rates, LIBOR for the applicable period will be the same as for the immediately preceding Dividend Period.

4.Restrictions on Declaration and Payment of Dividends. So long as any Dividend Restriction Event (as defined below) has occurred and is continuing, the Corporation shall not pay any dividends on the Series H Preferred Stock in excess of the New Capital Amount.

A “Dividend Restriction Event” shall occur if on any 20th day prior to a Dividend Payment Date (each, a “Determination Date”) both of the following conditions exist:

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

•the Tangible Common Stockholders’ Equity Amount as of the end of the Corporation’s then most recently completed fiscal quarter and as of the end of the Corporation’s fiscal quarter that is two fiscal quarters before the Corporation’s then most recently completed fiscal quarter has declined by 10% or more as compared to the Tangible Common Stockholders’ Equity Amount at the end of the Corporation’s fiscal quarter ending six quarters prior to the Corporation’s then most recently completed fiscal quarter (the “Benchmark Fiscal Quarter”).

If both the conditions set forth above exist for any Determination Date, the restriction on dividends in excess of the New Capital Amount shall continue until at least one of the conditions set forth above does not exist on a Determination Date and the Tangible Common Stockholders’ Equity Amount has increased, or has declined by less than 10%, in either case as compared to the Tangible Common Stockholders’ Equity Amount at the end of the Benchmark Fiscal Quarter for each Determination Date as to which restrictions were imposed under this Section 4. Any period during which dividends on the Series H Preferred Stock are restricted as described above is referred to as a “Dividend Restriction Period”.

For purposes of this test:

•“New Capital Amount” means, for any Dividend Payment Date, the net proceeds received by the Corporation from new issuances of Qualifying APM Securities (as defined below) (whether in one or more public offerings or private placements) during the period commencing on the 180^th day prior to (i) the date of the notice that dividends will be skipped on such Dividend Payment Date or (ii) if no such notice is given, the 15^th day prior to such Dividend Payment Date (without double counting proceeds received during such 180-day period);

•“GAAP” means, at any date or for any period, U.S. generally accepted accounting principles as in effect on such date or for such period;

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•“Tangible Common Stockholders’ Equity Amount” means, as of any quarter end and subject to certain adjustments described below, our common stockholders’ equity minus identifiable intangible assets and goodwill, in each case as reflected on our consolidated GAAP balance sheet as of such quarter end; and

•“Trailing Two Quarters Consolidated Net Income Amount” means, for any fiscal quarter and subject to certain adjustments described below, the sum of our consolidated net income for the two fiscal quarters ending as of the last day of such fiscal quarter.

All financial terms used in this Section 4 shall be determined in accordance with GAAP as applied to and reflected in the Corporation’s consolidated financial statements as of the relevant dates, except (i) that the Corporation’s common stockholders’ equity and consolidated net income at any date and for any period shall be adjusted to exclude extraordinary items, unusual items and infrequently occurring items as defined in Accounting Principles Bulletin 30, goodwill impairment as defined in Financial Accounting Standards Board Statements of Financial Accounting Standards No. 142 and amounts relating to discontinued operations as defined in Financial Accounting Standards Board Statements of Financial Accounting Standards No. 144 (or in each case, in any successor accounting bulletins or statements) and (ii) as provided in the next sentence. If because of a change in GAAP that results in a cumulative effect of a change in accounting principle or a restatement, either (i) the Corporation’s consolidated net income is higher or lower than it would have been absent such change, then, for purposes of calculating the calculations described above, commencing with the fiscal quarter for which such changes in GAAP becomes effective, such consolidated net income shall be calculated on a pro forma basis as if such changes had not occurred or (ii) the Tangible Common Stockholders’ Equity Amount as of a fiscal quarter end is higher or lower than it would have been absent such change, then, for purposes of the calculations described in the second bullet point in the definition of “Dividend Restriction Event” above, the Tangible Common Stockholders’ Equity Amount shall be calculated on a pro forma basis as if such change had not occurred.

Neither the Board nor any committee of the board shall declare dividends on the Series H Preferred Stock on a declaration date (i) that is more than 60 days prior to the related Dividend Payment Date or (ii) that is earlier than the date on which the Corporation’s financial statements for the most recently completed fiscal quarter prior to the related Dividend Payment Date have been filed with or furnished to the Securities and Exchange Commission or have otherwise been made publicly available; provided that, if the Board determines to delay filing the Corporation’s financial statements with the Securities and Exchange Commission to a date later than the date on which “accelerated filers” under the Securities and Exchange Commission’s rules would normally be required to file such financial statements, then the Board or a duly authorized committee thereof shall be permitted to determine the ability of the Board or a duly authorized committee thereof to declare dividends under the conditions set forth above based upon the Corporation’s financial statements as most recently filed with the Securities and Exchange Commission or otherwise made publicly available.

If at any relevant date or for any relevant period the Corporation is not a reporting company under the Exchange Act, then for any such relevant date and period the Corporation shall prepare and post on its website the consolidated financial statements that the Corporation

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would have been required to file with the Commission had the Corporation continued to be a reporting company under the Exchange Act, in each case on or before the dates that the Corporation would have been required to file such financial statements had the Corporation continued to be an “accelerated filer” within the meaning of Rule 12b-2 under the Exchange Act.

The Corporation shall give notice to the holders of the Series H Preferred Stock of a potential Dividend Restriction Event that could take effect for a subsequent payment date having a Determination Date two fiscal quarters in the future if (i) the Trailing Two Quarters Consolidated Net Income Amount for the Corporation’s most recently completed fiscal quarter is zero or a negative amount and (ii) the Tangible Common Stockholders’ Equity Amount as of the Corporation’s most recently completed fiscal quarter has declined by 10% or more as compared to the Tangible Common Stockholders’ Equity Amount as of the end of the Corporation’s fiscal quarter that is four fiscal quarters prior to the Corporation’s most recently completed fiscal quarter. The Corporation shall send any such notice no later than the first Dividend Payment Date following the end of the Corporation’s most recently completed fiscal quarter for which the relevant financial information is available as of which the conditions set forth in this Section 4 indicate that a potential Dividend Restriction Event could occur. Such notice shall be sent by first class mail, postage prepaid, addressed to the holders of record of the Series H Preferred Stock at their respective last addresses appearing on the Corporation’s books, and the Corporation shall file a copy of such notice on Form 8-K with the Commission. Such notice shall (x) set forth the results of the Trailing Two Quarters Consolidated Net Income Amount and the Tangible Common Stockholders’ Equity Amount for the relevant periods and dates, and (y) state that the Corporation may be precluded by the terms of the Preferred Securities from paying dividends on such Dividend Payment Date unless the Corporation, through the generation of earnings or issuance of Common Shares, increases the Tangible Common Stockholders’ Equity Amount by an amount specified in such notice by the second payment date after the date of such notice.

By not later than the 15th day prior to each Dividend Payment Date for which dividends are being skipped by reason of the conditions set forth in this Section 4, the Corporation shall give notice by first class mail, postage prepaid, addressed to the holders of record of the Series H Preferred Stock at their respective last addresses appearing on the Corporation’s books, and the Corporation shall file a copy of such notice on Form 8-K with the Commission. Such notice shall state (x) the amount of dividends that will be skipped and (y) the applicable Trailing Two Quarters Consolidated Net Income Amount and Tangible Common Stockholders’ Equity Amount (and the amounts by which the Trailing Two Quarters Consolidated Net Income Amount and Tangible Common Stockholders’ Equity Amount must increase in order for payment of dividends to be resumed).

For purposes of determining the New Capital Amount, the term Qualifying APM Securities has the following meaning:

“Qualifying APM Securities” means the Corporation’s common stock, qualifying preferred stock and qualifying warrants.

The Corporation may not include the net proceeds of qualifying preferred stock in the New Capital Amount for the purposes of paying dividends on the Series H Preferred Stock

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during a Dividend Restriction Period to the extent that such net proceeds, together with the net proceeds of all prior issuances of qualifying preferred stock included in the New Capital Amount for any prior payments of dividends on the  Series H Preferred Stock during a Dividend Restriction Period, would exceed 25% of the initial aggregate liquidation preference of the  Series H Preferred Stock.

If any Dividend Restriction Period lasts longer than one year and the Corporation has paid dividends on the Series H Preferred Stock during such Dividend Restriction Period, the Corporation shall not redeem or purchase any securities ranking pari passu with or junior to most senior of the Qualifying APM Securities issued to raise such amount until the first anniversary of the date on which such Dividend Restriction Period ended.

The following terms used in the definition of Qualifying APM Securities have the following meanings:

“Intent-based replacement disclosure” means, as to any qualified preferred stock, that the Corporation has publicly stated its intention, either in the prospectus or other offering document under which such qualified preferred stock was initially offered for sale or in filings with the SEC made by the Corporation under the Exchange Act prior to or contemporaneously with the issuance of such securities, that the Corporation, to the extent the qualified preferred stock provides the Corporation with equity credit, will repay, redeem or purchase such qualified preferred stock only with the proceeds of replacement capital securities that have terms and provisions at the time of repayment, redemption or purchase that are as or more equity-like than the qualified preferred stock then being repaid, redeemed or purchased, raised within 180 days prior to the applicable repayment, redemption or purchase date.

“Permitted remedies” means, with respect to any securities, one or more of the following remedies:

•rights in favor of the holders of such securities permitting such holders to elect one or more directors of the issuer (including any such rights required by the listing requirements of any stock or securities exchange on which such securities may be listed or traded); and

•complete or partial prohibitions preventing the issuer from paying distributions on or purchasing common stock or other securities that rank pari passu with or junior as to distributions to such securities for so long as distributions on such securities, including unpaid distributions, remain unpaid.

 “Qualifying capital replacement covenant” means a replacement capital covenant, as identified by the Board acting in good faith and in its reasonable discretion and reasonably construing the definitions and other terms of the replacement capital covenant, (i) entered into by the Corporation at a time when it is a reporting company under the Exchange Act and (ii) that restricts the Corporation from redeeming or purchasing identified securities except from the applicable percentage of the proceeds of specified replacement capital securities that have terms and provisions at the time of redemption or purchase that are as or more equity-like than the

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

“Qualifying preferred stock” means the Corporation’s non-cumulative perpetual preferred stock that ranks pari passu with or junior to all of the Corporation’s other preferred stock, is perpetual and (a) is subject to a replacement capital covenant substantially similar to the replacement capital covenant applicable to the Series H Preferred Stock as of the date of its initial issuance or any “qualifying capital replacement covenant” or (b) is subject to both (i) mandatory suspension of dividends in the event the Corporation breaches certain financial metrics specified within the offering documents and (ii) “intent-based replacement disclosure.” Additionally, the terms of the preferred stock shall provide for no remedies as a consequence of non-payment of dividends other than “permitted remedies.”

 “Qualifying warrants” means any net share settled warrants to purchase the Corporation’s common stock that (1) have an exercise price greater than the “current stock market price” of the Corporation’s common stock, and (2) the Corporation is not entitled to redeem for cash and the holders of which are not entitled to require the Corporation to purchase for cash in any circumstances. The “current stock market price” of the Corporation’s common stock on any date shall be the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions by the New York Stock Exchange or, if the Corporation’s common stock is not then listed on the New York Stock Exchange, as reported by the principal U.S. securities exchange on which the Corporation’s common stock is traded or quoted. If the Corporation’s common stock is not listed on any U.S. securities exchange on the relevant date, the “current stock market price” shall be the last quoted bid price for the Corporation’s common stock in the over-the-counter market on the relevant date as reported by the National Quotation Bureau or similar organization. If the Corporation’s common stock is not so quoted, the “current stock market price” shall be the average of the mid-point of the last bid and ask prices for the Corporation’s common stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Corporation for this purpose.

5.Liquidation Preference. The shares of Series H Preferred Stock shall rank, as to liquidation, dissolution or winding up of the Corporation, prior to the shares of common stock and any other stock of the Corporation ranking junior to the Series H Preferred Stock as to rights upon liquidation, dissolution or winding up of the Corporation, so that in the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the holders of the Series H Preferred Stock shall be entitled to receive out of the assets of the Corporation available for distribution to its stockholders, whether from capital, surplus or earnings, before any distribution is made to holders of shares of common stock or any other such junior stock, an amount equal to the liquidation preference of $100,000.00 per share plus an amount equal to all declared and unpaid dividends on the shares of Series H Preferred Stock to the date of final distribution. The holders of the Series H Preferred Stock shall not be entitled to receive the preferential amounts as aforesaid until the liquidation preference of any other stock of the Corporation ranking senior to the Series H Preferred Stock as to rights upon liquidation, dissolution or winding up shall have been paid (or a sum set aside therefor sufficient to provide for payment) in full. After payment of the full amount of the preferential amounts as aforesaid,

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the holders of shares of Series H Preferred Stock will not be entitled to any further participation in any distribution of assets by the Corporation. If, upon any liquidation, dissolution or winding up of the Corporation, the assets of the Corporation, or proceeds thereof, distributable among the holders of shares of Parity Preferred Stock and Series H Preferred Stock shall be insufficient to pay in full the preferential amounts payable thereon, then such assets, or the proceeds thereof, shall be distributable among such holders ratably in accordance with the respective amounts which would be payable on such shares if all amounts payable thereon were paid in full. For the purposes hereof, neither a consolidation or merger of the Corporation with or into any other corporation, nor a merger of any other corporation with or into the Corporation, nor a sale, lease, exchange or transfer of all or any part of the Corporation’s assets shall be considered a liquidation, dissolution or winding up of the Corporation.

6.Conversion. The Series H Preferred Stock is not convertible into, or exchangeable for, other securities or property.

7.Voting Rights. The Series H Preferred Stock, except as provided herein or as otherwise from time to time required by law, shall have no voting rights. Whenever, at any time or times, dividends payable on the shares of Series H Preferred Stock shall be in arrears for an aggregate number of days equal to six calendar quarters or more, whether or not consecutive, the authorized number of directors of the Corporation shall automatically be increased by two and the holders of the Series H Preferred Stock shall have the right, with holders of shares of any one or more other classes or series of Parity Preferred Stock outstanding at the time upon which like voting rights have been conferred and are exercisable (“Voting Parity Stock”), voting together as a class, to elect two directors (hereinafter the “Preferred Directors” and each a “Preferred Director”) to fill such newly created directorships at the Corporation’s next annual meeting of stockholders and at each subsequent annual meeting of stockholders until full dividends have been paid on the Series H Preferred Stock for at least one year, at which time such right shall terminate, except as herein or by law expressly provided, subject to revesting in the event of each and every subsequent default of the character above mentioned. Upon any termination of the right of the holders of shares of Series H Preferred Stock and Voting Parity Stock as a class to vote for directors as provided above, the term of office of all Preferred Directors then in office shall terminate immediately and the authorized number of directors shall be reduced by the number of Preferred Directors elected pursuant hereto. Any Preferred Director may be removed at any time, with or without cause. Any vacancy created thereby may be filled only by the affirmative vote of the holders of shares of Series H Preferred Stock voting separately as a class (together with the holders of shares of Voting Parity Stock). If the office of any Preferred Director becomes vacant for any reason other than removal from office as aforesaid, the remaining Preferred Director may choose a successor who shall hold office for the unexpired term in respect of which such vacancy occurred. At elections for such directors, each holder of shares of Series H Preferred Stock shall be entitled to 400 votes for each share held (the holders of shares of any other class or series of Voting Parity Stock being entitled to such number of votes, if any, for each share of such stock held as may be granted to them).

So long as any shares of any Series H Preferred Stock remain outstanding, the Corporation shall not, without the affirmative vote of the holders of at least 66-2/3% of the shares of such Series H Preferred Stock (i) authorize, create or issue any capital stock of the Corporation ranking, as to dividends or upon liquidation, dissolution or winding up, prior to such

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Series H Preferred Stock, or reclassify any authorized capital stock of the Corporation into any such shares of such capital stock or issue any obligation or security convertible into or evidencing the right to purchase any such shares of capital stock, or (ii) amend, alter or repeal the certificate of designations for such Series H Preferred Stock, or the Restated Certificate of Incorporation of the Corporation, whether by merger, consolidation or otherwise, so as to adversely affect the powers, preferences or special rights of such Series H Preferred Stock. Any increase in the amount of authorized common stock or other authorized preferred stock, or any increase or decrease in the number of shares of any series of preferred stock or the authorization, creation and issuance of other classes or series of common stock or other stock, in each case ranking on a parity with or junior to the shares of Series H Preferred Stock with respect to the payment of dividends and the distribution of assets upon liquidation, dissolution or winding up, shall not be deemed to adversely affect such powers, preferences or special rights. Parity Preferred Stock shall not be deemed to rank senior to the Series H Preferred Stock in the payment of dividends solely because of the Corporation’s ability to continue paying dividends thereon during any Dividend Restriction Period.

In exercising the voting rights set forth in this Section 7 or when otherwise granted voting rights by operation of law or by the Corporation, each share of Series H Preferred Stock shall be entitled to 400 votes.

The foregoing voting provisions shall not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required or upon which the holders of Series H Preferred Stock shall be entitled to vote shall be effected, all outstanding shares of Series H Preferred Stock shall have been redeemed or called for redemption and sufficient funds shall have been deposited in trust to effect such redemption.

8.Redemption. The shares of Series H Preferred Stock shall not be redeemable prior to the later of May 31, 2012 and the issue date of the Series H Preferred Stock. On any Dividend Payment Date on and after such date, the Corporation, at its option, may redeem shares of the Series H Preferred Stock, as a whole or in part, at a redemption price equal to $100,000.00 per share, plus, in each case, an amount equal to any declared and unpaid dividends to, but excluding, the date fixed for redemption.

The holders of shares of Series H Preferred Stock at the close of business on a Record Date shall be entitled to receive the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the call for redemption thereof (except that holders of shares called for redemption on a date occurring between such Record Date and the Dividend Payment Date shall not be entitled to receive such dividend on such Dividend Payment Date) or the Corporation’s default in payment of the dividend due on such Dividend Payment Date.

If fewer than all the outstanding shares of Series H Preferred Stock are to be redeemed, the number of shares to be redeemed shall be determined by the Board of Directors and the shares to be redeemed shall be selected by lot or pro rata or by any other means determined by the Board of Directors in its sole discretion to be equitable.

If dividends on the Series H Preferred Stock have been declared but not been paid or set apart for payment with respect to any Dividend Period, the Series H Preferred Stock may not be

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redeemed in part and the Corporation may not purchase or acquire any shares of the Series H Preferred Stock otherwise than pursuant to a purchase or exchange offer made on the same terms to all holders of the Series H Preferred Stock.

In the event the Corporation shall redeem shares of Series H Preferred Stock, written notice of such redemption shall be given by first class mail, postage prepaid, mailed not less than 20 days nor more than 60 days prior to the redemption date, to each holder of record of the shares to be redeemed at such holder’s address as the same appears on the stock books of the Corporation; provided, however, that no failure to give such notice nor any defect therein shall affect the validity of the proceeding for the redemption of any shares of Series H Preferred Stock to be redeemed except as to the holder to whom the Corporation has failed to mail said notice or except as to the holder whose notice was defective. Each such notice shall state: (a) the redemption date; (b) the number of shares of Series H Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed from such holder, the number of shares to be redeemed from such holder; (c) the redemption price and any declared and unpaid dividends as of the redemption date; (d) the place or places where certificates for such shares are to be surrendered for payment of the redemption price; and (e) that dividends on the shares to be redeemed will cease to accrue on such redemption date (unless the Corporation shall default in providing funds for the payment of the redemption price of the shares called for redemption at the time and place specified in such notice). If a notice of redemption has been given pursuant to this Section 6 and if, on or before the date fixed for redemption, the funds necessary for such redemption shall have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata benefit of the holders of the shares of Series H Preferred Stock so called for redemption, then, notwithstanding that any certificates for such shares have not been surrendered for cancellation, on the redemption date dividends shall cease to accrue on the shares to be redeemed, and at the close of business on the redemption date the holders of such shares shall cease to be stockholders with respect to such shares and shall have no interest in or claims against the Corporation by virtue thereof and shall have no voting or other rights with respect to such shares, except the right to receive the moneys payable upon surrender (and endorsement, if required by the Corporation) of their certificates, and the shares evidenced thereby shall no longer be outstanding. The Corporation’s obligation to provide funds for the payment of the redemption price (and any declared and unpaid dividends as of the redemption date) of the shares called for redemption shall be deemed fulfilled if, on or before a redemption date, the Corporation shall deposit, with a bank or trust company, or an affiliate of a bank or trust company, having an office or agency in New York City and having a capital and surplus of at least $50,000,000, such funds sufficient to pay the redemption price (and any declared and unpaid dividends as of the redemption date) of the shares called for redemption, in trust for the account of the holders of the shares to be redeemed (and so as to be and continue to be available therefor), with irrevocable instructions and authority to such bank or trust company that such funds be delivered upon redemption of the shares of Series H Preferred Stock so called for redemption.

Subject to applicable escheat laws, any moneys so set aside by the Corporation and unclaimed at the end of two years from the redemption date shall revert to the general funds of the Corporation, after which reversion the holders of such shares so called for redemption shall look only to the general funds of the Corporation for the payment of the amounts payable upon

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such redemption. Any interest accrued on funds so deposited shall be paid to the Corporation from time to time.

Shares of Series H Preferred Stock that have been issued and reacquired in any manner, including shares purchased or redeemed, shall (upon compliance with any applicable provisions of the laws of the State of Delaware) have the status of authorized and unissued shares of the class of Preferred Stock undesignated as to series and may be redesignated and reissued as part of any series of the preferred stock.

9.Amendment of Resolution. The Board reserves the right from time to time to increase or decrease the number of shares that constitute the Series H Preferred Stock (but not below the number of shares thereof then outstanding) and in other respects to amend this Certificate of Designations within the limitations provided by law, this resolution and the Restated Certificate of Incorporation.

10.Rank. Any stock of any class or classes or series of the Corporation shall be deemed to rank:

(a) prior to shares of the Series H Preferred Stock, either as to dividends or upon liquidation, dissolution or winding up, or both, if the holders of stock of such class or classes or series shall be entitled by the terms thereof to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of shares of the Series H Preferred Stock;

(b) on a parity with shares of the Series H Preferred Stock, either as to dividends or upon liquidation, dissolution or winding up, or both, whether or not the dividend rates, Dividend Payment Dates, or redemption or liquidation prices per share thereof be different from those of the Series H Preferred Stock, if the holders of stock of such class or classes or series shall be entitled by the terms thereof to the receipt of dividends or of amounts distributed upon liquidation, dissolution or winding up, as the case may be, in proportion to their respective dividend rates or liquidation prices, without preference or priority of one over the other as between the holders of such stock and the holders of shares of Series H Preferred Stock (the term “Parity Preferred Stock” being used to refer to any stock on a parity with the shares of Series H Preferred Stock, either as to dividend or upon  liquidation, dissolution or winding up, or both, as the content may require); and

(c) junior to shares of the Series H Preferred Stock, either as to dividends or upon liquidation, dissolution or winding up, or both, if such class or classes or series shall be common stock or if the holders of the Series H Preferred Stock shall be entitled to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of stock of such class or classes or series.

The Series H Preferred Stock shall rank, as to dividends and upon liquidation, dissolution or winding up, on a parity with the Corporation’s 5.94% Cumulative Preferred Stock, Series C, the Corporation’s 5.67% Cumulative Preferred Stock, Series D, the Corporation’s 6.50% Cumulative Preferred Stock, Series F, the Corporation’s Floating Rate Cumulative Preferred Stock, Series G, and any Parity Preferred Stock issued hereafter.

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IN WITNESS WHEREOF, the undersigned, being duly authorized thereto, does hereby affirm, under penalties of perjury, that this certificate is the act and deed of the Corporation and that the facts herein stated are true, and accordingly has hereunto set his hand this 17th day of May, 2007.

LEHMAN BROTHERS HOLDINGS INC.
By:	/s/ Barrett S. DiPaolo
	Name:	Barrett S. DiPaolo
	Title:	Vice President and
		Assistant Secretary

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EX-3.02

Exhibit 3.02

CERTIFICATE OF DESIGNATIONS, POWERS,
PREFERENCES AND RIGHTS
OF THE
NON-CUMULATIVE PERPETUAL PREFERRED STOCK, SERIES I
($100,000.00 initial liquidation preference per share)

OF

LEHMAN BROTHERS HOLDINGS INC.

Pursuant to Section 151 of the
General Corporation Law of the State of Delaware

LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation (the “Corporation”), HEREBY CERTIFIES that the following resolution was duly adopted by the Executive Committee of the Board of Directors of the Corporation in accordance with Section 151(g) of the General Corporation Law of the State of Delaware pursuant to the authority conferred upon the Board of Directors of the Corporation by the provisions of the Restated Certificate of Incorporation of the Corporation and pursuant to the authority conferred upon the Executive Committee by the By-Laws of the Corporation and pursuant to the authority duly delegated thereto by the Board of Directors of the Corporation:

RESOLVED, that the Corporation be, and hereby is, authorized to issue a new series of its preferred stock, par value $1.00 per share, with a liquidation preference, in the aggregate, of up to $500,000,000.00 on the following terms, with the following designations, powers, preferences and rights:

1.Designation and Amount; Fractional Shares. The series of preferred stock shall be designated as the “Non-Cumulative Perpetual Preferred Stock, Series I” (the “Series I Preferred Stock”). The Series I Preferred Stock shall be perpetual and the authorized number of shares of Series I Preferred Stock shall be five thousand (5,000) shares. The Series I Preferred Stock is issuable pursuant to the terms of stock purchase contracts issued by the Corporation on May 17, 2007.

2.Dividends. Holders of shares of Series I Preferred Stock shall be entitled to receive, only when, as and if declared by the Board or a duly authorized committee thereof out of funds of the Corporation legally available for payment, cash dividends at the Applicable Rate (as defined in Section 3). Declared dividends on the Series I Preferred Stock shall be payable from and including the later of May 31, 2012 and the date of initial issuance, quarterly on each February 28, May 31, August 31 and November 30; provided that if the Series I Preferred Stock is issued prior to May 31, 2012, declared dividends shall be payable quarterly on each February 28, May 31, August 31 and November 30 through May 31, 2012 (each such date a “Dividend Payment Date”). If any date on which dividends would otherwise be payable shall not be a New York and London business day, then the Dividend Payment Date will be the next succeeding

New York and London business day, unless such day falls in the next calendar month, in which case the Dividend Payment Date will be the immediately preceding New York and London business day. “New York business day” means any day that is not a Saturday or Sunday and that, in New York City, is not a day on which banking institutions generally are authorized or obligated by law or executive order to be closed. “London business day” means any day other than a Saturday or a Sunday on which dealings in deposits in dollars are transacted, or with respect to any future date are expected to be transacted, in the London interbank market.

Dividends on Series I Preferred Stock shall not be cumulative; holders of Series I Preferred Stock shall not be entitled to receive any dividends not declared by the Board or a duly authorized committee thereof and no interest, or sum of money in lieu of interest, shall be payable in respect of any dividend not so declared.

Declared dividends shall be payable, in arrears, to holders of record as they appear on the stock books of the Corporation on each record date, which shall be the 15^th day of the month in which the related Dividend Payment Date occurs (each of which dates being a “Record Date”).

The term “Dividend Period” means the period from and including each Dividend Payment Date to but excluding the next succeeding Dividend Payment Date (other than the initial Dividend Period, which shall commence on and include the date of initial issuance of the Series I Preferred Stock and shall end on but exclude the next Dividend Payment Date), in each case as such Dividend Payment Date may have been postponed or accelerated as aforesaid. Dividends payable on the Series I Preferred Stock shall be computed on the basis of a 360-day year and the actual number of days elapsed.

No dividends may be declared or paid or set apart for payment on any Parity Preferred Stock (as defined in Section 10) unless there shall also be or have been declared and paid or set apart for payment on the Series I Preferred Stock, dividends for the Dividend Period ending on or before the dividend payment date of such Parity Preferred Stock, ratably in proportion to the respective amounts of dividends (x) that have not been paid on the Series I Preferred Stock for such Dividend Period, on the one hand, and (y) accumulated and unpaid or payable on such Parity Preferred Stock (or, in the case of non-cumulative Parity Preferred Stock, that would be payable on such stock for the most recent dividend period for such stock if such dividends were declared in full), on the other hand.

Except as set forth in the preceding paragraph, unless full dividends on the Series I Preferred Stock have been declared and paid or set aside for payment for the most recently completed Dividend Period, no dividends (other than in common stock of the Corporation) may be paid or declared and set aside for payment or other distribution made upon the common stock or on any other stock of the Corporation ranking junior to or on a parity with the Series I Preferred Stock as to dividends, nor may any common stock or any other stock of the Corporation ranking junior to or on a parity with the Series I Preferred Stock as to dividends be redeemed, purchased or otherwise acquired for any consideration (or any payment be made to or available for a sinking fund for the redemption of any shares of such stock; provided, however, that any moneys theretofore deposited in any sinking fund with respect to any preferred stock of the Corporation in compliance with the provisions of such sinking fund may thereafter be applied to the purchase or redemption of such preferred stock in accordance with the terms of such

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sinking fund, regardless of whether at the time of such application full dividends upon shares of the Series I Preferred Stock for the most recently completed Dividend Period shall have been paid or declared and set apart for payment) by the Corporation; provided further that any such junior or parity stock or common stock may be (i) converted into or exchanged for stock of the Corporation ranking junior to the Series I Preferred Stock as to dividends or (ii) redeemed, purchased or otherwise acquired with the proceeds of a substantially contemporaneous sale of any such junior stock. The foregoing provision shall not restrict the ability of Lehman Brothers Inc., or any other affiliate of the Corporation, to engage in any market-making transactions in any such junior or parity stock or common stock in the ordinary course of business.

Notwithstanding the foregoing, dividends may be declared or paid or set apart for payment on any Parity Preferred Stock during any Dividend Restriction Period (as defined in Section 4).

3.Definition of Applicable Rate, etc. The “Applicable Rate” for any Dividend Period shall be (i) if the Series I Preferred Stock is issued prior to May 31, 2012, a rate per annum equal to three-month LIBOR plus 0.83% until May 31, 2012 and (ii) from and including the later of May 31, 2012 and the date of initial issuance, a rate per annum equal to the greater of (a) three-month LIBOR for the related Dividend Period plus 0.83% and (b) 4.00%. LIBOR, with respect to a Dividend Period, means the rate (expressed as a percentage per annum) for deposits in U.S. dollars for a three-month period that appears on Reuters Page LIBOR01 as of 11:00 a.m. (London time) on the second London business day immediately preceding the first day of such Dividend Period. The term “Reuters Page LIBOR01” means the display on the Reuters 3000 Xtra, or any successor service or page for the purpose of displaying the London interbank offered rates of major banks.

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

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

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4.Restrictions on Declaration and Payment of Dividends. So long as any Dividend Restriction Event (as defined below) has occurred and is continuing, the Corporation shall not pay any dividends on the Series I Preferred Stock in excess of the New Capital Amount.

A “Dividend Restriction Event” shall occur if on any 20th day prior to a Dividend Payment Date (each, a “Determination Date”) both of the following conditions exist:

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

•the Tangible Common Stockholders’ Equity Amount as of the end of the Corporation’s then most recently completed fiscal quarter and as of the end of the Corporation’s fiscal quarter that is two fiscal quarters before the Corporation’s then most recently completed fiscal quarter has declined by 10% or more as compared to the Tangible Common Stockholders’ Equity Amount at the end of the Corporation’s fiscal quarter ending six quarters prior to the Corporation’s then most recently completed fiscal quarter (the “Benchmark Fiscal Quarter”).

If both the conditions set forth above exist for any Determination Date, the restriction on dividends in excess of the New Capital Amount shall continue until at least one of the conditions set forth above does not exist on a Determination Date and the Tangible Common Stockholders’ Equity Amount has increased, or has declined by less than 10%, in either case as compared to the Tangible Common Stockholders’ Equity Amount at the end of the Benchmark Fiscal Quarter for each Determination Date as to which restrictions were imposed under this Section 4. Any period during which dividends on the Series I Preferred Stock are restricted as described above is referred to as a “Dividend Restriction Period”.

For purposes of this test:

•“New Capital Amount” means, for any Dividend Payment Date, the net proceeds received by the Corporation from new issuances of Qualifying APM Securities (as defined below) (whether in one or more public offerings or private placements) during the period commencing on the 180^th day prior to (i) the date of the notice that dividends will be skipped on such Dividend Payment Date or (ii) if no such notice is given, the 15^th day prior to such Dividend Payment Date (without double counting proceeds received during such 180-day period);

•“GAAP” means, at any date or for any period, U.S. generally accepted accounting principles as in effect on such date or for such period;

•“Tangible Common Stockholders’ Equity Amount” means, as of any quarter end and subject to certain adjustments described below, our common stockholders’ equity minus identifiable intangible assets and goodwill, in each case as reflected on our consolidated GAAP balance sheet as of such quarter end; and

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•“Trailing Two Quarters Consolidated Net Income Amount” means, for any fiscal quarter and subject to certain adjustments described below, the sum of our consolidated net income for the two fiscal quarters ending as of the last day of such fiscal quarter.

All financial terms used in this Section 4 shall be determined in accordance with GAAP as applied to and reflected in the Corporation’s consolidated financial statements as of the relevant dates, except (i) that the Corporation’s common stockholders’ equity and consolidated net income at any date and for any period shall be adjusted to exclude extraordinary items, unusual items and infrequently occurring items as defined in Accounting Principles Bulletin 30, goodwill impairment as defined in Financial Accounting Standards Board Statements of Financial Accounting Standards No. 142 and amounts relating to discontinued operations as defined in Financial Accounting Standards Board Statements of Financial Accounting Standards No. 144 (or in each case, in any successor accounting bulletins or statements) and (ii) as provided in the next sentence. If because of a change in GAAP that results in a cumulative effect of a change in accounting principle or a restatement, either (i) the Corporation’s consolidated net income is higher or lower than it would have been absent such change, then, for purposes of calculating the calculations described above, commencing with the fiscal quarter for which such changes in GAAP becomes effective, such consolidated net income shall be calculated on a pro forma basis as if such changes had not occurred or (ii) the Tangible Common Stockholders’ Equity Amount as of a fiscal quarter end is higher or lower than it would have been absent such change, then, for purposes of the calculations described in the second bullet point in the definition of “Dividend Restriction Event” above, the Tangible Common Stockholders’ Equity Amount shall be calculated on a pro forma basis as if such change had not occurred.

Neither the Board nor any committee of the board shall declare dividends on the Series I Preferred Stock on a declaration date (i) that is more than 60 days prior to the related Dividend Payment Date or (ii) that is earlier than the date on which the Corporation’s financial statements for the most recently completed fiscal quarter prior to the related Dividend Payment Date have been filed with or furnished to the Securities and Exchange Commission or have otherwise been made publicly available; provided that, if the Board determines to delay filing the Corporation’s financial statements with the Securities and Exchange Commission to a date later than the date on which “accelerated filers” under the Securities and Exchange Commission’s rules would normally be required to file such financial statements, then the Board or a duly authorized committee thereof shall be permitted to determine the ability of the Board or a duly authorized committee thereof to declare dividends under the conditions set forth above based upon the Corporation’s financial statements as most recently filed with the Securities and Exchange Commission or otherwise made publicly available.

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

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The Corporation shall give notice to the holders of the Series I Preferred Stock of a potential Dividend Restriction Event that could take effect for a subsequent payment date having a Determination Date two fiscal quarters in the future if (i) the Trailing Two Quarters Consolidated Net Income Amount for the Corporation’s most recently completed fiscal quarter is zero or a negative amount and (ii) the Tangible Common Stockholders’ Equity Amount as of the Corporation’s most recently completed fiscal quarter has declined by 10% or more as compared to the Tangible Common Stockholders’ Equity Amount as of the end of the Corporation’s fiscal quarter that is four fiscal quarters prior to the Corporation’s most recently completed fiscal quarter. The Corporation shall send any such notice no later than the first Dividend Payment Date following the end of the Corporation’s most recently completed fiscal quarter for which the relevant financial information is available as of which the conditions set forth in this Section 4 indicate that a potential Dividend Restriction Event could occur. Such notice shall be sent by first class mail, postage prepaid, addressed to the holders of record of the Series I Preferred Stock at their respective last addresses appearing on the Corporation’s books, and the Corporation shall file a copy of such notice on Form 8-K with the Commission. Such notice shall (x) set forth the results of the Trailing Two Quarters Consolidated Net Income Amount and the Tangible Common Stockholders’ Equity Amount for the relevant periods and dates, and (y) state that the Corporation may be precluded by the terms of the Preferred Securities from paying dividends on such Dividend Payment Date unless the Corporation, through the generation of earnings or issuance of Common Shares, increases the Tangible Common Stockholders’ Equity Amount by an amount specified in such notice by the second payment date after the date of such notice.

By not later than the 15th day prior to each Dividend Payment Date for which dividends are being skipped by reason of the conditions set forth in this Section 4, the Corporation shall give notice by first class mail, postage prepaid, addressed to the holders of record of the Series I Preferred Stock at their respective last addresses appearing on the Corporation’s books, and the Corporation shall file a copy of such notice on Form 8-K with the Commission. Such notice shall state (x) the amount of dividends that will be skipped and (y) the applicable Trailing Two Quarters Consolidated Net Income Amount and Tangible Common Stockholders’ Equity Amount (and the amounts by which the Trailing Two Quarters Consolidated Net Income Amount and Tangible Common Stockholders’ Equity Amount must increase in order for payment of dividends to be resumed).

For purposes of determining the New Capital Amount, the term Qualifying APM Securities has the following meaning:

“Qualifying APM Securities” means the Corporation’s common stock, qualifying preferred stock and qualifying warrants.

The Corporation may not include the net proceeds of qualifying preferred stock in the New Capital Amount for the purposes of paying dividends on the Series I Preferred Stock during a Dividend Restriction Period to the extent that such net proceeds, together with the net proceeds of all prior issuances of qualifying preferred stock included in the New Capital Amount for any prior payments of dividends on the  Series I Preferred Stock during a Dividend Restriction Period, would exceed 25% of the initial aggregate liquidation preference of the  Series I Preferred Stock.

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If any Dividend Restriction Period lasts longer than one year and the Corporation has paid dividends on the Series I Preferred Stock during such Dividend Restriction Period, the Corporation shall not redeem or purchase any securities ranking pari passu with or junior to the most senior of the Qualifying APM Securities issued to raise such amount until the first anniversary of the date on which such Dividend Restriction Period ended.

The following terms used in the definition of Qualifying APM Securities have the following meanings:

“Intent-based replacement disclosure” means, as to any qualified preferred stock, that the Corporation has publicly stated its intention, either in the prospectus or other offering document under which such qualified preferred stock was initially offered for sale or in filings with the SEC made by the Corporation under the Exchange Act prior to or contemporaneously with the issuance of such securities, that the Corporation, to the extent the qualified preferred stock provides the Corporation with equity credit, will repay, redeem or purchase such qualified preferred stock only with the proceeds of replacement capital securities that have terms and provisions at the time of repayment, redemption or purchase that are as or more equity-like than the qualified preferred stock then being repaid, redeemed or purchased, raised within 180 days prior to the applicable repayment, redemption or purchase date.

“Permitted remedies” means, with respect to any securities, one or more of the following remedies:

•rights in favor of the holders of such securities permitting such holders to elect one or more directors of the issuer (including any such rights required by the listing requirements of any stock or securities exchange on which such securities may be listed or traded); and

•complete or partial prohibitions preventing the issuer from paying distributions on or purchasing common stock or other securities that rank pari passu with or junior as to distributions to such securities for so long as distributions on such securities, including unpaid distributions, remain unpaid.

“Qualifying capital replacement covenant” means a replacement capital covenant, as identified by the Board acting in good faith and in its reasonable discretion and reasonably construing the definitions and other terms of the replacement capital covenant, (i) entered into by the Corporation at a time when it is a reporting company under the Exchange Act and (ii) that restricts the Corporation from redeeming or purchasing identified securities except from the applicable percentage of the proceeds of specified replacement capital securities that have terms and provisions at the time of redemption or purchase that are as or more equity-like than the securities then being redeemed or purchased, raised within 180 days prior to the applicable redemption or purchase date.

“Qualifying preferred stock” means the Corporation’s non-cumulative perpetual preferred stock that ranks pari passu with or junior to all of the Corporation’s other preferred stock, is perpetual and (a) is subject to a replacement capital covenant substantially similar to the replacement capital covenant applicable to the Series I Preferred Stock as of the date of its initial

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issuance or any “qualifying capital replacement covenant” or (b) is subject to both (i) mandatory suspension of dividends in the event the Corporation breaches certain financial metrics specified within the offering documents and (ii) “intent-based replacement disclosure.” Additionally, the terms of the preferred stock shall provide for no remedies as a consequence of non-payment of dividends other than “permitted remedies.”

 “Qualifying warrants” means any net share settled warrants to purchase the Corporation’s common stock that (1) have an exercise price greater than the “current stock market price” of the Corporation’s common stock, and (2) the Corporation is not entitled to redeem for cash and the holders of which are not entitled to require the Corporation to purchase for cash in any circumstances. The “current stock market price” of the Corporation’s common stock on any date shall be the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions by the New York Stock Exchange or, if the Corporation’s common stock is not then listed on the New York Stock Exchange, as reported by the principal U.S. securities exchange on which the Corporation’s common stock is traded or quoted. If the Corporation’s common stock is not listed on any U.S. securities exchange on the relevant date, the “current stock market price” shall be the last quoted bid price for the Corporation’s common stock in the over-the-counter market on the relevant date as reported by the National Quotation Bureau or similar organization. If the Corporation’s common stock is not so quoted, the “current stock market price” shall be the average of the mid-point of the last bid and ask prices for the Corporation’s common stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Corporation for this purpose.

5.Liquidation Preference. The shares of Series I Preferred Stock shall rank, as to liquidation, dissolution or winding up of the Corporation, prior to the shares of common stock and any other stock of the Corporation ranking junior to the Series I Preferred Stock as to rights upon liquidation, dissolution or winding up of the Corporation, so that in the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the holders of the Series I Preferred Stock shall be entitled to receive out of the assets of the Corporation available for distribution to its stockholders, whether from capital, surplus or earnings, before any distribution is made to holders of shares of common stock or any other such junior stock, an amount equal to the liquidation preference of $100,000.00 per share plus an amount equal to all declared and unpaid dividends on the shares of Series I Preferred Stock to the date of final distribution. The holders of the Series I Preferred Stock shall not be entitled to receive the preferential amounts as aforesaid until the liquidation preference of any other stock of the Corporation ranking senior to the Series I Preferred Stock as to rights upon liquidation, dissolution or winding up shall have been paid (or a sum set aside therefor sufficient to provide for payment) in full. After payment of the full amount of the preferential amounts as aforesaid, the holders of shares of Series I Preferred Stock will not be entitled to any further participation in any distribution of assets by the Corporation. If, upon any liquidation, dissolution or winding up of the Corporation, the assets of the Corporation, or proceeds thereof, distributable among the holders of shares of Parity Preferred Stock and Series I Preferred Stock shall be insufficient to pay in full the preferential amounts payable thereon, then such assets, or the proceeds thereof, shall be distributable among such holders ratably in accordance with the respective amounts which would be payable on such shares if all amounts payable thereon were paid in full. For the

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purposes hereof, neither a consolidation or merger of the Corporation with or into any other corporation, nor a merger of any other corporation with or into the Corporation, nor a sale, lease, exchange or transfer of all or any part of the Corporation’s assets shall be considered a liquidation, dissolution or winding up of the Corporation.

6.Conversion. The Series I Preferred Stock is not convertible into, or exchangeable for, other securities or property.

7.Voting Rights. The Series I Preferred Stock, except as provided herein or as otherwise from time to time required by law, shall have no voting rights. Whenever, at any time or times, dividends payable on the shares of Series I Preferred Stock shall be in arrears for an aggregate number of days equal to six calendar quarters or more, whether or not consecutive, the authorized number of directors of the Corporation shall automatically be increased by two and the holders of the Series I Preferred Stock shall have the right, with holders of shares of any one or more other classes or series of Parity Preferred Stock outstanding at the time upon which like voting rights have been conferred and are exercisable (“Voting Parity Stock”), voting together as a class, to elect two directors (hereinafter the “Preferred Directors” and each a “Preferred Director”) to fill such newly created directorships at the Corporation’s next annual meeting of stockholders and at each subsequent annual meeting of stockholders until full dividends have been paid on the Series I Preferred Stock for at least one year, at which time such right shall terminate, except as herein or by law expressly provided, subject to revesting in the event of each and every subsequent default of the character above mentioned. Upon any termination of the right of the holders of shares of Series I Preferred Stock and Voting Parity Stock as a class to vote for directors as provided above, the term of office of all Preferred Directors then in office shall terminate immediately and the authorized number of directors shall be reduced by the number of Preferred Directors elected pursuant hereto. Any Preferred Director may be removed at any time, with or without cause. Any vacancy created thereby may be filled only by the affirmative vote of the holders of shares of Series I Preferred Stock voting separately as a class (together with the holders of shares of Voting Parity Stock). If the office of any Preferred Director becomes vacant for any reason other than removal from office as aforesaid, the remaining Preferred Director may choose a successor who shall hold office for the unexpired term in respect of which such vacancy occurred. At elections for such directors, each holder of shares of Series I Preferred Stock shall be entitled to 400 votes for each share held (the holders of shares of any other class or series of Voting Parity Stock being entitled to such number of votes, if any, for each share of such stock held as may be granted to them).

So long as any shares of any Series I Preferred Stock remain outstanding, the Corporation shall not, without the affirmative vote of the holders of at least 66-2/3% of the shares of such Series I Preferred Stock (i) authorize, create or issue any capital stock of the Corporation ranking, as to dividends or upon liquidation, dissolution or winding up, prior to such Series I Preferred Stock, or reclassify any authorized capital stock of the Corporation into any such shares of such capital stock or issue any obligation or security convertible into or evidencing the right to purchase any such shares of capital stock, or (ii) amend, alter or repeal the certificate of designations for such Series I Preferred Stock, or the Restated Certificate of Incorporation of the Corporation, whether by merger, consolidation or otherwise, so as to adversely affect the powers, preferences or special rights of such Series I Preferred Stock. Any increase in the amount of authorized common stock or other authorized preferred stock, or any increase or decrease in the

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number of shares of any series of preferred stock or the authorization, creation and issuance of other classes or series of common stock or other stock, in each case ranking on a parity with or junior to the shares of Series I Preferred Stock with respect to the payment of dividends and the distribution of assets upon liquidation, dissolution or winding up, shall not be deemed to adversely affect such powers, preferences or special rights. Parity Preferred Stock shall not be deemed to rank senior to the Series I Preferred Stock in the payment of dividends solely because of the Corporation’s ability to continue paying dividends thereon during any Dividend Restriction Period.

In exercising the voting rights set forth in this Section 7 or when otherwise granted voting rights by operation of law or by the Corporation, each share of Series I Preferred Stock shall be entitled to 400 votes.

The foregoing voting provisions shall not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required or upon which the holders of Series I Preferred Stock shall be entitled to vote shall be effected, all outstanding shares of Series I Preferred Stock shall have been redeemed or called for redemption and sufficient funds shall have been deposited in trust to effect such redemption.

8.Redemption. The shares of Series I Preferred Stock shall not be redeemable prior to the later of May 31, 2012 and the issue date of the Series I Preferred Stock. On any Dividend Payment Date on and after such date, the Corporation, at its option, may redeem shares of the Series I Preferred Stock, as a whole or in part, at a redemption price equal to $100,000.00 per share, plus, in each case, an amount equal to any declared and unpaid dividends to, but excluding, the date fixed for redemption.

The holders of shares of Series I Preferred Stock at the close of business on a Record Date shall be entitled to receive the dividend payable on such shares on the corresponding Dividend Payment Date notwithstanding the call for redemption thereof (except that holders of shares called for redemption on a date occurring between such Record Date and the Dividend Payment Date shall not be entitled to receive such dividend on such Dividend Payment Date) or the Corporation’s default in payment of the dividend due on such Dividend Payment Date.

If fewer than all the outstanding shares of Series I Preferred Stock are to be redeemed, the number of shares to be redeemed shall be determined by the Board of Directors and the shares to be redeemed shall be selected by lot or pro rata or by any other means determined by the Board of Directors in its sole discretion to be equitable.

If dividends on the Series I Preferred Stock have been declared but not been paid or set apart for payment with respect to any Dividend Period, the Series I Preferred Stock may not be redeemed in part and the Corporation may not purchase or acquire any shares of the Series I Preferred Stock otherwise than pursuant to a purchase or exchange offer made on the same terms to all holders of the Series I Preferred Stock.

In the event the Corporation shall redeem shares of Series I Preferred Stock, written notice of such redemption shall be given by first class mail, postage prepaid, mailed not less than 20 days nor more than 60 days prior to the redemption date, to each holder of record of the

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shares to be redeemed at such holder’s address as the same appears on the stock books of the Corporation; provided, however, that no failure to give such notice nor any defect therein shall affect the validity of the proceeding for the redemption of any shares of Series I Preferred Stock to be redeemed except as to the holder to whom the Corporation has failed to mail said notice or except as to the holder whose notice was defective. Each such notice shall state: (a) the redemption date; (b) the number of shares of Series I Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed from such holder, the number of shares to be redeemed from such holder; (c) the redemption price and any declared and unpaid dividends as of the redemption date; (d) the place or places where certificates for such shares are to be surrendered for payment of the redemption price; and (e) that dividends on the shares to be redeemed will cease to accrue on such redemption date (unless the Corporation shall default in providing funds for the payment of the redemption price of the shares called for redemption at the time and place specified in such notice). If a notice of redemption has been given pursuant to this Section 6 and if, on or before the date fixed for redemption, the funds necessary for such redemption shall have been set aside by the Corporation, separate and apart from its other funds, in trust for the pro rata benefit of the holders of the shares of Series I Preferred Stock so called for redemption, then, notwithstanding that any certificates for such shares have not been surrendered for cancellation, on the redemption date dividends shall cease to accrue on the shares to be redeemed, and at the close of business on the redemption date the holders of such shares shall cease to be stockholders with respect to such shares and shall have no interest in or claims against the Corporation by virtue thereof and shall have no voting or other rights with respect to such shares, except the right to receive the moneys payable upon surrender (and endorsement, if required by the Corporation) of their certificates, and the shares evidenced thereby shall no longer be outstanding. The Corporation’s obligation to provide funds for the payment of the redemption price (and any declared and unpaid dividends as of the redemption date) of the shares called for redemption shall be deemed fulfilled if, on or before a redemption date, the Corporation shall deposit, with a bank or trust company, or an affiliate of a bank or trust company, having an office or agency in New York City and having a capital and surplus of at least $50,000,000, such funds sufficient to pay the redemption price (and any declared and unpaid dividends as of the redemption date) of the shares called for redemption, in trust for the account of the holders of the shares to be redeemed (and so as to be and continue to be available therefor), with irrevocable instructions and authority to such bank or trust company that such funds be delivered upon redemption of the shares of Series I Preferred Stock so called for redemption.

Subject to applicable escheat laws, any moneys so set aside by the Corporation and unclaimed at the end of two years from the redemption date shall revert to the general funds of the Corporation, after which reversion the holders of such shares so called for redemption shall look only to the general funds of the Corporation for the payment of the amounts payable upon such redemption. Any interest accrued on funds so deposited shall be paid to the Corporation from time to time.

Shares of Series I Preferred Stock that have been issued and reacquired in any manner, including shares purchased or redeemed, shall (upon compliance with any applicable provisions of the laws of the State of Delaware) have the status of authorized and unissued shares of the class of Preferred Stock undesignated as to series and may be redesignated and reissued as part of any series of the preferred stock.

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9.Amendment of Resolution. The Board reserves the right from time to time to increase or decrease the number of shares that constitute the Series I Preferred Stock (but not below the number of shares thereof then outstanding) and in other respects to amend this Certificate of Designations within the limitations provided by law, this resolution and the Restated Certificate of Incorporation.

10.Rank. Any stock of any class or classes or series of the Corporation shall be deemed to rank:

(a) prior to shares of the Series I Preferred Stock, either as to dividends or upon liquidation, dissolution or winding up, or both, if the holders of stock of such class or classes or series shall be entitled by the terms thereof to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of shares of the Series I Preferred Stock;

(b) on a parity with shares of the Series I Preferred Stock, either as to dividends or upon liquidation, dissolution or winding up, or both, whether or not the dividend rates, Dividend Payment Dates, or redemption or liquidation prices per share thereof be different from those of the Series I Preferred Stock, if the holders of stock of such class or classes or series shall be entitled by the terms thereof to the receipt of dividends or of amounts distributed upon liquidation, dissolution or winding up, as the case may be, in proportion to their respective dividend rates or liquidation prices, without preference or priority of one over the other as between the holders of such stock and the holders of shares of Series I Preferred Stock (the term “Parity Preferred Stock” being used to refer to any stock on a parity with the shares of Series I Preferred Stock, either as to dividend or upon  liquidation, dissolution or winding up, or both, as the content may require); and

(c) junior to shares of the Series I Preferred Stock, either as to dividends or upon liquidation, dissolution or winding up, or both, if such class or classes or series shall be common stock or if the holders of the Series I Preferred Stock shall be entitled to the receipt of dividends or of amounts distributable upon liquidation, dissolution or winding up, as the case may be, in preference or priority to the holders of stock of such class or classes or series.

The Series I Preferred Stock shall rank, as to dividends and upon liquidation, dissolution or winding up, on a parity with the Corporation’s 5.94% Cumulative Preferred Stock, Series C, the Corporation’s 5.67% Cumulative Preferred Stock, Series D, the Corporation’s 6.50% Cumulative Preferred Stock, Series F, the Corporation’s Floating Rate Cumulative Preferred Stock, Series G, and any Parity Preferred Stock issued hereafter.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the undersigned, being duly authorized thereto, does hereby affirm, under penalties of perjury, that this certificate is the act and deed of the Corporation and that the facts herein stated are true, and accordingly has hereunto set his hand this 17th day of May, 2007.

LEHMAN BROTHERS HOLDINGS INC.
By:	/s/ Barrett S. DiPaolo
	Name:	Barrett S. DiPaolo
	Title:	Vice President and
		Assistant Secretary

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EX-4.01

Exhibit 4.01

STOCK PURCHASE CONTRACT AGREEMENT

between

LEHMAN BROTHERS HOLDINGS INC.

and

U.S. bANK NATIONAL ASSOCIATION,

as Stock Purchase Contract Agent

Dated as of May 17, 2007

TABLE OF CONTENTS

		Page
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1	Definitions	2
Section 1.2	Compliance Certificates and Opinions	11
Section 1.3	Form of Documents Delivered to Stock Purchase Contract Agent	12
Section 1.4	Acts of Holders; Record Dates	12
Section 1.5	Notices	13
Section 1.6	Notice to Holders; Waiver	14
Section 1.7	Effect of Headings and Table of Contents	15
Section 1.8	Successors and Assigns	15
Section 1.9	Separability Clause	15
Section 1.10	Benefits of Agreement	15
Section 1.11	Governing Law	15
Section 1.12	Legal Holidays	16
Section 1.13	Counterparts	16
Section 1.14	Inspection of Agreement	16
Section 1.15	Appointment of Financial Institution as Agent for the Company	16
Section 1.16	No Waiver	16
ARTICLE II
CERTIFICATE FORMS
Section 2.1	Forms of Certificates Generally	17
Section 2.2	Form of Stock Purchase Contract Agent’s Certificate of Authentication	18
ARTICLE III
THE MCAPS
Section 3.1	Amount; Form and Denominations	19
Section 3.2	Rights and Obligations Evidenced by the Certificates	19
Section 3.3	Execution, Authentication, Delivery and Dating	20
Section 3.4	Temporary Certificates	20
Section 3.5	Registration; Registration of Transfer and Exchange	21
Section 3.6	Book-Entry Interests	22
Section 3.7	Notices to Holders	23
Section 3.8	Appointment of Successor MCAPS Depositary	23
Section 3.9	Definitive Certificates	23
Section 3.10	Mutilated, Destroyed, Lost and Stolen Certificates	24
Section 3.11	Persons Deemed Owners	25

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Section 3.12	Cancellation	26
Section 3.13	Creation of Treasury MCAPS by Substitution of Qualifying Treasury Securities	26
Section 3.14	Recreation of Normal MCAPS	28
Section 3.15	Transfer of Collateral upon Occurrence of Termination Event	29
Section 3.16	No Consent to Assumption	30
ARTICLE IV
THE TRUST PREFERRED SECURITIES
Section 4.1	Distributions; Rights to Distributions Preserved	31
Section 4.2	Notice and Voting	31
ARTICLE V
QUALIFYING TREASURY SECURITIES
Section 5.1	Qualifying Treasury Securities	33
ARTICLE VI
THE STOCK PURCHASE CONTRACTS
Section 6.1	Purchase of Depositary Share	34
Section 6.2	Remarketing; Payment of Purchase Price	35
Section 6.3	Issuance of Depositary Shares	37
Section 6.4	Termination Event; Notice	38
Section 6.5	Charges and Taxes	38
Section 6.6	Contract Payments	39
Section 6.7	Deferral of Contract Payments	43
Section 6.8	Rights of Holders of Treasury MCAPs to Receive Excess Proceeds	45
ARTICLE VII
REMEDIES
Section 7.1	Unconditional Right of Holders to Receive Contract Payments and to Purchase Depositary Shares	46
Section 7.2	Restoration of Rights and Remedies	46
Section 7.3	Rights and Remedies Cumulative	46
Section 7.4	Delay or Omission Not Waiver	46
Section 7.5	Undertaking for Costs	46
Section 7.6	Waiver of Stay or Extension Laws	47

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ARTICLE VIII
THE PURCHASE CONTRACT AGENT
Section 8.1	Certain Duties and Responsibilities	48
Section 8.2	Notice of Default	49
Section 8.3	Certain Rights of Stock Purchase Contract Agent	49
Section 8.4	Not Responsible for Recitals or Issuance of MCAPS	50
Section 8.5	May Hold MCAPS	51
Section 8.6	Money Held in Custody	51
Section 8.7	Compensation and Reimbursement	51
Section 8.8	Corporate Stock Purchase Contract Agent Required, Eligibility	52
Section 8.9	Resignation and Removal; Appointment of Successor	52
Section 8.10	Acceptance of Appointment by Successor	53
Section 8.11	Merger, Conversion, Consolidation or Succession to Business	54
Section 8.12	Preservation of Information; Communications to Holders	54
Section 8.13	No Obligations of Stock Purchase Contract Agent	55
Section 8.14	Tax Compliance	55
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
Section 9.1	Supplemental Agreements without Consent of Holders	56
Section 9.2	Supplemental Agreements with Consent of Holders	56
Section 9.3	Execution of Supplemental Agreements	57
Section 9.4	Effect of Supplemental Agreements	58
Section 9.5	Reference to Supplemental Agreements	58
ARTICLE X
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 10.1	Covenant Not to Consolidate, Merge, Convey, Transfer or Lease Property Except under Certain Conditions	59
Section 10.2	Rights and Duties of Successor Corporation	59
Section 10.3	Officers’ Certificate and Opinion of Counsel Given to Stock Purchase Contract Agent	60
ARTICLE XI
COVENANTS
Section 11.1	Performance under Stock Purchase Contracts	61
Section 11.2	Maintenance of Office or Agency	61
Section 11.3	Company to Reserve Preferred Stock	61
Section 11.4	Covenants as to Preferred Stock and Depositary Shares	62
Section 11.5	Statements of Officers of the Company as to Default	62
Section 11.6	ERISA	62
Section 11.7	Tax Treatment	62

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EXHIBITS:

Exhibit A – Form of Normal MCAPS Certificate

Exhibit B – Form of Treasury MCAPS Certificate

Exhibit C – Instruction to Stock Purchase Contract Agent

Exhibit D – Notice from Stock Purchase Contract Agent to Holders

Exhibit E – Notice to Settle by Treasury Securities

Exhibit F – Notice from Stock Purchase Contract Agent to Collateral Agent (Settlement of Purchase Contract through Remarketing)

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STOCK PURCHASE CONTRACT AGREEMENT, dated as of May 17, 2007, between LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation (the “Company”), having its principal office at 745 Seventh Avenue, New York, New York 10019, and U.S. Bank National Association, a national banking association, acting as stock purchase contract agent for the Holders of MCAPS (as defined herein) from time to time (the “Stock Purchase Contract Agent”).

RECITALS OF THE COMPANY

The Company has duly authorized the execution and delivery of this Agreement and the Certificates evidencing the MCAPS.

All things necessary to make the Stock Purchase Contracts (as defined herein), when the Certificates (as defined herein) are executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Stock Purchase Contract Agent, as provided in this Agreement, the valid obligations of the Company, and to constitute these presents a valid agreement of the Company, in accordance with its terms, have been done.

For and in consideration of the premises and the purchase of the MCAPS by the Holders thereof, it is mutually agreed as follows:

ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.1             Definitions.

For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

(a)The terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular.

(b)All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States, and the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles that are generally accepted in the United States at the date or time of such computation; provided that when two or more principles are so generally accepted, it shall mean that set of principles consistent with those in use by the Company.

(c)The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, Exhibit or other subdivision.

(d)Unless the context otherwise requires, any references to an “Article,” a “Section,” an “Exhibit” or another subdivision refers to an Article, a Section, an Exhibit or another subdivision, as the case may be, of this Stock Purchase Contract Agreement.

“Additional Subordinated Notes” means the subordinated notes of the Company that may be issued to the Stock Purchase Contract Agent as provided in Section 6.7(c).

“Agreement” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more agreements supplemental hereto entered into pursuant to the applicable provisions hereof.

“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, Title 11 of the United States Code, as amended from time to time, or any other law of the United States that from time to time provides a uniform system of bankruptcy laws.

“Beneficial Owner” means, with respect to a Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry Interest as reflected on the books of the MCAPS Depositary or on the books of a Person maintaining an account with such MCAPS Depositary (directly as a MCAPS Depositary Participant or as an indirect participant, in each case in accordance with the rules of such MCAPS Depositary).

“Board of Directors” means the board of directors of the Company or any committee of that board duly authorized to act hereunder.

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“Board Resolution” means one or more resolutions of the Board of Directors, a copy of which has been certified by the Secretary or an Assistant Secretary of the Company, to have been duly adopted by the Board of Directors, or such committee of the Board of Directors or officers of the Company to which authority to act on behalf of the Board of Directors has been delegated, and to be in full force and effect on the date of such certification and delivered to the Stock Purchase Contract Agent.

“Book-Entry Interest” means a beneficial interest in a Global Certificate, registered in the name of a MCAPS Depositary or a nominee thereof, ownership and transfers of which shall be maintained and made through book entries by such Depositary as described in Section 3.6.

“Business Day” means any day other than a Saturday, Sunday or any other day on which banking institutions in the Borough of Manhattan, City of New York are generally authorized or obligated to be closed.

“Certificate” means a Normal MCAPS Certificate or a Treasury MCAPS Certificate.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” has the meaning specified in the Collateral Agreement.

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

“Collateral Agreement” means the Collateral Agreement, dated as of the date hereof, among the Company, the Collateral Agent, the Securities Intermediary, and the Stock Purchase Contract Agent, on its own behalf and as attorney-in-fact for the Holders from time to time of the MCAPS, as amended from time to time.

“Collateral Substitution” means (i) with respect to a Normal MCAPS, the substitution for the Pledged Trust Preferred Security included in such Normal MCAPS by Qualifying Treasury Securities or portions thereof in an aggregate principal amount at maturity equal to the aggregate liquidation amount of such Pledged Trust Preferred Security, or (ii) with respect to a Treasury MCAPS, the substitution for the Pledged Treasury Securities included in such Treasury MCAPS by Trust Preferred Securities in an aggregate liquidation amount equal to the aggregate principal amount at stated maturity of the Pledged Treasury Securities.

“Company” means the Person named as the “Company” in the first paragraph of this Agreement until a successor shall have become such pursuant to the applicable provision of this Agreement, and thereafter “Company” shall mean such successor.

“Contract Payments” means the payments payable by the Company on the Payment Dates in respect of each Stock Purchase Contract, at the rate of 0.15% per annum of the Stated Amount per Stock Purchase Contract of each Stock Purchase Contract.

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“Corporate Trust Office” means the office of the Stock Purchase Contract Agent at which, at any particular time, its corporate trust business shall be principally administered, which office at the date hereof is located at One Federal Street, 3^rd Floor, Boston, MA 02110, Attn: Earl Dennison (provided, however, for purposes of Section 11.2 only, the Corporate Trust Office shall be located at 100 Wall Street, Suite 1600, Mai Station EX-NY-WALL, New York, New York 10005).

“Debentures” means the Remarketable Junior Subordinated Debentures due 2043 of the Company.

“Declaration of Trust” means the Amended and Restated Declaration of Trust, dated as of the date hereof, of Lehman Brothers Holdings Capital Trust VII, among the Company, as Sponsor, the Property Trustee, the Delaware Trustee and the Regular Trustees (each as named therein) and the several Holders (as defined therein).

“Deferred Contract Payments” has the meaning specified in Section 6.7(a).

“Depositary” means a clearing agency registered under Section 17A of the Exchange Act.

“Depositary Receipt” means one of the depositary receipts, whether in definition or temporary form, issued by the Preferred Stock Depositary pursuant to a Deposit Agreement, each representing any number of whole Depositary Shares.

“Depositary Shares” means the Depositary Shares of the Company, each representing a 1/100^th ownership interest in a share of Preferred Stock, which shall be evidenced by Depositary Receipts.

“DTC” means The Depository Trust Company.

“Early Remarketing” has the meaning specified in Section 2.3 of the Declaration of Trust.

“Eleventh Supplemental Indenture” means the Supplemental Indenture, dated as of the date hereof, between the Company and the Indenture Trustee, to the Base Indenture, dated as of February 1, 1996, between the Company and JPMorgan Chase Bank, N.A., as trustee.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Exchange Act” means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time, and the rules and regulations promulgated thereunder.

“Expiration Date” has the meaning specified in Section 1.4(e).

“Failed Remarketing” has the meaning specified in Section 1.1 of the Declaration of Trust.

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“Global Certificate” means a Certificate that evidences all or part of the MCAPS and is registered in the name of the MCAPS Depositary or a nominee thereof.

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

“Holder” means, with respect to a MCAPS, the Person in whose name the MCAPS evidenced by a Certificate is registered in the Securities Register; provided, however, that solely for the purpose of determining whether the Holders of the requisite number of MCAPS have voted on any matter (and not for any other purpose hereunder), if the MCAPS remains in the form of one or more Global Certificates and if the MCAPS Depositary that is the registered holder of such Global Certificate has sent an omnibus proxy assigning voting rights to the MCAPS Depositary Participants to whose accounts the MCAPS are credited on the record date, the term “Holder” shall mean such MCAPS Depositary Participant acting at the direction of the Beneficial Owners.

“Indemnitees” has the meaning specified in Section 8.7(c).

“Indenture” means the Base Indenture, dated as of February 1, 1996, between the Company and JPMorgan Chase Bank, N.A., as trustee, as supplemented by the First Supplemental Indenture, dated as of February 1, 1996, and the Eleventh Supplemental Indenture, as further amended or supplemented from time to time with respect to the Debentures.

“Indenture Trustee” means U.S. Bank National Association, national banking association duly organized and existing under the laws of the United States of America, solely in its capacity as trustee pursuant to the Indenture and not in its individual capacity, or its successor in interest in such capacity, or any successor trustee appointed as provided in the Indenture.

“Initial Liquidation Amount” has the meaning specified in the Declaration of Trust.

“Issuer Order” or “Issuer Request” means a written order or request signed in the name of the Company by (i) either its Chief Executive Officer, its President or one of its Vice Presidents, and (ii) either its Corporate Secretary or one of its Assistant Corporate Secretaries or its Treasurer or one of its Assistant Treasurers, and delivered to the Stock Purchase Contract Agent.

“MCAPS” means a Normal MCAPS or a Treasury MCAPS, as the case may be.

“MCAPS Depositary” means a clearing agency registered under Section 17A of the Exchange Act that is designated to act as Depositary for the MCAPS as contemplated by Sections 3.6 and 3.8.

“MCAPS Depositary Participant” means a broker, dealer, bank, other financial institution or other Person for whom from time to time the MCAPS Depositary effects book-entry transfers and pledges of securities deposited with the MCAPS Depositary.

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“Normal MCAPS” means the collective rights and obligations of a Holder of a Normal MCAPS Certificate in respect of one Trust Preferred Security subject to the Pledge thereof, and the related Stock Purchase Contract.

“Normal MCAPS Certificate” means a certificate evidencing the rights and obligations of a Holder in respect of the number of Normal MCAPS specified on such certificate.

“Officers’ Certificate” means a certificate signed by the Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the President or a Vice President, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company or the duly authorized designee of any of the foregoing, and delivered to the Stock Purchase Contract Agent.

“Opinion of Counsel” means a written opinion of counsel, who may be counsel for the Company (including an employee of the Company), and who shall be reasonably acceptable to the Stock Purchase Contract Agent.

“Outstanding MCAPS” means, with respect to any MCAPS and as of the date of determination, all MCAPS evidenced by Certificates theretofore authenticated, executed and delivered under this Agreement, except:

(i)if a Termination Event has occurred, no MCAPS shall be deemed outstanding;

(ii)MCAPS evidenced by Certificates theretofore cancelled by the Stock Purchase Contract Agent or delivered to the Stock Purchase Contract Agent for cancellation or deemed cancelled pursuant to the provisions of this Agreement; and

(iii)MCAPS evidenced by Certificates in exchange for or in lieu of which other Certificates have been authenticated, executed on behalf of the Holder and delivered pursuant to this Agreement, other than any such Certificate in respect of which there shall have been presented to the Stock Purchase Contract Agent proof satisfactory to it that such Certificate is held by a protected purchaser in whose hands the MCAPS evidenced by such Certificate are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite number of the MCAPS have given any request, demand, authorization, direction, notice, consent or waiver hereunder, MCAPS owned by the Company or any Affiliate of the Company shall be disregarded and deemed not to be Outstanding MCAPS, except that, in determining whether the Stock Purchase Contract Agent shall be authorized and protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only MCAPS that a Responsible Officer of the Stock Purchase Contract Agent actually knows to be so owned shall be so disregarded.  MCAPS so owned that have been pledged in good faith may be regarded as Outstanding MCAPS if the pledgee establishes to the satisfaction of the Stock Purchase Contract Agent the pledgee’s right so to act with respect to such MCAPS and that the pledgee is not the Company or any Affiliate of the Company.

“Parity Guarantee” has the meaning specified in Section 6.7(d) hereof.

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“Parity Debt Security” has the meaning specified in Section 6.7(d) hereof.

 “Paying Agent” has the meaning specified in the Declaration of Trust.

“Payment Date” means (i) each May 31 and November 30 of each year occurring on or prior to the Stock Purchase Date, commencing on November 30, 2007, and (ii) if not otherwise a Payment Date, the Stock Purchase Date.

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

“Plan” means an employee benefit plan that is subject to Title I of ERISA, a plan, individual retirement account or other arrangement that is subject to Section 4975 of the Code or Similar Law and any entity whose assets are considered assets of any such plan, account or arrangement.

“Pledge” means the pledge under the Collateral Agreement of the Trust Preferred Securities or the Qualifying Treasury Securities, as the case may be, in each case constituting a part of the MCAPS.

 “Pledged Securities” means the Pledged Trust Preferred Securities and the Pledged Treasury Securities.

“Pledged Treasury Securities” has the meaning specified in Section 1.1 of the Collateral Agreement.

“Pledged Trust Preferred Securities” has the meaning specified in Section 1.1(e) of the Collateral Agreement.

 “Predecessor Normal MCAPS Certificate” of any particular Normal MCAPS Certificate means every previous Normal MCAPS Certificate evidencing all or a portion of the rights and obligations of the Company and the Holder under the Normal MCAPS evidenced thereby; and, for the purposes of this definition, any Normal MCAPS Certificate authenticated and delivered under Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Normal MCAPS Certificate shall be deemed to evidence the same rights and obligations of the Company and the Holder as the mutilated, destroyed, lost or stolen Normal MCAPS Certificate.

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“Predecessor Treasury MCAPS Certificate” of any particular Treasury MCAPS Certificate means every previous Treasury MCAPS Certificate evidencing all or a portion of the rights and obligations of the Company and the Holder under the Treasury MCAPS evidenced thereby; and, for the purposes of this definition, any Treasury MCAPS Certificate authenticated and delivered under Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Treasury MCAPS Certificate shall be deemed to evidence the same rights and obligations of the Company and the Holder as the mutilated, destroyed, lost or stolen Treasury MCAPS Certificate.

“Preferred Stock” means the Non-Cumulative Perpetual Preferred Stock, Series H, $100,000 liquidation preference per share with no par value, of the Company.

“Preferred Stock Deposit Agreement” means an agreement among the Company, the Preferred Stock Depositary and the holder from time to time of Depositary Receipts.

“Preferred Stock Depositary” means the Depositary under the Preferred Stock Deposit Agreement.

“Proceeds” has the meaning specified in Section 1.1 of the Collateral Agreement.

“Property Trustee” has the meaning specified in Section 1.1 of the Declaration of Trust.

“Purchase Price” has the meaning set forth in Section 6.1(a).

“Qualifying Treasury Security” has the meaning specified in Section 5.1.

“Quarterly Date” has the meaning specified in Section 5.1.

“Record Date” for any distribution and Contract Payment payable on any Payment Date means, as to any Global Certificate or any other Certificate, the 15^th day of the calendar month in which the relevant Payment Date falls (whether or not a Business Day).

“Regular Trustee” has the meaning specified in the Declaration of Trust.

“Remarketing” means a remarketing of Trust Preferred Securities pursuant to Section 1.1 of the Declaration of Trust.

“Remarketing Agent” has the meaning specified in Section 1.1 of the Declaration of Trust.

“Remarketing Agreement” has the meaning specified in Section 1.1 of the Declaration of Trust.

“Remarketing Date” has the meaning specified in Section 1.1 of the Declaration of Trust.

“Remarketing Fee” has the meaning specified in Section 1.1 of the Declaration of Trust.

“Remarketing Period” has the meaning specified in Section 1.1 of the Declaration of Trust.

“Remarketing Settlement Date” has the meaning specified in Section 1.1 of the Declaration of Trust.

“Responsible Officer” shall mean, when used with respect to the Stock Purchase Contact Agent, any officer within the corporate trust department of the Stock Purchase Contract Agent, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Stock Purchase Contract Agent who customarily performs functions similar to those performed by the Persons who at the time shall be such officers,

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respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Stock Purchase Contract Agreement.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933 and any successor statute thereto, in each case as amended from time to time, and the rules and regulations promulgated thereunder.

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

“Securities Register” and “Securities Registrar” have the respective meanings specified in Section 3.5.

“Senior Debt” has the meaning specified in Section 1401 of the Indenture.

“Separate Trust Preferred Securities” means Trust Preferred Securities that are no longer a component of Normal MCAPS.

“Settlement with Qualifying Treasury Securities” has the meaning specified in Section 6.2(b).

“Similar Law” means any federal, state, local, non-U.S. or other law or regulation that is similar to the fiduciary responsibility provisions of Title I of ERISA or the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code.

“Stated Amount” means, with respect to any one Normal MCAPS, Treasury MCAPS, or Trust Preferred Security, $1,000.

“Stock Purchase Contract” means, with respect to any MCAPS, the contract forming a part of such MCAPS and obligating (i) the Company to sell, and the Holder of such MCAPS to purchase Depositary Shares and (ii) the Company to pay the Holder thereof Contract Payments, in each case on the terms and subject to the conditions specified in Article VI.

“Stock Purchase Contract Agent” means the Person named as the “Stock Purchase Contract Agent” in the first paragraph of this Agreement until a successor Stock Purchase Contract Agent shall have become such pursuant to the applicable provisions of this Agreement, and thereafter “Stock Purchase Contract Agent” shall mean such Person or any subsequent successor who is appointed pursuant to this Agreement.

“Stock Purchase Contract Settlement Fund” has the meaning specified in Section 6.3(a).

“Stock Purchase Date” means May 31, 2012, provided that the Stock Purchase Date may be (i) moved to an earlier date if an Early Remarketing occurs, in accordance with

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Section 6.2(b)(v), or (ii) deferred for quarterly periods until May 31, 2013 in accordance with Section 6.2(b)(iv).

“Successful” has the meaning specified in Section 1.1 of the Declaration of Trust.

“Termination Date” means the date, if any, on which a Termination Event occurs.

“Termination Event” means the occurrence of any of the following events at any time on or prior to the Stock Purchase Date:

(i)a judgment, decree or court order shall have been entered granting relief under the Bankruptcy Code, adjudicating the Company to be insolvent, or approving as properly filed a petition seeking reorganization or liquidation of the Company or any other similar applicable federal or state law and if such judgment, decree or order shall have been entered more than 90 days prior to the Stock Purchase Date, such decree or order shall have continued undischarged and unstayed for a period of 90 days;

(ii)a judgment, decree or court order for the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the Company or of its property, or for the termination or liquidation of its affairs, shall have been entered and if such judgment, decree or order shall have been entered more than 90 days prior to the Stock Purchase Date, such judgment, decree or order shall have continued undischarged and unstayed for a period of 90 days;

(iii)the Company shall file a petition for relief under the Bankruptcy Code, or shall consent to the filing of a bankruptcy proceeding against it, or shall file a petition or answer or consent seeking reorganization or liquidation under the Bankruptcy Code or any other similar applicable federal or state law, or shall consent to the filing of any such petition, or shall consent to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it or of its property, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due; or

(iv)the Company shall redeem the Debentures prior to the Stock Purchase Date upon the occurrence of a “tax event”, a “capital treatment event” or a “rating agency event,” in each case, as defined in the Indenture.

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

“Transfer Agent” means the Property Trustee solely in its capacity as transfer agent for the MCAPS.

“Treasury MCAPS” means, following the substitution of Qualifying Treasury Securities for Pledged Trust Preferred Securities as collateral to secure a Holder’s obligations under the Stock Purchase Contract, the collective rights and obligations of a Holder of a Treasury MCAPS Certificate in respect of such Qualifying Treasury Securities subject to the Pledge thereof, and the related Stock Purchase Contract.

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“Treasury MCAPS Certificate” means a certificate evidencing the rights and obligations of a Holder in respect of the number of Treasury MCAPS specified on such certificate.

“Trust Enforcement Event” has the meaning specified in Section 1.1 of the Declaration of Trust.

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

“Underwriters” means the underwriters identified in Schedule II to the Underwriting Agreement.

“Underwriting Agreement” means the Underwriting Agreement, dated May 8, 2007, among the Company and the Underwriters, relating to the issuance of MCAPS by the Company.

“Vice President” means any vice president, whether or not designated by a number or a word or words added before or after the title “Vice President.”

Section 1.2Compliance Certificates and Opinions.

Except as otherwise expressly provided by this Agreement, upon any application or request by the Company to the Stock Purchase Contract Agent to take any action in accordance with any provision of this Agreement, the Company shall furnish to the Stock Purchase Contract Agent an Officers’ Certificate stating that all conditions precedent, if any, provided for in this Agreement relating to the proposed action have been complied with and, if reasonably requested by the Stock Purchase Contract Agent, an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Agreement relating to such particular application or request, no additional certificate or opinion need be furnished.  Notwithstanding any portion of this Agreement to the contrary, the Company shall not be required to furnish the Stock Purchase Contract Agent an Opinion of Counsel in connection with the issuance of the MCAPS pursuant to the Underwriting Agreement.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Agreement (other than the Officers’ Certificate provided for in Section 11.5) shall include:

(i)a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(ii)a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(iii)a statement that, in the opinion of each such individual, he or she has made such examination or investigation as is necessary to enable such individual to

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express an informed opinion as to whether or not such covenant or condition has been complied with; and

(iv)a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

Section 1.3Form of Documents Delivered to Stock Purchase Contract Agent.

(a)In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.  Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which its certificate or opinion is based are erroneous.  Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

(b)Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Agreement, they may, but need not, be consolidated and form one instrument.

Section 1.4Acts of Holders; Record Dates.

(a)Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Agreement to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Stock Purchase Contract Agent and, where it is hereby expressly required, to the Company.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Agreement and (subject to Section 8.1) conclusive in favor of the Stock Purchase Contract Agent and the Company, if made in the manner provided in this Section.

(b)The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner that the Stock Purchase Contract Agent deems sufficient.

(c)The ownership of MCAPS shall be proved by the Securities Register.

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(d)Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any MCAPS shall bind every future Holder of the same MCAPS and the Holder of every Certificate evidencing such MCAPS issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Stock Purchase Contract Agent or the Company in reliance thereon, whether or not notation of such action is made upon such Certificate.

(e)The Company may set any date as a record date for the purpose of determining the Holders of Outstanding MCAPS entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Agreement to be given, made or taken by Holders of MCAPS.  If any record date is set pursuant to this paragraph, the Holders of the Outstanding Normal MCAPS and the Outstanding Treasury MCAPS, as the case may be, on such record date, and no other Holders, shall be entitled to take the relevant action with respect to the Normal MCAPS or the Treasury MCAPS, as the case may be, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken prior to or on the applicable Expiration Date by Holders of the requisite number of Outstanding MCAPS on such record date.  Nothing contained in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and be of no effect), and nothing contained in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite number of Outstanding MCAPS on the date such action is taken.  Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Stock Purchase Contract Agent in writing and to each Holder of MCAPS in the manner specified in Section 1.6.

With respect to any record date set pursuant to this Section 1.4(e), the Company may designate any date as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the Stock Purchase Contract Agent in writing, and to each Holder of MCAPS in the manner specified in Section 1.6, prior to or on the existing Expiration Date.  If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the Company shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph.  Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date.

Section 1.5Notices.

Any notice or communication is duly given if in writing and delivered in Person or mailed by first-class mail (registered or certified, return receipt requested), telecopier (with receipt confirmed) or overnight air courier guaranteeing next day delivery, to the others’ address; provided that notice shall be deemed given to the Stock Purchase Contract Agent only upon receipt thereof:

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If to the Stock Purchase Contract Agent:

U.S. Bank National Association,

as Stock Purchase Contract Agent

One Federal Street, 3^rd Floor

Boston, MA 02110

Attention: Corporate Trust Services

Facsimile: 617-603-6667

If to the Company:

Lehman Brothers Holdings Inc.

745 Seventh Avenue

New York, New York 10019

Attention: General Counsel

Facsimile: 212-526-0339

If to the Collateral Agent:

The Bank of New York,

       as Collateral Agent

101 Barclay Street, Floor 4 West

New York, NY 10286

Attention: MBS Group

Facsimile: 212-815-3910

If to the Property Trustee:

U.S. Bank National Association,

as Trustee

One Federal Street, 3^rd Floor

Boston, MA 02110

Attention: Corporate Trust Services

Facsimile: 617-603-6667

The Stock Purchase Contract Agent shall send to the Indenture Trustee at the telecopier number set forth above a copy of any notices in the form of Exhibits C, D, E or F it sends or receives.

Section 1.6Notice to Holders; Waiver.

Where this Agreement provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at its address as it appears in the

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Securities Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice.  In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed to any particular Holder, shall affect the sufficiency of such notice with respect to other Holders.  Where this Agreement provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Holders shall be filed with the Stock Purchase Contract Agent, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Stock Purchase Contract Agent shall constitute a sufficient notification for every purpose hereunder.

Section 1.7Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

Section 1.8Successors and Assigns.

All covenants and agreements in this Agreement by the Company and the Stock Purchase Contract Agent shall bind their respective successors and assigns, whether so expressed or not.

Section 1.9Separability Clause.

In case any provision in this Agreement or in the MCAPS shall be declared invalid, illegal or unenforceable by a court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions hereof and thereof shall not in any way be affected or impaired thereby.

Section 1.10Benefits of Agreement.

Nothing contained in this Agreement or in the MCAPS, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and, to the extent provided hereby, the Holders, any benefits or any legal or equitable right, remedy or claim under this Agreement.  The Holders from time to time shall be beneficiaries of this Agreement and shall be bound by all of the terms and conditions hereof and of the MCAPS evidenced by their Certificates by their acceptance of delivery of such Certificates.

Section 1.11Governing Law.

This Agreement and the MCAPS shall be governed by and construed in accordance with the laws of the State of New York.

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Section 1.12Legal Holidays.

(a)In any case where any Payment Date shall not be a Business Day (notwithstanding any other provision of this Agreement or the MCAPS), Contract Payments or other distributions shall not be paid on such date, but Contract Payments or such other distributions shall be paid on the next succeeding Business Day with the same force and effect as if made on such Payment Date.  No interest shall accrue or be payable by the Company or to any Holder for the period from and after any such Payment Date on such successive Business Day.

(b)In any case where the Stock Purchase Date shall not be a Business Day (notwithstanding any other provision of this Agreement or the MCAPS), the Stock Purchase Contracts shall not be performed and shall not be effected on such date, but the Stock Purchase Contracts shall be performed on the next succeeding Business Day with the same force and effect as if made on such Stock Purchase Date.

Section 1.13Counterparts.

This Agreement may be executed in any number of counterparts by the parties hereto on separate counterparts, each of which, when so executed and delivered, shall be deemed an original, but all such counterparts shall together constitute one and the same instrument.

Section 1.14Inspection of Agreement.

A copy of this Agreement shall be available at all reasonable times during normal business hours at the Corporate Trust Office for inspection by any Holder or Beneficial Owner.

Section 1.15Appointment of Financial Institution as Agent for the Company.

The Company may appoint a financial institution (which may be the Collateral Agent) to act as its agent in performing its obligations and in accepting and enforcing performance of the obligations of the Stock Purchase Contract Agent and the Holders, under this Agreement and the Stock Purchase Contracts, by giving notice of such appointment in the manner provided in Section 1.5 hereof.  Any such appointment shall not relieve the Company in any way from its obligations hereunder.

Section 1.16No Waiver.

No failure on the part of the Company, the Stock Purchase Contract Agent, the Collateral Agent, the Securities Intermediary or any of their respective agents to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Company, the Stock Purchase Contract Agent, the Collateral Agent, the Securities Intermediary or any of their respective agents of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy.  The remedies herein are cumulative and are not exclusive of any remedies provided by law.

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ARTICLE II

CERTIFICATE FORMS

Section 2.1Forms of Certificates Generally.

The Certificates (including the form of Stock Purchase Contract forming part of each MCAPS evidenced thereby) shall be in substantially the form set forth in Exhibit A hereto (in the case of Certificates evidencing Normal MCAPS) or Exhibit B hereto (in the case of Certificates evidencing Treasury MCAPS), with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the MCAPS are listed or any depositary therefor, or as may, consistently herewith, be determined by the officers of the Company executing such Certificates, as evidenced by their execution of the Certificates.

The definitive Certificates shall be produced in any manner as determined by the officers of the Company executing the MCAPS evidenced by such Certificates, consistent with the provisions of this Agreement, as evidenced by their execution thereof.

Every Global Certificate authenticated, executed on behalf of the Holders and delivered hereunder shall bear a legend in substantially the following form:

THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE STOCK PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE “DEPOSITARY”), THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY.  THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE STOCK PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE 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 CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REQUESTED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED 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.

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Section 2.2Form of Stock Purchase Contract Agent’s Certificate of Authentication.

The form of the Stock Purchase Contract Agent’s certificate of authentication of the MCAPS shall be in substantially the form set forth on the form of the applicable Certificates.

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ARTICLE III

THE MCAPS

Section 3.1Amount; Form and Denominations.

The aggregate stated amount of MCAPS evidenced by Certificates authenticated, executed on behalf of the Holders and delivered hereunder is limited to $1,000,000,000, except for Certificates authenticated, executed and delivered upon registration of transfer of, in exchange for, or in lieu of, other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.13, 3.14 or 9.5.

The Certificates shall be issuable only in registered form and only in denominations of a single Normal MCAPS or Treasury MCAPS and any integral multiple thereof.

Section 3.2Rights and Obligations Evidenced by the Certificates.

Each Normal MCAPS Certificate shall evidence the number of Normal MCAPS specified therein, with each such Normal MCAPS representing (1) the ownership by the Holder thereof of one Trust Preferred Security, subject to the Pledge of such Trust Preferred Security by such Holder pursuant to the Collateral Agreement, and (2) the rights and obligations of the Holder thereof and the Company under one Stock Purchase Contract.  The Stock Purchase Contract Agent is hereby authorized, as attorney-in-fact for, and on behalf of, the Holder of each Normal MCAPS, to pledge, pursuant to the Collateral Agreement, the Trust Preferred Security forming a part of such Normal MCAPS, to the Collateral Agent for the benefit of the Company, and to grant to the Collateral Agent, for the benefit of the Company, a security interest in the right, title and interest of such Holder in such Trust Preferred Security to secure the obligation of the Holder under each Stock Purchase Contract to purchase Depositary Shares.

Upon the formation of a Treasury MCAPS pursuant to Section 3.13, each Treasury MCAPS Certificate shall evidence the number of Treasury MCAPS specified therein, with each such Treasury MCAPS representing (1) the ownership by the Holder thereof of one Qualifying Treasury Security with a principal amount at maturity equal to $1,000, subject to the Pledge of such interest by such Holder pursuant to the Collateral Agreement, and (2) the rights and obligations of the Holder thereof and the Company under one Stock Purchase Contract.  The Stock Purchase Contract Agent is hereby authorized, as attorney-in-fact for, and on behalf of, the Holder of each Treasury MCAPS, to pledge, pursuant to the Collateral Agreement, such Holder’s interest in the Qualifying Treasury Security forming a part of such Treasury MCAPS (and any Qualifying Treasury Security subsequently purchased by the Collateral Agent on behalf of the Holder of such Treasury MCAPS with the proceeds of any maturing Qualifying Treasury Security prior to the Stock Purchase Date) to the Collateral Agent, for the benefit of the Company, and to grant to the Collateral Agent, for the benefit of the Company, a security interest in the right, title and interest of such Holder in such Qualifying Treasury Security (and any Qualifying Treasury Security subsequently purchased by the Collateral Agent on behalf of the Holder of such Treasury MCAPS with the proceeds of any maturing Qualifying Treasury Security prior to the Stock Purchase Date) Treasury Security to secure the obligation of the Holder under each Stock Purchase Contract to purchase Depositary Shares.

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Prior to the purchase of Depositary Shares under each Stock Purchase Contract, such Stock Purchase Contract shall not entitle the Holder of an MCAPS to any of the rights of a holder of Depositary Shares, including, without limitation, the right to vote or receive any dividends or other payments or to consent or to receive notice as a stockholder in respect of the meetings of stockholders or for the election of directors of the Company or for any other matter, or any other rights whatsoever as a stockholder of the Company.

Section 3.3Execution, Authentication, Delivery and Dating.

(a)Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the execution and delivery of this Agreement, and at any time and from time to time thereafter, the Company may deliver Certificates executed by the Company to the Stock Purchase Contract Agent for authentication, execution on behalf of the Holders and delivery, together with its Issuer Order for authentication of such Certificates, and the Stock Purchase Contract Agent in accordance with such Issuer Order shall authenticate, execute on behalf of the Holders and deliver such Certificates.

(b)The Certificates shall be executed on behalf of the Company by its Chairman of the Board of Directors, its Chief Executive Officer, its President, its Chief Financial Officer, its Treasurer or one of its Vice Presidents.  The signature of any of these officers on the Certificates may be manual or facsimile.

(c)Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Certificates or did not hold such offices at the date of such Certificates.

(d)No Stock Purchase Contract evidenced by a Certificate shall be valid until such Certificate has been executed on behalf of the Holder by the manual signature of an authorized officer of the Stock Purchase Contract Agent, as such Holder’s attorney-in-fact.  Such signature by an authorized officer of the Stock Purchase Contract Agent shall be conclusive evidence that the Holder of such Certificate has entered into the Stock Purchase Contracts evidenced by such Certificate.

(e)Each Certificate shall be dated the date of its authentication.

(f)No Certificate shall be entitled to any benefit under this Agreement or be valid or obligatory for any purpose unless there appears on such Certificate a certificate of authentication substantially in the form provided for herein executed by an authorized officer of the Stock Purchase Contract Agent by manual signature, and such certificate upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly authenticated and delivered hereunder.

Section 3.4Temporary Certificates.

(a)Pending the preparation of definitive Certificates, the Company shall execute and deliver to the Stock Purchase Contract Agent, and the Stock Purchase Contract Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu of such definitive Certificates,

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temporary Certificates that are in substantially the form set forth in Exhibit A or Exhibit B hereto, as the case may be, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the Normal MCAPS or Treasury MCAPS, as the case may be, are listed, or as may, consistently herewith, be determined by the officers of the Company executing such Certificates, as evidenced by their execution of the Certificates.

(b)If temporary Certificates are issued, the Company will cause definitive Certificates to be prepared without unreasonable delay.  After the preparation of definitive Certificates, the temporary Certificates shall be exchangeable for definitive Certificates upon surrender of the temporary Certificates at the Corporate Trust Office, at the expense of the Company and without charge to the Holder.  Upon surrender for cancellation of any one or more temporary Certificates, the Company shall execute and deliver to the Stock Purchase Contract Agent, and the Stock Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and deliver in exchange therefor, one or more definitive Certificates of like tenor and denominations and evidencing a like number of MCAPS as the temporary Certificate or Certificates so surrendered.  Until so exchanged, the temporary Certificates shall in all respects evidence the same benefits and the same obligations with respect to the MCAPS evidenced thereby as definitive Certificates.

Section 3.5Registration; Registration of Transfer and Exchange.

(a)The Stock Purchase Contract Agent shall keep at the Corporate Trust Office a register (the “Securities Register”) in which, subject to such reasonable regulations as it may prescribe, the Stock Purchase Contract Agent shall provide for the registration of Certificates and of transfers of Certificates (the Stock Purchase Contract Agent, in such capacity, the “Securities Registrar”).  The Securities Registrar shall record separately the registration and transfer of the Certificates evidencing Normal MCAPS and Treasury MCAPS.

(b)Upon surrender for registration of transfer of any Certificate at the Corporate Trust Office, the Company shall execute and deliver to the Stock Purchase Contract Agent, and the Stock Purchase Contract Agent shall authenticate, execute on behalf of the designated transferee or transferees, and deliver, in the name of the designated transferee or transferees, one or more new Certificates of any authorized denominations, like tenor, and evidencing a like number of Normal MCAPS or Treasury MCAPS, as the case may be.

(c)At the option of the Holder, Certificates may be exchanged for other Certificates, of any authorized denominations and evidencing a like number of Normal MCAPS or Treasury MCAPS, as the case may be, upon surrender of the Certificates to be exchanged at the Corporate Trust Office.  Whenever any Certificates are so surrendered for exchange, the Company shall execute and deliver to the Stock Purchase Contract Agent, and the Stock Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and deliver the Certificates that the Holder making the exchange is entitled to receive.

(d)All Certificates issued upon any registration of transfer or exchange of a Certificate shall evidence the ownership of the same number of Normal MCAPS or Treasury

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MCAPS, as the case may be, and be entitled to the same benefits and subject to the same obligations under this Agreement as the Normal MCAPS or Treasury MCAPS, as the case may be, evidenced by the Certificate surrendered upon such registration of transfer or exchange.

(e)Every Certificate presented or surrendered for registration of transfer or exchange shall (if so required by the Stock Purchase Contract Agent) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Stock Purchase Contract Agent duly executed, by the Holder thereof or its attorney duly authorized in writing.

(f)No service charge shall be made for any registration of transfer or exchange of a Certificate, but the Company and the Stock Purchase Contract Agent may require payment from the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Certificates, other than any exchanges pursuant to Sections 3.4, 3.6 and 9.5 not involving any transfer.

(g)Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Stock Purchase Contract Agent, and the Stock Purchase Contract Agent shall not be obligated to authenticate, execute on behalf of the Holder and deliver any Certificate in exchange for any other Certificate presented or surrendered for registration of transfer or for exchange on or after the Business Day immediately preceding the earliest to occur of the Stock Purchase Date or the Termination Date.  In lieu of delivery of a new Certificate, upon satisfaction of the applicable conditions specified above in this Section and receipt of appropriate registration or transfer instructions from such Holder, the Stock Purchase Contract Agent shall:

(i)if the Stock Purchase Date (including upon any Settlement with Qualifying Treasury Securities) with respect to such other Certificate has occurred, deliver the Depositary Shares issuable in respect of the Stock Purchase Contracts forming a part of the MCAPS evidenced by such other Certificate; or

(ii)if a Termination Event shall have occurred prior to the Stock Purchase Date, transfer the Trust Preferred Securities or the Qualifying Treasury Securities, as the case may be, evidenced thereby, in each case subject to the applicable conditions and in accordance with the applicable provisions of Section 3.15 and Article VI hereof.

Section 3.6Book-Entry Interests.

(a)The Certificates, on original issuance, will be issued in the form of one or more fully registered Global Certificates, to be delivered to the MCAPS Depositary or its custodian by, or on behalf of, the Company.  The Company hereby designates DTC as the initial MCAPS Depositary.  Such Global Certificates shall initially be registered on the books and records of the Company in the name of Cede & Co., the nominee of the MCAPS Depositary, and no Beneficial Owner will receive a definitive Certificate representing such Beneficial Owner’s interest in such Global Certificate, except as provided in Section 3.9.  The Stock Purchase Contract Agent shall enter into an agreement with the MCAPS Depositary if so requested by the Company.  Unless and until definitive, fully registered Certificates have been issued to Beneficial Owners pursuant to Section 3.9:

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(i)the provisions of this Section 3.6 shall be in full force and effect;

(ii)the Company shall be entitled to deal with the MCAPS Depositary for all purposes of this Agreement (including, without limitation, making Contract Payments and receiving approvals, votes or consents hereunder) as the Holder of the MCAPS and the sole holder of the Global Certificates and shall have no obligation to the Beneficial Owners; provided that any Beneficial Owner may directly enforce against the Company, without the involvement of the MCAPS Depositary or any other Person, its right to receive definitive Certificates pursuant to Section 3.9;

(iii)to the extent that the provisions of this Section 3.6 conflict with any other provisions of this Agreement, the provisions of this Section 3.6 shall control; and

(iv)the rights of the Beneficial Owners shall be exercised only through the MCAPS  Depositary and shall be limited to those established by law and agreements between such Beneficial Owners and the MCAPS Depositary or the MCAPS Depositary Participants; provided that any Beneficial Owner may directly enforce against the Company, without the involvement of the MCAPS Depositary or any other Person, its right to receive definitive Certificates pursuant to Section 3.9.

Transfers of securities evidenced by Global Certificates shall be made through the facilities of the MCAPS Depositary, and any cancellation of, or increase or decrease in the number of, such securities (including the creation of Treasury MCAPS and the recreation of Normal MCAPS pursuant to Sections 3.13 and 3.14 respectively) shall be accomplished by making appropriate annotations on the Schedule of Increases and Decreases for such Global Certificate.

Section 3.7Notices to Holders.

Whenever a notice or other communication to the Holders is required to be given under this Agreement, the Company or the Company’s agent shall give such notices and communications to the Holders and, with respect to any MCAPS registered in the name of the MCAPS Depositary or the nominee of the MCAPS Depositary, the Company or the Company’s agent shall, except as specified herein, have no obligations to the Beneficial Owners.

Section 3.8Appointment of Successor MCAPS Depositary.

If the MCAPS Depositary elects to discontinue its services as securities depositary with respect to the MCAPS, the Company may, in its sole discretion, appoint a successor MCAPS  Depositary with respect to the MCAPS.

Section 3.9Definitive Certificates.

If:

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(a)the MCAPS Depositary notifies the Company that it is unwilling or unable to continue its services as securities depositary with respect to the MCAPS and no successor Depositary has been appointed pursuant to Section 3.8 within 90 days after such notice; or

(b)the MCAPS Depositary ceases to be a “clearing agency” registered under Section 17A of the Exchange Act when the MCAPS Depositary is required to be so registered to act as the MCAPS Depositary and so notifies the Company, and no successor MCAPS Depositary has been appointed pursuant to Section 3.8 within 90 days after such notice; or

(c)any event of default has occurred and is continuing under the Trust Preferred Securities or this Agreement; or

(d)the Company determines in its sole discretion that the Global Certificates shall be exchangeable for definitive Certificates,

then (x) definitive Certificates shall be prepared by the Company with respect to such MCAPS and delivered to the Stock Purchase Contract Agent and (y) upon surrender of the Global Certificates representing the MCAPS by the MCAPS  Depositary, accompanied by registration instructions, the Company shall cause definitive Certificates to be delivered to Beneficial Owners in accordance with the instructions of the MCAPS Depositary.  The Company and the Stock Purchase Contract Agent shall not be liable for any delay in delivery of such instructions and may conclusively rely on and shall be authorized and protected in relying on, such instructions.  Each definitive Certificate so delivered shall evidence MCAPS of the same kind and tenor as the Global Certificate so surrendered in respect thereof.

Section 3.10Mutilated, Destroyed, Lost and Stolen Certificates.

(a)If any mutilated Certificate is surrendered to the Stock Purchase Contract Agent, the Company shall execute and deliver to the Stock Purchase Contract Agent, and the Stock Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and deliver in exchange therefor, a new Certificate, evidencing the same number of Normal MCAPS or Treasury MCAPS, as the case may be, and bearing a Certificate number not contemporaneously outstanding.

(b)If there shall be delivered to the Company and the Stock Purchase Contract Agent (i) evidence to their satisfaction of the destruction, loss or theft of any Certificate, and (ii) such security or indemnity as may be required by them to hold each of them and any agent of any of them harmless, then, in the absence of notice to the Company or the Stock Purchase Contract Agent that such Certificate has been acquired by a protected purchaser, the Company shall execute and deliver to the Stock Purchase Contract Agent, and the Stock Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and deliver to the Holder, in lieu of any such destroyed, lost or stolen Certificate, a new Certificate, evidencing the same number of Normal MCAPS or Treasury MCAPS, as the case may be, and bearing a Certificate number not contemporaneously outstanding.

(c)Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Stock Purchase Contract Agent, and the Stock Purchase Contract Agent shall not

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be obligated to authenticate, execute on behalf of the Holder, and deliver to the Holder, a Certificate on or after the Business Day immediately preceding the earliest of the Stock Purchase Date or the Termination Date.  In lieu of delivery of a new Certificate, upon satisfaction of the applicable conditions specified above in this Section and receipt of appropriate registration or transfer instructions from such Holder, the Stock Purchase Contract Agent shall:

(i)if the Stock Purchase Date with respect to such lost, stolen, destroyed or mutilated Certificate has occurred, deliver the Depositary Shares issuable in respect of the Stock Purchase Contracts forming a part of the MCAPS evidenced by such Certificate; or

(ii)if a Settlement with Qualifying Treasury Securities with respect to such lost or mutilated Certificate or if a Termination Event shall have occurred prior to the Stock Purchase Date, transfer the Trust Preferred Securities or the Qualifying Treasury Securities, as the case may be, evidenced thereby, in each case subject to the applicable conditions and in accordance with the applicable provisions of Section 3.15 and Article VI hereof.

(d)Upon the issuance of any new Certificate under this Section, the Company and the Stock Purchase Contract Agent may require the payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other fees and expenses (including, without limitation, the fees and expenses of the Stock Purchase Contract Agent) connected therewith.

(e)Every new Certificate issued pursuant to this Section in lieu of any destroyed, lost or stolen Certificate shall constitute an original additional contractual obligation of the Company and of the Holder in respect of the MCAPS evidenced thereby, whether or not the destroyed, lost or stolen Certificate (and the MCAPS evidenced thereby) shall be at any time enforceable by anyone, and shall be entitled to all the benefits and be subject to all the obligations of this Agreement equally and proportionately with any and all other Certificates delivered hereunder.

(f)The provisions of this Section are exclusive and shall preclude, to the extent lawful, all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Certificates.

Section 3.11Persons Deemed Owners.

(a)Prior to due presentment of a Certificate for registration of transfer, the Company and the Stock Purchase Contract Agent, and any agent of the Company or the Stock Purchase Contract Agent, may treat the Person in whose name such Certificate is registered as the owner of the MCAPS evidenced thereby for purposes of (subject to any applicable record date) any payment or distribution on the Trust Preferred Securities, payment of Contract Payments and performance of the Stock Purchase Contracts and for all other purposes whatsoever in connection with such MCAPS, whether or not such payment, distribution, or performance shall be overdue and notwithstanding any notice to the contrary, and neither the Company nor the Stock Purchase Contract Agent, nor any agent of the Company or the Stock Purchase Contract Agent, shall be affected by notice to the contrary.

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(b)Notwithstanding the foregoing, with respect to any Global Certificate, nothing contained herein shall prevent the Company, the Stock Purchase Contract Agent or any agent of the Company or the Stock Purchase Contract Agent from giving effect to any written certification, proxy or other authorization furnished by the MCAPS Depositary (or its nominee), as a Holder, with respect to such Global Certificate, or impair, as between such MCAPS Depositary and the related Beneficial Owner, the operation of customary practices governing the exercise of rights of the MCAPS Depositary (or its nominee) as Holder of such Global Certificate.  None of the Company, the Stock Purchase Contract Agent or any agent of the Company or the Stock Purchase Contract Agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Certificate or maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

Section 3.12Cancellation.

(a)All Certificates surrendered for delivery of the Depositary Shares on or after the Stock Purchase Date or upon the transfer of Trust Preferred Securities or for delivery of Trust Preferred Securities or Qualifying Treasury Securities, as the case may be, after the occurrence of a Termination Event or pursuant to a Settlement with Qualifying Treasury Securities, or upon the registration of transfer or exchange of a MCAPS, or a Collateral Substitution or the recreation of Normal MCAPS shall, if surrendered to any Person other than the Stock Purchase Contract Agent, be delivered to the Stock Purchase Contract Agent along with appropriate written instructions regarding the cancellation thereof and, if not already cancelled, shall be promptly cancelled by it.  The Company may at any time deliver to the Stock Purchase Contract Agent for cancellation any Certificates previously authenticated, executed and delivered hereunder that the Company may have acquired in any manner whatsoever, and all Certificates so delivered shall, upon an Issuer Order, be promptly cancelled by the Stock Purchase Contract Agent.  No Certificates shall be authenticated, executed on behalf of the Holder and delivered in lieu of or in exchange for any Certificates cancelled as provided in this Section, except as expressly permitted by this Agreement.  All cancelled Certificates held by the Stock Purchase Contract Agent shall be disposed of in accordance with its customary practices.

(b)If the Company or any Affiliate of the Company shall acquire any Certificate, such acquisition shall not operate as a cancellation of such Certificate unless and until such Certificate is delivered to the Stock Purchase Contract Agent cancelled or for cancellation.

Section 3.13Creation of Treasury MCAPS by Substitution of Qualifying Treasury Securities.

(a)Subject to the conditions specified in this Agreement, a Holder may, at any time from and after the date of this Agreement and prior to the Successful Remarketing of the Trust Preferred Securities (except (1) on a day in February, May, August or November that is on or after the 15^th day of the month (or the next Business Day if the last day is not a Business Day) or (2) during the period from 3:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of any Remarketing Period until the opening of business on the Business Day immediately following such Remarketing Settlement Date), effect a Collateral Substitution and separate the Pledged Trust Preferred Securities from the related Stock Purchase

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Contracts in respect of all or a portion of such Holder’s Normal MCAPS by substituting for such Pledged Trust Preferred Securities or Qualifying Treasury Securities maturing at least one business day prior to the next Quarterly Date in an aggregate principal amount at maturity equal to the aggregate liquidation amount of such Pledged Trust Preferred Securities.  To effect such substitution, the Holder must:

(i)deposit with the Collateral Agent the applicable Qualifying Treasury Securities that will mature at least one business day prior to the next Quarterly Date and, in each case, in an aggregate principal amount of $1,000, which must be purchased in the open market by the Holder (unless otherwise owned by the Holder); and

(ii)transfer the related Normal MCAPS to the Stock Purchase Contract Agent accompanied by a notice to be substantially in the form of Exhibit C hereto, (i) stating that the Holder has deposited the appropriate amount of Qualifying Treasury Securities with the Collateral Agent for credit to the Collateral Account in substitution for the Pledged Trust Preferred Securities, (ii) stating that the Holder is transferring the Normal MCAPS to the Transfer Agent and (iii) requesting that the Collateral Agent release the Pledged Trust Preferred Securities underlying such Normal MCAPS.

(b)Upon receipt of the Qualifying Treasury Securities described in clause (i) above and the instruction described in clause (ii) above, in accordance with the terms of the Collateral Agreement, the Collateral Agent will cause the release of such Pledged Trust Preferred Securities from the Pledge and the transfer of such Trust Preferred Securities to the Stock Purchase Contract Agent on behalf of the Holder free and clear of the Company’s security interest therein.  Upon receipt of such Trust Preferred Securities, the Stock Purchase Contract Agent shall promptly:

(i)cancel the related Normal MCAPS;

(ii)transfer the Trust Preferred Securities to the Holder (such Trust Preferred Securities shall be tradeable as a separate security, independent of the resulting Treasury MCAPS); and

(iii)authenticate, execute on behalf of such Holder and deliver Treasury MCAPS in book-entry form, or if applicable, in the form of a Treasury MCAPS Certificate executed by the Company in accordance with Section 3.3 evidencing the same number of Stock Purchase Contracts as were evidenced by the cancelled Normal MCAPS.

(c)In the event a Holder making a Collateral Substitution pursuant to this Section 3.13 fails to effect a book-entry transfer of the Normal MCAPS or fails to deliver Normal MCAPS Certificates to the Transfer Agent after depositing Qualifying Treasury Securities with the Collateral Agent, any distributions on the Trust Preferred Securities constituting a part of such Normal MCAPS shall be held in the name of the Stock Purchase Contract Agent or its nominee in trust for the benefit of such Holder, until such Normal MCAPS are so transferred or the Normal MCAPS Certificate is so delivered, as the case may be, or, such Holder provides

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evidence satisfactory to the Company and the Stock Purchase Contract Agent that such Normal MCAPS Certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the Stock Purchase Contract Agent and the Company.

(d)Except as described in Section 6.2 or in this Section 3.13 or in connection with a Settlement with Qualifying Treasury Securities or a Termination Event, for so long as the Stock Purchase Contract underlying a Normal MCAPS remains in effect, such Normal MCAPS shall not be separable into its constituent parts, and the rights and obligations of the Holder in respect of the Trust Preferred Securities and the Stock Purchase Contract comprising such Normal MCAPS may be acquired, and may be transferred and exchanged, only as a Normal MCAPS.

(e)Promptly following each quarterly publication of the U.S. Department of the Treasury of the tentative auction schedule, the Collateral Agent shall prepare and deliver to the Company a schedule identifying for the upcoming 12-month period the issue and maturity dates for each Qualifying Treasury Security. 

Section 3.14Recreation of Normal MCAPS.

(a)Subject to the conditions specified in this Agreement, a Holder of Treasury MCAPS may recreate Normal MCAPS at any time from and after the date of this Agreement and prior to the Successful Remarketing of the Trust Preferred Securities (except (1) on a day in February, May, August or November that is on or after the 15^th day of the month through the last day of the month (or the next Business Day if the last day is not a Business Day) or (2) during the period from 3:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of such Remarketing Period until the opening of business on the Business Day immediately following such Remarketing Settlement Date). To recreate Normal MCAPS, the Holder must:

(i)deposit with the Securities Intermediary Trust Preferred Securities having an aggregate liquidation amount equal to the stated amount of the Normal MCAPS to be recreated, which Trust Preferred Securities must be purchased at Holder’s expense (unless otherwise owned by the Holder); and

(ii)transfer the related Treasury MCAPS to the Stock Purchase Contract Agent accompanied by a notice to the Stock Purchase Contract Agent, substantially in the form of Exhibit C hereto, (i) stating that the Holder has transferred the relevant amount of Trust Preferred Securities to the Collateral Agent for deposit in the Collateral Account in substitution for the Pledged Qualifying Treasury Securities and (ii) instructing the Stock Purchase Contract Agent to instruct the Collateral Agent to release the Pledged Treasury Securities underlying such Treasury MCAPS, whereupon the Stock Purchase Contract Agent shall promptly provide an instruction to such effect to the Collateral Agent, substantially in the form of Exhibit C to the Collateral Agreement.

(b)Upon receipt of the Trust Preferred Securities described in clause (i) above and the instruction described in clause (ii) above, in accordance with the terms of the Collateral Agreement, the Collateral Agent will effect the release of the Pledged Qualifying Treasury Securities having a corresponding aggregate principal amount at maturity from the Pledge and

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the transfer thereof to the Stock Purchase Contract Agent on behalf of the Holder free and clear of the Company’s security interest therein.  Upon receipt of such Qualifying Treasury Securities, the Stock Purchase Contract Agent shall promptly:

(i)cancel the related Treasury MCAPS;

(ii)transfer the Qualifying Treasury Securities to the Holder; and

(iii)authenticate, execute on behalf of such Holder and deliver Normal MCAPS in book-entry form or, if applicable, in the form of a Normal MCAPS Certificate executed by the Company in accordance with Section 3.3 evidencing the same number of Stock Purchase Contracts as were evidenced by the cancelled Treasury MCAPS.

(c)Except as provided in Section 6.2 or in this Section 3.14 or in connection with a Termination Event, for so long as the Stock Purchase Contract underlying a Treasury MCAPS remains in effect, such Treasury MCAPS shall not be separable into its constituent parts and the rights and obligations of the Holder of such Treasury MCAPS in respect of the Qualifying Treasury Security and the Stock Purchase Contract comprising such Treasury MCAPS may be acquired, and may be transferred and exchanged, only as a Treasury MCAPS.

Section 3.15Transfer of Collateral upon Occurrence of Termination Event.

(a)Upon the occurrence of a Termination Event and the transfer to the Stock Purchase Contract Agent of the Trust Preferred Securities or the Qualifying Treasury Securities, as the case may be, underlying the Normal MCAPS or the Treasury MCAPS, respectively, pursuant to the terms of the Collateral Agreement, the Stock Purchase Contract Agent shall request transfer instructions with respect to such Trust Preferred Securities or Qualifying Treasury Securities, as the case may be, from each Holder by written request, substantially in the form of Exhibit D hereto, mailed to such Holder at its address as it appears in the Securities Register.

(b)Upon book-entry transfer of the Normal MCAPS or the Treasury MCAPS or delivery of a Normal MCAPS Certificate or Treasury MCAPS Certificate to the Stock Purchase Contract Agent with such transfer instructions, the Stock Purchase Contract Agent shall transfer the Trust Preferred Securities or Qualifying Treasury Securities, as the case may be, underlying such Normal MCAPS or Treasury MCAPS, as the case may be, to such Holder by book-entry transfer, or other appropriate procedures, in accordance with such instructions.  In the event a Holder of Normal MCAPS or Treasury MCAPS fails to effect such transfer or delivery, the Trust Preferred Securities or Qualifying Treasury Securities, as the case may be, underlying such Normal MCAPS or Treasury MCAPS, as the case may be, and any distributions thereon, shall be held in the name of the Stock Purchase Contract Agent or its nominee in trust for the benefit of such Holder, until the earlier to occur of:

(i)the transfer of such Normal MCAPS or Treasury MCAPS or surrender of the Normal MCAPS Certificate or Treasury MCAPS Certificate or the receipt by the Company and the Stock Purchase Contract Agent from such Holder of satisfactory evidence that such Normal MCAPS Certificate or Treasury MCAPS

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Certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the Stock Purchase Contract Agent and the Company; and

(ii)the expiration of the time period specified in the abandoned property laws of the relevant State in which the Stock Purchase Contract Agent holds such property.

Section 3.16No Consent to Assumption.

Each Holder of a MCAPS, by acceptance thereof, shall be deemed expressly to have withheld any consent to the assumption, under Section 365 of the Bankruptcy Code or otherwise, of the Stock Purchase Contract by the Company or its trustee, receiver, liquidator or a person or entity performing similar functions in the event that the Company becomes the debtor under the Bankruptcy Code or subject to other similar state or Federal law providing for reorganization or liquidation.

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ARTICLE IV

THE TRUST PREFERRED SECURITIES

Section 4.1Distributions; Rights to Distributions Preserved.

(a)Any payment on any Trust Preferred Security that is paid on any Payment Date shall, subject to receipt thereof by the Stock Purchase Contract Agent from the Company (in the case of a Trust Preferred Security that is held in the name of the Stock Purchase Contract Agent) or from the Collateral Agent as provided by the terms of the Collateral Agreement (in the case of a Trust Preferred Security that is held in the name of the Collateral Agent), be paid by the Stock Purchase Contract Agent to the Person in whose name the Normal MCAPS Certificate (or one or more Predecessor Normal MCAPS Certificates) of which such Trust Preferred Security forms a part is registered at the close of business on the Record Date for such Payment Date.

(b)Each Normal MCAPS Certificate evidencing a Trust Preferred Security delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of any other Normal MCAPS Certificate shall carry the right to accumulated and unpaid distributions or distributions, and to accrue distributions, which were carried by the Trust Preferred Security underlying such other Normal MCAPS Certificate.

(c)In the case of any Normal MCAPS with respect to which (A) a Collateral Substitution is properly effected pursuant to Section 3.13, or (B) a Successful Remarketing occurs with respect to the Trust Preferred Security that is part of such Normal MCAPS, in each case on a date that is after any Record Date and prior to or on the next succeeding Payment Date, distributions on the Trust Preferred Securities underlying such Normal MCAPS otherwise payable on such Payment Date shall be payable on such Payment Date notwithstanding such Collateral Substitution or Remarketing, and such payment or distributions shall, subject to receipt thereof by the Stock Purchase Contract Agent, be payable to the Person in whose name the Normal MCAPS Certificate (or one or more Predecessor Normal MCAPS Certificates) was registered at the close of business on the Record Date.

(d)Except as otherwise expressly provided in Section 4.1(c) in the case of any Normal MCAPS with respect to which a Collateral Substitution has been effected, payments on the related Trust Preferred Securities that would otherwise be payable or made after the date of the Collateral Substitution shall not be payable hereunder to the Holder of such Normal MCAPS; provided, however, that to the extent that such Holder continues to hold Separate Trust Preferred Securities that formerly comprised a part of such Holder’s Normal MCAPS, such Holder shall be entitled to receive distributions on such Separate Trust Preferred Securities.

Section 4.2Notice and Voting.

(a)The Stock Purchase Contract Agent will be entitled to exercise the voting and any other consensual rights pertaining to the Pledged Trust Preferred Securities, but only to the extent instructed in writing by the Holders as described below.  Upon receipt of notice of any meeting at which holders of Trust Preferred Securities are entitled to vote or upon any solicitation of consents, waivers or proxies of holders of Trust Preferred Securities, the Stock

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Purchase Contract Agent shall, as soon as practicable thereafter, mail, first class, postage pre-paid, to the Holders of Normal MCAPS a notice:

(i)containing such information as is contained in the notice or solicitation;

(ii)stating that each Holder on the record date set by the Stock Purchase Contract Agent therefor (which, to the extent possible, shall be the same date as the record date for determining the holders of Trust Preferred Securities, as the case may be, entitled to vote) shall be entitled to instruct the Stock Purchase Contract Agent as to the exercise of the voting rights pertaining to such Trust Preferred Securities underlying their Normal MCAPS; and

(iii)stating the manner in which such instructions may be given.

(b)Upon the written request of the Holders of Normal MCAPS on such record date received by the Stock Purchase Contract Agent at least six days prior to such meeting, the Stock Purchase Contract Agent shall endeavor insofar as practicable to vote or cause to be voted, in accordance with the instructions specified in such requests, the maximum number of Trust Preferred Securities, as the case may be, as to which any particular voting instructions are received.  In the absence of specific instructions from the Holder of a Normal MCAPS, the Stock Purchase Contract Agent shall abstain from voting the Trust Preferred Securities underlying such Normal MCAPS.  The Company hereby agrees, if applicable, to solicit Holders of Normal MCAPS to timely instruct the Stock Purchase Contract Agent in order to enable the Stock Purchase Contract Agent to vote such Trust Preferred Securities.

(c)The Holders of Normal MCAPS and Treasury MCAPS shall have no voting or other rights in respect of Depositary Shares or the Preferred Stock.

(d)The Holders of Normal MCAPS have the right to (i) exercise or enforce all the rights of a holder of Trust Preferred Securities under Section 7.5 of the Declaration of Trust as if such Holders held the Trust Preferred Securities that form a part of their Normal MCAPS directly or (ii) direct the Stock Purchase Contract Agent to exercise or enforce its rights under Section 7.5 of the Declaration of Trust as the holder of such Trust Preferred Securities.

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ARTICLE V

QUALIFYING TREASURY SECURITIES

Section 5.1Qualifying Treasury Securities.

(a)For each February 28, May 31, August 31 and November 30, commencing on May 31, 2007 and ending on the Stock Purchase Date or the earlier termination of the Stock Purchase Contracts, or if any such day is not a Business Day, the immediately succeeding Business Day (each, a “Quarterly Date”), the Collateral Agent shall identify:

(i)the 13-week treasury bill that matures at least one and not more than six Business Days prior to that Quarterly Date, or

(ii)if no 13-week treasury bill that matures at least one and not more than six Business Days prior to that Quarterly Date is or is scheduled to be outstanding or is available in a sufficient principal amount on the immediately preceding Quarterly Date, the 26-week treasury bill that matures at least one and not more than six Business Days prior to that Quarterly Date, or

(iii)if neither of such treasury bills is or is scheduled to be outstanding or is available in a sufficient principal amount on the immediately preceding Quarterly Date, any other treasury security (which may be a zero coupon treasury security) that is outstanding on the immediately preceding Quarterly Date, is highly liquid and matures at least one Business Day prior to such Quarterly Date; provided that any treasury security identified pursuant to this clause (iii) shall be selected in a manner intended to minimize the cash value of the security selected.

(b)The Collateral Agent shall use commercially reasonable efforts to identify the security meeting the foregoing criteria for each Quarterly Date promptly after the Department of the Treasury makes the schedule for upcoming auctions of treasury securities publicly available and shall, to the extent that a security previously identified with respect to any Quarterly Date is no longer expected to be outstanding on the immediately preceding Quarterly Date, identify another security meeting the foregoing criteria for such Quarterly Date. The security most recently identified by the Collateral Agent with respect to any Quarterly Date shall be the “Qualifying Treasury Security” with respect to the period from and including its date of issuance (or if later, the date of maturity of the Qualifying Treasury Security with respect to the immediately preceding Quarterly Date) to but excluding its date of maturity, and the Collateral Agent’s identification of a security as a Qualifying Treasury Security for such period shall be final and binding for all purposes absent manifest error. The Collateral Agent shall give (or cause to be given) prompt written notice to the Company and the Stock Purchase Contract Agent of each determination made pursuant to this Section 5.1.

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ARTICLE VI

THE STOCK PURCHASE CONTRACTS

Section 6.1Purchase of Depositary Share.

(a)Each Stock Purchase Contract shall obligate the Holder of the related MCAPS to purchase, and the Company to sell, on the Stock Purchase Date at a price equal to $1,000 (the “Purchase Price”), one Depositary Share, unless a Termination Event with respect to the MCAPS of which such Stock Purchase Contract is a part shall have occurred.

(b)Each Holder of a Normal MCAPS or a Treasury MCAPS, by its acceptance of such MCAPS:

(i)irrevocably authorizes the Stock Purchase Contract Agent to enter into and perform the related Stock Purchase Contract on its behalf as its attorney-in-fact (including, without limitation, the execution of Certificates on behalf of such Holder);

(ii)agrees to be bound by the terms and provisions thereof;

(iii)covenants and agrees to perform its obligations under such Stock Purchase Contract for so long as such Holder remains a Holder of a Normal MCAPS or a Treasury MCAPS;

(iv)consents to the provisions hereof;

(v)irrevocably authorizes the Stock Purchase Contract Agent to enter into and perform this Agreement and the Collateral Agreement on its behalf and in its name as its attorney-in-fact;

(vi)consents to, and agrees to be bound by, the Pledge of such Holder’s right, title and interest in and to the Collateral Account, including the Trust Preferred Securities and the Qualifying Treasury Securities pursuant to the Collateral Agreement; and

(vii)for United States federal, state and local income and franchise tax purposes, agrees to (A) treat an acquisition of the Normal MCAPS as an acquisition of a unit consisting of the Trust Preferred Securities and Stock Purchase Contracts constituting the Normal MCAPS and, with respect to Treasury MCAPS, treat Treasury MCAPS as a unit consisting of a Qualifying Treasury Security and a Stock Purchase Contracts, (B) treat itself as the owner of the applicable interest in the Collateral Account, including the Trust Preferred Securities and the Qualifying Treasury Securities, as the case may be and (C) treat the Junior Subordinated Debentures as indebtedness of the Company;

provided that upon a Termination Event, the rights of the Holder of such MCAPS under the Stock Purchase Contract may be enforced without regard to any other rights or obligations.

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(c)Each Holder of a Normal MCAPS or a Treasury MCAPS, by its acceptance thereof, further covenants and agrees that to the extent and in the manner provided in Section 6.2 hereof and the provisions of the Collateral Agreement, but subject to the terms thereof, Proceeds of the Trust Preferred Securities or the Qualifying Treasury Securities, as applicable, on the Stock Purchase Date, shall be paid by the Collateral Agent to the Company in satisfaction of such Holder’s obligations under such Stock Purchase Contract and such Holder shall acquire no right, title or interest in such Proceeds.

(d)Upon registration of transfer of a Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee) by the terms of this Agreement, the Stock Purchase Contracts underlying such Certificate and the Collateral Agreement and the transferor shall be released from the obligations under this Agreement, the Stock Purchase Contracts underlying the Certificate so transferred and the Collateral Agreement.  The Company covenants and agrees, and each Holder of a Certificate, by its acceptance thereof, likewise covenants and agrees, to be bound by the provisions of this paragraph.

(e)In any case where the Stock Purchase Date shall not be a Business Day (notwithstanding any other provision of this Agreement or the MCAPS), the Stock Purchase Contracts shall not be performed and shall not be effected on such date, but the Stock Purchase Contracts shall be performed on the next preceding Business Day with the same force and effect as if made on such Stock Purchase Date.

Section 6.2Remarketing; Payment of Purchase Price.

(a)The Company shall conduct a Remarketing of the Trust Preferred Securities in accordance with Article XIII of the Declaration of Trust and the Remarketing Agreement.

(i)With respect to any Trust Preferred Security that constitutes part of Normal MCAPS that are subject to a final Remarketing attempt, the Collateral Agent for the benefit of the Company reserves all of its rights as a secured party with respect to the Trust Preferred Securities and, subject to applicable law and Section 6.2(d), may, among other things, (i) retain such Trust Preferred Securities in full satisfaction of the Holders’ obligations under the Stock Purchase Contracts or (ii) sell such Trust Preferred Securities in one or more public or private sales as permitted by applicable law, in order to satisfy the Stock Purchase Contract Agent’s obligations under Section 2.2(a) to pay the purchase price in respect of the Stock Purchase Contracts.

(ii)The Stock Purchase Contract Agent shall give Holders of MCAPS, and the Company shall request that the MCAPS Depositary or its nominee give MCAPS Depositary Participants holding MCAPS and Separate Trust Preferred Securities, notice of a Remarketing at least 21 Business Days prior to any Remarketing Date.  Such notice will specify the information required to be specified in the notice pursuant to Section 13.2 of the Declaration of Trust.

(b)Each Holder of Normal MCAPS shall have the right to satisfy such Holder’s obligations under the Stock Purchase Contract on the Stock Purchase Date with separate Qualifying Treasury Securities by notifying the Stock Purchase Contract Agent by presenting a

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notice in substantially the form of Exhibit E hereto of its intention to settle with Qualifying Treasury Securities and surrendering the Normal MCAPS certificate on or prior to 5:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of any Remarketing Period and delivering Qualifying Treasury Securities having a principal amount equal to the Purchase Price under the related Stock Purchase Contracts to the Collateral Agent on or prior to 5:00 p.m. (New York City time) on the first Business Day immediately preceding the beginning of any Remarketing Period.  Promptly following 5:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of any Remarketing Period, the Stock Purchase Contract Agent shall notify the Collateral Agent and the Trustee of the receipt of such notices from Holders intending to make a Settlement with Qualifying Treasury Securities by use of a notice in substantially the form of Exhibit F hereto.

(i)A Holder of a Normal MCAPS who has so notified the Stock Purchase Contract Agent of its intention to effect a Settlement with Qualifying Treasury Securities shall deliver the Qualifying Treasury Securities specified in Section 6.2(b) above to the Collateral Agent for deposit in the Collateral Account on or prior to 5:00 p.m. (New York City time) on the first Business Day immediately preceding the beginning of any Remarketing Period.  Any securities or their proceeds received shall be paid or delivered, as the case may be, to the Company on the Stock Purchase Date in settlement of the Stock Purchase Contracts in accordance with the terms of this Agreement and the Collateral Agreement. 

(ii)If a Holder of a Normal MCAPS does not notify the Stock Purchase Contract Agent of its intention to make a Settlement with Qualifying Treasury Securities in accordance with Section 6.2(b)(ii), or does notify the Stock Purchase Contract Agent in accordance with Section 6.2(b)(i) but fails to make such delivery as required by Section 6.2(b)(ii), such Holder shall be deemed to have consented to the disposition of the Pledged Trust Preferred Securities pursuant to the next applicable Remarketing. 

(iii)As soon as practicable after 5:00 p.m. (New York City time) on the first Business Day immediately preceding the beginning of any Remarketing Period, the Collateral Agent, based on Qualifying Treasury Securities received by the Collateral Agent pursuant to Section 6.2(b)(ii), shall promptly notify the Stock Purchase Contract Agent of the aggregate liquidation amount of Trust Preferred Securities to be tendered for purchase in the Remarketing in a notice pursuant to the terms of the Collateral Agreement.

(iv)In the event of a Remarketing that is not Successful, (A) the Stock Purchase Date shall be deferred for a quarterly period, except in the case of a Failed Remarketing, in which case the Stock Purchase Date shall occur on May 31, 2013 (or the fifth scheduled Remarketing Settlement Date in the case of an Early Remarketing), and (B) if the Holders of MCAPS have delivered Qualifying Treasury Securities in order to effect Settlement with Qualifying Treasury Securities in accordance with Section 6.2(b)(ii), the Collateral Agent will promptly return the Qualifying Treasury Securities or their proceeds, as the case may be, that it has received with respect to the Settlement with

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Qualifying Treasury Securities to the Stock Purchase Contract Agent for distribution to the applicable Holders of Normal MCAPS.

(v)In the event of a Successful Remarketing, if the Holders of MCAPS have delivered Qualifying Treasury Securities in order to effect Settlement with Qualifying Treasury Securities, the Collateral Agent will cause the Securities Intermediary to effect the release of Pledged Trust Preferred Securities from the Pledge and the transfer of such Trust Preferred Securities to the Stock Purchase Contract Agent on behalf of the Holders free and clear of the Company’s security interest therein.  Upon receipt of such Trust Preferred Securities, the Stock Purchase Contract Agent shall promptly transfer the Trust Preferred Securities to the Holders.

(c)The obligations of the Holders to pay the Purchase Price are non-recourse obligations and, except to the extent satisfied by Settlement with Qualifying Treasury Securities, are payable solely out of the Proceeds of any Collateral pledged to secure the obligations of the Holders, and in no event will the Holders be liable for any deficiency between the Proceeds of the disposition of Collateral and the Purchase Price.

(d)The Company shall not be obligated to issue any Depositary Shares in respect of a Stock Purchase Contract or deliver any certificates therefor to the Holder of the related MCAPS unless the Company shall have received payment for the Depositary Shares to be purchased thereunder in the manner herein specified.

Section 6.3Issuance of Depositary Shares.

(a)Unless a Termination Event shall have occurred, on the Stock Purchase Date upon receipt of the aggregate Purchase Price payable on all Outstanding MCAPS, the Company shall issue and deposit with the Depositary for the Depositary Shares, for the benefit of the Holders of the Outstanding MCAPS, one or more certificates representing newly issued or treasury Depositary Shares (the “Depositary Receipts”) registered in the name of the Stock Purchase Contract Agent (or its nominee) as custodian for the Holders (such certificates for Depositary Shares, together with any dividends or distributions for which a record date and payment date for such dividend or distribution has occurred after the Stock Purchase Date, being hereinafter referred to as the “Stock Purchase Contract Settlement Fund”) to which the Holders are entitled hereunder, it being understood that in order for the Company to satisfy its obligations under this Section 6.3(a), the Company shall issue and deposit with the Preferred Stock Depositary shares of Preferred Stock and, pursuant to a Deposit Agreement, shall cause the Preferred Stock Depositary to issue and deposit such Depositary Receipts in respect of the Preferred Stock so deposited.

(b)Subject to the foregoing, upon surrender of a Certificate to the Stock Purchase Contract Agent on or after the Stock Purchase Date together with settlement instructions thereon duly completed and executed, the Holder of such Certificate shall be entitled to receive forthwith in exchange therefor a certificate representing that number of newly issued Depositary Shares that such Holder is entitled to receive pursuant to the provisions of this Article VI (after taking into account all MCAPS then held by such Holder), together with any dividends or distributions with respect to such shares constituting part of the Stock Purchase Contract Settlement Fund, but

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without any interest thereon, and the Certificate so surrendered shall forthwith be cancelled.  Such shares shall be registered in the name of the Holder or the Holder’s designee as specified in the settlement instructions provided by the Holder to the Stock Purchase Contract Agent.  If any Depositary Shares issued in respect of a Stock Purchase Contract are to be registered to a Person other than the Person in whose name the Certificate evidencing such Stock Purchase Contract is registered (but excluding any MCAPS Depositary or nominee thereof), no such registration shall be made unless the Person requesting such registration has paid any transfer and other taxes required by reason of such registration in a name other than that of the registered Holder of the Certificate evidencing such Stock Purchase Contract or has established to the satisfaction of the Company that such tax either has been paid or is not payable.

(c)The Stock Purchase Contract Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any Preferred Stock or Depositary Shares, or of any securities or property, that may at the time be issued or delivered with respect to any Stock Purchase Contract, and the Stock Purchase Contract Agent makes no representation with respect thereto.  The Stock Purchase Contract Agent shall not be responsible for any failure of the Company to cause to issue, transfer or deliver any Depositary Shares pursuant to a Stock Purchase Contract or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article VI.

Section 6.4Termination Event; Notice.

(a)The Stock Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights of the Holders to receive and the obligation of the Company to pay any Contract Payments (including any accrued and unpaid Contract Payments), and the rights and obligations of Holders to purchase Depositary Shares, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Stock Purchase Contract Agent or the Company, if a Termination Event shall have occurred on or prior to the Stock Purchase Date.

(b)Upon and after the occurrence of a Termination Event, the MCAPS shall thereafter represent the right to receive the Trust Preferred Securities or the Qualifying Treasury Securities, as the case may be, forming part of such MCAPS, in accordance with the provisions of Section 5.4 of the Collateral Agreement.  Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than five Business Days thereafter give written notice of such event to the Stock Purchase Contract Agent, the Collateral Agent and the Holders, at their addresses as they appear in the Securities Register.

Section 6.5Charges and Taxes.

The Company shall pay all stock transfer and similar taxes attributable to the initial issuance and delivery of the Depositary Shares pursuant to the Stock Purchase Contracts; provided, however, that the Company shall not be required to pay any such tax or taxes that may be payable in respect of any exchange of or substitution for a Certificate evidencing a MCAPS or any issuance of a Depositary Share in a name other than that of the registered Holder of a Certificate surrendered in respect of the MCAPS evidenced thereby, other than in the name of the Stock Purchase Contract Agent, as custodian for such Holder, and the Company shall not be

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required to issue or deliver such share certificates or Certificates unless or until the Person or Persons requesting the transfer or issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

Section 6.6Contract Payments.

(a)Subject to Section 6.7, the Company shall pay, on each Payment Date, the Contract Payments payable in respect of each Stock Purchase Contract to the Person in whose name a Certificate is registered at the close of business on the Record Date relating to such Payment Date.  The Contract Payments will be payable at the office of the Stock Purchase Contract Agent in the Borough of Manhattan, New York City maintained for that purpose.  If the book-entry system for the MCAPS has been terminated, the Contract Payments will be payable, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person’s address as it appears on the Securities Register, or by wire transfer to the account designated by such Person by a prior written notice to the Stock Purchase Contract Agent.  If any date on which Contract Payments are to be made is not a Business Day, then payment of the Contract Payments payable on such date will be made on the next succeeding day that is a Business Day (and without any interest in respect of such delay).  The Contract Payments will accrue from and including May 17, 2007 or from and including the most recent Payment Date on which Contract Payments have been paid or duly provided for (subject to deferral as specified in Section 6.7) to but excluding the next succeeding Payment Date.  Contract Payments will be calculated on the basis of a 360-day year consisting of twelve 30-day months.

(b)Upon the occurrence of a Termination Event, the Company’s obligation to pay future Contract Payments (including any accrued Contract Payments) shall cease.

(c)Each Certificate delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of (including as a result of a Collateral Substitution or the recreation of Normal MCAPS) any other Certificate shall carry the right to accrued and unpaid Contract Payments that was carried by the Stock Purchase Contracts underlying such other Certificates.

(d)The Company’s obligations with respect to Contract Payments, if any, will be subordinated and junior in right of payment to the Company’s obligations under any Senior Debt.

(e)In the event of (A) any insolvency, bankruptcy, receivership, liquidation, reorganization, readjustment, composition or other similar proceeding relating to the Company, its creditors or its property, (B) any proceeding for the liquidation, dissolution or other winding up of the Company, voluntary or involuntary, whether or not involving insolvency or bankruptcy proceedings, (C) any assignment by the Company for the benefit of creditors, or (D) any other marshalling of the assets of the Company:

(i)all Senior Debt (including any interest thereon accruing after the commencement of any such proceedings) shall first be paid in full before any payment or distribution, whether in cash, securities or other property, shall be made to any Holder of MCAPS in respect of Contract Payments;

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(ii)any payment or distribution, whether in cash, securities or other property that would otherwise (but for these subordination provisions) be payable or deliverable in respect of Contract Payments shall be paid or delivered directly to the holders of Senior Debt in accordance with the priorities then existing among such holders until all Senior Debt (including any interest thereon accruing after the commencement of any such proceedings) shall have been paid in full;

(iii)after payment in full of all sums owing with respect to Senior Debt, the Holders of MCAPS, together with the holders of any obligations of the Company ranking on a parity with the Contract Payments, shall be entitled to be paid from the remaining assets of the Company the amounts at the time due and owing on account of unpaid Contract Payments and interest thereon and such other obligations before any payment or other distribution, whether in cash, securities or other property, shall be made on account of any capital stock of the Company or any obligations of the Company ranking junior to the Company’s obligations to make Contract Payments under the Stock Purchase Contracts and such other obligations; and

(iv)in the event that, notwithstanding the foregoing, any payment or distribution of any character or any security, whether in cash, securities or other property, shall be received by the Stock Purchase Contract Agent or any Holder of MCAPS in contravention of any of the terms hereof such payment or distribution or security shall be received in trust for the benefit of, and shall be paid over or delivered and transferred back to the transferor for distribution, or to the holders of the Senior Debt at the time outstanding in accordance with the priorities then existing among such holders for application to the payment of all Senior Debt remaining unpaid, to the extent necessary to pay all such Senior Debt in full.  In the event of the failure of the Stock Purchase Contract Agent or any Holder of MCAPS to endorse or assign any such payment, distribution or security, each holder of Senior Debt is hereby irrevocably authorized to endorse or assign the same.

(f)For purposes of Sections 6.6(d) through (p), the words “cash, securities or other property” shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other Person provided for by a plan of reorganization or readjustment, the payment of which is subordinated at least to the extent provided in Sections 6.6(d) through (p) with respect to such Contract Payments on the MCAPS to the payment of all Senior Debt that may at the time be outstanding; provided that (i) the indebtedness or guarantee of indebtedness, as the case may be, that constitutes Senior Debt is assumed by the Person, if any, resulting from any such reorganization or readjustment, and (ii) the rights of the holders of the Senior Debt are not, without the consent of each such holder adversely affected thereby, altered by such reorganization or readjustment.

(g)Any failure by the Company to make any payment on or perform any other obligation under Senior Debt, other than any indebtedness incurred by the Company or assumed or guaranteed, directly or indirectly, by the Company for money borrowed (or any deferral, renewal, extension or refunding thereof) or any indebtedness or obligation as to which the provisions of Sections 6.6(d) through (p) shall have been waived by the Company in the instrument or instruments by which the Company incurred, assumed, guaranteed or otherwise

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created such indebtedness or obligation, shall not be deemed a default or event of default if (i) the Company shall be disputing its obligation to make such payment or perform such obligation and (ii) either (A) no final judgment relating to such dispute shall have been issued against the Company that is in full force and effect and is not subject to further review, including a judgment that has become final by reason of the expiration of the time within which a party may seek further appeal or review, or (B) in the event a judgment that is subject to further review or appeal has been issued, the Company shall in good faith be prosecuting an appeal or other proceeding for review and a stay of execution shall have been obtained pending such appeal or review.

(h)Subject to the irrevocable payment in full of all Senior Debt, the Holders of the MCAPS shall be subrogated (equally and ratably with the holders of all obligations of the Company that by their express terms are subordinated to Senior Debt of the Company to the same extent as payment of the Contract Payments in respect of the Stock Purchase Contracts underlying the MCAPS is subordinated and  that are entitled to like rights of subrogation) to the rights of the holders of Senior Debt to receive payments or distributions of cash, securities or other property of the Company applicable to the Senior Debt until all such Contract Payments owing on the MCAPS shall be paid in full, and as between the Company, its creditors other than holders of such Senior Debt and the Holders, no such payment or distribution made to the holders of Senior Debt by virtue of Sections 6.6(d) through (p) that otherwise would have been made to the Holders shall be deemed to be a payment by the Company on account of such Senior Debt, it being understood that the provisions of Sections 6.6(d) through (p) are intended solely for the purpose of defining the relative rights of the Holders, on the one hand, and the holders of Senior Debt, on the other hand.

(i)Nothing contained in Sections 6.6(d) through (p) or elsewhere in this Agreement or in the MCAPS is intended to or shall impair, as among the Company, its creditors other than the holders of Senior Debt and the Holders, the obligation of the Company, which is absolute and unconditional, to pay to the Holders such Contract Payments on the MCAPS as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders and creditors of the Company other than the holders of Senior Debt, nor shall anything herein or therein prevent the Stock Purchase Contract Agent or any Holder from exercising all remedies otherwise permitted by applicable law upon default under this Agreement, subject to the rights, if any, under Sections 6.6(d) through (p), of the holders of Senior Debt in respect of cash, securities or other property of the Company received upon the exercise of any such remedy.

(j)Upon payment or distribution of assets of the Company referred to in Sections 6.6(d) through (p), the Stock Purchase Contract Agent and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which any such dissolution, winding up, liquidation or reorganization proceeding affecting the affairs of the Company is pending or upon a certificate of the trustee in bankruptcy, receiver, conservator, assignee for the benefit of creditors, liquidating trustee or Stock Purchase Contract Agent or other Person making any payment or distribution, delivered to the Stock Purchase Contract Agent or to the Holders, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Debt and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to Sections 6.6(d) through (p).

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(k)The Stock Purchase Contract Agent shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Debt (or a trustee or representative on behalf of such holder) to establish that such notice has been given by a holder of Senior Debt or a trustee or representative on behalf of any such holder or holders.  In the event that the Stock Purchase Contract Agent determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Debt to participate in any payment or distribution pursuant to Section 6.6(d) through (p), the Stock Purchase Contract Agent may request such Person to furnish evidence to the reasonable satisfaction of the Stock Purchase Contract Agent as to the amount of Senior Debt held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under Sections 6.6(d) through (p), and, if such evidence is not furnished, the Stock Purchase Contract Agent may defer payment to such Person pending judicial determination as to the right of such Person to receive such payment.

(l)Nothing contained in Sections 6.6(d) through (p) shall affect the obligations of the Company to make, or prevent the Company from making, payment of the Contract Payments, except as otherwise provided in Sections 6.6(d) through (p).

(m)Each Holder of MCAPS, by its acceptance thereof, authorizes and directs the Stock Purchase Contract Agent on its behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in Section 6.6(d) through (p) and appoints the Stock Purchase Contract Agent its attorney-in-fact, as the case may be, for any and all such purposes.

(n)The Company shall give prompt written notice to the Stock Purchase Contract Agent of any fact known to the Company that would prohibit the making of any payment of moneys to or by the Stock Purchase Contract Agent in respect of the MCAPS pursuant to the provisions of this Section.  Notwithstanding the provisions of Section 6.6(d) through (p) or any other provisions of this Agreement, the Stock Purchase Contract Agent shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment of moneys to or by the Stock Purchase Contract Agent, or the taking of any other action by the Stock Purchase Contract Agent, unless and until the Stock Purchase Contract Agent shall have received written notice thereof mailed or delivered to the Stock Purchase Contract Agent at its Corporate Trust Services department from the Company, any Holder, or the holder or representative of any Senior Debt; provided that if at least two Business Days prior to the date upon which by the terms hereof any such moneys may become payable for any purpose, the Stock Purchase Contract Agent shall not have received with respect to such moneys the notice provided for in this Section, then, anything herein contained to the contrary notwithstanding, the Stock Purchase Contract Agent shall have full power and authority to receive such moneys and to apply the same to the purpose for which they were received and shall not be affected by any notice to the contrary that may be received by it within two Business Days prior to or on or after such date.

(o)The Stock Purchase Contract Agent in its individual capacity shall be entitled to all the rights specified in this Section with respect to any Senior Debt at the time held by it, to the same extent as any other holder of Senior Debt and nothing in this Agreement shall deprive the Stock Purchase Contract Agent of any of its rights as such holder.

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(p)No right of any present or future holder of any Senior Debt to enforce the subordination herein shall at any time or in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any noncompliance by the Company with the terms, provisions and covenants of this Agreement, regardless of any knowledge thereof that any such holder may have or be otherwise charged with.

(q)Nothing in this Section 6.6 shall apply to claims of, or payments to, the Stock Purchase Contract Agent under or pursuant to Section 8.7.

(r)With respect to the holders of Senior Debt, (i) the duties and obligations of the Stock Purchase Contract Agent shall be determined solely by the express provisions of this Agreement; (ii) the Stock Purchase Contract Agent shall not be liable to any such holders if it shall, acting in good faith, mistakenly pay over or distribute to the Holders or to the Company or any other Person cash, securities or other property to which any holders of Senior Debt shall be entitled by virtue of this Section 6.6 or otherwise; (iii) no implied covenants or obligations shall be read into this Agreement against the Stock Purchase Contract Agent; and (iv) the Stock Purchase Contract Agent shall not be deemed to be a fiduciary as to such holders.

Section 6.7Deferral of Contract Payments.

(a)The Company shall have the right (which will be exercised if so directed by the SEC), at any time prior to the Stock Purchase Date, to defer the payment of any or all of the Contract Payments otherwise payable on any Payment Date, but only if the Company shall give the Holders and the Stock Purchase Contract Agent written notice of its election to defer each such deferred Contract Payment (specifying the amount to be deferred) at least ten Business Days prior to the earlier of (i) the next succeeding Payment Date or (ii) the date the company is required to give notice of any Record Date or Payment Date with respect to the payment of such Contract Payments to the New York Stock Exchange, or any other national securities exchange, automated interdealer quotation system or other applicable self regulatory organization or to Holders of MCAPS, but in any event not less than one Business Day prior to such Record Date. Any Contract Payments so deferred shall, to the extent permitted by law, accrue interest thereon at the rate originally applicable to the Debentures (calculated on the same basis as originally applicable to the Debentures), compounding on each succeeding Payment Date, until paid in full (such deferred installments of Contract Payments, if any, together with the additional Contract Payments, if any, accrued thereon, being referred to herein as the “Deferred Contract Payments”).  Deferred Contract Payments, if any, shall be due on the next succeeding Payment Date except to the extent that payment is deferred pursuant to this Section 6.7.  No Contract Payments may be deferred to a date that is after the Stock Purchase Date and no such deferral period may end other than on a Payment Date.  If the Stock Purchase Contracts are terminated upon the occurrence of a Termination Event, the Holder’s right to receive any Contract Payments and any Deferred Contract Payments will terminate.

(b)In the event that the Company elects to defer the payment of Contract Payments until a Payment Date prior to the Stock Purchase Date, then all Deferred Contract Payments, if any, shall be payable to the registered Holders as of the close of business on the Record Date immediately preceding such Payment Date.

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(c)In the event that the Company elects to defer the payment of Contract Payments on the Stock Purchase Contracts and such deferral is continuing on the Stock Purchase Date, each Holder will receive on the Stock Purchase Date in lieu of a cash payment, in addition to the Depositary Shares to be issued pursuant to Section 6.3, subordinated notes of the Company (“Additional Subordinated Notes”) that will (i) have a principal amount equal to the aggregate amount of Deferred Contract Payments at the Stock Purchase Date, (ii) mature on the later of June 2, 2014 and five years after the first Payment Date on which any of such Deferred Contract Payments were payable, (iii) bear interest at the rate per annum equal to the originally applicable rate of interest on the Debentures (subject to deferral on the same basis as the Contract Payments; provided that the reference in clause (i)(2) of Section 6.7(d) to the beginning of the deferral period shall be deemed to refer to the beginning of the deferral period with respect to the Contract Payments), (iv) be subordinate and rank junior in right of payment to all of the Company’s Senior Debt on the same basis as the Debentures and (v) be redeemable at the option of the Company at any time or from time to time prior to their stated maturity at a redemption price equal to the principal amount thereof plus any accrued and unpaid interest to the date of redemption.

In the event the Company exercises its option to defer the payment of Contract Payments then, until the earlier of (x) the Termination Date or (y) the date on which the Company shall have either paid all Deferred Contract Payments in the manner set forth in Section 6.7(c) to the Stock Purchase Contract Agent in cash or repaid all amounts outstanding on the Additional Subordinated Notes, the Company shall not (A) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any shares of its capital stock, including Preferred Stock; (B) make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt security of the Company that ranks pari passu in all respects with or junior in interest to the Debentures; and (C) make any guarantee payments with respect to any guarantee by the Company of the debt securities of any subsidiary of the Company that by its terms ranks pari passu in all respects with or junior in interest to the Guarantee (as such term is defined in the Declaration of Trust), other than, in each case: (a) dividends or distributions in the form of common stock of the Company; (b) payments under the Trust Guarantee (as such term is defined in the Declaration of Trust); (c) any declaration of a dividend in connection with the implementation of a shareholders’ rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto; (d) purchases of common stock related to the issuance of common stock or rights under any of the Company’s benefit plans; (e) payments of interest on any of the Company’s debt securities that rank on a parity with (“Parity Debt Securities”) or junior in interest to the Debentures or payments under any guarantee of the Company of the debt securities of any subsidiary of the Company if such guarantee ranks on a parity with (“Parity Guarantees”) or junior in interest to the Debentures in respect of interest payments on debt securities of any subsidiary of the Company, in each case ratably and in proportion to the respective amount of (x) accrued and unpaid interest on such Parity Debt Securities or guaranteed by such Parity Guarantees, on the one hand, and (y) accrued and unpaid interest on the Debentures (including compounded amounts and all amounts of principal and interest on any Additional Subordinated Notes), on the other hand; and (f) payment of interest on the Debentures in Additional Subordinated Notes in connection with a Failed Remarketing.

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Section 6.8Rights of Holders of Treasury MCAPS to Receive Excess Proceeds.

The Stock Purchase Contract Agent shall pay, solely out of the funds received from the Collateral Agent for such purpose pursuant to Section 5.5 of the Collateral Agreement, on each Quarterly Date, an amount in cash equal to the excess of the net proceeds received by the Collateral Agent upon the maturity of the related Pledged Treasury Securities over the net purchase price of the Qualifying Treasury Securities purchased therewith pursuant to Section 5.5 of the Collateral Agreement to the Person in whose name a Treasury MCAPS Certificate is registered at the close of business on the Record Date relating to such Quarterly Date.  Such amounts will be payable at the office of the Stock Purchase Contract Agent in the Borough of Manhattan, New York City maintained for that purpose.  If the book entry system for the MCAPS has been terminated, such payments will be payable, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person’s address as it appears on the Security Register, or by wire transfer to the account designated by such Person by a prior written notice to the Stock Purchase Contract Agent.

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ARTICLE VII

REMEDIES

Section 7.1Unconditional Right of Holders to Receive Contract Payments and to Purchase Depositary Shares.

Each Holder of MCAPS shall have the right, which is absolute and unconditional, except upon and following a Termination Event, (i) subject to Article VI, to receive each Contract Payment with respect to each Stock Purchase Contract comprising part of such MCAPS on the respective Payment Date for such MCAPS and (ii) to purchase Depositary Shares pursuant to such Stock Purchase Contract and, in each such case, to institute suit for the enforcement of any such right to receive Contract Payments and the right to purchase Depositary Shares, and such rights shall not be impaired without the consent of such Holder.

Section 7.2Restoration of Rights and Remedies.

If any Holder has instituted any proceeding to enforce any right or remedy under this Agreement and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to such Holder, then and in every such case, subject to any determination in such proceeding, the Company and such Holder shall be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of such Holder shall continue as though no such proceeding had been instituted.

Section 7.3Rights and Remedies Cumulative.

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Certificates in Section 3.10(f), no right or remedy herein conferred upon or reserved to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 7.4Delay or Omission Not Waiver.

No delay or omission of any Holder to exercise any right upon a default or remedy upon a default shall impair any such right or remedy or constitute a waiver of any such right.  Every right and remedy given by this Article VII or by law to the Holders may be exercised from time to time, and as often as may be deemed expedient, by such Holders.

Section 7.5Undertaking for Costs.

All parties to this Agreement agree, and each Holder of a MCAPS, by its acceptance of such MCAPS shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Agreement, or in any suit against the Stock Purchase Contract Agent for any action taken, suffered or omitted by it as Stock Purchase Contract Agent, the filing by any party litigant in such suit of an undertaking to pay the costs of

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such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and costs against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided that the provisions of this Section shall not apply to any suit instituted by the Stock Purchase Contract Agent, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% of the Outstanding MCAPS, or to any suit instituted by any Holder for the enforcement of interest on any Trust Preferred Securities or Contract Payments on or after the respective Payment Date therefor in respect of any MCAPS held by such Holder, or for enforcement of the right to purchase Depositary Shares under the Stock Purchase Contracts constituting part of any MCAPS held by such Holder.

Section 7.6Waiver of Stay or Extension Laws.

The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Agreement; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Stock Purchase Contract Agent or the Holders, but will suffer and permit the execution of every such power as though no such law had been enacted.

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ARTICLE VIII

THE PURCHASE CONTRACT AGENT

Section 8.1Certain Duties and Responsibilities.

(a)The Stock Purchase Contract Agent:

(i)undertakes to perform, with respect to the MCAPS, such duties and only such duties as are or will be specifically specified in this Agreement, the Collateral Agreement and the Remarketing Agreement and no implied covenants or obligations shall be read into this Agreement, the Collateral Agreement or the Remarketing Agreement against the Stock Purchase Contract Agent; and

(ii)in the absence of bad faith or gross negligence on its part, may, with respect to the MCAPS, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Stock Purchase Contract Agent and conforming to the requirements of this Agreement or the Collateral Agreement or the Remarketing Agreement, as applicable, but in the case of any certificates or opinions which by any provision hereof are specifically required to be furnished to the Stock Purchase Contract Agent, the Stock Purchase Contract Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Agreement, the Collateral Agreement or the Remarketing Agreement, as applicable (but need not confirm or investigate the accuracy of the mathematical calculations or other facts stated therein).

(b)No provision of this Agreement, the Collateral Agreement or the Remarketing Agreement shall be construed to relieve the Stock Purchase Contract Agent from liability for its own grossly negligent action, its own grossly negligent failure to act, or its own willful misconduct, except that:

(i)this Section 8.1(b) shall not be construed to limit the effect of Section 8.1(a);

(ii)the Stock Purchase Contract Agent shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be conclusively determined by a court of competent jurisdiction that the Stock Purchase Contract Agent was grossly negligent in ascertaining the pertinent facts; and

(iii)no provision of this Agreement or the Collateral Agreement or the Remarketing Agreement shall require the Stock Purchase Contract Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(c)Whether or not therein expressly so provided, every provision of this Agreement, the Collateral Agreement and the Remarketing Agreement relating to the conduct or affecting the

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liability of or affording protection to the Stock Purchase Contract Agent shall be subject to the provisions of this Section.

(d)The Stock Purchase Contract Agent is authorized to execute and deliver the Collateral Agreement in its capacity as Stock Purchase Contract Agent.

Section 8.2Notice of Default.

Within 30 days after the occurrence of any default by the Company hereunder of which a Responsible Officer of the Stock Purchase Contract Agent has actual knowledge, the Stock Purchase Contract Agent shall transmit by mail to the Company and the Holders of MCAPS, as their names and addresses appear in the Securities Register, notice of such default hereunder, unless such default shall have been cured or waived.

Section 8.3Certain Rights of Stock Purchase Contract Agent.

Subject to the provisions of Section 8.1:

(a)the Stock Purchase Contract Agent may, in the absence of bad faith, 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, Trust Preferred Securities, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(b)any request or direction of the Company mentioned herein shall be sufficiently evidenced by an Officers’ Certificate, Issuer Order or Issuer Request, and any resolution of the Board of Directors of the Company may be sufficiently evidenced by a Board Resolution;

(c)whenever in the administration of this Agreement, the Collateral Agreement or the Remarketing Agreement the Stock Purchase Contract Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting to take any action hereunder, the Stock Purchase Contract Agent (unless other evidence be herein specifically prescribed in this Agreement) may, in the absence of bad faith on its part, conclusively rely upon an Officers’ Certificate of the Company;

(d)the Stock Purchase Contract Agent may consult with counsel of its selection appointed with due care by it hereunder and the advice of such counsel or any Opinion of Counsel 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 reliance thereon;

(e)the Stock Purchase Contract Agent 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 Stock Purchase Contract Agent, in its discretion, may make reasonable further inquiry or investigation into such facts or matters related to the execution, delivery and performance of the Stock Purchase Contracts as it may see fit, and, if the Stock Purchase Contract Agent shall determine to make such further inquiry or

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investigation, it shall be entitled to examine the relevant books, records and premises of the Company, personally or by agent or attorney;

(f)the Stock Purchase Contract Agent may execute any of the powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees or an Affiliate and the Stock Purchase Contract Agent shall not be responsible for any misconduct or negligence on the part of any agent, attorney, custodian or nominee or an Affiliate appointed with due care by it hereunder;

(g)the Stock Purchase Contract Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement at the request or direction of any of the Holders pursuant to this Agreement, unless such Holders shall have offered to the Stock Purchase Contract Agent security or indemnity reasonably satisfactory to the Stock Purchase Contract Agent against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

(h)the Stock Purchase Contract Agent shall not be liable for any action taken, suffered, or omitted to be taken by it in the absence of bad faith or gross negligence by it;

(i)the Stock Purchase Contract Agent shall not be deemed to have notice of any default hereunder unless a Responsible Officer of the Stock Purchase Contract Agent has actual knowledge thereof or unless written notice of any event that is in fact such a default is received by the Stock Purchase Contract Agent at the Corporate Trust Office of the Stock Purchase Contract Agent, and such notice references the MCAPS and this Agreement;

(j)the Stock Purchase Contract Agent may request that the Company deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Agreement, which Officers’ Certificate may be signed by any person authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded;

(k)the rights, privileges, protections, immunities and benefits given to the Stock Purchase Contract Agent, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Stock Purchase Contract Agent in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder; and

(l)the Stock Purchase Contract Agent shall not be required to initiate or conduct any litigation or collection proceedings hereunder and shall have no responsibilities with respect to any default hereunder except as expressly specified herein.

Section 8.4Not Responsible for Recitals or Issuance of MCAPS.

The recitals contained herein, in the Collateral Agreement, the Remarketing Agreement and in the Certificates shall be taken as the statements of the Company, and the Stock Purchase Contract Agent assumes no responsibility for their accuracy or validity.  The Stock Purchase Contract Agent makes no representations as to the validity or sufficiency of either this Agreement or of the MCAPS, or of the Collateral Agreement or the Pledge or the Collateral and shall have no responsibility for perfecting or maintaining the perfection of any security interest in

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the Collateral.  The Stock Purchase Contract Agent shall not be accountable for the use or application by the Company of the proceeds in respect of the Stock Purchase Contracts.

Section 8.5May Hold MCAPS.

Any Securities Registrar or any other agent of the Company, or the Stock Purchase Contract Agent and its Affiliates, in their individual or any other capacity, may become the owner or pledgee of MCAPS and may otherwise deal with the Company, the Collateral Agent or any other Person with the same rights it would have if it were not Securities Registrar or such other agent, or the Stock Purchase Contract Agent.  The Company may become the owner or pledgee of MCAPS.

Section 8.6Money Held in Custody.

Money held by the Stock Purchase Contract Agent in custody hereunder need not be segregated from the Stock Purchase Contract Agent’s other funds except to the extent required by law or provided herein.  The Stock Purchase Contract Agent shall be under no obligation to invest or pay interest on any money received by it hereunder except as otherwise provided hereunder or agreed in writing with the Company.

Section 8.7Compensation and Reimbursement.

The Company agrees:

(a)to pay to the Stock Purchase Contract Agent compensation for all services rendered by it hereunder, under the Collateral Agreement and under the Remarketing Agreement as the Company and the Stock Purchase Contract Agent shall from time to time agree in writing;

(b)except as otherwise expressly provided for herein, to reimburse the Stock Purchase Contract Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the Stock Purchase Contract Agent in accordance with any provision of this Agreement, the Collateral Agreement and the Remarketing Agreement (including the reasonable compensation and the expenses and disbursements of its agents and counsel) in connection with the negotiation, preparation, execution and delivery and performance of this Agreement, the Collateral Agreement and the Remarketing Agreement and any modification, supplement or waiver of any of the terms thereof, except any such expense, disbursement or advance as may be attributable to its gross negligence, willful misconduct or bad faith; and

(c)to indemnify the Stock Purchase Contract Agent and any predecessor Stock Purchase Contract Agent (and each of its directors, officers, agents and employees (collectively, the “Indemnitees”) for, and to hold it harmless against, any loss, claim, damage, fine, penalty, liability or expense (including reasonable fees and expenses of counsel) incurred without gross negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of its duties hereunder and under the Collateral Agreement and the Remarketing Agreement, including the Indemnitees’ reasonable costs and expenses of defending themselves against any claim (whether asserted by the Company, a Holder or any other person)

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or liability in connection with the exercise or performance of any of the Stock Purchase Contract Agent’s powers or duties hereunder or thereunder.

The provisions of this Section shall survive the resignation and removal of the Stock Purchase Contract Agent and the termination of this Agreement.

Section 8.8Corporate Stock Purchase Contract Agent Required, Eligibility.

There shall at all times be a Stock Purchase Contract Agent hereunder which shall be a Person organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having (or being a member of a bank holding company having) a combined capital and surplus of at least $50,000,000, subject to supervision or examination by Federal or State authority and having a corporate trust office in the Borough of Manhattan, New York City, if there be such a Person in the Borough of Manhattan, New York City, qualified and eligible under this Article VIII and willing to act on reasonable terms.  If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as specified in its most recent report of condition so published.  If at any time the Stock Purchase Contract Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article VIII.

Section 8.9Resignation and Removal; Appointment of Successor.

(a)No resignation or removal of the Stock Purchase Contract Agent and no appointment of a successor Stock Purchase Contract Agent pursuant to this Article VIII shall become effective until the acceptance of appointment by the successor Stock Purchase Contract Agent in accordance with the applicable requirements of Section 8.10.

(b)The Stock Purchase Contract Agent may resign at any time by giving written notice thereof to the Company 60 days prior to the effective date of such resignation.  If the instrument of acceptance by a successor Stock Purchase Contract Agent required by Section 8.10 shall not have been delivered to the Stock Purchase Contract Agent within 30 days after the giving of such notice of resignation, the resigning Stock Purchase Contract Agent may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Stock Purchase Contract Agent.

(c)The Stock Purchase Contract Agent may be removed at any time by Act of the Holders of at least a majority in number of the Outstanding MCAPS delivered to the Stock Purchase Contract Agent and the Company.  If the instrument of acceptance by a successor Stock Purchase Contract Agent required by Section 8.10 shall not have been delivered to the Stock Purchase Contract Agent within 30 days after such Act, the Stock Purchase Contract Agent being removed may petition any court of competent jurisdiction for the appointment at the expense of the Company of a successor Stock Purchase Contract Agent.

(d)If at any time:

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(i)the Stock Purchase Contract Agent fails to comply with Section 310(b) of the TIA, as if the Stock Purchase Contract Agent were an indenture trustee under an indenture qualified under the TIA, and shall fail to resign after written request therefor by the Company or by any Holder who has been a bona fide Holder of a MCAPS for at least six months;

(ii)the Stock Purchase Contract Agent shall cease to be eligible under Section 8.8 and shall fail to resign after written request therefor by the Company or by any such Holder; or

(iii)the Stock Purchase Contract Agent shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Stock Purchase Contract Agent or of its property shall be appointed or any public officer shall take charge or control of the Stock Purchase Contract Agent or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company by a Board Resolution may remove the Stock Purchase Contract Agent, or (ii) any Holder who has been a bona fide Holder of a MCAPS for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Stock Purchase Contract Agent and the appointment of a successor Stock Purchase Contract Agent.

(e)If the Stock Purchase Contract Agent shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Stock Purchase Contract Agent for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Stock Purchase Contract Agent and shall comply with the applicable requirements of Section 8.10.  If no successor Stock Purchase Contract Agent shall have been so appointed by the Company and accepted appointment in the manner required by Section 8.10, any Holder who has been a bona fide Holder of a MCAPS for at least six months, on behalf of itself and all others similarly situated, or the Stock Purchase Contract Agent may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Stock Purchase Contract Agent.

(f)The Company shall give, or shall cause such successor Stock Purchase Contract Agent to give, notice of each resignation and each removal of the Stock Purchase Contract Agent and each appointment of a successor Stock Purchase Contract Agent by mailing written notice of such event by first-class mail, postage prepaid, to all Holders as their names and addresses appear in the applicable Securities Register.  Each notice shall include the name of the successor Stock Purchase Contract Agent and the address of its Corporate Trust Office.

Section 8.10Acceptance of Appointment by Successor.

(a)In case of the appointment hereunder of a successor Stock Purchase Contract Agent, every such successor Stock Purchase Contract Agent so appointed shall execute, acknowledge and deliver to the Company and to the retiring Stock Purchase Contract Agent an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Stock Purchase Contract Agent shall become effective and such successor Stock Purchase Contract Agent, without any further act, deed or conveyance, shall become vested with all the

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rights, powers, agencies and duties of the retiring Stock Purchase Contract Agent; but, on the request of the Company or the successor Stock Purchase Contract Agent, such retiring Stock Purchase Contract Agent shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Stock Purchase Contract Agent all the rights, powers and trusts of the retiring Stock Purchase Contract Agent and duly assign, transfer and deliver to such successor Stock Purchase Contract Agent all property and money held by such retiring Stock Purchase Contract Agent hereunder.

(b)Upon request of any such successor Stock Purchase Contract Agent, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Stock Purchase Contract Agent all such rights, powers and agencies referred to in Section 8.10(a).

(c)No successor Stock Purchase Contract Agent shall accept its appointment unless at the time of such acceptance such successor Stock Purchase Contract Agent shall be qualified and eligible under this Article VIII.

Section 8.11Merger, Conversion, Consolidation or Succession to Business.

Any Person into which the Stock Purchase Contract Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Stock Purchase Contract Agent shall be a party, or any Person succeeding to all or substantially all the corporate trust business of the Stock Purchase Contract Agent, shall be the successor of the Stock Purchase Contract Agent hereunder, provided that such Person shall be otherwise qualified and eligible under this Article VIII, without the execution or filing of any paper or any further act on the part of any of the parties hereto.  In case any Certificates shall have been authenticated and executed on behalf of the Holders, but not delivered, by the Stock Purchase Contract Agent then in office, any successor by merger, conversion or consolidation to such Stock Purchase Contract Agent may adopt such authentication and execution and deliver the Certificates so authenticated and executed with the same effect as if such successor Stock Purchase Contract Agent had itself authenticated and executed such MCAPS.

Section 8.12Preservation of Information; Communications to Holders.

(a)The Stock Purchase Contract Agent shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders received by the Stock Purchase Contract Agent in its capacity as Securities Registrar.

(b)If three or more Holders (herein referred to as “Applicants”) apply in writing to the Stock Purchase Contract Agent, and furnish to the Stock Purchase Contract Agent reasonable proof that each such applicant has owned a MCAPS for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders with respect to their rights under this Agreement or under the MCAPS and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Stock Purchase Contract Agent shall mail to all the Holders copies of the form of proxy or other communication which is specified in such request,

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with reasonable promptness after a tender to the Stock Purchase Contract Agent of the materials to be mailed and of payment, or provision for the payment, of the reasonable expenses of such mailing.

Section 8.13No Obligations of Stock Purchase Contract Agent.

Except to the extent otherwise expressly provided in this Agreement, the Stock Purchase Contract Agent assumes no obligations and shall not be subject to any liability under this Agreement, the Collateral Agreement, the Remarketing Agreement or any Stock Purchase Contract in respect of the obligations of the Holder of any MCAPS thereunder.  The Company agrees, and each Holder of a Certificate, by its acceptance thereof, shall be deemed to have agreed, that the Stock Purchase Contract Agent’s execution of the Certificates on behalf of the Holders shall be solely as agent and attorney-in-fact for the Holders, and that the Stock Purchase Contract Agent shall have no obligation to perform such Stock Purchase Contracts on behalf of the Holders, except to the extent expressly provided in Article VI hereof.  Anything contained in this Agreement to the contrary notwithstanding, in no event shall the Stock Purchase Contract Agent or its officers, directors, employees or agents be liable under this Agreement, the Collateral Agreement or the Remarketing Agreement to any third party for indirect, incidental, special, punitive, or consequential loss or damage of any kind whatsoever, including lost profits, whether or not the likelihood of such loss or damage was known to the Stock Purchase Contract Agent and regardless of the form of action.

Section 8.14Tax Compliance.

(a)The Stock Purchase Contract Agent, on its own behalf and on behalf of the Company, will comply with all applicable certification, information reporting and withholding (including “backup” withholding) requirements imposed by applicable tax laws, regulations or administrative practice with respect to (i) any payments made with respect to the MCAPS or (ii) the issuance, delivery, holding, transfer, redemption or exercise of rights under the MCAPS.  Such compliance shall include, without limitation, the preparation and timely filing of required returns and the timely payment of all amounts required to be withheld to the appropriate taxing authority or its designated agent.

(b)The Stock Purchase Contract Agent shall comply in accordance with the terms hereof with any written direction received from the Company with respect to the execution or certification of any required documentation and the application of such requirements to particular payments or Holders or in other particular circumstances, and may for purposes of this Agreement conclusively rely on any such direction in accordance with the provisions of Section 8.1(a) hereof.

(c)The Stock Purchase Contract Agent shall maintain all appropriate records documenting compliance with such requirements, and shall make such records available, on written request, to the Company or its authorized representative within a reasonable period of time after receipt of such request.

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ARTICLE IX

SUPPLEMENTAL AGREEMENTS

Section 9.1Supplemental Agreements without Consent of Holders.

Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Stock Purchase Contract Agent, at any time and from time to time, may enter into one or more agreements supplemental hereto, in form satisfactory to the Company and the Stock Purchase Contract Agent, to:

(a)evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company herein and in the Certificates;

(b)add to the covenants of the Company for the benefit of the Holders, or surrender any right or power herein conferred upon the Company;

(c)evidence and provide for the acceptance of appointment hereunder by a successor Stock Purchase Contract Agent;

(d)cure any ambiguity (or formal defect) or correct or supplement any provisions herein which may be inconsistent with any other provisions herein;

(e)conform the terms of this Agreement to the terms as set forth in the Prospectus dated May 8, 2007 of the Trust and the Company relating to the MCAPS (the “Prospectus”); provided, however, that in connection with such amendment, the Company shall deliver to the Stock Purchase Contract Agent an Officers’ Certificate and an opinion of counsel (who may be counsel to the Compay or the Trust), in each case confirming that such amendment has the effect of conforming the terms of this Declaration of Trust to the terms of the Trust Securities as set forth in the Prospectus.; or

(f)make any other provisions with respect to such matters or questions arising under this Agreement, provided that such action shall not adversely affect the interests of the Holders in any material respect.

Section 9.2Supplemental Agreements with Consent of Holders.

With the consent of the Holders of not less than a majority of the Outstanding MCAPS voting together as one class, including without limitation the consent of the Holders obtained in connection with a tender or an exchange offer, by Act of said Holders delivered to the Company and the Stock Purchase Contract Agent, the Company, when duly authorized, and the Stock Purchase Contract Agent may enter into an agreement or agreements supplemental hereto for the purpose of modifying in any manner the terms of the Stock Purchase Contracts, or the provisions of this Agreement or the rights of the Holders in respect of the MCAPS; provided, however, that, except as contemplated herein, no such supplemental agreement shall, without the unanimous consent of the Holders of each outstanding Stock Purchase Contract affected thereby,

(a)change any Payment Date;

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(b)change the amount or the type of Collateral required to be Pledged to secure a Holder’s obligations under the Stock Purchase Contract, impair the right of the Holder of any Stock Purchase Contract to receive distributions on the related Collateral or otherwise adversely affect the Holder’s rights in or to such Collateral or adversely alter the rights in or to such Collateral;

(c)reduce the amount of any Contract Payments or change any place where, or the coin or currency in which, any Contract Payment is payable;

(d)impair the right to institute suit for the enforcement of any Stock Purchase Contract or any Contract Payments;

(e)reduce the number of Depositary Shares or the amount of any other property to be purchased pursuant to any Stock Purchase Contract, increase the price to purchase Depositary Shares or any other property upon settlement of any Stock Purchase Contract or change the Stock Purchase Date or otherwise adversely affect the Holder’s rights under the Stock Purchase Contract; or

(f)reduce the percentage of the outstanding Stock Purchase Contracts the consent of whose Holders is required for any modification or amendment to the provisions of this Agreement, the Stock Purchase Contracts or the Collateral Agreement;

provided that if any amendment or proposal referred to above would adversely affect only the Normal MCAPS or the Treasury MCAPS, then only the affected class of Holders as of the record date for the Holders entitled to vote thereon will be entitled to vote on such amendment or proposal, and such amendment or proposal shall not be effective except with the consent of Holders of not less than a majority of such class; and provided, further, that the unanimous consent of the Holders of each outstanding Stock Purchase Contract of such class affected thereby shall be required to approve any amendment or proposal specified in clauses (a) through (f) above.

It shall not be necessary for any Act of Holders under this Section 9.2 to approve the particular form of any proposed supplemental agreement, but it shall be sufficient if such Act shall approve the substance thereof.

Section 9.3Execution of Supplemental Agreements.

In executing, or accepting the additional agencies created by, any supplemental agreement permitted by this Article IX or the modifications thereby of the agencies created by this Agreement, the Stock Purchase Contract Agent shall be provided, and (subject to Section 8.1) shall be fully authorized and protected in relying upon, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such supplemental agreement is authorized or permitted by this Agreement and that any and all conditions precedent to the execution and delivery of such supplemental agreement have been satisfied.  The Stock Purchase Contract Agent may, but shall not be obligated to, enter into any such supplemental agreement which affects the Stock Purchase Contract Agent’s own rights, duties or immunities under this Agreement or otherwise.

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Section 9.4Effect of Supplemental Agreements.

Upon the execution of any supplemental agreement under this Article IX, this Agreement shall be modified in accordance therewith, and such supplemental agreement shall form a part of this Agreement for all purposes; and every Holder of Certificates theretofore or thereafter authenticated, executed on behalf of the Holders and delivered hereunder, shall be bound thereby.

Section 9.5Reference to Supplemental Agreements.

Certificates authenticated, executed on behalf of the Holders and delivered after the execution of any supplemental agreement pursuant to this Article IX may, and shall if required by the Stock Purchase Contract Agent, bear a notation in form approved by the Stock Purchase Contract Agent as to any matter provided for in such supplemental agreement.  If the Company shall so determine, new Certificates so modified as to conform, in the opinion of the Stock Purchase Contract Agent and the Company, to any such supplemental agreement may be prepared and executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Stock Purchase Contract Agent in exchange for outstanding Certificates.

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ARTICLE X

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 10.1Covenant Not to Consolidate, Merge, Convey, Transfer or Lease Property Except under Certain Conditions.

The Company covenants that it will not consolidate with, convert into, or merge with and into, any other entity or sell, assign, transfer, lease or convey all or substantially all of its properties and assets to any Person or entity, unless:

(a)either the Company shall be the continuing corporation, or the successor (if other than the Company) shall be a corporation organized and existing under the laws of the United States of America or a State thereof or the District of Columbia and such corporation shall expressly assume all the obligations of the Company under the Stock Purchase Contracts, this Agreement, the Collateral Agreement, the Declaration of Trust, the Indenture (including any supplement thereto), the Guarantee Agreement, the Deposit Agreement and the Remarketing Agreement by one or more supplemental agreements in form reasonably satisfactory to the Stock Purchase Contract Agent and the Collateral Agent, executed and delivered to the Stock Purchase Contract Agent and the Collateral Agent by such corporation;

(b)the Company or such successor corporation, as the case may be, shall not, immediately after such consolidation, conversion, merger, sale, assignment, transfer, lease or conveyance, be in default of payment obligations under the Stock Purchase Contracts, this Agreement, the Collateral Agreement, the Declaration of Trust, the Indenture (including any supplement thereto), the Guarantee Agreement, the Deposit Agreement or the Remarketing Agreement or in material default in the performance of any other covenants under any of the foregoing agreements; and

(c)the successor entity, if not the Company, shall have reserved sufficient authorized and unissued shares of preferred stock having substantially the same terms and conditions as the Preferred Stock for deposit pursuant to the Deposit Agreement, such that each holder of MCAPS will receive, on the Stock Purchase Date, Depositary Shares having substantially the same rights as the Depositary Shares that such holder would have received had such merger, consolidation or other transaction not occurred.

Section 10.2Rights and Duties of Successor Corporation.

In case of any such merger, consolidation, share exchange, sale, assignment, transfer, lease or conveyance and upon any such assumption by a successor corporation in accordance with Section 10.1, such successor entity shall succeed to and be substituted for the Company with the same effect as if it had been named herein as the Company.  Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of the Company, any or all of the Certificates evidencing MCAPS issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Stock Purchase Contract

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Agent; and, upon the order of such successor corporation, instead of the Company, and subject to all the terms, conditions and limitations in this Agreement prescribed, the Stock Purchase Contract Agent shall authenticate and execute on behalf of the Holders and deliver any Certificates which previously shall have been signed and delivered by the officers of the Company to the Stock Purchase Contract Agent for authentication and execution, and any Certificate evidencing MCAPS which such successor corporation thereafter shall cause to be signed and delivered to the Stock Purchase Contract Agent or that purpose.  All the Certificates issued shall in all respects have the same legal rank and benefit under this Agreement as the Certificates theretofore or thereafter issued in accordance with the terms of this Agreement as though all of such Certificates had been issued at the date of the execution hereof.

In case of any such merger, consolidation, share exchange, sale, assignment, transfer, lease or conveyance, such change in phraseology and form (but not in substance) may be made in the Certificates evidencing MCAPS thereafter to be issued as may be appropriate.

Section 10.3Officers’ Certificate and Opinion of Counsel Given to Stock Purchase Contract Agent.

The Stock Purchase Contract Agent, subject to Section 8.1 and Section 8.3, shall receive an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any such merger, consolidation, share exchange, sale, assignment, transfer, lease or conveyance, and any such assumption, complies with the provisions of this Article X and that all conditions precedent to the consummation of any such merger, consolidation, share exchange, sale, assignment, transfer, lease or conveyance have been met.

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ARTICLE XI

COVENANTS

Section 11.1Performance under Stock Purchase Contracts.

The Company covenants and agrees for the benefit of the Holders from time to time of the MCAPS that it will duly and punctually perform its obligations under the Stock Purchase Contracts in accordance with the terms of the Stock Purchase Contracts and this Agreement.

Section 11.2Maintenance of Office or Agency.

The Company will maintain in the Borough of Manhattan, New York City an office or agency where Certificates may be presented or surrendered for acquisition of Depositary Shares upon settlement of the Stock Purchase Contracts on the Stock Purchase Date and for transfer of Collateral upon occurrence of a Termination Event, where Certificates may be surrendered for registration of transfer or exchange, for a Collateral Substitution or recreation of Normal MCAPS and where notices and demands to or upon the Company in respect of the MCAPS and this Agreement may be served.  The Company will give prompt written notice to the Stock Purchase Contract Agent of the location, and any change in the location, of such office or agency.  The Company initially designates the Corporate Trust Office of the Stock Purchase Contract Agent as such office of the Company.  If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Stock Purchase Contract Agent with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Company hereby appoints the Stock Purchase Contract Agent as its agent to receive all such presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more other offices or agencies where Certificates may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, New York City for such purposes.  The Company will give prompt written notice to the Stock Purchase Contract Agent of any such designation or rescission and of any change in the location of any such other office or agency.  The Company hereby designates as the place of payment for the MCAPS the Corporate Trust Office and appoints the Stock Purchase Contract Agent at its Corporate Trust Office as paying agent in such city.

Section 11.3Company to Reserve Preferred Stock.

The Company shall at all times prior to the Stock Purchase Date reserve and keep available, free from preemptive rights, out of its authorized but unissued Preferred Stock the full number of shares of Preferred Stock issuable against tender of payment for the Depositary Shares in respect of all Stock Purchase Contracts constituting a part of the MCAPS evidenced by Outstanding Certificates.

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Section 11.4Covenants as to the Remarketing

The Company will (1) cooperate with the Remarketing Agent to the full extent, (2) comply with all necessary governmental and regulatory requirements and (3) receive all necessary governmental and third party consents and approvals in connection with the Remarketing.

The Company shall use its commercially reasonable efforts to effect the Remarketing of the Trust Preferred securities as contemplated by the Remarketing Agreement.

Section 11.5Covenants as to Preferred Stock and Depositary Shares.

The Company covenants that all shares of Preferred Stock and Depositary Shares that may be issued against tender of payment for the Depositary Shares in respect of any Stock Purchase Contract constituting a part of the Outstanding MCAPS will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable.

Section 11.6Statements of Officers of the Company as to Default.

The Company will deliver to the Stock Purchase Contract Agent, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers’ Certificate, stating whether or not to the knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions hereof, and if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge.

Section 11.7ERISA.

Each Holder from time to time of the MCAPS hereby represents and warrants for the entire time it holds any interest in an MCAPS or a Trust Preferred Security, as the case may be, that either (i) no portion of the assets used by such Holder to acquire or hold the MCAPS or any Trust Preferred Security constitutes assets of any Plan or (ii) the purchase, holding and disposition of the MCAPS or Trust Preferred Security by such Holder will not constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or similar violation under any applicable Similar Laws.

Section 11.8Tax Treatment.

(a)The Company covenants and agrees, each Holder of MCAPS agrees, by acceptance of MCAPS, and each Beneficial Owner agrees, by acceptance of a beneficial interest in MCAPS, for United States federal, state and local income and franchise tax purposes, (i) to treat a Holder’s acquisition of the Normal MCAPS as the acquisition of the Trust Preferred Securities and Stock Purchase Contract constituting the Normal MCAPS and Treasury MCAPS as a unit consisting of Qualifying Treasury Securities and a Stock Purchase Contract and to treat each Holder as the owner of the applicable interest in the Collateral Account, including the Trust Preferred Securities or the Qualifying Treasury Securities, (ii) the Debentures as indebtedness of the Company, and (iii) the fair market value of each $1,000 Initial Liquidation Amount of Trust

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Preferred Securities included in Normal MCAPS as $1,000 and the fair market value of each Stock Purchase Contract as $0.

* * * *

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

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

LEHMAN BROTHERS HOLDINGS INC.
By:	/s/ Barrett S. DiPaolo
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
as Stock Purchase Contract Agent
By:	/s/ Earl Dennison
Name:
Title:

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EXHIBIT A

(FORM OF FACE OF NORMAL MCAPS CERTIFICATE)

{For inclusion in Global Certificates only – THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE STOCK PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO., AS THE NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE “DEPOSITARY”), THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE STOCK PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE 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 CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY 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 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.}

No.	CUSIP No.
Number of Normal MCAPS:

LEHMAN BROTHERS HOLDINGS INC.
Normal MCAPS

This Normal MCAPS Certificate certifies that {Cede & Co.} is the registered Holder of the number of Normal MCAPS set forth above {for inclusion in Global Certificates only - or such other number of Normal MCAPS reflected in the Schedule of Increases or Decreases in the Global Certificate attached hereto}. Each Normal MCAPS consists of (i) one trust preferred security (the “Trust Preferred Security”) of Lehman Brothers Holdings Capital Trust VII, a Delaware statutory trust (the “Trust”), subject to the Pledge of such Trust Preferred Security by such Holder pursuant to the Collateral Agreement, and (ii) the rights and obligations of the Holder under one Stock Purchase Contract with Lehman Brothers Holdings Inc. (the “Company”). All capitalized terms used herein which are defined in the Stock Purchase Contract Agreement (as defined on the reverse hereof) have the meaning set forth therein.

Pursuant to the Collateral Agreement, the Trust Preferred Security, constituting part of each Normal MCAPS evidenced hereby has been pledged to the Collateral Agent, for the benefit of the Company, to secure the obligations of the Holder under the Stock Purchase Contract comprising part of such Normal MCAPS.

The Collateral Agreement provides that all distributions on any Pledged Trust Preferred Securities constituting part of the Normal MCAPS received by the Securities Intermediary shall be paid by wire transfer in same day funds (i) in the case of (A) distributions on Pledged Trust Preferred Securities to the Stock Purchase Contract Agent to the account designated by the Stock Purchase Contract Agent, no later than 2:00 p.m., New York City time, on the Business Day such payment is received by the Securities Intermediary (provided that in the event such payment is received by the Securities Intermediary on a day that is not a Business Day or after 12:30 p.m., New York City time, on a Business Day, then such payment shall be made no later than 10:30 a.m., New York City time, on the next succeeding Business Day) and (ii) in the case of payments with respect to the liquidation amount of the Pledged Trust Preferred Securities (in connection with a Remarketing or otherwise), to the Company in accordance with the terms of the Collateral Agreement, in full satisfaction of the respective obligations of the Holders of the Normal MCAPS of which such Pledged Trust Preferred Securities are a part under the Stock Purchase Contracts forming a part of such Normal MCAPS. Distributions on the Trust Preferred Securities forming part of a Normal MCAPS evidenced hereby, which are payable semiannually on May 31 and November 30 each year, commencing November 30, 2007 (each, a “Payment Date”), shall, subject to receipt thereof by the Stock Purchase Contract Agent from the Securities Intermediary, be paid to the Person in whose name this Normal MCAPS Certificate (or a Predecessor Normal MCAPS Certificate) is registered at the close of business on the Record Date for such Payment Date.

Each Stock Purchase Contract evidenced hereby obligates the Holder of this Normal MCAPS Certificate to purchase, and the Company to sell, on the Stock Purchase Date, at a price equal to $1,000 (the “Purchase Price”), one depositary share (“Depositary Share”), representing 1/100^th of a share of the Non-Cumulative Perpetual Preferred Stock, Series H, $100,000 liquidation preference per share (the “Preferred Stock”), of the Company, unless on or prior to the Stock Purchase Date there shall have occurred a Termination Event with respect to such Stock Purchase Contract, all as provided in the Stock Purchase Contract Agreement and more fully described on the reverse hereof. The purchase price (the “Purchase Price”) for the Depositary Share purchased pursuant to each Stock Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the Stock Purchase Date by application of payment received in respect of the liquidation amount with respect to the Pledged Trust Preferred Security pursuant to the Remarketing pledged to secure the obligations under such Stock Purchase Contract of the Holder of the Normal MCAPS of which such Stock Purchase Contract is a part.

Each Holder of MCAPS agrees, by acceptance of MCAPS, and each Beneficial Owner agrees, by acceptance of a beneficial interest in MCAPS, for United States federal, state and local income and franchise tax purposes, (i) to treat a Holder’s acquisition of the Normal MCAPS as the acquisition of the Trust Preferred Securities and Stock Purchase Contract constituting the Normal MCAPS and Treasury MCAPS as a unit consisting of Qualifying Treasury Securities and a Stock Purchase Contract and to treat each Holder as the owner of the applicable interest in the Collateral Account, including the Trust Preferred Securities or the

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Qualifying Treasury Securities, (ii) the Debentures as indebtedness of the Company, and (iii) the fair market value of each $1,000 Initial Liquidation Amount of Trust Preferred Securities included in Normal MCAPS as $1,000 and the fair market value of each Stock Purchase Contract as $0.

The Company shall pay, on each Payment Date, in respect of each Stock Purchase Contract forming part of a Normal MCAPS evidenced hereby, an amount (the “Contract Payments”) equal to 0.15% per year of the Stated Amount, subject to its rights provided for in the Stock Purchase Contract Agreement to defer Contract Payments. Such Contract Payments shall be payable to the Person in whose name this Normal MCAPS Certificate is registered at the close of business on the Record Date for such Payment Date.

Distributions on the Trust Preferred Securities and the Contract Payments will be payable at the office of the Stock Purchase Contract Agent in New York City. If the book-entry system for the Normal MCAPS has been terminated, the Contract Payments will be payable, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person’s address as it appears on the Security Register, or by wire transfer to the account designated by such Person by a prior written notice to the Stock Purchase Contract Agent.

Reference is hereby made to the further provisions set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Stock Purchase Contract Agent by manual signature, this Normal MCAPS Certificate shall not be entitled to any benefit under the Collateral Agreement or the Stock Purchase Contract Agreement or be valid or obligatory for any purpose.

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IN WITNESS WHEREOF, the Company and the Holder specified above have caused this instrument to be duly executed.

	LEHMAN BROTHERS HOLDINGS INC.
	By:
	Name:
	Title:
	HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Stock Purchase Contracts)
	U.S. BANK NATIONAL ASSOCIATION, not individually but solely as attorney-in-fact of such Holder as Stock Purchase Contract Agent
	By:
	Name:
	Title:
Date:

CERTIFICATE OF AUTHENTICATION
OF STOCK PURCHASE CONTRACT AGENT

This is one of the Normal MCAPS Certificates referred to in the within mentioned Stock Purchase Contract Agreement.

	By:	U.S. BANK NATIONAL ASSOCIATION, as Stock Purchase Contract Agent
	By:
	Name:
	Title:
Date:

(FORM OF REVERSE OF NORMAL MCAPS CERTIFICATE)

Each Stock Purchase Contract evidenced hereby is governed by a Stock Purchase Contract Agreement, dated as of May 17, 2007 (as may be supplemented from time to time, the “Stock Purchase Contract Agreement”), between the Company and U.S. Bank National Association, as Stock Purchase Contract Agent (including its successors hereunder, the “Stock Purchase Contract Agent”), to which Stock Purchase Contract Agreement and supplemental agreements thereto reference, is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Stock Purchase Contract Agent, the Company, and the Holders and of the terms upon which the Normal MCAPS Certificates are, and are to be, executed and delivered.

Each Stock Purchase Contract evidenced hereby obligates the Holder of this Normal MCAPS Certificate to purchase, and the Company to sell, on the Stock Purchase Date at a price equal to $1,000 (the “Purchase Price”), one depositary share (“Depositary Share”) of the Company, representing 1/100^th of a share of the Non-Cumulative Perpetual Preferred Stock, Series H, $100,000 liquidation preference per share (the “Preferred Stock”), of the Company, unless on or prior to the Stock Purchase Date there shall have occurred a Termination Event with respect to the MCAPS of which such Stock Purchase Contract is a part shall have occurred.

In accordance with the terms of the Stock Purchase Contract Agreement, the Holder of this Normal MCAPS Certificate may pay the Purchase Price for the Depositary Share purchased pursuant to each Stock Purchase Contract evidenced hereby by effecting a Settlement with Qualifying Treasury Securities or from the proceeds of or from a Remarketing of the related Pledged Trust Preferred Securities. A Holder of Normal MCAPS who does not, on or prior to 5:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of any Remarketing Period, notify the Stock Purchase Contract Agent of its intention to effect a Settlement with Qualifying Treasury Securities, or who does so notify the Stock Purchase Contract Agent but fails to make an effective Settlement with Qualifying Treasury Securities on or prior to 5:00 p.m. (New York City time) on the first Business Day immediately preceding the beginning of any Remarketing Period shall pay the Purchase Price for the Depositary Share to be delivered under the related Stock Purchase Contract from the proceeds of the sale of the related Pledged Trust Preferred Securities held by the Collateral Agent in the Remarketing. Such sale will be made by the Remarketing Agent pursuant to the terms of the Remarketing Agreement on the applicable Remarketing Date.

Upon the occurrence of a final Failed Remarketing, the Collateral Agent, for the benefit of the Company, will exercise its rights as a secured party with respect to the Pledged Trust Preferred Securities underlying the Normal MCAPS, and may, among other things, (A) retain such Trust Preferred Securities in full satisfaction of the Holders’ obligations under the Stock Purchase Contracts or (B) sell such Trust Preferred Securities in one or more public or private sales or otherwise. In the event of a Failed Remarketing, the Company will issue a note, payable on the later of June 2, 2014 and five years after the first Payment Date on which any Deferred Contract Payments were payable and bearing interest at the rate of 5.707% per annum, in the amount of any accrued and unpaid interest on the Debentures underlying such Pledged Trust Preferred Securities as of the Stock Purchase Date, to the Stock Purchase Contract Agent for delivery to the Holders of such Trust Preferred Securities.

The Stock Purchase Contract Agent will be entitled to exercise the voting and any other consensual rights pertaining to the Pledged Trust Preferred Securities, but only to the extent instructed in writing by the Holders. Upon receipt of notice of any meeting at which holders of Trust Preferred Securities are entitled to vote or upon any solicitation of consents, waivers or proxies of holders of Trust Preferred Securities, the Stock Purchase Contract Agent shall, as soon as practicable thereafter, mail, first class, postage pre-paid, to the Normal MCAPS Holders a notice:

(1)containing such information as is contained in the notice or solicitation;

(2)stating that each Holder on the Record Date set by the Stock Purchase Contract Agent therefor (which, to the extent possible, shall be the same date as the record date for determining the holders of Trust Preferred Securities, as the case may be, entitled to vote) shall be entitled to instruct the Stock Purchase Contract Agent as to the exercise of the voting rights pertaining to the Trust Preferred Securities underlying such Holder’s Normal MCAPS; and

(3)stating the manner in which such instructions may be given.

Upon the written request of the Normal MCAPS Holders on such Record Date received by the Stock Purchase Contract Agent at least six days prior to such meeting, the Stock Purchase Contract Agent shall endeavor insofar as practicable to vote or cause to be voted, in accordance with the instructions set forth in such requests, the maximum aggregate liquidation amount of Trust Preferred Securities, as the case may be, as to which any particular voting instructions are received. In the absence of specific instructions from the Holder of a Normal MCAPS, the Stock Purchase Contract Agent shall abstain from voting the Trust Preferred Securities evidenced by such Normal MCAPS. The Company hereby agrees, if applicable, to solicit Holders of Normal MCAPS to timely instruct the Stock Purchase Contract Agent in order to enable the Stock Purchase Contract Agent to vote the Trust Preferred Securities. The Holders of Normal MCAPS shall have no voting or other rights in respect of the Depositary Shares or the Preferred Stock.

Upon the occurrence of a Successful Remarketing, the Collateral Agent shall, in accordance with the Collateral Agreement, cause the Securities Intermediary to transfer the Pledged Trust Preferred Securities upon confirmation of deposit by the Remarketing Agent of the proceeds of such Successful Remarketing in the Collateral Account. The Remarketing Agent will deduct a remarketing fee in accordance with the terms of the Remarketing Agreement. With respect to Pledged Trust Preferred Securities upon a Successful Remarketing, any proceeds of the Remarketing in excess of the aggregate Purchase Price applicable to the related Normal MCAPS plus the portion of the Remarketing Fee attributable to such Pledged Trust Preferred Securities will be remitted to the Stock Purchase Contract Agent for payment to the Holders of the related Normal MCAPS.

The Normal MCAPS Certificates are issuable only in registered form and only in denominations of a single Normal MCAPS and any integral multiple thereof. The transfer of any Normal MCAPS Certificate will be registered and Normal MCAPS Certificates may be exchanged as provided in the Stock Purchase Contract Agreement. The Security Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer

documents permitted by the Stock Purchase Contract Agreement. No service charge shall be required for any such registration of transfer or exchange, but the Company and the Stock Purchase Contract Agent may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Except as provided in the Stock Purchase Contract Agreement, for so long as the Stock Purchase Contract underlying a Normal MCAPS remains in effect, such Normal MCAPS shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Normal MCAPS in respect of the Trust Preferred Security and Stock Purchase Contract constituting such Normal MCAPS may be transferred and exchanged only as a Normal MCAPS.

Subject to the conditions set forth in the Stock Purchase Contract Agreement, a Holder may, at any time on or prior to 5:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of any Remarketing Period, effect a Collateral Substitution and separate the Pledged Trust Preferred Securities from the related Stock Purchase Contracts in respect of all or a portion of such Holder’s Normal MCAPS by substituting for such Pledged Trust Preferred Securities, Qualifying Treasury Securities or portions thereof in an aggregate liquidation amount at maturity equal to the aggregate liquidation amount of such Pledged Trust Preferred Securities.

The Company shall pay, on each Payment Date, the Contract Payments payable in respect of each Stock Purchase Contract to the Person in whose name the Normal MCAPS Certificate evidencing such Stock Purchase Contract is registered at the close of business on the Record Date for such Payment Date. Contract Payments will be payable at the office of the Stock Purchase Contract Agent in New York City. If the book-entry system for the Normal MCAPS has been terminated, the Contract Payments will be payable, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person’s address as it appears on the Security Register, or by wire transfer to the account designated by such Person by a prior written notice to the Stock Purchase Contract Agent.

The Company shall have the right, at any time prior to the Stock Purchase Date, to defer the payment of any or all of the Contract Payments otherwise payable on any Payment Date, but only if the Company shall give the Holders and the Stock Purchase Contract Agent written notice of its election to defer each such deferred Contract Payment pursuant to Section 6.7 of the Stock Purchase Contract Agreement. Any Contract Payments so deferred shall, to the extent permitted by law, accrue interest thereon at the rate of 5.707% per year (computed on the basis of a 360-day year of twelve 30-day months), compounding on each succeeding Payment Date, until paid in full (such deferred installments of Contract Payments, if any, together with the additional Contract Payments, if any, accrued thereon, being referred to herein as the “Deferred Contract Payments”). Deferred Contract Payments, if any, shall be due on the next succeeding Payment Date except to the extent that payment is deferred pursuant to the Section 6.7 of the Stock Purchase Contract Agreement. No Contract Payments may be deferred to a date that is after the Stock Purchase Date and no such deferral period may end other than on a Payment Date. If the Stock Purchase Contracts are terminated upon the occurrence of a Termination Event, the Holder’s right to receive Contract Payments, if any, and any Deferred Contract Payments, will terminate.

The Stock Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights of the Holders to receive and the obligation of the Company to pay any Contract Payments, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Stock Purchase Contract Agent or the Company, if, on or prior to the Stock Purchase Date, a Termination Event shall have occurred. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Stock Purchase Contract Agent, the Collateral Agent and the Holders, at their addresses as they appear in the Securities Register. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Pledged Trust Preferred Securities from the Pledge in accordance with the provisions of the Collateral Agreement. A Normal MCAPS shall thereafter represent the right to receive the Trust Preferred Security forming a part of such Normal MCAPS in accordance with the terms of, and except as set forth in, the Stock Purchase Contract Agreement and the Collateral Agreement.

Upon registration of transfer of this Normal MCAPS Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee, except as may be required by the Stock Purchase Contract Agent pursuant to the Stock Purchase Contract Agreement), under the terms of the Stock Purchase Contract Agreement and the Stock Purchase Contracts evidenced hereby and the transferor shall be released from the obligations under the Stock Purchase Contracts evidenced by this Normal MCAPS Certificate. The Company covenants and agrees, and the Holder, by its acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph.

The Holder of this Normal MCAPS Certificate, by its acceptance hereof, irrevocably authorizes the Stock Purchase Contract Agent to enter into and perform the related Stock Purchase Contracts forming part of the Normal MCAPS evidenced hereby on its behalf as its attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Stock Purchase Contracts by the Company or its trustee in the event that the Company becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform its obligations under such Stock Purchase Contracts, consents to the provisions of the Stock Purchase Contract Agreement, irrevocably authorizes the Stock Purchase Contract Agent to enter into and perform the Stock Purchase Contract Agreement and the Collateral Agreement on its behalf as its attorney-in-fact, and consents to, and agrees to be bound by, the Pledge of such Holder’s right, title and interest in and to the Collateral Account, including the Trust Preferred Security underlying this Normal MCAPS Certificate pursuant to the Collateral Agreement. The Holder further covenants and agrees that, to the extent and in the manner provided in the Stock Purchase Contract Agreement and the Collateral Agreement, but subject to the terms thereof, payments with respect to the aggregate liquidation amount of the Pledged Trust Preferred Securities on the Stock Purchase Date shall be paid by the Collateral Agent to the Company in satisfaction of such Holder’s obligations under such Stock Purchase Contract and such Holder shall acquire no right, title or interest in such payments.

Subject to certain exceptions, the provisions of the Stock Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the Stock Purchase Contracts.

The Stock Purchase Contracts shall be governed by, and construed in accordance with, the laws of the State of New York.

Prior to due presentment of this Certificate for registration of transfer, the Company, the Stock Purchase Contract Agent and its Affiliates and any agent of the Company or the Stock Purchase Contract Agent may treat the Person in whose name this Normal MCAPS Certificate is registered as the owner of the Normal MCAPS evidenced hereby for the purpose of receiving distributions payable on the Trust Preferred Security, receiving payments of Contract Payments (subject to any applicable record date), performance of the Stock Purchase Contracts and for all other purposes whatsoever, whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Stock Purchase Contract Agent nor any such agent shall be affected by notice to the contrary.

The Stock Purchase Contracts shall not, prior to the settlement thereof, entitle the Holder to any of the rights of a holder of depositary shares and the Preferred Stock.

A copy of the Stock Purchase Contract Agreement is available for inspection at the offices of the Stock Purchase Contract Agent.

ABBREVIATIONS

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

TEN COM:	as tenants in common
UNIF GIFT MIN ACT:	Custodian                  (cust)(minor) Under Uniform Gifts to Minors Act of
TENANT:	as tenants by the entireties
JT TEN:	as joint tenants with right of survivorship and not as tenants in common

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

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

(Please insert Social Security or Taxpayer I.D.
or other Identifying Number of Assignee)

(Please print or type name and address including Postal Zip code of Assignee)

the within Normal MCAPS Certificates and all rights thereunder, hereby irrevocably constituting and appointing attorney        , to transfer said Normal MCAPS Certificates on the books of Lehman Brothers Holdings Inc., with full power of substitution in the premises.

Dated:	Signature
	NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Normal MCAPS Certificates in every particular, without alteration or enlargement or any change whatsoever.

Signature Guarantee:

SETTLEMENT INSTRUCTIONS

The undersigned Holder directs that a certificate for a depositary share deliverable upon settlement on or after the Stock Purchase Date of the Stock Purchase Contracts underlying the number of Normal MCAPS evidenced by this Normal MCAPS Certificate be registered in the name of, and delivered, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto.

Dated:
	Signature
	Signature Guarantee:
	(if assigned to another person)
If shares are to be registered in the name of and delivered to a Person other than the Holder, please (i) print such Person’s name and address and (ii) provide a guarantee of your signature:	REGISTERED HOLDER Please print name and address of Registered Holder:
Name	Name
Address	Address
Social Security or other Taxpayer Identification Number, if any

{TO BE ATTACHED TO GLOBAL CERTIFICATES}

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE

The following increases or decreases in this Global Certificate have been made:

Dat-e Amount of
increase in
Number of
Normal MCAPS
evidenced by the
Global Certificate Amount of
decrease in
Number of
Normal MCAPS
evidenced by the
Global Certificate Number of
Normal MCAPS
evidenced by this
Global Certificate
following such
decrease or
increase Signature of
authorized
signatory of Stock
Purchase Contract
Agent

EXHIBIT B

(FORM OF FACE OF TREASURY MCAPS CERTIFICATE)

{For inclusion in Global Certificate only - THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE STOCK PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE “DEPOSITARY”), THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE 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 CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY 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 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.}

No.	CUSIP No.
Number of Treasury MCAPS:

LEHMAN BROTHERS HOLDINGS INC.
Treasury MCAPS

This Treasury MCAPS Certificate certifies that {Cede & Co.} is the registered Holder of the number of Treasury MCAPS set forth above {for inclusion in Global Certificates only – or such other number of Treasury MCAPS reflected in the Schedule of Increases or Decreases in the Global Certificate attached hereto}. Each Treasury MCAPS consists of (i) a Qualifying Treasury Security having a principal amount at maturity equal to $1,000, subject to the Pledge of such Qualifying Treasury Security by such Holder pursuant to the Collateral Agreement, and (ii) the rights and obligations of the Holder under one Stock Purchase Contract with Lehman Brothers Holdings Inc., a Delaware corporation (the “Company”). All capitalized terms used herein which are defined in the Stock Purchase Contract Agreement (as defined on the reverse hereof) have the meaning set forth therein.

Pursuant to the Collateral Agreement, the Qualifying Treasury Security constituting part of each Treasury MCAPS evidenced hereby have been pledged to the Collateral Agent, for the benefit of the Company, to secure the obligations of the Holder under the Stock Purchase Contract comprising part of such Treasury MCAPS.

Each Stock Purchase Contract evidenced hereby obligates the Holder of this Treasury MCAPS Certificate to purchase, and the Company to sell, on the Stock Purchase Date, at a price equal to $1,000 (the “Purchase Price”), one depositary share (“Depositary Share”), representing 1/100^th of a share of the Non-Cumulative Perpetual Preferred Stock, Series H, $100,000 liquidation preference per share (the “Preferred Stock”), of the Company, unless on or prior to the Stock Purchase Date there shall have occurred a Termination Event with respect to such Stock Purchase Contract, all as provided in the Stock Purchase Contract Agreement and more fully described on the reverse hereof. The Purchase Price for a Depositary Share purchased pursuant to each Stock Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the Stock Purchase Date by application of the proceeds from the Qualifying Treasury Securities at maturity pledged to secure the obligations of the Holder under such Stock Purchase Contract of the Treasury MCAPS of which such Stock Purchase Contract is a part.

Each Holder of MCAPS agrees, by acceptance of MCAPS, and each Beneficial Owner agrees, by acceptance of a beneficial interest in MCAPS, for United States federal, state and local income and franchise tax purposes, (i) to treat a Holder’s acquisition of the Normal MCAPS as the acquisition of the Trust Preferred Securities and Stock Purchase Contract constituting the Normal MCAPS and Treasury MCAPS as a unit consisting of Qualifying Treasury Securities and a Stock Purchase Contract and to treat each Holder as the owner of the applicable interest in the Collateral Account, including the Trust Preferred Securities or the Qualifying Treasury Securities, (ii) the Debentures as indebtedness of the Company, and (iii) the fair market value of each $1,000 Initial Liquidation Amount of Trust Preferred Securities included in Normal MCAPS as $1,000 and the fair market value of each Stock Purchase Contract as $0.

The Company shall pay, on each Payment Date, in respect of each Stock Purchase Contract forming part of a Treasury MCAPS evidenced hereby, an amount (the “Contract Payments”) equal to 0.15% per year of the Stated Amount, subject to its rights provided for in the Stock Purchase Contract Agreement to defer Contract Payments. Such Contract Payments shall be payable to the Person in whose name this Treasury MCAPS Certificate is registered at the close of business on the Record Date for such Payment Date.

Contract Payments will be payable at the office of the Stock Purchase Contract Agent in New York City. If the book-entry system for the Treasury MCAPS has been terminated, the Contract Payments will be payable, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person’s address as it appears on the Security Register, or by wire transfer to the account designated by such Person by a prior written notice to the Stock Purchase Contract Agent.

Reference is hereby made to the further provisions set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

B-2

Unless the certificate of authentication hereon has been executed by the Stock Purchase Contract Agent by manual signature, this Treasury MCAPS Certificate shall not be entitled to any benefit under the Collateral Agreement or the Stock Purchase Contract Agreement or be valid or obligatory for any purpose.

B-3

IN WITNESS WHEREOF, the Company and the Holder specified above have caused this instrument to be duly executed.

	LEHMAN BROTHERS HOLDINGS INC.
	By:
	Name:
	Title:
	HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Stock Purchase Contracts)
	By:	U.S. BANK NATIONAL ASSOCIATION, not individually but solely as attorney-in-fact of such Holder as Stock Purchase Contract Agent
	By:
	Name:
	Title:
Date:

B-4

CERTIFICATE OF AUTHENTICATION OF
STOCK PURCHASE CONTRACT AGENT

This is one of the Treasury MCAPS referred to in the within-mentioned Stock Purchase Contract Agreement.

	U.S. BANK NATIONAL ASSOCIATION, as Stock Purchase Contract Agent
	By:
	Name:
	Title:
Date:

B-5

(FORM OF REVERSE OF TREASURY MCAPS CERTIFICATE)

Each Stock Purchase Contract evidenced hereby is governed by a Stock Purchase Contract Agreement, dated as of May 17, 2007 (as may be supplemented from time to time, the “Stock Purchase Contract Agreement”) between the Company and U.S. Bank National Association, as Stock Purchase Contract Agent (including its successors thereunder, herein called the “Stock Purchase Contract Agent”), to which the Stock Purchase Contract Agreement and supplemental agreements thereto reference, is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Stock Purchase Contract Agent, the Company and the Holders and of the terms upon which the Treasury MCAPS Certificates are, and are to be, executed and delivered.

Each Stock Purchase Contract evidenced hereby obligates the Holder of this Treasury MCAPS Certificate to purchase, and the Company to sell, on the Stock Purchase Date, at a price equal to $1,000 (the “Purchase Price”), one depositary share (“Depositary Share”), representing 1/100^th of a share of the Non-Cumulative Perpetual Preferred Stock, Series H, $100,000 liquidation preference per share (the “Preferred Stock”), of the Company, unless on or prior to the Stock Purchase Date there shall have occurred a Termination Event with respect to the MCAPS of which such Stock Purchase Contract is a part shall have occurred.

In accordance with the terms of the Stock Purchase Contract Agreement, the Holder of this Treasury MCAPS shall pay the Purchase Price for a Depositary Share purchased pursuant to each Stock Purchase Contract evidenced hereby either by effecting a Settlement with Treasury Securities of each such Stock Purchase Contract on or prior to 5:00 p.m. (New York City time) on the second Business Day prior to the Stock Purchase Date, or by applying a principal amount of the Pledged Treasury Security underlying such Holder’s Treasury MCAPS equal to the Stated Amount of such Stock Purchase Contract to the purchase of the Depositary Share.

The Company shall not be obligated to issue a depositary share in respect of a Stock Purchase Contract or deliver any certificates therefor to the Holder unless it shall have received payment of the aggregate purchase price for the depositary share to be purchased thereunder in the manner set forth in the Stock Purchase Contract Agreement.

The Treasury MCAPS Certificates are issuable only in registered form and only in denominations of a single Treasury MCAPS and any integral multiple thereof. The transfer of any Treasury MCAPS Certificate will be registered and Treasury MCAPS Certificates may be exchanged as provided in the Stock Purchase Contract Agreement. The Security Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents permitted by the Stock Purchase Contract Agreement. No service charge shall be required for any such registration of transfer or exchange, but the Company and the Stock Purchase Contract Agent may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Except as provided in the Stock Purchase Contract Agreement, for so long as the Stock Purchase Contract underlying a Treasury MCAPS remains in effect, such Treasury MCAPS shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Treasury MCAPS in respect of the Qualifying Treasury Security and the Stock Purchase Contract constituting such Treasury MCAPS may be transferred and exchanged only as a Treasury MCAPS.

B-6

Subject to the conditions set forth in the Stock Purchase Contract Agreement, a Holder of Treasury MCAPS may recreate, at any time on or prior to 5:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of any Remarketing Period, Normal MCAPS by delivering to the Securities Intermediary Trust Preferred Securities with an aggregate liquidation amount equal to the aggregate principal amount at maturity of the Pledged Treasury Securities in exchange for the release of such Pledged Treasury Securities in accordance with the terms of the Stock Purchase Contract Agreement and the Collateral Agreement.

The Company shall pay, on each Payment Date, the Contract Payments payable in respect of each Stock Purchase Contract to the Person in whose name the Treasury MCAPS Certificate evidencing such Stock Purchase Contract is registered at the close of business on the Record Date for such Payment Date. Contract Payments will be payable at the office of the Stock Purchase Contract Agent in New York City. If the book-entry system for the Normal MCAPS has been terminated, the Contract Payments will be payable, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person’s address as it appears on the Security Register, or by wire transfer to the account designated by such Person by a prior written notice to the Stock Purchase Contract Agent.

The Company shall have the right, at any time prior to the Stock Purchase Date, to defer the payment of any or all of the Contract Payments otherwise payable on any Payment Date, but only if the Company shall give the Holders and the Stock Purchase Contract Agent written notice of its election to defer each such deferred Contract Payment pursuant to Section 6.7 of the Stock Purchase Contract Agreement. Any Contract Payments so deferred shall, to the extent permitted by law, accrue interest thereon at the rate of 5.707% per year (computed on the basis of a 360-day year of twelve 30-day months), compounding on each succeeding Payment Date, until paid in full (such deferred installments of Contract Payments, if any, together with the additional Contract Payments, if any, accrued thereon, being referred to herein as the “Deferred Contract Payments”). Deferred Contract Payments, if any, shall be due on the next succeeding Payment Date except to the extent that payment is deferred pursuant to the Section 6.7 of the Stock Purchase Contract Agreement. No Contract Payments may be deferred to a date that is after the Stock Purchase Date and no such deferral period may end other than on a Payment Date. If the Stock Purchase Contracts are terminated upon the occurrence of a Termination Event, the Holder’s right to receive Contract Payments, if any, and any Deferred Contract Payments, will terminate.

The Stock Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights of the Holders to receive and the obligation of the Company to pay any Contract Payments, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Stock Purchase Contract Agent or the Company, if, on or prior to the Stock Purchase Date, a Termination Event shall have occurred. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Stock Purchase Contract Agent, the Collateral Agent and the Holders, at their addresses as they appear in the Security Register. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Pledged Treasury Securities (as defined in the Collateral Agreement) in accordance with the provisions of the Collateral Agreement. A Treasury MCAPS shall thereafter represent the right to receive the interest in the Qualifying Treasury Security forming a part of

B-7

such Treasury MCAPS, in accordance with the terms of and except as set forth in, the Stock Purchase Contract Agreement and the Collateral Agreement.

Upon registration of transfer of this Treasury MCAPS Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee, except as may be required by the Stock Purchase Contract Agent pursuant to the Stock Purchase Contract Agreement), under the terms of the Stock Purchase Contract Agreement and the Stock Purchase Contracts evidenced hereby and the transferor shall be released from the obligations under the Stock Purchase Contracts evidenced by this Treasury MCAPS Certificate. The Company covenants and agrees, and the Holder, by its acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph.

The Holder of this Treasury MCAPS Certificate, by its acceptance hereof, authorizes the Stock Purchase Contract Agent to enter into and perform the related Stock Purchase Contracts forming part of the Treasury MCAPS evidenced hereby on its behalf as its attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Stock Purchase Contracts by the Company or its trustee in the event that the Company becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform its obligations under such Stock Purchase Contracts, consents to the provisions of the Stock Purchase Contract Agreement, authorizes the Stock Purchase Contract Agent to enter into and perform the Stock Purchase Contract Agreement and the Collateral Agreement on its behalf as its attorney-in-fact, and consents to the Pledge of the Qualifying Treasury Securities underlying this Treasury MCAPS Certificate pursuant to the Collateral Agreement. The Holder further covenants and agrees, that, to the extent and in the manner provided in the Stock Purchase Contract Agreement and the Collateral Agreement, but subject to the terms thereof, payments in respect to the aggregate principal amount of the Pledged Treasury Securities on the Stock Purchase Date shall be paid by the Collateral Agent to the Company in satisfaction of such Holder’s obligations under such Stock Purchase Contract and such Holder shall acquire no right, title or interest in such payments.

Subject to certain exceptions, the provisions of the Stock Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the Stock Purchase Contracts.

The Stock Purchase Contracts shall for all purposes be governed by, and construed in accordance with, the laws of the State of New York.

Prior to due presentment of this Certificate for registration or transfer, the Company, the Stock Purchase Contract Agent and its Affiliates and any agent of the Company or the Stock Purchase Contract Agent may treat the Person in whose name this Treasury MCAPS Certificate is registered as the owner of the Treasury MCAPS evidenced hereby for the purpose of receiving payments of interest on the Qualifying Treasury Securities, receiving payments of Contract Payments (subject to any applicable record date), performance of the Stock Purchase Contracts and for all other purposes whatsoever, whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Stock Purchase Contract Agent nor any such agent shall be affected by notice to the contrary.

B-8

The Stock Purchase Contracts shall not, prior to the settlement thereof, entitle the Holder to any of the rights of a holder of depositary shares and the Preferred Stock.

A copy of the Stock Purchase Contract Agreement is available for inspection at the offices of the Stock Purchase Contract Agent.

B-9

ABBREVIATIONS

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

TEN COM:	as tenants in common
	Custodian
UNIF GIFT MIN ACT:	(cust)	(minor)
	Under Uniform Gifts to Minors Act of
TENANT:	as tenants by the entireties
JT TEN:	as joint tenants with right of survivorship and not as tenants in common

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

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

(Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee)

the within Treasury MCAPS Certificates and all rights thereunder, hereby irrevocably constituting and appointing attorney              , to transfer said Treasury MCAPS Certificates on the books of Lehman Brothers Holdings Inc., with full power of substitution in the premises.

Dated:	Signature
	NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Treasury MCAPS Certificates in every particular, without alteration or enlargement or any change whatsoever.

Signature Guarantee:

B-10

SETTLEMENT INSTRUCTIONS

The undersigned Holder directs that a certificate for depositary shares deliverable upon settlement on or after the Stock Purchase Date of the Stock Purchase Contracts underlying the number of Treasury MCAPS evidenced by this Treasury MCAPS Certificate be registered in the name of, and delivered, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto.

Dated:

If shares are to be registered in the name of and delivered to a Person other than the Holder, please (i) print such Person’s name and address and (ii) provide a guarantee of your signature:

Name

Address

Social Security or other Taxpayer
Identification Number, if any

Signature

Signature Guarantee:

(if assigned to another person)

B-11

{TO BE ATTACHED TO GLOBAL CERTIFICATES}

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE

The following increases or decreases in this Global Certificate have been made:

Date Amount of
increase in
Number of
Treasury
MCAPS
evidenced by the
Global Certificate Amount of
decrease in
Number of
Treasury
MCAPS
evidenced by the
Global
Certificate Number of
Treasury
MCAPS
evidenced by this
Global
Certificate
following such
decrease or
increase Signature of
authorized
signatory of
Stock Purchase
Contract Agent

B-12

EXHIBIT C

INSTRUCTION TO STOCK PURCHASE CONTRACT AGENT

The Bank of New York
Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Re: {Creation of Treasury MCAPS} {Recreation of Normal MCAPS} of Lehman Brothers Holdings Inc., a Delaware corporation (the “Company”).

The undersigned Holder hereby notifies you that it has delivered to The Bank of New York as Collateral Agent, for credit to the Collateral Account, $             aggregate [principal] [liquidation] amount of {Treasury Securities}{Trust Preferred Securities} in exchange for the {Pledged Trust Preferred Securities} {Pledged Treasury Securities} held in the Collateral Account, in accordance with the Collateral Agreement, dated as of May 17,  2007 (the “Collateral Agreement”; unless otherwise defined herein, terms defined in the Pledge Agreement are used herein as defined therein), between you, the Company, the Collateral Agent, the Custodial Agent and the Securities Intermediary. The undersigned Holder has paid all applicable fees and expenses relating to such exchange. The undersigned Holder hereby instructs you to instruct the Collateral Agent to release to you on behalf of the undersigned Holder the {Pledged Trust Preferred Securities} {Pledged Treasury Securities} related to such {Normal MCAPS} {Treasury MCAPS}.

Date:
	Signature Guarantee:
Please print name and address of Registered Holder:
Name	Social Security or other Taxpayer Identification Number, if any
Address

EXHIBIT D

NOTICE FROM STOCK PURCHASE CONTRACT AGENT
TO HOLDERS

(Transfer of Collateral upon Occurrence of a Termination Event)

{HOLDER}

Attention:
Telecopy:                

Re:{Normal MCAPS} {Treasury MCAPS} of Lehman Brothers Holdings Inc., a Delaware corporation (the “COMPANY”)

Please refer to the Stock Purchase Contract Agreement, dated as of May 17, 2007 (the “Stock Purchase Contract Agreement”; unless otherwise defined herein, terms defined in the Stock Purchase Contract Agreement are used herein as defined therein), between the Company and the undersigned, as Stock Purchase Contract Agent and as attorney-in-fact for the holders of Normal MCAPS and Treasury MCAPS from time to time.

We hereby notify you that a Termination Event has occurred and that {the Trust Preferred Securities} {the Qualifying Treasury Securities} comprising a portion of your ownership interest in {Normal MCAPS} {Treasury MCAPS} have been released and are being held by us for your account pending receipt of transfer instructions with respect to such {Trust Preferred Securities} {Qualifying Treasury Securities} (the “Released Securities”).

Pursuant to Section 3.15 of the Stock Purchase Contract Agreement, we hereby request written transfer instructions with respect to the Released Securities. Upon receipt of your instructions and upon transfer to us of your {Normal MCAPS]{Treasury MCAPS} effected through book-entry or by delivery to us of your {Normal MCAPS Certificate]{Treasury MCAPS Certificate}, we shall transfer the Released Securities by book-entry transfer or other appropriate procedures, in accordance with your instructions.

In the event you fail to effect such transfer or delivery, the Released Securities and any distributions thereon, shall be held in our name, or a nominee in trust for your benefit, until such time as such {Normal MCAPS}{Treasury MCAPS} are transferred or your {Normal MCAPS Certificate} {Treasury MCAPS Certificate} is surrendered or satisfactory evidence is provided that such {Normal MCAPS Certificate}{Treasury MCAPS Certificate} has been destroyed, lost or stolen, together with any indemnification that we or the Company may require.

Dated:	By: U.S. BANK NATIONAL ASSOCIATION
	By:
	Name:
	Title: Authorized Signatory

EXHIBIT E

NOTICE TO SETTLE BY TREASURY SECURITIES

U.S. BANK NATIONAL ASSOCIATION
The Stock Purchase Contract Agent

One Federal Street, 3^rd Floor

Boston, MA 02110
Attention:  Corporate Trust Services
Facsimile:  617-603-6667

Re:Normal MCAPS of Lehman Brothers Holdings Inc.,
a Delaware corporation (the “Company”)

The undersigned Holder hereby irrevocably notifies you in accordance with Section 6.2(b) of the Stock Purchase Contract Agreement, dated as of May 17, 2007 (the “Stock Purchase Contract Agreement”; unless otherwise defined herein, terms defined in the Stock Purchase Contract Agreement are used herein as defined therein), between the Company and you, as Stock Purchase Contract Agent and as attorney-in-fact for the Holders of the Stock Purchase Contracts, that such Holder has elected to pay to the Securities Intermediary for deposit in the Collateral Account, on or prior to 5:00 p.m. (New York City time) on the first Business Day immediately preceding the beginning of the Remarketing Period (in lawful money of the United States by certified or cashiers’ check or wire transfer, in immediately available funds), $[    ] as the Purchase Price for the depositary shares issuable to such Holder by the Company with respect to Stock Purchase Contracts on the Stock Purchase Date. The undersigned Holder hereby instructs you to notify promptly the Collateral Agent of the undersigned Holders’ election to make such Settlement with Treasury Securities with respect to the Stock Purchase Contracts related to such Holder’s Normal MCAPS.

EXHIBIT F

NOTICE FROM STOCK PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Settlement of Stock Purchase Contract through Remarketing)

The Bank of New York
Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Re:Normal MCAPS of Lehman Brothers Holdings Inc.,
a Delaware corporation (the “Company”)

Please refer to the Stock Purchase Contract Agreement, dated as of May 17, 2007 (the “Stock Purchase Contract Agreement”; unless otherwise defined herein, terms defined in the Stock Purchase Contract Agreement are used herein as defined therein), between the Company and the undersigned, as Stock Purchase Contract Agent and as attorney-in-fact for the Holders of Normal MCAPS from time to time.

In accordance with Section 6.2(b) of the Stock Purchase Contract Agreement and, based on notices of Settlement with Treasury Securities received from Holders of Normal MCAPS as of 5:00 p.m. (New York City time), on the second Business Day immediately preceding the beginning of the Remarketing Period, we hereby notify you that an aggregate liquidation amount of $     Trust Preferred Securities are to be tendered for purchase in the Remarketing.

Dated:	By:	U.S. BANK NATIONAL ASSOCIATION,
		as the Stock Purchase Contract Agent
	By:
	Name:
	Title: Authorized Signatory

EX-4.02

Exhibit 4.02

STOCK PURCHASE CONTRACT AGREEMENT

between

LEHMAN BROTHERS HOLDINGS INC.

and

U.S. BANK NATIONAL ASSOCIATION,

as Stock Purchase Contract Agent

Dated as of May 17, 2007

TABLE OF CONTENTS

		Page
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1	Definitions	2
Section 1.2	Compliance Certificates and Opinions	12
Section 1.3	Form of Documents Delivered to Stock Purchase Contract Agent	12
Section 1.4	Acts of Holders; Record Dates	13
Section 1.5	Notices	14
Section 1.6	Notice to Holders; Waiver	15
Section 1.7	Effect of Headings and Table of Contents	16
Section 1.8	Successors and Assigns	16
Section 1.9	Separability Clause	16
Section 1.10	Benefits of Agreement	16
Section 1.11	Governing Law	16
Section 1.12	Legal Holidays	16
Section 1.13	Counterparts	17
Section 1.14	Inspection of Agreement	17
Section 1.15	Appointment of Financial Institution as Agent for the Company	17
Section 1.16	No Waiver	17
ARTICLE II
CERTIFICATE FORMS
Section 2.1	Forms of Certificates Generally	18
Section 2.2	Form of Stock Purchase Contract Agent’s Certificate of Authentication	19
ARTICLE III
THE MCAPS
Section 3.1	Amount; Form and Denominations	20
Section 3.2	Rights and Obligations Evidenced by the Certificates	20
Section 3.3	Execution, Authentication, Delivery and Dating	21
Section 3.4	Temporary Certificates	21
Section 3.5	Registration; Registration of Transfer and Exchange	22
Section 3.6	Book-Entry Interests	23
Section 3.7	Notices to Holders	24
Section 3.8	Appointment of Successor MCAPS Depositary	24
Section 3.9	Definitive Certificates	24
Section 3.10	Mutilated, Destroyed, Lost and Stolen Certificates	25
Section 3.11	Persons Deemed Owners	26

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Section 3.12	Cancellation	27
Section 3.13	Creation of Treasury MCAPS by Substitution of Qualifying Treasury Securities	27
Section 3.14	Recreation of Normal MCAPS	29
Section 3.15	Transfer of Collateral upon Occurrence of Termination Event	30
Section 3.16	No Consent to Assumption	31
ARTICLE IV
THE TRUST PREFERRED SECURITIES
Section 4.1	Distributions; Rights to Distributions Preserved	32
Section 4.2	Notice and Voting	32
ARTICLE V
QUALIFYING TREASURY SECURITIES
Section 5.1	Qualifying Treasury Securities	34
ARTICLE VI
THE STOCK PURCHASE CONTRACTS
Section 6.1	Purchase of Depositary Share	35
Section 6.2	Remarketing; Payment of Purchase Price	36
Section 6.3	Issuance of Depositary Shares	38
Section 6.4	Termination Event; Notice	39
Section 6.5	Charges and Taxes	39
Section 6.6	Contract Payments	40
Section 6.7	Deferral of Contract Payments	44
Section 6.8	Rights of Holders of Treasury MCAPs to Receive Excess Proceeds	46
ARTICLE VII
REMEDIES
Section 7.1	Unconditional Right of Holders to Receive Contract Payments and to Purchase Depositary Shares	47
Section 7.2	Restoration of Rights and Remedies	47
Section 7.3	Rights and Remedies Cumulative	47
Section 7.4	Delay or Omission Not Waiver	47
Section 7.5	Undertaking for Costs	47
Section 7.6	Waiver of Stay or Extension Laws	48

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ARTICLE VIII
THE PURCHASE CONTRACT AGENT
Section 8.1	Certain Duties and Responsibilities	49
Section 8.2	Notice of Default	50
Section 8.3	Certain Rights of Stock Purchase Contract Agent	50
Section 8.4	Not Responsible for Recitals or Issuance of MCAPS	51
Section 8.5	May Hold MCAPS	52
Section 8.6	Money Held in Custody	52
Section 8.7	Compensation and Reimbursement	52
Section 8.8	Corporate Stock Purchase Contract Agent Required, Eligibility	53
Section 8.9	Resignation and Removal; Appointment of Successor	53
Section 8.10	Acceptance of Appointment by Successor	54
Section 8.11	Merger, Conversion, Consolidation or Succession to Business	55
Section 8.12	Preservation of Information; Communications to Holders	55
Section 8.13	No Obligations of Stock Purchase Contract Agent	56
Section 8.14	Tax Compliance	56
ARTICLE IX
SUPPLEMENTAL AGREEMENTS
Section 9.1	Supplemental Agreements without Consent of Holders	57
Section 9.2	Supplemental Agreements with Consent of Holders	57
Section 9.3	Execution of Supplemental Agreements	58
Section 9.4	Effect of Supplemental Agreements	59
Section 9.5	Reference to Supplemental Agreements	59
ARTICLE X
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
Section 10.1	Covenant Not to Consolidate, Merge, Convey, Transfer or Lease Property Except under Certain Conditions	60
Section 10.2	Rights and Duties of Successor Corporation	60
Section 10.3	Officers’ Certificate and Opinion of Counsel Given to Stock Purchase Contract Agent	61
ARTICLE XI
COVENANTS
Section 11.1	Performance under Stock Purchase Contracts	62
Section 11.2	Maintenance of Office or Agency	62
Section 11.3	Company to Reserve Preferred Stock	62
Section 11.4	Covenants as to Preferred Stock and Depositary Shares	63
Section 11.5	Statements of Officers of the Company as to Default	63
Section 11.6	ERISA	63
Section 11.7	Tax Treatment	63

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EXHIBITS:
Exhibit A	– Form of Normal MCAPS Certificate
Exhibit B	– Form of Treasury MCAPS Certificate
Exhibit C	– Instruction to Stock Purchase Contract Agent
Exhibit D	– Notice from Stock Purchase Contract Agent to Holders
Exhibit E	– Notice to Settle by Treasury Securities
Exhibit F	– Notice from Stock Purchase Contract Agent to Collateral Agent (Settlement of Purchase Contract through Remarketing)

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STOCK PURCHASE CONTRACT AGREEMENT, dated as of May 17, 2007, between LEHMAN BROTHERS HOLDINGS INC., a Delaware corporation (the “Company”), having its principal office at 745 Seventh Avenue, New York, New York 10019, and U.S. Bank National Association, a national banking association, acting as stock purchase contract agent for the Holders of MCAPS (as defined herein) from time to time (the “Stock Purchase Contract Agent”).

RECITALS OF THE COMPANY

The Company has duly authorized the execution and delivery of this Agreement and the Certificates evidencing the MCAPS.

All things necessary to make the Stock Purchase Contracts (as defined herein), when the Certificates (as defined herein) are executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Stock Purchase Contract Agent, as provided in this Agreement, the valid obligations of the Company, and to constitute these presents a valid agreement of the Company, in accordance with its terms, have been done.

For and in consideration of the premises and the purchase of the MCAPS by the Holders thereof, it is mutually agreed as follows:

ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.1Definitions.

For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

(a)The terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular.

(b)All accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States, and the term “generally accepted accounting principles” with respect to any computation required or permitted hereunder shall mean such accounting principles that are generally accepted in the United States at the date or time of such computation; provided that when two or more principles are so generally accepted, it shall mean that set of principles consistent with those in use by the Company.

(c)The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, Exhibit or other subdivision.

(d)Unless the context otherwise requires, any references to an “Article,” a “Section,” an “Exhibit” or another subdivision refers to an Article, a Section, an Exhibit or another subdivision, as the case may be, of this Stock Purchase Contract Agreement.

“Additional Subordinated Notes” means the subordinated notes of the Company that may be issued to the Stock Purchase Contract Agent as provided in Section 6.7(c).

“Agreement” means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more agreements supplemental hereto entered into pursuant to the applicable provisions hereof.

“Bankruptcy Code” means the Bankruptcy Reform Act of 1978, Title 11 of the United States Code, as amended from time to time, or any other law of the United States that from time to time provides a uniform system of bankruptcy laws.

“Beneficial Owner” means, with respect to a Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry Interest as reflected on the books of the MCAPS Depositary or on the books of a Person maintaining an account with such MCAPS Depositary (directly as a MCAPS Depositary Participant or as an indirect participant, in each case in accordance with the rules of such MCAPS Depositary).

“Board of Directors” means the board of directors of the Company or any committee of that board duly authorized to act hereunder.

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“Board Resolution” means one or more resolutions of the Board of Directors, a copy of which has been certified by the Secretary or an Assistant Secretary of the Company, to have been duly adopted by the Board of Directors, or such committee of the Board of Directors or officers of the Company to which authority to act on behalf of the Board of Directors has been delegated, and to be in full force and effect on the date of such certification and delivered to the Stock Purchase Contract Agent.

“Book-Entry Interest” means a beneficial interest in a Global Certificate, registered in the name of a MCAPS Depositary or a nominee thereof, ownership and transfers of which shall be maintained and made through book entries by such Depositary as described in Section 3.6.

“Business Day” means any day other than a Saturday, Sunday or any other day on which banking institutions in the Borough of Manhattan, City of New York are generally authorized or obligated to be closed.

“Certificate” means a Normal MCAPS Certificate or a Treasury MCAPS Certificate.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” has the meaning specified in the Collateral Agreement.

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

“Collateral Agreement” means the Collateral Agreement, dated as of the date hereof, among the Company, the Collateral Agent, the Securities Intermediary, and the Stock Purchase Contract Agent, on its own behalf and as attorney-in-fact for the Holders from time to time of the MCAPS, as amended from time to time.

“Collateral Substitution” means (i) with respect to a Normal MCAPS, the substitution for the Pledged Trust Preferred Security included in such Normal MCAPS by Qualifying Treasury Securities or portions thereof in an aggregate principal amount at maturity equal to the aggregate liquidation amount of such Pledged Trust Preferred Security, or (ii) with respect to a Treasury MCAPS, the substitution for the Pledged Treasury Securities included in such Treasury MCAPS by Trust Preferred Securities in an aggregate liquidation amount equal to the aggregate principal amount at stated maturity of the Pledged Treasury Securities.

“Company” means the Person named as the “Company” in the first paragraph of this Agreement until a successor shall have become such pursuant to the applicable provision of this Agreement, and thereafter “Company” shall mean such successor.

“Contract Payments” means the payments payable by the Company on the Payment Dates in respect of each Stock Purchase Contract, at the rate of 0.15% per annum of the Stated Amount per Stock Purchase Contract of each Stock Purchase Contract.

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“Corporate Trust Office” means the office of the Stock Purchase Contract Agent at which, at any particular time, its corporate trust business shall be principally administered, which office at the date hereof is located at One Federal Street, 3^rd Floor, Boston, MA 02110, Attn: Earl Dennison (provided, however, for purposes of Section 11.2 only, the Corporate Trust Office shall be located at 100 Wall Street, Suite 1600, Mai Station EX-NY-WALL, New York, New York 10005).

“Debentures” means the Remarketable Junior Subordinated Debentures due 2043 of the Company.

“Declaration of Trust” means the Amended and Restated Declaration of Trust, dated as of the date hereof, of Lehman Brothers Holdings Capital Trust VIII, among the Company, as Sponsor, the Property Trustee, the Delaware Trustee and the Regular Trustees (each as named therein) and the several Holders (as defined therein).

“Deferred Contract Payments” has the meaning specified in Section 6.7(a).

“Depositary” means a clearing agency registered under Section 17A of the Exchange Act.

“Depositary Receipt” means one of the depositary receipts, whether in definition or temporary form, issued by the Preferred Stock Depositary pursuant to a Deposit Agreement, each representing any number of whole Depositary Shares.

“Depositary Shares” means the Depositary Shares of the Company, each representing a 1/100^th ownership interest in a share of Preferred Stock, which shall be evidenced by Depositary Receipts.

“DTC” means The Depository Trust Company.

“Early Remarketing” has the meaning specified in Section 2.3 of the Declaration of Trust.

 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Exchange Act” means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time, and the rules and regulations promulgated thereunder.

“Expiration Date” has the meaning specified in Section 1.4(e).

“Failed Remarketing” has the meaning specified in Section 1.1 of the Declaration of Trust.

“Global Certificate” means a Certificate that evidences all or part of the MCAPS and is registered in the name of the MCAPS Depositary or a nominee thereof.

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

“Holder” means, with respect to a MCAPS, the Person in whose name the MCAPS evidenced by a Certificate is registered in the Securities Register; provided, however, that solely for the purpose of determining whether the Holders of the requisite number of MCAPS have voted on any matter (and not for any other purpose hereunder), if the MCAPS remains in the form of one or more Global Certificates and if the MCAPS Depositary that is the registered holder of such Global Certificate has sent an omnibus proxy assigning voting rights to the MCAPS Depositary Participants to whose accounts the MCAPS are credited on the record date, the term “Holder” shall mean such MCAPS Depositary Participant acting at the direction of the Beneficial Owners.

“Indemnitees” has the meaning specified in Section 8.7(c).

“Indenture” means the Base Indenture, dated as of February 1, 1996, between the Company and JPMorgan Chase Bank, N.A., as trustee, as supplemented by the First Supplemental Indenture, dated as of February 1, 1996, and the Twelfth Supplemental Indenture, as further amended or supplemented from time to time with respect to the Debentures.

“Indenture Trustee” means U.S. Bank National Association, national banking association duly organized and existing under the laws of the United States of America, solely in its capacity as trustee pursuant to the Indenture and not in its individual capacity, or its successor in interest in such capacity, or any successor trustee appointed as provided in the Indenture.

“Initial Liquidation Amount” has the meaning specified in the Declaration of Trust.

“Issuer Order” or “Issuer Request” means a written order or request signed in the name of the Company by (i) either its Chief Executive Officer, its President or one of its Vice Presidents, and (ii) either its Corporate Secretary or one of its Assistant Corporate Secretaries or its Treasurer or one of its Assistant Treasurers, and delivered to the Stock Purchase Contract Agent.

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

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

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

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

 “MCAPS” means a Normal MCAPS or a Treasury MCAPS, as the case may be.

“MCAPS Depositary” means a clearing agency registered under Section 17A of the Exchange Act that is designated to act as Depositary for the MCAPS as contemplated by Sections 3.6 and 3.8.

“MCAPS Depositary Participant” means a broker, dealer, bank, other financial institution or other Person for whom from time to time the MCAPS Depositary effects book-entry transfers and pledges of securities deposited with the MCAPS Depositary.

“Normal MCAPS” means the collective rights and obligations of a Holder of a Normal MCAPS Certificate in respect of one Trust Preferred Security subject to the Pledge thereof, and the related Stock Purchase Contract.

“Normal MCAPS Certificate” means a certificate evidencing the rights and obligations of a Holder in respect of the number of Normal MCAPS specified on such certificate.

“Officers’ Certificate” means a certificate signed by the Chairman of the Board of Directors, a Vice Chairman of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the President or a Vice President, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company or the duly authorized designee of any of the foregoing, and delivered to the Stock Purchase Contract Agent.

“Opinion of Counsel” means a written opinion of counsel, who may be counsel for the Company (including an employee of the Company), and who shall be reasonably acceptable to the Stock Purchase Contract Agent.

“Outstanding MCAPS” means, with respect to any MCAPS and as of the date of determination, all MCAPS evidenced by Certificates theretofore authenticated, executed and delivered under this Agreement, except:

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(i)if a Termination Event has occurred, no MCAPS shall be deemed outstanding;

(ii)MCAPS evidenced by Certificates theretofore cancelled by the Stock Purchase Contract Agent or delivered to the Stock Purchase Contract Agent for cancellation or deemed cancelled pursuant to the provisions of this Agreement; and

(iii)MCAPS evidenced by Certificates in exchange for or in lieu of which other Certificates have been authenticated, executed on behalf of the Holder and delivered pursuant to this Agreement, other than any such Certificate in respect of which there shall have been presented to the Stock Purchase Contract Agent proof satisfactory to it that such Certificate is held by a protected purchaser in whose hands the MCAPS evidenced by such Certificate are valid obligations of the Company;

provided, however, that in determining whether the Holders of the requisite number of the MCAPS have given any request, demand, authorization, direction, notice, consent or waiver hereunder, MCAPS owned by the Company or any Affiliate of the Company shall be disregarded and deemed not to be Outstanding MCAPS, except that, in determining whether the Stock Purchase Contract Agent shall be authorized and protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only MCAPS that a Responsible Officer of the Stock Purchase Contract Agent actually knows to be so owned shall be so disregarded. MCAPS so owned that have been pledged in good faith may be regarded as Outstanding MCAPS if the pledgee establishes to the satisfaction of the Stock Purchase Contract Agent the pledgee’s right so to act with respect to such MCAPS and that the pledgee is not the Company or any Affiliate of the Company.

“Parity Guarantee” has the meaning specified in Section 6.7(d) hereof.

“Parity Debt Security” has the meaning specified in Section 6.7(d) hereof.

 “Paying Agent” has the meaning specified in the Declaration of Trust.

“Payment Date” means (i) each February 28, May 31, August 31 and November 30 of each year occurring on or prior to the Stock Purchase Date, commencing on August 31, 2007, and (ii) if not otherwise a Payment Date, the Stock Purchase Date.

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

“Plan” means an employee benefit plan that is subject to Title I of ERISA, a plan, individual retirement account or other arrangement that is subject to Section 4975 of the Code or Similar Law and any entity whose assets are considered assets of any such plan, account or arrangement.

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“Pledge” means the pledge under the Collateral Agreement of the Trust Preferred Securities or the Qualifying Treasury Securities, as the case may be, in each case constituting a part of the MCAPS.

 “Pledged Securities” means the Pledged Trust Preferred Securities and the Pledged Treasury Securities.

“Pledged Treasury Securities” has the meaning specified in Section 1.1 of the Collateral Agreement.

“Pledged Trust Preferred Securities” has the meaning specified in Section 1.1(e) of the Collateral Agreement.

 “Predecessor Normal MCAPS Certificate” of any particular Normal MCAPS Certificate means every previous Normal MCAPS Certificate evidencing all or a portion of the rights and obligations of the Company and the Holder under the Normal MCAPS evidenced thereby; and, for the purposes of this definition, any Normal MCAPS Certificate authenticated and delivered under Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Normal MCAPS Certificate shall be deemed to evidence the same rights and obligations of the Company and the Holder as the mutilated, destroyed, lost or stolen Normal MCAPS Certificate.

“Predecessor Treasury MCAPS Certificate” of any particular Treasury MCAPS Certificate means every previous Treasury MCAPS Certificate evidencing all or a portion of the rights and obligations of the Company and the Holder under the Treasury MCAPS evidenced thereby; and, for the purposes of this definition, any Treasury MCAPS Certificate authenticated and delivered under Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Treasury MCAPS Certificate shall be deemed to evidence the same rights and obligations of the Company and the Holder as the mutilated, destroyed, lost or stolen Treasury MCAPS Certificate.

“Preferred Stock” means the Non-Cumulative Perpetual Preferred Stock, Series I, $100,000 liquidation preference per share with no par value, of the Company.

“Preferred Stock Deposit Agreement” means an agreement among the Company, the Preferred Stock Depositary and the holder from time to time of Depositary Receipts.

“Preferred Stock Depositary” means the Depositary under the Preferred Stock Deposit Agreement.

“Proceeds” has the meaning specified in Section 1.1 of the Collateral Agreement.

“Property Trustee” has the meaning specified in Section 1.1 of the Declaration of Trust.

“Purchase Price” has the meaning set forth in Section 6.1(a).

“Qualifying Treasury Security” has the meaning specified in Section 5.1.

“Quarterly Date” has the meaning specified in Section 5.1.

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“Record Date” for any distribution and Contract Payment payable on any Payment Date means, as to any Global Certificate or any other Certificate, the 15^th day of the calendar month in which the relevant Payment Date falls (whether or not a Business Day).

“Regular Trustee” has the meaning specified in the Declaration of Trust.

“Remarketing” means a remarketing of Trust Preferred Securities pursuant to Section 1.1 of the Declaration of Trust.

“Remarketing Agent” has the meaning specified in Section 1.1 of the Declaration of Trust.

“Remarketing Agreement” has the meaning specified in Section 1.1 of the Declaration of Trust.

“Remarketing Date” has the meaning specified in Section 1.1 of the Declaration of Trust.

“Remarketing Fee” has the meaning specified in Section 1.1 of the Declaration of Trust.

“Remarketing Period” has the meaning specified in Section 1.1 of the Declaration of Trust.

“Remarketing Settlement Date” has the meaning specified in Section 1.1 of the Declaration of Trust.

“Responsible Officer” shall mean, when used with respect to the Stock Purchase Contact Agent, any officer within the corporate trust department of the Stock Purchase Contract Agent, including any vice president, assistant vice president, assistant secretary, assistant treasurer, trust officer or any other officer of the Stock Purchase Contract Agent who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Stock Purchase Contract Agreement.

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933 and any successor statute thereto, in each case as amended from time to time, and the rules and regulations promulgated thereunder.

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

“Securities Register” and “Securities Registrar” have the respective meanings specified in Section 3.5.

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“Senior Debt” has the meaning specified in Section 1401 of the Indenture.

“Separate Trust Preferred Securities” means Trust Preferred Securities that are no longer a component of Normal MCAPS.

“Settlement with Qualifying Treasury Securities” has the meaning specified in Section 6.2(b).

“Similar Law” means any federal, state, local, non-U.S. or other law or regulation that is similar to the fiduciary responsibility provisions of Title I of ERISA or the prohibited transaction provisions of Section 406 of ERISA or Section 4975 of the Code.

“Stated Amount” means, with respect to any one Normal MCAPS, Treasury MCAPS, or Trust Preferred Security, $1,000.

“Stock Purchase Contract” means, with respect to any MCAPS, the contract forming a part of such MCAPS and obligating (i) the Company to sell, and the Holder of such MCAPS to purchase Depositary Shares and (ii) the Company to pay the Holder thereof Contract Payments, in each case on the terms and subject to the conditions specified in Article VI.

“Stock Purchase Contract Agent” means the Person named as the “Stock Purchase Contract Agent” in the first paragraph of this Agreement until a successor Stock Purchase Contract Agent shall have become such pursuant to the applicable provisions of this Agreement, and thereafter “Stock Purchase Contract Agent” shall mean such Person or any subsequent successor who is appointed pursuant to this Agreement.

“Stock Purchase Contract Settlement Fund” has the meaning specified in Section 6.3(a).

“Stock Purchase Date” means May 31, 2012, provided that the Stock Purchase Date may be (i) moved to an earlier date if an Early Remarketing occurs, in accordance with Section 6.2(b)(v), or (ii) deferred for quarterly periods until May 31, 2013 in accordance with Section 6.2(b)(iv).

“Successful” has the meaning specified in Section 1.1 of the Declaration of Trust.

“Termination Date” means the date, if any, on which a Termination Event occurs.

“Termination Event” means the occurrence of any of the following events at any time on or prior to the Stock Purchase Date:

(i)a judgment, decree or court order shall have been entered granting relief under the Bankruptcy Code, adjudicating the Company to be insolvent, or approving as properly filed a petition seeking reorganization or liquidation of the Company or any other similar applicable federal or state law and if such judgment, decree or order shall have been entered more than 90 days prior to the Stock Purchase Date, such decree or order shall have continued undischarged and unstayed for a period of 90 days;

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(ii)a judgment, decree or court order for the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the Company or of its property, or for the termination or liquidation of its affairs, shall have been entered and if such judgment, decree or order shall have been entered more than 90 days prior to the Stock Purchase Date, such judgment, decree or order shall have continued undischarged and unstayed for a period of 90 days;

(iii)the Company shall file a petition for relief under the Bankruptcy Code, or shall consent to the filing of a bankruptcy proceeding against it, or shall file a petition or answer or consent seeking reorganization or liquidation under the Bankruptcy Code or any other similar applicable federal or state law, or shall consent to the filing of any such petition, or shall consent to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it or of its property, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due; or

(iv)the Company shall redeem the Debentures prior to the Stock Purchase Date upon the occurrence of a “tax event”, a “capital treatment event” or a “rating agency event,” in each case, as defined in the Indenture.

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

“Transfer Agent” means the Property Trustee solely in its capacity as transfer agent for the MCAPS.

“Treasury MCAPS” means, following the substitution of Qualifying Treasury Securities for Pledged Trust Preferred Securities as collateral to secure a Holder’s obligations under the Stock Purchase Contract, the collective rights and obligations of a Holder of a Treasury MCAPS Certificate in respect of such Qualifying Treasury Securities subject to the Pledge thereof, and the related Stock Purchase Contract.

“Treasury MCAPS Certificate” means a certificate evidencing the rights and obligations of a Holder in respect of the number of Treasury MCAPS specified on such certificate.

“Trust Enforcement Event” has the meaning specified in Section 1.1 of the Declaration of Trust.

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

“Twelfth Supplemental Indenture” means the Supplemental Indenture, dated as of the date hereof, between the Company and the Indenture Trustee, to the Base Indenture, dated as of February 1, 1996, between the Company and JPMorgan Chase Bank, N.A., as trustee.

“Underwriters” means the underwriters identified in Schedule II to the Underwriting Agreement.

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“Underwriting Agreement” means the Underwriting Agreement, dated May 8, 2007, among the Company and the Underwriters, relating to the issuance of MCAPS by the Company.

“Vice President” means any vice president, whether or not designated by a number or a word or words added before or after the title “Vice President.”

Section 1.2Compliance Certificates and Opinions.

Except as otherwise expressly provided by this Agreement, upon any application or request by the Company to the Stock Purchase Contract Agent to take any action in accordance with any provision of this Agreement, the Company shall furnish to the Stock Purchase Contract Agent an Officers’ Certificate stating that all conditions precedent, if any, provided for in this Agreement relating to the proposed action have been complied with and, if reasonably requested by the Stock Purchase Contract Agent, an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Agreement relating to such particular application or request, no additional certificate or opinion need be furnished. Notwithstanding any portion of this Agreement to the contrary, the Company shall not be required to furnish the Stock Purchase Contract Agent an Opinion of Counsel in connection with the issuance of the MCAPS pursuant to the Underwriting Agreement.

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Agreement (other than the Officers’ Certificate provided for in Section 11.5) shall include:

(i)a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(ii)a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(iii)a statement that, in the opinion of each such individual, he or she has made such examination or investigation as is necessary to enable such individual to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(iv)a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

Section 1.3Form of Documents Delivered to Stock Purchase Contract Agent.

(a)In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give

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an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which its certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

(b)Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Agreement, they may, but need not, be consolidated and form one instrument.

Section 1.4Acts of Holders; Record Dates.

(a)Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Agreement to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Stock Purchase Contract Agent and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Agreement and (subject to Section 8.1) conclusive in favor of the Stock Purchase Contract Agent and the Company, if made in the manner provided in this Section.

(b)The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner that the Stock Purchase Contract Agent deems sufficient.

(c)The ownership of MCAPS shall be proved by the Securities Register.

(d)Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any MCAPS shall bind every future Holder of the same MCAPS and the Holder of every Certificate evidencing such MCAPS issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Stock Purchase Contract Agent or the Company in reliance thereon, whether or not notation of such action is made upon such Certificate.

(e)The Company may set any date as a record date for the purpose of determining the Holders of Outstanding MCAPS entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Agreement to be given, made or taken by Holders of MCAPS. If any record date is set pursuant to this paragraph, the Holders of the Outstanding Normal MCAPS and the Outstanding Treasury MCAPS, as the case may be, on such record date, and no other Holders, shall be entitled to take

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the relevant action with respect to the Normal MCAPS or the Treasury MCAPS, as the case may be, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken prior to or on the applicable Expiration Date by Holders of the requisite number of Outstanding MCAPS on such record date. Nothing contained in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and be of no effect), and nothing contained in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite number of Outstanding MCAPS on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Stock Purchase Contract Agent in writing and to each Holder of MCAPS in the manner specified in Section 1.6.

With respect to any record date set pursuant to this Section 1.4(e), the Company may designate any date as the “Expiration Date” and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the Stock Purchase Contract Agent in writing, and to each Holder of MCAPS in the manner specified in Section 1.6, prior to or on the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the Company shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date.

Section 1.5Notices.

Any notice or communication is duly given if in writing and delivered in Person or mailed by first-class mail (registered or certified, return receipt requested), telecopier (with receipt confirmed) or overnight air courier guaranteeing next day delivery, to the others’ address; provided that notice shall be deemed given to the Stock Purchase Contract Agent only upon receipt thereof:

If to the Stock Purchase Contract Agent:

U.S. Bank National Association,
as Stock Purchase Contract Agent
One Federal Street, 3^rd Floor

Boston, MA 02110
Attention:  Corporate Trust Services
Facsimile:  617-603-6667

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If to the Company:

Lehman Brothers Holdings Inc.
745 Seventh Avenue
New York, New York 10019
Attention: General Counsel
Facsimile:  212-526-0339

If to the Collateral Agent:

The Bank of New York,

as Collateral Agent

101 Barclay Street, Floor 4 West

New York, NY 10286

Attention:  MBS Group
Facsimile:  212-815-3910

If to the Property Trustee:

U.S. Bank National Association,
as Trustee
One Federal Street, 3^rd Floor

Boston, MA 02110
Attention:  Corporate Trust Services
Facsimile:  617-603-6667

The Stock Purchase Contract Agent shall send to the Indenture Trustee at the telecopier number set forth above a copy of any notices in the form of Exhibits C, D, E or F it sends or receives.

Section 1.6Notice to Holders; Waiver.

Where this Agreement provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at its address as it appears in the Securities Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed to any particular Holder, shall affect the sufficiency of such notice with respect to other Holders. Where this Agreement provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Stock Purchase Contract Agent, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

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In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Stock Purchase Contract Agent shall constitute a sufficient notification for every purpose hereunder.

Section 1.7Effect of Headings and Table of Contents.

The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

Section 1.8Successors and Assigns.

All covenants and agreements in this Agreement by the Company and the Stock Purchase Contract Agent shall bind their respective successors and assigns, whether so expressed or not.

Section 1.9Separability Clause.

In case any provision in this Agreement or in the MCAPS shall be declared invalid, illegal or unenforceable by a court of competent jurisdiction, the validity, legality and enforceability of the remaining provisions hereof and thereof shall not in any way be affected or impaired thereby.

Section 1.10Benefits of Agreement.

Nothing contained in this Agreement or in the MCAPS, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and, to the extent provided hereby, the Holders, any benefits or any legal or equitable right, remedy or claim under this Agreement. The Holders from time to time shall be beneficiaries of this Agreement and shall be bound by all of the terms and conditions hereof and of the MCAPS evidenced by their Certificates by their acceptance of delivery of such Certificates.

Section 1.11Governing Law.

This Agreement and the MCAPS shall be governed by and construed in accordance with the laws of the State of New York.

Section 1.12Legal Holidays.

(a)In any case where any Payment Date shall not be a Business Day (notwithstanding any other provision of this Agreement or the MCAPS), Contract Payments or other distributions shall not be paid on such date, but Contract Payments or such other distributions shall be paid on the next succeeding Business Day with the same force and effect as if made on such Payment Date. No interest shall accrue or be payable by the Company or to any Holder for the period from and after any such Payment Date on such successive Business Day.

(b)In any case where the Stock Purchase Date shall not be a Business Day (notwithstanding any other provision of this Agreement or the MCAPS), the Stock Purchase Contracts shall not be performed and shall not be effected on such date, but the Stock Purchase

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Contracts shall be performed on the next succeeding Business Day with the same force and effect as if made on such Stock Purchase Date.

Section 1.13Counterparts.

This Agreement may be executed in any number of counterparts by the parties hereto on separate counterparts, each of which, when so executed and delivered, shall be deemed an original, but all such counterparts shall together constitute one and the same instrument.

Section 1.14Inspection of Agreement.

A copy of this Agreement shall be available at all reasonable times during normal business hours at the Corporate Trust Office for inspection by any Holder or Beneficial Owner.

Section 1.15Appointment of Financial Institution as Agent for the Company.

The Company may appoint a financial institution (which may be the Collateral Agent) to act as its agent in performing its obligations and in accepting and enforcing performance of the obligations of the Stock Purchase Contract Agent and the Holders, under this Agreement and the Stock Purchase Contracts, by giving notice of such appointment in the manner provided in Section 1.5 hereof. Any such appointment shall not relieve the Company in any way from its obligations hereunder.

Section 1.16No Waiver.

No failure on the part of the Company, the Stock Purchase Contract Agent, the Collateral Agent, the Securities Intermediary or any of their respective agents to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Company, the Stock Purchase Contract Agent, the Collateral Agent, the Securities Intermediary or any of their respective agents of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law.

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ARTICLE II

CERTIFICATE FORMS

Section 2.1Forms of Certificates Generally.

The Certificates (including the form of Stock Purchase Contract forming part of each MCAPS evidenced thereby) shall be in substantially the form set forth in Exhibit A hereto (in the case of Certificates evidencing Normal MCAPS) or Exhibit B hereto (in the case of Certificates evidencing Treasury MCAPS), with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the MCAPS are listed or any depositary therefor, or as may, consistently herewith, be determined by the officers of the Company executing such Certificates, as evidenced by their execution of the Certificates.

The definitive Certificates shall be produced in any manner as determined by the officers of the Company executing the MCAPS evidenced by such Certificates, consistent with the provisions of this Agreement, as evidenced by their execution thereof.

Every Global Certificate authenticated, executed on behalf of the Holders and delivered hereunder shall bear a legend in substantially the following form:

THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE STOCK PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE “DEPOSITARY”), THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE STOCK PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE 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 CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REQUESTED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED 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.

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Section 2.2Form of Stock Purchase Contract Agent’s Certificate of Authentication.

The form of the Stock Purchase Contract Agent’s certificate of authentication of the MCAPS shall be in substantially the form set forth on the form of the applicable Certificates.

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ARTICLE III

THE MCAPS

Section 3.1Amount; Form and Denominations.

The aggregate stated amount of MCAPS evidenced by Certificates authenticated, executed on behalf of the Holders and delivered hereunder is limited to $500,000,000, except for Certificates authenticated, executed and delivered upon registration of transfer of, in exchange for, or in lieu of, other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.13, 3.14 or 9.5.

The Certificates shall be issuable only in registered form and only in denominations of a single Normal MCAPS or Treasury MCAPS and any integral multiple thereof.

Section 3.2Rights and Obligations Evidenced by the Certificates.

Each Normal MCAPS Certificate shall evidence the number of Normal MCAPS specified therein, with each such Normal MCAPS representing (1) the ownership by the Holder thereof of one Trust Preferred Security, subject to the Pledge of such Trust Preferred Security by such Holder pursuant to the Collateral Agreement, and (2) the rights and obligations of the Holder thereof and the Company under one Stock Purchase Contract. The Stock Purchase Contract Agent is hereby authorized, as attorney-in-fact for, and on behalf of, the Holder of each Normal MCAPS, to pledge, pursuant to the Collateral Agreement, the Trust Preferred Security forming a part of such Normal MCAPS, to the Collateral Agent for the benefit of the Company, and to grant to the Collateral Agent, for the benefit of the Company, a security interest in the right, title and interest of such Holder in such Trust Preferred Security to secure the obligation of the Holder under each Stock Purchase Contract to purchase Depositary Shares.

Upon the formation of a Treasury MCAPS pursuant to Section 3.13, each Treasury MCAPS Certificate shall evidence the number of Treasury MCAPS specified therein, with each such Treasury MCAPS representing (1) the ownership by the Holder thereof of one Qualifying Treasury Security with a principal amount at maturity equal to $1,000, subject to the Pledge of such interest by such Holder pursuant to the Collateral Agreement, and (2) the rights and obligations of the Holder thereof and the Company under one Stock Purchase Contract. The Stock Purchase Contract Agent is hereby authorized, as attorney-in-fact for, and on behalf of, the Holder of each Treasury MCAPS, to pledge, pursuant to the Collateral Agreement, such Holder’s interest in the Qualifying Treasury Security forming a part of such Treasury MCAPS (and any Qualifying Treasury Security subsequently purchased by the Collateral Agent on behalf of the Holder of such Treasury MCAPS with the proceeds of any maturing Qualifying Treasury Security prior to the Stock Purchase Date) to the Collateral Agent, for the benefit of the Company, and to grant to the Collateral Agent, for the benefit of the Company, a security interest in the right, title and interest of such Holder in such Qualifying Treasury Security (and any Qualifying Treasury Security subsequently purchased by the Collateral Agent on behalf of the Holder of such Treasury MCAPS with the proceeds of any maturing Qualifying Treasury Security prior to the Stock Purchase Date) Treasury Security to secure the obligation of the Holder under each Stock Purchase Contract to purchase Depositary Shares.

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Prior to the purchase of Depositary Shares under each Stock Purchase Contract, such Stock Purchase Contract shall not entitle the Holder of an MCAPS to any of the rights of a holder of Depositary Shares, including, without limitation, the right to vote or receive any dividends or other payments or to consent or to receive notice as a stockholder in respect of the meetings of stockholders or for the election of directors of the Company or for any other matter, or any other rights whatsoever as a stockholder of the Company.

Section 3.3Execution, Authentication, Delivery and Dating.

(a)Subject to the provisions of Sections 3.13 and 3.14 hereof, upon the execution and delivery of this Agreement, and at any time and from time to time thereafter, the Company may deliver Certificates executed by the Company to the Stock Purchase Contract Agent for authentication, execution on behalf of the Holders and delivery, together with its Issuer Order for authentication of such Certificates, and the Stock Purchase Contract Agent in accordance with such Issuer Order shall authenticate, execute on behalf of the Holders and deliver such Certificates.

(b)The Certificates shall be executed on behalf of the Company by its Chairman of the Board of Directors, its Chief Executive Officer, its President, its Chief Financial Officer, its Treasurer or one of its Vice Presidents. The signature of any of these officers on the Certificates may be manual or facsimile.

(c)Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Certificates or did not hold such offices at the date of such Certificates.

(d)No Stock Purchase Contract evidenced by a Certificate shall be valid until such Certificate has been executed on behalf of the Holder by the manual signature of an authorized officer of the Stock Purchase Contract Agent, as such Holder’s attorney-in-fact. Such signature by an authorized officer of the Stock Purchase Contract Agent shall be conclusive evidence that the Holder of such Certificate has entered into the Stock Purchase Contracts evidenced by such Certificate.

(e)Each Certificate shall be dated the date of its authentication.

(f)No Certificate shall be entitled to any benefit under this Agreement or be valid or obligatory for any purpose unless there appears on such Certificate a certificate of authentication substantially in the form provided for herein executed by an authorized officer of the Stock Purchase Contract Agent by manual signature, and such certificate upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly authenticated and delivered hereunder.

Section 3.4Temporary Certificates.

(a)Pending the preparation of definitive Certificates, the Company shall execute and deliver to the Stock Purchase Contract Agent, and the Stock Purchase Contract Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu of such definitive Certificates,

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temporary Certificates that are in substantially the form set forth in Exhibit A or Exhibit B hereto, as the case may be, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the Normal MCAPS or Treasury MCAPS, as the case may be, are listed, or as may, consistently herewith, be determined by the officers of the Company executing such Certificates, as evidenced by their execution of the Certificates.

(b)If temporary Certificates are issued, the Company will cause definitive Certificates to be prepared without unreasonable delay. After the preparation of definitive Certificates, the temporary Certificates shall be exchangeable for definitive Certificates upon surrender of the temporary Certificates at the Corporate Trust Office, at the expense of the Company and without charge to the Holder. Upon surrender for cancellation of any one or more temporary Certificates, the Company shall execute and deliver to the Stock Purchase Contract Agent, and the Stock Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and deliver in exchange therefor, one or more definitive Certificates of like tenor and denominations and evidencing a like number of MCAPS as the temporary Certificate or Certificates so surrendered. Until so exchanged, the temporary Certificates shall in all respects evidence the same benefits and the same obligations with respect to the MCAPS evidenced thereby as definitive Certificates.

Section 3.5Registration; Registration of Transfer and Exchange.

(a)The Stock Purchase Contract Agent shall keep at the Corporate Trust Office a register (the “Securities Register”) in which, subject to such reasonable regulations as it may prescribe, the Stock Purchase Contract Agent shall provide for the registration of Certificates and of transfers of Certificates (the Stock Purchase Contract Agent, in such capacity, the “Securities Registrar”). The Securities Registrar shall record separately the registration and transfer of the Certificates evidencing Normal MCAPS and Treasury MCAPS.

(b)Upon surrender for registration of transfer of any Certificate at the Corporate Trust Office, the Company shall execute and deliver to the Stock Purchase Contract Agent, and the Stock Purchase Contract Agent shall authenticate, execute on behalf of the designated transferee or transferees, and deliver, in the name of the designated transferee or transferees, one or more new Certificates of any authorized denominations, like tenor, and evidencing a like number of Normal MCAPS or Treasury MCAPS, as the case may be.

(c)At the option of the Holder, Certificates may be exchanged for other Certificates, of any authorized denominations and evidencing a like number of Normal MCAPS or Treasury MCAPS, as the case may be, upon surrender of the Certificates to be exchanged at the Corporate Trust Office. Whenever any Certificates are so surrendered for exchange, the Company shall execute and deliver to the Stock Purchase Contract Agent, and the Stock Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and deliver the Certificates that the Holder making the exchange is entitled to receive.

(d)All Certificates issued upon any registration of transfer or exchange of a Certificate shall evidence the ownership of the same number of Normal MCAPS or Treasury

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MCAPS, as the case may be, and be entitled to the same benefits and subject to the same obligations under this Agreement as the Normal MCAPS or Treasury MCAPS, as the case may be, evidenced by the Certificate surrendered upon such registration of transfer or exchange.

(e)Every Certificate presented or surrendered for registration of transfer or exchange shall (if so required by the Stock Purchase Contract Agent) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Stock Purchase Contract Agent duly executed, by the Holder thereof or its attorney duly authorized in writing.

(f)No service charge shall be made for any registration of transfer or exchange of a Certificate, but the Company and the Stock Purchase Contract Agent may require payment from the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Certificates, other than any exchanges pursuant to Sections 3.4, 3.6 and 9.5 not involving any transfer.

(g)Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Stock Purchase Contract Agent, and the Stock Purchase Contract Agent shall not be obligated to authenticate, execute on behalf of the Holder and deliver any Certificate in exchange for any other Certificate presented or surrendered for registration of transfer or for exchange on or after the Business Day immediately preceding the earliest to occur of the Stock Purchase Date or the Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of the applicable conditions specified above in this Section and receipt of appropriate registration or transfer instructions from such Holder, the Stock Purchase Contract Agent shall:

(i)if the Stock Purchase Date (including upon any Settlement with Qualifying Treasury Securities) with respect to such other Certificate has occurred, deliver the Depositary Shares issuable in respect of the Stock Purchase Contracts forming a part of the MCAPS evidenced by such other Certificate; or

(ii)if a Termination Event shall have occurred prior to the Stock Purchase Date, transfer the Trust Preferred Securities or the Qualifying Treasury Securities, as the case may be, evidenced thereby, in each case subject to the applicable conditions and in accordance with the applicable provisions of Section 3.15 and Article VI hereof.

Section 3.6Book-Entry Interests.

(a)The Certificates, on original issuance, will be issued in the form of one or more fully registered Global Certificates, to be delivered to the MCAPS Depositary or its custodian by, or on behalf of, the Company. The Company hereby designates DTC as the initial MCAPS Depositary. Such Global Certificates shall initially be registered on the books and records of the Company in the name of Cede & Co., the nominee of the MCAPS Depositary, and no Beneficial Owner will receive a definitive Certificate representing such Beneficial Owner’s interest in such Global Certificate, except as provided in Section 3.9. The Stock Purchase Contract Agent shall enter into an agreement with the MCAPS Depositary if so requested by the Company. Unless and until definitive, fully registered Certificates have been issued to Beneficial Owners pursuant to Section 3.9:

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(i)the provisions of this Section 3.6 shall be in full force and effect;

(ii)the Company shall be entitled to deal with the MCAPS Depositary for all purposes of this Agreement (including, without limitation, making Contract Payments and receiving approvals, votes or consents hereunder) as the Holder of the MCAPS and the sole holder of the Global Certificates and shall have no obligation to the Beneficial Owners; provided that any Beneficial Owner may directly enforce against the Company, without the involvement of the MCAPS Depositary or any other Person, its right to receive definitive Certificates pursuant to Section 3.9;

(iii)to the extent that the provisions of this Section 3.6 conflict with any other provisions of this Agreement, the provisions of this Section 3.6 shall control; and

(iv)the rights of the Beneficial Owners shall be exercised only through the MCAPS Depositary and shall be limited to those established by law and agreements between such Beneficial Owners and the MCAPS Depositary or the MCAPS Depositary Participants; provided that any Beneficial Owner may directly enforce against the Company, without the involvement of the MCAPS Depositary or any other Person, its right to receive definitive Certificates pursuant to Section 3.9.

Transfers of securities evidenced by Global Certificates shall be made through the facilities of the MCAPS Depositary, and any cancellation of, or increase or decrease in the number of, such securities (including the creation of Treasury MCAPS and the recreation of Normal MCAPS pursuant to Sections 3.13 and 3.14 respectively) shall be accomplished by making appropriate annotations on the Schedule of Increases and Decreases for such Global Certificate.

Section 3.7Notices to Holders.

Whenever a notice or other communication to the Holders is required to be given under this Agreement, the Company or the Company’s agent shall give such notices and communications to the Holders and, with respect to any MCAPS registered in the name of the MCAPS Depositary or the nominee of the MCAPS Depositary, the Company or the Company’s agent shall, except as specified herein, have no obligations to the Beneficial Owners.

Section 3.8Appointment of Successor MCAPS Depositary.

If the MCAPS Depositary elects to discontinue its services as securities depositary with respect to the MCAPS, the Company may, in its sole discretion, appoint a successor MCAPS Depositary with respect to the MCAPS.

Section 3.9Definitive Certificates.

If:

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(a)the MCAPS Depositary notifies the Company that it is unwilling or unable to continue its services as securities depositary with respect to the MCAPS and no successor Depositary has been appointed pursuant to Section 3.8 within 90 days after such notice; or

(b)the MCAPS Depositary ceases to be a “clearing agency” registered under Section 17A of the Exchange Act when the MCAPS Depositary is required to be so registered to act as the MCAPS Depositary and so notifies the Company, and no successor MCAPS Depositary has been appointed pursuant to Section 3.8 within 90 days after such notice; or

(c)any event of default has occurred and is continuing under the Trust Preferred Securities or this Agreement; or

(d)the Company determines in its sole discretion that the Global Certificates shall be exchangeable for definitive Certificates,

then (x) definitive Certificates shall be prepared by the Company with respect to such MCAPS and delivered to the Stock Purchase Contract Agent and (y) upon surrender of the Global Certificates representing the MCAPS by the MCAPS Depositary, accompanied by registration instructions, the Company shall cause definitive Certificates to be delivered to Beneficial Owners in accordance with the instructions of the MCAPS Depositary. The Company and the Stock Purchase Contract Agent shall not be liable for any delay in delivery of such instructions and may conclusively rely on and shall be authorized and protected in relying on, such instructions. Each definitive Certificate so delivered shall evidence MCAPS of the same kind and tenor as the Global Certificate so surrendered in respect thereof.

Section 3.10Mutilated, Destroyed, Lost and Stolen Certificates.

(a)If any mutilated Certificate is surrendered to the Stock Purchase Contract Agent, the Company shall execute and deliver to the Stock Purchase Contract Agent, and the Stock Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and deliver in exchange therefor, a new Certificate, evidencing the same number of Normal MCAPS or Treasury MCAPS, as the case may be, and bearing a Certificate number not contemporaneously outstanding.

(b)If there shall be delivered to the Company and the Stock Purchase Contract Agent (i) evidence to their satisfaction of the destruction, loss or theft of any Certificate, and (ii) such security or indemnity as may be required by them to hold each of them and any agent of any of them harmless, then, in the absence of notice to the Company or the Stock Purchase Contract Agent that such Certificate has been acquired by a protected purchaser, the Company shall execute and deliver to the Stock Purchase Contract Agent, and the Stock Purchase Contract Agent shall authenticate, execute on behalf of the Holder, and deliver to the Holder, in lieu of any such destroyed, lost or stolen Certificate, a new Certificate, evidencing the same number of Normal MCAPS or Treasury MCAPS, as the case may be, and bearing a Certificate number not contemporaneously outstanding.

(c)Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Stock Purchase Contract Agent, and the Stock Purchase Contract Agent shall not

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be obligated to authenticate, execute on behalf of the Holder, and deliver to the Holder, a Certificate on or after the Business Day immediately preceding the earliest of the Stock Purchase Date or the Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of the applicable conditions specified above in this Section and receipt of appropriate registration or transfer instructions from such Holder, the Stock Purchase Contract Agent shall:

(i)if the Stock Purchase Date with respect to such lost, stolen, destroyed or mutilated Certificate has occurred, deliver the Depositary Shares issuable in respect of the Stock Purchase Contracts forming a part of the MCAPS evidenced by such Certificate; or

(ii)if a Settlement with Qualifying Treasury Securities with respect to such lost or mutilated Certificate or if a Termination Event shall have occurred prior to the Stock Purchase Date, transfer the Trust Preferred Securities or the Qualifying Treasury Securities, as the case may be, evidenced thereby, in each case subject to the applicable conditions and in accordance with the applicable provisions of Section 3.15 and Article VI hereof.

(d)Upon the issuance of any new Certificate under this Section, the Company and the Stock Purchase Contract Agent may require the payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other fees and expenses (including, without limitation, the fees and expenses of the Stock Purchase Contract Agent) connected therewith.

(e)Every new Certificate issued pursuant to this Section in lieu of any destroyed, lost or stolen Certificate shall constitute an original additional contractual obligation of the Company and of the Holder in respect of the MCAPS evidenced thereby, whether or not the destroyed, lost or stolen Certificate (and the MCAPS evidenced thereby) shall be at any time enforceable by anyone, and shall be entitled to all the benefits and be subject to all the obligations of this Agreement equally and proportionately with any and all other Certificates delivered hereunder.

(f)The provisions of this Section are exclusive and shall preclude, to the extent lawful, all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Certificates.

Section 3.11Persons Deemed Owners.

(a)Prior to due presentment of a Certificate for registration of transfer, the Company and the Stock Purchase Contract Agent, and any agent of the Company or the Stock Purchase Contract Agent, may treat the Person in whose name such Certificate is registered as the owner of the MCAPS evidenced thereby for purposes of (subject to any applicable record date) any payment or distribution on the Trust Preferred Securities, payment of Contract Payments and performance of the Stock Purchase Contracts and for all other purposes whatsoever in connection with such MCAPS, whether or not such payment, distribution, or performance shall be overdue and notwithstanding any notice to the contrary, and neither the Company nor the Stock Purchase Contract Agent, nor any agent of the Company or the Stock Purchase Contract Agent, shall be affected by notice to the contrary.

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(b)Notwithstanding the foregoing, with respect to any Global Certificate, nothing contained herein shall prevent the Company, the Stock Purchase Contract Agent or any agent of the Company or the Stock Purchase Contract Agent from giving effect to any written certification, proxy or other authorization furnished by the MCAPS Depositary (or its nominee), as a Holder, with respect to such Global Certificate, or impair, as between such MCAPS Depositary and the related Beneficial Owner, the operation of customary practices governing the exercise of rights of the MCAPS Depositary (or its nominee) as Holder of such Global Certificate. None of the Company, the Stock Purchase Contract Agent or any agent of the Company or the Stock Purchase Contract Agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Certificate or maintaining, supervising or reviewing any records relating to such beneficial ownership interests.

Section 3.12Cancellation.

(a)All Certificates surrendered for delivery of the Depositary Shares on or after the Stock Purchase Date or upon the transfer of Trust Preferred Securities or for delivery of Trust Preferred Securities or Qualifying Treasury Securities, as the case may be, after the occurrence of a Termination Event or pursuant to a Settlement with Qualifying Treasury Securities, or upon the registration of transfer or exchange of a MCAPS, or a Collateral Substitution or the recreation of Normal MCAPS shall, if surrendered to any Person other than the Stock Purchase Contract Agent, be delivered to the Stock Purchase Contract Agent along with appropriate written instructions regarding the cancellation thereof and, if not already cancelled, shall be promptly cancelled by it. The Company may at any time deliver to the Stock Purchase Contract Agent for cancellation any Certificates previously authenticated, executed and delivered hereunder that the Company may have acquired in any manner whatsoever, and all Certificates so delivered shall, upon an Issuer Order, be promptly cancelled by the Stock Purchase Contract Agent. No Certificates shall be authenticated, executed on behalf of the Holder and delivered in lieu of or in exchange for any Certificates cancelled as provided in this Section, except as expressly permitted by this Agreement. All cancelled Certificates held by the Stock Purchase Contract Agent shall be disposed of in accordance with its customary practices.

(b)If the Company or any Affiliate of the Company shall acquire any Certificate, such acquisition shall not operate as a cancellation of such Certificate unless and until such Certificate is delivered to the Stock Purchase Contract Agent cancelled or for cancellation.

Section 3.13Creation of Treasury MCAPS by Substitution of Qualifying Treasury Securities.

(a)Subject to the conditions specified in this Agreement, a Holder may, at any time from and after the date of this Agreement and prior to the Successful Remarketing of the Trust Preferred Securities (except (1) on a day in February, May, August or November that is on or after the 15^th day of the month (or the next Business Day if the last day is not a Business Day) or (2) during the period from 3:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of any Remarketing Period until the opening of business on the Business Day immediately following such Remarketing Settlement Date), effect a Collateral Substitution and separate the Pledged Trust Preferred Securities from the related Stock Purchase

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Contracts in respect of all or a portion of such Holder’s Normal MCAPS by substituting for such Pledged Trust Preferred Securities or Qualifying Treasury Securities maturing at least one business day prior to the next Quarterly Date in an aggregate principal amount at maturity equal to the aggregate liquidation amount of such Pledged Trust Preferred Securities. To effect such substitution, the Holder must:

(i)deposit with the Collateral Agent the applicable Qualifying Treasury Securities that will mature at least one business day prior to the next Quarterly Date and, in each case, in an aggregate principal amount of $1,000, which must be purchased in the open market by the Holder (unless otherwise owned by the Holder); and

(ii)transfer the related Normal MCAPS to the Stock Purchase Contract Agent accompanied by a notice to be substantially in the form of Exhibit C hereto, (i) stating that the Holder has deposited the appropriate amount of Qualifying Treasury Securities with the Collateral Agent for credit to the Collateral Account in substitution for the Pledged Trust Preferred Securities, (ii) stating that the Holder is transferring the Normal MCAPS to the Transfer Agent and (iii) requesting that the Collateral Agent release the Pledged Trust Preferred Securities underlying such Normal MCAPS.

(b)Upon receipt of the Qualifying Treasury Securities described in clause (i) above and the instruction described in clause (ii) above, in accordance with the terms of the Collateral Agreement, the Collateral Agent will cause the release of such Pledged Trust Preferred Securities from the Pledge and the transfer of such Trust Preferred Securities to the Stock Purchase Contract Agent on behalf of the Holder free and clear of the Company’s security interest therein. Upon receipt of such Trust Preferred Securities, the Stock Purchase Contract Agent shall promptly:

(i)cancel the related Normal MCAPS;

(ii)transfer the Trust Preferred Securities to the Holder (such Trust Preferred Securities shall be tradeable as a separate security, independent of the resulting Treasury MCAPS); and

(iii)authenticate, execute on behalf of such Holder and deliver Treasury MCAPS in book-entry form, or if applicable, in the form of a Treasury MCAPS Certificate executed by the Company in accordance with Section 3.3 evidencing the same number of Stock Purchase Contracts as were evidenced by the cancelled Normal MCAPS.

(c)In the event a Holder making a Collateral Substitution pursuant to this Section 3.13 fails to effect a book-entry transfer of the Normal MCAPS or fails to deliver Normal MCAPS Certificates to the Transfer Agent after depositing Qualifying Treasury Securities with the Collateral Agent, any distributions on the Trust Preferred Securities constituting a part of such Normal MCAPS shall be held in the name of the Stock Purchase Contract Agent or its nominee in trust for the benefit of such Holder, until such Normal MCAPS are so transferred or the Normal MCAPS Certificate is so delivered, as the case may be, or, such Holder provides

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evidence satisfactory to the Company and the Stock Purchase Contract Agent that such Normal MCAPS Certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the Stock Purchase Contract Agent and the Company.

(d)Except as described in Section 6.2 or in this Section 3.13 or in connection with a Settlement with Qualifying Treasury Securities or a Termination Event, for so long as the Stock Purchase Contract underlying a Normal MCAPS remains in effect, such Normal MCAPS shall not be separable into its constituent parts, and the rights and obligations of the Holder in respect of the Trust Preferred Securities and the Stock Purchase Contract comprising such Normal MCAPS may be acquired, and may be transferred and exchanged, only as a Normal MCAPS.

(e)Promptly following each quarterly publication of the U.S. Department of the Treasury of the tentative auction schedule, the Collateral Agent shall prepare and deliver to the Company a schedule identifying for the upcoming 12-month period the issue and maturity dates for each Qualifying Treasury Security.

Section 3.14Recreation of Normal MCAPS.

(a)Subject to the conditions specified in this Agreement, a Holder of Treasury MCAPS may recreate Normal MCAPS at any time from and after the date of this Agreement and prior to the Successful Remarketing of the Trust Preferred Securities (except (1) on a day in February, May, August or November that is on or after the 15^th day of the month through the last day of the month (or the next Business Day if the last day is not a Business Day) or (2) during the period from 3:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of such Remarketing Period until the opening of business on the Business Day immediately following such Remarketing Settlement Date). To recreate Normal MCAPS, the Holder must:

(i)deposit with the Securities Intermediary Trust Preferred Securities having an aggregate liquidation amount equal to the stated amount of the Normal MCAPS to be recreated, which Trust Preferred Securities must be purchased at Holder’s expense (unless otherwise owned by the Holder); and

(ii)transfer the related Treasury MCAPS to the Stock Purchase Contract Agent accompanied by a notice to the Stock Purchase Contract Agent, substantially in the form of Exhibit C hereto, (i) stating that the Holder has transferred the relevant amount of Trust Preferred Securities to the Collateral Agent for deposit in the Collateral Account in substitution for the Pledged Qualifying Treasury Securities and (ii) instructing the Stock Purchase Contract Agent to instruct the Collateral Agent to release the Pledged Treasury Securities underlying such Treasury MCAPS, whereupon the Stock Purchase Contract Agent shall promptly provide an instruction to such effect to the Collateral Agent, substantially in the form of Exhibit C to the Collateral Agreement.

(b)Upon receipt of the Trust Preferred Securities described in clause (i) above and the instruction described in clause (ii) above, in accordance with the terms of the Collateral Agreement, the Collateral Agent will effect the release of the Pledged Qualifying Treasury Securities having a corresponding aggregate principal amount at maturity from the Pledge and

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the transfer thereof to the Stock Purchase Contract Agent on behalf of the Holder free and clear of the Company’s security interest therein. Upon receipt of such Qualifying Treasury Securities, the Stock Purchase Contract Agent shall promptly:

(i)cancel the related Treasury MCAPS;

(ii)transfer the Qualifying Treasury Securities to the Holder; and

(iii)authenticate, execute on behalf of such Holder and deliver Normal MCAPS in book-entry form or, if applicable, in the form of a Normal MCAPS Certificate executed by the Company in accordance with Section 3.3 evidencing the same number of Stock Purchase Contracts as were evidenced by the cancelled Treasury MCAPS.

(c)Except as provided in Section 6.2 or in this Section 3.14 or in connection with a Termination Event, for so long as the Stock Purchase Contract underlying a Treasury MCAPS remains in effect, such Treasury MCAPS shall not be separable into its constituent parts and the rights and obligations of the Holder of such Treasury MCAPS in respect of the Qualifying Treasury Security and the Stock Purchase Contract comprising such Treasury MCAPS may be acquired, and may be transferred and exchanged, only as a Treasury MCAPS.

Section 3.15Transfer of Collateral upon Occurrence of Termination Event.

(a)Upon the occurrence of a Termination Event and the transfer to the Stock Purchase Contract Agent of the Trust Preferred Securities or the Qualifying Treasury Securities, as the case may be, underlying the Normal MCAPS or the Treasury MCAPS, respectively, pursuant to the terms of the Collateral Agreement, the Stock Purchase Contract Agent shall request transfer instructions with respect to such Trust Preferred Securities or Qualifying Treasury Securities, as the case may be, from each Holder by written request, substantially in the form of Exhibit D hereto, mailed to such Holder at its address as it appears in the Securities Register.

(b)Upon book-entry transfer of the Normal MCAPS or the Treasury MCAPS or delivery of a Normal MCAPS Certificate or Treasury MCAPS Certificate to the Stock Purchase Contract Agent with such transfer instructions, the Stock Purchase Contract Agent shall transfer the Trust Preferred Securities or Qualifying Treasury Securities, as the case may be, underlying such Normal MCAPS or Treasury MCAPS, as the case may be, to such Holder by book-entry transfer, or other appropriate procedures, in accordance with such instructions. In the event a Holder of Normal MCAPS or Treasury MCAPS fails to effect such transfer or delivery, the Trust Preferred Securities or Qualifying Treasury Securities, as the case may be, underlying such Normal MCAPS or Treasury MCAPS, as the case may be, and any distributions thereon, shall be held in the name of the Stock Purchase Contract Agent or its nominee in trust for the benefit of such Holder, until the earlier to occur of:

(i)the transfer of such Normal MCAPS or Treasury MCAPS or surrender of the Normal MCAPS Certificate or Treasury MCAPS Certificate or the receipt by the Company and the Stock Purchase Contract Agent from such Holder of satisfactory evidence that such Normal MCAPS Certificate or Treasury MCAPS

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Certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the Stock Purchase Contract Agent and the Company; and

(ii)the expiration of the time period specified in the abandoned property laws of the relevant State in which the Stock Purchase Contract Agent holds such property.

Section 3.16No Consent to Assumption.

Each Holder of a MCAPS, by acceptance thereof, shall be deemed expressly to have withheld any consent to the assumption, under Section 365 of the Bankruptcy Code or otherwise, of the Stock Purchase Contract by the Company or its trustee, receiver, liquidator or a person or entity performing similar functions in the event that the Company becomes the debtor under the Bankruptcy Code or subject to other similar state or Federal law providing for reorganization or liquidation.

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ARTICLE IV

THE TRUST PREFERRED SECURITIES

Section 4.1Distributions; Rights to Distributions Preserved.

(a)Any payment on any Trust Preferred Security that is paid on any Payment Date shall, subject to receipt thereof by the Stock Purchase Contract Agent from the Company (in the case of a Trust Preferred Security that is held in the name of the Stock Purchase Contract Agent) or from the Collateral Agent as provided by the terms of the Collateral Agreement (in the case of a Trust Preferred Security that is held in the name of the Collateral Agent), be paid by the Stock Purchase Contract Agent to the Person in whose name the Normal MCAPS Certificate (or one or more Predecessor Normal MCAPS Certificates) of which such Trust Preferred Security forms a part is registered at the close of business on the Record Date for such Payment Date.

(b)Each Normal MCAPS Certificate evidencing a Trust Preferred Security delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of any other Normal MCAPS Certificate shall carry the right to accumulated and unpaid distributions or distributions, and to accrue distributions, which were carried by the Trust Preferred Security underlying such other Normal MCAPS Certificate.

(c)In the case of any Normal MCAPS with respect to which (A) a Collateral Substitution is properly effected pursuant to Section 3.13, or (B) a Successful Remarketing occurs with respect to the Trust Preferred Security that is part of such Normal MCAPS, in each case on a date that is after any Record Date and prior to or on the next succeeding Payment Date, distributions on the Trust Preferred Securities underlying such Normal MCAPS otherwise payable on such Payment Date shall be payable on such Payment Date notwithstanding such Collateral Substitution or Remarketing, and such payment or distributions shall, subject to receipt thereof by the Stock Purchase Contract Agent, be payable to the Person in whose name the Normal MCAPS Certificate (or one or more Predecessor Normal MCAPS Certificates) was registered at the close of business on the Record Date.

(d)Except as otherwise expressly provided in Section 4.1(c) in the case of any Normal MCAPS with respect to which a Collateral Substitution has been effected, payments on the related Trust Preferred Securities that would otherwise be payable or made after the date of the Collateral Substitution shall not be payable hereunder to the Holder of such Normal MCAPS; provided, however, that to the extent that such Holder continues to hold Separate Trust Preferred Securities that formerly comprised a part of such Holder’s Normal MCAPS, such Holder shall be entitled to receive distributions on such Separate Trust Preferred Securities.

Section 4.2Notice and Voting.

(a)The Stock Purchase Contract Agent will be entitled to exercise the voting and any other consensual rights pertaining to the Pledged Trust Preferred Securities, but only to the extent instructed in writing by the Holders as described below. Upon receipt of notice of any meeting at which holders of Trust Preferred Securities are entitled to vote or upon any solicitation of consents, waivers or proxies of holders of Trust Preferred Securities, the Stock

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Purchase Contract Agent shall, as soon as practicable thereafter, mail, first class, postage pre-paid, to the Holders of Normal MCAPS a notice:

(i)containing such information as is contained in the notice or solicitation;

(ii)stating that each Holder on the record date set by the Stock Purchase Contract Agent therefor (which, to the extent possible, shall be the same date as the record date for determining the holders of Trust Preferred Securities, as the case may be, entitled to vote) shall be entitled to instruct the Stock Purchase Contract Agent as to the exercise of the voting rights pertaining to such Trust Preferred Securities underlying their Normal MCAPS; and

(iii)stating the manner in which such instructions may be given.

(b)Upon the written request of the Holders of Normal MCAPS on such record date received by the Stock Purchase Contract Agent at least six days prior to such meeting, the Stock Purchase Contract Agent shall endeavor insofar as practicable to vote or cause to be voted, in accordance with the instructions specified in such requests, the maximum number of Trust Preferred Securities, as the case may be, as to which any particular voting instructions are received. In the absence of specific instructions from the Holder of a Normal MCAPS, the Stock Purchase Contract Agent shall abstain from voting the Trust Preferred Securities underlying such Normal MCAPS. The Company hereby agrees, if applicable, to solicit Holders of Normal MCAPS to timely instruct the Stock Purchase Contract Agent in order to enable the Stock Purchase Contract Agent to vote such Trust Preferred Securities.

(c)The Holders of Normal MCAPS and Treasury MCAPS shall have no voting or other rights in respect of Depositary Shares or the Preferred Stock.

(d)The Holders of Normal MCAPS have the right to (i) exercise or enforce all the rights of a holder of Trust Preferred Securities under Section 7.5 of the Declaration of Trust as if such Holders held the Trust Preferred Securities that form a part of their Normal MCAPS directly or (ii) direct the Stock Purchase Contract Agent to exercise or enforce its rights under Section 7.5 of the Declaration of Trust as the holder of such Trust Preferred Securities.

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ARTICLE V

QUALIFYING TREASURY SECURITIES

Section 5.1Qualifying Treasury Securities.

(a)For each February 28, May 31, August 31 and November 30, commencing on May 31, 2007 and ending on the Stock Purchase Date or the earlier termination of the Stock Purchase Contracts, or if any such day is not a Business Day, the immediately succeeding Business Day (each, a “Quarterly Date”), the Collateral Agent shall identify:

(i)the 13-week treasury bill that matures at least one and not more than six Business Days prior to that Quarterly Date, or

(ii)if no 13-week treasury bill that matures at least one and not more than six Business Days prior to that Quarterly Date is or is scheduled to be outstanding or is available in a sufficient principal amount on the immediately preceding Quarterly Date, the 26-week treasury bill that matures at least one and not more than six Business Days prior to that Quarterly Date, or

(iii)if neither of such treasury bills is or is scheduled to be outstanding or is available in a sufficient principal amount on the immediately preceding Quarterly Date, any other treasury security (which may be a zero coupon treasury security) that is outstanding on the immediately preceding Quarterly Date, is highly liquid and matures at least one Business Day prior to such Quarterly Date; provided that any treasury security identified pursuant to this clause (iii) shall be selected in a manner intended to minimize the cash value of the security selected.

(b)The Collateral Agent shall use commercially reasonable efforts to identify the security meeting the foregoing criteria for each Quarterly Date promptly after the Department of the Treasury makes the schedule for upcoming auctions of treasury securities publicly available and shall, to the extent that a security previously identified with respect to any Quarterly Date is no longer expected to be outstanding on the immediately preceding Quarterly Date, identify another security meeting the foregoing criteria for such Quarterly Date. The security most recently identified by the Collateral Agent with respect to any Quarterly Date shall be the “Qualifying Treasury Security” with respect to the period from and including its date of issuance (or if later, the date of maturity of the Qualifying Treasury Security with respect to the immediately preceding Quarterly Date) to but excluding its date of maturity, and the Collateral Agent’s identification of a security as a Qualifying Treasury Security for such period shall be final and binding for all purposes absent manifest error. The Collateral Agent shall give (or cause to be given) prompt written notice to the Company and the Stock Purchase Contract Agent of each determination made pursuant to this Section 5.1.

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ARTICLE VI

THE STOCK PURCHASE CONTRACTS

Section 6.1Purchase of Depositary Share.

(a)Each Stock Purchase Contract shall obligate the Holder of the related MCAPS to purchase, and the Company to sell, on the Stock Purchase Date at a price equal to $1,000 (the “Purchase Price”), one Depositary Share, unless a Termination Event with respect to the MCAPS of which such Stock Purchase Contract is a part shall have occurred.

(b)Each Holder of a Normal MCAPS or a Treasury MCAPS, by its acceptance of such MCAPS:

(i)irrevocably authorizes the Stock Purchase Contract Agent to enter into and perform the related Stock Purchase Contract on its behalf as its attorney-in-fact (including, without limitation, the execution of Certificates on behalf of such Holder);

(ii)agrees to be bound by the terms and provisions thereof;

(iii)covenants and agrees to perform its obligations under such Stock Purchase Contract for so long as such Holder remains a Holder of a Normal MCAPS or a Treasury MCAPS;

(iv)consents to the provisions hereof;

(v)irrevocably authorizes the Stock Purchase Contract Agent to enter into and perform this Agreement and the Collateral Agreement on its behalf and in its name as its attorney-in-fact;

(vi)consents to, and agrees to be bound by, the Pledge of such Holder’s right, title and interest in and to the Collateral Account, including the Trust Preferred Securities and the Qualifying Treasury Securities pursuant to the Collateral Agreement; and

(vii)for United States federal, state and local income and franchise tax purposes, agrees to (A) treat an acquisition of the Normal MCAPS as an acquisition of a unit consisting of the Trust Preferred Securities and Stock Purchase Contracts constituting the Normal MCAPS and, with respect to Treasury MCAPS, treat Treasury MCAPS as a unit consisting of a Qualifying Treasury Security and a Stock Purchase Contracts, (B) treat itself as the owner of the applicable interest in the Collateral Account, including the Trust Preferred Securities and the Qualifying Treasury Securities, as the case may be and (C) treat the Junior Subordinated Debentures as indebtedness of the Company;

provided that upon a Termination Event, the rights of the Holder of such MCAPS under the Stock Purchase Contract may be enforced without regard to any other rights or obligations.

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(c)Each Holder of a Normal MCAPS or a Treasury MCAPS, by its acceptance thereof, further covenants and agrees that to the extent and in the manner provided in Section 6.2 hereof and the provisions of the Collateral Agreement, but subject to the terms thereof, Proceeds of the Trust Preferred Securities or the Qualifying Treasury Securities, as applicable, on the Stock Purchase Date, shall be paid by the Collateral Agent to the Company in satisfaction of such Holder’s obligations under such Stock Purchase Contract and such Holder shall acquire no right, title or interest in such Proceeds.

(d)Upon registration of transfer of a Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee) by the terms of this Agreement, the Stock Purchase Contracts underlying such Certificate and the Collateral Agreement and the transferor shall be released from the obligations under this Agreement, the Stock Purchase Contracts underlying the Certificate so transferred and the Collateral Agreement. The Company covenants and agrees, and each Holder of a Certificate, by its acceptance thereof, likewise covenants and agrees, to be bound by the provisions of this paragraph.

(e)In any case where the Stock Purchase Date shall not be a Business Day (notwithstanding any other provision of this Agreement or the MCAPS), the Stock Purchase Contracts shall not be performed and shall not be effected on such date, but the Stock Purchase Contracts shall be performed on the next preceding Business Day with the same force and effect as if made on such Stock Purchase Date.

Section 6.2Remarketing; Payment of Purchase Price.

(a)The Company shall conduct a Remarketing of the Trust Preferred Securities in accordance with Article XIII of the Declaration of Trust and the Remarketing Agreement.

(i)With respect to any Trust Preferred Security that constitutes part of Normal MCAPS that are subject to a final Remarketing attempt, the Collateral Agent for the benefit of the Company reserves all of its rights as a secured party with respect to the Trust Preferred Securities and, subject to applicable law and Section 6.2(d), may, among other things, (i) retain such Trust Preferred Securities in full satisfaction of the Holders’ obligations under the Stock Purchase Contracts or (ii) sell such Trust Preferred Securities in one or more public or private sales as permitted by applicable law, in order to satisfy the Stock Purchase Contract Agent’s obligations under Section 2.2(a) to pay the purchase price in respect of the Stock Purchase Contracts.

(ii)The Stock Purchase Contract Agent shall give Holders of MCAPS, and the Company shall request that the MCAPS Depositary or its nominee give MCAPS Depositary Participants holding MCAPS and Separate Trust Preferred Securities, notice of a Remarketing at least 21 Business Days prior to any Remarketing Date. Such notice will specify the information required to be specified in the notice pursuant to Section 13.2 of the Declaration of Trust.

(b)Each Holder of Normal MCAPS shall have the right to satisfy such Holder’s obligations under the Stock Purchase Contract on the Stock Purchase Date with separate Qualifying Treasury Securities by notifying the Stock Purchase Contract Agent by presenting a

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notice in substantially the form of Exhibit E hereto of its intention to settle with Qualifying Treasury Securities and surrendering the Normal MCAPS certificate on or prior to 5:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of any Remarketing Period and delivering Qualifying Treasury Securities having a principal amount equal to the Purchase Price under the related Stock Purchase Contracts to the Collateral Agent on or prior to 5:00 p.m. (New York City time) on the first Business Day immediately preceding the beginning of any Remarketing Period. Promptly following 5:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of any Remarketing Period, the Stock Purchase Contract Agent shall notify the Collateral Agent and the Trustee of the receipt of such notices from Holders intending to make a Settlement with Qualifying Treasury Securities by use of a notice in substantially the form of Exhibit F hereto.

(i)A Holder of a Normal MCAPS who has so notified the Stock Purchase Contract Agent of its intention to effect a Settlement with Qualifying Treasury Securities shall deliver the Qualifying Treasury Securities specified in Section 6.2(b) above to the Collateral Agent for deposit in the Collateral Account on or prior to 5:00 p.m. (New York City time) on the first Business Day immediately preceding the beginning of any Remarketing Period. Any securities or their proceeds received shall be paid or delivered, as the case may be, to the Company on the Stock Purchase Date in settlement of the Stock Purchase Contracts in accordance with the terms of this Agreement and the Collateral Agreement.

(ii)If a Holder of a Normal MCAPS does not notify the Stock Purchase Contract Agent of its intention to make a Settlement with Qualifying Treasury Securities in accordance with Section 6.2(b)(ii), or does notify the Stock Purchase Contract Agent in accordance with Section 6.2(b)(i) but fails to make such delivery as required by Section 6.2(b)(ii), such Holder shall be deemed to have consented to the disposition of the Pledged Trust Preferred Securities pursuant to the next applicable Remarketing.

(iii)As soon as practicable after 5:00 p.m. (New York City time) on the first Business Day immediately preceding the beginning of any Remarketing Period, the Collateral Agent, based on Qualifying Treasury Securities received by the Collateral Agent pursuant to Section 6.2(b)(ii), shall promptly notify the Stock Purchase Contract Agent of the aggregate liquidation amount of Trust Preferred Securities to be tendered for purchase in the Remarketing in a notice pursuant to the terms of the Collateral Agreement.

(iv)In the event of a Remarketing that is not Successful, (A) the Stock Purchase Date shall be deferred for a quarterly period, except in the case of a Failed Remarketing, in which case the Stock Purchase Date shall occur on May 31, 2013 (or the fifth scheduled Remarketing Settlement Date in the case of an Early Remarketing), and (B) if the Holders of MCAPS have delivered Qualifying Treasury Securities in order to effect Settlement with Qualifying Treasury Securities in accordance with Section 6.2(b)(ii), the Collateral Agent will promptly return the Qualifying Treasury Securities or their proceeds, as the case may be, that it has received with respect to the Settlement with

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Qualifying Treasury Securities to the Stock Purchase Contract Agent for distribution to the applicable Holders of Normal MCAPS.

(v)In the event of a Successful Remarketing, if the Holders of MCAPS have delivered Qualifying Treasury Securities in order to effect Settlement with Qualifying Treasury Securities, the Collateral Agent will cause the Securities Intermediary to effect the release of Pledged Trust Preferred Securities from the Pledge and the transfer of such Trust Preferred Securities to the Stock Purchase Contract Agent on behalf of the Holders free and clear of the Company’s security interest therein. Upon receipt of such Trust Preferred Securities, the Stock Purchase Contract Agent shall promptly transfer the Trust Preferred Securities to the Holders.

(c)The obligations of the Holders to pay the Purchase Price are non-recourse obligations and, except to the extent satisfied by Settlement with Qualifying Treasury Securities, are payable solely out of the Proceeds of any Collateral pledged to secure the obligations of the Holders, and in no event will the Holders be liable for any deficiency between the Proceeds of the disposition of Collateral and the Purchase Price.

(d)The Company shall not be obligated to issue any Depositary Shares in respect of a Stock Purchase Contract or deliver any certificates therefor to the Holder of the related MCAPS unless the Company shall have received payment for the Depositary Shares to be purchased thereunder in the manner herein specified.

Section 6.3Issuance of Depositary Shares.

(a)Unless a Termination Event shall have occurred, on the Stock Purchase Date upon receipt of the aggregate Purchase Price payable on all Outstanding MCAPS, the Company shall issue and deposit with the Depositary for the Depositary Shares, for the benefit of the Holders of the Outstanding MCAPS, one or more certificates representing newly issued or treasury Depositary Shares (the “Depositary Receipts”) registered in the name of the Stock Purchase Contract Agent (or its nominee) as custodian for the Holders (such certificates for Depositary Shares, together with any dividends or distributions for which a record date and payment date for such dividend or distribution has occurred after the Stock Purchase Date, being hereinafter referred to as the “Stock Purchase Contract Settlement Fund”) to which the Holders are entitled hereunder, it being understood that in order for the Company to satisfy its obligations under this Section 6.3(a), the Company shall issue and deposit with the Preferred Stock Depositary shares of Preferred Stock and, pursuant to a Deposit Agreement, shall cause the Preferred Stock Depositary to issue and deposit such Depositary Receipts in respect of the Preferred Stock so deposited.

(b)Subject to the foregoing, upon surrender of a Certificate to the Stock Purchase Contract Agent on or after the Stock Purchase Date together with settlement instructions thereon duly completed and executed, the Holder of such Certificate shall be entitled to receive forthwith in exchange therefor a certificate representing that number of newly issued Depositary Shares that such Holder is entitled to receive pursuant to the provisions of this Article VI (after taking into account all MCAPS then held by such Holder), together with any dividends or distributions with respect to such shares constituting part of the Stock Purchase Contract Settlement Fund, but

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without any interest thereon, and the Certificate so surrendered shall forthwith be cancelled. Such shares shall be registered in the name of the Holder or the Holder’s designee as specified in the settlement instructions provided by the Holder to the Stock Purchase Contract Agent. If any Depositary Shares issued in respect of a Stock Purchase Contract are to be registered to a Person other than the Person in whose name the Certificate evidencing such Stock Purchase Contract is registered (but excluding any MCAPS Depositary or nominee thereof), no such registration shall be made unless the Person requesting such registration has paid any transfer and other taxes required by reason of such registration in a name other than that of the registered Holder of the Certificate evidencing such Stock Purchase Contract or has established to the satisfaction of the Company that such tax either has been paid or is not payable.

(c)The Stock Purchase Contract Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any Preferred Stock or Depositary Shares, or of any securities or property, that may at the time be issued or delivered with respect to any Stock Purchase Contract, and the Stock Purchase Contract Agent makes no representation with respect thereto. The Stock Purchase Contract Agent shall not be responsible for any failure of the Company to cause to issue, transfer or deliver any Depositary Shares pursuant to a Stock Purchase Contract or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article VI.

Section 6.4Termination Event; Notice.

(a)The Stock Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights of the Holders to receive and the obligation of the Company to pay any Contract Payments (including any accrued and unpaid Contract Payments), and the rights and obligations of Holders to purchase Depositary Shares, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Stock Purchase Contract Agent or the Company, if a Termination Event shall have occurred on or prior to the Stock Purchase Date.

(b)Upon and after the occurrence of a Termination Event, the MCAPS shall thereafter represent the right to receive the Trust Preferred Securities or the Qualifying Treasury Securities, as the case may be, forming part of such MCAPS, in accordance with the provisions of Section 5.4 of the Collateral Agreement. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than five Business Days thereafter give written notice of such event to the Stock Purchase Contract Agent, the Collateral Agent and the Holders, at their addresses as they appear in the Securities Register.

Section 6.5Charges and Taxes.

The Company shall pay all stock transfer and similar taxes attributable to the initial issuance and delivery of the Depositary Shares pursuant to the Stock Purchase Contracts; provided, however, that the Company shall not be required to pay any such tax or taxes that may be payable in respect of any exchange of or substitution for a Certificate evidencing a MCAPS or any issuance of a Depositary Share in a name other than that of the registered Holder of a Certificate surrendered in respect of the MCAPS evidenced thereby, other than in the name of the Stock Purchase Contract Agent, as custodian for such Holder, and the Company shall not be

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required to issue or deliver such share certificates or Certificates unless or until the Person or Persons requesting the transfer or issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

Section 6.6Contract Payments.

(a)Subject to Section 6.7, the Company shall pay, on each Payment Date, the Contract Payments payable in respect of each Stock Purchase Contract to the Person in whose name a Certificate is registered at the close of business on the Record Date relating to such Payment Date. The Contract Payments will be payable at the office of the Stock Purchase Contract Agent in the Borough of Manhattan, New York City maintained for that purpose. If the book-entry system for the MCAPS has been terminated, the Contract Payments will be payable, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person’s address as it appears on the Securities Register, or by wire transfer to the account designated by such Person by a prior written notice to the Stock Purchase Contract Agent. If any date on which Contract Payments are to be made is not a Business Day, then payment of the Contract Payments payable on such date will be made on the next succeeding day that is a Business Day (and without any interest in respect of such delay). The Contract Payments will accrue from and including May 17, 2007 or from and including the most recent Payment Date on which Contract Payments have been paid or duly provided for (subject to deferral as specified in Section 6.7) to but excluding the next succeeding Payment Date. Contract Payments will be calculated on the basis of the actual number of days elapsed in the related payment period using a 360-day year.

(b)Upon the occurrence of a Termination Event, the Company’s obligation to pay future Contract Payments (including any accrued Contract Payments) shall cease.

(c)Each Certificate delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of (including as a result of a Collateral Substitution or the recreation of Normal MCAPS) any other Certificate shall carry the right to accrued and unpaid Contract Payments that was carried by the Stock Purchase Contracts underlying such other Certificates.

(d)The Company’s obligations with respect to Contract Payments, if any, will be subordinated and junior in right of payment to the Company’s obligations under any Senior Debt.

(e)In the event of (A) any insolvency, bankruptcy, receivership, liquidation, reorganization, readjustment, composition or other similar proceeding relating to the Company, its creditors or its property, (B) any proceeding for the liquidation, dissolution or other winding up of the Company, voluntary or involuntary, whether or not involving insolvency or bankruptcy proceedings, (C) any assignment by the Company for the benefit of creditors, or (D) any other marshalling of the assets of the Company:

(i)all Senior Debt (including any interest thereon accruing after the commencement of any such proceedings) shall first be paid in full before any payment or distribution, whether in cash, securities or other property, shall be made to any Holder of MCAPS in respect of Contract Payments;

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(ii)any payment or distribution, whether in cash, securities or other property that would otherwise (but for these subordination provisions) be payable or deliverable in respect of Contract Payments shall be paid or delivered directly to the holders of Senior Debt in accordance with the priorities then existing among such holders until all Senior Debt (including any interest thereon accruing after the commencement of any such proceedings) shall have been paid in full;

(iii)after payment in full of all sums owing with respect to Senior Debt, the Holders of MCAPS, together with the holders of any obligations of the Company ranking on a parity with the Contract Payments, shall be entitled to be paid from the remaining assets of the Company the amounts at the time due and owing on account of unpaid Contract Payments and interest thereon and such other obligations before any payment or other distribution, whether in cash, securities or other property, shall be made on account of any capital stock of the Company or any obligations of the Company ranking junior to the Company’s obligations to make Contract Payments under the Stock Purchase Contracts and such other obligations; and

(iv)in the event that, notwithstanding the foregoing, any payment or distribution of any character or any security, whether in cash, securities or other property, shall be received by the Stock Purchase Contract Agent or any Holder of MCAPS in contravention of any of the terms hereof such payment or distribution or security shall be received in trust for the benefit of, and shall be paid over or delivered and transferred back to the transferor for distribution, or to the holders of the Senior Debt at the time outstanding in accordance with the priorities then existing among such holders for application to the payment of all Senior Debt remaining unpaid, to the extent necessary to pay all such Senior Debt in full. In the event of the failure of the Stock Purchase Contract Agent or any Holder of MCAPS to endorse or assign any such payment, distribution or security, each holder of Senior Debt is hereby irrevocably authorized to endorse or assign the same.

(f)For purposes of Sections 6.6(d) through (p), the words “cash, securities or other property” shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other Person provided for by a plan of reorganization or readjustment, the payment of which is subordinated at least to the extent provided in Sections 6.6(d) through (p) with respect to such Contract Payments on the MCAPS to the payment of all Senior Debt that may at the time be outstanding; provided that (i) the indebtedness or guarantee of indebtedness, as the case may be, that constitutes Senior Debt is assumed by the Person, if any, resulting from any such reorganization or readjustment, and (ii) the rights of the holders of the Senior Debt are not, without the consent of each such holder adversely affected thereby, altered by such reorganization or readjustment.

(g)Any failure by the Company to make any payment on or perform any other obligation under Senior Debt, other than any indebtedness incurred by the Company or assumed or guaranteed, directly or indirectly, by the Company for money borrowed (or any deferral, renewal, extension or refunding thereof) or any indebtedness or obligation as to which the provisions of Sections 6.6(d) through (p) shall have been waived by the Company in the instrument or instruments by which the Company incurred, assumed, guaranteed or otherwise

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created such indebtedness or obligation, shall not be deemed a default or event of default if (i) the Company shall be disputing its obligation to make such payment or perform such obligation and (ii) either (A) no final judgment relating to such dispute shall have been issued against the Company that is in full force and effect and is not subject to further review, including a judgment that has become final by reason of the expiration of the time within which a party may seek further appeal or review, or (B) in the event a judgment that is subject to further review or appeal has been issued, the Company shall in good faith be prosecuting an appeal or other proceeding for review and a stay of execution shall have been obtained pending such appeal or review.

(h)Subject to the irrevocable payment in full of all Senior Debt, the Holders of the MCAPS shall be subrogated (equally and ratably with the holders of all obligations of the Company that by their express terms are subordinated to Senior Debt of the Company to the same extent as payment of the Contract Payments in respect of the Stock Purchase Contracts underlying the MCAPS is subordinated and that are entitled to like rights of subrogation) to the rights of the holders of Senior Debt to receive payments or distributions of cash, securities or other property of the Company applicable to the Senior Debt until all such Contract Payments owing on the MCAPS shall be paid in full, and as between the Company, its creditors other than holders of such Senior Debt and the Holders, no such payment or distribution made to the holders of Senior Debt by virtue of Sections 6.6(d) through (p) that otherwise would have been made to the Holders shall be deemed to be a payment by the Company on account of such Senior Debt, it being understood that the provisions of Sections 6.6(d) through (p) are intended solely for the purpose of defining the relative rights of the Holders, on the one hand, and the holders of Senior Debt, on the other hand.

(i)Nothing contained in Sections 6.6(d) through (p) or elsewhere in this Agreement or in the MCAPS is intended to or shall impair, as among the Company, its creditors other than the holders of Senior Debt and the Holders, the obligation of the Company, which is absolute and unconditional, to pay to the Holders such Contract Payments on the MCAPS as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders and creditors of the Company other than the holders of Senior Debt, nor shall anything herein or therein prevent the Stock Purchase Contract Agent or any Holder from exercising all remedies otherwise permitted by applicable law upon default under this Agreement, subject to the rights, if any, under Sections 6.6(d) through (p), of the holders of Senior Debt in respect of cash, securities or other property of the Company received upon the exercise of any such remedy.

(j)Upon payment or distribution of assets of the Company referred to in Sections 6.6(d) through (p), the Stock Purchase Contract Agent and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which any such dissolution, winding up, liquidation or reorganization proceeding affecting the affairs of the Company is pending or upon a certificate of the trustee in bankruptcy, receiver, conservator, assignee for the benefit of creditors, liquidating trustee or Stock Purchase Contract Agent or other Person making any payment or distribution, delivered to the Stock Purchase Contract Agent or to the Holders, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Debt and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to Sections 6.6(d) through (p).

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(k)The Stock Purchase Contract Agent shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Debt (or a trustee or representative on behalf of such holder) to establish that such notice has been given by a holder of Senior Debt or a trustee or representative on behalf of any such holder or holders. In the event that the Stock Purchase Contract Agent determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Debt to participate in any payment or distribution pursuant to Section 6.6(d) through (p), the Stock Purchase Contract Agent may request such Person to furnish evidence to the reasonable satisfaction of the Stock Purchase Contract Agent as to the amount of Senior Debt held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under Sections 6.6(d) through (p), and, if such evidence is not furnished, the Stock Purchase Contract Agent may defer payment to such Person pending judicial determination as to the right of such Person to receive such payment.

(l)Nothing contained in Sections 6.6(d) through (p) shall affect the obligations of the Company to make, or prevent the Company from making, payment of the Contract Payments, except as otherwise provided in Sections 6.6(d) through (p).

(m)Each Holder of MCAPS, by its acceptance thereof, authorizes and directs the Stock Purchase Contract Agent on its behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in Section 6.6(d) through (p) and appoints the Stock Purchase Contract Agent its attorney-in-fact, as the case may be, for any and all such purposes.

(n)The Company shall give prompt written notice to the Stock Purchase Contract Agent of any fact known to the Company that would prohibit the making of any payment of moneys to or by the Stock Purchase Contract Agent in respect of the MCAPS pursuant to the provisions of this Section. Notwithstanding the provisions of Section 6.6(d) through (p) or any other provisions of this Agreement, the Stock Purchase Contract Agent shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment of moneys to or by the Stock Purchase Contract Agent, or the taking of any other action by the Stock Purchase Contract Agent, unless and until the Stock Purchase Contract Agent shall have received written notice thereof mailed or delivered to the Stock Purchase Contract Agent at its Corporate Trust Services department from the Company, any Holder, or the holder or representative of any Senior Debt; provided that if at least two Business Days prior to the date upon which by the terms hereof any such moneys may become payable for any purpose, the Stock Purchase Contract Agent shall not have received with respect to such moneys the notice provided for in this Section, then, anything herein contained to the contrary notwithstanding, the Stock Purchase Contract Agent shall have full power and authority to receive such moneys and to apply the same to the purpose for which they were received and shall not be affected by any notice to the contrary that may be received by it within two Business Days prior to or on or after such date.

(o)The Stock Purchase Contract Agent in its individual capacity shall be entitled to all the rights specified in this Section with respect to any Senior Debt at the time held by it, to the same extent as any other holder of Senior Debt and nothing in this Agreement shall deprive the Stock Purchase Contract Agent of any of its rights as such holder.

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(p)No right of any present or future holder of any Senior Debt to enforce the subordination herein shall at any time or in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any noncompliance by the Company with the terms, provisions and covenants of this Agreement, regardless of any knowledge thereof that any such holder may have or be otherwise charged with.

(q)Nothing in this Section 6.6 shall apply to claims of, or payments to, the Stock Purchase Contract Agent under or pursuant to Section 8.7.

(r)With respect to the holders of Senior Debt, (i) the duties and obligations of the Stock Purchase Contract Agent shall be determined solely by the express provisions of this Agreement; (ii) the Stock Purchase Contract Agent shall not be liable to any such holders if it shall, acting in good faith, mistakenly pay over or distribute to the Holders or to the Company or any other Person cash, securities or other property to which any holders of Senior Debt shall be entitled by virtue of this Section 6.6 or otherwise; (iii) no implied covenants or obligations shall be read into this Agreement against the Stock Purchase Contract Agent; and (iv) the Stock Purchase Contract Agent shall not be deemed to be a fiduciary as to such holders.

Section 6.7Deferral of Contract Payments.

(a)The Company shall have the right (which will be exercised if so directed by the SEC), at any time prior to the Stock Purchase Date, to defer the payment of any or all of the Contract Payments otherwise payable on any Payment Date, but only if the Company shall give the Holders and the Stock Purchase Contract Agent written notice of its election to defer each such deferred Contract Payment (specifying the amount to be deferred) at least ten Business Days prior to the earlier of (i) the next succeeding Payment Date or (ii) the date the company is required to give notice of any Record Date or Payment Date with respect to the payment of such Contract Payments to the New York Stock Exchange, or any other national securities exchange, automated interdealer quotation system or other applicable self regulatory organization or to Holders of MCAPS, but in any event not less than one Business Day prior to such Record Date. Any Contract Payments so deferred shall, to the extent permitted by law, accrue interest thereon at the rate originally applicable to the Debentures (calculated on the same basis as originally applicable to the Debentures), compounding on each succeeding Payment Date, until paid in full (such deferred installments of Contract Payments, if any, together with the additional Contract Payments, if any, accrued thereon, being referred to herein as the “Deferred Contract Payments”). Deferred Contract Payments, if any, shall be due on the next succeeding Payment Date except to the extent that payment is deferred pursuant to this Section 6.7. No Contract Payments may be deferred to a date that is after the Stock Purchase Date and no such deferral period may end other than on a Payment Date. If the Stock Purchase Contracts are terminated upon the occurrence of a Termination Event, the Holder’s right to receive any Contract Payments and any Deferred Contract Payments will terminate.

(b)In the event that the Company elects to defer the payment of Contract Payments until a Payment Date prior to the Stock Purchase Date, then all Deferred Contract Payments, if any, shall be payable to the registered Holders as of the close of business on the Record Date immediately preceding such Payment Date.

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(c)In the event that the Company elects to defer the payment of Contract Payments on the Stock Purchase Contracts and such deferral is continuing on the Stock Purchase Date, each Holder will receive on the Stock Purchase Date in lieu of a cash payment, in addition to the Depositary Shares to be issued pursuant to Section 6.3, subordinated notes of the Company (“Additional Subordinated Notes”) that will (i) have a principal amount equal to the aggregate amount of Deferred Contract Payments at the Stock Purchase Date, (ii) mature on the later of June 2, 2014 and five years after the first Payment Date on which any of such Deferred Contract Payments were payable, (iii) bear interest at the rate per annum equal to the originally applicable rate of interest on the Debentures (subject to deferral on the same basis as the Contract Payments; provided that the reference in clause (i)(2) of Section 6.7(d) to the beginning of the deferral period shall be deemed to refer to the beginning of the deferral period with respect to the Contract Payments), (iv) be subordinate and rank junior in right of payment to all of the Company’s Senior Debt on the same basis as the Debentures and (v) be redeemable at the option of the Company at any time or from time to time prior to their stated maturity at a redemption price equal to the principal amount thereof plus any accrued and unpaid interest to the date of redemption.

In the event the Company exercises its option to defer the payment of Contract Payments then, until the earlier of (x) the Termination Date or (y) the date on which the Company shall have either paid all Deferred Contract Payments in the manner set forth in Section 6.7(c) to the Stock Purchase Contract Agent in cash or repaid all amounts outstanding on the Additional Subordinated Notes, the Company shall not (A) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any shares of its capital stock, including Preferred Stock; (B) make any payment of principal of or interest or premium, if any, on or repay, repurchase or redeem any debt security of the Company that ranks pari passu in all respects with or junior in interest to the Debentures; and (C) make any guarantee payments with respect to any guarantee by the Company of the debt securities of any subsidiary of the Company that by its terms ranks pari passu in all respects with or junior in interest to the Guarantee (as such term is defined in the Declaration of Trust), other than, in each case: (a) dividends or distributions in the form of common stock of the Company; (b) payments under the Trust Guarantee (as such term is defined in the Declaration of Trust); (c) any declaration of a dividend in connection with the implementation of a shareholders’ rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto; (d) purchases of common stock related to the issuance of common stock or rights under any of the Company’s benefit plans; (e) payments of interest on any of the Company’s debt securities that rank on a parity with (“Parity Debt Securities”) or junior in interest to the Debentures or payments under any guarantee of the Company of the debt securities of any subsidiary of the Company if such guarantee ranks on a parity with (“Parity Guarantees”) or junior in interest to the Debentures in respect of interest payments on debt securities of any subsidiary of the Company, in each case ratably and in proportion to the respective amount of (x) accrued and unpaid interest on such Parity Debt Securities or guaranteed by such Parity Guarantees, on the one hand, and (y) accrued and unpaid interest on the Debentures (including compounded amounts and all amounts of principal and interest on any Additional Subordinated Notes), on the other hand; and (f) payment of interest on the Debentures in Additional Subordinated Notes in connection with a Failed Remarketing.

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Section 6.8Rights of Holders of Treasury MCAPS to Receive Excess Proceeds.

The Stock Purchase Contract Agent shall pay, solely out of the funds received from the Collateral Agent for such purpose pursuant to Section 5.5 of the Collateral Agreement, on each Quarterly Date, an amount in cash equal to the excess of the net proceeds received by the Collateral Agent upon the maturity of the related Pledged Treasury Securities over the net purchase price of the Qualifying Treasury Securities purchased therewith pursuant to Section 5.5 of the Collateral Agreement to the Person in whose name a Treasury MCAPS Certificate is registered at the close of business on the Record Date relating to such Quarterly Date. Such amounts will be payable at the office of the Stock Purchase Contract Agent in the Borough of Manhattan, New York City maintained for that purpose. If the book entry system for the MCAPS has been terminated, such payments will be payable, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person’s address as it appears on the Security Register, or by wire transfer to the account designated by such Person by a prior written notice to the Stock Purchase Contract Agent.

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ARTICLE VII

REMEDIES

Section 7.1Unconditional Right of Holders to Receive Contract Payments and to Purchase Depositary Shares.

Each Holder of MCAPS shall have the right, which is absolute and unconditional, except upon and following a Termination Event, (i) subject to Article VI, to receive each Contract Payment with respect to each Stock Purchase Contract comprising part of such MCAPS on the respective Payment Date for such MCAPS and (ii) to purchase Depositary Shares pursuant to such Stock Purchase Contract and, in each such case, to institute suit for the enforcement of any such right to receive Contract Payments and the right to purchase Depositary Shares, and such rights shall not be impaired without the consent of such Holder.

Section 7.2Restoration of Rights and Remedies.

If any Holder has instituted any proceeding to enforce any right or remedy under this Agreement and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to such Holder, then and in every such case, subject to any determination in such proceeding, the Company and such Holder shall be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of such Holder shall continue as though no such proceeding had been instituted.

Section 7.3Rights and Remedies Cumulative.

Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Certificates in Section 3.10(f), no right or remedy herein conferred upon or reserved to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 7.4Delay or Omission Not Waiver.

No delay or omission of any Holder to exercise any right upon a default or remedy upon a default shall impair any such right or remedy or constitute a waiver of any such right. Every right and remedy given by this Article VII or by law to the Holders may be exercised from time to time, and as often as may be deemed expedient, by such Holders.

Section 7.5Undertaking for Costs.

All parties to this Agreement agree, and each Holder of a MCAPS, by its acceptance of such MCAPS shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Agreement, or in any suit against the Stock Purchase Contract Agent for any action taken, suffered or omitted by it as Stock Purchase Contract Agent, the filing by any party litigant in such suit of an undertaking to pay the costs of

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such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and costs against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided that the provisions of this Section shall not apply to any suit instituted by the Stock Purchase Contract Agent, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% of the Outstanding MCAPS, or to any suit instituted by any Holder for the enforcement of interest on any Trust Preferred Securities or Contract Payments on or after the respective Payment Date therefor in respect of any MCAPS held by such Holder, or for enforcement of the right to purchase Depositary Shares under the Stock Purchase Contracts constituting part of any MCAPS held by such Holder.

Section 7.6Waiver of Stay or Extension Laws.

The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Agreement; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Stock Purchase Contract Agent or the Holders, but will suffer and permit the execution of every such power as though no such law had been enacted.

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ARTICLE VIII

THE PURCHASE CONTRACT AGENT

Section 8.1Certain Duties and Responsibilities.

(a)The Stock Purchase Contract Agent:

(i)undertakes to perform, with respect to the MCAPS, such duties and only such duties as are or will be specifically specified in this Agreement, the Collateral Agreement and the Remarketing Agreement and no implied covenants or obligations shall be read into this Agreement, the Collateral Agreement or the Remarketing Agreement against the Stock Purchase Contract Agent; and

(ii)in the absence of bad faith or gross negligence on its part, may, with respect to the MCAPS, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Stock Purchase Contract Agent and conforming to the requirements of this Agreement or the Collateral Agreement or the Remarketing Agreement, as applicable, but in the case of any certificates or opinions which by any provision hereof are specifically required to be furnished to the Stock Purchase Contract Agent, the Stock Purchase Contract Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Agreement, the Collateral Agreement or the Remarketing Agreement, as applicable (but need not confirm or investigate the accuracy of the mathematical calculations or other facts stated therein).

(b)No provision of this Agreement, the Collateral Agreement or the Remarketing Agreement shall be construed to relieve the Stock Purchase Contract Agent from liability for its own grossly negligent action, its own grossly negligent failure to act, or its own willful misconduct, except that:

(i)this Section 8.1(b) shall not be construed to limit the effect of Section 8.1(a);

(ii)the Stock Purchase Contract Agent shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be conclusively determined by a court of competent jurisdiction that the Stock Purchase Contract Agent was grossly negligent in ascertaining the pertinent facts; and

(iii)no provision of this Agreement or the Collateral Agreement or the Remarketing Agreement shall require the Stock Purchase Contract Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(c)Whether or not therein expressly so provided, every provision of this Agreement, the Collateral Agreement and the Remarketing Agreement relating to the conduct or affecting the

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liability of or affording protection to the Stock Purchase Contract Agent shall be subject to the provisions of this Section.

(d)The Stock Purchase Contract Agent is authorized to execute and deliver the Collateral Agreement in its capacity as Stock Purchase Contract Agent.

Section 8.2Notice of Default.

Within 30 days after the occurrence of any default by the Company hereunder of which a Responsible Officer of the Stock Purchase Contract Agent has actual knowledge, the Stock Purchase Contract Agent shall transmit by mail to the Company and the Holders of MCAPS, as their names and addresses appear in the Securities Register, notice of such default hereunder, unless such default shall have been cured or waived.

Section 8.3Certain Rights of Stock Purchase Contract Agent.

Subject to the provisions of Section 8.1:

(a)the Stock Purchase Contract Agent may, in the absence of bad faith, 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, Trust Preferred Securities, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties;

(b)any request or direction of the Company mentioned herein shall be sufficiently evidenced by an Officers’ Certificate, Issuer Order or Issuer Request, and any resolution of the Board of Directors of the Company may be sufficiently evidenced by a Board Resolution;

(c)whenever in the administration of this Agreement, the Collateral Agreement or the Remarketing Agreement the Stock Purchase Contract Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting to take any action hereunder, the Stock Purchase Contract Agent (unless other evidence be herein specifically prescribed in this Agreement) may, in the absence of bad faith on its part, conclusively rely upon an Officers’ Certificate of the Company;

(d)the Stock Purchase Contract Agent may consult with counsel of its selection appointed with due care by it hereunder and the advice of such counsel or any Opinion of Counsel 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 reliance thereon;

(e)the Stock Purchase Contract Agent 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 Stock Purchase Contract Agent, in its discretion, may make reasonable further inquiry or investigation into such facts or matters related to the execution, delivery and performance of the Stock Purchase Contracts as it may see fit, and, if the Stock Purchase Contract Agent shall determine to make such further inquiry or

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investigation, it shall be entitled to examine the relevant books, records and premises of the Company, personally or by agent or attorney;

(f)the Stock Purchase Contract Agent may execute any of the powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees or an Affiliate and the Stock Purchase Contract Agent shall not be responsible for any misconduct or negligence on the part of any agent, attorney, custodian or nominee or an Affiliate appointed with due care by it hereunder;

(g)the Stock Purchase Contract Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement at the request or direction of any of the Holders pursuant to this Agreement, unless such Holders shall have offered to the Stock Purchase Contract Agent security or indemnity reasonably satisfactory to the Stock Purchase Contract Agent against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction;

(h)the Stock Purchase Contract Agent shall not be liable for any action taken, suffered, or omitted to be taken by it in the absence of bad faith or gross negligence by it;

(i)the Stock Purchase Contract Agent shall not be deemed to have notice of any default hereunder unless a Responsible Officer of the Stock Purchase Contract Agent has actual knowledge thereof or unless written notice of any event that is in fact such a default is received by the Stock Purchase Contract Agent at the Corporate Trust Office of the Stock Purchase Contract Agent, and such notice references the MCAPS and this Agreement;

(j)the Stock Purchase Contract Agent may request that the Company deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Agreement, which Officers’ Certificate may be signed by any person authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded;

(k)the rights, privileges, protections, immunities and benefits given to the Stock Purchase Contract Agent, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Stock Purchase Contract Agent in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder; and

(l)the Stock Purchase Contract Agent shall not be required to initiate or conduct any litigation or collection proceedings hereunder and shall have no responsibilities with respect to any default hereunder except as expressly specified herein.

Section 8.4Not Responsible for Recitals or Issuance of MCAPS.

The recitals contained herein, in the Collateral Agreement, the Remarketing Agreement and in the Certificates shall be taken as the statements of the Company, and the Stock Purchase Contract Agent assumes no responsibility for their accuracy or validity. The Stock Purchase Contract Agent makes no representations as to the validity or sufficiency of either this Agreement or of the MCAPS, or of the Collateral Agreement or the Pledge or the Collateral and shall have no responsibility for perfecting or maintaining the perfection of any security interest in

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the Collateral. The Stock Purchase Contract Agent shall not be accountable for the use or application by the Company of the proceeds in respect of the Stock Purchase Contracts.

Section 8.5May Hold MCAPS.

Any Securities Registrar or any other agent of the Company, or the Stock Purchase Contract Agent and its Affiliates, in their individual or any other capacity, may become the owner or pledgee of MCAPS and may otherwise deal with the Company, the Collateral Agent or any other Person with the same rights it would have if it were not Securities Registrar or such other agent, or the Stock Purchase Contract Agent. The Company may become the owner or pledgee of MCAPS.

Section 8.6Money Held in Custody.

Money held by the Stock Purchase Contract Agent in custody hereunder need not be segregated from the Stock Purchase Contract Agent’s other funds except to the extent required by law or provided herein. The Stock Purchase Contract Agent shall be under no obligation to invest or pay interest on any money received by it hereunder except as otherwise provided hereunder or agreed in writing with the Company.

Section 8.7Compensation and Reimbursement.

The Company agrees:

(a)to pay to the Stock Purchase Contract Agent compensation for all services rendered by it hereunder, under the Collateral Agreement and under the Remarketing Agreement as the Company and the Stock Purchase Contract Agent shall from time to time agree in writing;

(b)except as otherwise expressly provided for herein, to reimburse the Stock Purchase Contract Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the Stock Purchase Contract Agent in accordance with any provision of this Agreement, the Collateral Agreement and the Remarketing Agreement (including the reasonable compensation and the expenses and disbursements of its agents and counsel) in connection with the negotiation, preparation, execution and delivery and performance of this Agreement, the Collateral Agreement and the Remarketing Agreement and any modification, supplement or waiver of any of the terms thereof, except any such expense, disbursement or advance as may be attributable to its gross negligence, willful misconduct or bad faith; and

(c)to indemnify the Stock Purchase Contract Agent and any predecessor Stock Purchase Contract Agent (and each of its directors, officers, agents and employees (collectively, the “Indemnitees”) for, and to hold it harmless against, any loss, claim, damage, fine, penalty, liability or expense (including reasonable fees and expenses of counsel) incurred without gross negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of its duties hereunder and under the Collateral Agreement and the Remarketing Agreement, including the Indemnitees’ reasonable costs and expenses of defending themselves against any claim (whether asserted by the Company, a Holder or any other person)

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or liability in connection with the exercise or performance of any of the Stock Purchase Contract Agent’s powers or duties hereunder or thereunder.

The provisions of this Section shall survive the resignation and removal of the Stock Purchase Contract Agent and the termination of this Agreement.

Section 8.8Corporate Stock Purchase Contract Agent Required, Eligibility.

There shall at all times be a Stock Purchase Contract Agent hereunder which shall be a Person organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having (or being a member of a bank holding company having) a combined capital and surplus of at least $50,000,000, subject to supervision or examination by Federal or State authority and having a corporate trust office in the Borough of Manhattan, New York City, if there be such a Person in the Borough of Manhattan, New York City, qualified and eligible under this Article VIII and willing to act on reasonable terms. If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as specified in its most recent report of condition so published. If at any time the Stock Purchase Contract Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article VIII.

Section 8.9Resignation and Removal; Appointment of Successor.

(a)No resignation or removal of the Stock Purchase Contract Agent and no appointment of a successor Stock Purchase Contract Agent pursuant to this Article VIII shall become effective until the acceptance of appointment by the successor Stock Purchase Contract Agent in accordance with the applicable requirements of Section 8.10.

(b)The Stock Purchase Contract Agent may resign at any time by giving written notice thereof to the Company 60 days prior to the effective date of such resignation. If the instrument of acceptance by a successor Stock Purchase Contract Agent required by Section 8.10 shall not have been delivered to the Stock Purchase Contract Agent within 30 days after the giving of such notice of resignation, the resigning Stock Purchase Contract Agent may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Stock Purchase Contract Agent.

(c)The Stock Purchase Contract Agent may be removed at any time by Act of the Holders of at least a majority in number of the Outstanding MCAPS delivered to the Stock Purchase Contract Agent and the Company. If the instrument of acceptance by a successor Stock Purchase Contract Agent required by Section 8.10 shall not have been delivered to the Stock Purchase Contract Agent within 30 days after such Act, the Stock Purchase Contract Agent being removed may petition any court of competent jurisdiction for the appointment at the expense of the Company of a successor Stock Purchase Contract Agent.

(d)If at any time:

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(i)the Stock Purchase Contract Agent fails to comply with Section 310(b) of the TIA, as if the Stock Purchase Contract Agent were an indenture trustee under an indenture qualified under the TIA, and shall fail to resign after written request therefor by the Company or by any Holder who has been a bona fide Holder of a MCAPS for at least six months;

(ii)the Stock Purchase Contract Agent shall cease to be eligible under Section 8.8 and shall fail to resign after written request therefor by the Company or by any such Holder; or

(iii)the Stock Purchase Contract Agent shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Stock Purchase Contract Agent or of its property shall be appointed or any public officer shall take charge or control of the Stock Purchase Contract Agent or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company by a Board Resolution may remove the Stock Purchase Contract Agent, or (ii) any Holder who has been a bona fide Holder of a MCAPS for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Stock Purchase Contract Agent and the appointment of a successor Stock Purchase Contract Agent.

(e)If the Stock Purchase Contract Agent shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Stock Purchase Contract Agent for any cause, the Company, by a Board Resolution, shall promptly appoint a successor Stock Purchase Contract Agent and shall comply with the applicable requirements of Section 8.10. If no successor Stock Purchase Contract Agent shall have been so appointed by the Company and accepted appointment in the manner required by Section 8.10, any Holder who has been a bona fide Holder of a MCAPS for at least six months, on behalf of itself and all others similarly situated, or the Stock Purchase Contract Agent may petition at the expense of the Company any court of competent jurisdiction for the appointment of a successor Stock Purchase Contract Agent.

(f)The Company shall give, or shall cause such successor Stock Purchase Contract Agent to give, notice of each resignation and each removal of the Stock Purchase Contract Agent and each appointment of a successor Stock Purchase Contract Agent by mailing written notice of such event by first-class mail, postage prepaid, to all Holders as their names and addresses appear in the applicable Securities Register. Each notice shall include the name of the successor Stock Purchase Contract Agent and the address of its Corporate Trust Office.

Section 8.10Acceptance of Appointment by Successor.

(a)In case of the appointment hereunder of a successor Stock Purchase Contract Agent, every such successor Stock Purchase Contract Agent so appointed shall execute, acknowledge and deliver to the Company and to the retiring Stock Purchase Contract Agent an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Stock Purchase Contract Agent shall become effective and such successor Stock Purchase Contract Agent, without any further act, deed or conveyance, shall become vested with all the

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rights, powers, agencies and duties of the retiring Stock Purchase Contract Agent; but, on the request of the Company or the successor Stock Purchase Contract Agent, such retiring Stock Purchase Contract Agent shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Stock Purchase Contract Agent all the rights, powers and trusts of the retiring Stock Purchase Contract Agent and duly assign, transfer and deliver to such successor Stock Purchase Contract Agent all property and money held by such retiring Stock Purchase Contract Agent hereunder.

(b)Upon request of any such successor Stock Purchase Contract Agent, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Stock Purchase Contract Agent all such rights, powers and agencies referred to in Section 8.10(a).

(c)No successor Stock Purchase Contract Agent shall accept its appointment unless at the time of such acceptance such successor Stock Purchase Contract Agent shall be qualified and eligible under this Article VIII.

Section 8.11Merger, Conversion, Consolidation or Succession to Business.

Any Person into which the Stock Purchase Contract Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Stock Purchase Contract Agent shall be a party, or any Person succeeding to all or substantially all the corporate trust business of the Stock Purchase Contract Agent, shall be the successor of the Stock Purchase Contract Agent hereunder, provided that such Person shall be otherwise qualified and eligible under this Article VIII, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Certificates shall have been authenticated and executed on behalf of the Holders, but not delivered, by the Stock Purchase Contract Agent then in office, any successor by merger, conversion or consolidation to such Stock Purchase Contract Agent may adopt such authentication and execution and deliver the Certificates so authenticated and executed with the same effect as if such successor Stock Purchase Contract Agent had itself authenticated and executed such MCAPS.

Section 8.12Preservation of Information; Communications to Holders.

(a)The Stock Purchase Contract Agent shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders received by the Stock Purchase Contract Agent in its capacity as Securities Registrar.

(b)If three or more Holders (herein referred to as “Applicants”) apply in writing to the Stock Purchase Contract Agent, and furnish to the Stock Purchase Contract Agent reasonable proof that each such applicant has owned a MCAPS for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with other Holders with respect to their rights under this Agreement or under the MCAPS and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Stock Purchase Contract Agent shall mail to all the Holders copies of the form of proxy or other communication which is specified in such request,

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with reasonable promptness after a tender to the Stock Purchase Contract Agent of the materials to be mailed and of payment, or provision for the payment, of the reasonable expenses of such mailing.

Section 8.13No Obligations of Stock Purchase Contract Agent.

Except to the extent otherwise expressly provided in this Agreement, the Stock Purchase Contract Agent assumes no obligations and shall not be subject to any liability under this Agreement, the Collateral Agreement, the Remarketing Agreement or any Stock Purchase Contract in respect of the obligations of the Holder of any MCAPS thereunder. The Company agrees, and each Holder of a Certificate, by its acceptance thereof, shall be deemed to have agreed, that the Stock Purchase Contract Agent’s execution of the Certificates on behalf of the Holders shall be solely as agent and attorney-in-fact for the Holders, and that the Stock Purchase Contract Agent shall have no obligation to perform such Stock Purchase Contracts on behalf of the Holders, except to the extent expressly provided in Article VI hereof. Anything contained in this Agreement to the contrary notwithstanding, in no event shall the Stock Purchase Contract Agent or its officers, directors, employees or agents be liable under this Agreement, the Collateral Agreement or the Remarketing Agreement to any third party for indirect, incidental, special, punitive, or consequential loss or damage of any kind whatsoever, including lost profits, whether or not the likelihood of such loss or damage was known to the Stock Purchase Contract Agent and regardless of the form of action.

Section 8.14Tax Compliance.

(a)The Stock Purchase Contract Agent, on its own behalf and on behalf of the Company, will comply with all applicable certification, information reporting and withholding (including “backup” withholding) requirements imposed by applicable tax laws, regulations or administrative practice with respect to (i) any payments made with respect to the MCAPS or (ii) the issuance, delivery, holding, transfer, redemption or exercise of rights under the MCAPS. Such compliance shall include, without limitation, the preparation and timely filing of required returns and the timely payment of all amounts required to be withheld to the appropriate taxing authority or its designated agent.

(b)The Stock Purchase Contract Agent shall comply in accordance with the terms hereof with any written direction received from the Company with respect to the execution or certification of any required documentation and the application of such requirements to particular payments or Holders or in other particular circumstances, and may for purposes of this Agreement conclusively rely on any such direction in accordance with the provisions of Section 8.1(a) hereof.

(c)The Stock Purchase Contract Agent shall maintain all appropriate records documenting compliance with such requirements, and shall make such records available, on written request, to the Company or its authorized representative within a reasonable period of time after receipt of such request.

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ARTICLE IX

SUPPLEMENTAL AGREEMENTS

Section 9.1Supplemental Agreements without Consent of Holders.

Without the consent of any Holders, the Company, when authorized by a Board Resolution, and the Stock Purchase Contract Agent, at any time and from time to time, may enter into one or more agreements supplemental hereto, in form satisfactory to the Company and the Stock Purchase Contract Agent, to:

(a)evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company herein and in the Certificates;

(b)add to the covenants of the Company for the benefit of the Holders, or surrender any right or power herein conferred upon the Company;

(c)evidence and provide for the acceptance of appointment hereunder by a successor Stock Purchase Contract Agent;

(d)cure any ambiguity (or formal defect) or correct or supplement any provisions herein which may be inconsistent with any other provisions herein;

(e)conform the terms of this Agreement to the terms as set forth in the Prospectus dated May 8, 2007 of the Trust and the Company relating to the MCAPS (the “Prospectus”); provided, however, that in connection with such amendment, the Company shall deliver to the Stock Purchase Contract Agent an Officers’ Certificate and an opinion of counsel (who may be counsel to the Compay or the Trust), in each case confirming that such amendment has the effect of conforming the terms of this Declaration of Trust to the terms of the Trust Securities as set forth in the Prospectus.; or

(f)make any other provisions with respect to such matters or questions arising under this Agreement, provided that such action shall not adversely affect the interests of the Holders in any material respect.

Section 9.2Supplemental Agreements with Consent of Holders.

With the consent of the Holders of not less than a majority of the Outstanding MCAPS voting together as one class, including without limitation the consent of the Holders obtained in connection with a tender or an exchange offer, by Act of said Holders delivered to the Company and the Stock Purchase Contract Agent, the Company, when duly authorized, and the Stock Purchase Contract Agent may enter into an agreement or agreements supplemental hereto for the purpose of modifying in any manner the terms of the Stock Purchase Contracts, or the provisions of this Agreement or the rights of the Holders in respect of the MCAPS; provided, however, that, except as contemplated herein, no such supplemental agreement shall, without the unanimous consent of the Holders of each outstanding Stock Purchase Contract affected thereby,

(a)change any Payment Date;

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(b)change the amount or the type of Collateral required to be Pledged to secure a Holder’s obligations under the Stock Purchase Contract, impair the right of the Holder of any Stock Purchase Contract to receive distributions on the related Collateral or otherwise adversely affect the Holder’s rights in or to such Collateral or adversely alter the rights in or to such Collateral;

(c)reduce the amount of any Contract Payments or change any place where, or the coin or currency in which, any Contract Payment is payable;

(d)impair the right to institute suit for the enforcement of any Stock Purchase Contract or any Contract Payments;

(e)reduce the number of Depositary Shares or the amount of any other property to be purchased pursuant to any Stock Purchase Contract, increase the price to purchase Depositary Shares or any other property upon settlement of any Stock Purchase Contract or change the Stock Purchase Date or otherwise adversely affect the Holder’s rights under the Stock Purchase Contract; or

(f)reduce the percentage of the outstanding Stock Purchase Contracts the consent of whose Holders is required for any modification or amendment to the provisions of this Agreement, the Stock Purchase Contracts or the Collateral Agreement;

provided that if any amendment or proposal referred to above would adversely affect only the Normal MCAPS or the Treasury MCAPS, then only the affected class of Holders as of the record date for the Holders entitled to vote thereon will be entitled to vote on such amendment or proposal, and such amendment or proposal shall not be effective except with the consent of Holders of not less than a majority of such class; and provided, further, that the unanimous consent of the Holders of each outstanding Stock Purchase Contract of such class affected thereby shall be required to approve any amendment or proposal specified in clauses (a) through (f) above.

It shall not be necessary for any Act of Holders under this Section 9.2 to approve the particular form of any proposed supplemental agreement, but it shall be sufficient if such Act shall approve the substance thereof.

Section 9.3Execution of Supplemental Agreements.

In executing, or accepting the additional agencies created by, any supplemental agreement permitted by this Article IX or the modifications thereby of the agencies created by this Agreement, the Stock Purchase Contract Agent shall be provided, and (subject to Section 8.1) shall be fully authorized and protected in relying upon, an Officers’ Certificate and an Opinion of Counsel stating that the execution of such supplemental agreement is authorized or permitted by this Agreement and that any and all conditions precedent to the execution and delivery of such supplemental agreement have been satisfied. The Stock Purchase Contract Agent may, but shall not be obligated to, enter into any such supplemental agreement which affects the Stock Purchase Contract Agent’s own rights, duties or immunities under this Agreement or otherwise.

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Section 9.4Effect of Supplemental Agreements.

Upon the execution of any supplemental agreement under this Article IX, this Agreement shall be modified in accordance therewith, and such supplemental agreement shall form a part of this Agreement for all purposes; and every Holder of Certificates theretofore or thereafter authenticated, executed on behalf of the Holders and delivered hereunder, shall be bound thereby.

Section 9.5Reference to Supplemental Agreements.

Certificates authenticated, executed on behalf of the Holders and delivered after the execution of any supplemental agreement pursuant to this Article IX may, and shall if required by the Stock Purchase Contract Agent, bear a notation in form approved by the Stock Purchase Contract Agent as to any matter provided for in such supplemental agreement. If the Company shall so determine, new Certificates so modified as to conform, in the opinion of the Stock Purchase Contract Agent and the Company, to any such supplemental agreement may be prepared and executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Stock Purchase Contract Agent in exchange for outstanding Certificates.

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ARTICLE X

CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE

Section 10.1Covenant Not to Consolidate, Merge, Convey, Transfer or Lease Property Except under Certain Conditions.

The Company covenants that it will not consolidate with, convert into, or merge with and into, any other entity or sell, assign, transfer, lease or convey all or substantially all of its properties and assets to any Person or entity, unless:

(a)either the Company shall be the continuing corporation, or the successor (if other than the Company) shall be a corporation organized and existing under the laws of the United States of America or a State thereof or the District of Columbia and such corporation shall expressly assume all the obligations of the Company under the Stock Purchase Contracts, this Agreement, the Collateral Agreement, the Declaration of Trust, the Indenture (including any supplement thereto), the Guarantee Agreement, the Deposit Agreement and the Remarketing Agreement by one or more supplemental agreements in form reasonably satisfactory to the Stock Purchase Contract Agent and the Collateral Agent, executed and delivered to the Stock Purchase Contract Agent and the Collateral Agent by such corporation;

(b)the Company or such successor corporation, as the case may be, shall not, immediately after such consolidation, conversion, merger, sale, assignment, transfer, lease or conveyance, be in default of payment obligations under the Stock Purchase Contracts, this Agreement, the Collateral Agreement, the Declaration of Trust, the Indenture (including any supplement thereto), the Guarantee Agreement, the Deposit Agreement or the Remarketing Agreement or in material default in the performance of any other covenants under any of the foregoing agreements; and

(c)the successor entity, if not the Company, shall have reserved sufficient authorized and unissued shares of preferred stock having substantially the same terms and conditions as the Preferred Stock for deposit pursuant to the Deposit Agreement, such that each holder of MCAPS will receive, on the Stock Purchase Date, Depositary Shares having substantially the same rights as the Depositary Shares that such holder would have received had such merger, consolidation or other transaction not occurred.

Section 10.2Rights and Duties of Successor Corporation.

In case of any such merger, consolidation, share exchange, sale, assignment, transfer, lease or conveyance and upon any such assumption by a successor corporation in accordance with Section 10.1, such successor entity shall succeed to and be substituted for the Company with the same effect as if it had been named herein as the Company. Such successor corporation thereupon may cause to be signed, and may issue either in its own name or in the name of the Company, any or all of the Certificates evidencing MCAPS issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Stock Purchase Contract Agent; and, upon the order of such successor corporation, instead of the Company, and subject to all the terms, conditions and limitations in this Agreement prescribed, the Stock Purchase Contract

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Agent shall authenticate and execute on behalf of the Holders and deliver any Certificates which previously shall have been signed and delivered by the officers of the Company to the Stock Purchase Contract Agent for authentication and execution, and any Certificate evidencing MCAPS which such successor corporation thereafter shall cause to be signed and delivered to the Stock Purchase Contract Agent or that purpose. All the Certificates issued shall in all respects have the same legal rank and benefit under this Agreement as the Certificates theretofore or thereafter issued in accordance with the terms of this Agreement as though all of such Certificates had been issued at the date of the execution hereof.

In case of any such merger, consolidation, share exchange, sale, assignment, transfer, lease or conveyance, such change in phraseology and form (but not in substance) may be made in the Certificates evidencing MCAPS thereafter to be issued as may be appropriate.

Section 10.3Officers’ Certificate and Opinion of Counsel Given to Stock Purchase Contract Agent.

The Stock Purchase Contract Agent, subject to Section 8.1 and Section 8.3, shall receive an Officers’ Certificate and an Opinion of Counsel as conclusive evidence that any such merger, consolidation, share exchange, sale, assignment, transfer, lease or conveyance, and any such assumption, complies with the provisions of this Article X and that all conditions precedent to the consummation of any such merger, consolidation, share exchange, sale, assignment, transfer, lease or conveyance have been met.

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ARTICLE XI

COVENANTS

Section 11.1Performance under Stock Purchase Contracts.

The Company covenants and agrees for the benefit of the Holders from time to time of the MCAPS that it will duly and punctually perform its obligations under the Stock Purchase Contracts in accordance with the terms of the Stock Purchase Contracts and this Agreement.

Section 11.2Maintenance of Office or Agency.

The Company will maintain in the Borough of Manhattan, New York City an office or agency where Certificates may be presented or surrendered for acquisition of Depositary Shares upon settlement of the Stock Purchase Contracts on the Stock Purchase Date and for transfer of Collateral upon occurrence of a Termination Event, where Certificates may be surrendered for registration of transfer or exchange, for a Collateral Substitution or recreation of Normal MCAPS and where notices and demands to or upon the Company in respect of the MCAPS and this Agreement may be served. The Company will give prompt written notice to the Stock Purchase Contract Agent of the location, and any change in the location, of such office or agency. The Company initially designates the Corporate Trust Office of the Stock Purchase Contract Agent as such office of the Company. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Stock Purchase Contract Agent with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Company hereby appoints the Stock Purchase Contract Agent as its agent to receive all such presentations, surrenders, notices and demands.

The Company may also from time to time designate one or more other offices or agencies where Certificates may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, New York City for such purposes. The Company will give prompt written notice to the Stock Purchase Contract Agent of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates as the place of payment for the MCAPS the Corporate Trust Office and appoints the Stock Purchase Contract Agent at its Corporate Trust Office as paying agent in such city.

Section 11.3Company to Reserve Preferred Stock.

The Company shall at all times prior to the Stock Purchase Date reserve and keep available, free from preemptive rights, out of its authorized but unissued Preferred Stock the full number of shares of Preferred Stock issuable against tender of payment for the Depositary Shares in respect of all Stock Purchase Contracts constituting a part of the MCAPS evidenced by Outstanding Certificates.

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Section 11.4Covenants as to the Remarketing

The Company will (1) cooperate with the Remarketing Agent to the full extent, (2) comply with all necessary governmental and regulatory requirements and (3) receive all necessary governmental and third party consents and approvals in connection with the Remarketing.

The Company shall use its commercially reasonable efforts to effect the Remarketing of the Trust Preferred securities as contemplated by the Remarketing Agreement.

Section 11.5Covenants as to Preferred Stock and Depositary Shares.

The Company covenants that all shares of Preferred Stock and Depositary Shares that may be issued against tender of payment for the Depositary Shares in respect of any Stock Purchase Contract constituting a part of the Outstanding MCAPS will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable.

Section 11.6Statements of Officers of the Company as to Default.

The Company will deliver to the Stock Purchase Contract Agent, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers’ Certificate, stating whether or not to the knowledge of the signers thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions hereof, and if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge.

Section 11.7ERISA.

Each Holder from time to time of the MCAPS hereby represents and warrants for the entire time it holds any interest in an MCAPS or a Trust Preferred Security, as the case may be, that either (i) no portion of the assets used by such Holder to acquire or hold the MCAPS or any Trust Preferred Security constitutes assets of any Plan or (ii) the purchase, holding and disposition of the MCAPS or Trust Preferred Security by such Holder will not constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or similar violation under any applicable Similar Laws.

Section 11.8Tax Treatment.

(a)The Company covenants and agrees, each Holder of MCAPS agrees, by acceptance of MCAPS, and each Beneficial Owner agrees, by acceptance of a beneficial interest in MCAPS, for United States federal, state and local income and franchise tax purposes, (i) to treat a Holder’s acquisition of the Normal MCAPS as the acquisition of the Trust Preferred Securities and Stock Purchase Contract constituting the Normal MCAPS and Treasury MCAPS as a unit consisting of Qualifying Treasury Securities and a Stock Purchase Contract and to treat each Holder as the owner of the applicable interest in the Collateral Account, including the Trust Preferred Securities or the Qualifying Treasury Securities, (ii) the Debentures as indebtedness of the Company, and (iii) the fair market value of each $1,000 Initial Liquidation Amount of Trust

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Preferred Securities included in Normal MCAPS as $1,000 and the fair market value of each Stock Purchase Contract as $0.

* * * *

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

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

LEHMAN BROTHERS HOLDINGS INC.
By:	/s/ Barrett S. DiPaolo
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
as Stock Purchase Contract Agent
By:	/s/ Earl Dennison
Name:
Title:

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EXHIBIT A

(FORM OF FACE OF NORMAL MCAPS CERTIFICATE)

{For inclusion in Global Certificates only – THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE STOCK PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO., AS THE NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE “DEPOSITARY”), THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE STOCK PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE 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 CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY 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 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.}

No.                      CUSIP No.

Number of Normal MCAPS:           

LEHMAN BROTHERS HOLDINGS INC.
Normal MCAPS

This Normal MCAPS Certificate certifies that {Cede & Co.} is the registered Holder of the number of Normal MCAPS set forth above {for inclusion in Global Certificates only - or such other number of Normal MCAPS reflected in the Schedule of Increases or Decreases in the Global Certificate attached hereto}. Each Normal MCAPS consists of (i) one trust preferred security (the “Trust Preferred Security”) of Lehman Brothers Holdings Capital Trust VIII, a Delaware statutory trust (the “Trust”), subject to the Pledge of such Trust Preferred Security by such Holder pursuant to the Collateral Agreement, and (ii) the rights and obligations of the Holder under one Stock Purchase Contract with Lehman Brothers Holdings Inc. (the “Company”). All capitalized terms used herein which are defined in the Stock Purchase Contract Agreement (as defined on the reverse hereof) have the meaning set forth therein.

Pursuant to the Collateral Agreement, the Trust Preferred Security, constituting part of each Normal MCAPS evidenced hereby has been pledged to the Collateral Agent, for the benefit of the Company, to secure the obligations of the Holder under the Stock Purchase Contract comprising part of such Normal MCAPS.

The Collateral Agreement provides that all distributions on any Pledged Trust Preferred Securities constituting part of the Normal MCAPS received by the Securities Intermediary shall be paid by wire transfer in same day funds (i) in the case of (A) distributions on Pledged Trust Preferred Securities to the Stock Purchase Contract Agent to the account designated by the Stock Purchase Contract Agent, no later than 2:00 p.m., New York City time, on the Business Day such payment is received by the Securities Intermediary (provided that in the event such payment is received by the Securities Intermediary on a day that is not a Business Day or after 12:30 p.m., New York City time, on a Business Day, then such payment shall be made no later than 10:30 a.m., New York City time, on the next succeeding Business Day) and (ii) in the case of payments with respect to the liquidation amount of the Pledged Trust Preferred Securities (in connection with a Remarketing or otherwise), to the Company in accordance with the terms of the Collateral Agreement, in full satisfaction of the respective obligations of the Holders of the Normal MCAPS of which such Pledged Trust Preferred Securities are a part under the Stock Purchase Contracts forming a part of such Normal MCAPS. Distributions on the Trust Preferred Securities forming part of a Normal MCAPS evidenced hereby, which are payable quarterly on February 28, May 31, August 31 and November 30 each year, commencing August 31, 2007 (each, a “Payment Date”), shall, subject to receipt thereof by the Stock Purchase Contract Agent from the Securities Intermediary, be paid to the Person in whose name this Normal MCAPS Certificate (or a Predecessor Normal MCAPS Certificate) is registered at the close of business on the Record Date for such Payment Date.

Each Stock Purchase Contract evidenced hereby obligates the Holder of this Normal MCAPS Certificate to purchase, and the Company to sell, on the Stock Purchase Date, at a price equal to $1,000 (the “Purchase Price”), one depositary share (“Depositary Share”), representing 1/100^th of a share of the Non-Cumulative Perpetual Preferred Stock, Series I, $100,000 liquidation preference per share (the “Preferred Stock”), of the Company, unless on or prior to the Stock Purchase Date there shall have occurred a Termination Event with respect to such Stock Purchase Contract, all as provided in the Stock Purchase Contract Agreement and more fully described on the reverse hereof. The purchase price (the “Purchase Price”) for the Depositary Share purchased pursuant to each Stock Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the Stock Purchase Date by application of payment received in respect of the liquidation amount with respect to the Pledged Trust Preferred Security pursuant to the Remarketing pledged to secure the obligations under such Stock Purchase Contract of the Holder of the Normal MCAPS of which such Stock Purchase Contract is a part.

Each Holder of MCAPS agrees, by acceptance of MCAPS, and each Beneficial Owner agrees, by acceptance of a beneficial interest in MCAPS, for United States federal, state and local income and franchise tax purposes, (i) to treat a Holder’s acquisition of the Normal MCAPS as the acquisition of the Trust Preferred Securities and Stock Purchase Contract constituting the Normal MCAPS and Treasury MCAPS as a unit consisting of Qualifying Treasury Securities and a Stock Purchase Contract and to treat each Holder as the owner of the applicable interest in the Collateral Account, including the Trust Preferred Securities or the

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Qualifying Treasury Securities, (ii) the Debentures as indebtedness of the Company, and (iii) the fair market value of each $1,000 Initial Liquidation Amount of Trust Preferred Securities included in Normal MCAPS as $1,000 and the fair market value of each Stock Purchase Contract as $0.

The Company shall pay, on each Payment Date, in respect of each Stock Purchase Contract forming part of a Normal MCAPS evidenced hereby, an amount (the “Contract Payments”) equal to 0.15% per year of the Stated Amount, subject to its rights provided for in the Stock Purchase Contract Agreement to defer Contract Payments. Such Contract Payments shall be payable to the Person in whose name this Normal MCAPS Certificate is registered at the close of business on the Record Date for such Payment Date.

Distributions on the Trust Preferred Securities and the Contract Payments will be payable at the office of the Stock Purchase Contract Agent in New York City. If the book-entry system for the Normal MCAPS has been terminated, the Contract Payments will be payable, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person’s address as it appears on the Security Register, or by wire transfer to the account designated by such Person by a prior written notice to the Stock Purchase Contract Agent.

Reference is hereby made to the further provisions set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

Unless the certificate of authentication hereon has been executed by the Stock Purchase Contract Agent by manual signature, this Normal MCAPS Certificate shall not be entitled to any benefit under the Collateral Agreement or the Stock Purchase Contract Agreement or be valid or obligatory for any purpose.

3

IN WITNESS WHEREOF, the Company and the Holder specified above have caused this instrument to be duly executed.

	LEHMAN BROTHERS HOLDINGS INC.
	By:
	Name:
	Title:
	HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Stock Purchase Contracts)
	U.S. BANK NATIONAL ASSOCIATION, not individually but solely as attorney-in-fact of such Holder as Stock Purchase Contract Agent
	By:
	Name:
	Title:
Date:

CERTIFICATE OF AUTHENTICATION

OF STOCK PURCHASE CONTRACT AGENT

This is one of the Normal MCAPS Certificates referred to in the within mentioned Stock Purchase Contract Agreement.

	By: U.S. BANK NATIONAL ASSOCIATION,
	as Stock Purchase Contract Agent
	By:
	Name:
	Title:
Date:

(FORM OF REVERSE OF NORMAL MCAPS CERTIFICATE)

Each Stock Purchase Contract evidenced hereby is governed by a Stock Purchase Contract Agreement, dated as of May 17, 2007 (as may be supplemented from time to time, the “Stock Purchase Contract Agreement”), between the Company and U.S. Bank National Association, as Stock Purchase Contract Agent (including its successors hereunder, the “Stock Purchase Contract Agent”), to which Stock Purchase Contract Agreement and supplemental agreements thereto reference, is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Stock Purchase Contract Agent, the Company, and the Holders and of the terms upon which the Normal MCAPS Certificates are, and are to be, executed and delivered.

Each Stock Purchase Contract evidenced hereby obligates the Holder of this Normal MCAPS Certificate to purchase, and the Company to sell, on the Stock Purchase Date at a price equal to $1,000 (the “Purchase Price”), one depositary share (“Depositary Share”) of the Company, representing 1/100^th of a share of the Non-Cumulative Perpetual Preferred Stock, Series I, $100,000 liquidation preference per share (the “Preferred Stock”), of the Company, unless on or prior to the Stock Purchase Date there shall have occurred a Termination Event with respect to the MCAPS of which such Stock Purchase Contract is a part shall have occurred.

In accordance with the terms of the Stock Purchase Contract Agreement, the Holder of this Normal MCAPS Certificate may pay the Purchase Price for the Depositary Share purchased pursuant to each Stock Purchase Contract evidenced hereby by effecting a Settlement with Qualifying Treasury Securities or from the proceeds of or from a Remarketing of the related Pledged Trust Preferred Securities. A Holder of Normal MCAPS who does not, on or prior to 5:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of any Remarketing Period, notify the Stock Purchase Contract Agent of its intention to effect a Settlement with Qualifying Treasury Securities, or who does so notify the Stock Purchase Contract Agent but fails to make an effective Settlement with Qualifying Treasury Securities on or prior to 5:00 p.m. (New York City time) on the first Business Day immediately preceding the beginning of any Remarketing Period shall pay the Purchase Price for the Depositary Share to be delivered under the related Stock Purchase Contract from the proceeds of the sale of the related Pledged Trust Preferred Securities held by the Collateral Agent in the Remarketing. Such sale will be made by the Remarketing Agent pursuant to the terms of the Remarketing Agreement on the applicable Remarketing Date.

Upon the occurrence of a final Failed Remarketing, the Collateral Agent, for the benefit of the Company, will exercise its rights as a secured party with respect to the Pledged Trust Preferred Securities underlying the Normal MCAPS, and may, among other things, (A) retain such Trust Preferred Securities in full satisfaction of the Holders’ obligations under the Stock Purchase Contracts or (B) sell such Trust Preferred Securities in one or more public or private sales or otherwise. In the event of a Failed Remarketing, the Company will issue a note, payable on the later of June 2, 2014 and five years after the first Payment Date on which any Deferred Contract Payments were payable and bearing interest at the rate of three-month LIBOR plus 0.68% per annum, in the amount of any accrued and unpaid interest on the Debentures underlying such Pledged Trust Preferred Securities as of the Stock Purchase Date, to the Stock Purchase Contract Agent for delivery to the Holders of such Trust Preferred Securities.

The Stock Purchase Contract Agent will be entitled to exercise the voting and any other consensual rights pertaining to the Pledged Trust Preferred Securities, but only to the extent instructed in writing by the Holders. Upon receipt of notice of any meeting at which holders of Trust Preferred Securities are entitled to vote or upon any solicitation of consents, waivers or proxies of holders of Trust Preferred Securities, the Stock Purchase Contract Agent shall, as soon as practicable thereafter, mail, first class, postage pre-paid, to the Normal MCAPS Holders a notice:

(1)           containing such information as is contained in the notice or solicitation;

(2)           stating that each Holder on the Record Date set by the Stock Purchase Contract Agent therefor (which, to the extent possible, shall be the same date as the record date for determining the holders of Trust Preferred Securities, as the case may be, entitled to vote) shall be entitled to instruct the Stock Purchase Contract Agent as to the exercise of the voting rights pertaining to the Trust Preferred Securities underlying such Holder’s Normal MCAPS; and

(3)           stating the manner in which such instructions may be given.

Upon the written request of the Normal MCAPS Holders on such Record Date received by the Stock Purchase Contract Agent at least six days prior to such meeting, the Stock Purchase Contract Agent shall endeavor insofar as practicable to vote or cause to be voted, in accordance with the instructions set forth in such requests, the maximum aggregate liquidation amount of Trust Preferred Securities, as the case may be, as to which any particular voting instructions are received. In the absence of specific instructions from the Holder of a Normal MCAPS, the Stock Purchase Contract Agent shall abstain from voting the Trust Preferred Securities evidenced by such Normal MCAPS. The Company hereby agrees, if applicable, to solicit Holders of Normal MCAPS to timely instruct the Stock Purchase Contract Agent in order to enable the Stock Purchase Contract Agent to vote the Trust Preferred Securities. The Holders of Normal MCAPS shall have no voting or other rights in respect of the Depositary Shares or the Preferred Stock.

Upon the occurrence of a Successful Remarketing, the Collateral Agent shall, in accordance with the Collateral Agreement, cause the Securities Intermediary to transfer the Pledged Trust Preferred Securities upon confirmation of deposit by the Remarketing Agent of the proceeds of such Successful Remarketing in the Collateral Account. The Remarketing Agent will deduct a remarketing fee in accordance with the terms of the Remarketing Agreement. With respect to Pledged Trust Preferred Securities upon a Successful Remarketing, any proceeds of the Remarketing in excess of the aggregate Purchase Price applicable to the related Normal MCAPS plus the portion of the Remarketing Fee attributable to such Pledged Trust Preferred Securities will be remitted to the Stock Purchase Contract Agent for payment to the Holders of the related Normal MCAPS.

The Normal MCAPS Certificates are issuable only in registered form and only in denominations of a single Normal MCAPS and any integral multiple thereof. The transfer of any Normal MCAPS Certificate will be registered and Normal MCAPS Certificates may be exchanged as provided in the Stock Purchase Contract Agreement. The Security Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer

documents permitted by the Stock Purchase Contract Agreement. No service charge shall be required for any such registration of transfer or exchange, but the Company and the Stock Purchase Contract Agent may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Except as provided in the Stock Purchase Contract Agreement, for so long as the Stock Purchase Contract underlying a Normal MCAPS remains in effect, such Normal MCAPS shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Normal MCAPS in respect of the Trust Preferred Security and Stock Purchase Contract constituting such Normal MCAPS may be transferred and exchanged only as a Normal MCAPS.

Subject to the conditions set forth in the Stock Purchase Contract Agreement, a Holder may, at any time on or prior to 5:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of any Remarketing Period, effect a Collateral Substitution and separate the Pledged Trust Preferred Securities from the related Stock Purchase Contracts in respect of all or a portion of such Holder’s Normal MCAPS by substituting for such Pledged Trust Preferred Securities, Qualifying Treasury Securities or portions thereof in an aggregate liquidation amount at maturity equal to the aggregate liquidation amount of such Pledged Trust Preferred Securities.

The Company shall pay, on each Payment Date, the Contract Payments payable in respect of each Stock Purchase Contract to the Person in whose name the Normal MCAPS Certificate evidencing such Stock Purchase Contract is registered at the close of business on the Record Date for such Payment Date. Contract Payments will be payable at the office of the Stock Purchase Contract Agent in New York City. If the book-entry system for the Normal MCAPS has been terminated, the Contract Payments will be payable, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person’s address as it appears on the Security Register, or by wire transfer to the account designated by such Person by a prior written notice to the Stock Purchase Contract Agent.

The Company shall have the right, at any time prior to the Stock Purchase Date, to defer the payment of any or all of the Contract Payments otherwise payable on any Payment Date, but only if the Company shall give the Holders and the Stock Purchase Contract Agent written notice of its election to defer each such deferred Contract Payment pursuant to Section 6.7 of the Stock Purchase Contract Agreement. Any Contract Payments so deferred shall, to the extent permitted by law, accrue interest thereon at the rate of three-month LIBOR plus 0.68% per year (computed on the basis of the actual number of days elapsed in the related payment period using a 360-day year), compounding on each succeeding Payment Date, until paid in full (such deferred installments of Contract Payments, if any, together with the additional Contract Payments, if any, accrued thereon, being referred to herein as the “Deferred Contract Payments”). Deferred Contract Payments, if any, shall be due on the next succeeding Payment Date except to the extent that payment is deferred pursuant to the Section 6.7 of the Stock Purchase Contract Agreement. No Contract Payments may be deferred to a date that is after the Stock Purchase Date and no such deferral period may end other than on a Payment Date. If the Stock Purchase Contracts are terminated upon the occurrence of a Termination Event, the Holder’s right to receive Contract Payments, if any, and any Deferred Contract Payments, will terminate.

The Stock Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights of the Holders to receive and the obligation of the Company to pay any Contract Payments, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Stock Purchase Contract Agent or the Company, if, on or prior to the Stock Purchase Date, a Termination Event shall have occurred. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Stock Purchase Contract Agent, the Collateral Agent and the Holders, at their addresses as they appear in the Securities Register. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Pledged Trust Preferred Securities from the Pledge in accordance with the provisions of the Collateral Agreement. A Normal MCAPS shall thereafter represent the right to receive the Trust Preferred Security forming a part of such Normal MCAPS in accordance with the terms of, and except as set forth in, the Stock Purchase Contract Agreement and the Collateral Agreement.

Upon registration of transfer of this Normal MCAPS Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee, except as may be required by the Stock Purchase Contract Agent pursuant to the Stock Purchase Contract Agreement), under the terms of the Stock Purchase Contract Agreement and the Stock Purchase Contracts evidenced hereby and the transferor shall be released from the obligations under the Stock Purchase Contracts evidenced by this Normal MCAPS Certificate. The Company covenants and agrees, and the Holder, by its acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph.

The Holder of this Normal MCAPS Certificate, by its acceptance hereof, irrevocably authorizes the Stock Purchase Contract Agent to enter into and perform the related Stock Purchase Contracts forming part of the Normal MCAPS evidenced hereby on its behalf as its attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Stock Purchase Contracts by the Company or its trustee in the event that the Company becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform its obligations under such Stock Purchase Contracts, consents to the provisions of the Stock Purchase Contract Agreement, irrevocably authorizes the Stock Purchase Contract Agent to enter into and perform the Stock Purchase Contract Agreement and the Collateral Agreement on its behalf as its attorney-in-fact, and consents to, and agrees to be bound by, the Pledge of such Holder’s right, title and interest in and to the Collateral Account, including the Trust Preferred Security underlying this Normal MCAPS Certificate pursuant to the Collateral Agreement. The Holder further covenants and agrees that, to the extent and in the manner provided in the Stock Purchase Contract Agreement and the Collateral Agreement, but subject to the terms thereof, payments with respect to the aggregate liquidation amount of the Pledged Trust Preferred Securities on the Stock Purchase Date shall be paid by the Collateral Agent to the Company in satisfaction of such Holder’s obligations under such Stock Purchase Contract and such Holder shall acquire no right, title or interest in such payments.

Subject to certain exceptions, the provisions of the Stock Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the Stock Purchase Contracts.

The Stock Purchase Contracts shall be governed by, and construed in accordance with, the laws of the State of New York.

Prior to due presentment of this Certificate for registration of transfer, the Company, the Stock Purchase Contract Agent and its Affiliates and any agent of the Company or the Stock Purchase Contract Agent may treat the Person in whose name this Normal MCAPS Certificate is registered as the owner of the Normal MCAPS evidenced hereby for the purpose of receiving distributions payable on the Trust Preferred Security, receiving payments of Contract Payments (subject to any applicable record date), performance of the Stock Purchase Contracts and for all other purposes whatsoever, whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Stock Purchase Contract Agent nor any such agent shall be affected by notice to the contrary.

The Stock Purchase Contracts shall not, prior to the settlement thereof, entitle the Holder to any of the rights of a holder of depositary shares and the Preferred Stock.

A copy of the Stock Purchase Contract Agreement is available for inspection at the offices of the Stock Purchase Contract Agent.

ABBREVIATIONS

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

TEN COM:	as tenants in common
UNIF GIFT MIN ACT:	Custodian           (cust)(minor) Under Uniform Gifts to Minors Act of
TENANT:	as tenants by the entireties
JT TEN:	as joint tenants with right of survivorship and not as tenants in common

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

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

(Please insert Social Security or Taxpayer I.D.
or other Identifying Number of Assignee)

(Please print or type name and address including Postal Zip code of Assignee)

the within Normal MCAPS Certificates and all rights thereunder, hereby irrevocably constituting and appointing attorney          , to transfer said Normal MCAPS Certificates on the books of Lehman Brothers Holdings Inc., with full power of substitution in the premises.

Dated:	Signature
	NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Normal MCAPS Certificates in every particular, without alteration or enlargement or any change whatsoever.
Signature Guarantee:

SETTLEMENT INSTRUCTIONS

The undersigned Holder directs that a certificate for a depositary share deliverable upon settlement on or after the Stock Purchase Date of the Stock Purchase Contracts underlying the number of Normal MCAPS evidenced by this Normal MCAPS Certificate be registered in the name of, and delivered, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto.

Dated:
	Signature
	Signature Guarantee:
	(if assigned to another person)
If shares are to be registered in the name of and delivered to a Person other than the Holder, please (i) print such Person’s name and address and (ii) provide a guarantee of your signature:	REGISTERED HOLDER Please print name and address of Registered Holder:
Name	Name
Address	Address
Social Security or other Taxpayer Identification Number, if any

{TO BE ATTACHED TO GLOBAL CERTIFICATES}

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE

The following increases or decreases in this Global Certificate have been made:

Date Amount of
increase in
Number of
Normal MCAPS
evidenced by the
Global Certificate Amount of
decrease in
Number of
Normal MCAPS
evidenced by the
Global Certificate Number of
Normal MCAPS
evidenced by this
Global Certificate
following such
decrease or
increase Signature of
authorized
signatory of Stock
Purchase Contract
Agent

EXHIBIT B

(FORM OF FACE OF TREASURY MCAPS CERTIFICATE)

{For inclusion in Global Certificate only - THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE STOCK PURCHASE CONTRACT AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF CEDE & CO., AS NOMINEE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (THE “DEPOSITARY”), THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY. THIS CERTIFICATE IS EXCHANGEABLE FOR CERTIFICATES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT AND NO TRANSFER OF THIS CERTIFICATE (OTHER THAN A TRANSFER OF THIS CERTIFICATE 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 CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY 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 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.}

No.           CUSIP No.

Number of Treasury MCAPS:             

LEHMAN BROTHERS HOLDINGS INC.
Treasury MCAPS

This Treasury MCAPS Certificate certifies that {Cede & Co.} is the registered Holder of the number of Treasury MCAPS set forth above {for inclusion in Global Certificates only – or such other number of Treasury MCAPS reflected in the Schedule of Increases or Decreases in the Global Certificate attached hereto}. Each Treasury MCAPS consists of (i) a Qualifying Treasury Security having a principal amount at maturity equal to $1,000, subject to the Pledge of such Qualifying Treasury Security by such Holder pursuant to the Collateral Agreement, and (ii) the rights and obligations of the Holder under one Stock Purchase Contract with Lehman Brothers Holdings Inc., a Delaware corporation (the “Company”). All capitalized terms used herein which are defined in the Stock Purchase Contract Agreement (as defined on the reverse hereof) have the meaning set forth therein.

Pursuant to the Collateral Agreement, the Qualifying Treasury Security constituting part of each Treasury MCAPS evidenced hereby have been pledged to the Collateral Agent, for the benefit of the Company, to secure the obligations of the Holder under the Stock Purchase Contract comprising part of such Treasury MCAPS.

Each Stock Purchase Contract evidenced hereby obligates the Holder of this Treasury MCAPS Certificate to purchase, and the Company to sell, on the Stock Purchase Date, at a price equal to $1,000 (the “Purchase Price”), one depositary share (“Depositary Share”), representing 1/100^th of a share of the Non-Cumulative Perpetual Preferred Stock, Series I, $100,000 liquidation preference per share (the “Preferred Stock”), of the Company, unless on or prior to the Stock Purchase Date there shall have occurred a Termination Event with respect to such Stock Purchase Contract, all as provided in the Stock Purchase Contract Agreement and more fully described on the reverse hereof. The Purchase Price for a Depositary Share purchased pursuant to each Stock Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the Stock Purchase Date by application of the proceeds from the Qualifying Treasury Securities at maturity pledged to secure the obligations of the Holder under such Stock Purchase Contract of the Treasury MCAPS of which such Stock Purchase Contract is a part.

Each Holder of MCAPS agrees, by acceptance of MCAPS, and each Beneficial Owner agrees, by acceptance of a beneficial interest in MCAPS, for United States federal, state and local income and franchise tax purposes, (i) to treat a Holder’s acquisition of the Normal MCAPS as the acquisition of the Trust Preferred Securities and Stock Purchase Contract constituting the Normal MCAPS and Treasury MCAPS as a unit consisting of Qualifying Treasury Securities and a Stock Purchase Contract and to treat each Holder as the owner of the applicable interest in the Collateral Account, including the Trust Preferred Securities or the Qualifying Treasury Securities, (ii) the Debentures as indebtedness of the Company, and (iii) the fair market value of each $1,000 Initial Liquidation Amount of Trust Preferred Securities included in Normal MCAPS as $1,000 and the fair market value of each Stock Purchase Contract as $0.

The Company shall pay, on each Payment Date, in respect of each Stock Purchase Contract forming part of a Treasury MCAPS evidenced hereby, an amount (the “Contract Payments”) equal to 0.15% per year of the Stated Amount, subject to its rights provided for in the Stock Purchase Contract Agreement to defer Contract Payments. Such Contract Payments shall be payable to the Person in whose name this Treasury MCAPS Certificate is registered at the close of business on the Record Date for such Payment Date.

Contract Payments will be payable at the office of the Stock Purchase Contract Agent in New York City. If the book-entry system for the Treasury MCAPS has been terminated, the Contract Payments will be payable, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person’s address as it appears on the Security Register, or by wire transfer to the account designated by such Person by a prior written notice to the Stock Purchase Contract Agent.

Reference is hereby made to the further provisions set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

2

Unless the certificate of authentication hereon has been executed by the Stock Purchase Contract Agent by manual signature, this Treasury MCAPS Certificate shall not be entitled to any benefit under the Collateral Agreement or the Stock Purchase Contract Agreement or be valid or obligatory for any purpose.

3

IN WITNESS WHEREOF, the Company and the Holder specified above have caused this instrument to be duly executed.

	LEHMAN BROTHERS HOLDINGS INC.
	By:
	Name:
	Title:
	HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Stock Purchase Contracts)
	By:	U.S. BANK NATIONAL ASSOCIATION, not individually but solely as attorney-in-fact of such Holder as Stock Purchase Contract Agent
	By:
	Name:
	Title:
Date:

4

CERTIFICATE OF AUTHENTICATION OF
STOCK PURCHASE CONTRACT AGENT

This is one of the Treasury MCAPS referred to in the within-mentioned Stock Purchase Contract Agreement.

	U.S. BANK NATIONAL ASSOCIATION, as Stock Purchase Contract Agent
	By:
	Name:
	Title:
Date:

5

(FORM OF REVERSE OF TREASURY MCAPS CERTIFICATE)

Each Stock Purchase Contract evidenced hereby is governed by a Stock Purchase Contract Agreement, dated as of May 17, 2007 (as may be supplemented from time to time, the “Stock Purchase Contract Agreement”) between the Company and U.S. Bank National Association, as Stock Purchase Contract Agent (including its successors thereunder, herein called the “Stock Purchase Contract Agent”), to which the Stock Purchase Contract Agreement and supplemental agreements thereto reference, is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Stock Purchase Contract Agent, the Company and the Holders and of the terms upon which the Treasury MCAPS Certificates are, and are to be, executed and delivered.

Each Stock Purchase Contract evidenced hereby obligates the Holder of this Treasury MCAPS Certificate to purchase, and the Company to sell, on the Stock Purchase Date, at a price equal to $1,000 (the “Purchase Price”), one depositary share (“Depositary Share”), representing 1/100^th of a share of the Non-Cumulative Perpetual Preferred Stock, Series I, $100,000 liquidation preference per share (the “Preferred Stock”), of the Company, unless on or prior to the Stock Purchase Date there shall have occurred a Termination Event with respect to the MCAPS of which such Stock Purchase Contract is a part shall have occurred.

In accordance with the terms of the Stock Purchase Contract Agreement, the Holder of this Treasury MCAPS shall pay the Purchase Price for a Depositary Share purchased pursuant to each Stock Purchase Contract evidenced hereby either by effecting a Settlement with Treasury Securities of each such Stock Purchase Contract on or prior to 5:00 p.m. (New York City time) on the second Business Day prior to the Stock Purchase Date, or by applying a principal amount of the Pledged Treasury Security underlying such Holder’s Treasury MCAPS equal to the Stated Amount of such Stock Purchase Contract to the purchase of the Depositary Share.

The Company shall not be obligated to issue a depositary share in respect of a Stock Purchase Contract or deliver any certificates therefor to the Holder unless it shall have received payment of the aggregate purchase price for the depositary share to be purchased thereunder in the manner set forth in the Stock Purchase Contract Agreement.

The Treasury MCAPS Certificates are issuable only in registered form and only in denominations of a single Treasury MCAPS and any integral multiple thereof. The transfer of any Treasury MCAPS Certificate will be registered and Treasury MCAPS Certificates may be exchanged as provided in the Stock Purchase Contract Agreement. The Security Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents permitted by the Stock Purchase Contract Agreement. No service charge shall be required for any such registration of transfer or exchange, but the Company and the Stock Purchase Contract Agent may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Except as provided in the Stock Purchase Contract Agreement, for so long as the Stock Purchase Contract underlying a Treasury MCAPS remains in effect, such Treasury MCAPS shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Treasury MCAPS in respect of the Qualifying Treasury Security and the Stock Purchase Contract constituting such Treasury MCAPS may be transferred and exchanged only as a Treasury MCAPS.

6

Subject to the conditions set forth in the Stock Purchase Contract Agreement, a Holder of Treasury MCAPS may recreate, at any time on or prior to 5:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of any Remarketing Period, Normal MCAPS by delivering to the Securities Intermediary Trust Preferred Securities with an aggregate liquidation amount equal to the aggregate principal amount at maturity of the Pledged Treasury Securities in exchange for the release of such Pledged Treasury Securities in accordance with the terms of the Stock Purchase Contract Agreement and the Collateral Agreement.

The Company shall pay, on each Payment Date, the Contract Payments payable in respect of each Stock Purchase Contract to the Person in whose name the Treasury MCAPS Certificate evidencing such Stock Purchase Contract is registered at the close of business on the Record Date for such Payment Date. Contract Payments will be payable at the office of the Stock Purchase Contract Agent in New York City. If the book-entry system for the Normal MCAPS has been terminated, the Contract Payments will be payable, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person’s address as it appears on the Security Register, or by wire transfer to the account designated by such Person by a prior written notice to the Stock Purchase Contract Agent.

The Company shall have the right, at any time prior to the Stock Purchase Date, to defer the payment of any or all of the Contract Payments otherwise payable on any Payment Date, but only if the Company shall give the Holders and the Stock Purchase Contract Agent written notice of its election to defer each such deferred Contract Payment pursuant to Section 6.7 of the Stock Purchase Contract Agreement. Any Contract Payments so deferred shall, to the extent permitted by law, accrue interest thereon at the rate of three-month LIBOR plus 0.68% per year (computed on the basis of the actual number of days elapsed in the related payment period using a 360-day year), compounding on each succeeding Payment Date, until paid in full (such deferred installments of Contract Payments, if any, together with the additional Contract Payments, if any, accrued thereon, being referred to herein as the “Deferred Contract Payments”). Deferred Contract Payments, if any, shall be due on the next succeeding Payment Date except to the extent that payment is deferred pursuant to the Section 6.7 of the Stock Purchase Contract Agreement. No Contract Payments may be deferred to a date that is after the Stock Purchase Date and no such deferral period may end other than on a Payment Date. If the Stock Purchase Contracts are terminated upon the occurrence of a Termination Event, the Holder’s right to receive Contract Payments, if any, and any Deferred Contract Payments, will terminate.

The Stock Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights of the Holders to receive and the obligation of the Company to pay any Contract Payments, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Stock Purchase Contract Agent or the Company, if, on or prior to the Stock Purchase Date, a Termination Event shall have occurred. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Stock Purchase Contract Agent, the Collateral Agent and the Holders, at their addresses as they appear in the Security Register. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Pledged Treasury Securities (as defined in the Collateral Agreement) in accordance with the provisions of the Collateral Agreement. A Treasury MCAPS shall thereafter represent the right to receive the interest in the Qualifying Treasury Security forming a part of

7

such Treasury MCAPS, in accordance with the terms of and except as set forth in, the Stock Purchase Contract Agreement and the Collateral Agreement.

Upon registration of transfer of this Treasury MCAPS Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee, except as may be required by the Stock Purchase Contract Agent pursuant to the Stock Purchase Contract Agreement), under the terms of the Stock Purchase Contract Agreement and the Stock Purchase Contracts evidenced hereby and the transferor shall be released from the obligations under the Stock Purchase Contracts evidenced by this Treasury MCAPS Certificate. The Company covenants and agrees, and the Holder, by its acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph.

The Holder of this Treasury MCAPS Certificate, by its acceptance hereof, authorizes the Stock Purchase Contract Agent to enter into and perform the related Stock Purchase Contracts forming part of the Treasury MCAPS evidenced hereby on its behalf as its attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Stock Purchase Contracts by the Company or its trustee in the event that the Company becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform its obligations under such Stock Purchase Contracts, consents to the provisions of the Stock Purchase Contract Agreement, authorizes the Stock Purchase Contract Agent to enter into and perform the Stock Purchase Contract Agreement and the Collateral Agreement on its behalf as its attorney-in-fact, and consents to the Pledge of the Qualifying Treasury Securities underlying this Treasury MCAPS Certificate pursuant to the Collateral Agreement. The Holder further covenants and agrees, that, to the extent and in the manner provided in the Stock Purchase Contract Agreement and the Collateral Agreement, but subject to the terms thereof, payments in respect to the aggregate principal amount of the Pledged Treasury Securities on the Stock Purchase Date shall be paid by the Collateral Agent to the Company in satisfaction of such Holder’s obligations under such Stock Purchase Contract and such Holder shall acquire no right, title or interest in such payments.

Subject to certain exceptions, the provisions of the Stock Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the Stock Purchase Contracts.

The Stock Purchase Contracts shall for all purposes be governed by, and construed in accordance with, the laws of the State of New York.

Prior to due presentment of this Certificate for registration or transfer, the Company, the Stock Purchase Contract Agent and its Affiliates and any agent of the Company or the Stock Purchase Contract Agent may treat the Person in whose name this Treasury MCAPS Certificate is registered as the owner of the Treasury MCAPS evidenced hereby for the purpose of receiving payments of interest on the Qualifying Treasury Securities, receiving payments of Contract Payments (subject to any applicable record date), performance of the Stock Purchase Contracts and for all other purposes whatsoever, whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Stock Purchase Contract Agent nor any such agent shall be affected by notice to the contrary.

8

The Stock Purchase Contracts shall not, prior to the settlement thereof, entitle the Holder to any of the rights of a holder of depositary shares and the Preferred Stock.

A copy of the Stock Purchase Contract Agreement is available for inspection at the offices of the Stock Purchase Contract Agent.

9

ABBREVIATIONS

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

TEN COM:	as tenants in common
	Custodian
UNIF GIFT MIN ACT:	(cust)	(minor)
	Under Uniform Gifts to Minors Act of
TENANT:	as tenants by the entireties
JT TEN:	as joint tenants with right of survivorship and not as tenants in common

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

FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto

(Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee)

the within Treasury MCAPS Certificates and all rights thereunder, hereby irrevocably constituting and appointing attorney          , to transfer said Treasury MCAPS Certificates on the books of Lehman Brothers Holdings Inc., with full power of substitution in the premises.

Dated:	Signature
	NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Treasury MCAPS Certificates in every particular, without alteration or enlargement or any change whatsoever.
Signature Guarantee:

10

SETTLEMENT INSTRUCTIONS

The undersigned Holder directs that a certificate for depositary shares deliverable upon settlement on or after the Stock Purchase Date of the Stock Purchase Contracts underlying the number of Treasury MCAPS evidenced by this Treasury MCAPS Certificate be registered in the name of, and delivered, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto.

Dated:

If shares are to be registered in the name of and delivered to a Person other than the Holder, please (i) print such Person’s name and address and (ii) provide a guarantee of your signature:

Name

Address

Social Security or other Taxpayer
Identification Number, if any

Signature

Signature Guarantee:

(if assigned to another person)

11

{TO BE ATTACHED TO GLOBAL CERTIFICATES}

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE

The following increases or decreases in this Global Certificate have been made:

Date Amount of
increase in
Number of
Treasury
MCAPS
evidenced by the
Global
Certificate Amount of
decrease in
Number of
Treasury
MCAPS
evidenced by the
Global
Certificate Number of
Treasury
MCAPS
evidenced by this
Global
Certificate
following such
decrease or
increase Signature of
authorized
signatory of
Stock Purchase
Contract Agent

EXHIBIT C

INSTRUCTION TO STOCK PURCHASE CONTRACT AGENT

The Bank of New York
Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Facsimile: 212-815-3910

Re: {Creation of Treasury MCAPS} {Recreation of Normal MCAPS} of Lehman Brothers Holdings Inc., a Delaware corporation (the “Company”).

The undersigned Holder hereby notifies you that it has delivered to The Bank of New York as Collateral Agent, for credit to the Collateral Account, $         aggregate [principal] [liquidation] amount of {Treasury Securities}{Trust Preferred Securities} in exchange for the {Pledged Trust Preferred Securities} {Pledged Treasury Securities} held in the Collateral Account, in accordance with the Collateral Agreement, dated as of May 17, 2007 (the “Collateral Agreement”; unless otherwise defined herein, terms defined in the Pledge Agreement are used herein as defined therein), between you, the Company, the Collateral Agent, the Custodial Agent and the Securities Intermediary. The undersigned Holder has paid all applicable fees and expenses relating to such exchange. The undersigned Holder hereby instructs you to instruct the Collateral Agent to release to you on behalf of the undersigned Holder the {Pledged Trust Preferred Securities} {Pledged Treasury Securities} related to such {Normal MCAPS} {Treasury MCAPS}.

Date:
	Signature Guarantee:
Please print name and address of
Registered Holder:
Name	Social Security or other Taxpayer Identification Number, if any
Address

EXHIBIT D

NOTICE FROM STOCK PURCHASE CONTRACT AGENT
TO HOLDERS

(Transfer of Collateral upon Occurrence of a Termination Event)

{HOLDER}

Attention:

Telecopy:                      

Re:{Normal MCAPS} {Treasury MCAPS} of Lehman Brothers Holdings Inc., a Delaware corporation (the “COMPANY”)

Please refer to the Stock Purchase Contract Agreement, dated as of May 17, 2007 (the “Stock Purchase Contract Agreement”; unless otherwise defined herein, terms defined in the Stock Purchase Contract Agreement are used herein as defined therein), between the Company and the undersigned, as Stock Purchase Contract Agent and as attorney-in-fact for the holders of Normal MCAPS and Treasury MCAPS from time to time.

We hereby notify you that a Termination Event has occurred and that {the Trust Preferred Securities} {the Qualifying Treasury Securities} comprising a portion of your ownership interest in {Normal MCAPS} {Treasury MCAPS} have been released and are being held by us for your account pending receipt of transfer instructions with respect to such {Trust Preferred Securities} {Qualifying Treasury Securities} (the “Released Securities”).

Pursuant to Section 3.15 of the Stock Purchase Contract Agreement, we hereby request written transfer instructions with respect to the Released Securities. Upon receipt of your instructions and upon transfer to us of your {Normal MCAPS]{Treasury MCAPS} effected through book-entry or by delivery to us of your {Normal MCAPS Certificate]{Treasury MCAPS Certificate}, we shall transfer the Released Securities by book-entry transfer or other appropriate procedures, in accordance with your instructions.

In the event you fail to effect such transfer or delivery, the Released Securities and any distributions thereon, shall be held in our name, or a nominee in trust for your benefit, until such time as such {Normal MCAPS}{Treasury MCAPS} are transferred or your {Normal MCAPS Certificate} {Treasury MCAPS Certificate} is surrendered or satisfactory evidence is provided that such {Normal MCAPS Certificate}{Treasury MCAPS Certificate} has been destroyed, lost or stolen, together with any indemnification that we or the Company may require.

Dated:	By: U.S. BANK NATIONAL ASSOCIATION
	By:
	Name:
	Title: Authorized Signatory

EXHIBIT E

NOTICE TO SETTLE BY TREASURY SECURITIES

U.S. BANK NATIONAL ASSOCIATION
The Stock Purchase Contract Agent

One Federal Street, 3^rd Floor

Boston, MA 02110
Attention:  Corporate Trust Services
Facsimile:  617-603-6667

Re:Normal MCAPS of Lehman Brothers Holdings Inc.,
a Delaware corporation (the “Company”)

The undersigned Holder hereby irrevocably notifies you in accordance with Section 6.2(b) of the Stock Purchase Contract Agreement, dated as of May 17, 2007 (the “Stock Purchase Contract Agreement”; unless otherwise defined herein, terms defined in the Stock Purchase Contract Agreement are used herein as defined therein), between the Company and you, as Stock Purchase Contract Agent and as attorney-in-fact for the Holders of the Stock Purchase Contracts, that such Holder has elected to pay to the Securities Intermediary for deposit in the Collateral Account, on or prior to 5:00 p.m. (New York City time) on the first Business Day immediately preceding the beginning of the Remarketing Period (in lawful money of the United States by certified or cashiers’ check or wire transfer, in immediately available funds), $[    ] as the Purchase Price for the depositary shares issuable to such Holder by the Company with respect to Stock Purchase Contracts on the Stock Purchase Date. The undersigned Holder hereby instructs you to notify promptly the Collateral Agent of the undersigned Holders’ election to make such Settlement with Treasury Securities with respect to the Stock Purchase Contracts related to such Holder’s Normal MCAPS.

EXHIBIT F

NOTICE FROM STOCK PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Settlement of Stock Purchase Contract through Remarketing)

The Bank of New York
Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Facsimile: 212-815-3910

Re:Normal MCAPS of Lehman Brothers Holdings Inc.,
a Delaware corporation (the “Company”)

Please refer to the Stock Purchase Contract Agreement, dated as of May 17, 2007 (the “Stock Purchase Contract Agreement”; unless otherwise defined herein, terms defined in the Stock Purchase Contract Agreement are used herein as defined therein), between the Company and the undersigned, as Stock Purchase Contract Agent and as attorney-in-fact for the Holders of Normal MCAPS from time to time.

In accordance with Section 6.2(b) of the Stock Purchase Contract Agreement and, based on notices of Settlement with Treasury Securities received from Holders of Normal MCAPS as of 5:00 p.m. (New York City time), on the second Business Day immediately preceding the beginning of the Remarketing Period, we hereby notify you that an aggregate liquidation amount of $     Trust Preferred Securities are to be tendered for purchase in the Remarketing.

Dated:	By:	U.S. BANK NATIONAL ASSOCIATION,
		as the Stock Purchase Contract Agent
	By:
	Name:
	Title: Authorized Signatory

EX-4.03

Exhibit 4.03

COLLATERAL AGREEMENT

among

LEHMAN BROTHERS HOLDINGS INC.

and

THE BANK OF NEW YORK,

as Collateral Agent and Securities Intermediary

and

U.S. BANK NATIONAL ASSOCIATION,

as Stock Purchase Contract Agent

Dated as of May 17, 2007

TABLE OF CONTENTS

			Page
ARTICLE I
DEFINITIONS
Section 1.1.	Definitions	2
ARTICLE II
PLEDGE
Section 2.1.	Pledge	7
Section 2.2.	Control	7
Section 2.3.	Termination	7
ARTICLE III
DISTRIBUTIONS ON PLEDGED COLLATERAL
Section 3.1.	Income and Distributions.	8
Section 3.2.	Payments Following Termination Event	8
Section 3.3.	Payments Prior to or on Stock Purchase Date	8
Section 3.4.	Payments to Stock Purchase Contract Agent	9
Section 3.5.	Assets Not Properly Released	9
ARTICLE IV
CONTROL
Section 4.1.	Establishment of Collateral Account	10
Section 4.2.	Treatment as Financial Assets	10
Section 4.3.	Sole Control by Collateral Agent	10
Section 4.4.	Securities Intermediary’s Location	10
Section 4.5.	No Other Claims	11
Section 4.6.	Investment and Release	11
Section 4.7.	Statements and Confirmations	11
Section 4.8.	Tax Allocations	11
Section 4.9.	No Other Agreements	11
Section 4.10.	Powers Coupled with an Interest	11
Section 4.11.	Waiver of Lien; Waiver of Set-off	11
ARTICLE V
INITIAL DEPOSIT; CREATION OF TREASURY MCAPS
AND RECREATION OF NORMAL MCAPS
Section 5.1.	Initial Deposit of Trust Preferred Securities	13
Section 5.2.	Creation of Treasury MCAPS	13

i

Section 5.3.	Recreation of Normal MCAPS	14
Section 5.4.	Termination Event	14
Section 5.5.	Reinvestment of Proceeds of Pledged Treasury Securities	15
Section 5.6.	Settlement with Qualifying Treasury Securities	16
Section 5.7.	Application of Proceeds in Settlement of Stock Purchase Contracts	17
ARTICLE VI
PLEDGED TRUST PREFERRED SECURITIES
Section 6.1.	Voting Rights	19
ARTICLE VII
RIGHTS AND REMEDIES
Section 7.1.	Rights and Remedies of the Collateral Agent	20
Section 7.2.	Remarketing	20
Section 7.3.	Successful Remarketing	21
Section 7.4.	Substitutions	21
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES; COVENANTS
Section 8.1.	Representations and Warranties	22
Section 8.2.	Covenants	22
ARTICLE IX
THE COLLATERAL AGENT AND THE SECURITIES INTERMEDIARY
Section 9.1.	Appointment, Powers and Immunities	23
Section 9.2.	Instructions of the Company	23
Section 9.3.	Reliance by Collateral Agent and Securities Intermediary	24
Section 9.4.	Certain Rights	24
Section 9.5.	Merger, Conversion, Consolidation or Succession to Business	25
Section 9.6.	Rights in Other Capacities	25
Section 9.7.	Non-reliance on Collateral Agent and Securities Intermediary	25
Section 9.8.	Compensation and Indemnity	25
Section 9.9.	Failure to Act	26
Section 9.10.	Resignation of Collateral Agent and Securities Intermediary	26
Section 9.11.	Right to Appoint Agent or Advisor	27
Section 9.12.	Survival	28
Section 9.13.	Exculpation	28
ARTICLE X
AMENDMENT
Section 10.1.	Amendment Without Consent of Holders	29
Section 10.2.	Amendment with Consent of Holders	29

ii

Section 10.3.	Execution of Amendments	30
Section 10.4.	Effect of Amendments	30
Section 10.5.	Reference of Amendments	30
ARTICLE XI
MISCELLANEOUS
Section 11.1.	No Waiver	31
Section 11.2.	Governing Law; Submission to Jurisdiction	31
Section 11.3.	Notices	31
Section 11.4.	Successors and Assigns	31
Section 11.5.	Counterparts	32
Section 11.6.	Severability	32
Section 11.7.	Expenses, Etc.	32
Section 11.8.	Security Interest Absolute	32
Section 11.9.	Notice of Termination Event	33
Section 11.10.	Incorporation by Reference	33
EXHIBITS:
EXHIBIT A –  Instruction from Stock Purchase Contract Agent to Collateral Agent (Creation of Treasury MCAPS)
EXHIBIT B –  Instruction from Collateral Agent to Securities Intermediary (Creation of Treasury MCAPS)
EXHIBIT C –  Instruction from Stock Purchase Contract Agent to Collateral Agent (Recreation of Normal MCAPS)
EXHIBIT D –  Instruction from Collateral Agent to Securities Intermediary (Recreation of Normal MCAPS)
EXHIBIT E –  Notice of Settlement with Treasury Securities from Collateral Agent to Stock Purchase Contract Agent
EXHIBIT F –  Instruction to Collateral Agent Regarding Remarketing
EXHIBIT G –  Instruction to Collateral Agent Regarding Withdrawal From Remarketing
EXHIBIT H –  Notice of Occurrence of Termination Event
SCHEDULES:
SCHEDULE I -  Reference Dealers
SCHEDULE II – Contact Persons for Confirmation

iii

COLLATERAL AGREEMENT dated as of May 17, 2007 among Lehman Brothers Holdings Inc., a Delaware corporation (the “Company”), The Bank of New York, as collateral agent (in such capacity, the “Collateral Agent”), and as securities intermediary (as defined in Section 8-102(a)(14) of the UCC) with respect to the Collateral Account (in such capacity, the “Securities Intermediary”), and U.S. Bank National Association, as stock purchase contract agent and as attorney-in-fact of the Holders from time to time of the Mandatory Capital Advantaged Preferred Securities (“MCAPS”^SM) (in such capacity, the “Stock Purchase Contract Agent”) under the Stock Purchase Contract Agreement.

RECITALS

WHEREAS, the Company and the Stock Purchase Contract Agent are parties to the Stock Purchase Contract Agreement dated as of the date hereof (as modified and supplemented and in effect from time to time, the “Stock Purchase Contract Agreement”), pursuant to which 1,000,000 Normal MCAPS will be issued.

WHEREAS, each Normal MCAPS consists of a unit comprised of (a) a stock purchase contract (a “Stock Purchase Contract”) pursuant to which the Holder will purchase from the Company on the Stock Purchase Date, for an amount equal to $1,000 (the “Stated Amount”), one depositary share of the Company (a “Depositary Share”), representing 1/100^th of a share of the Company’s Non-Cumulative Perpetual Preferred Stock, Series H, $100,000 liquidation preference per share, (the “Preferred Stock”), and (b) a Trust Preferred Security.

WHEREAS, pursuant to the terms of the Stock Purchase Contract Agreement and the Stock Purchase Contracts, the Holders of the MCAPS have irrevocably authorized the Stock Purchase Contract Agent, as attorney-in-fact of such Holders, among other things, to execute and deliver this Agreement on behalf of such Holders and to grant the pledge provided herein of the Collateral to secure the Obligations.

NOW, THEREFORE, the Company, the Collateral Agent, the Securities Intermediary and the Stock Purchase Contract Agent agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1.Definitions.

For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

(a)    the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular, and nouns and pronouns of the masculine gender include the feminine and neuter genders;

(b)    the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, Exhibit or other subdivision;

(c)    the following terms which are defined in the UCC shall have the meanings set forth therein: “Certificated Security,” “Control,” “Financial Asset,” “Entitlement Order,” “Securities Account” and “Security Entitlement”;

(d)    capitalized terms used herein and not defined herein have the meanings assigned to them in the Stock Purchase Contract Agreement; and

(e)    the following terms have the meanings given to them in this Section 1.1(e):

“Agreement” means this Collateral Agreement, as the same may be amended, modified or supplemented from time to time.

“Collateral” means the collective reference to:

(1)the Collateral Account and all investment property and other financial assets from time to time credited to the Collateral Account and all Security Entitlements with respect thereto, including, without limitation, (A) the Trust Preferred Securities and Security Entitlements relating thereto that are a component of the Normal MCAPS from time to time (but excluding the right to receive distributions on the Trust Preferred Securities), (B) any Qualifying Treasury Securities and Security Entitlements relating thereto delivered from time to time upon creation of Treasury MCAPS in accordance with Section 5.2 hereof and (C) payments made by Holders pursuant to Section 5.6 hereof;

(2)all Proceeds of any of the foregoing (whether such Proceeds arise before or after the commencement of any proceeding under any applicable bankruptcy, insolvency or other similar law, by or against the pledgor or with respect to the pledgor); and

(3)all powers and rights now owned or hereafter acquired under or with respect to the Collateral.

“Collateral Account” means the Securities Account of The Bank of New York, as Collateral Agent, maintained by the Securities Intermediary and designated “The Bank of New York, as Collateral Agent of the Company, as pledgee of U.S. Bank National Association, as the Stock Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders.”

2

“Collateral Agent” means the Person named as the “Collateral Agent” in the first paragraph of this Agreement until a successor Collateral Agent shall have become such pursuant to the applicable provisions of this Agreement, and thereafter “Collateral Agent” shall mean such Person or any subsequent successor who is appointed pursuant to this Agreement.

“Company” means the Person named as the “Company” in the first paragraph of this Agreement until a successor shall have become such pursuant to the applicable provisions of the Stock Purchase Contract Agreement, and thereafter “Company” shall mean such successor.

“Declaration of Trust” means the Amended and Restated Declaration of Trust, dated as of the date hereof, among the Company, as Sponsor, the Property Trustee, the Delaware Trustee and the Regular Trustees (each as named therein), and the several Holders (as defined therein).

“Depositary Share” has the meaning specified in the second paragraph of the recitals of this Agreement.

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

“Final Dealer” has the meaning specified in Section 5.5(a).

“Holder” has the meaning specified in Section 1.1 of the Stock Purchase Contract Agreement, as in effect on the date hereof.

“Market Disruption Event” means (i) a general moratorium on commercial banking activities in New York declared by the relevant authorities or (ii) any material disruption of the U.S. government securities market or U.S. federal funds-transfer systems, written notification of which shall have been given to the Collateral Agent by any of the Regular Trustees.

“Obligations” means, with respect to each Holder, all obligations and liabilities of such Holder under such Holder’s Stock Purchase Contract, the Stock Purchase Contract Agreement and this Agreement or any other document made, delivered or given in connection herewith or therewith, in each case whether on account of principal, interest (including, without limitation, interest accruing before and after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Holder, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Company or the Collateral Agent or the Securities Intermediary that are required to be paid by the Holder pursuant to the terms of any of the foregoing agreements).

“Permitted Investments” means any one of the following, in each case maturing on the Business Day following the date of acquisition:

(1)any evidence of indebtedness with an original maturity of 365 days or less issued, or directly and fully guaranteed or insured, by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support of the timely payment thereof or such indebtedness constitutes a general obligation of it);

(2)deposits, certificates of deposit or acceptances with an original maturity of 365 days or less of any institution which is a member of the Federal Reserve System having combined capital and surplus and undivided profits of not less than $500 million at the time of deposit (and which may include the Collateral Agent);

3

(3)investments with an original maturity of 365 days or less of any Person that are fully and unconditionally guaranteed by a bank referred to in clause (2);

(4)repurchase agreements and reverse repurchase agreements relating to marketable direct obligations issued or unconditionally guaranteed by the United States of America or issued by any agency thereof and backed as to timely payment by the full faith and credit of the United States of America;

(5)investments in commercial paper, other than commercial paper issued by the Company or its Affiliates, of any corporation incorporated under the laws of the United States of America or any State thereof, which commercial paper has a rating at the time of purchase at least equal to “A-1” by Standard & Poor’s Ratings Services (“S&P”) or at least equal to “P-1” by Moody’s Investors Service, Inc. (“Moody’s”); and

(6) investments in money market funds (including, but not limited to, money market funds managed by the Collateral Agent or an affiliate of the Collateral Agent) registered under the Investment Company Act of 1940, as amended, rated in the highest applicable rating category by S&P or Moody’s.

“Pledge” means the lien and security interest created by this Agreement.

“Pledged Securities” means the Pledged Trust Preferred Securities and the Pledged Treasury Securities, collectively.

“Pledged Trust Preferred Securities” means Trust Preferred Securities and Security Entitlements with respect thereto from time to time credited to the Collateral Account and not then released from the Pledge.

“Pledged Treasury Securities” means Qualifying Treasury Securities and Security Entitlements with respect thereto from time to time credited to the Collateral Account and not then released from the Pledge, together with all Qualifying Treasury Securities purchased from time to time by the Collateral Agent with the Proceeds of maturing Pledged Treasury Securities pursuant to Section 5.5.

“Preferred Stock” has the meaning specified in the second paragraph of the recitals of this Agreement.

“Proceeds” has the meaning ascribed thereto in Section 9-102(a)(64) of the UCC and includes, without limitation, all interest, dividends, cash, instruments, securities, financial assets and other property received, receivable or otherwise distributed upon the sale (including, without limitation, the Remarketing), exchange, collection or disposition of any financial assets from time to time held in the Collateral Account.

“Qualifying Treasury Securities” has the meaning specified in the Stock Purchase Contract Agreement, as in effect on the date hereof.

“Quarterly Date” means each February 28, May 31, August 31, and November 30, commencing on the later of the first such date on which Qualifying Treasury Securities are held in the Collateral Account and August 31, 2007 (or, if any such day is not a Business Day, the next succeeding Business Day).

4

 “Reference Dealer” means each of the U.S. government securities dealers listed on Schedule I hereto (including any successor thereto) and any other U.S. government securities dealers designated by the Collateral Agent or agent thereof (it being understood that the Collateral Agent may, but shall not be obligated, to designate any one or more such other U.S. government securities dealers); provided that if at any time fewer than three of the entities named on Schedule I are active U.S. government securities dealers and approved counterparties of The Bank of New York, any of the Regular Trustees may designate an additional U.S. government securities dealer as a Reference Dealer.

“Regular Trustee” has the meaning set forth in the Declaration of Trust, as in effect on the date hereof.

“Reset Rate” has the meaning set forth in the Indenture, as in effect on the date hereof.

“Roll Date” means, with respect to any Quarterly Date, the latest date prior to such Quarterly Date that is a maturity date of Qualifying Treasury Securities held in the Collateral Account.

“Securities Intermediary” means the Person named as the “Securities Intermediary” in the first paragraph of this Agreement until a successor Securities Intermediary shall have become such pursuant to the applicable provisions of this Agreement, and thereafter “Securities Intermediary” shall mean such Person or any subsequent successor who is appointed pursuant to this Agreement.

“Stated Amount” has the meaning specified in the second paragraph of the recitals of this Agreement.

“Stock Purchase Contract” has the meaning specified in the second paragraph of the recitals of this Agreement.

“Stock Purchase Contract Agent” means the Person named as the “Stock Purchase Contract Agent” in the first paragraph of this Agreement until a successor Stock Purchase Contract Agent shall have become such pursuant to the applicable provisions of this Agreement, and thereafter “Stock Purchase Contract Agent” shall mean such Person or any subsequent successor who is appointed pursuant to this Agreement.

“Stock Purchase Contract Agreement” has the meaning specified in the first paragraph of the recitals of this Agreement.

“Trade Date” means, with respect to each Roll Date, the Business Day immediately preceding such Roll Date.

“Trades” means the Treasury/Reserve Automated Debt Entry System maintained by the Federal Reserve Bank of New York pursuant to the Trades Regulations.

“Trades Regulations” means the regulations of the United States Department of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time. Unless otherwise defined herein, all terms defined in the Trades Regulations are used herein as therein defined.

“Transfer” means (i) in the case of certificated securities in registered form, delivery as provided in Section 8-301(a) of the UCC, endorsed to the transferee or in blank by an effective endorsement, (ii) in the case of Qualifying Treasury Securities, registration of the transferee as the owner of such Qualifying Treasury Securities on Trades and (iii) in the case of Security Entitlements, including, without limitation, Security Entitlements with respect to Qualifying Treasury Securities, a securities intermediary indicating by book entry that such Security Entitlement has been credited to the transferee’s Securities Account.

5

“Trust” means Lehman Holdings Capital Trust VII, a Delaware statutory trust.

“UCC” means the Uniform Commercial Code as in effect in the State of New York from time to time.

“Value” means, with respect to any item of Collateral on any date, as to (1) Trust Preferred Securities, the aggregate liquidation amount thereof, and (2) Qualifying Treasury Securities, the aggregate principal amount thereof.

6

ARTICLE II

PLEDGE

Section 2.1.Pledge.

Each Holder, acting through the Stock Purchase Contract Agent as such Holder’s attorney-in-fact, and the Stock Purchase Contract Agent, acting solely as such attorney-in-fact, hereby pledges and grants to the Collateral Agent, as agent of and for the benefit of the Company, a continuing first priority security interest in and to, and a lien upon and right of set-off against, all of such Person’s right, title and interest in and to the Collateral to secure the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Obligations. The Collateral Agent shall have all of the rights, remedies and recourses with respect to the Collateral afforded a secured party by the UCC, in addition to, and not in limitation of, the other rights, remedies and recourses afforded to the Collateral Agent by this Agreement.

Section 2.2.Control.

The Collateral Agent shall have control of the Collateral Account pursuant to the provisions of Article IV of this Agreement.

Section 2.3.Termination.

As to each Holder, this Agreement and the Pledge created hereby shall terminate upon the satisfaction of such Holder’s Obligations. Upon such termination, the Collateral Agent shall, except as otherwise provided herein, instruct the Securities Intermediary to Transfer such Holder’s portion of the Collateral to the Stock Purchase Contract Agent for distribution to such Holder, free and clear of the Pledge created hereby.

7

ARTICLE III

DISTRIBUTIONS ON PLEDGED COLLATERAL

Section 3.1.Income and Distributions.

The Collateral Agent shall transfer all income and distributions received by the Collateral Agent on account of the Pledged Trust Preferred Securities or Permitted Investments from time to time held in the Collateral Account (ABA No. 021-000-018, A/C No. 212825, Re: Lehman Brothers MCAPS Collateral Account Trust VII) to the Stock Purchase Contract Agent for distribution to the applicable Holders as provided in the Stock Purchase Contracts or Stock Purchase Contract Agreement.

Section 3.2.Payments Following Termination Event.

Following a Termination Event, the Collateral Agent shall transfer all payments of liquidation amounts or principal it receives, if any, in respect of (1) the Pledged Trust Preferred Securities and (2) the Pledged Treasury Securities or Permitted Investments, to the Stock Purchase Contract Agent for the benefit of the applicable Holders for distribution to such Holders in accordance with their respective interests, free and clear of the Pledge created hereby.

Section 3.3.Payments Prior to or on Stock Purchase Date.

(a)    Except as provided in Sections 3.3(b), 3.3(c) and 5.5 below, if no Termination Event shall have occurred, all payments of liquidation amounts or principal received by the Securities Intermediary in respect of (1) the Remarketing of the Pledged Trust Preferred Securities and (2) the Pledged Treasury Securities, shall be held and invested in Permitted Investments selected by the Company until the Stock Purchase Date, and transferred to the Company on the Stock Purchase Date as provided in Section 5.7 hereof. Any balance remaining in the Collateral Account shall be released from the Pledge and transferred to the Stock Purchase Contract Agent for the benefit of the applicable Holders for distribution to such Holders in accordance with their respective interests, free and clear of the Pledge created thereby. The Company shall instruct the Collateral Agent in writing as to the Permitted Investments in which any payments made under this Section 3.3(a) shall be invested. The Collateral Agent shall have no liability in respect of losses incurred as a result of the failure of the Company to provide timely written investment direction. The Collateral Agent may conclusively rely on any written direction and shall bear no liability for any loss or other damage based on acting or omitting to act under this Section 3.3 pursuant to any direction of the Company and neither the Collateral Agent nor the Securities Intermediary shall in any way be liable for the selection of Permitted Investments or by reason of any insufficiency in the Collateral Account resulting from any loss on any Permitted Investment included therein.

(b)    All payments of liquidation amounts or principal received by the Securities Intermediary in respect of (1) the Trust Preferred Securities and (2) the Qualifying Treasury Securities or Security Entitlements thereto, that, in each case, have been released from the Pledge pursuant hereto shall be transferred to the Stock Purchase Contract Agent for the benefit of the applicable Holders for distribution to such Holders in accordance with their respective interests.

(c)    In the event that a Remarketing is not Successful, principal payments received by the Securities Intermediary in respect of the Pledged Treasury Securities shall be invested in Qualifying Treasury Securities maturing at least one business day prior to the next Quarterly Date in a principal amount equal to the aggregate stated amount of the related Treasury MCAPS, which Qualifying Treasury Securities shall be considered Pledged Treasury Securities for the purpose of this Agreement. The Collateral Agent shall remit any remaining funds, after application of principal payments received in

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respect of Qualifying Treasury Securities to purchase new Qualifying Treasury Securities, to the Stock Purchase Contract Agent who shall remit such funds to the holders of the related Treasury MCAPS on a pro rata basis.

Section 3.4.Payments to Stock Purchase Contract Agent.

The Securities Intermediary shall use commercially reasonable efforts to deliver payments to the Stock Purchase Contract Agent hereunder to the account designated by the Stock Purchase Contract Agent for such purpose not later than 12:00 p.m. (New York City time) on the Business Day such payment is received by the Securities Intermediary; provided, however, that if such payment is received by the Securities Intermediary on a day that is not a Business Day or after 11:00 a.m. (New York City time) on a Business Day, then the Securities Intermediary shall use commercially reasonable efforts to deliver such payment to the Stock Purchase Contract Agent no later than 10:30 a.m. (New York City time) on the next succeeding Business Day. Notwithstanding the foregoing, if the Securities Intermediary is required to deliver payments to the Stock Purchase Contract Agent on a Business Day that is in the next calendar year, then the Securities Intermediary shall use commercially reasonable efforts to deliver such payment to the Stock Purchase Contract Agent no later than 10:30 am (New York City time) on the immediately preceding Business Day.

Section 3.5.Assets Not Properly Released.

If the Stock Purchase Contract Agent or any Holder shall receive any principal payments on account of financial assets credited to the Collateral Account and not released therefrom in accordance with this Agreement, the Stock Purchase Contract Agent or such Holder shall hold the same as trustee of an express trust for the benefit of the Company and, upon receipt of an Officers’ Certificate of the Company so directing, promptly deliver the same to the Securities Intermediary for credit to the Collateral Account or to the Company for application to the Obligations of the Holders, and the Stock Purchase Contract Agent and Holders shall acquire no right, title or interest in any such payments of principal amounts so received. The Stock Purchase Contract Agent shall have no liability under this Section 3.5 unless and until it has been notified in writing that such payment was delivered to it erroneously and shall have no liability for any action taken, suffered or omitted to be taken prior to its receipt of such notice.

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ARTICLE IV

CONTROL

Section 4.1.Establishment of Collateral Account.

The Securities Intermediary hereby confirms that:

(a)    Securities Intermediary has established the Collateral Account;

(b)    the Collateral Account is a Securities Account;

(c)    subject to the terms of this Agreement, the Securities Intermediary shall identify in its records the Collateral Agent as the entitlement holder entitled to exercise the rights that comprise any financial asset credited to the Collateral Account;

(d)    all property delivered to the Securities Intermediary pursuant to this Agreement or the Stock Purchase Contract Agreement, including any Permitted Investments, will be credited promptly to the Collateral Account; and

(e)    all securities or other property underlying any financial assets credited to the Collateral Account shall be (i) registered in the name of the Stock Purchase Contract Agent and endorsed to the Securities Intermediary or in blank, (ii) registered in the name of the Securities Intermediary or (iii) credited to another Securities Account maintained in the name of the Securities Intermediary. In no case will any financial asset credited to the Collateral Account be registered in the name of the Stock Purchase Contract Agent or any Holder or specially endorsed to the Stock Purchase Contract Agent or any Holder unless such financial asset has been further endorsed to the Securities Intermediary or in blank.

Section 4.2.Treatment as Financial Assets.

Each item of property (whether investment property, financial asset, security, instrument or cash) credited to the Collateral Account shall be treated as a financial asset.

Section 4.3.Sole Control by Collateral Agent.

Except as provided in Section 6.1, at all times prior to the termination of the Pledge, the Collateral Agent shall have sole control of the Collateral Account, and the Securities Intermediary shall take instructions and directions with respect to the Collateral Account solely from the Collateral Agent. If at any time the Securities Intermediary shall receive an entitlement order issued by the Collateral Agent and relating to the Collateral Account, the Securities Intermediary shall comply with such entitlement order without further consent by the Stock Purchase Contract Agent or any Holder or any other Person. Except as otherwise permitted under this Agreement, until termination of the Pledge, the Securities Intermediary will not comply with any entitlement orders issued by the Stock Purchase Contract Agent or any Holder.

Section 4.4.Securities Intermediary’s Location.

The Collateral Account, and the rights and obligations of the Securities Intermediary, the Collateral Agent, the Stock Purchase Contract Agent and the Holders with respect thereto, shall be governed by the laws of the State of New York. Regardless of any provision in any other agreement, for purposes of the UCC, New York shall be deemed to be the Securities Intermediary’s jurisdiction.

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Section 4.5.No Other Claims.

Except for the claims and interest of the Collateral Agent and of the Stock Purchase Contract Agent and the Holders in the Collateral Account, as at the date of this Agreement, the Securities Intermediary (without having conducted any investigation) does not know of any claim to, or interest in, the Collateral Account or in any financial asset credited thereto. If any Person asserts any lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Collateral Account or in any financial asset carried therein, the Securities Intermediary will promptly notify the Collateral Agent and the Stock Purchase Contract Agent.

Section 4.6.Investment and Release.

All proceeds of financial assets from time to time deposited in the Collateral Account shall be invested and reinvested as provided in this Agreement. At no time prior to termination of the Pledge with respect to any particular property shall such property be released from the Collateral Account except in accordance with this Agreement or upon written instructions of the Collateral Agent.

Section 4.7.Statements and Confirmations.

The Securities Intermediary will promptly send copies of all statements, confirmations and other correspondence concerning the Collateral Account and any financial assets credited thereto simultaneously to each of the Stock Purchase Contract Agent and the Collateral Agent at their addresses for notices under this Agreement.

Section 4.8.Tax Allocations.

The Stock Purchase Contract Agent shall report all items of income, gain, expense and loss recognized in the Collateral Account, to the extent such reporting is required by law, to the Internal Revenue Service authorities in the manner required by law. Neither the Securities Intermediary nor the Collateral Agent shall have any tax reporting duties hereunder.

Section 4.9.No Other Agreements.

The Securities Intermediary has not entered into, and prior to the termination of the Pledge will not enter into, any agreement with any other Person relating to the Collateral Account or any financial assets credited thereto, including, without limitation, any agreement to comply with entitlement orders of any Person other than the Collateral Agent.

Section 4.10.Powers Coupled with an Interest.

The rights and powers granted in this Article IV to the Collateral Agent have been granted in order to perfect its security interests in the Collateral Account, are powers coupled with an interest and will be affected neither by the bankruptcy of the Stock Purchase Contract Agent or any Holder nor by the lapse of time. The obligations of the Securities Intermediary under this Article IV shall continue in effect until the termination of the Pledge with respect to any and all Collateral.

Section 4.11.Waiver of Lien; Waiver of Set-off.

The Securities Intermediary waives any security interest, lien or right to make deductions or set- offs that it may now have or hereafter acquire in or with respect to the Collateral Account, any financial asset credited thereto or any Security Entitlement in respect thereof. Neither the financial assets credited

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to the Collateral Account nor the Security Entitlements in respect thereof will be subject to deduction, set-off, banker’s lien or any other right in favor of any person other than the Company.

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ARTICLE V

INITIAL DEPOSIT; CREATION OF TREASURY MCAPS
AND RECREATION OF NORMAL MCAPS

Section 5.1.Initial Deposit of Trust Preferred Securities.

(a)    Prior to or concurrently with the execution and delivery of this Agreement, the Stock Purchase Contract Agent, on behalf of the initial Holders of the Normal MCAPS, shall Transfer to the Securities Intermediary, for credit to the Collateral Account, the Trust Preferred Securities or Security Entitlements relating thereto, and, in the case of Security Entitlements, the Securities Intermediary shall indicate by book-entry that a Securities Entitlement to such Trust Preferred Securities has been credited to the Collateral Account.

(b)    The Collateral Agent may, at any time or from time to time, in its sole discretion, cause any or all securities or other property underlying any financial assets credited to the Collateral Account to be registered in the name of the Securities Intermediary, the Collateral Agent or their respective nominees; provided, however, that unless any Trust Enforcement Event (defined in the Declaration of Trust) shall have occurred and be continuing, the Collateral Agent agrees not to cause any Trust Preferred Securities to be so re-registered.

Section 5.2.Creation of Treasury MCAPS.

(a)    A Holder of Normal MCAPS shall have the right, at any time from and after the date of this Agreement and prior to the Successful Remarketing of the Trust Preferred Securities (except (1) on a day in February, May, August or November that is on or after the 15^th day of the month through the last day of the month (or the next Business Day if the last day is not a Business Day) or (2) during the period from 3:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of any Remarketing Period until the opening of business on the Business Day immediately following the end of that Remarketing Period), on or prior to 5:00 p.m. (New York City time) to create Treasury MCAPS by substitution of Qualifying Treasury Securities or Security Entitlements with respect thereto for the Pledged Trust Preferred Securities comprising a part of all or a portion of such Holder’s Normal MCAPS by:

(i)    transferring to the Collateral Agent, for credit to the Collateral Account, Qualifying Treasury Securities or Security Entitlements with respect thereto having a Value equal to the aggregate liquidation amount of the Pledged Trust Preferred Securities to be released, accompanied by a notice, substantially in the form of Exhibit C to the Stock Purchase Contract Agreement, whereupon the Stock Purchase Contract Agent shall deliver to the Collateral Agent a notice, substantially in the form of Exhibit A hereto, (A) stating that such Holder has notified the Stock Purchase Contract Agent that such Holder has Transferred Qualifying Treasury Securities or Security Entitlements with respect thereto to the Collateral Agent for credit to the Collateral Account, (B) stating the Value of the Qualifying Treasury Securities or Security Entitlements with respect thereto Transferred by such Holder and (C) requesting that the Collateral Agent release from the Pledge the Pledged Trust Preferred Securities that are a component of such Normal MCAPS and deliver the Treasury MCAPS and Trust Preferred Securities; and

(ii)    delivering the related Normal MCAPS to the Stock Purchase Contract Agent.

Upon receipt of such notice and confirmation that Qualifying Treasury Securities or Security Entitlements with respect thereto have been credited to the Collateral Account as described in such notice,

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the Collateral Agent shall instruct the Securities Intermediary by a notice, substantially in the form of Exhibit B hereto, to release such Pledged Trust Preferred Securities from the Pledge by Transfer to the Stock Purchase Contract Agent for distribution to such Holder, free and clear of the Pledge created hereby.

(b)    Upon credit to the Collateral Account of Qualifying Treasury Securities or Security Entitlements with respect thereto delivered by a Holder of Normal MCAPS and receipt of the related instruction from the Collateral Agent, the Securities Intermediary shall release such Pledged Trust Preferred Securities from the Pledge and shall promptly Transfer the same to the Stock Purchase Contract Agent for distribution to such Holder, free and clear of the Pledge created hereby.

Section 5.3.Recreation of Normal MCAPS.

(a)    A Holder of Treasury MCAPS shall have the right, at any time from and after the date of this Agreement and prior to the Successful Remarketing of the Trust Preferred Securities (except (1) on a day in February, May, August or November that is on or after the 15^th day of the month through the last day of the month (or the next Business Day if the last day is not a Business Day) or (2) during the period from 3:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of a Remarketing Period until the opening of business on the Business Day immediately the end of such Remarketing Period), on or prior to 5:00 p.m. (New York City time), to recreate Normal MCAPS by substitution of Trust Preferred Securities or Security Entitlements with respect thereto for Pledged Treasury Securities by:

(i)    transferring to the Securities Intermediary, for credit to the Collateral Account, Trust Preferred Securities or Security Entitlements with respect thereto having an aggregate liquidation amount equal to the Value of the Pledged Treasury Securities to be released, accompanied by a notice, substantially in the form of Exhibit C to the Stock Purchase Contract Agreement, whereupon the Stock Purchase Contract Agent shall deliver to the Collateral Agent a notice, substantially in the form of Exhibit C hereto, stating that such Holder has Transferred the Trust Preferred Securities or Security Entitlements with respect thereto to the Collateral Account for credit to the Collateral Account and requesting that the Collateral Agent release from the Pledge the Pledged Treasury Securities related to such Treasury MCAPS; and

(ii)    delivering the related Treasury MCAPS to the Stock Purchase Contract Agent.

Upon receipt of such notice and confirmation that Trust Preferred Securities or Security Entitlements with respect thereto have been credited to the Collateral Account as described in such notice, the Collateral Agent shall instruct the Securities Intermediary by a notice substantially in the form of Exhibit D hereto to release such Pledged Treasury Securities from the Pledge by Transfer to the Stock Purchase Contract Agent for distribution to such Holder, free and clear of the Pledge created hereby.

(b)    Upon credit to the Collateral Account of Trust Preferred Securities or Security Entitlements with respect thereto delivered by a Holder of Treasury MCAPS and receipt of the related instruction from the Collateral Agent, the Securities Intermediary shall release such Pledged Treasury Securities from the Pledge and shall promptly Transfer the same to the Stock Purchase Contract Agent for distribution to such Holder, free and clear of the Pledge created hereby.

Section 5.4.Termination Event.

(a)    Upon receipt by the Collateral Agent of written notice from the Company or the Stock Purchase Contract Agent in the Form set forth in Exhibit H that a Termination Event has occurred, the

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Collateral Agent shall release all Collateral from the Pledge and shall promptly instruct the Securities Intermediary to Transfer:

(i)    any Pledged Trust Preferred Securities or Security Entitlements with respect thereto;  and

(ii)    any Pledged Treasury Securities

to the Stock Purchase Contract Agent for the benefit of the Holders for distribution to such Holders, in accordance with their respective interests, free and clear of the Pledge created hereby.

(b)    If such Termination Event shall result from the Company’s becoming a debtor under the Bankruptcy Code, and if the Collateral Agent shall for any reason fail promptly to effectuate the release and Transfer of all Pledged Trust Preferred Securities, Pledged Treasury Securities and Proceeds of any of the foregoing, as the case may be, as provided by this Section 5.4, the Stock Purchase Contract Agent shall:

(i)    use its best efforts to obtain an opinion of a nationally recognized law firm to the effect that, notwithstanding the Company’s being the debtor in such a bankruptcy case, the Collateral Agent will not be prohibited from releasing or Transferring the Collateral as provided in this Section 5.4 and shall deliver or cause to be delivered such opinion to the Collateral Agent within ten days after the occurrence of such Termination Event, and if (A) the Stock Purchase Contract Agent shall be unable to obtain such opinion within ten days after the occurrence of such Termination Event or (B) the Collateral Agent shall continue, after delivery of such opinion, to refuse to effectuate the release and Transfer of all Pledged Trust Preferred Securities, Pledged Treasury Securities and Proceeds of any of the foregoing, as the case may be, as provided in this Section 5.4, then the Stock Purchase Contract Agent shall within fifteen days after the occurrence of such Termination Event commence an action or proceeding in the court having jurisdiction of the Company’s case under the Bankruptcy Code seeking an order requiring the Collateral Agent to effectuate the release and transfer of all Pledged Trust Preferred Securities, Pledged Treasury Securities and Proceeds of any of the foregoing, or as the case may be, as provided by this Section 5.4; or

(ii)    commence an action or proceeding like that described in Section 5.4(b)(i) hereof within ten days after the occurrence of such Termination Event.

Section 5.5.Reinvestment of Proceeds of Pledged Treasury Securities.

(a)    At or about 11:00 A.M., New York City time, on each Trade Date, the Collateral Agent shall select at least three Reference Dealers (including at least three Reference Dealers named on Schedule I hereto or named by any of the Regular Trustees as replacements therefor who are approved counterparties of The Bank of New York) and request each of them to provide a commitment (which may be oral if promptly confirmed in writing by facsimile or e-mail), satisfactory in form to the Collateral Agent, to the effect that if selected as the Final Dealer, such Reference Dealer shall sell to the Collateral Agent, for delivery against payment on the immediately succeeding Roll Date, an aggregate principal amount of the U.S. treasury security that is the Qualifying Treasury Security on such Roll Date equal to the aggregate principal amount of Qualifying Treasury Securities held in the Collateral Account on such Trade Date. If the Collateral Agent shall have received at least two firm offers, it shall select the lowest offer and the Reference Dealer providing the lowest offer shall be the “Final Dealer”; provided that if two or more Reference Dealers have provided identical lowest offers, the Collateral Agent shall select any of these Reference Dealers as the Final Dealer in its absolute discretion. The Final Dealer shall be obligated

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to sell to the Collateral Agent, for Cash on the Roll Date, the aggregate principal amount of the U.S. treasury security specified in such offer. If the Collateral Agent determines that (i) a Market Disruption Event has occurred or (ii) fewer than two Reference Dealers have provided firm offers in a timely manner meeting the foregoing requirements, the steps contemplated above shall be taken on each succeeding Business Day on which the Collateral Agent determines that no Market Disruption Event has occurred until at least two Reference Dealers have provided such offers, except that the Collateral Agent shall request offers from the Reference Dealers for same day settlement. The Collateral Agent shall use reasonable care in administering the foregoing procedures and shall have no liability in connection therewith to the Issuer Trust, the Property Trustee, the Company or any other Person in the absence of gross negligence or willful misconduct. All determinations regarding whether a Market Disruption Event has occurred shall be made by the Collateral Agent in its sole discretion.

(b)    On each Roll Date (or, if no Final Dealer shall have been selected on the Trade Date, on the date that the Final Dealer is selected), the Collateral Agent shall instruct the Securities Intermediary to apply the Proceeds of the U.S. treasury securities held in the Collateral Account to the Purchase Price of the Qualifying Treasury Securities, which shall be deposited in the Collateral Account, and to apply the excess of such Proceeds over the Purchase Price of the Qualifying Treasury Securities to purchase Permitted Investments for deposit in the Collateral Account.

(c)    On each Quarterly Date, if the Qualifying Treasury Securities shall have been purchased and deposited in the Collateral Account, the Collateral Agent shall liquidate the Permitted Investments in the Collateral Account and promptly remit the Proceeds to the Stock Purchase Contract Agent for payment to each Holder of Treasury MCAPS on a pro rata basis.

Section 5.6.Settlement with Qualifying Treasury Securities.

(a)    Upon receipt by the Collateral Agent of (1) a notice from the Stock Purchase Contract Agent promptly following the receipt by the Stock Purchase Contract Agent of a notice from a Holder of Normal MCAPS that such Holder has elected, in accordance with the procedures specified in Section 6.2 of the Stock Purchase Contract Agreement, to effect a Settlement with Qualifying Treasury Securities and (2) delivery by such Holder of Qualifying Treasury Securities having a principal amount equal to the Purchase Price under the related Stock Purchase Contracts by deposit in the Collateral Account on or prior to 5:00 p.m. (New York City time) on the first Business Day prior to the beginning of the Remarketing Period, then any securities or their proceeds received shall be paid or delivered, as the case may be, to the Company on the Stock Purchase Date in settlement of the Stock Purchase Contracts in accordance with the terms of this Agreement and the Stock Purchase Contract Agreement.

(b)    If a Holder of Normal MCAPS (i) fails to notify the Stock Purchase Contract Agent of its intention to make a Settlement with Qualifying Treasury Securities as provided in Section 6.2 of the Stock Purchase Contract Agreement or (ii) does notify the Stock Purchase Contract Agent of its intention to made a Settlement with Qualifying Treasury Securities but fails to make such delivery as required by Section 6.2 of the Stock Purchase Contract Agreement, such Holder shall be deemed to have consented to the disposition of such Holder’s Pledged Trust Preferred Securities in accordance with Section 6.2 of the Stock Purchase Contract Agreement.

(c)    As soon as practicable after 5:00 p.m. (New York City time) on the first Business Day immediately preceding the beginning of the Remarketing Period, the Collateral Agent shall deliver to the Stock Purchase Contract Agent a notice, substantially in the form of Exhibit E hereto, stating the number of Pledged Trust Preferred Securities to be remarketed in the applicable Remarketing pursuant to Section 6.2(a) of the Stock Purchase Contract Agreement.

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(d)    If any Remarketing other than a Final Remarketing is not Successful, the Collateral Agent shall promptly return the Qualifying Treasury Securities or their proceeds, as the case may be, that it has received with respect to the Settlement with Qualifying Treasury Securities to the Stock Purchase Contract Agent for distribution to the Holders who elected to effect a Settlement with Qualifying Treasury Securities.

(e)    In the event of a Successful Remarketing, the Collateral Agent shall (i) instruct the Securities Intermediary to release from the Pledge such Holder’s related Pledged Trust Preferred Securities as to which such Holder has effected a Settlement with Qualifying Treasury Securities pursuant to Section 5.6(a) and (ii) instruct the Securities Intermediary to Transfer all such Pledged Trust Preferred Securities to the Stock Purchase Contract Agent for distribution to such Holder free and clear of the Pledge created hereby.

Section 5.7.Application of Proceeds in Settlement of Stock Purchase Contracts.

(a)    If a Holder of Normal MCAPS has not elected to make an effective Settlement with Qualifying Treasury Securities by notifying the Stock Purchase Contract Agent in the manner provided for in Section 6.2  of the Stock Purchase Contract Agreement or does notify the Stock Purchase Contract Agent as provided in Section 6.2  of the Stock Purchase Contract Agreement of its intention to deliver Qualifying Treasury Securities having a principal amount equal to the Purchase Price under the related Stock Purchase Contracts but fails to make such delivery as required by Section 6.2  of the Stock Purchase Contract Agreement, such Holder shall be deemed to have elected to pay for the Depositary Shares to be issued under such Stock Purchase Contracts from the Proceeds of the Remarketing of the related Pledged Trust Preferred Securities.

In the event of a Successful Remarketing, the Collateral Agent shall, upon written instruction of the Company, instruct the Securities Intermediary to Transfer the related Pledged Trust Preferred Securities to the Remarketing Agent, upon confirmation of deposit by the Remarketing Agent of the Proceeds of such Successful Remarketing (less, to the extent permitted by the Remarketing Agreement, the Remarketing Fee) in the Collateral Account. On the Stock Purchase Date, the Collateral Agent shall, in consultation with the Stock Purchase Contract Agent, instruct the Securities Intermediary to remit a portion of the Proceeds from such Successful Remarketing equal to the aggregate liquidation amount of such Pledged Trust Preferred Securities to satisfy in full such Holder’s obligations to pay the Purchase Price to purchase the Depositary Shares under the related Stock Purchase Contracts and to remit the balance of the Proceeds from the Successful Remarketing, if any, to the Stock Purchase Contract Agent for distribution to such Holder.

In the event of a Failed Remarketing, the Collateral Agent, for the benefit of the Company, will, at the written instruction of the Company, deliver or dispose of the Pledged Trust Preferred Securities in accordance with the Company’s written instructions to satisfy in full, from any such disposition or retention, such Holders’ obligations to pay the Purchase Price for the Depositary Shares to be issued under the Stock Purchase Contracts underlying such Normal MCAPS. Thereafter, the Collateral Agent shall promptly remit the Proceeds in excess of the aggregate Purchase Price for the Depositary Shares to be issued under such Stock Purchase Contracts to the Stock Purchase Contract Agent for payment to the Holders of the Normal MCAPS to which such Trust Preferred Securities relate.

(b)    A Holder of a Treasury MCAPS shall be deemed to have elected to pay for the Depositary Shares to be issued under such Stock Purchase Contracts from the Proceeds of the related Pledged Treasury Securities. Without receiving any instruction from any Holder, the Collateral Agent shall instruct the Securities Intermediary to remit the Proceeds of the related Pledged Treasury Securities to the Company in settlement of such Stock Purchase Contracts on the Stock Purchase Date. In the event the

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sum of the Proceeds from the related Pledged Treasury Securities exceeds the aggregate Purchase Price of the Stock Purchase Contracts being settled thereby, the Collateral Agent shall instruct the Securities Intermediary to transfer such excess, when received, to the Stock Purchase Contract Agent for distribution to Holders of the Treasury MCAPS to which such Qualifying Treasury Securities relate.

(c)    On or prior to 5:00 p.m. (New York City time) on the second Business Day immediately preceding any beginning of a Remarketing Period, but no earlier than the Payment Date immediately preceding such date, Holders of Separate Trust Preferred Securities may elect to have their Separate Trust Preferred Securities remarketed under the Remarketing Agreement, by delivering their Separate Trust Preferred Securities along with a notice of such election, substantially in the form of Exhibit F hereto, to the Collateral Agent. Any such notice and delivery may not be conditioned upon the level at which the Reset Rate is established in the Remarketing or any other condition. The Collateral Agent shall hold Separate Trust Preferred Securities in an account separate from the Collateral Account in which the Pledged Securities shall be held. Holders of Separate Trust Preferred Securities electing to have their Separate Trust Preferred Securities remarketed will also have the right to withdraw that election by written notice to the Collateral Agent, substantially in the form of Exhibit G hereto, on or prior to 5:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of any Remarketing Period, upon which notice the Collateral Agent shall return such Separate Trust Preferred Securities to such Holder. After such time, such election shall become an irrevocable election to have such Separate Trust Preferred Securities remarketed in such Remarketing.

Promptly after 11:00 a.m. (New York City time) on the Business Day immediately preceding the beginning of any Remarketing Period, the Collateral Agent shall notify the Remarketing Agent of the aggregate liquidation amount of the Separate Trust Preferred Securities to be remarketed and deliver to the Remarketing Agent for remarketing all Separate Trust Preferred Securities delivered to the Collateral Agent pursuant to this Section 5.7(c) and not validly withdrawn prior to such date. In the event of a Successful Remarketing, after deducting the Remarketing Fee, the Remarketing Agent will remit to the Collateral Agent the remaining portion of the proceeds of such Remarketing for payment to the Holders of the remarketed Separate Trust Preferred Securities, in accordance with their respective interests. In the event of a Failed Remarketing, the Remarketing Agent will promptly return such Separate Trust Preferred Securities to the Collateral Agent for distribution to the appropriate Holders.

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ARTICLE VI

PLEDGED TRUST PREFERRED SECURITIES

Section 6.1.Voting Rights.

The Stock Purchase Contract Agent and Holder may exercise, or refrain from exercising, any and all voting and other consensual rights pertaining to the Pledged Trust Preferred Securities or any part thereof for any purpose not inconsistent with the terms of this Agreement and in accordance with the terms of the Stock Purchase Contract Agreement.

Upon receipt of any notices and other communications in respect of any Pledged Trust Preferred Securities, including notice of any meeting at which holders of the Trust Preferred Securities are entitled to vote or solicitation of consents, waivers or proxies of holders of the Trust Preferred Securities, the Collateral Agent shall use reasonable efforts to send promptly to the Stock Purchase Contract Agent such notice or communication, and as soon as reasonably practicable after receipt of a written request therefore from the Stock Purchase Contract Agent, execute and deliver to the Stock Purchase Contract Agent such proxies and other instruments in respect of such Pledged Trust Preferred Securities (in form and substance satisfactory to the Collateral Agent) as are prepared by the Company and delivered to the Collateral Agent with respect to the Pledged Trust Preferred Securities.

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ARTICLE VII

RIGHTS AND REMEDIES

Section 7.1.Rights and Remedies of the Collateral Agent.

(a)    In addition to the rights and remedies specified in Section 5.7 hereof or otherwise available at law or in equity, after an event of default (as specified in Section 7.1(b) below) hereunder, the Collateral Agent shall have all of the rights and remedies with respect to the Collateral of a secured party under the UCC (whether or not the UCC is in effect in the jurisdiction where the rights and remedies are asserted) and the Trades Regulations and such additional rights and remedies to which a secured party is entitled under the laws in effect in any jurisdiction where any rights and remedies hereunder may be asserted. Without limiting the generality of the foregoing, such remedies may include, to the extent permitted by applicable law, (1) retention of the Pledged Trust Preferred Securities or the Pledged Treasury Securities in full satisfaction of the Holders’ obligations under the Stock Purchase Contracts and the Stock Purchase Contract Agreement or (2) sale of the Pledged Trust Preferred Securities or the Pledged Treasury Securities in one or more public or private sales.

(b)    Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, in the event the Company is unable to make payments from amounts transferred or transferable to the Company on account of the principal payments of any Pledged Treasury Securities as provided in Article III hereof, in satisfaction of the Obligations of the Holder of the Treasury MCAPS of which such applicable Pledged Treasury Securities are a part under the related Stock Purchase Contracts, the inability to make such payments shall constitute an event of default hereunder and the Collateral Agent shall have and may exercise, with reference to such Pledged Treasury Securities any and all of the rights and remedies available to a secured party under the UCC and the Trades Regulations after default by a debtor, and as otherwise granted herein or under any other law.

(c)    Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably authorized to receive and collect all payments of (i) the liquidation amount of the Pledged Trust Preferred Securities and (ii) the principal amount of the Pledged Treasury Securities, subject, in each case, to the provisions of Article III hereof, and as otherwise granted herein.

(d)    The Stock Purchase Contract Agent and each Holder of MCAPS agrees that, from time to time, upon the written request of the Collateral Agent or the Stock Purchase Contract Agent, such Holder shall execute and deliver such further documents and do such other acts and things as the Company may reasonably request in order to maintain the Pledge, and the perfection and priority thereof, and to confirm the rights of the Collateral Agent hereunder. The Stock Purchase Contract Agent shall have no liability to any Holder for executing any documents or taking any such acts requested by the Collateral Agent hereunder, except for liability for its own negligent acts, its own negligent failure to act or its own willful misconduct.

Section 7.2.Remarketing.

The Collateral Agent shall, promptly after 11:00 a.m., New York City time, on the Business Day immediately preceding the beginning of any Remarketing Period, notify the Remarketing Agent of the aggregate liquidation amount of the Pledged Trust Preferred Securities that are to be remarketed and without any instruction from any Holder of Normal MCAPS, present the related Pledged Trust Preferred Securities to the Remarketing Agent for Remarketing. In the event of a Failed Remarketing, the Trust

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Preferred Securities presented to the Remarketing Agent pursuant to this Section 7.2 for Remarketing shall be redeposited into the Collateral Account.

Section 7.3.Successful Remarketing.

In the event of a Successful Remarketing, the Collateral Agent shall, at the direction of the Company, instruct the Securities Intermediary to (i) Transfer the Pledged Trust Preferred Securities to the Remarketing Agent upon confirmation of deposit by the Remarketing Agent of the Proceeds of such Successful Remarketing (after deducting any Remarketing Fee in accordance with the Remarketing Agreement) in the Collateral Account, (ii) apply an amount equal to the aggregate Purchase Price for the Depositary Shares to be issued under the related Stock Purchase Contracts in full satisfaction of such Holders’ obligations to pay the Purchase Price under the related Stock Purchase Contracts, and (iii) promptly remit the remaining portion of such Proceeds to the Stock Purchase Contract Agent for payment to the Holders of Normal MCAPS, in accordance with their respective interests and the Stock Purchase Contract Agreement. With respect to Separate Trust Preferred Securities, any Proceeds of such Remarketing (after deducting any Remarketing Fee in accordance with the Remarketing Agreement) attributable to the Separate Trust Preferred Securities will be remitted to the Collateral Agent for payment to the holders of Separate Trust Preferred Securities. In the event of a Failed Remarketing, the Pledged Trust Preferred Securities shall remain credited to the Collateral Account and Section 5.7 shall apply.

Section 7.4.Substitutions.

Whenever a Holder has the right to substitute Qualifying Treasury Securities, Trust Preferred Securities or Security Entitlements for any of them, as the case may be, for financial assets held in the Collateral Account, such substitution shall not constitute a novation of the security interest created hereby.

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ARTICLE VIII

REPRESENTATIONS AND WARRANTIES; COVENANTS

Section 8.1.Representations and Warranties.

Each Holder from time to time, acting through the Stock Purchase Contract Agent as attorney-in-fact (it being understood that the Stock Purchase Contract Agent shall not be liable for any representation or warranty made by or on behalf of a Holder), hereby represents and warrants to the Collateral Agent (with respect to such Holder’s interest in the Collateral), which representations and warranties shall be deemed repeated on each day a Holder Transfers Collateral, that:

(a)    such Holder has the power to grant a security interest in and lien on the Collateral;

(b)    such Holder is the sole beneficial owner of the Collateral and, in the case of Collateral delivered in physical form, is the sole holder of such Collateral and is the sole beneficial owner of, or has the right to Transfer, the Collateral it Transfers to the Collateral Agent for credit to the Collateral Account, free and clear of any security interest, lien, encumbrance, call, liability to pay money or other restriction other than the security interest and lien granted under Article II hereof;

(c)    upon the Transfer of the Collateral to the Collateral Agent for credit to the Collateral Account, the Collateral Agent, for the benefit of the Company, will have a valid and perfected first priority security interest therein (assuming that any central clearing operation or any securities intermediary or other entity not within the control of the Holder involved in the Transfer of the Collateral, including the Collateral Agent and the Securities Intermediary, gives the notices and takes the action required of it hereunder and under applicable law for perfection of that interest and assuming the establishment and exercise of control pursuant to Article IV hereof); and

(d)    the execution and performance by the Holder of its obligations under this Agreement will not result in the creation of any security interest, lien or other encumbrance on the Collateral other than the security interest and lien granted under Article II hereof or violate any provision of any existing law or regulation applicable to it or of any mortgage, charge, pledge, indenture, contract or undertaking to which it is a party or which is binding on it or any of its assets.

Section 8.2.Covenants.

The Holders from time to time, acting through the Stock Purchase Contract Agent as their attorney-in-fact (it being understood that the Stock Purchase Contract Agent shall not be liable for any covenant made by or on behalf of a Holder), hereby covenant to the Collateral Agent that for so long as the Collateral remains subject to the Pledge:

(a)    neither the Stock Purchase Contract Agent nor such Holders will create or purport to create or allow to subsist any mortgage, charge, lien, pledge or any other security interest whatsoever over the Collateral or any part of it other than pursuant to this Agreement; and

(b)    neither the Stock Purchase Contract Agent nor such Holders will sell or otherwise dispose (or attempt to dispose) of the Collateral or any part of it except for the beneficial interest therein, subject to the Pledge hereunder, transferred in connection with the Transfer of the MCAPS.

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ARTICLE IX

THE COLLATERAL AGENT AND THE SECURITIES INTERMEDIARY

It is hereby agreed as follows:

Section 9.1.Appointment, Powers and Immunities.

The Collateral Agent or the Securities Intermediary shall act as agent for the Company hereunder with such powers as are specifically vested in the Collateral Agent or the Securities Intermediary, as the case may be, by the terms of this Agreement. The Collateral Agent and Securities Intermediary shall:

(a)    have no duties or responsibilities except those expressly set forth in this Agreement and no implied covenants or obligations shall be inferred from this Agreement against the Collateral Agent and the Securities Intermediary, nor shall the Collateral Agent and the Securities Intermediary be bound by the provisions of any agreement by any party hereto beyond the specific terms hereof;

(b)    not be responsible for any recitals contained in this Agreement, or in any certificate or other document referred to or provided for in, or received by it under, this Agreement, the MCAPS or the Stock Purchase Contract Agreement, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement (other than as against the Collateral Agent or the Securities Intermediary, as the case may be), the MCAPS, any Collateral or the Stock Purchase Contract Agreement or any other document referred to or provided for herein or therein or for any failure by the Company or any other Person (except the Collateral Agent or the Securities Intermediary, as the case may be) to perform any of its obligations hereunder or hereunder or for the validity, perfection, enforceability, priority or, except as expressly required hereby, maintenance of any security interest created hereunder;

(c)    not be required to initiate or conduct any litigation or collection proceedings hereunder (except pursuant to directions furnished under Section 9.2 hereof, subject to Section 9.8 hereof);

(d)    not be responsible for any action taken or omitted to be taken by it hereunder or under any other document or instrument referred to or provided for herein or in connection herewith or therewith, except for its own gross negligence or willful misconduct; and

(e)    not be required to advise any party as to selling or retaining, or taking or refraining from taking any action with respect to, any securities or other property deposited hereunder.

Subject to the foregoing, during the term of this Agreement, the Collateral Agent and the Securities Intermediary shall take all reasonable action in connection with the safekeeping and preservation of the Collateral hereunder as determined by industry standards.

No provision of this Agreement shall require the Collateral Agent or the Securities Intermediary to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. In no event shall the Collateral Agent or the Securities Intermediary be liable for any amount in excess of the Value of the Collateral.

Section 9.2.Instructions of the Company.

The Company shall have the right, by one or more written instruments executed and delivered to the Collateral Agent, to direct the time, method and place of conducting any proceeding for the realization of any right or remedy in connection with a Failed Remarketing, or of exercising any power conferred on the Collateral Agent, or to direct the taking or refraining from taking of any action authorized by this

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Agreement; provided, however, that (i) such direction shall not conflict with the provisions of any law or of this Agreement or involve the Collateral Agent in personal liability and (ii) the Collateral Agent shall be indemnified to its satisfaction as provided herein. Nothing contained in this Section 9.2 shall impair the right of the Collateral Agent in its discretion to take any action or omit to take any action which it deems proper and which is not inconsistent with such direction. None of the Collateral Agent or the Securities Intermediary has any obligation or responsibility to file UCC financing statements.

Section 9.3.Reliance by Collateral Agent and Securities Intermediary.

Each of the Collateral Agent and the Securities Intermediary shall be entitled, in the absence of bad faith, to rely conclusively upon any certification, order, judgment, opinion, notice or other written communication (including, without limitation, any thereof by e-mail or similar electronic means, telecopy, telex or facsimile) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons (without being required to determine the correctness of any fact stated therein) and consult with and conclusively rely upon advice, opinions and statements of legal counsel and other experts selected by the Collateral Agent or the Securities Intermediary, as the case may be. As to any matters not expressly provided for by this Agreement, the Collateral Agent and the Securities Intermediary shall in all cases be fully protected in acting, or in refraining from acting, hereunder in accordance with instructions given by the Company in accordance with this Agreement. In the event any instructions are given (other than in writing at the time of the execution of the Agreement), whether in writing, by telecopier or otherwise, the Collateral Agent and the Securities Intermediary are authorized to seek confirmation of such instructions by telephone call-back to the person or persons designated on Schedule II hereto, and the Collateral Agent and the Securities Intermediary may rely upon the confirmations of anyone purporting to be the person or persons so designated. The persons and telephone numbers for call-backs may be changed only in writing actually received and acknowledged by the Collateral Agent and the Securities Intermediary.

It is understood that the Collateral Agent and the Securities Intermediary in any funds transfer may rely solely upon any account numbers or similar identifying number provided by the Company to identify (i) the beneficiary, (ii) the beneficiary’s bank, or (iii) an intermediary bank. The Collateral Agent and the Securities Intermediary may apply any of the deposited funds for any payment order it executes using any such identifying number, even where its use may result in a person other than the beneficiary being paid, or the transfer of funds to a bank other than the beneficiary’s bank, or an intermediary bank, designated by the Company.

Section 9.4.Certain Rights.

(a)    Whenever in the administration of the provisions of this Agreement the Collateral Agent or the Securities Intermediary shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action to be taken hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of gross negligence or bad faith on the part of the Collateral Agent or the Securities Intermediary, be deemed to be conclusively proved and established by a certificate signed by one of the Company’s officers, and delivered to the Collateral Agent or the Securities Intermediary and such certificate, in the absence of gross negligence or bad faith on the part of the Collateral Agent or the Securities Intermediary, shall be full warrant to the Collateral Agent or the Securities Intermediary for any action taken, suffered or omitted by it under the provisions of this Agreement upon the faith thereof.

(b)    The Collateral Agent or the Securities Intermediary shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, entitlement order, approval or other paper or document.

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Section 9.5.Merger, Conversion, Consolidation or Succession to Business.

Any corporation into which the Collateral Agent or the Securities Intermediary may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Collateral Agent or the Securities Intermediary shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Collateral Agent or the Securities Intermediary shall be the successor of the Collateral Agent or the Securities Intermediary hereunder without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.

Section 9.6.Rights in Other Capacities.

The Collateral Agent and the Securities Intermediary and their affiliates may (without having to account therefore to the Company) accept deposits from, lend money to, make their investments in and generally engage in any kind of banking, trust or other business with the Stock Purchase Contract Agent, any other Person interested herein and any Holder of MCAPS (and any of their respective subsidiaries or affiliates) as if it were not acting as the Collateral Agent or the Securities Intermediary, as the case may be, and the Collateral Agent, the Securities Intermediary and their affiliates may accept fees and other consideration from the Stock Purchase Contract Agent and any Holder of MCAPS without having to account for the same to the Company; provided that each of the Securities Intermediary and the Collateral Agent covenants and agrees with the Company that it shall not accept, receive or permit there to be created in favor of itself and shall take no affirmative action to permit there to be created in favor of any other Person, any security interest, lien or other encumbrance of any kind in or upon the Collateral other than the lien created by the Pledge.

Section 9.7.Non-reliance on Collateral Agent and Securities Intermediary.

None of the Securities Intermediary or the Collateral Agent shall be required to keep itself informed as to the performance or observance by the Stock Purchase Contract Agent or any Holder of MCAPS of this Agreement, the Stock Purchase Contract Agreement, the MCAPS or any other document referred to or provided for herein or therein or to inspect the properties or books of the Stock Purchase Contract Agent or any Holder of MCAPS. None of the Collateral Agent or the Securities Intermediary shall have any duty or responsibility to provide the Company with any credit or other information concerning the affairs, financial condition or business of the Stock Purchase Contract Agent or any Holder of MCAPS (or any of their respective affiliates) that may come into the possession of the Collateral Agent or the Securities Intermediary or any of their respective affiliates.

Section 9.8.Compensation and Indemnity.

The Company agrees to:

(a)    pay the Collateral Agent and the Securities Intermediary from time to time such compensation as shall be agreed in writing between the Company and the Collateral Agent or the Securities Intermediary, as the case may be, for all services rendered by them hereunder;

(b)    indemnify and hold harmless the Collateral Agent the Securities Intermediary and each of their respective directors, officers, agents and employees (collectively, the “Indemnitees”), from and against any and all claims, liabilities, losses, damages, fines, penalties and expenses (including reasonable fees and expenses of counsel) and taxes (other than those based upon, determined by or measured by the income of the Collateral Agent and Securities Intermediary) (collectively, “Losses” and individually, a

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“Loss”) that may be imposed on, incurred by, or asserted against, the Indemnitees or any of them for following any instructions or other directions upon which either the Collateral Agent or the Securities Intermediary is entitled to rely pursuant to the terms of this Agreement, provided that the Collateral Agent or the Securities Intermediary has not acted with gross negligence or engaged in willful misconduct or bad faith with respect to the specific Loss against which indemnifications sought; and

(c)    in addition to and not in limitation of paragraph (b) immediately above, indemnify and hold the Indemnitees and each of them harmless from and against any and all Losses that may be imposed on, incurred by or asserted against, the Indemnitees or any of them in connection with or arising out of the Collateral Agent’s or the Securities Intermediary’s acceptance or performance of its powers and duties under this Agreement, provided that the Collateral Agent or the Securities Intermediary has not acted with gross negligence or engaged in willful misconduct or bad faith with respect to the specific Loss against which indemnification is sought.

The provisions of this Section and Section 11.7 shall survive the resignation or removal of the Collateral Agent or Securities Intermediary and the termination of this Agreement.

Section 9.9.Failure to Act.

In the event of any ambiguity in the provisions of this Agreement or any dispute between or conflicting claims by or among the parties hereto or any other Person with respect to any funds or property deposited hereunder, then at its sole option, each of the Collateral Agent and the Securities Intermediary shall be entitled, after prompt notice to the Company and the Stock Purchase Contract Agent, to refuse to comply with any and all claims, demands or instructions with respect to such property or funds so long as such dispute or conflict shall continue, and the Collateral Agent and the Securities Intermediary shall not be or become liable in any way to any of the parties hereto for its failure or refusal to comply with such conflicting claims, demands or instructions. The Collateral Agent and the Securities Intermediary shall be entitled to refuse to act until either:

(a)    such conflicting or adverse claims or demands shall have been finally determined by a court of competent jurisdiction or settled by agreement between the conflicting parties as evidenced in a writing satisfactory to the Collateral Agent or the Securities Intermediary; or

(b)    the Collateral Agent or the Securities Intermediary shall have received security or an indemnity satisfactory to it sufficient to save it harmless from and against any and all loss, liability or reasonable out-of-pocket expense which it may incur by reason of its acting.

The Collateral Agent and the Securities Intermediary may in addition elect to commence an interpleaded action or seek other judicial relief or orders as the Collateral Agent or the Securities Intermediary may deem necessary. Notwithstanding anything contained herein to the contrary, none of the Collateral Agent or the Securities Intermediary shall be required to take any action that is in its opinion contrary to law or to the terms of this Agreement, or which would in its opinion subject it or any of its officers, employees or directors to liability.

Section 9.10.Resignation of Collateral Agent and Securities Intermediary.

Subject to the appointment and acceptance of a successor Collateral Agent or Securities Intermediary as provided below:

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(i)    the Collateral Agent and the Securities Intermediary may resign at any time by giving notice thereof to the Company and the Stock Purchase Contract Agent as attorney-in-fact for the Holders of MCAPS;

(ii)    the Collateral Agent and the Securities Intermediary may be removed at any time by the Company; and

(iii)    if the Collateral Agent or the Securities Intermediary fails to perform any of its material obligations hereunder in any material respect for a period of not less than 20 days after receiving written notice of such failure by the Stock Purchase Contract Agent and such failure shall be continuing, the Collateral Agent and the Securities Intermediary may be removed by the Stock Purchase Contract Agent, acting at the direction of the Holders of MCAPS.

provided that any Person at any time acting as Collateral Agent or Securities Intermediary may not resign or be removed in any one of those capacities without the consent of each party to this Collateral Agreement unless it resigns or is removed in all such capacities in which it is then acting.

The Stock Purchase Contract Agent shall promptly notify the Company of any removal of the Collateral Agent or the Securities Intermediary pursuant to clause (iii) of this Section 9.10. Upon any such resignation or removal, the Company shall have the right to appoint a successor Collateral Agent or Securities Intermediary, as the case maybe, which shall not be an Affiliate of the Stock Purchase Contract Agent. If no successor Collateral Agent or Securities Intermediary shall have been so appointed and shall have accepted such appointment within 30 days after the retiring Collateral Agent’s or Securities Intermediary’s giving of notice of resignation or the Company’s or the Stock Purchase Contract Agent’s giving notice of such removal, then the retiring or removed Collateral Agent or Securities Intermediary may petition any court of competent jurisdiction, at the expense of the Company, for the appointment of a successor Collateral Agent or Securities Intermediary. The Collateral Agent and the Securities Intermediary shall each be a bank or a national banking association which has an office (or an agency office) in New York City with a combined capital and surplus of at least $50,000,000. Upon the acceptance of any appointment as Collateral Agent or Securities Intermediary hereunder by a successor Collateral Agent or Securities Intermediary, as the case may be, such successor Collateral Agent or Securities Intermediary, as the case may be, shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent or Securities Intermediary, as the case may be, and the retiring Collateral Agent or Securities Intermediary, as the case may be, shall take all appropriate action, subject to payment of any amounts then due and payable to it hereunder, to transfer any money and property held by it hereunder (including the Collateral) to such successor. The retiring Collateral Agent or Securities Intermediary shall, upon such succession, be discharged from its duties and obligations as Collateral Agent or Securities Intermediary hereunder. After any retiring Collateral Agent’s or Securities Intermediary’s resignation hereunder as Collateral Agent or Securities Intermediary, the provisions of this Article IX shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Collateral Agent or Securities Intermediary. Any resignation or removal of the Collateral Agent or Securities Intermediary hereunder, at a time when such Person is acting as the Collateral Agent or Securities Intermediary, shall be deemed for all purposes of this Agreement as the simultaneous resignation or removal of the Collateral Agent or Securities Intermediary, as the case may be.

Section 9.11.Right to Appoint Agent or Advisor.

The Collateral Agent shall have the right to appoint agents or advisors in connection with any of its duties hereunder, and the Collateral Agent shall not be liable for any action taken or omitted by, or in reliance upon the advice of, such agents or advisors selected in good faith. The appointment of agents

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pursuant to this Section 9.11 shall be subject to prior written consent of the Company, which consent shall not be unreasonably withheld.

Section 9.12.Survival.

The provisions of this Article IX shall survive termination of this Agreement and the resignation or removal of the Collateral Agent or the Securities Intermediary.

Section 9.13.Exculpation.

Anything contained in this Agreement to the contrary notwithstanding, in no event shall the Collateral Agent or the Securities Intermediary or their officers, directors, employees or agents be liable under this Agreement to any third party for indirect, special, punitive, or consequential loss or damage of any kind whatsoever, including, but not limited to, lost profits, whether or not the likelihood of such loss or damage was known to the Collateral Agent or the Securities Intermediary, or any of them incurred without any act or deed that is found to be attributable to gross negligence or willful misconduct on the part of the Collateral Agent or the Securities Intermediary.

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ARTICLE X

AMENDMENT

Section 10.1.Amendment Without Consent of Holders.

Without the consent of any Holders, the Company, when duly authorized, the Collateral Agent, the Securities Intermediary and the Stock Purchase Contract Agent, at any time and from time to time, may amend this Agreement, in form satisfactory to the Company, the Collateral Agent, the Securities Intermediary and the Stock Purchase Contract Agent, to:

(a)    evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company;

(b)    evidence and provide for the acceptance of appointment hereunder by a successor Collateral Agent, Securities Intermediary or Stock Purchase Contract Agent;

(c)    add to the covenants of the Company for the benefit of the Holders, or surrender any right or power herein conferred upon the Company, provided that such covenants or such surrender do not adversely affect the validity, perfection or priority of the Pledge created hereunder;

(d)    cure any ambiguity (or formal defect), correct or supplement any provisions herein which may be inconsistent with another such provisions herein;

(e)    conform the terms of this Agreement to the terms set forth in the Prospectus dated May 8, 2007 of the Company and the Trust relating to the MCAPS; or

(f)    make any other provisions with respect to such matters or questions arising under this Agreement, provided that such action shall not adversely affect the interests of the Holders in any material respect.

Section 10.2.Amendment with Consent of Holders.

With the consent of the Holders of not less than a majority of the Stock Purchase Contracts at the time outstanding, including without limitation the consent of the Holders obtained in connection with a tender or an exchange offer, by Act of such Holders delivered to the Company, the Stock Purchase Contract Agent, the Securities Intermediary and the Collateral Agent, as the case may be, the Company, when duly authorized by a Board Resolution, the Stock Purchase Contract Agent, the Securities Intermediary and the Collateral Agent may amend this Agreement for the purpose of modifying in any manner the provisions of this Agreement or the rights of the Holders in respect of the MCAPS; provided, however, that no such supplemental agreement shall, without the unanimous consent of the Holders of each Outstanding MCAPS adversely affected thereby in any material respect:

(a)    change the amount or type of Collateral underlying a MCAPS (except for the rights of holders of Normal MCAPS to substitute the Qualifying Treasury Securities for the Pledged Trust Preferred Securities or the rights of Holders of Treasury MCAPS to substitute Trust Preferred Securities, as applicable, for the Pledged Treasury Securities), impair the right of the Holder of any MCAPS to receive distributions on the underlying Collateral or otherwise adversely affect the Holder’s rights in or to such Collateral; or

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(b)    otherwise effect any action that would require the consent of the Holder of each Outstanding MCAPS affected thereby pursuant to the Stock Purchase Contract Agreement if such action were effected by a modification or amendment of the provisions of the Stock Purchase Contract Agreement; or

(c)    reduce the percentage of Stock Purchase Contracts the consent of whose Holders is required for the modification or amendment of the provisions of this Agreement;

(d)    provided that if any amendment or proposal referred to above would adversely affect only the Normal MCAPS or only the Treasury MCAPS, then only the affected class of Holders as of the record date for the Holders entitled to vote thereon will be entitled to vote on such amendment or proposal, and such amendment or proposal shall not be effective except with the consent of Holders of not less than a majority of such class; provided further that the unanimous consent of the Holders of each outstanding Stock Purchase Contract of such class affected thereby shall be required to approve any amendment or proposal specified in clauses (a) through (c) above.

It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed amendment, but it shall be sufficient if such Act shall approve the substance thereof.

Section 10.3.Execution of Amendments.

In executing any amendment permitted by this Article, the Collateral Agent, the Securities Intermediary and the Stock Purchase Contract Agent shall be entitled to receive and (subject to Section 7.1 of the Stock Purchase Contract Agreement with respect to the Stock Purchase Contract Agent) shall be fully authorized and protected in relying upon, an Opinion of Counsel and an officers’ certificate stating that the execution of such amendment is authorized or permitted by this Agreement and that all conditions precedent, if any, to the execution and delivery of such amendment have been satisfied. The Collateral Agent, Securities Intermediary and Stock Purchase Contract Agent may, but shall not be obligated to, enter into any such amendment which affects their own respective rights, duties or immunities under this Agreement or otherwise.

Section 10.4.Effect of Amendments.

Upon the execution of any amendment under this Article, this Agreement shall be modified in accordance therewith, and such amendment shall form a part of this Agreement for all purposes; and every Holder of Certificates theretofore or thereafter authenticated, executed on behalf of the Holders and delivered under the Stock Purchase Contract Agreement shall be bound thereby.

Section 10.5.Reference of Amendments.

Certificates authenticated, executed on behalf of the Holders and delivered after the execution of any amendment pursuant to this Section may, and shall if required by the Collateral Agent or the Stock Purchase Contract Agent, bear a notation in form approved by the Stock Purchase Contract Agent and the Collateral Agent as to any matter provided for in such amendment. If the Company shall so determine, new Certificates so modified as to conform, in the opinion of the Collateral Agent, the Stock Purchase Contract Agent and the Company, to any such amendment may be prepared and executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Stock Purchase Contract Agent in accordance with the Stock Purchase Contract Agreement in exchange for Certificates representing Outstanding MCAPS.

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ARTICLE XI

MISCELLANEOUS

Section 11.1.No Waiver.

No failure on the part of the Company, the Collateral Agent, the Securities Intermediary or any of their respective agents to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operates a waiver thereof; nor shall any single or partial exercise by the Company, the Collateral Agent, the Securities Intermediary or any of their respective agents of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law.

Section 11.2.Governing Law; Submission to Jurisdiction.

This agreement shall be governed by, and construed in accordance with, the laws of the State of New York. The Company, the Collateral Agent, the Securities Intermediary and the Holders from time to time of the Trust Preferred Securities, acting through the Stock Purchase Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York state court sitting in New York City for the purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Company, the Collateral Agent, the Securities Intermediary and the Holders from time to time of the Trust Preferred Securities, acting through the Stock Purchase Contract Agent as their attorney-in-fact, irrevocably waive, to the fullest extent permitted by applicable law, any objection that they may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.

Section 11.3.Notices.

All notices, requests, consents and other communications provided for herein (including, without limitation, any modifications of, or waivers or consents under, this Agreement) shall be give nor made in writing (including, without limitation, by telecopy) delivered to the intended recipient at the “Address For Notices” specified below its name on the signature pages hereof or, as to any party, at such other address as shall be designated by such party in a notice to the other parties. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by telecopy or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid.

Section 11.4.Successors and Assigns.

This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the Company, the Collateral Agent, the Securities Intermediary and the Stock Purchase Contract Agent, and the Holders from time to time of the MCAPS, by their acceptance of the same, shall be deemed to have agreed to be bound by the provisions hereof and to have ratified the agreements of, and the grant of the Pledge hereunder by, the Stock Purchase Contract Agent.

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Section 11.5.Counterparts.

This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart.

Section 11.6.Severability.

If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties hereto as nearly as may be possible and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction.

Section 11.7.Expenses, Etc.

The Company agrees to reimburse the Collateral Agent and the Securities Intermediary for:

(a)    all reasonable costs and expenses of the Collateral Agent and the Securities Intermediary (including, without limitation, the reasonable fees and expenses of counsel to the Collateral Agent and the Securities Intermediary), in connection with (i) the negotiation, preparation, execution and delivery or performance of this Agreement and (ii) any modification, supplement or waiver of any of the terms of this Agreement;

(b)    all reasonable costs and expenses of the Collateral Agent and the Securities Intermediary (including, without limitation, reasonable fees and expenses of counsel) in connection with (i) any enforcement or proceedings resulting or incurred in connection with causing any Holder of MCAPS to satisfy its obligations under the Stock Purchase Contracts forming a part of the MCAPS and (ii) the enforcement of this Section 11.7;

(c)    all transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any other document referred to herein and all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated hereby;

(d)    all reasonable fees and expenses of any agent or advisor appointed by the Collateral Agent and consented to by the Company under Section 9.11 of this Agreement; and

(e)    any other out-of-pocket costs and expenses reasonably incurred by the Collateral Agent and the Securities Intermediary in connection with the performance of their duties hereunder.

Section 11.8.Security Interest Absolute.

All rights of the Collateral Agent and security interests hereunder, and all obligations of the Holders from time to time hereunder, shall be absolute and unconditional irrespective of:

(a)    any lack of validity or enforceability of any provision of the Stock Purchase Contracts or the MCAPS or any other agreement or instrument relating thereto;

(b)    any change in the time, manner or place of payment of, or any other term of, or any increase in the amount of, all or any of the obligations of Holders of the MCAPS under the related Stock Purchase

32

Contracts, or any other amendment or waiver of any term of, or any consent to any departure from any requirement of, the Stock Purchase Contract Agreement or any Stock Purchase Contract or any other agreement or instrument relating thereto; or

(c)    any other circumstance which might otherwise constitute a defense available to, or discharge of, a borrower, a guarantor or a pledgor.

Section 11.9.Notice of Termination Event.

Upon the occurrence of a Termination Event, the Company shall deliver written notice to the Stock Purchase Contract Agent, the Collateral Agent and the Securities Intermediary. Upon the written request of the Collateral Agent or the Securities Intermediary, the Company shall inform such party whether or not a Termination Event has occurred.

Section 11.10.Incorporation by Reference

In connection with its execution and performance hereunder the Stock Purchase Contract Agent is entitled to all rights, privileges, protections, immunities, benefits and indemnities provided to it under the Stock Purchase Contract Agreement.

[SIGNATURES ON THE FOLLOWING PAGE]

33

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

LEHMAN BROTHERS HOLDINGS INC.		U.S. BANK NATIONAL ASSOCIATION, as Stock Purchase Contract Agent and as attorney-in-fact of the Holders from time to time of the MCAPS
By:	/s/ BARRETT S. DIPAOLO	By:	/s/ EARL DENNISON
Name:		Name:
Title:		Title:
Address for Notices:		Address for Notices:
Lehman Brothers Holdings Inc. 745 Seventh Avenue New York, New York 10019 Facsimile: (646) 834-2658 Attention: Lee Goldblatt		U.S. Bank National Association One Federal Street, 3rd Floor Boston, MA 02110 Attn: Corporate Trust Services Fax: 617-603-6667
THE BANK OF NEW YORK, as Collateral Agent and Securities Intermediary
By:	/s/ MARIA TOKARZ
Name:
Title:
Address for Notices:
Attn: MBS Group 101 Barclay Street, Floor 4 West New York, NY 10286 Fax: 212-815-3910

34

EXHIBIT A

INSTRUCTION
FROM STOCK PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Creation of Treasury MCAPS)

The Bank of New York

Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Re:        Normal MCAPS of Lehman Brothers Holdings Inc. (the “COMPANY”)

The Securities Account of The Bank of New York, as Collateral Agent, maintained by the Securities Intermediary and designated “The Bank of New York, as Collateral Agent of Lehman Brothers Holdings Inc., as pledgee of U.S. Bank National Association, as the Stock Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders” (the “COLLATERAL ACCOUNT”)

Please refer to the Collateral Agreement, dated as of May 17, 2007 (the “COLLATERAL AGREEMENT”), among the Company, you, as Collateral Agent and as Securities Intermediary and the undersigned, as Stock Purchase Contract Agent and as attorney-in-fact for the holders of Normal MCAPS from time to time. Capitalized terms used herein but not defined shall have the meaning set forth in the Collateral Agreement.

We hereby notify you in accordance with Section 5.2 of the Collateral Agreement that the holder of securities named below (the “HOLDER”) has elected to substitute $                 Value of Qualifying Treasury Securities or Security Entitlements with respect thereto in exchange for an equal Value of Pledged Trust Preferred Securities relating to Normal MCAPS and has delivered to the undersigned a notice stating that the Holder has Transferred such Qualifying Treasury Securities or Security Entitlements with respect thereto to the Securities Intermediary, for credit to the Collateral Account.

We hereby request that you instruct the Securities Intermediary, upon confirmation that such Qualifying Treasury Securities or Security Entitlements thereto have been credited to the Collateral Account, to release to the undersigned an equal Value of Pledged Trust Preferred Securities in accordance with Section 5.2 of the Collateral Agreement.

A-1

Date:

U.S. BANK NATIONAL ASSOCIATION, as Stock
Purchase Contract Agent and as attorney-in-fact of the
Holders from time to time of the MCAPS
By:
	Name:
	Title:

Please print name and address of Holder electing to substitute Qualifying Treasury Securities or Security Entitlements with respect thereto for the Pledged Trust Preferred Securities:

Name	Social Security or other Taxpayer Identification Number, if any
Address

A-2

EXHIBIT B

INSTRUCTION
FROM COLLATERAL AGENT
TO SECURITIES INTERMEDIARY
(Creation of Treasury MCAPS)

The Bank of New York

as Securities Intermediary

Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Re:              Normal MCAPS of Lehman Brothers Holdings Inc. (the “COMPANY”)

The Securities Account of The Bank of New York, as Collateral Agent, maintained by the Securities Intermediary and designated “The Bank of New York, as Collateral Agent of Lehman Brothers Holdings Inc., as pledgee of U.S. Bank National Association, as the Stock Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders” (the “COLLATERAL ACCOUNT”)

Please refer to the Collateral Agreement, dated as of May 17, 2007 (the “COLLATERAL AGREEMENT”), among the Company, you, as Collateral Agent and as Securities Intermediary and U.S. Bank National Association, as Stock Purchase Contract Agent and as attorney-in-fact for the holders of Normal MCAPS from time to time. Capitalized terms used herein but not defined shall have the meanings set forth in the Collateral Agreement.

When you have confirmed that $                Value of Qualifying Treasury Securities or Security Entitlements thereto has been credited to the Collateral Account by or for the benefit of                 , as Holder of Normal MCAPS (the “HOLDER”), you are hereby instructed to release from the Collateral Account an equal Value of Pledged Trust Preferred Securities or Security Entitlements with respect thereto relating to Normal MCAPS of the Holder by Transfer to the Stock Purchase Contract Agent.

Dated:

	The Bank of New York, as Collateral Agent
	By:
		Name:
		Title:
Please print name and address of Holder:
Name	Social Security or other Taxpayer
	Identification Number, if any
Address

B-1

EXHIBIT C

INSTRUCTION
FROM STOCK PURCHASE CONTRACT AGENT
TO COLLATERAL AGENT
(Recreation of Normal MCAPS)

The Bank of New York

The Collateral Agent

Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Re:              Treasury MCAPS of Lehman Brothers Holdings Inc. (the “COMPANY”)

The Securities Account of The Bank of New York, as Collateral Agent, maintained by the Securities Intermediary and designated “The Bank of New York, as Collateral Agent of Lehman Brothers Holdings Inc., as pledgee of U.S. Bank National Association, as the Stock Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders” (the “COLLATERAL ACCOUNT”)

Please refer to the Collateral Agreement dated as of May 17, 2007 (the “COLLATERAL AGREEMENT”), among the Company, you, as Collateral Agent and as Securities Intermediary and the undersigned, as Stock Purchase Contract Agent and as attorney-in-fact for the holders of Treasury MCAPS from time to time. Capitalized terms used herein but not defined shall have the meaning set forth in the Collateral Agreement.

We hereby notify you in accordance with Section 5.3 of the Collateral Agreement that the holder of securities named below (the “HOLDER”) has elected to substitute $               Value of Trust Preferred Securities or Security Entitlements with respect thereto in exchange for $                 an equal Value of Pledged Treasury Securities with respect to                Treasury MCAPS and has delivered to the undersigned a notice stating that the holder has Transferred such Trust Preferred Securities or Security Entitlements with respect thereto to the Securities Intermediary, for credit to the Collateral Account.

We hereby request that you instruct the Securities Intermediary, upon confirmation that such Trust Preferred Securities or Security Entitlements with respect thereto have been credited to the Collateral Account, to release to the undersigned $               an equal Value of Qualifying Treasury Securities in accordance with Section 5.3 of the Collateral Agreement.

C-1

Dated:

U.S. Bank National Association, as
Stock Purchase Contract Agent
By:
	Name:
	Title:

Please print name and address of Holder electing to substitute Trust Preferred Securities or Security Entitlements with respect thereto for Pledged Treasury Securities:

Name	Social Security or other Taxpayer
	Identification Number, if any
Address

C-2

EXHIBIT D

INSTRUCTION

FROM COLLATERAL AGENT

TO SECURITIES INTERMEDIARY

(Recreation of Normal MCAPS)

The Bank of New York

as Securities Intermediary

Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Re: {      } Treasury MCAPS of Lehman Brothers Holdings Inc. (the “COMPANY”)

The Securities Account of The Bank of New York, as Collateral Agent, maintained by the Securities Intermediary and designated “The Bank of New York, as Collateral Agent of Lehman Brothers Holdings Inc., as pledgee of U.S. Bank National Association, as the Stock Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders” (the “COLLATERAL ACCOUNT”)

Please refer to the Collateral Agreement dated as of May 17, 2007 (the “COLLATERAL AGREEMENT”), among the Company, you, as Securities Intermediary and Collateral Agent and U.S. Bank National Association, as Stock Purchase Contract Agent and as attorney-in-fact for the holders of Treasury MCAPS from time to time. Capitalized terms used herein but not defined shall have the meanings set forth in the Collateral Agreement.

When you have confirmed that $                 Value of Trust Preferred Securities or Security Entitlements with respect thereto has been credited to the Collateral Account by or for the benefit of                      , as Holder of Treasury MCAPS (the “HOLDER”), you are hereby instructed to release from the Collateral Account an equal Value of Qualifying Treasury Securities or Security Entitlements with respect thereto relating to Treasury MCAPS of the Holder by Transfer to the Stock Purchase Contract Agent.

D-1

Dated:

The Bank of New York, as
Collateral Agent
By:
	Name:
	Title:

Please print name and address of Holder:

Name	Social Security or other Taxpayer
	Identification Number, if any
Address

D-2

EXHIBIT E

NOTICE OF SETTLEMENT WITH TREASURY SECURITIES FROM COLLATERAL
AGENT TO STOCK PURCHASE CONTRACT AGENT

U.S. Bank National Association

The Stock Purchase Contract Agent

One Federal Street, 3^rd Floor

Boston, MA 02110
Attention:  Corporate Trust Services
Facsimile:  617-603-6667

Re:              Normal MCAPS of Lehman Brothers Holdings Inc. (the “COMPANY”)

Treasury MCAPS of the Company

Please refer to the Collateral Agreement dated as of May 17, 2007 (the “COLLATERAL AGREEMENT”), by and among you, the Company, and the undersigned, as Collateral Agent and Securities Intermediary. Unless otherwise defined herein, terms defined in the Collateral Agreement are used herein as defined therein.

In accordance with Section 5.6(c) of the Collateral Agreement, we hereby notify you that as of 5:00 p.m. (New York City time) on the ninth Business Day immediately preceding {    } (the “REMARKETING SETTLEMENT DATE”), we have received (i) a principal amount of $            of Qualifying Treasury Securities equal to the Purchase Price due to the Company on the Stock Purchase Date with respect to             Normal MCAPS, and (ii) based on the principal amount of the Qualifying Treasury Securities received set forth in clause (i) above, an aggregate liquidation amount of $            of Pledged Trust Preferred Securities are to be tendered for purchase in the Remarketing.

Dated:

The Bank of New York, as
Collateral Agent
By:
	Name:
	Title:

E-1

EXHIBIT F

INSTRUCTION TO COLLATERAL AGENT REGARDING
REMARKETING

The Bank of New York

The Collateral Agent and Securities Intermediary

Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Re: Trust Preferred Securities of Lehman Brothers Holdings Capital Trust VII

The undersigned hereby notifies you in accordance with Section 5.7(c) of the Collateral Agreement, dated as of May 17, 2007 (the “COLLATERAL AGREEMENT”), among Lehman Brothers Holdings Inc. (the “Company”), you, as Collateral Agent and Securities Intermediary and U.S. Bank National Association, as the Stock Purchase Contract Agent and as attorney-in-fact for the holders of Normal MCAPS from time to time, that the undersigned elects to deliver $                 aggregate liquidation amount of Separate Trust Preferred Securities for delivery to the Remarketing Agent on or prior to 5:00 p.m. (New York City time) on the ninth Business Day immediately preceding the Remarketing Settlement Date for remarketing pursuant to Section 5.7(c) of the Collateral Agreement. The undersigned will, upon request of the Remarketing Agent, execute and deliver any additional documents deemed by the Remarketing Agent or by the Company to be necessary or desirable to complete the sale, assignment and transfer of the Separate Trust Preferred Securities tendered hereby. Capitalized terms used herein but not defined shall have the meaning set forth in the Collateral Agreement.

The undersigned hereby instructs you, upon receipt of the Proceeds of such remarketing from the Remarketing Agent, to deliver such Proceeds to the undersigned in accordance with the instructions indicated herein under “A. Payment Instructions.” The undersigned hereby instructs you, in the event of a Failed Remarketing, upon receipt of the Separate Trust Preferred Securities tendered herewith from the Remarketing Agent, to deliver such Separate Trust Preferred Securities to the person(s) and the address(es) indicated herein under “B. Delivery Instructions.”

With this notice, the undersigned hereby (i) represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Separate Trust Preferred Securities tendered hereby and that the undersigned is the record owner of any Trust Preferred Securities tendered herewith in physical form or a participant in The Depository Trust Company (“DTC”) and the beneficial owner of any Trust Preferred Securities tendered herewith by book-entry transfer to your account at DTC, (ii) agrees to be bound by the terms and conditions of Section 5.7(c) of the Collateral Agreement and (iii) acknowledges and agrees that after 5:00 p.m. (New York City time) on the ninth Business Day immediately preceding the Remarketing Settlement Date, such election shall become an irrevocable election to have such Separate Trust Preferred Securities remarketed in the Remarketing. In the case of a Failed Remarketing, such Separate Trust Preferred Securities shall be returned to the undersigned.

F-1

Dated:

By:
	Name:
	Title:

Name	Social Security or other Taxpayer
	Identification Number, if any
Address

A.PAYMENT INSTRUCTIONS

Proceeds of the remarketing should be paid by check in the name of the person(s) set forth below and mailed to the address set forth below.

Name (s)

(Please Print)

Address

(Please Print)

(Zip Code)

(Taxpayer Identification or Social Security Number)

B.DELIVERY INSTRUCTIONS

In the event of a Failed Remarketing, Trust Preferred Securities that are in physical form should be delivered to the person(s) set forth below and mailed to the address set forth below.

Name (s)
(Please Print)
Address
(Please Print)	(Zip Code)
(Tax Identification or Social Security Number)

F-2

In the event of a Failed Remarketing, Trust Preferred Securities that are in book-entry form should be credited to the account at The Depository Trust Company set forth below.

DTC Account Number

Name of Account Party:

F-3

EXHIBIT G

INSTRUCTION TO COLLATERAL AGENT REGARDING
WITHDRAWAL FROM REMARKETING

The Bank of New York

The Collateral Agent

Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Re: Trust Preferred Securities of Lehman Brothers Holdings Capital Trust VII

The undersigned hereby notifies you in accordance with Section 5.7(c) of the Collateral Agreement, dated as of May 17, 2007 (the “COLLATERAL AGREEMENT”), among Lehman Brothers Holdings Inc. and you, as Collateral Agent and Securities Intermediary, and U.S. Bank National Association, as Stock Purchase Contract Agent and as attorney-in-fact for the holders of Normal MCAPS from time to time, that the undersigned elects to withdraw the $                   aggregate liquidation amount of Separate Trust Preferred Securities delivered to the Collateral Agent on                     for remarketing pursuant to Section 5.7(c) of the Collateral Agreement. The undersigned hereby instructs you to return such Trust Preferred Securities to the undersigned in accordance with the undersigned’s instructions. With this notice, the Undersigned hereby agrees to be bound by the terms and conditions of Section 5.7(c) of the Collateral Agreement. Capitalized terms used herein but not defined shall have the meaning set forth in the Collateral Agreement.

Dated:

By:
	Name:
	Title:

	Signature Guarantee:
Name	Social Security or other Taxpayer
	Identification Number, if any
Address

G-1

EXHIBIT H

NOTICE OF OCCURRENCE OF TERMINATION EVENT

The Bank of New York

The Collateral Agent and Securities Intermediary

Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Re:              Lehman Brothers Holdings Inc. (the “COMPANY”)

Please refer to the Collateral Agreement dated as of May 17, 2007 (the “COLLATERAL AGREEMENT”), by and among you, the Company, and the undersigned, as Collateral Agent and Securities Intermediary. Unless otherwise defined herein, terms defined in the Collateral Agreement are used herein as defined therein.

In accordance with Section 5.4(c) of the Collateral Agreement, we hereby notify you that a Termination Event has occurred.

Dated:

{Lehman Brothers Holdings Inc.}{U.S. Bank National Association}
By:
	Name:
	Title:

H-1

Schedule I

Reference Dealers

Schedule II

Contact Persons for Confirmation

Name Phone Number

EX-4.04

Exhibit 4.04

COLLATERAL AGREEMENT

among

LEHMAN BROTHERS HOLDINGS INC.

and

THE BANK OF NEW YORK,

as Collateral Agent and Securities Intermediary

and

U.S. BANK NATIONAL ASSOCIATION,

as Stock Purchase Contract Agent

Dated as of May 17, 2007

TABLE OF CONTENTS

ARTICLE I

DEFINITIONS

				Page
Section 1.1.		Definitions		2
		ARTICLE II PLEDGE
Section 2.1.		Pledge		7
Section 2.2.		Control		7
Section 2.3.		Termination		7
		ARTICLE III DISTRIBUTIONS ON PLEDGED COLLATERAL
Section 3.1.		Income and Distributions		8
Section 3.2.		Payments Following Termination Event		8
Section 3.3.		Payments Prior to or on Stock Purchase Date		8
Section 3.4.		Payments to Stock Purchase Contract Agent		9
Section 3.5.		Assets Not Properly Released		9
		ARTICLE IV CONTROL
Section 4.1.	Establishment of Collateral Account		10
Section 4.2.	Treatment as Financial Assets		10
Section 4.3.	Sole Control by Collateral Agent		10
Section 4.4.	Securities Intermediary’s Location		10
Section 4.5.	No Other Claims		11
Section 4.6.	Investment and Release		11
Section 4.7.	Statements and Confirmations		11
Section 4.8.	Tax Allocations		11
Section 4.9.	No Other Agreements		11
Section 4.10.	Powers Coupled with an Interest		11
Section 4.11.	Waiver of Lien; Waiver of Set-off		11
	ARTICLE V INITIAL DEPOSIT; CREATION OF TREASURY MCAPS AND RECREATION OF NORMAL MCAPS
Section 5.1.	Initial Deposit of Trust Preferred Securities		13
Section 5.2.	Creation of Treasury MCAPS		13

i

	Section 5.3.	Recreation of Normal MCAPS	14
	Section 5.4.	Termination Event	14
	Section 5.5.	Reinvestment of Proceeds of Pledged Treasury Securities	15
	Section 5.6.	Settlement with Qualifying Treasury Securities	16
	Section 5.7.	Application of Proceeds in Settlement of Stock Purchase Contracts	17
		ARTICLE VI PLEDGED TRUST PREFERRED SECURITIES
	Section 6.1.	Voting Rights	19
		ARTICLE VII RIGHTS AND REMEDIES
Section 7.1.		Rights and Remedies of the Collateral Agent	20
Section 7.2.		Remarketing	20
Section 7.3.		Successful Remarketing	21
Section 7.4.		Substitutions	21
		ARTICLE VIII REPRESENTATIONS AND WARRANTIES; COVENANTS
Section 8.1.		Representations and Warranties	22
Section 8.2.		Covenants	22
		ARTICLE IX THE COLLATERAL AGENT AND THE SECURITIES INTERMEDIARY
Section 9.1.		Appointment, Powers and Immunities	23
Section 9.2.		Instructions of the Company	23
Section 9.3.		Reliance by Collateral Agent and Securities Intermediary	24
Section 9.4.		Certain Rights	24
Section 9.5.		Merger, Conversion, Consolidation or Succession to Business	25
Section 9.6.		Rights in Other Capacities	25
Section 9.7.		Non-reliance on Collateral Agent and Securities Intermediary	25
Section 9.8.		Compensation and Indemnity	25
Section 9.9.		Failure to Act	26
Section 9.10.		Resignation of Collateral Agent and Securities Intermediary	26
Section 9.11.		Right to Appoint Agent or Advisor	27
Section 9.12.		Survival	28
Section 9.13.		Exculpation	28
		ARTICLE X AMENDMENT
Section 10.1.		Amendment Without Consent of Holders	29
Section 10.2.		Amendment with Consent of Holders	29

ii

Section 10.3.	Execution of Amendments	30
Section 10.4.	Effect of Amendments	30
Section 10.5.	Reference of Amendments	30
	ARTICLE XI MISCELLANEOUS
Section 11.1.	No Waiver	31
Section 11.2.	Governing Law; Submission to Jurisdiction	31
Section 11.3.	Notices	31
Section 11.4.	Successors and Assigns	31
Section 11.5.	Counterparts	32
Section 11.6.	Severability	32
Section 11.7.	Expenses, Etc.	32
Section 11.8.	Security Interest Absolute	32
Section 11.9.	Notice of Termination Event	33
Section 11.10.	Incorporation by Reference	33

EXHIBITS:

EXHIBIT A	—	Instruction from Stock Purchase Contract Agent to Collateral Agent (Creation of Treasury MCAPS)
EXHIBIT B	—	Instruction from Collateral Agent to Securities Intermediary (Creation of Treasury MCAPS)
EXHIBIT C	—	Instruction from Stock Purchase Contract Agent to Collateral Agent (Recreation of Normal MCAPS)
EXHIBIT D	—	Instruction from Collateral Agent to Securities Intermediary (Recreation of Normal MCAPS)
EXHIBIT E	—	Notice of Settlement with Treasury Securities from Collateral Agent to Stock Purchase Contract Agent
EXHIBIT F	—	Instruction to Collateral Agent Regarding Remarketing
EXHIBIT G	—	Instruction to Collateral Agent Regarding Withdrawal From Remarketing
EXHIBIT H	—	Notice of Occurrence of Termination Event

SCHEDULES:

SCHEDULE I -  Reference Dealers

SCHEDULE II – Contact Persons for Confirmation

iii

COLLATERAL AGREEMENT dated as of May 17, 2007 among Lehman Brothers Holdings Inc., a Delaware corporation (the “Company”), The Bank of New York, as collateral agent (in such capacity, the “Collateral Agent”), and as securities intermediary (as defined in Section 8-102(a)(14) of the UCC) with respect to the Collateral Account (in such capacity, the “Securities Intermediary”), and U.S. Bank National Association, as stock purchase contract agent and as attorney-in-fact of the Holders from time to time of the Mandatory Capital Advantaged Preferred Securities (“MCAPS”^SM) (in such capacity, the “Stock Purchase Contract Agent”) under the Stock Purchase Contract Agreement.

RECITALS

WHEREAS, the Company and the Stock Purchase Contract Agent are parties to the Stock Purchase Contract Agreement dated as of the date hereof (as modified and supplemented and in effect from time to time, the “Stock Purchase Contract Agreement”), pursuant to which 500,000 Normal MCAPS will be issued.

WHEREAS, each Normal MCAPS consists of a unit comprised of (a) a stock purchase contract (a “Stock Purchase Contract”) pursuant to which the Holder will purchase from the Company on the Stock Purchase Date, for an amount equal to $1,000 (the “Stated Amount”), one depositary share of the Company (a “Depositary Share”), representing 1/100^th of a share of the Company’s Non-Cumulative Perpetual Preferred Stock, Series I, $100,000 liquidation preference per share, (the “Preferred Stock”), and (b) a Trust Preferred Security.

WHEREAS, pursuant to the terms of the Stock Purchase Contract Agreement and the Stock Purchase Contracts, the Holders of the MCAPS have irrevocably authorized the Stock Purchase Contract Agent, as attorney-in-fact of such Holders, among other things, to execute and deliver this Agreement on behalf of such Holders and to grant the pledge provided herein of the Collateral to secure the Obligations.

NOW, THEREFORE, the Company, the Collateral Agent, the Securities Intermediary and the Stock Purchase Contract Agent agree as follows:

ARTICLE I

DEFINITIONS

Section 1.1.            Definitions.

For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires:

(a)   the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular, and nouns and pronouns of the masculine gender include the feminine and neuter genders;

(b)   the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section, Exhibit or other subdivision;

(c)   the following terms which are defined in the UCC shall have the meanings set forth therein: “Certificated Security,” “Control,” “Financial Asset,” “Entitlement Order,” “Securities Account” and “Security Entitlement”;

(d)   capitalized terms used herein and not defined herein have the meanings assigned to them in the Stock Purchase Contract Agreement; and

(e)   the following terms have the meanings given to them in this Section 1.1(e):

“Agreement” means this Collateral Agreement, as the same may be amended, modified or supplemented from time to time.

“Collateral” means the collective reference to:

(1)   the Collateral Account and all investment property and other financial assets from time to time credited to the Collateral Account and all Security Entitlements with respect thereto, including, without limitation, (A) the Trust Preferred Securities and Security Entitlements relating thereto that are a component of the Normal MCAPS from time to time (but excluding the right to receive distributions on the Trust Preferred Securities), (B) any Qualifying Treasury Securities and Security Entitlements relating thereto delivered from time to time upon creation of Treasury MCAPS in accordance with Section 5.2 hereof and (C) payments made by Holders pursuant to Section 5.6 hereof;

(2)   all Proceeds of any of the foregoing (whether such Proceeds arise before or after the commencement of any proceeding under any applicable bankruptcy, insolvency or other similar law, by or against the pledgor or with respect to the pledgor); and

(3)   all powers and rights now owned or hereafter acquired under or with respect to the Collateral.

“Collateral Account” means the Securities Account of The Bank of New York, as Collateral Agent, maintained by the Securities Intermediary and designated “The Bank of New York, as Collateral Agent of the Company, as pledgee of U.S. Bank National Association, as the Stock Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders.”

2

“Collateral Agent” means the Person named as the “Collateral Agent” in the first paragraph of this Agreement until a successor Collateral Agent shall have become such pursuant to the applicable provisions of this Agreement, and thereafter “Collateral Agent” shall mean such Person or any subsequent successor who is appointed pursuant to this Agreement.

“Company” means the Person named as the “Company” in the first paragraph of this Agreement until a successor shall have become such pursuant to the applicable provisions of the Stock Purchase Contract Agreement, and thereafter “Company” shall mean such successor.

“Declaration of Trust” means the Amended and Restated Declaration of Trust, dated as of the date hereof, among the Company, as Sponsor, the Property Trustee, the Delaware Trustee and the Regular Trustees (each as named therein), and the several Holders (as defined therein).

“Depositary Share” has the meaning specified in the second paragraph of the recitals of this Agreement.

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

“Final Dealer” has the meaning specified in Section 5.5(a).

“Holder” has the meaning specified in Section 1.1 of the Stock Purchase Contract Agreement, as in effect on the date hereof.

“Market Disruption Event” means (i) a general moratorium on commercial banking activities in New York declared by the relevant authorities or (ii) any material disruption of the U.S. government securities market or U.S. federal funds-transfer systems, written notification of which shall have been given to the Collateral Agent by any of the Regular Trustees.

“Obligations” means, with respect to each Holder, all obligations and liabilities of such Holder under such Holder’s Stock Purchase Contract, the Stock Purchase Contract Agreement and this Agreement or any other document made, delivered or given in connection herewith or therewith, in each case whether on account of principal, interest (including, without limitation, interest accruing before and after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to such Holder, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Company or the Collateral Agent or the Securities Intermediary that are required to be paid by the Holder pursuant to the terms of any of the foregoing agreements).

“Permitted Investments” means any one of the following, in each case maturing on the Business Day following the date of acquisition:

(1)   any evidence of indebtedness with an original maturity of 365 days or less issued, or directly and fully guaranteed or insured, by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support of the timely payment thereof or such indebtedness constitutes a general obligation of it);

(2)   deposits, certificates of deposit or acceptances with an original maturity of 365 days or less of any institution which is a member of the Federal Reserve System having combined capital and surplus and undivided profits of not less than $500 million at the time of deposit (and which may include the Collateral Agent);

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(3)   investments with an original maturity of 365 days or less of any Person that are fully and unconditionally guaranteed by a bank referred to in clause (2);

(4)   repurchase agreements and reverse repurchase agreements relating to marketable direct obligations issued or unconditionally guaranteed by the United States of America or issued by any agency thereof and backed as to timely payment by the full faith and credit of the United States of America;

(5)   investments in commercial paper, other than commercial paper issued by the Company or its Affiliates, of any corporation incorporated under the laws of the United States of America or any State thereof, which commercial paper has a rating at the time of purchase at least equal to “A-1” by Standard & Poor’s Ratings Services (“S&P”) or at least equal to “P-1” by Moody’s Investors Service, Inc. (“Moody’s”); and

(6)   investments in money market funds (including, but not limited to, money market funds managed by the Collateral Agent or an affiliate of the Collateral Agent) registered under the Investment Company Act of 1940, as amended, rated in the highest applicable rating category by S&P or Moody’s.

“Pledge” means the lien and security interest created by this Agreement.

“Pledged Securities” means the Pledged Trust Preferred Securities and the Pledged Treasury Securities, collectively.

“Pledged Trust Preferred Securities” means Trust Preferred Securities and Security Entitlements with respect thereto from time to time credited to the Collateral Account and not then released from the Pledge.

“Pledged Treasury Securities” means Qualifying Treasury Securities and Security Entitlements with respect thereto from time to time credited to the Collateral Account and not then released from the Pledge, together with all Qualifying Treasury Securities purchased from time to time by the Collateral Agent with the Proceeds of maturing Pledged Treasury Securities pursuant to Section 5.5.

“Preferred Stock” has the meaning specified in the second paragraph of the recitals of this Agreement.

“Proceeds” has the meaning ascribed thereto in Section 9-102(a)(64) of the UCC and includes, without limitation, all interest, dividends, cash, instruments, securities, financial assets and other property received, receivable or otherwise distributed upon the sale (including, without limitation, the Remarketing), exchange, collection or disposition of any financial assets from time to time held in the Collateral Account.

“Qualifying Treasury Securities” has the meaning specified in the Stock Purchase Contract Agreement, as in effect on the date hereof.

“Quarterly Date” means each February 28, May 31, August 31, and November 30, commencing on the later of the first such date on which Qualifying Treasury Securities are held in the Collateral Account and August 31, 2007 (or, if any such day is not a Business Day, the next succeeding Business Day).

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 “Reference Dealer” means each of the U.S. government securities dealers listed on Schedule I hereto (including any successor thereto) and any other U.S. government securities dealers designated by the Collateral Agent or agent thereof (it being understood that the Collateral Agent may, but shall not be obligated, to designate any one or more such other U.S. government securities dealers); provided that if at any time fewer than three of the entities named on Schedule I are active U.S. government securities dealers and approved counterparties of The Bank of New York, any of the Regular Trustees may designate an additional U.S. government securities dealer as a Reference Dealer.

“Regular Trustee” has the meaning set forth in the Declaration of Trust, as in effect on the date hereof.

“Reset Rate” has the meaning set forth in the Indenture, as in effect on the date hereof.

“Roll Date” means, with respect to any Quarterly Date, the latest date prior to such Quarterly Date that is a maturity date of Qualifying Treasury Securities held in the Collateral Account.

“Securities Intermediary” means the Person named as the “Securities Intermediary” in the first paragraph of this Agreement until a successor Securities Intermediary shall have become such pursuant to the applicable provisions of this Agreement, and thereafter “Securities Intermediary” shall mean such Person or any subsequent successor who is appointed pursuant to this Agreement.

“Stated Amount” has the meaning specified in the second paragraph of the recitals of this Agreement.

“Stock Purchase Contract” has the meaning specified in the second paragraph of the recitals of this Agreement.

“Stock Purchase Contract Agent” means the Person named as the “Stock Purchase Contract Agent” in the first paragraph of this Agreement until a successor Stock Purchase Contract Agent shall have become such pursuant to the applicable provisions of this Agreement, and thereafter “Stock Purchase Contract Agent” shall mean such Person or any subsequent successor who is appointed pursuant to this Agreement.

“Stock Purchase Contract Agreement” has the meaning specified in the first paragraph of the recitals of this Agreement.

“Trade Date” means, with respect to each Roll Date, the Business Day immediately preceding such Roll Date.

“Trades” means the Treasury/Reserve Automated Debt Entry System maintained by the Federal Reserve Bank of New York pursuant to the Trades Regulations.

“Trades Regulations” means the regulations of the United States Department of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time. Unless otherwise defined herein, all terms defined in the Trades Regulations are used herein as therein defined.

“Transfer” means (i) in the case of certificated securities in registered form, delivery as provided in Section 8-301(a) of the UCC, endorsed to the transferee or in blank by an effective endorsement, (ii) in the case of Qualifying Treasury Securities, registration of the transferee as the owner of such Qualifying Treasury Securities on Trades and (iii) in the case of Security Entitlements, including, without limitation, Security Entitlements with respect to Qualifying Treasury Securities, a securities intermediary indicating by book entry that such Security Entitlement has been credited to the transferee’s Securities Account.

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“Trust” means Lehman Holdings Capital Trust VIII, a Delaware statutory trust.

“UCC” means the Uniform Commercial Code as in effect in the State of New York from time to time.

“Value” means, with respect to any item of Collateral on any date, as to (1) Trust Preferred Securities, the aggregate liquidation amount thereof, and (2) Qualifying Treasury Securities, the aggregate principal amount thereof.

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ARTICLE II

PLEDGE

Section 2.1.            Pledge.

Each Holder, acting through the Stock Purchase Contract Agent as such Holder’s attorney-in-fact, and the Stock Purchase Contract Agent, acting solely as such attorney-in-fact, hereby pledges and grants to the Collateral Agent, as agent of and for the benefit of the Company, a continuing first priority security interest in and to, and a lien upon and right of set-off against, all of such Person’s right, title and interest in and to the Collateral to secure the prompt and complete payment and performance when due (whether at stated maturity, by acceleration or otherwise) of the Obligations. The Collateral Agent shall have all of the rights, remedies and recourses with respect to the Collateral afforded a secured party by the UCC, in addition to, and not in limitation of, the other rights, remedies and recourses afforded to the Collateral Agent by this Agreement.

Section 2.2.            Control.

The Collateral Agent shall have control of the Collateral Account pursuant to the provisions of Article IV of this Agreement.

Section 2.3.            Termination.

As to each Holder, this Agreement and the Pledge created hereby shall terminate upon the satisfaction of such Holder’s Obligations. Upon such termination, the Collateral Agent shall, except as otherwise provided herein, instruct the Securities Intermediary to Transfer such Holder’s portion of the Collateral to the Stock Purchase Contract Agent for distribution to such Holder, free and clear of the Pledge created hereby.

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ARTICLE III

DISTRIBUTIONS ON PLEDGED COLLATERAL

Section 3.1.            Income and Distributions.

The Collateral Agent shall transfer all income and distributions received by the Collateral Agent on account of the Pledged Trust Preferred Securities or Permitted Investments from time to time held in the Collateral Account (ABA No. 021-000-018, A/C No. 212937, Re: Lehman Brothers MCAPS Collateral Account Trust VIII) to the Stock Purchase Contract Agent for distribution to the applicable Holders as provided in the Stock Purchase Contracts or Stock Purchase Contract Agreement.

Section 3.2.            Payments Following Termination Event.

Following a Termination Event, the Collateral Agent shall transfer all payments of liquidation amounts or principal it receives, if any, in respect of (1) the Pledged Trust Preferred Securities and (2) the Pledged Treasury Securities or Permitted Investments, to the Stock Purchase Contract Agent for the benefit of the applicable Holders for distribution to such Holders in accordance with their respective interests, free and clear of the Pledge created hereby.

Section 3.3.            Payments Prior to or on Stock Purchase Date.

(a)   Except as provided in Sections 3.3(b), 3.3(c) and 5.5 below, if no Termination Event shall have occurred, all payments of liquidation amounts or principal received by the Securities Intermediary in respect of (1) the Remarketing of the Pledged Trust Preferred Securities and (2) the Pledged Treasury Securities, shall be held and invested in Permitted Investments selected by the Company until the Stock Purchase Date, and transferred to the Company on the Stock Purchase Date as provided in Section 5.7 hereof. Any balance remaining in the Collateral Account shall be released from the Pledge and transferred to the Stock Purchase Contract Agent for the benefit of the applicable Holders for distribution to such Holders in accordance with their respective interests, free and clear of the Pledge created thereby. The Company shall instruct the Collateral Agent in writing as to the Permitted Investments in which any payments made under this Section 3.3(a) shall be invested. The Collateral Agent shall have no liability in respect of losses incurred as a result of the failure of the Company to provide timely written investment direction. The Collateral Agent may conclusively rely on any written direction and shall bear no liability for any loss or other damage based on acting or omitting to act under this Section 3.3 pursuant to any direction of the Company and neither the Collateral Agent nor the Securities Intermediary shall in any way be liable for the selection of Permitted Investments or by reason of any insufficiency in the Collateral Account resulting from any loss on any Permitted Investment included therein.

(b)   All payments of liquidation amounts or principal received by the Securities Intermediary in respect of (1) the Trust Preferred Securities and (2) the Qualifying Treasury Securities or Security Entitlements thereto, that, in each case, have been released from the Pledge pursuant hereto shall be transferred to the Stock Purchase Contract Agent for the benefit of the applicable Holders for distribution to such Holders in accordance with their respective interests.

(c)   In the event that a Remarketing is not Successful, principal payments received by the Securities Intermediary in respect of the Pledged Treasury Securities shall be invested in Qualifying Treasury Securities maturing at least one business day prior to the next Quarterly Date in a principal amount equal to the aggregate stated amount of the related Treasury MCAPS, which Qualifying Treasury Securities shall be considered Pledged Treasury Securities for the purpose of this Agreement. The Collateral Agent shall remit any remaining funds, after application of principal payments received in

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respect of Qualifying Treasury Securities to purchase new Qualifying Treasury Securities, to the Stock Purchase Contract Agent who shall remit such funds to the holders of the related Treasury MCAPS on a pro rata basis.

Section 3.4.            Payments to Stock Purchase Contract Agent.

The Securities Intermediary shall use commercially reasonable efforts to deliver payments to the Stock Purchase Contract Agent hereunder to the account designated by the Stock Purchase Contract Agent for such purpose not later than 12:00 p.m. (New York City time) on the Business Day such payment is received by the Securities Intermediary; provided, however, that if such payment is received by the Securities Intermediary on a day that is not a Business Day or after 11:00 a.m. (New York City time) on a Business Day, then the Securities Intermediary shall use commercially reasonable efforts to deliver such payment to the Stock Purchase Contract Agent no later than 10:30 a.m. (New York City time) on the next succeeding Business Day. Notwithstanding the foregoing, if the Securities Intermediary is required to deliver payments to the Stock Purchase Contract Agent on a Business Day that is in the next calendar year, then the Securities Intermediary shall use commercially reasonable efforts to deliver such payment to the Stock Purchase Contract Agent no later than 10:30 am (New York City time) on the immediately preceding Business Day.

Section 3.5.            Assets Not Properly Released.

If the Stock Purchase Contract Agent or any Holder shall receive any principal payments on account of financial assets credited to the Collateral Account and not released therefrom in accordance with this Agreement, the Stock Purchase Contract Agent or such Holder shall hold the same as trustee of an express trust for the benefit of the Company and, upon receipt of an Officers’ Certificate of the Company so directing, promptly deliver the same to the Securities Intermediary for credit to the Collateral Account or to the Company for application to the Obligations of the Holders, and the Stock Purchase Contract Agent and Holders shall acquire no right, title or interest in any such payments of principal amounts so received. The Stock Purchase Contract Agent shall have no liability under this Section 3.5 unless and until it has been notified in writing that such payment was delivered to it erroneously and shall have no liability for any action taken, suffered or omitted to be taken prior to its receipt of such notice.

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ARTICLE IV

CONTROL

Section 4.1.            Establishment of Collateral Account.

The Securities Intermediary hereby confirms that:

(a)   Securities Intermediary has established the Collateral Account;

(b)   the Collateral Account is a Securities Account;

(c)   subject to the terms of this Agreement, the Securities Intermediary shall identify in its records the Collateral Agent as the entitlement holder entitled to exercise the rights that comprise any financial asset credited to the Collateral Account;

(d)   all property delivered to the Securities Intermediary pursuant to this Agreement or the Stock Purchase Contract Agreement, including any Permitted Investments, will be credited promptly to the Collateral Account; and

(e)   all securities or other property underlying any financial assets credited to the Collateral Account shall be (i) registered in the name of the Stock Purchase Contract Agent and endorsed to the Securities Intermediary or in blank, (ii) registered in the name of the Securities Intermediary or (iii) credited to another Securities Account maintained in the name of the Securities Intermediary. In no case will any financial asset credited to the Collateral Account be registered in the name of the Stock Purchase Contract Agent or any Holder or specially endorsed to the Stock Purchase Contract Agent or any Holder unless such financial asset has been further endorsed to the Securities Intermediary or in blank.

Section 4.2.            Treatment as Financial Assets.

Each item of property (whether investment property, financial asset, security, instrument or cash) credited to the Collateral Account shall be treated as a financial asset.

Section 4.3.            Sole Control by Collateral Agent.

Except as provided in Section 6.1, at all times prior to the termination of the Pledge, the Collateral Agent shall have sole control of the Collateral Account, and the Securities Intermediary shall take instructions and directions with respect to the Collateral Account solely from the Collateral Agent. If at any time the Securities Intermediary shall receive an entitlement order issued by the Collateral Agent and relating to the Collateral Account, the Securities Intermediary shall comply with such entitlement order without further consent by the Stock Purchase Contract Agent or any Holder or any other Person. Except as otherwise permitted under this Agreement, until termination of the Pledge, the Securities Intermediary will not comply with any entitlement orders issued by the Stock Purchase Contract Agent or any Holder.

Section 4.4.            Securities Intermediary’s Location.

The Collateral Account, and the rights and obligations of the Securities Intermediary, the Collateral Agent, the Stock Purchase Contract Agent and the Holders with respect thereto, shall be governed by the laws of the State of New York. Regardless of any provision in any other agreement, for purposes of the UCC, New York shall be deemed to be the Securities Intermediary’s jurisdiction.

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Section 4.5.            No Other Claims.

Except for the claims and interest of the Collateral Agent and of the Stock Purchase Contract Agent and the Holders in the Collateral Account, as at the date of this Agreement, the Securities Intermediary (without having conducted any investigation) does not know of any claim to, or interest in, the Collateral Account or in any financial asset credited thereto. If any Person asserts any lien, encumbrance or adverse claim (including any writ, garnishment, judgment, warrant of attachment, execution or similar process) against the Collateral Account or in any financial asset carried therein, the Securities Intermediary will promptly notify the Collateral Agent and the Stock Purchase Contract Agent.

Section 4.6.            Investment and Release.

All proceeds of financial assets from time to time deposited in the Collateral Account shall be invested and reinvested as provided in this Agreement. At no time prior to termination of the Pledge with respect to any particular property shall such property be released from the Collateral Account except in accordance with this Agreement or upon written instructions of the Collateral Agent.

Section 4.7.            Statements and Confirmations.

The Securities Intermediary will promptly send copies of all statements, confirmations and other correspondence concerning the Collateral Account and any financial assets credited thereto simultaneously to each of the Stock Purchase Contract Agent and the Collateral Agent at their addresses for notices under this Agreement.

Section 4.8.            Tax Allocations.

The Stock Purchase Contract Agent shall report all items of income, gain, expense and loss recognized in the Collateral Account, to the extent such reporting is required by law, to the Internal Revenue Service authorities in the manner required by law. Neither the Securities Intermediary nor the Collateral Agent shall have any tax reporting duties hereunder.

Section 4.9.            No Other Agreements.

The Securities Intermediary has not entered into, and prior to the termination of the Pledge will not enter into, any agreement with any other Person relating to the Collateral Account or any financial assets credited thereto, including, without limitation, any agreement to comply with entitlement orders of any Person other than the Collateral Agent.

Section 4.10.          Powers Coupled with an Interest.

The rights and powers granted in this Article IV to the Collateral Agent have been granted in order to perfect its security interests in the Collateral Account, are powers coupled with an interest and will be affected neither by the bankruptcy of the Stock Purchase Contract Agent or any Holder nor by the lapse of time. The obligations of the Securities Intermediary under this Article IV shall continue in effect until the termination of the Pledge with respect to any and all Collateral.

Section 4.11.          Waiver of Lien; Waiver of Set-off.

The Securities Intermediary waives any security interest, lien or right to make deductions or set- offs that it may now have or hereafter acquire in or with respect to the Collateral Account, any financial asset credited thereto or any Security Entitlement in respect thereof. Neither the financial assets credited

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to the Collateral Account nor the Security Entitlements in respect thereof will be subject to deduction, set-off, banker’s lien or any other right in favor of any person other than the Company.

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ARTICLE V

INITIAL DEPOSIT; CREATION OF TREASURY MCAPS
AND RECREATION OF NORMAL MCAPS

Section 5.1.            Initial Deposit of Trust Preferred Securities.

(a)   Prior to or concurrently with the execution and delivery of this Agreement, the Stock Purchase Contract Agent, on behalf of the initial Holders of the Normal MCAPS, shall Transfer to the Securities Intermediary, for credit to the Collateral Account, the Trust Preferred Securities or Security Entitlements relating thereto, and, in the case of Security Entitlements, the Securities Intermediary shall indicate by book-entry that a Securities Entitlement to such Trust Preferred Securities has been credited to the Collateral Account.

(b)   The Collateral Agent may, at any time or from time to time, in its sole discretion, cause any or all securities or other property underlying any financial assets credited to the Collateral Account to be registered in the name of the Securities Intermediary, the Collateral Agent or their respective nominees; provided, however, that unless any Trust Enforcement Event (defined in the Declaration of Trust) shall have occurred and be continuing, the Collateral Agent agrees not to cause any Trust Preferred Securities to be so re-registered.

Section 5.2.            Creation of Treasury MCAPS.

(a)   A Holder of Normal MCAPS shall have the right, at any time from and after the date of this Agreement and prior to the Successful Remarketing of the Trust Preferred Securities (except (1) on a day in February, May, August or November that is on or after the 15^th day of the month through the last day of the month (or the next Business Day if the last day is not a Business Day) or (2) during the period from 3:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of any Remarketing Period until the opening of business on the Business Day immediately following the end of that Remarketing Period), on or prior to 5:00 p.m. (New York City time) to create Treasury MCAPS by substitution of Qualifying Treasury Securities or Security Entitlements with respect thereto for the Pledged Trust Preferred Securities comprising a part of all or a portion of such Holder’s Normal MCAPS by:

(i)   transferring to the Collateral Agent, for credit to the Collateral Account, Qualifying Treasury Securities or Security Entitlements with respect thereto having a Value equal to the aggregate liquidation amount of the Pledged Trust Preferred Securities to be released, accompanied by a notice, substantially in the form of Exhibit C to the Stock Purchase Contract Agreement, whereupon the Stock Purchase Contract Agent shall deliver to the Collateral Agent a notice, substantially in the form of Exhibit A hereto, (A) stating that such Holder has notified the Stock Purchase Contract Agent that such Holder has Transferred Qualifying Treasury Securities or Security Entitlements with respect thereto to the Collateral Agent for credit to the Collateral Account, (B) stating the Value of the Qualifying Treasury Securities or Security Entitlements with respect thereto Transferred by such Holder and (C) requesting that the Collateral Agent release from the Pledge the Pledged Trust Preferred Securities that are a component of such Normal MCAPS and deliver the Treasury MCAPS and Trust Preferred Securities; and

(ii)   delivering the related Normal MCAPS to the Stock Purchase Contract Agent.

Upon receipt of such notice and confirmation that Qualifying Treasury Securities or Security Entitlements with respect thereto have been credited to the Collateral Account as described in such notice,

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the Collateral Agent shall instruct the Securities Intermediary by a notice, substantially in the form of Exhibit B hereto, to release such Pledged Trust Preferred Securities from the Pledge by Transfer to the Stock Purchase Contract Agent for distribution to such Holder, free and clear of the Pledge created hereby.

(b)   Upon credit to the Collateral Account of Qualifying Treasury Securities or Security Entitlements with respect thereto delivered by a Holder of Normal MCAPS and receipt of the related instruction from the Collateral Agent, the Securities Intermediary shall release such Pledged Trust Preferred Securities from the Pledge and shall promptly Transfer the same to the Stock Purchase Contract Agent for distribution to such Holder, free and clear of the Pledge created hereby.

Section 5.3.            Recreation of Normal MCAPS.

(a)   A Holder of Treasury MCAPS shall have the right, at any time from and after the date of this Agreement and prior to the Successful Remarketing of the Trust Preferred Securities (except (1) on a day in February, May, August or November that is on or after the 15^th day of the month through the last day of the month (or the next Business Day if the last day is not a Business Day) or (2) during the period from 3:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of a Remarketing Period until the opening of business on the Business Day immediately the end of such Remarketing Period), on or prior to 5:00 p.m. (New York City time), to recreate Normal MCAPS by substitution of Trust Preferred Securities or Security Entitlements with respect thereto for Pledged Treasury Securities by:

(i)   transferring to the Securities Intermediary, for credit to the Collateral Account, Trust Preferred Securities or Security Entitlements with respect thereto having an aggregate liquidation amount equal to the Value of the Pledged Treasury Securities to be released, accompanied by a notice, substantially in the form of Exhibit C to the Stock Purchase Contract Agreement, whereupon the Stock Purchase Contract Agent shall deliver to the Collateral Agent a notice, substantially in the form of Exhibit C hereto, stating that such Holder has Transferred the Trust Preferred Securities or Security Entitlements with respect thereto to the Collateral Account for credit to the Collateral Account and requesting that the Collateral Agent release from the Pledge the Pledged Treasury Securities related to such Treasury MCAPS; and

(ii)   delivering the related Treasury MCAPS to the Stock Purchase Contract Agent.

Upon receipt of such notice and confirmation that Trust Preferred Securities or Security Entitlements with respect thereto have been credited to the Collateral Account as described in such notice, the Collateral Agent shall instruct the Securities Intermediary by a notice substantially in the form of Exhibit D hereto to release such Pledged Treasury Securities from the Pledge by Transfer to the Stock Purchase Contract Agent for distribution to such Holder, free and clear of the Pledge created hereby.

(b)   Upon credit to the Collateral Account of Trust Preferred Securities or Security Entitlements with respect thereto delivered by a Holder of Treasury MCAPS and receipt of the related instruction from the Collateral Agent, the Securities Intermediary shall release such Pledged Treasury Securities from the Pledge and shall promptly Transfer the same to the Stock Purchase Contract Agent for distribution to such Holder, free and clear of the Pledge created hereby.

Section 5.4.            Termination Event.

(a)   Upon receipt by the Collateral Agent of written notice from the Company or the Stock Purchase Contract Agent in the Form set forth in Exhibit H that a Termination Event has occurred, the

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Collateral Agent shall release all Collateral from the Pledge and shall promptly instruct the Securities Intermediary to Transfer:

(i)   any Pledged Trust Preferred Securities or Security Entitlements with respect thereto;  and

(ii)   any Pledged Treasury Securities

to the Stock Purchase Contract Agent for the benefit of the Holders for distribution to such Holders, in accordance with their respective interests, free and clear of the Pledge created hereby.

(b)   If such Termination Event shall result from the Company’s becoming a debtor under the Bankruptcy Code, and if the Collateral Agent shall for any reason fail promptly to effectuate the release and Transfer of all Pledged Trust Preferred Securities, Pledged Treasury Securities and Proceeds of any of the foregoing, as the case may be, as provided by this Section 5.4, the Stock Purchase Contract Agent shall:

(i)   use its best efforts to obtain an opinion of a nationally recognized law firm to the effect that, notwithstanding the Company’s being the debtor in such a bankruptcy case, the Collateral Agent will not be prohibited from releasing or Transferring the Collateral as provided in this Section 5.4 and shall deliver or cause to be delivered such opinion to the Collateral Agent within ten days after the occurrence of such Termination Event, and if (A) the Stock Purchase Contract Agent shall be unable to obtain such opinion within ten days after the occurrence of such Termination Event or (B) the Collateral Agent shall continue, after delivery of such opinion, to refuse to effectuate the release and Transfer of all Pledged Trust Preferred Securities, Pledged Treasury Securities and Proceeds of any of the foregoing, as the case may be, as provided in this Section 5.4, then the Stock Purchase Contract Agent shall within fifteen days after the occurrence of such Termination Event commence an action or proceeding in the court having jurisdiction of the Company’s case under the Bankruptcy Code seeking an order requiring the Collateral Agent to effectuate the release and transfer of all Pledged Trust Preferred Securities, Pledged Treasury Securities and Proceeds of any of the foregoing, or as the case may be, as provided by this Section 5.4; or

(ii)   commence an action or proceeding like that described in Section 5.4(b)(i) hereof within ten days after the occurrence of such Termination Event.

Section 5.5.            Reinvestment of Proceeds of Pledged Treasury Securities.

(a)   At or about 11:00 A.M., New York City time, on each Trade Date, the Collateral Agent shall select at least three Reference Dealers (including at least three Reference Dealers named on Schedule I hereto or named by any of the Regular Trustees as replacements therefor who are approved counterparties of The Bank of New York) and request each of them to provide a commitment (which may be oral if promptly confirmed in writing by facsimile or e-mail), satisfactory in form to the Collateral Agent, to the effect that if selected as the Final Dealer, such Reference Dealer shall sell to the Collateral Agent, for delivery against payment on the immediately succeeding Roll Date, an aggregate principal amount of the U.S. treasury security that is the Qualifying Treasury Security on such Roll Date equal to the aggregate principal amount of Qualifying Treasury Securities held in the Collateral Account on such Trade Date. If the Collateral Agent shall have received at least two firm offers, it shall select the lowest offer and the Reference Dealer providing the lowest offer shall be the “Final Dealer”; provided that if two or more Reference Dealers have provided identical lowest offers, the Collateral Agent shall select any of these Reference Dealers as the Final Dealer in its absolute discretion. The Final Dealer shall be obligated

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to sell to the Collateral Agent, for Cash on the Roll Date, the aggregate principal amount of the U.S. treasury security specified in such offer. If the Collateral Agent determines that (i) a Market Disruption Event has occurred or (ii) fewer than two Reference Dealers have provided firm offers in a timely manner meeting the foregoing requirements, the steps contemplated above shall be taken on each succeeding Business Day on which the Collateral Agent determines that no Market Disruption Event has occurred until at least two Reference Dealers have provided such offers, except that the Collateral Agent shall request offers from the Reference Dealers for same day settlement. The Collateral Agent shall use reasonable care in administering the foregoing procedures and shall have no liability in connection therewith to the Issuer Trust, the Property Trustee, the Company or any other Person in the absence of gross negligence or willful misconduct. All determinations regarding whether a Market Disruption Event has occurred shall be made by the Collateral Agent in its sole discretion.

(b)   On each Roll Date (or, if no Final Dealer shall have been selected on the Trade Date, on the date that the Final Dealer is selected), the Collateral Agent shall instruct the Securities Intermediary to apply the Proceeds of the U.S. treasury securities held in the Collateral Account to the Purchase Price of the Qualifying Treasury Securities, which shall be deposited in the Collateral Account, and to apply the excess of such Proceeds over the Purchase Price of the Qualifying Treasury Securities to purchase Permitted Investments for deposit in the Collateral Account.

(c)   On each Quarterly Date, if the Qualifying Treasury Securities shall have been purchased and deposited in the Collateral Account, the Collateral Agent shall liquidate the Permitted Investments in the Collateral Account and promptly remit the Proceeds to the Stock Purchase Contract Agent for payment to each Holder of Treasury MCAPS on a pro rata basis.

Section 5.6.            Settlement with Qualifying Treasury Securities.

(a)   Upon receipt by the Collateral Agent of (1) a notice from the Stock Purchase Contract Agent promptly following the receipt by the Stock Purchase Contract Agent of a notice from a Holder of Normal MCAPS that such Holder has elected, in accordance with the procedures specified in Section 6.2 of the Stock Purchase Contract Agreement, to effect a Settlement with Qualifying Treasury Securities and (2) delivery by such Holder of Qualifying Treasury Securities having a principal amount equal to the Purchase Price under the related Stock Purchase Contracts by deposit in the Collateral Account on or prior to 5:00 p.m. (New York City time) on the first Business Day prior to the beginning of the Remarketing Period, then any securities or their proceeds received shall be paid or delivered, as the case may be, to the Company on the Stock Purchase Date in settlement of the Stock Purchase Contracts in accordance with the terms of this Agreement and the Stock Purchase Contract Agreement.

(b)   If a Holder of Normal MCAPS (i) fails to notify the Stock Purchase Contract Agent of its intention to make a Settlement with Qualifying Treasury Securities as provided in Section 6.2 of the Stock Purchase Contract Agreement or (ii) does notify the Stock Purchase Contract Agent of its intention to made a Settlement with Qualifying Treasury Securities but fails to make such delivery as required by Section 6.2 of the Stock Purchase Contract Agreement, such Holder shall be deemed to have consented to the disposition of such Holder’s Pledged Trust Preferred Securities in accordance with Section 6.2 of the Stock Purchase Contract Agreement.

(c)   As soon as practicable after 5:00 p.m. (New York City time) on the first Business Day immediately preceding the beginning of the Remarketing Period, the Collateral Agent shall deliver to the Stock Purchase Contract Agent a notice, substantially in the form of Exhibit E hereto, stating the number of Pledged Trust Preferred Securities to be remarketed in the applicable Remarketing pursuant to Section 6.2(a) of the Stock Purchase Contract Agreement.

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(d)   If any Remarketing other than a Final Remarketing is not Successful, the Collateral Agent shall promptly return the Qualifying Treasury Securities or their proceeds, as the case may be, that it has received with respect to the Settlement with Qualifying Treasury Securities to the Stock Purchase Contract Agent for distribution to the Holders who elected to effect a Settlement with Qualifying Treasury Securities.

(e)   In the event of a Successful Remarketing, the Collateral Agent shall (i) instruct the Securities Intermediary to release from the Pledge such Holder’s related Pledged Trust Preferred Securities as to which such Holder has effected a Settlement with Qualifying Treasury Securities pursuant to Section 5.6(a) and (ii) instruct the Securities Intermediary to Transfer all such Pledged Trust Preferred Securities to the Stock Purchase Contract Agent for distribution to such Holder free and clear of the Pledge created hereby.

Section 5.7.            Application of Proceeds in Settlement of Stock Purchase Contracts.

(a)   If a Holder of Normal MCAPS has not elected to make an effective Settlement with Qualifying Treasury Securities by notifying the Stock Purchase Contract Agent in the manner provided for in Section 6.2  of the Stock Purchase Contract Agreement or does notify the Stock Purchase Contract Agent as provided in Section 6.2  of the Stock Purchase Contract Agreement of its intention to deliver Qualifying Treasury Securities having a principal amount equal to the Purchase Price under the related Stock Purchase Contracts but fails to make such delivery as required by Section 6.2  of the Stock Purchase Contract Agreement, such Holder shall be deemed to have elected to pay for the Depositary Shares to be issued under such Stock Purchase Contracts from the Proceeds of the Remarketing of the related Pledged Trust Preferred Securities.

In the event of a Successful Remarketing, the Collateral Agent shall, upon written instruction of the Company, instruct the Securities Intermediary to Transfer the related Pledged Trust Preferred Securities to the Remarketing Agent, upon confirmation of deposit by the Remarketing Agent of the Proceeds of such Successful Remarketing (less, to the extent permitted by the Remarketing Agreement, the Remarketing Fee) in the Collateral Account. On the Stock Purchase Date, the Collateral Agent shall, in consultation with the Stock Purchase Contract Agent, instruct the Securities Intermediary to remit a portion of the Proceeds from such Successful Remarketing equal to the aggregate liquidation amount of such Pledged Trust Preferred Securities to satisfy in full such Holder’s obligations to pay the Purchase Price to purchase the Depositary Shares under the related Stock Purchase Contracts and to remit the balance of the Proceeds from the Successful Remarketing, if any, to the Stock Purchase Contract Agent for distribution to such Holder.

In the event of a Failed Remarketing, the Collateral Agent, for the benefit of the Company, will, at the written instruction of the Company, deliver or dispose of the Pledged Trust Preferred Securities in accordance with the Company’s written instructions to satisfy in full, from any such disposition or retention, such Holders’ obligations to pay the Purchase Price for the Depositary Shares to be issued under the Stock Purchase Contracts underlying such Normal MCAPS. Thereafter, the Collateral Agent shall promptly remit the Proceeds in excess of the aggregate Purchase Price for the Depositary Shares to be issued under such Stock Purchase Contracts to the Stock Purchase Contract Agent for payment to the Holders of the Normal MCAPS to which such Trust Preferred Securities relate.

(b)   A Holder of a Treasury MCAPS shall be deemed to have elected to pay for the Depositary Shares to be issued under such Stock Purchase Contracts from the Proceeds of the related Pledged Treasury Securities. Without receiving any instruction from any Holder, the Collateral Agent shall instruct the Securities Intermediary to remit the Proceeds of the related Pledged Treasury Securities to the Company in settlement of such Stock Purchase Contracts on the Stock Purchase Date. In the event the

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sum of the Proceeds from the related Pledged Treasury Securities exceeds the aggregate Purchase Price of the Stock Purchase Contracts being settled thereby, the Collateral Agent shall instruct the Securities Intermediary to transfer such excess, when received, to the Stock Purchase Contract Agent for distribution to Holders of the Treasury MCAPS to which such Qualifying Treasury Securities relate.

(c)   On or prior to 5:00 p.m. (New York City time) on the second Business Day immediately preceding any beginning of a Remarketing Period, but no earlier than the Payment Date immediately preceding such date, Holders of Separate Trust Preferred Securities may elect to have their Separate Trust Preferred Securities remarketed under the Remarketing Agreement, by delivering their Separate Trust Preferred Securities along with a notice of such election, substantially in the form of Exhibit F hereto, to the Collateral Agent. Any such notice and delivery may not be conditioned upon the level at which the Reset Rate is established in the Remarketing or any other condition. The Collateral Agent shall hold Separate Trust Preferred Securities in an account separate from the Collateral Account in which the Pledged Securities shall be held. Holders of Separate Trust Preferred Securities electing to have their Separate Trust Preferred Securities remarketed will also have the right to withdraw that election by written notice to the Collateral Agent, substantially in the form of Exhibit G hereto, on or prior to 5:00 p.m. (New York City time) on the second Business Day immediately preceding the beginning of any Remarketing Period, upon which notice the Collateral Agent shall return such Separate Trust Preferred Securities to such Holder. After such time, such election shall become an irrevocable election to have such Separate Trust Preferred Securities remarketed in such Remarketing.

Promptly after 11:00 a.m. (New York City time) on the Business Day immediately preceding the beginning of any Remarketing Period, the Collateral Agent shall notify the Remarketing Agent of the aggregate liquidation amount of the Separate Trust Preferred Securities to be remarketed and deliver to the Remarketing Agent for remarketing all Separate Trust Preferred Securities delivered to the Collateral Agent pursuant to this Section 5.7(c) and not validly withdrawn prior to such date. In the event of a Successful Remarketing, after deducting the Remarketing Fee, the Remarketing Agent will remit to the Collateral Agent the remaining portion of the proceeds of such Remarketing for payment to the Holders of the remarketed Separate Trust Preferred Securities, in accordance with their respective interests. In the event of a Failed Remarketing, the Remarketing Agent will promptly return such Separate Trust Preferred Securities to the Collateral Agent for distribution to the appropriate Holders.

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ARTICLE VI

PLEDGED TRUST PREFERRED SECURITIES

Section 6.1.            Voting Rights.

The Stock Purchase Contract Agent and Holder may exercise, or refrain from exercising, any and all voting and other consensual rights pertaining to the Pledged Trust Preferred Securities or any part thereof for any purpose not inconsistent with the terms of this Agreement and in accordance with the terms of the Stock Purchase Contract Agreement.

Upon receipt of any notices and other communications in respect of any Pledged Trust Preferred Securities, including notice of any meeting at which holders of the Trust Preferred Securities are entitled to vote or solicitation of consents, waivers or proxies of holders of the Trust Preferred Securities, the Collateral Agent shall use reasonable efforts to send promptly to the Stock Purchase Contract Agent such notice or communication, and as soon as reasonably practicable after receipt of a written request therefore from the Stock Purchase Contract Agent, execute and deliver to the Stock Purchase Contract Agent such proxies and other instruments in respect of such Pledged Trust Preferred Securities (in form and substance satisfactory to the Collateral Agent) as are prepared by the Company and delivered to the Collateral Agent with respect to the Pledged Trust Preferred Securities.

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ARTICLE VII

RIGHTS AND REMEDIES

Section 7.1.            Rights and Remedies of the Collateral Agent.

(a)   In addition to the rights and remedies specified in Section 5.7 hereof or otherwise available at law or in equity, after an event of default (as specified in Section 7.1(b) below) hereunder, the Collateral Agent shall have all of the rights and remedies with respect to the Collateral of a secured party under the UCC (whether or not the UCC is in effect in the jurisdiction where the rights and remedies are asserted) and the Trades Regulations and such additional rights and remedies to which a secured party is entitled under the laws in effect in any jurisdiction where any rights and remedies hereunder may be asserted. Without limiting the generality of the foregoing, such remedies may include, to the extent permitted by applicable law, (1) retention of the Pledged Trust Preferred Securities or the Pledged Treasury Securities in full satisfaction of the Holders’ obligations under the Stock Purchase Contracts and the Stock Purchase Contract Agreement or (2) sale of the Pledged Trust Preferred Securities or the Pledged Treasury Securities in one or more public or private sales.

(b)   Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, in the event the Company is unable to make payments from amounts transferred or transferable to the Company on account of the principal payments of any Pledged Treasury Securities as provided in Article III hereof, in satisfaction of the Obligations of the Holder of the Treasury MCAPS of which such applicable Pledged Treasury Securities are a part under the related Stock Purchase Contracts, the inability to make such payments shall constitute an event of default hereunder and the Collateral Agent shall have and may exercise, with reference to such Pledged Treasury Securities any and all of the rights and remedies available to a secured party under the UCC and the Trades Regulations after default by a debtor, and as otherwise granted herein or under any other law.

(c)   Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably authorized to receive and collect all payments of (i) the liquidation amount of the Pledged Trust Preferred Securities and (ii) the principal amount of the Pledged Treasury Securities, subject, in each case, to the provisions of Article III hereof, and as otherwise granted herein.

(d)   The Stock Purchase Contract Agent and each Holder of MCAPS agrees that, from time to time, upon the written request of the Collateral Agent or the Stock Purchase Contract Agent, such Holder shall execute and deliver such further documents and do such other acts and things as the Company may reasonably request in order to maintain the Pledge, and the perfection and priority thereof, and to confirm the rights of the Collateral Agent hereunder. The Stock Purchase Contract Agent shall have no liability to any Holder for executing any documents or taking any such acts requested by the Collateral Agent hereunder, except for liability for its own negligent acts, its own negligent failure to act or its own willful misconduct.

Section 7.2.            Remarketing.

The Collateral Agent shall, promptly after 11:00 a.m., New York City time, on the Business Day immediately preceding the beginning of any Remarketing Period, notify the Remarketing Agent of the aggregate liquidation amount of the Pledged Trust Preferred Securities that are to be remarketed and without any instruction from any Holder of Normal MCAPS, present the related Pledged Trust Preferred Securities to the Remarketing Agent for Remarketing. In the event of a Failed Remarketing, the Trust

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Preferred Securities presented to the Remarketing Agent pursuant to this Section 7.2 for Remarketing shall be redeposited into the Collateral Account.

Section 7.3.            Successful Remarketing.

In the event of a Successful Remarketing, the Collateral Agent shall, at the direction of the Company, instruct the Securities Intermediary to (i) Transfer the Pledged Trust Preferred Securities to the Remarketing Agent upon confirmation of deposit by the Remarketing Agent of the Proceeds of such Successful Remarketing (after deducting any Remarketing Fee in accordance with the Remarketing Agreement) in the Collateral Account, (ii) apply an amount equal to the aggregate Purchase Price for the Depositary Shares to be issued under the related Stock Purchase Contracts in full satisfaction of such Holders’ obligations to pay the Purchase Price under the related Stock Purchase Contracts, and (iii) promptly remit the remaining portion of such Proceeds to the Stock Purchase Contract Agent for payment to the Holders of Normal MCAPS, in accordance with their respective interests and the Stock Purchase Contract Agreement. With respect to Separate Trust Preferred Securities, any Proceeds of such Remarketing (after deducting any Remarketing Fee in accordance with the Remarketing Agreement) attributable to the Separate Trust Preferred Securities will be remitted to the Collateral Agent for payment to the holders of Separate Trust Preferred Securities. In the event of a Failed Remarketing, the Pledged Trust Preferred Securities shall remain credited to the Collateral Account and Section 5.7 shall apply.

Section 7.4.            Substitutions.

Whenever a Holder has the right to substitute Qualifying Treasury Securities, Trust Preferred Securities or Security Entitlements for any of them, as the case may be, for financial assets held in the Collateral Account, such substitution shall not constitute a novation of the security interest created hereby.

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ARTICLE VIII

REPRESENTATIONS AND WARRANTIES; COVENANTS

Section 8.1.            Representations and Warranties.

Each Holder from time to time, acting through the Stock Purchase Contract Agent as attorney-in-fact (it being understood that the Stock Purchase Contract Agent shall not be liable for any representation or warranty made by or on behalf of a Holder), hereby represents and warrants to the Collateral Agent (with respect to such Holder’s interest in the Collateral), which representations and warranties shall be deemed repeated on each day a Holder Transfers Collateral, that:

(a)   such Holder has the power to grant a security interest in and lien on the Collateral;

(b)   such Holder is the sole beneficial owner of the Collateral and, in the case of Collateral delivered in physical form, is the sole holder of such Collateral and is the sole beneficial owner of, or has the right to Transfer, the Collateral it Transfers to the Collateral Agent for credit to the Collateral Account, free and clear of any security interest, lien, encumbrance, call, liability to pay money or other restriction other than the security interest and lien granted under Article II hereof;

(c)   upon the Transfer of the Collateral to the Collateral Agent for credit to the Collateral Account, the Collateral Agent, for the benefit of the Company, will have a valid and perfected first priority security interest therein (assuming that any central clearing operation or any securities intermediary or other entity not within the control of the Holder involved in the Transfer of the Collateral, including the Collateral Agent and the Securities Intermediary, gives the notices and takes the action required of it hereunder and under applicable law for perfection of that interest and assuming the establishment and exercise of control pursuant to Article IV hereof); and

(d)   the execution and performance by the Holder of its obligations under this Agreement will not result in the creation of any security interest, lien or other encumbrance on the Collateral other than the security interest and lien granted under Article II hereof or violate any provision of any existing law or regulation applicable to it or of any mortgage, charge, pledge, indenture, contract or undertaking to which it is a party or which is binding on it or any of its assets.

Section 8.2.            Covenants.

The Holders from time to time, acting through the Stock Purchase Contract Agent as their attorney-in-fact (it being understood that the Stock Purchase Contract Agent shall not be liable for any covenant made by or on behalf of a Holder), hereby covenant to the Collateral Agent that for so long as the Collateral remains subject to the Pledge:

(a)   neither the Stock Purchase Contract Agent nor such Holders will create or purport to create or allow to subsist any mortgage, charge, lien, pledge or any other security interest whatsoever over the Collateral or any part of it other than pursuant to this Agreement; and

(b)   neither the Stock Purchase Contract Agent nor such Holders will sell or otherwise dispose (or attempt to dispose) of the Collateral or any part of it except for the beneficial interest therein, subject to the Pledge hereunder, transferred in connection with the Transfer of the MCAPS.

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ARTICLE IX

THE COLLATERAL AGENT AND THE SECURITIES INTERMEDIARY

It is hereby agreed as follows:

Section 9.1.            Appointment, Powers and Immunities.

The Collateral Agent or the Securities Intermediary shall act as agent for the Company hereunder with such powers as are specifically vested in the Collateral Agent or the Securities Intermediary, as the case may be, by the terms of this Agreement. The Collateral Agent and Securities Intermediary shall:

(a)   have no duties or responsibilities except those expressly set forth in this Agreement and no implied covenants or obligations shall be inferred from this Agreement against the Collateral Agent and the Securities Intermediary, nor shall the Collateral Agent and the Securities Intermediary be bound by the provisions of any agreement by any party hereto beyond the specific terms hereof;

(b)   not be responsible for any recitals contained in this Agreement, or in any certificate or other document referred to or provided for in, or received by it under, this Agreement, the MCAPS or the Stock Purchase Contract Agreement, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement (other than as against the Collateral Agent or the Securities Intermediary, as the case may be), the MCAPS, any Collateral or the Stock Purchase Contract Agreement or any other document referred to or provided for herein or therein or for any failure by the Company or any other Person (except the Collateral Agent or the Securities Intermediary, as the case may be) to perform any of its obligations hereunder or hereunder or for the validity, perfection, enforceability, priority or, except as expressly required hereby, maintenance of any security interest created hereunder;

(c)   not be required to initiate or conduct any litigation or collection proceedings hereunder (except pursuant to directions furnished under Section 9.2 hereof, subject to Section 9.8 hereof);

(d)   not be responsible for any action taken or omitted to be taken by it hereunder or under any other document or instrument referred to or provided for herein or in connection herewith or therewith, except for its own gross negligence or willful misconduct; and

(e)   not be required to advise any party as to selling or retaining, or taking or refraining from taking any action with respect to, any securities or other property deposited hereunder.

Subject to the foregoing, during the term of this Agreement, the Collateral Agent and the Securities Intermediary shall take all reasonable action in connection with the safekeeping and preservation of the Collateral hereunder as determined by industry standards.

No provision of this Agreement shall require the Collateral Agent or the Securities Intermediary to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. In no event shall the Collateral Agent or the Securities Intermediary be liable for any amount in excess of the Value of the Collateral.

Section 9.2.            Instructions of the Company.

The Company shall have the right, by one or more written instruments executed and delivered to the Collateral Agent, to direct the time, method and place of conducting any proceeding for the realization of any right or remedy in connection with a Failed Remarketing, or of exercising any power conferred on the Collateral Agent, or to direct the taking or refraining from taking of any action authorized by this

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Agreement; provided, however, that (i) such direction shall not conflict with the provisions of any law or of this Agreement or involve the Collateral Agent in personal liability and (ii) the Collateral Agent shall be indemnified to its satisfaction as provided herein. Nothing contained in this Section 9.2 shall impair the right of the Collateral Agent in its discretion to take any action or omit to take any action which it deems proper and which is not inconsistent with such direction. None of the Collateral Agent or the Securities Intermediary has any obligation or responsibility to file UCC financing statements.

Section 9.3.            Reliance by Collateral Agent and Securities Intermediary.

Each of the Collateral Agent and the Securities Intermediary shall be entitled, in the absence of bad faith, to rely conclusively upon any certification, order, judgment, opinion, notice or other written communication (including, without limitation, any thereof by e-mail or similar electronic means, telecopy, telex or facsimile) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons (without being required to determine the correctness of any fact stated therein) and consult with and conclusively rely upon advice, opinions and statements of legal counsel and other experts selected by the Collateral Agent or the Securities Intermediary, as the case may be. As to any matters not expressly provided for by this Agreement, the Collateral Agent and the Securities Intermediary shall in all cases be fully protected in acting, or in refraining from acting, hereunder in accordance with instructions given by the Company in accordance with this Agreement. In the event any instructions are given (other than in writing at the time of the execution of the Agreement), whether in writing, by telecopier or otherwise, the Collateral Agent and the Securities Intermediary are authorized to seek confirmation of such instructions by telephone call-back to the person or persons designated on Schedule II hereto, and the Collateral Agent and the Securities Intermediary may rely upon the confirmations of anyone purporting to be the person or persons so designated. The persons and telephone numbers for call-backs may be changed only in writing actually received and acknowledged by the Collateral Agent and the Securities Intermediary.

It is understood that the Collateral Agent and the Securities Intermediary in any funds transfer may rely solely upon any account numbers or similar identifying number provided by the Company to identify (i) the beneficiary, (ii) the beneficiary’s bank, or (iii) an intermediary bank. The Collateral Agent and the Securities Intermediary may apply any of the deposited funds for any payment order it executes using any such identifying number, even where its use may result in a person other than the beneficiary being paid, or the transfer of funds to a bank other than the beneficiary’s bank, or an intermediary bank, designated by the Company.

Section 9.4.            Certain Rights.

(a)   Whenever in the administration of the provisions of this Agreement the Collateral Agent or the Securities Intermediary shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action to be taken hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of gross negligence or bad faith on the part of the Collateral Agent or the Securities Intermediary, be deemed to be conclusively proved and established by a certificate signed by one of the Company’s officers, and delivered to the Collateral Agent or the Securities Intermediary and such certificate, in the absence of gross negligence or bad faith on the part of the Collateral Agent or the Securities Intermediary, shall be full warrant to the Collateral Agent or the Securities Intermediary for any action taken, suffered or omitted by it under the provisions of this Agreement upon the faith thereof.

(b)   The Collateral Agent or the Securities Intermediary shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, entitlement order, approval or other paper or document.

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Section 9.5.            Merger, Conversion, Consolidation or Succession to Business.

Any corporation into which the Collateral Agent or the Securities Intermediary may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Collateral Agent or the Securities Intermediary shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Collateral Agent or the Securities Intermediary shall be the successor of the Collateral Agent or the Securities Intermediary hereunder without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.

Section 9.6.            Rights in Other Capacities.

The Collateral Agent and the Securities Intermediary and their affiliates may (without having to account therefore to the Company) accept deposits from, lend money to, make their investments in and generally engage in any kind of banking, trust or other business with the Stock Purchase Contract Agent, any other Person interested herein and any Holder of MCAPS (and any of their respective subsidiaries or affiliates) as if it were not acting as the Collateral Agent or the Securities Intermediary, as the case may be, and the Collateral Agent, the Securities Intermediary and their affiliates may accept fees and other consideration from the Stock Purchase Contract Agent and any Holder of MCAPS without having to account for the same to the Company; provided that each of the Securities Intermediary and the Collateral Agent covenants and agrees with the Company that it shall not accept, receive or permit there to be created in favor of itself and shall take no affirmative action to permit there to be created in favor of any other Person, any security interest, lien or other encumbrance of any kind in or upon the Collateral other than the lien created by the Pledge.

Section 9.7.            Non-reliance on Collateral Agent and Securities Intermediary.

None of the Securities Intermediary or the Collateral Agent shall be required to keep itself informed as to the performance or observance by the Stock Purchase Contract Agent or any Holder of MCAPS of this Agreement, the Stock Purchase Contract Agreement, the MCAPS or any other document referred to or provided for herein or therein or to inspect the properties or books of the Stock Purchase Contract Agent or any Holder of MCAPS. None of the Collateral Agent or the Securities Intermediary shall have any duty or responsibility to provide the Company with any credit or other information concerning the affairs, financial condition or business of the Stock Purchase Contract Agent or any Holder of MCAPS (or any of their respective affiliates) that may come into the possession of the Collateral Agent or the Securities Intermediary or any of their respective affiliates.

Section 9.8.            Compensation and Indemnity.

The Company agrees to:

(a)   pay the Collateral Agent and the Securities Intermediary from time to time such compensation as shall be agreed in writing between the Company and the Collateral Agent or the Securities Intermediary, as the case may be, for all services rendered by them hereunder;

(b)   indemnify and hold harmless the Collateral Agent the Securities Intermediary and each of their respective directors, officers, agents and employees (collectively, the “Indemnitees”), from and against any and all claims, liabilities, losses, damages, fines, penalties and expenses (including reasonable fees and expenses of counsel) and taxes (other than those based upon, determined by or measured by the income of the Collateral Agent and Securities Intermediary) (collectively, “Losses” and individually, a

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“Loss”) that may be imposed on, incurred by, or asserted against, the Indemnitees or any of them for following any instructions or other directions upon which either the Collateral Agent or the Securities Intermediary is entitled to rely pursuant to the terms of this Agreement, provided that the Collateral Agent or the Securities Intermediary has not acted with gross negligence or engaged in willful misconduct or bad faith with respect to the specific Loss against which indemnifications sought; and

(c)   in addition to and not in limitation of paragraph (b) immediately above, indemnify and hold the Indemnitees and each of them harmless from and against any and all Losses that may be imposed on, incurred by or asserted against, the Indemnitees or any of them in connection with or arising out of the Collateral Agent’s or the Securities Intermediary’s acceptance or performance of its powers and duties under this Agreement, provided that the Collateral Agent or the Securities Intermediary has not acted with gross negligence or engaged in willful misconduct or bad faith with respect to the specific Loss against which indemnification is sought.

The provisions of this Section and Section 11.7 shall survive the resignation or removal of the Collateral Agent or Securities Intermediary and the termination of this Agreement.

Section 9.9.            Failure to Act.

In the event of any ambiguity in the provisions of this Agreement or any dispute between or conflicting claims by or among the parties hereto or any other Person with respect to any funds or property deposited hereunder, then at its sole option, each of the Collateral Agent and the Securities Intermediary shall be entitled, after prompt notice to the Company and the Stock Purchase Contract Agent, to refuse to comply with any and all claims, demands or instructions with respect to such property or funds so long as such dispute or conflict shall continue, and the Collateral Agent and the Securities Intermediary shall not be or become liable in any way to any of the parties hereto for its failure or refusal to comply with such conflicting claims, demands or instructions. The Collateral Agent and the Securities Intermediary shall be entitled to refuse to act until either:

(a)   such conflicting or adverse claims or demands shall have been finally determined by a court of competent jurisdiction or settled by agreement between the conflicting parties as evidenced in a writing satisfactory to the Collateral Agent or the Securities Intermediary; or

(b)   the Collateral Agent or the Securities Intermediary shall have received security or an indemnity satisfactory to it sufficient to save it harmless from and against any and all loss, liability or reasonable out-of-pocket expense which it may incur by reason of its acting.

The Collateral Agent and the Securities Intermediary may in addition elect to commence an interpleaded action or seek other judicial relief or orders as the Collateral Agent or the Securities Intermediary may deem necessary. Notwithstanding anything contained herein to the contrary, none of the Collateral Agent or the Securities Intermediary shall be required to take any action that is in its opinion contrary to law or to the terms of this Agreement, or which would in its opinion subject it or any of its officers, employees or directors to liability.

Section 9.10.          Resignation of Collateral Agent and Securities Intermediary.

Subject to the appointment and acceptance of a successor Collateral Agent or Securities Intermediary as provided below:

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(i)   the Collateral Agent and the Securities Intermediary may resign at any time by giving notice thereof to the Company and the Stock Purchase Contract Agent as attorney-in-fact for the Holders of MCAPS;

(ii)   the Collateral Agent and the Securities Intermediary may be removed at any time by the Company; and

(iii)   if the Collateral Agent or the Securities Intermediary fails to perform any of its material obligations hereunder in any material respect for a period of not less than 20 days after receiving written notice of such failure by the Stock Purchase Contract Agent and such failure shall be continuing, the Collateral Agent and the Securities Intermediary may be removed by the Stock Purchase Contract Agent, acting at the direction of the Holders of MCAPS.

provided that any Person at any time acting as Collateral Agent or Securities Intermediary may not resign or be removed in any one of those capacities without the consent of each party to this Collateral Agreement unless it resigns or is removed in all such capacities in which it is then acting.

The Stock Purchase Contract Agent shall promptly notify the Company of any removal of the Collateral Agent or the Securities Intermediary pursuant to clause (iii) of this Section 9.10. Upon any such resignation or removal, the Company shall have the right to appoint a successor Collateral Agent or Securities Intermediary, as the case maybe, which shall not be an Affiliate of the Stock Purchase Contract Agent. If no successor Collateral Agent or Securities Intermediary shall have been so appointed and shall have accepted such appointment within 30 days after the retiring Collateral Agent’s or Securities Intermediary’s giving of notice of resignation or the Company’s or the Stock Purchase Contract Agent’s giving notice of such removal, then the retiring or removed Collateral Agent or Securities Intermediary may petition any court of competent jurisdiction, at the expense of the Company, for the appointment of a successor Collateral Agent or Securities Intermediary. The Collateral Agent and the Securities Intermediary shall each be a bank or a national banking association which has an office (or an agency office) in New York City with a combined capital and surplus of at least $50,000,000. Upon the acceptance of any appointment as Collateral Agent or Securities Intermediary hereunder by a successor Collateral Agent or Securities Intermediary, as the case may be, such successor Collateral Agent or Securities Intermediary, as the case may be, shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent or Securities Intermediary, as the case may be, and the retiring Collateral Agent or Securities Intermediary, as the case may be, shall take all appropriate action, subject to payment of any amounts then due and payable to it hereunder, to transfer any money and property held by it hereunder (including the Collateral) to such successor. The retiring Collateral Agent or Securities Intermediary shall, upon such succession, be discharged from its duties and obligations as Collateral Agent or Securities Intermediary hereunder. After any retiring Collateral Agent’s or Securities Intermediary’s resignation hereunder as Collateral Agent or Securities Intermediary, the provisions of this Article IX shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Collateral Agent or Securities Intermediary. Any resignation or removal of the Collateral Agent or Securities Intermediary hereunder, at a time when such Person is acting as the Collateral Agent or Securities Intermediary, shall be deemed for all purposes of this Agreement as the simultaneous resignation or removal of the Collateral Agent or Securities Intermediary, as the case may be.

Section 9.11.          Right to Appoint Agent or Advisor.

The Collateral Agent shall have the right to appoint agents or advisors in connection with any of its duties hereunder, and the Collateral Agent shall not be liable for any action taken or omitted by, or in reliance upon the advice of, such agents or advisors selected in good faith. The appointment of agents

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pursuant to this Section 9.11 shall be subject to prior written consent of the Company, which consent shall not be unreasonably withheld.

Section 9.12.          Survival.

The provisions of this Article IX shall survive termination of this Agreement and the resignation or removal of the Collateral Agent or the Securities Intermediary.

Section 9.13.          Exculpation.

Anything contained in this Agreement to the contrary notwithstanding, in no event shall the Collateral Agent or the Securities Intermediary or their officers, directors, employees or agents be liable under this Agreement to any third party for indirect, special, punitive, or consequential loss or damage of any kind whatsoever, including, but not limited to, lost profits, whether or not the likelihood of such loss or damage was known to the Collateral Agent or the Securities Intermediary, or any of them incurred without any act or deed that is found to be attributable to gross negligence or willful misconduct on the part of the Collateral Agent or the Securities Intermediary.

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ARTICLE X

AMENDMENT

Section 10.1.          Amendment Without Consent of Holders.

Without the consent of any Holders, the Company, when duly authorized, the Collateral Agent, the Securities Intermediary and the Stock Purchase Contract Agent, at any time and from time to time, may amend this Agreement, in form satisfactory to the Company, the Collateral Agent, the Securities Intermediary and the Stock Purchase Contract Agent, to:

(a)   evidence the succession of another Person to the Company and the assumption by any such successor of the covenants of the Company;

(b)   evidence and provide for the acceptance of appointment hereunder by a successor Collateral Agent, Securities Intermediary or Stock Purchase Contract Agent;

(c)   add to the covenants of the Company for the benefit of the Holders, or surrender any right or power herein conferred upon the Company, provided that such covenants or such surrender do not adversely affect the validity, perfection or priority of the Pledge created hereunder;

(d)   cure any ambiguity (or formal defect), correct or supplement any provisions herein which may be inconsistent with another such provisions herein;

(e)   conform the terms of this Agreement to the terms set forth in the Prospectus dated May 8, 2007 of the Company and the Trust relating to the MCAPS; or

(f)   make any other provisions with respect to such matters or questions arising under this Agreement, provided that such action shall not adversely affect the interests of the Holders in any material respect.

Section 10.2.          Amendment with Consent of Holders.

With the consent of the Holders of not less than a majority of the Stock Purchase Contracts at the time outstanding, including without limitation the consent of the Holders obtained in connection with a tender or an exchange offer, by Act of such Holders delivered to the Company, the Stock Purchase Contract Agent, the Securities Intermediary and the Collateral Agent, as the case may be, the Company, when duly authorized by a Board Resolution, the Stock Purchase Contract Agent, the Securities Intermediary and the Collateral Agent may amend this Agreement for the purpose of modifying in any manner the provisions of this Agreement or the rights of the Holders in respect of the MCAPS; provided, however, that no such supplemental agreement shall, without the unanimous consent of the Holders of each Outstanding MCAPS adversely affected thereby in any material respect:

(a)   change the amount or type of Collateral underlying a MCAPS (except for the rights of holders of Normal MCAPS to substitute the Qualifying Treasury Securities for the Pledged Trust Preferred Securities or the rights of Holders of Treasury MCAPS to substitute Trust Preferred Securities, as applicable, for the Pledged Treasury Securities), impair the right of the Holder of any MCAPS to receive distributions on the underlying Collateral or otherwise adversely affect the Holder’s rights in or to such Collateral; or

29

(b)   otherwise effect any action that would require the consent of the Holder of each Outstanding MCAPS affected thereby pursuant to the Stock Purchase Contract Agreement if such action were effected by a modification or amendment of the provisions of the Stock Purchase Contract Agreement; or

(c)   reduce the percentage of Stock Purchase Contracts the consent of whose Holders is required for the modification or amendment of the provisions of this Agreement;

(d)   provided that if any amendment or proposal referred to above would adversely affect only the Normal MCAPS or only the Treasury MCAPS, then only the affected class of Holders as of the record date for the Holders entitled to vote thereon will be entitled to vote on such amendment or proposal, and such amendment or proposal shall not be effective except with the consent of Holders of not less than a majority of such class; provided further that the unanimous consent of the Holders of each outstanding Stock Purchase Contract of such class affected thereby shall be required to approve any amendment or proposal specified in clauses (a) through (c) above.

It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed amendment, but it shall be sufficient if such Act shall approve the substance thereof.

Section 10.3.          Execution of Amendments.

In executing any amendment permitted by this Article, the Collateral Agent, the Securities Intermediary and the Stock Purchase Contract Agent shall be entitled to receive and (subject to Section 7.1 of the Stock Purchase Contract Agreement with respect to the Stock Purchase Contract Agent) shall be fully authorized and protected in relying upon, an Opinion of Counsel and an officers’ certificate stating that the execution of such amendment is authorized or permitted by this Agreement and that all conditions precedent, if any, to the execution and delivery of such amendment have been satisfied. The Collateral Agent, Securities Intermediary and Stock Purchase Contract Agent may, but shall not be obligated to, enter into any such amendment which affects their own respective rights, duties or immunities under this Agreement or otherwise.

Section 10.4.          Effect of Amendments.

Upon the execution of any amendment under this Article, this Agreement shall be modified in accordance therewith, and such amendment shall form a part of this Agreement for all purposes; and every Holder of Certificates theretofore or thereafter authenticated, executed on behalf of the Holders and delivered under the Stock Purchase Contract Agreement shall be bound thereby.

Section 10.5.          Reference of Amendments.

Certificates authenticated, executed on behalf of the Holders and delivered after the execution of any amendment pursuant to this Section may, and shall if required by the Collateral Agent or the Stock Purchase Contract Agent, bear a notation in form approved by the Stock Purchase Contract Agent and the Collateral Agent as to any matter provided for in such amendment. If the Company shall so determine, new Certificates so modified as to conform, in the opinion of the Collateral Agent, the Stock Purchase Contract Agent and the Company, to any such amendment may be prepared and executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Stock Purchase Contract Agent in accordance with the Stock Purchase Contract Agreement in exchange for Certificates representing Outstanding MCAPS.

30

ARTICLE XI

MISCELLANEOUS

Section 11.1.          No Waiver.

No failure on the part of the Company, the Collateral Agent, the Securities Intermediary or any of their respective agents to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operates a waiver thereof; nor shall any single or partial exercise by the Company, the Collateral Agent, the Securities Intermediary or any of their respective agents of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law.

Section 11.2.          Governing Law; Submission to Jurisdiction.

This agreement shall be governed by, and construed in accordance with, the laws of the State of New York. The Company, the Collateral Agent, the Securities Intermediary and the Holders from time to time of the Trust Preferred Securities, acting through the Stock Purchase Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York state court sitting in New York City for the purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Company, the Collateral Agent, the Securities Intermediary and the Holders from time to time of the Trust Preferred Securities, acting through the Stock Purchase Contract Agent as their attorney-in-fact, irrevocably waive, to the fullest extent permitted by applicable law, any objection that they may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.

Section 11.3.          Notices.

All notices, requests, consents and other communications provided for herein (including, without limitation, any modifications of, or waivers or consents under, this Agreement) shall be give nor made in writing (including, without limitation, by telecopy) delivered to the intended recipient at the “Address For Notices” specified below its name on the signature pages hereof or, as to any party, at such other address as shall be designated by such party in a notice to the other parties. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when transmitted by telecopy or personally delivered or, in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid.

Section 11.4.          Successors and Assigns.

This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the Company, the Collateral Agent, the Securities Intermediary and the Stock Purchase Contract Agent, and the Holders from time to time of the MCAPS, by their acceptance of the same, shall be deemed to have agreed to be bound by the provisions hereof and to have ratified the agreements of, and the grant of the Pledge hereunder by, the Stock Purchase Contract Agent.

31

Section 11.5.          Counterparts.

This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart.

Section 11.6.          Severability.

If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties hereto as nearly as may be possible and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction.

Section 11.7.          Expenses, Etc.

The Company agrees to reimburse the Collateral Agent and the Securities Intermediary for:

(a)   all reasonable costs and expenses of the Collateral Agent and the Securities Intermediary (including, without limitation, the reasonable fees and expenses of counsel to the Collateral Agent and the Securities Intermediary), in connection with (i) the negotiation, preparation, execution and delivery or performance of this Agreement and (ii) any modification, supplement or waiver of any of the terms of this Agreement;

(b)   all reasonable costs and expenses of the Collateral Agent and the Securities Intermediary (including, without limitation, reasonable fees and expenses of counsel) in connection with (i) any enforcement or proceedings resulting or incurred in connection with causing any Holder of MCAPS to satisfy its obligations under the Stock Purchase Contracts forming a part of the MCAPS and (ii) the enforcement of this Section 11.7;

(c)   all transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any other document referred to herein and all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated hereby;

(d)   all reasonable fees and expenses of any agent or advisor appointed by the Collateral Agent and consented to by the Company under Section 9.11 of this Agreement; and

(e)   any other out-of-pocket costs and expenses reasonably incurred by the Collateral Agent and the Securities Intermediary in connection with the performance of their duties hereunder.

Section 11.8.          Security Interest Absolute.

All rights of the Collateral Agent and security interests hereunder, and all obligations of the Holders from time to time hereunder, shall be absolute and unconditional irrespective of:

(a)   any lack of validity or enforceability of any provision of the Stock Purchase Contracts or the MCAPS or any other agreement or instrument relating thereto;

(b)   any change in the time, manner or place of payment of, or any other term of, or any increase in the amount of, all or any of the obligations of Holders of the MCAPS under the related Stock Purchase

32

Contracts, or any other amendment or waiver of any term of, or any consent to any departure from any requirement of, the Stock Purchase Contract Agreement or any Stock Purchase Contract or any other agreement or instrument relating thereto; or

(c)   any other circumstance which might otherwise constitute a defense available to, or discharge of, a borrower, a guarantor or a pledgor.

Section 11.9.          Notice of Termination Event.

Upon the occurrence of a Termination Event, the Company shall deliver written notice to the Stock Purchase Contract Agent, the Collateral Agent and the Securities Intermediary. Upon the written request of the Collateral Agent or the Securities Intermediary, the Company shall inform such party whether or not a Termination Event has occurred.

Section 11.10.        Incorporation by Reference

In connection with its execution and performance hereunder the Stock Purchase Contract Agent is entitled to all rights, privileges, protections, immunities, benefits and indemnities provided to it under the Stock Purchase Contract Agreement.

[SIGNATURES ON THE FOLLOWING PAGE]

33

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

LEHMAN BROTHERS HOLDINGS INC.		U.S. BANK NATIONAL ASSOCIATION, as Stock
		Purchase Contract Agent and as attorney-in-fact
		of the Holders from time to time of the MCAPS
By:	/s/ Barrett S. DiPaolo	By:	/s/ Earl Dennison
Name:		Name:
Title:		Title:

Address for Notices:	Address for Notices:
Lehman Brothers Holdings Inc.	U.S. Bank National Association
745 Seventh Avenue	One Federal Street, 3rd Floor
New York, New York 10019	Boston, MA 02110
Facsimile: (646) 834-2658	Attn: Corporate Trust Services
Attention: Lee Goldblatt	Fax: 617-603-6667

THE BANK OF NEW YORK, as Collateral
Agent and Securities Intermediary

By:	/s/ Maria Tokarz
Name:
Title:

Address for Notices:

Attn: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Fax: 212-815-3910

34

EXHIBIT A

INSTRUCTION

FROM STOCK PURCHASE CONTRACT AGENT

TO COLLATERAL AGENT

(Creation of Treasury MCAPS)

The Bank of New York

Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Re:          Normal MCAPS of Lehman Brothers Holdings Inc. (the “COMPANY”)

The Securities Account of The Bank of New York, as Collateral Agent, maintained by the Securities Intermediary and designated “The Bank of New York, as Collateral Agent of Lehman Brothers Holdings Inc., as pledgee of U.S. Bank National Association, as the Stock Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders” (the “COLLATERAL ACCOUNT”)

Please refer to the Collateral Agreement, dated as of May 17, 2007 (the “COLLATERAL AGREEMENT”), among the Company, you, as Collateral Agent and as Securities Intermediary and the undersigned, as Stock Purchase Contract Agent and as attorney-in-fact for the holders of Normal MCAPS from time to time. Capitalized terms used herein but not defined shall have the meaning set forth in the Collateral Agreement.

We hereby notify you in accordance with Section 5.2 of the Collateral Agreement that the holder of securities named below (the “HOLDER”) has elected to substitute $               Value of Qualifying Treasury Securities or Security Entitlements with respect thereto in exchange for an equal Value of Pledged Trust Preferred Securities relating to Normal MCAPS and has delivered to the undersigned a notice stating that the Holder has Transferred such Qualifying Treasury Securities or Security Entitlements with respect thereto to the Securities Intermediary, for credit to the Collateral Account.

We hereby request that you instruct the Securities Intermediary, upon confirmation that such Qualifying Treasury Securities or Security Entitlements thereto have been credited to the Collateral Account, to release to the undersigned an equal Value of Pledged Trust Preferred Securities in accordance with Section 5.2 of the Collateral Agreement.

A-1

Date:

U.S. BANK NATIONAL ASSOCIATION, as Stock Purchase Contract Agent and as attorney-in-fact of the Holders from time to time of the MCAPS
By:
	Name:
	Title:

Please print name and address of Holder electing to substitute Qualifying Treasury Securities or Security Entitlements with respect thereto for the Pledged Trust Preferred Securities:

Name	Social Security or other Taxpayer
	Identification Number, if any
Address

A-2

EXHIBIT B

INSTRUCTION

FROM COLLATERAL AGENT

TO SECURITIES INTERMEDIARY

(Creation of Treasury MCAPS)

The Bank of New York

as Securities Intermediary

Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Re:           Normal MCAPS of Lehman Brothers Holdings Inc. (the “COMPANY”)

The Securities Account of The Bank of New York, as Collateral Agent, maintained by the Securities Intermediary and designated “The Bank of New York, as Collateral Agent of Lehman Brothers Holdings Inc., as pledgee of U.S. Bank National Association, as the Stock Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders” (the “COLLATERAL ACCOUNT”)

Please refer to the Collateral Agreement, dated as of May 17, 2007 (the “COLLATERAL AGREEMENT”), among the Company, you, as Collateral Agent and as Securities Intermediary and U.S. Bank National Association, as Stock Purchase Contract Agent and as attorney-in-fact for the holders of Normal MCAPS from time to time. Capitalized terms used herein but not defined shall have the meanings set forth in the Collateral Agreement.

When you have confirmed that $            Value of Qualifying Treasury Securities or Security Entitlements thereto has been credited to the Collateral Account by or for the benefit of            , as Holder of Normal MCAPS (the “HOLDER”), you are hereby instructed to release from the Collateral Account an equal Value of Pledged Trust Preferred Securities or Security Entitlements with respect thereto relating to Normal MCAPS of the Holder by Transfer to the Stock Purchase Contract Agent.

Dated:

	The Bank of New York, as Collateral Agent
	By:
		Name:
		Title:
Please print name and address of Holder:
Name		Social Security or other Taxpayer
		Identification Number, if any
Address

B-1

EXHIBIT C

INSTRUCTION

FROM STOCK PURCHASE CONTRACT AGENT

TO COLLATERAL AGENT

(Recreation of Normal MCAPS)

The Bank of New York

The Collateral Agent

Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Re:           Treasury MCAPS of Lehman Brothers Holdings Inc. (the “COMPANY”)

The Securities Account of The Bank of New York, as Collateral Agent, maintained by the Securities Intermediary and designated “The Bank of New York, as Collateral Agent of Lehman Brothers Holdings Inc., as pledgee of U.S. Bank National Association, as the Stock Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders” (the “COLLATERAL ACCOUNT”)

Please refer to the Collateral Agreement dated as of May 17, 2007 (the “COLLATERAL AGREEMENT”), among the Company, you, as Collateral Agent and as Securities Intermediary and the undersigned, as Stock Purchase Contract Agent and as attorney-in-fact for the holders of Treasury MCAPS from time to time. Capitalized terms used herein but not defined shall have the meaning set forth in the Collateral Agreement.

We hereby notify you in accordance with Section 5.3 of the Collateral Agreement that the holder of securities named below (the “HOLDER”) has elected to substitute $                Value of Trust Preferred Securities or Security Entitlements with respect thereto in exchange for $               an equal Value of Pledged Treasury Securities with respect to                Treasury MCAPS and has delivered to the undersigned a notice stating that the holder has Transferred such Trust Preferred Securities or Security Entitlements with respect thereto to the Securities Intermediary, for credit to the Collateral Account.

We hereby request that you instruct the Securities Intermediary, upon confirmation that such Trust Preferred Securities or Security Entitlements with respect thereto have been credited to the Collateral Account, to release to the undersigned $               an equal Value of Qualifying Treasury Securities in accordance with Section 5.3 of the Collateral Agreement.

C-1

Dated:

	U.S. Bank National Association, as
	Stock Purchase Contract Agent
	By:
	Name:
	Title:
Please print name and address of Holder electing to substitute Trust Preferred Securities or Security Entitlements with respect thereto for Pledged Treasury Securities:
Name	Social Security or other Taxpayer
	Identification Number, if any
Address

C-2

EXHIBIT D

INSTRUCTION

FROM COLLATERAL AGENT

TO SECURITIES INTERMEDIARY

(Recreation of Normal MCAPS)

The Bank of New York

as Securities Intermediary

Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Re: {     } Treasury MCAPS of Lehman Brothers Holdings Inc. (the “COMPANY”)

The Securities Account of The Bank of New York, as Collateral Agent, maintained by the Securities Intermediary and designated “The Bank of New York, as Collateral Agent of Lehman Brothers Holdings Inc., as pledgee of U.S. Bank National Association, as the Stock Purchase Contract Agent on behalf of and as attorney-in-fact for the Holders” (the “COLLATERAL ACCOUNT”)

Please refer to the Collateral Agreement dated as of May 17, 2007 (the “COLLATERAL AGREEMENT”), among the Company, you, as Securities Intermediary and Collateral Agent and U.S. Bank National Association, as Stock Purchase Contract Agent and as attorney-in-fact for the holders of Treasury MCAPS from time to time. Capitalized terms used herein but not defined shall have the meanings set forth in the Collateral Agreement.

When you have confirmed that $            Value of Trust Preferred Securities or Security Entitlements with respect thereto has been credited to the Collateral Account by or for the benefit of               , as Holder of Treasury MCAPS (the “HOLDER”), you are hereby instructed to release from the Collateral Account an equal Value of Qualifying Treasury Securities or Security Entitlements with respect thereto relating to Treasury MCAPS of the Holder by Transfer to the Stock Purchase Contract Agent.

D-1

Dated:

	The Bank of New York, as
	Collateral Agent
	By:
	Name:
	Title:
Please print name and address of Holder:
Name	Social Security or other Taxpayer
	Identification Number, if any
Address

D-2

EXHIBIT E

NOTICE OF SETTLEMENT WITH TREASURY SECURITIES FROM COLLATERAL

AGENT TO STOCK PURCHASE CONTRACT AGENT

U.S. Bank National Association

The Stock Purchase Contract Agent

One Federal Street, 3rd Floor

Boston, MA 02110

Attention:  Corporate Trust Services

Facsimile:  617-603-6667

Re:          Normal MCAPS of Lehman Brothers Holdings Inc. (the “COMPANY”)
                     Treasury MCAPS of the Company

Please refer to the Collateral Agreement dated as of May 17, 2007 (the “COLLATERAL AGREEMENT”), by and among you, the Company, and the undersigned, as Collateral Agent and Securities Intermediary. Unless otherwise defined herein, terms defined in the Collateral Agreement are used herein as defined therein.

In accordance with Section 5.6(c) of the Collateral Agreement, we hereby notify you that as of 5:00 p.m. (New York City time) on the ninth Business Day immediately preceding {   } (the “REMARKETING SETTLEMENT DATE”), we have received (i) a principal amount of $          of Qualifying Treasury Securities equal to the Purchase Price due to the Company on the Stock Purchase Date with respect to           Normal MCAPS, and (ii) based on the principal amount of the Qualifying Treasury Securities received set forth in clause (i) above, an aggregate liquidation amount of $          of Pledged Trust Preferred Securities are to be tendered for purchase in the Remarketing.

The Bank of New York, as

Collateral Agent

By:

  Name:

  Title:

E-1

EXHIBIT F

INSTRUCTION TO COLLATERAL AGENT REGARDING

REMARKETING

The Bank of New York

The Collateral Agent and Securities Intermediary

Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Re: Trust Preferred Securities of Lehman Brothers Holdings Capital Trust VIII

The undersigned hereby notifies you in accordance with Section 5.7(c) of the Collateral Agreement, dated as of May 17, 2007 (the “COLLATERAL AGREEMENT”), among Lehman Brothers Holdings Inc. (the “Company”), you, as Collateral Agent and Securities Intermediary and U.S. Bank National Association, as the Stock Purchase Contract Agent and as attorney-in-fact for the holders of Normal MCAPS from time to time, that the undersigned elects to deliver $             aggregate liquidation amount of Separate Trust Preferred Securities for delivery to the Remarketing Agent on or prior to 5:00 p.m. (New York City time) on the ninth Business Day immediately preceding the Remarketing Settlement Date for remarketing pursuant to Section 5.7(c) of the Collateral Agreement. The undersigned will, upon request of the Remarketing Agent, execute and deliver any additional documents deemed by the Remarketing Agent or by the Company to be necessary or desirable to complete the sale, assignment and transfer of the Separate Trust Preferred Securities tendered hereby. Capitalized terms used herein but not defined shall have the meaning set forth in the Collateral Agreement.

The undersigned hereby instructs you, upon receipt of the Proceeds of such remarketing from the Remarketing Agent, to deliver such Proceeds to the undersigned in accordance with the instructions indicated herein under “A. Payment Instructions.” The undersigned hereby instructs you, in the event of a Failed Remarketing, upon receipt of the Separate Trust Preferred Securities tendered herewith from the Remarketing Agent, to deliver such Separate Trust Preferred Securities to the person(s) and the address(es) indicated herein under “B. Delivery Instructions.”

F-1

With this notice, the undersigned hereby (i) represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Separate Trust Preferred Securities tendered hereby and that the undersigned is the record owner of any Trust Preferred Securities tendered herewith in physical form or a participant in The Depository Trust Company (“DTC”) and the beneficial owner of any Trust Preferred Securities tendered herewith by book-entry transfer to your account at DTC, (ii) agrees to be bound by the terms and conditions of Section 5.7(c) of the Collateral Agreement and (iii) acknowledges and agrees that after 5:00 p.m. (New York City time) on the ninth Business Day immediately preceding the Remarketing Settlement Date, such election shall become an irrevocable election to have such Separate Trust Preferred Securities remarketed in the Remarketing. In the case of a Failed Remarketing, such Separate Trust Preferred Securities shall be returned to the undersigned.

Dated:

	By:
	Name:
	Title:
Name	Social Security or other Taxpayer
	Identification Number, if any
Address

A.            PAYMENT INSTRUCTIONS

Proceeds of the remarketing should be paid by check in the name of the person(s) set forth below and mailed to the address set forth below.

Name (s)

(Please Print)

Address

(Please Print)

(Zip Code)

(Taxpayer Identification or Social Security Number)

B.            DELIVERY INSTRUCTIONS

In the event of a Failed Remarketing, Trust Preferred Securities that are in physical form should be delivered to the person(s) set forth below and mailed to the address set forth below.

Name (s)
(Please Print)
Address
(Please Print)	(Zip Code)

F-1

(Tax Identification or Social Security Number)

F-2

In the event of a Failed Remarketing, Trust Preferred Securities that are in book-entry form should be credited to the account at The Depository Trust Company set forth below.

DTC Account Number

Name of Account Party:

F-3

EXHIBIT G

INSTRUCTION TO COLLATERAL AGENT REGARDING

WITHDRAWAL FROM REMARKETING

The Bank of New York

The Collateral Agent

Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Re: Trust Preferred Securities of Lehman Brothers Holdings Capital Trust VIII

The undersigned hereby notifies you in accordance with Section 5.7(c) of the Collateral Agreement, dated as of May 17, 2007 (the “COLLATERAL AGREEMENT”), among Lehman Brothers Holdings Inc. and you, as Collateral Agent and Securities Intermediary, and U.S. Bank National Association, as Stock Purchase Contract Agent and as attorney-in-fact for the holders of Normal MCAPS from time to time, that the undersigned elects to withdraw the $              aggregate liquidation amount of Separate Trust Preferred Securities delivered to the Collateral Agent on                    for remarketing pursuant to Section 5.7(c) of the Collateral Agreement. The undersigned hereby instructs you to return such Trust Preferred Securities to the undersigned in accordance with the undersigned’s instructions. With this notice, the Undersigned hereby agrees to be bound by the terms and conditions of Section 5.7(c) of the Collateral Agreement. Capitalized terms used herein but not defined shall have the meaning set forth in the Collateral Agreement.

Dated:

By:

  Name:

  Title:

	Signature Guarantee:
Name	Social Security or other Taxpayer
	Identification Number, if any
Address

G-1

EXHIBIT H

NOTICE OF OCCURRENCE OF TERMINATION EVENT

The Bank of New York

The Collateral Agent and Securities Intermediary

Attn.: MBS Group

101 Barclay Street, Floor 4 West

New York, NY 10286

Re:          Lehman Brothers Holdings Inc. (the “COMPANY”)

Please refer to the Collateral Agreement dated as of May 17, 2007 (the “COLLATERAL AGREEMENT”), by and among you, the Company, and the undersigned, as Collateral Agent and Securities Intermediary. Unless otherwise defined herein, terms defined in the Collateral Agreement are used herein as defined therein.

In accordance with Section 5.4(c) of the Collateral Agreement, we hereby notify you that a Termination Event has occurred.

Dated:

{Lehman Brothers Holdings Inc.}{U.S. Bank

National Association}

By:

  Name:

  Title:

H-1

Schedule I

Reference Dealers

Schedule II

Contact Persons for Confirmation

Name Phone Number

EX-4.05

Exhibit 4.05

AMENDED AND RESTATED

DECLARATION OF TRUST

LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VII

Dated as of May 17, 2007

TABLE OF CONTENTS

		Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1.	Interpretation and Definitions	2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1.	Trust Indenture Act; Application	12
SECTION 2.2.	Lists of Holders of Trust Securities	12
SECTION 2.3.	Reports by the Property Trustee	12
SECTION 2.4.	Periodic Reports to Property Trustee	13
SECTION 2.5.	Evidence of Compliance with Conditions Precedent	13
SECTION 2.6.	Trust Enforcement Events; Waiver	13
SECTION 2.7.	Trust Enforcement Event; Notice	15
ARTICLE III
ORGANIZATION
SECTION 3.1.	Name	16
SECTION 3.2.	Office	16
SECTION 3.3.	Purpose	16
SECTION 3.4.	Authority	16
SECTION 3.5.	Title to Property of the Trust	17
SECTION 3.6.	Powers and Duties of the Regular Trustees	17
SECTION 3.7.	Prohibition of Actions by the Trust and the Trustees	20
SECTION 3.8.	Powers and Duties of the Property Trustee	21
SECTION 3.9.	Certain Duties and Responsibilities of the Property Trustee	23
SECTION 3.10.	Certain Rights of Property Trustee	24
SECTION 3.11.	Delaware Trustee	27
SECTION 3.12.	Execution of Documents	27
SECTION 3.13.	Not Responsible for Recitals or Issuance of Trust Securities	27
SECTION 3.14.	Duration of Trust	27
SECTION 3.15.	Mergers	27
SECTION 3.16.	Property Trustee May File Proofs of Claim	29

i

ARTICLE IV
SPONSOR
SECTION 4.1.	Responsibilities of the Sponsor	31
SECTION 4.2.	Indemnification and Fees and Expenses of the Trustees	31
ARTICLE V
TRUST COMMON SECURITIES HOLDER
SECTION 5.1.	Company’s Purchase of Trust Common Securities	32
SECTION 5.2.	Covenants of the Trust Common Securities Holder	32
ARTICLE VI
TRUSTEES
SECTION 6.1.	Number of Trustees	33
SECTION 6.2.	Delaware Trustee	33
SECTION 6.3.	Property Trustee; Eligibility	33
SECTION 6.4.	Qualifications of Regular Trustees and Delaware Trustee Generally	34
SECTION 6.5.	Regular Trustees	34
SECTION 6.6.	Delaware Trustee	35
SECTION 6.7.	Appointment, Removal and Resignation of Trustees	35
SECTION 6.8.	Vacancies among Trustees	37
SECTION 6.9.	Effect of Vacancies	37
SECTION 6.10.	Meetings	37
SECTION 6.11.	Delegation of Power	37
SECTION 6.12.	Merger, Conversion, Consolidation or Succession to Business	38
ARTICLE VII
TERMS OF SECURITIES
SECTION 7.1.	General Provisions Regarding Securities	39
SECTION 7.2.	Distributions	41
SECTION 7.3.	Redemption of Trust Securities	41
SECTION 7.4.	Redemption Procedures	42
SECTION 7.5.	Voting and Enforcement Rights of Trust Preferred Securities	43
SECTION 7.6.	Voting and Enforcement Rights of Trust Common Securities	45
SECTION 7.7.	Paying Agent and Security Registrar	47
SECTION 7.8.	Certificates of Trust Securities	47
SECTION 7.9.	Transfer of Trust Securities	49
SECTION 7.10.	Mutilated, Destroyed, Lost or Stolen Certificates	50
SECTION 7.11.	Deemed Security Holders	50
SECTION 7.12.	Global Securities	50

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ARTICLE VIII
DISSOLUTION AND LIQUIDATION OF THE TRUST
SECTION 8.1.	Dissolution and Termination of Trust	53
SECTION 8.2.	Liquidation Distribution Upon Dissolution and Termination of the Trust	53
ARTICLE IX
LIMITATION OF LIABILITY OF
HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS
SECTION 9.1.	Liability	55
SECTION 9.2.	Exculpation	55
SECTION 9.3.	Fiduciary Duty	56
SECTION 9.4.	Indemnification	57
SECTION 9.5.	Outside Businesses	59
ARTICLE X
ACCOUNTING AND TAX MATTERS
SECTION 10.1.	Fiscal Year	60
SECTION 10.2.	Certain Accounting Matters; Returns and Information	60
SECTION 10.3.	Banking	60
SECTION 10.4.	Withholding	61
SECTION 10.5.	Treatment as Grantor Trust for Federal Income Tax Purposes	61
ARTICLE XI
AMENDMENTS AND MEETINGS
SECTION 11.1.	Amendments of this Declaration of Trust	62
SECTION 11.2.	Meetings of the Holders of Trust Securities; Action by Written Consent	64
ARTICLE XII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 12.1.	Representations and Warranties of Property Trustee	66
SECTION 12.2.	Representations and Warranties of Delaware Trustee	67

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ARTICLE XIII
REMARKETING AND RESET RATE MECHANICS
SECTION 13.1.	Obligation to Conduct Remarketing and Related Requirements	68
SECTION 13.2.	Company Decisions in Connection with Remarketing	68
SECTION 13.3.	Reset of Interest Rate on Debentures in Connection with Remarketings and Related Changes in Terms	69
SECTION 13.4.	Early Remarketing	71
SECTION 13.5.	Remarketing Procedures	71
ARTICLE XIV
OTHER MCAPS RELATED PROVISIONS
SECTION 14.1.	Agreed Tax Treatment	74
ARTICLE XV
MISCELLANEOUS
SECTION 15.1.	Notices	75
SECTION 15.2.	Governing Law	76
SECTION 15.3.	Headings	76
SECTION 15.4.	Successors and Assigns	76
SECTION 15.5.	Partial Enforceability	76
SECTION 15.6.	Counterparts	76

EXHIBIT A-1	Form of Global Trust Preferred Security Certificate
EXHIBIT A-2	Form of Trust Preferred Security
EXHIBIT A-2	Form of Trust Common Security Certificate

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CROSS-REFERENCE TABLE^*

Section of Trust Indenture Act of 1939, as amended	Section of Declaration of Trust
310(a)	6.3(a)
310(b)	6.3(c)
310(c)	Inapplicable
311(a)	2.2(b)
311(b)	2.2(b)
311(c)	Inapplicable
312(a)	2.2(a)
312(b)	2.2(b)
313	2.3
314(a)	2.4
314(b)	Inapplicable
314(c)	2.5
314(d)	Inapplicable
314(f)	Inapplicable
315(a)	3.9(b)
315(c)	3.9(a)
315(d)	3.9(a)
316(a)	2.6(a)
316(c)	3.6(e)

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

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AMENDED AND RESTATED DECLARATION OF TRUST
OF
LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VII

May 17, 2007

AMENDED AND RESTATED DECLARATION OF TRUST (the “Declaration of Trust”) dated and effective as of May 17, 2007 by and among Lehman Brothers Holdings Inc., a Delaware corporation, as Sponsor, and Barrett S. DiPaolo, James Killerlane and Andrew Yeung, as the Regular Trustees, U.S. Bank National Association, as the Property Trustee and U.S. Bank Trust National Association, as the Delaware Trustee, not in their individual capacities but solely as Trustees, and by the Holders, from time to time, of undivided beneficial ownership interests in the Trust to be issued pursuant to this Declaration of Trust.

WHEREAS, certain initial trustees of the Trust and the Sponsor have heretofore duly declared and established Lehman Brothers Holdings Capital Trust VII (the “Trust”) pursuant to the Delaware Statutory Trust Act (as hereinafter defined) by entering into that certain Declaration of Trust, dated November 23, 2004 (the “Original Declaration of Trust”), and by the execution and filing with the Secretary of State of the State of Delaware the Certificate of Trust, filed on December 8, 2004 (the “Certificate of Trust”); 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 Sponsor 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 I

INTERPRETATION AND DEFINITIONS

SECTION 1.1.  Interpretation and Definitions.

Unless the context otherwise requires:

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

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

(c)all references in this Declaration of Trust to Articles and Sections and Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits to this Declaration of Trust unless otherwise specified;

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

(e)a reference to the singular includes the plural and vice versa; and

“10% in Liquidation Amount” means, except as provided by the Trust Indenture Act, Holder(s) of outstanding Trust Securities, voting together as a single class, or, as the context may require, Holders of outstanding Trust Preferred Securities or Holders of outstanding Trust Common Securities, voting separately as a class, who are the record owners of 10% or more of the aggregate liquidation amount of all outstanding Trust Securities of the relevant class (excluding any Trust Preferred Securities held by the Company or any of its Affiliates).

“Affiliate” means, with respect to any specified Person, any other Person that directly or indirectly controls or is controlled by, or is under common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Certificate, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.

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

“Business Day” means any day other than a Saturday or Sunday or a day on which banking institutions generally in The City of New York are authorized or required by law, regulation or executive order to close.

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

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

“Closing Date” means the date on which the Normal MCAPS are issued and sold.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor legislation.

“Commission” means the Securities and Exchange Commission.

“Company” means Lehman Brothers Holdings Inc., a Delaware corporation, and any of its successors.

“Company 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, director, shareholder, member, partner, employee, representative or agent of the Trust or any of its Affiliates.

“Collateral Account” has the meaning set forth in the Collateral Agreement.

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

“Collateral Agreement” means the Collateral Agreement, dated as of the date hereof, among the Sponsor, the Collateral Agent, the Securities Intermediary, and U.S. Bank National Association, as Stock Purchase Contract Agent and attorney-in-fact for the Holders (as defined in the Stock Purchase Contract Agreement) of the Stock Purchase Contracts, as amended from time to time.

“Corporate Trust Office” means the principal corporate trust office of the Property Trustee at which, at any particular time, its corporate trust business shall be administered, which office at the date hereof is located at 100 Wall Street, Suite 1600, Mail Station EX-NY-WALL, New York, New York 10005.

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

“Creditor” has the meaning set forth in Section 4.2(c) hereof.

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

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“Debentures” means the $1,000,001,000 initial aggregate principal amount of the Company’s 5.707% Remarketable Junior Subordinated Debentures due 2043 issued pursuant to the Indenture.

“Declaration of Trust” means this Amended and Restated Declaration of Trust, as it may be amended, modified or supplemented from time to time.

“Delaware Trustee” has the meaning set forth in Section 6.2 hereof.

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

“Determination Date” means the 20th business day prior to the last day of each fiscal quarter.

“Direct Action” has the meaning set forth in Section 3.8(e) hereof.

“DTC” means The Depository Trust Company, the initial Depositary.

“Early Remarketing” has the meaning set forth in Section 13.4 hereof.

“Early Remarketing Event” shall occur if on any Determination Date, both of the following conditions exist:

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

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

“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.

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

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

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

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

“Floating Rate Reset Cap” means 3.00%, per annum.

 “Fiscal Year” has the meaning set forth in Section 10.1 hereof.

“Global Certificate” means a fully registered, global certificate representing Trust Preferred Securities.

“Global Certificate Legend” means the legend set forth in Section 7.12 hereof, which is required to be placed on all Global Certificates issued under this Declaration of Trust.

“Guarantee” means the Guarantee Agreement dated as of May 17, 2007 entered into by the Company, as Guarantor, for the benefit of the Holders of the Trust Securities.

“Holder” means a Person in whose name a Certificate representing a Trust Security is registered in the books and records of the Trust, such Person being a beneficial owner within the meaning of the Statutory Trust Act.

“Indemnified Person” means a Company Indemnified Person or a Fiduciary Indemnified Person.

“Indenture” means the Base Indenture, dated as of February 1, 1996, between the Company and JPMorgan Chase Bank, N.A., as trustee, as supplemented by the First Supplemental Indenture, dated as of February 1, 1996, and the Supplemental Indenture, as further amended or supplemented from time to time.

“Indenture Event of Default” means any event of default under the Indenture.

“Indirect Participant” means a Person who holds a beneficial interest in a Global Certificate through a Participant.

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

“Legal Action” has the meaning set forth in Section 3.6(h) hereof.

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“Liquidation” has the meaning set forth in Section 8.2 hereof.

“List of Holders” has the meaning set forth in Section 2.2(a) hereof.

“Majority in Liquidation Amount” means, except as provided by the Trust Indenture Act, Holder(s) of outstanding Trust Securities, voting together as a single class, or, as the context may require, Holders of outstanding Trust Preferred Securities or Holders of outstanding Trust Common Securities, voting separately as a class, who are the record owners of more than 50% of the aggregate liquidation amount of all outstanding Trust Securities of the relevant class (excluding any Trust Preferred Securities held by the Company or any of its Affiliates).

“Normal MCAPS” means the collective rights and obligations of a Holder of a Normal MCAPS Certificate in respect of one Trust Preferred Security subject to the Pledge thereof, and the related Stock Purchase Contract.

“Normal MCAPS Certificate” means a certificate evidencing the rights and obligations of a Holder in respect of the number of Normal MCAPS specified on such certificate.

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

(a)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;

(b)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;

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

(d)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;

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 that otherwise satisfies the foregoing requirements.

“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Security Registrar.

“Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream)

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“Paying Agent” has the meaning set forth in Section 3.8(g) hereof.

“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.

“Property Account” has the meaning set forth in Section 3.8(c)(i) hereof.

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

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

“Redemption Notice” has the meaning set forth in Section 7.4(a) hereof.

“Redemption Price” means such amount as each Trust Security would receive if all the assets then held by the Trust were paid in full in cash in accordance with their terms and the Trust were liquidated in accordance with its terms.

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

“Remarketing” means a remarketing of Trust Preferred Securities pursuant to Article XIII hereof and the related Remarketing Agreement.

“Remarketing Agent” means, as to a Remarketing and Remarketing Agreement, the remarketing agent and any successor or replacement remarketing agent appointed by the Sponsor.

 “Remarketing Agreement” means the remarketing agreement to be entered into prior to the first Remarketing among the Sponsor, the Trust (acting through the Property Trustee) and the Remarketing Agent, as amended or supplemented from time to time pursuant with respect to such Remarketing of Trust Preferred Securities.

“Remarketing Date” means, as to a Remarketing Settlement Date, the third business day immediately preceding such Remarketing Settlement Date.

“Remarketing Fee” means, as to a Remarketing, the fee payable to the Remarketing Agent provided for in the Remarketing Agreement.

 “Remarketing Period” means the five Business Day Period beginning on the seventh Business Day preceding each of May 31, 2012, August 31, 2012, November 30, 2012, February 28, 2013 and May 31, 2013 (or if any such day is not a Business Day, the preceding Business Day) until the settlement of a Successful Remarketing, or if an Early Remarketing Event shall have occurred, each of the periods determined in accordance with Section 13.4.

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

“Reset Date” means the first date that is a Remarketing Settlement Date or a Final Remarketing that is not Successful.

 “Reset Rate” means, if the Debentures are remarketed as fixed rate notes, the rate of interest on the Debentures, if any, set in a Remarketing, as set forth in Section 2 of the Supplemental Indenture.

“Reset Spread” means, if the Debentures are remarked as floating rate notes, the spread, if any, set in a Remarketing, as set forth in Section 2 of the Supplemental Indenture.

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

“Securities Act” means the Securities Act of 1933, as amended.

“Securities Intermediary” means The Bank of New York, and any successor thereto as securities intermediary under the Collateral Agreement.

“Security Register” has the meaning set forth in Section 7.7(a) hereof.

“Security Registrar” has the meaning set forth in Section 7.7(c) hereof.

“Separate Trust Preferred Securities” means Trust Preferred Securities that are no longer a component of Normal MCAPS.

“Special Event” has the meaning set forth in the Indenture.

“Sponsor” means the Company or any successor entity in a merger, consolidation or amalgamation, in its capacity as sponsor of the Trust.

“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.

“Stock Purchase Contract” has the meaning set forth in the Stock Purchase Contract Agreement.

“Stock Purchase Contract Agent” means U.S. Bank National Association, and any successor thereto as stock purchase contract agent under the Stock Purchase Contract Agreement.

8

“Stock Purchase Contract Agreement” means the Stock Purchase Contract Agreement, dated as of the date hereof, between the Sponsor and the Stock Purchase Contract Agent.

“Stock Purchase Date” has the meaning set forth in the Stock Purchase Contract Agreement.

“Successful” means, as to a Remarketing, that the Remarketing is conducted in accordance with Article XIII and the Remarketing Agent finds buyers for all Trust Preferred Securities offered in the Remarketing by 4:00 PM, New York City time, on the Remarketing Date.

“Successor Delaware Trustee” has the meaning set forth in Section 6.7(c) hereof.

“Successor Entity” has the meaning set forth in Section 3.15(b)(i) hereof.

“Successor Property Trustee” has the meaning set forth in Section 6.7(b) hereof.

“Successor Trust Preferred Securities” has the meaning set forth in Section 3.15(b)(i)(B) hereof.

“Super Majority” has the meaning set forth in Section 2.6(a)(ii) hereof.

“Supplemental Indenture” means the Eleventh Supplemental Indenture, dated as of May 17, 2007, between Lehman Brothers Holdings Inc. and U.S. Bank National Association, to the Indenture, as further amended or supplemented from time to time with respect to the Debentures.

“Tangible Common Stockholders’ Equity Amount” means, as of any quarter end and subject to the adjustments below, the Sponsor’s common stockholders’ equity minus identifiable intangible assets and goodwill, in each case as reflected on the company’s consolidated GAAP balance sheets as of such quarter end.

All financial terms in the preceding paragraph and in the definition of “Trailing Two Quarters Consolidated Net Income Amount” below shall be determined in accordance with GAAP as applied to and reflected in the Company’s consolidated financial statements as of the relevant dates, except (i) that the Company’s common stockholders’ equity and consolidated net income at any date and for any period shall be adjusted to exclude extraordinary items, unusual items and infrequently occurring items as defined in Accounting Principles Bulletin 30, goodwill impairment as defined in Financial Accounting Standards Board Statements of Financial Accounting Standards No. 142 and amounts relating to discontinued operations as defined in Financial Accounting Standards Board Statements of Financial Accounting Standards No. 144 or, in ech case, in any successor accounting bulletins or statements and (ii) as provided in the next sentence. If because of a change in GAAP that results in a cumulative effect of a change in accounting principle or a restatement, either (i) the Company’s consolidated net income is higher or lower than it would have been absent such change, then, for purposes of calculating the calculations described in “Early Remarketing Event,” commencing with the fiscal quarter for which such changes in GAAP becomes effective, such consolidated net income shall be

9

calculated on a pro forma basis as if such changes had not occurred; or (ii) the Tangible Common Stockholders’ Equity Amount as of a fiscal quarter end is higher or lower than it would have been absent such change, then, for purposes of the calculations described in the preceding paragraph, the Tangible Common Stockholders’ Equity Amount shall be calculated on a pro forma basis as if such change had not occurred.

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

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

“Trust” has the meaning set forth in the recitals hereto.

“Trust Common Security” has the meaning set forth in Section 7.1(a)(ii) hereof.

“Trust Common Security Certificate” means a definitive certificate in fully registered form representing a Trust Common Security substantially in the form of Exhibit A-2 hereto.

“Trust Enforcement Event” means (i) a default by the Company in respect of any of its obligations under the Guarantee or (ii) an Indenture Event of Default.

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

“Trust Preferred Security” has the meaning set forth in Section 7.1(a)(i) hereof.

“Trust Preferred Security Certificate” means a certificate in fully registered form representing a Trust Preferred Security substantially in the form of Exhibit A-1 hereto.

“Trust Securities” has the meaning set forth in Section 7.1(a)(ii) hereof.

“Trustee” or “Trustees” means each Person who has signed this Declaration of Trust 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 U.S. Person as defined in Rule 902(k) promulgated under the Securities Act.

“Underwriters” means the underwriters named in Schedule II to the Underwriting Agreement.

10

“Underwriting Agreement” means the underwriting agreement by and among the Sponsor, the Trust and Lehman Brothers Inc. as representative of the Underwriters, dated as of May 8, 2007.

11

ARTICLE II

TRUST INDENTURE ACT

SECTION 2.1.  Trust Indenture Act; Application.

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

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

(c)If and to the extent that any provision of this Declaration of Trust 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 Trust Securities.

(a)Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide the Property Trustee (i), except while the Trust Preferred Securities are represented by one or more Global Certificates, 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 Trust 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 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 Trust Preferred Securities), the Property Trustee shall provide to the Holders of the Trust 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

12

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 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 of Trust 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 Trust Preferred Securities may, by vote or written consent, on behalf of the Holders of all of the Trust Preferred Securities, waive any past Trust Enforcement Event in respect of the Trust 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 simple 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 Trust Preferred Securities that the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding.

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 of Trust and the Trust 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 Trust Preferred Securities arising therefrom shall be deemed to have been cured, for every purpose of this Declaration of Trust, but no such waiver shall extend to any subsequent or other default or Trust Enforcement Event with respect to the Trust Preferred Securities or impair any right consequent thereon. Any waiver by the Holders of the Trust Preferred Securities of Trust Enforcement Events with respect to the Trust Preferred Securities shall also be deemed to constitute a waiver by the Holders of the Trust Common Securities of any such Trust Enforcement Event with respect to the Trust Common Securities for

13

all purposes of this Declaration of Trust without any further act, vote, or consent of the Holders of the Trust Common Securities.

(b)The Holders of a Majority in Liquidation Amount of the Trust Common Securities may, by vote or written consent, on behalf of the Holders of all of the Trust Common Securities, waive any past Trust Enforcement Event in respect of the Trust 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 Trust 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 Trust Common Securities that the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding;

provided further, each Holder of Trust Common Securities shall be deemed to have waived any such Trust Enforcement Event and all Trust Enforcement Events with respect to the Trust Common Securities and its consequences until all Trust Enforcement Events with respect to the Trust Preferred Securities have been cured, waived or otherwise eliminated, and until such Trust Enforcement Events have been so cured, waived or otherwise eliminated, the Property Trustee shall be deemed to be acting solely on behalf of the Holders of the Trust Preferred Securities and only the Holders of the Trust Preferred Securities shall have the right to direct the Property Trustee in accordance with the terms of the Trust 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 of Trust and the Trust Securities, as permitted by the Trust Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon such waiver, any such default shall cease to exist and any Trust Enforcement Event with respect to the Trust Common Securities arising therefrom shall be deemed to have been cured for every purpose of this Declaration of Trust, but no such waiver shall extend to any subsequent or other default or Trust Enforcement Event with respect to the Trust 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 Trust Preferred Securities constitutes a waiver of the corresponding Trust Enforcement Event with respect to the Trust Preferred Securities under this Declaration of Trust. 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 of Trust and the Trust Securities, as permitted by the Trust Indenture Act.

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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 Trust Securities, notices of all defaults with respect to the Trust 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 being hereby defined to be defaults as defined in the Guarantee or any 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 the Debentures or in the payment of any sinking fund installment established for 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 Trust Securities.

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

(i)a default under Section 501(1) 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 of Trust shall have actual knowledge.

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ARTICLE III

ORGANIZATION

SECTION 3.1.  Name.

The Trust is named “Lehman Brothers Holdings Capital Trust VII,” as such name may be modified from time to time by the Regular Trustees following written notice to the Holders of Trust 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.

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, NY 10019. On ten Business Days written notice to the Holders of Trust Securities, the Property Trustee, the Delaware Trustee and the Regular Trustees may designate another principal office.

SECTION 3.3.  Purpose.

The exclusive purposes and functions of the Trust are (a) to issue and sell Trust 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 not to be classified for United States federal income tax purposes as a grantor trust.

By the acceptance of this Trust, the Trustees, the Sponsor, the Holders of the Trust Preferred Securities and Trust Common Securities 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.

(a)Subject to the limitations provided in this Declaration of Trust and to the specific duties of the Property Trustee, the Regular Trustees shall have exclusive and complete 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 of Trust.

(b)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

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power to act, any power of the Regular Trustees may be exercised by, or with the consent of, any one such Regular Trustee.

(c)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)(iii), including any amendments thereto, shall be signed by or on behalf of a majority of the Regular Trustees; and

(d)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 that such natural person is a U.S. Person.

SECTION 3.5.  Title to Property of the Trust.

Except as provided in Section 3.8 with respect to the Property Account or as otherwise provided in this Declaration of Trust, 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 Trust Preferred Securities and the Trust Common Securities in the manner specified in Section 7.1(a) and issue and sell the Trust Preferred Securities and the Trust Common Securities in accordance with this Declaration of Trust; provided, however, that the Trust may issue no more than one series of Trust Preferred Securities and no more than one series of Trust Common Securities; provided, further, that there shall be no interests in the Trust other than the Trust Securities, and the issuance of Trust Securities shall be limited to a one-time, simultaneous issuance of both Trust Preferred Securities and Trust Common Securities on the Closing Date;

(b)in connection with the issue and sale of the Trust 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 Trust Preferred Securities, the Guarantee and the Debentures;

(ii)issue the Trust Preferred Securities in exchange for the Debentures and to take any action as may be necessary or desirable in connection with the consummation of the Underwriting Agreement and the Remarketing Agreement;

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(iii)cause the Trust to execute, deliver and perform its obligations under Remarketing Agreements entered into pursuant to Article XIII and, except as otherwise expressly provided in Article XIII, causing the Trust to take such actions with respect to Remarketings as are provided for in Article XIII or as may be necessary or, as determined by the Regular Trustees, useful in connection with Remarketings;

(iv)execute and file with the Commission a registration statement on Form S-3 or Form S-4, as applicable, or any amendment or supplement thereto prepared by the Sponsor, pertaining to the Trust Preferred Securities and the Guarantee including any amendments thereto;

(v)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 Trust Preferred Securities in any state in which the Sponsor has determined to qualify or register such Trust Preferred Securities for sale; and

(vi)execute and file with the Commission a registration statement on Form 8-A, including any amendments thereto, prepared by the Sponsor, relating to the registration of the Trust Preferred Securities and the Guarantee under Section 12(b) of the Exchange Act;

(c)to acquire the Debentures with the proceeds of the sale of the Trust Preferred Securities and the Trust 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 Trust Preferred Securities and the Holders of Trust Common Securities;

(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 a 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 Trust Preferred Securities and Holders of Trust Common Securities as to such actions and applicable record dates;

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

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

(h)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

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pursuant to Section 3.8(h), the Property Trustee has the exclusive power to bring such Legal Action;

(i)subject to Section 6.11, to employ or otherwise engage employees and agents (who may be designated as officers with titles) and managers, contractors, advisors, and consultants and pay reasonable compensation for such services; provided that such delegates are U.S. Persons and conduct only those services that the Regular Trustees have authority to conduct directly;

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

(k)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;

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

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

(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 Trust Preferred Securities or to enable the Trust to effect the purposes for which the Trust was created;

(o)to take any action, not inconsistent with this Declaration of Trust or 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 Sponsor as the issuer of the Debentures to ensure that the Debentures will be treated as indebtedness of the Sponsor 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.

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(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 must 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 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 Sponsor pursuant to Article IV hereof.

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

(a)The Trust shall not, and the Trustees (including the Property Trustee) shall cause the Trust not to, engage in any activity other than as required or authorized by this Declaration of Trust. In particular, the Trust shall not and the Trustees (including the Property Trustee) shall cause the Trust not to:

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

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

(iii)possess Trust property for other than a purpose stated in Section 3.3 of this Declaration of Trust;

(iv)make any loans or incur any indebtedness or acquire any securities other than the Debentures;

(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 Trust Securities in any way whatsoever, except to the extent expressly authorized in this Declaration of Trust or by the terms of the Trust Securities;

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

(viii)other than as provided in this Declaration or by the terms of the Trust Securities, (A) direct the time, method and place of exercising any trust or power conferred upon the Indenture 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

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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 authorized or approved by vote of the Holders of the Trust Preferred Securities;

(xi)other than in connection with the liquidation of the Trust pursuant to a Special Event or upon redemption of all the Trust Securities, file a certificate of cancellation of the Trust.

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 Holders of the Trust 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 6.7. 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 of the Property Trustee on behalf of the Holders of the Trust Securities and, upon the receipt of payments of funds from the Company on the Debentures or the Guarantee, deposit such funds into the Property Account and make payments to the Holders of the Trust Preferred Securities and Holders of the Trust Common Securities from the Property Account in accordance with Sections 7.3 and 8.2. Funds in the Property Account shall be held uninvested until disbursed in accordance with this Declaration of Trust. The Property Account shall be an account that is maintained with a banking institution authorized to exercise corporate trust powers and having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal or state authority, and the rating on whose long term unsecured indebtedness is at least equal to the rating assigned to the Trust Preferred Securities by a “nationally recognized statistical rating organization”, within the meaning of Rule 436(g)(2) under the Securities Act; and

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(ii)engage in such ministerial activities as shall be necessary or appropriate to effect the redemption of the Trust Preferred Securities and the Trust 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 Trust 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 Trust Securities upon the occurrence of a Special Event in accordance with the provisions.

(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 of Trust and the Trust 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.

(f)The Property Trustee shall have the legal power to exercise all of the rights, powers and privileges of a Holder of Debentures and, if a Trust Enforcement Event occurs and is continuing, the Property Trustee shall, for the benefit of Holders of the Trust Securities, enforce its rights as Holder of the Debentures subject to the rights of the Holders pursuant to the terms of such Trust Securities, including requiring the delivery of a Payment Notice to the Company upon written direction of Holders of a Majority in Liquidation Amount of the outstanding Trust Securities.

(g)Subject to Section 7.8(a), 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 Trust 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.

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

(i)the Trust has been completely liquidated and the assets of the Trust available for distribution have been distributed to the Holders of Trust Securities pursuant to the terms of this Declaration of Trust or the Trust Securities; or

(ii)a Successor Property Trustee has been appointed and has accepted that appointment in accordance with Section 6.7.

(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 must 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

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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 or waiver of all Trust Enforcement Events that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Declaration of Trust and no implied covenants shall be read into this Declaration of Trust 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 of Trust, 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 of Trust 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 of Trust 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 of Trust, and no implied covenants or obligations shall be read into this Declaration of Trust 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 of Trust; 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 of Trust;

(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 Trust Securities relating to the time, method and place of conducting any proceeding for any

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remedy available to the Property Trustee, or exercising any trust or power conferred upon the Property Trustee under this Declaration of Trust;

(iv)no provision of this Declaration of Trust 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 of Trust 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 of Trust 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;

(vii)the Property Trustee shall not be liable for any interest in 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 of Trust, 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 acting on behalf of the Trust contemplated by this Declaration of Trust shall be sufficiently evidenced by an Officers’ Certificate;

(iii)whenever in the administration of this Declaration of Trust, the Property Trustee shall deem it desirable that a matter be proved or established before taking,

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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 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 and 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 the right at any time to seek instructions concerning the administration of this Declaration of Trust 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 of Trust 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)(vi) shall be taken to relieve the Property Trustee, upon the occurrence of a Trust Enforcement Event, of its obligation to exercise the rights and powers vested in it by this Declaration of Trust;

(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 Trust Securities, and the signature of the Property Trustee or its agents alone shall be sufficient and effective to perform any such action and

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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 of Trust, 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 of Trust 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 Trust Securities which instructions may only be given by the Holders of the same proportion in liquidation amount of the Trust Securities as would be entitled to direct the Property Trustee under the terms of the Trust 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 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 of Trust, the Property Trustee shall not be under any obligation to take any action that is discretionary under the provisions of this Declaration of Trust;

(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 of Trust;

(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 received written notice of such event from Holders holding more than a Majority in Liquidation Amount of the Trust 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 agent 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 of Trust, 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 of Trust 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

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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 provision of this Declaration of Trust 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 of Trust. 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 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 cause the Trust to execute pursuant to Section 3.6; provided that the registration statement referred to in Section 3.6(b)(iii), 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 Trust Securities.

The recitals contained in this Declaration of Trust and the Trust 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 of Trust or the Trust Securities.

SECTION 3.14.  Duration of Trust.

The Trust, unless terminated pursuant to the provisions of Article VIII hereof, shall have perpetual existence.

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 Trust Securities, the Delaware Trustee or the Property Trustee,

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consolidate, amalgamate, merge with or into, or be replaced by or convey, transfer or leave its properties substantially as an entirety to a trust organized as such under the laws of any State of the United States; provided that:

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

(A)expressly assumes all of the obligations of the Trust under the Trust Securities; or

(B)substitutes for the Trust Preferred Securities other securities having substantially the same terms as the Trust Preferred Securities (the “Successor Trust Preferred Securities”) so long as the Successor Trust Preferred Securities rank the same as the Trust Preferred Securities rank with respect to distributions, assets and payments upon liquidation, redemption and otherwise;

(ii)the Company expressly acknowledges a trustee of the Successor Entity that possesses the same powers and duties as the Property Trustee as the Holder of the Debentures;

(iii)such merger, consolidation, amalgamation or replacement does not cause the Trust Preferred Securities (including any Successor Trust Preferred Securities) or the MCAPS to be downgraded by any “nationally recognized statistical rating organization” as defined by the Commission;

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

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

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

(A)such merger, consolidation, amalgamation, replacement conveyance, transfer or lease shall not adversely affect the rights, preferences and privileges of the Holders of the Trust Preferred Securities (including any Successor Trust Preferred Securities) in any material respect (other than with respect to any dilution of the Holders’ interest in the new entity); and

(B)following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease the Trust (or the Successor Entity) shall not be required to register as an investment company under the Investment Company Act; and

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(C)following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease the Trust (or the Successor Entity) shall not be classified as other than a grantor trust for United States federal income tax purposes.

(vii)the Sponsor or any permitted successor or assignee owns all of the Trust Common Securities and guarantees the obligations of such Successor Entity under the Successor Securities at least to the extent provided by the Securities Guarantee; and

(viii)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 Trust Preferred 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.

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 Trust 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 Trust 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 Trust Securities (or, if the Trust Securities are original issue discount Trust Securities, such portion of the liquidation amount as may be specified in the terms of such Trust 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

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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, arrangement adjustment or compensation affecting the Trust 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.

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ARTICLE IV

SPONSOR

SECTION 4.1.  Responsibilities of the Sponsor.

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

(a)to negotiate the terms of an underwriting agreement providing for the sale of the Trust Preferred Securities to the underwriters in connection with the issuance of Mandatory Capital Advantages Preferred Securities;

(b)to register the Trust Preferred Securities under the Securities Act and under state securities or blue sky laws and the qualification of this Declaration of Trust as a trust indenture under the Trust Indenture Act;

(c)to determine the States in which to take appropriate action to qualify or register for sale all or part of the Trust 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;

(d)to list the Trust Preferred securities upon such national securities exchange of exchanges, if any, and to register the Trust Preferred Securities under the Exchange Act, if required, and prepare for filing by the Trust with the Commission a registration statement on Form 8-A, including any amendments thereto.

SECTION 4.2.  Indemnification and Fees and Expenses of the Trustees

(a)The Sponsor 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 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(a) shall survive the resignation or removal of the Delaware Trustee or the Property Trustee or the termination of the Declaration of Trust.

(b)The foregoing obligations of the Sponsor are for the benefit of, and shall be enforceable by, any Person to whom any such debts, obligations, costs, expenses and taxes are owed (each, a “Creditor”) whether or not such Creditor has received notice thereof. Any such Creditor may enforce such obligations of the Sponsor directly against the Sponsor, and the Sponsor irrevocably waives any right or remedy to require that any such Creditor take any action against the Trust or any other Person before proceeding against the Sponsor.

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ARTICLE V

TRUST COMMON SECURITIES HOLDER

SECTION 5.1.  Company’s Purchase of Trust Common Securities.

On the Closing Date, the Company shall receive all of the Trust Common Securities and all of the Trust Preferred Securities issued by the Trust in exchange for the Debentures issued to the Trust by the Company. The Trust Common Securities will be issued in an amount equal to $1,000.

SECTION 5.2.  Covenants of the Trust Common Securities Holder.

For so long as the Trust Preferred Securities remain outstanding, the Company shall covenant (i) to maintain directly 100% ownership of the Trust 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 of Trust, (iii) to use its commercially reasonable efforts to ensure that the Trust shall not be an investment company for purposes of the Investment Company Act and (iv) to take no action that would be reasonably likely to cause the Trust to be classified as other than a grantor trust for United States federal income tax purposes.

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ARTICLE VI

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 Trust Securities, the Sponsor may, by written instrument, increase or decrease the number of Trustees;

(b)after the issuance of any Trust Securities, the number of Trustees may be increased or decreased by vote of the Holders of a Majority in Liquidation Amount of the Trust Common Securities voting as a class at a meeting of the Holders of the Trust Common Securities (or, if there is only one Holder, by written instrument); provided however, that the number of Trustees shall in no event be less than three; provided further, that all Trustees shall be U.S. Persons and (1) if required by the Statutory Trust Act, one Trustee is the Delaware Trustee; (2) there shall be at least one Regular Trustee who is an employee or officer of, or is affiliated with the Company; and (3) one Trustee shall be the Property Trustee for so long as this Declaration of Trust is required to qualify as an indenture under the Trust Indenture Act, and such Property 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.

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

(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 may also be the Delaware Trustee (in which case Section 3.11 shall have no application).

SECTION 6.3.  Property Trustee; Eligibility.

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

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

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(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 Person permitted by the Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least US$50,000,000, and subject to supervision or examination by Federal, State, Territorial or District of Columbia banking 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.

Pursuant to the Original Declaration of Trust, JPMorgan Chase Bank, N.A. was named Property Trustee. Effective immediately prior to the issuance of the Trust Securities, U.S. Bank National Association is hereby appointed by the Sponsor as Property Trustee.

(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 6.7(d).

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

(e)Nothing herein shall prevent the Trustee from filing with the Commission the application referred to in the penultimate paragraph of Section 310(b) of the Trust Indenture Act.

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.

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SECTION 6.5.  Regular Trustees.

(a)Pursuant to the Original Declaration of Trust, Jeffrey A. Welikson, Barrett S. DiPaolo and Oliver Budde were named as the Regular Trustees. Effective immediately prior to the issuance of the Trust Securities, Barrett S. DiPaolo, James Killerlane and Andrew Yeung are hereby appointed by the Sponsor as the Regular Trustees.

(b)Except as expressly set forth in this Declaration of Trust 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.

(c)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 that the Regular Trustees have the power and authority to cause the Trust to execute pursuant to Section 3.6; provided that the registration statement referred to in Section 3.6(b)(iii), including any amendments thereto, shall be signed by or on behalf of a majority of the Regular Trustees.

SECTION 6.6.  Delaware Trustee.

Pursuant to the Original Declaration of Trust, J.P.Morgan Chase Bank, N.A. was named Delaware Trustee. Effective immediately prior to the issuance of the Trust Securities, U.S. Bank Trust National Association is hereby appointed by the Sponsor as Delaware Trustee.

SECTION 6.7.  Appointment, Removal and Resignation of Trustees.

(a)Subject to Section 6.7(b), Trustees may be appointed or removed without cause at any time:

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

(ii)after the issuance of any Trust Securities, by vote of the Holders of a Majority in Liquidation Amount of the Trust Common Securities voting as a class at a meeting of the Holders of the Trust Common Securities (or, if there is only one Holder, by written instrument); and

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

(b)The Trustee that acts as Property Trustee shall not be removed in accordance with Section 6.7(a) until a successor Trustee possessing the qualifications to act as Property Trustee under Section 6.3 (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.

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(c)The Trustee that acts as Delaware Trustee shall not be removed in accordance with Section 6.7(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.

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

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

(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 Trust 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.

(e)The Holders of the Trust 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 6.7.

(f)If no Successor Property Trustee or Successor Delaware Trustee shall have been appointed and accepted appointment as provided in this Section 6.7 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. Such court may thereupon, after prescribing such notice, if any, as it may deem proper and prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee, as the case may be.

(g)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.

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SECTION 6.8.  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 6.7.

SECTION 6.9.  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 6.7, 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 of Trust.

SECTION 6.10.  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 or any committee thereof 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 of Trust, 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. Notwithstanding the foregoing, any and all actions of the Regular Trustees may be taken by the unanimous written consent of all Regular Trustees.

SECTION 6.11.  Delegation of Power.

(a)Any 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 purpose of executing any documents contemplated in Section 3.6, including any registration statement or amendment thereto filed with the Commission, or making any other governmental filing; provided that such person is a U.S. Person; and

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

SECTION 6.12.  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, as the case may be, may be merged or converted or with which either may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Property Trustee or the Delaware Trustee, as the case may be, shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Property Trustee or the Delaware Trustee, as the case may be, shall be the successor of the Property Trustee or the Delaware Trustee, as the case may be, 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.

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ARTICLE VII

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 and one class of Trust Common Securities, each representing undivided beneficial ownership interests in the assets of the Trust, as follows:

(i)Trust Preferred Securities. 1,000,000 Trust Preferred Securities of the Trust with an aggregate liquidation amount with respect to the assets of the Trust of $1,000 per Trust Preferred Security are hereby designated for the purposes of identification only as Trust Preferred Securities (the “Trust Preferred Securities”). The Trust Preferred Securities shall have an aggregate liquidation amount not greater than $1,000,000,000. The Trust Preferred Securities may be issued in the form of one or more Global Certificates or in fully registered, definitive form as set forth in Section 7.12 hereof. The Global Trust Preferred Security Certificates evidencing the Trust Preferred Securities shall be substantially in the form of Exhibit A-1 to this Declaration of Trust and the Trust Preferred Securities in registered, definitive form shall be substantially in the form of Exhibit A-2 to this Declaration of Trust, in each case, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice.

(ii)Trust Common Securities. $1,000 in Trust Common Securities of the Trust are hereby designated for the purposes of identification only as Trust Common Securities (the “Trust Common Securities” and, together with the Trust Preferred Securities, the “Trust Securities”). The Trust Common Security Certificate evidencing the Trust Common Securities shall be substantially in the form of Exhibit A-3 to this Declaration of Trust, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice.

(b)The Certificates shall be signed on behalf of the Trust by any Regular Trustee. In case any Regular Trustee of the Trust who shall have signed any of the Trust Securities shall cease to be a 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 Trust Security, shall be the Regular Trustees of the Trust, although at the date of the execution and delivery of this Declaration of Trust 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 Trust Securities may be listed, or to conform to usage.

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A Trust Security 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 the Trust Security has been authenticated under this Declaration of Trust.

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

The Property Trustee may appoint an authenticating agent acceptable to the Trust to authenticate Trust Securities; provided that such authenticating agent is a U.S. Person. An authenticating agent may authenticate Trust Preferred Securities whenever the Property Trustee may do so. Each reference in this Declaration of Trust 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.

(c)The Trust shall issue no securities or other interests in the assets of the Trust other than the Trust Preferred Securities and the Trust Common Securities.

(d)The Trust Preferred Securities rank pari passu and payment thereon shall be made Pro Rata with the Trust Common Securities; provided that if an Indenture Event of Default shall have occurred and be continuing, (i) no payment of any distribution on any of the Trust Common Securities shall be made unless payment in full in cash of the Distributions on all outstanding Trust Preferred Securities for all semiannual distribution periods terminating on or prior thereto and (ii) no payment on account of the redemption, liquidation or other acquisition of Trust Common Securities shall be made unless the full amount of the Redemption Price for all of the outstanding Trust Preferred Securities then called for redemption or, in the case of amounts payable upon liquidation of the Trust in accordance with Section 8.2 hereof, assets in an amount equal to the Redemption Price for all outstanding Trust Preferred Securities shall have been made or provided for, and all funds available to the Property Trustee shall first be applied to the payment in full of, or the Redemption Price of, or all liquidation amounts on the Trust Preferred Securities then due and payable.

(e)Upon issuance of the Trust Securities as provided herein, the Trust Securities so issued shall be deemed to be validly issued, fully paid and non-assessable beneficial ownership interests in the assets of the Trust, subject to Section 9.1(b) with respect to the Trust Common Securities.

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

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

(h)The Holders of the Trust Securities shall have no preemptive rights.

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SECTION 7.2.  Distributions.

(a)Holders of Trust Securities shall be entitled to receive cumulative cash distributions at such times and in such amounts as the Trust receives cash payments from the Company on the Debentures and the Guarantee. If and to the extent that the Trust receives any such cash payments, the Trust shall and the Property Trustee is directed, to the extent funds are available for that purpose, to make a distribution of such cash payment on the Trust Preferred Securities and the Trust Common Securities on a Pro Rata basis.

(b)Distributions on the Trust Securities shall be payable only to the extent that the Trust has funds available for the payment of such distributions in the Property Account. Amounts available to the Trust for distribution to the Holders of the Trust Securities shall be limited to payments received by the Trust from the Company on the Debentures and the Guarantee. If the Property Trustee, as the holder of the Debentures for the benefit of the Holders of the Trust Securities, receives notice of any determination by the Company to defer interest on such Debentures, the Property Trustee shall give notice of such determination to the Holders promptly.

(c)All distributions on the Trust Securities shall be payable to the Holders thereof as they appear on the books and records of the Trust on the relevant record dates, which relevant record dates, as long as the Trust Preferred Securities remain in book-entry only form, shall be one Business Day prior to the relevant payment dates. In the event that the Trust Securities are issue in definitive form or if issued in book-entry form, do not remain in book-entry only form, the relevant record dates shall be determined by the Regular Trustees and shall be at least one Business Day before the relevant payment dates. All distributions shall be paid through the Property Trustee out of funds held in the Property Account for the benefit of the Holders of the Trust Securities. If distributions are not paid when scheduled, the accumulated distributions will be paid to the Holders of Trust Securities as they appear on the books and records of the Trust on the record date with respect to the payment date for the Trust Securities that corresponds to the payment date fixed by the Company with respect to the payment date for the Trust Securities that corresponds to the payment date fixed by the Company with respect to the payment of cumulative interest on the Debentures.

(d)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 Trust Securities.

SECTION 7.3.  Redemption of Trust Securities.

(a)Upon a redemption for cash of the Debentures by the Company, the proceeds from such redemption shall be simultaneously applied on a Pro Rata basis, except as otherwise provided in Section 7.1(d), to redeem Trust Securities having an aggregate liquidation amount equal to the aggregate liquidation preference of the Debentures so redeemed, at the Redemption Price on a Pro Rata basis. Holders shall be given not less than 30 nor more than 60 days’ notice of such redemption.

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(b)On any date fixed for distribution of Debentures upon dissolution of the Trust, (i) the Trust Securities shall no longer be deemed to be outstanding and (ii) certificates representing Trust Securities shall be deemed to represent their Pro Rata portion of the Debentures until such certificates are presented to the Sponsor or its agent for exchange for such securities.

SECTION 7.4.  Redemption Procedures.

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

(b)In the event that fewer than all the outstanding Trust Securities are to be redeemed, the Trust Securities to be redeemed shall be redeemed Pro Rata from each Holder of Trust Securities; provided that in respect of Trust Preferred Securities registered in the name of and held of record by DTC or its nominee (or any successor Depositary or its nominee) or any nominee, the distribution of the proceeds of such redemption shall be made to each Participant (or Person on whose behalf such nominee holds such securities) in accordance with the procedures applied by such agency or nominee. The Trust may not redeem the Trust Securities in part unless all accumulated and unpaid distributions to the date of redemption have been paid in full on all Trust Securities then outstanding. For all purposes of this Declaration of Trust, unless the context otherwise requires, all provisions relating to the redemption of Trust Preferred Securities shall relate, in the case of any Trust Preferred Security redeemed or to be redeemed only in part, to the portion of the aggregate liquidation amount of Trust Preferred Securities that has been or is to be redeemed.

(c)If Trust Securities are to be redeemed and the Trust gives a Redemption Notice (which notice shall be irrevocable), then (A) while the Trust Preferred Securities are in book-entry only form, by 12:00 noon, New York City time, on the redemption date, the Property Trustee shall deposit irrevocably with the DTC or its nominee (or successor Depositary or its nominee) funds sufficient to pay the applicable Redemption Price with respect to the Trust Preferred Securities and shall give the DTC irrevocable instructions and authority to pay the Redemption Price to the Holders of the Trust Preferred Securities, and (B) with respect to Trust Preferred Securities issued in definitive form and Trust Common Securities, the Property Trustee shall pay the relevant Redemption Price to the Holders of such Trust Securities by check mailed to the address of the relevant Holder appearing on the books and records of the Trust on the redemption date. If a Redemption Notice shall have been given and funds deposited as required, if applicable, then immediately prior to the close of business on the date of such deposit, or on the redemption date, as applicable, distributions shall cease to accumulate on the Trust Securities so called for redemption and all rights of Holders of such Trust Securities shall cease, except the

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right of the Holders of such Trust Securities to receive the Redemption Price, but without interest on such Redemption Price. If any date fixed for redemption of Trust Securities is not a Business Day, then payment of the Redemption Price payable on such date shall be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date fixed for redemption. If payment of the Redemption Price in respect of any Trust Securities is improperly withheld or refused and not paid either by the Property Trustee or by the Sponsor as guarantor pursuant to the relevant Guarantee, distributions on such Trust Securities shall 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 shall 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. Upon satisfaction of the foregoing conditions, then immediately prior to the close of business on the date of such deposit or payment, all rights of Holders of such Trust Preferred Securities so called for redemption shall cease, except the right of the Holders to received the Redemption Price, but without interest on such Redemption Price, and from and after the date fixed for redemption, such Trust Preferred Securities shall not accumulate distributions or bear interest.

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

SECTION 7.5.  Voting and Enforcement Rights of Trust Preferred Securities.

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

(b)The Holders of a Majority in liquidation amount of the Trust Preferred 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 of Trust, 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, including the right to enforce (x) the Company’s creditors rights and other rights with respect to the Debentures, (y) the rights of the Holders of the Debentures under the Indenture and (z) the rights of the Holders of the Debentures to receive interest payments on the Debentures; (ii) consent to any amendment, modification, or termination 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 Trust 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

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the aggregate stated liquidation amount of the Trust Preferred Securities which is at least equal to the percentage required under the Indenture may direct the Property Trustee to give such consent to take such action.

(c)If the Property Trustee fails to enforce its rights under the Indenture after a Holder of record of Trust Preferred Securities has made a written request, such Holder of record of Trust Preferred Securities may institute a legal proceeding directly against the Company to (i) enforce the Property Trustee’s rights under the Indenture or (ii) enforce the Property Trustee’s rights under the Guarantee, without first instituting any legal proceeding against the Property Trustee or any other Person or entity.

(d)Notwithstanding anything to the contrary in this Declaration of Trust, (i) if the Company fails to comply with its obligations under the Indenture, including its obligation under Section 1.7 of the Supplemental Indenture to issue Qualifying APM Securities (as defined therein), or (ii) if a Trust Enforcement Event has occurred and is continuing and such event is attributable to the failure of the Company to pay interest, principal or other required payments on the Debentures or the Guarantee on the date such interest, principal or other required payments are otherwise payable, then a Holder of Trust Preferred Securities may directly institute a proceeding against the Company (a “Direct Action”) for enforcement of such obligation or payment to such Holder of the principal of or interest on Debentures or the Guarantee having a principal amount equal to the aggregate liquidation amount of the Trust Preferred Securities of such Holder on or after the respective due date specified in the Debentures.

(e)The Property Trustee shall notify all Holders of the Trust 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.

(f)In the event that the consent of the Property Trustee, as the Holder of the Debentures, is required under the Indenture with respect to any amendment, modification or waiver of the Indenture, the Property Trustee shall request the direction of the Holders of the Trust Preferred Securities with respect to such amendment, modification or waiver and shall vote with respect to such amendment, modification or waiver as directed by not less than 66-2/3% of the aggregate liquidation amount of the Trust 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 Trust Preferred Securities.

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

(h)Any required approval or direction of Holders of Trust Preferred Securities may be given at a separate meeting of Holders of Trust Preferred Securities convened for such purpose, at a meeting of all of the Holders of Trust Securities or pursuant to written consent. The Regular Trustees shall cause a notice of any meeting at which Holders of Trust Preferred Securities are entitled to vote, or of any matter upon which action by written consent of

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such Holders is to be taken, to be mailed to each Holder of record of Trust 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.

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

(j)Notwithstanding that Holders of Trust Preferred Securities are entitled to vote or consent under any of the circumstances described above, any of the Trust Preferred Securities that are owned at such time by the Sponsor, any Regular Trustee or any of their Affiliates, shall not be entitled to vote or consent and shall, for purposes of such vote or consent, be treated as if such Trust Preferred Securities were not outstanding; provided, however, that Persons otherwise eligible to vote to whom the Sponsor or any of its subsidiaries have pledged Trust Preferred Securities may vote or consent with respect to such pledged Trust Preferred Securities under any of the circumstances described herein.

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

(l)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 Trust Preferred Securities.

SECTION 7.6.  Voting and Enforcement Rights of Trust Common Securities

(a)Except as provided under Section 6.1, this Section 7.6, 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 of Trust, the Holders of the Trust Common Securities shall have no voting rights.

(b)The Holders of the Trust Common Securities are entitled, in accordance with Sections 6.1(b) and 6.7(a) hereof, to vote to appoint, remove or replace any Trustee or to increase or decrease the number of Trustees.

(c)Subject to Section 2.6 hereof and only after all Trust Enforcement Events with respect to the Trust Preferred Securities have been cured, waived, or otherwise eliminated, the Holders of a Majority in liquidation amount of the Trust 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 of Trust, 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, including (A) the right to enforce the rights of the Holders of the Debentures under the Indenture or (B) consent to any amendment, modification or waiver of the Indenture or the

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Debentures where such consent shall be required or (iii) waive any past default and its consequences that is waivable under Section 513 of the Indenture; provided, however, that where a consent or action under the Indenture would require the consent or act of the Holders of more than a majority of the aggregate principal amount of Debentures affected thereby, only the Holders of the percentage of the aggregate stated liquidation amount of the Trust 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.

(d)If the Property Trustee fails to enforce its rights under the Indenture after a Holder of record of Trust Common Securities has made a written request (and is permitted to do so pursuant to Section 7.6(c)), such Holder of record of Trust Common Securities may directly institute a legal proceeding directly against the Company, 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 Company to make any required payment when due on the Debentures or on the Guarantee, then a Holder of Trust Common Securities may directly institute a proceeding against the Company for enforcement of payment with respect to such Debentures or the Guarantee.

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

(f)Any required approval or direction of Holders of Trust Common Securities may be given at a separate meeting of Holders of Trust Common Securities convened for such purpose, at a meeting of all of the Holders of Trust Securities or pursuant to written consent. The Regular Trustees shall cause a notice of any meeting at which Holders of Trust Common Securities are entitled to vote, or of any matter upon which action by written consent of such Holders is to be taken, to be mailed to each Holder of record of Trust Common 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.

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

(h)Notwithstanding that Holders of Trust Common Securities are entitled to vote or consent under any of the circumstances described above, if Trust Common Securities are voting together with the Trust Preferred Securities as a single class, any of the Trust Common Securities that are owned at such time by the Sponsor or any of its Affiliates, shall not be entitled to vote or consent and shall, for purposes of such vote or consent, be treated as if such Trust Common Securities were not outstanding; provided, however, that Persons otherwise eligible to vote to whom the Sponsor or any of its subsidiaries have pledged Trust Preferred Securities may vote or consent with respect to such pledged Trust Preferred Securities under any of the circumstances described herein.

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SECTION 7.7.  Paying Agent and Security Registrar.

(a)The Trust shall maintain in the Borough of Manhattan, City of New York, State of New York, (i) the Paying Agent’s office or agency where the Trust Preferred Securities may be presented for payment in the event that the Trust Preferred Securities are not in book-entry only form and (ii) an office or agency where the Trust Preferred Securities may be presented for registration of transfer or exchange (“Security Register”).

(b)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 any Holder. The Trust shall notify the Property Trustee of the name and address of any Paying Agent not a party to this Declaration of Trust. If the Trust fails to appoint or maintain another entity as Paying Agent, the Property Trustee shall act as such. The Trust or any of its Affiliates may act as Paying Agent. The Property Trustee shall initially act as Paying Agent for the Trust Preferred Securities and the Trust Common Securities.

(c)The Security Register shall initially be kept at the Corporate Trust Office of the Property Trustee. Subject to such reasonable regulations as it may prescribe, the Trust shall provide for the registration of Trust Preferred Securities and of transfers of Trust Preferred Securities. The Property Trustee shall initially act as Security Registrar (the “Security Registrar”) for the purpose of registering Trust Preferred Securities and transfers of Trust Preferred Securities as herein provided.

SECTION 7.8.  Certificates of Trust Securities.

(a)The Trust Preferred Securities may be issued in the form of one or more Global Certificates or in fully registered, definitive form as set forth in Section 7.12 hereof. If the Trust Preferred Securities are to be issued in the form of one or more Global Certificates, then the Regular Trustee on behalf of the Trust shall execute and the Property Trustee shall authenticate and deliver one or more Global Certificates that (i) shall represent and shall be denominated in an amount equal to the aggregate liquidation amount of all of the Trust Preferred Securities to be issued in the form of Global Certificates and not yet cancelled, (ii) shall be registered in the name of the Depositary for such Global Certificate or Trust 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 Certificates shall bear a legend as set forth in Section 7.12 hereof.

(b)Trust Preferred Securities Certificates that are no longer a component of Normal MCAPS and are released from the Collateral Account will be issued in the form of a Trust Preferred Security Certificate or Certificates representing a book-entry Trust Preferred Security Certificate, to be delivered to, or on behalf of the Depositary, by, or on behalf of, the Trust. Such Trust Preferred Security Certificate or Certificates shall initially be registered on the Securities Register in the name of Cede & Co., the nominee of the Depositary, and no Holder will receive a Trust Preferred Security Certificate in definitive form representing such Holder’s interest in such Trust Preferred Securities, except as provided in Sections 7.8(e) and 7.8(f).

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(c)A single Trust Common Securities Certificate representing the Trust Common Securities shall be issued to the Sponsor in the form of a definitive Trust Common Securities Certificate.

(d)Trust Preferred Securities not represented by a Global Certificate issued in exchange for all or a part of a Global Certificate pursuant to Section 7.12 hereof shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its Participant or Indirect Participants or otherwise, shall instruct the Property Trustee. Upon execution and authentication, the Property Trustee shall deliver such Trust Preferred Securities not represented by a Global Certificate to the Persons in whose names such definitive Trust Preferred Securities are so registered in the form of Trust Preferred Securities Certificates.

(e)If at any time the Depositary for any Trust Preferred Securities represented by one or more Global Certificates notifies the Trust that it is unwilling or unable to continue as Depositary for such Trust Preferred Securities or if at any time the Depositary for such Trust Preferred Securities shall no longer be eligible under this Section 7.8, the Trust shall appoint a successor Depositary with respect to such Trust Preferred Securities. If a successor Depositary for such Trust 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 Trust Preferred Securities be represented by one or more Global Certificates shall no longer be effective and the Trust shall execute, and the Property Trustee shall authenticate and deliver, Trust Preferred Securities in definitive registered form, in any authorized denominations, in an aggregate liquidation amount equal to the principal amount of the Global Certificate or Trust Preferred Securities representing such Trust Preferred Securities in exchange for such Global Certificate or Trust Preferred Securities.

(f)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 Certificates shall no longer be represented by a Global Certificate or Trust Preferred Securities. In such event the Trust shall execute, and the Property Trustee shall authenticate and deliver, Trust Preferred Securities in definitive registered form, in any authorized denominations, in an aggregate liquidation amount equal to the principal amount of the Global Certificate or Trust Preferred Securities representing such Preferred Securities, in exchange for such Global Certificate or Trust Preferred Securities.

(g)Notwithstanding any other provisions of this Declaration of Trust (other than the provisions set forth in Section 7.9 hereof), Global Certificates 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.

(h)Interests of beneficial owners in a Global Certificate may be transferred or exchanged for Trust Preferred Securities Certificates and Trust Preferred Securities Certificates may be transferred or exchange for Global Certificates in accordance with rules of the Depositary, the Applicable Procedures and the provisions of Section 7.9.

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SECTION 7.9.  Transfer of Trust Securities.

(a)Trust 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 VII, 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 Trust Preferred Securities and of transfers of Trust Preferred Securities. The Property Trustee is hereby appointed “Security Registrar” for the purpose of registering Trust Preferred Securities and transfers of Trust Preferred Securities as herein provided.

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

(f)Every Trust 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 Trust 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 Trust Securities, but the Trust may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Trust Securities.

(h)If the Trust Securities are to be redeemed in part, the Trust shall not be required (A) to issue, register the transfer of or exchange any Trust 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.

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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 Trust 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 Trust 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 Trust Preferred Securities will initially be issued in the form of definitive certificates registered in the name of the Stock Purchase Contract Agent. To the extent that Holders of Normal MCAPS create Treasury MCAPS and hold their Trust Preferred Securities separately, such Trust Preferred Securities may be issued in the form of one or more Global Securities. If Trust Preferred Securities are to be issued in the form of one or more Global Securities, then the Regular Trustee on behalf of the Trust shall execute and the Property Trustee shall authenticate and deliver one or more Global Securities that (i) shall represent and shall be denominated in an amount equal to the aggregate liquidation amount of all of the Preferred Securities to be issued in the form of Global Securities and not yet cancelled, (ii) shall be registered in the name of the Depositary for such Global Security or Trust 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 TRUST PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION OF TRUST HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST

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COMPANY, A NEW YORK CORPORATION (“DTC”), OR A NOMINEE OF DTC. THIS TRUST PREFERRED SECURITY IS EXCHANGEABLE FOR TRUST PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION OF TRUST. UNLESS THIS GLOBAL CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY TRUST PREFERRED SECURITY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. (“CEDE”) OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE, HAS AN INTEREST HEREIN.”

Trust 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 Trust Preferred Securities not represented by a Global Security to the Persons in whose names such definitive Trust 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 Trust Preferred Securities not represented by a Global Security, redeemed, cancelled or transferred to a transferee who receives Trust Preferred Securities not represented by a Global Security therefor or any Trust 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.

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

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If at any time the Depositary for any Trust Preferred Securities represented by one or more Global Securities notifies the Trust that it is unwilling or unable to continue as Depositary for such Trust Preferred Securities or if at any time the Depositary for such Trust 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 Trust 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 Trust 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, Trust 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 Trust Preferred Securities representing such Trust Preferred Securities in exchange for such Global Security or Trust Preferred Securities.

The Trust may at any time and in its sole discretion determine that the Trust Preferred Securities issued in the form of one or more Global Securities shall no longer be represented by a Global Security or Trust Preferred Securities. In such event the Trust shall execute, and the Property Trustee, shall authenticate and deliver, Trust 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 Trust Preferred Securities, in exchange for such Global Security or Preferred Securities.

Notwithstanding any other provisions of this Declaration of Trust (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 Trust Preferred Securities not represented by a Global Security and Trust 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.

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ARTICLE VIII

DISSOLUTION AND LIQUIDATION OF THE 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 Trust Common Securities or the Sponsor;

(ii)the filing of a certificate of dissolution or its equivalent with respect to the Sponsor 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 filing of a certificate of cancellation with respect to the Trust after having obtained the consent of at least a Majority in Liquidation Amount of the Trust Securities, voting together as a single class, to file such certificate of cancellation, with respect to the Trust;

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

(v)the time when all of the Trust Securities shall have been called for redemption and the amounts necessary for redemption thereof shall have been paid to the Holders in accordance with the terms of the Trust Securities;

(vi)upon the election of the Regular Trustees, following the occurrence and continuation of a Special Event; provided that the Trust shall have been dissolved and the Debentures distributed to the Holders of the Trust Securities in exchange for the Trust Securities; or

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

(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 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 3.9 and Article IX shall survive the termination of the Trust.

SECTION 8.2.  Liquidation Distribution Upon Dissolution and Termination of the Trust.

(a)In the event of any voluntary or involuntary liquidation, dissolution, winding-up or termination of the Trust (a “Liquidation”), the Holders of the Trust Securities on the date of the Liquidation shall be entitled to receive all assets of the Trust available for

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distribution to Holders of Trust Securities after satisfaction of the Trust’s 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 $1,000 per Trust 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 Trust Securities shall be distributed on a Pro Rata basis to the Holders of the Trust Securities in exchange for such Trust 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 Trust Securities shall be paid on a Pro Rata basis. The Holders of the Trust Common Securities will be entitled to receive distributions upon any such Liquidation Pro Rata with the Holders of the Trust Preferred Securities except that if an Indenture Event of Default has occurred and is continuing, the Trust Preferred Securities shall have a preference over the Trust Common Securities with regard to such distributions.

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ARTICLE IX

LIMITATION OF LIABILITY OF
HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS

SECTION 9.1.  Liability.

(a)Except as expressly set forth in this Declaration of Trust, the Guarantee and the terms of the Trust Securities, the Sponsor and the Trustees shall not be:

(i)personally liable for the return of any portion of the capital contributions (or any return thereon) of the Holders of the Trust Securities, which shall be made solely from assets of the Trust; and

(ii)required to pay to the Trust or to any Holder of Trust 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 Trust 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, that the Holders of the Trust Common Securities, by entering into this Agreement, shall be liable directly to any creditor or claimant of or against the Trust for the entire amount of all of the debts and obligations of the Trust (other than obligations to the Holders of Trust Securities in their capacities as Holders) 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 Trust Preferred Securities shall be entitled to the same limitation of personal liability extended to shareholders of private corporations for profit organized under the General Corporation Law of the State of Delaware.

SECTION 9.2.  Exculpation.

(a)No Company 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 Company Indemnified Person in good faith on behalf of the Trust and in a manner such Company Indemnified Person reasonably believed to be within the scope of the authority conferred on such Company Indemnified Person by this Declaration of Trust or by law, except that a Company Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Company Indemnified Person’s gross negligence (or, in the case of the Property Trustee, 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

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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 Trust 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 of Trust shall not be liable to the Trust or to any other Covered Person for its good faith reliance on the provisions of this Declaration of Trust. The provisions of this Declaration of Trust, 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 an Indemnified Person and any Covered Person; or

(ii)whenever this Declaration of Trust 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 Trust Securities,

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

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SECTION 9.4.  Indemnification.

(a)To the fullest extent permitted by applicable law, the Sponsor shall indemnify and hold harmless any Company 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 Company Indemnified Person against expenses (including attorneys’ 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 Company 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.

(i)The Sponsor shall indemnify, to the fullest extent permitted by law, any Company 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 Company Indemnified Person against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Trust and except that no such indemnification shall be made in respect of any claim, issue or matter as to which such Company 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.

(ii)To the extent that a Company Indemnified Person shall be successful on the merits or otherwise (including dismissal of an action without prejudice or the settlement of an action without admission of liability) in defense of any action, suit or proceeding referred to in paragraphs (i) and (ii) of this Section 9.4(a), or in defense of any claim, issue or matter therein, he shall be indemnified, to the fullest extent permitted by law, against expenses (including attorneys’ fees) actually and reasonably, incurred by him in connection therewith.

(iii)Any indemnification under paragraphs (i) and (ii) of this Section 9.4(a) (unless ordered by a court) shall be made by the Sponsor only as authorized in the specific case upon a determination that indemnification of the Company 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

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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 Holder of the Trust Common Securities.

(iv)Expenses (including attorneys’ fees) incurred by a Company 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 Sponsor in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Company Indemnified Person to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Sponsor as authorized in this Section 9.4(a). Notwithstanding the foregoing, no advance shall be made by the Sponsor 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 Holder of the Trust Common Securities, that, based upon the facts known to the Regular Trustees, counsel or the Holder of the Trust Common Securities at the time such determination is made, such Company 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 Company 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 Holder of the Trust Common Securities reasonably determine that such Person deliberately breached his duty to the Holders of Trust Common Securities or the Holders of Trust Preferred Securities.

(v)The indemnification and advancement of expenses provided by, or granted pursuant to, the other paragraphs of this Section 9.4(a) shall not be deemed exclusive of any other rights to which those seeking indemnification and advancement of expenses may be entitled under any agreement, vote of shareholders or disinterested directors of the Sponsor or Holders of the Trust Preferred Securities 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 Sponsor and each Company 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 Sponsor or the Trust may purchase and maintain insurance on behalf of any Person who is or was a Company 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 Sponsor 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

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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 Company Indemnified Person and shall inure to the benefit of the heirs, executors and administrators of such a Person.

(b)The Sponsor agrees to indemnify the (i) Property Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee and the Delaware Trustee, and (iv) any officers, directors, shareholders, members, partners, employees, representatives, custodians, nominees or agents of the Property Trustee and 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, damage, claim, liability or expense including taxes (other than taxes based on the income of the Trustee) incurred without negligence or bad faith on the part of the Trustee arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses (including reasonable legal fees and expenses) of defending itself against or investigating any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The obligation to indemnify as set forth in this Section 9.4(b) shall survive the satisfaction and discharge of this Declaration of Trust.

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 business of the Trust, and the Trust and the Holders of Trust Securities shall have no rights by virtue of this Declaration of Trust 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 business of the Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware Trustee, nor 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.

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ARTICLE X

ACCOUNTING AND TAX MATTERS

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 or the Treasury Regulations.

SECTION 10.2.  Certain Accounting Matters; Returns and Information.

(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 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)Within 60 days after December 31 of each year, the Property Trustee shall provide to the Holders of the Trust 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.

(c)The Regular Trustees shall cause to be duly prepared and delivered to each of the Holders of Trust Securities, any annual United States federal income tax information statement required by the Code containing such information with regard to the Trust 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.

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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 (or beneficial owner of Trust Securities), 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 or beneficial owner of Trust Securities, shall remit amounts withheld with respect to the Holder or beneficial owner 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 or beneficial owner, the amount withheld shall be deemed to be a distribution in the amount of the withholding to such Holder or beneficial owner. In the event of any claimed over-withholding, Holders or beneficial owners 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 to such Holder or beneficial owner by the amount of such withholding.

SECTION 10.5.  Treatment as Grantor Trust for Federal Income Tax Purposes.

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 of Trust shall be interpreted to further this intention of the parties. Holders of Trust Securities by virtue of accepting delivery thereof, agree that the arrangement created by this Declaration of Trust shall be treated as a grantor trust under Subpart E of the Code, for United States federal income tax purposes and that the Trustees shall be authorized to take any action consistent with such treatment. Neither the Trustee, nor any other Person shall make any check-the-box election for the Trust to be treated as an association under Treas. Reg. § 301.7701-3 or take any other action inconsistent with the treatment of the Trust as a grantor trust for United States federal income tax purposes.

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ARTICLE XI

AMENDMENTS AND MEETINGS

SECTION 11.1.  Amendments of this Declaration of Trust.

(a)Except as otherwise provided in this Declaration of Trust or by any applicable terms of the Trust Securities, this Declaration of Trust 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);

(ii)the Property Trustee, if the amendment affects the rights, powers, duties, obligations or immunities of the Property Trustee; and

(iii)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 of Trust (including the terms of the Trust Securities);

(ii)unless, in the case of any proposed amendment that affects the rights, powers, duties, obligations or immunities of the Property Trustee, the Property Trustee shall have first received an Officers’ Certificate from each of the Trust and Sponsor and opinion of counsel (who may be counsel to the Sponsor or the Trust), in each case stating that such amendment is permitted by, and conforms to, the terms of this Declaration of Trust (including the terms of the Trust 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 fail to continue to be classified as a grantor trust for purposes of United States federal income tax purposes;

(B)reduce or otherwise adversely affect the rights, powers, duties, obligations or immunities of the Property Trustee in contravention of the Trust Indenture Act;

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

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(c)Any amendment that would (i) change the amount or timing of any distribution of the Trust Securities or otherwise adversely affect the amount of any distribution required to be made in respect of the Trust Securities as of a specified date or (ii) restrict the right of a Holder of Trust Securities to institute suit for the enforcement of any such payment on or after such date, may be effected only with the approval of each of the Holders of the Trust Securities affected thereby (excluding any Trust Securities held by the Sponsor of any of its Affiliates).

(d)Any amendment that would adversely affect the rights, preferences or privileges of the Trust Securities, including any amendment of this Section 11.1, or (ii) provide for the dissolution, winding-up or termination of the Trust other than pursuant to the terms of this Declaration of Trust, may be effected only with the approval of the Holders of at least 66 2/3% in Liquidation Amount of the Trust Securities affected thereby (except in the case of an amendment affecting only Trust Common Securities, excluding any Trust Securities held by the Sponsor of any of its Affiliates); provided that if any amendment or proposal referred to in clause (i) hereof would adversely affect only the Trust Preferred Securities or the Trust Common Securities, then only the affected class (excluding any Trust Preferred Securities held by the Sponsor of any of its Affiliates) shall be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of 66 2/3% in Liquidation Amount of such class of Trust Securities.

(e)Section 9.1(c) shall not be amended without the consent of all of the Holders of the Trust Securities.

(f)Article VI and the rights of the Holders of the Trust Common Securities under Article VI to increase or decrease the number of, and appoint and remove, Trustees shall not be amended without the consent of the Holders of 66 2/3%in Liquidation Amount of the Trust Common Securities.

(g)Notwithstanding Section 11.1(d), this Declaration of Trust may be amended by the Sponsor without the consent of the Holders of the Trust Securities to:

(i)cure any ambiguity or to correct or supplement any provision in this Declaration of Trust that may be defective or inconsistent with any other provision of this Declaration of Trust;

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

(iii)comply with the requirements of the Commission in order to effect or maintain qualification of this Declaration of Trust under the Trust Indenture Act or ensure that the Trust is not required to register as an investment company under the Investment Company Act;

(iv)modify, eliminate and add to any provision of this Declaration of Trust to such extent as may be deemed necessary or desirable by the Sponsor; provided that such modification, elimination or addition does not have a material adverse effect on the rights, preferences or privileges of the Holders of the Trust Securities; or

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(v)conform the terms of this Declaration of Trust to the terms of the Trust Securities as set forth in the Prospectus dated May 8, 2007 of the Trust and the Company relating to the Trust Preferred Securities (the “Prospectus”); provided, however, that in connection with such amendment, each of the Sponsor and the Trust shall deliver to the Property Trustee an Officers’ Certificate and an opinion of counsel (who may be counsel to the Sponsor or the Trust), in each case confirming that such amendment has the effect of conforming the terms of this Declaration of Trust to the terms of the Trust Securities as set forth in the Prospectus.

(h)In the event that the consent of the Property Trustee, as the Holder of the Debentures, is required under the Indenture with respect to any amendment, modification or waiver of the Indenture, the Property Trustee shall request the direction of the Holders of the Trust Preferred Securities with respect to such amendment, modification or waiver and shall vote with respect to such amendment, modification or waiver as directed by a Majority in Liquidation Amount of the Trust Preferred 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 a simple majority 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 Trust Preferred Securities.

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

(a)Meetings of the Holders of any class of Trust Securities may be_. called at any time by the Regular Trustees (or as provided in the terms of the Trust Securities) to consider and act on any matter on which Holders of such class of Trust Securities are entitled to act under the terms of this Declaration of Trust, the terms of the Trust Securities, the rules of any stock exchange on which the Trust Preferred Securities are listed or admitted for trading, the Statutory Trust Act or other applicable law. 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 Trust 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 Trust Securities wish to call a meeting and indicating the general or specific purpose for which the meeting is to be called. Any Holders of Trust Securities calling a meeting shall specify in writing the Certificates held by the Holders of Trust Securities exercising the right to call a meeting and only those Trust 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 Trust Securities, the following provisions shall apply to meetings of Holders of Trust Securities:

(i)notice of any such meeting shall be given to all the Holders of Trust Securities having a right to vote thereat at least seven days and not more than 60 days before the date of such meeting. Whenever a vote, consent or approval of the Holders of Trust Securities is permitted or required under this Declaration of Trust, such vote, consent or approval may be given at a meeting of the Trust Securities. Any action that may be taken at a meeting of the Holders of Trust Securities may be taken without a meeting if a consent in writing setting forth the action so taken is signed by the Holders

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of Trust Securities owning not less than the minimum amount of Trust Securities that would be necessary to authorize or take such action at a meeting at which all Holders of Trust Securities having a right to vote thereon were present and voting. Prompt notice of the taking of action without a meeting shall be given to the Holders of Trust Securities entitled to vote who have not consented in writing. The Regular Trustees may specify that any written ballot submitted to the Holder 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 Trust Security may authorize any Person to act for it by proxy on all matters in which a Holder of Trust 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 Trust Securities executing it. 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 Trust Securities were shareholders of a Delaware corporation;

(iii)each meeting of the Holders of the Trust 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 of Trust, the terms of the Trust Securities, the Trust Indenture Act otherwise provides, the Regular Trustees, in their sole discretion, shall establish all other provisions relating to meetings of Holders of Trust 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 Trust 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.

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ARTICLE XII

REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE

SECTION 12.1.  Representations and Warranties of 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 of Trust, and each Successor Property Trustee represents and warrants to the Trust and the Sponsor at the time of the Successor Property Trustee’s acceptance of its appointment as Property Trustee that:

(a)the Property Trustee is a national banking association with trust powers, 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, the Declaration of Trust;

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

(c)the execution, delivery and performance by the Property Trustee of the Declaration of Trust have been duly authorized by all necessary corporate action on the part of the Property Trustee. The Declaration of Trust 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 the Declaration of Trust by the Property Trustee does not conflict with or constitute a breach of the Articles of Organization or By-laws (or other similar organizational documents) of the Property Trustee;

(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 the Declaration of Trust; and

(f)the Property Trustee, pursuant to this Declaration of Trust, shall hold legal title to, and valid ownership interest on behalf of the Holders of the Trust Securities, in the Debentures and agrees that, except as expressly provided or contemplated by this Agreement, it shall not create, incur or assume, or suffer to exist any mortgage, pledge, hypothecation, encumbrance, lien or other charge or security interest upon the Debentures.

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SECTION 12.2.  Representations and Warranties of 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 of Trust, 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 is a national banking association with trust powers, duly organized, validly existing ^.and in good standing under the laws of the jurisdiction of its incorporation or organization, with power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, the Declaration of Trust.

(b)The Delaware Trustee has been authorized to perform its obligations under the Certificate of Trust and the Declaration of Trust. The Declaration of Trust 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).

(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 the Declaration of Trust.

(d)The Delaware Trustee is an entity which has its principal place of business in the State of Delaware.

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ARTICLE XIII
REMARKETING AND RESET RATE MECHANICS

SECTION 13.1.  Obligation to Conduct Remarketing and Related Requirements

(a)The Sponsor and the Property Trustee (on behalf of the Trust) shall appoint the Remarketing Agent and enter into a Remarketing Agreement prior to the first Remarketing to effect the Remarketing of the Trust Preferred Securities upon the terms, conditions and other provisions to substantially the following effect:

(i)provide that that the Sponsor and the Remarketing Agent agree to use commercially reasonable efforts to effect the Remarketing of the Trust Preferred Securities as described in this Article XIII and Section 2 of the Supplemental Indenture;

(ii)provide that the Remarketing Fee for the Remarketing will be as agreed among the Sponsor, the Trust and the Remarketing Agent and set forth in the Remarketing Agreement.

(iii)provide that the Remarketing Agent will deduct the Remarketing Fee from the proceeds of the Remarketing and remit any proceeds remaining after such deduction to or at the direction of the Property Trustee, who will apply such proceeds (or will have given the Remarketing Agent instructions to remit such proceeds in a manner that will result in their application) as follows (allocated to the Trust Preferred Securities that participated in the Remarketing on a pro rata basis in proportion to their liquidation amounts):

(a)to the extent such proceeds relate to Trust Preferred Securities that are a part of Normal MCAPS, to pay such proceeds up to the aggregate liquidation amount of such Trust Preferred Securities to the Collateral Agent for application in accordance with the Stock Purchase Contract Agreement and to pay the balance, if any, to the applicable selling Holders; and

(b)to the extent the proceeds relate to Separate Trust Preferred Securities, to pay such proceeds to the applicable selling Holders.

(b)On any day other than the last day of a Remarketing Period, the Sponsor shall have the right, in its absolute discretion and without prior notice to the Holders, to postpone the Remarketing until the following Business Day.

SECTION 13.2.  Company Decisions in Connection with Remarketing.

In connection with Remarketings, the Company shall have the right under Section 2 of the Supplemental Indenture to make changes in certain terms of the Debentures underlying the Trust Preferred Securities, without the consent of any Holder of the Trust Preferred Securities. By not later than the 21st day prior to the first day of each Remarketing Period, the Sponsor will specify the following information or decisions in a notice to the Remarketing Agent, the Property Trustee (on behalf of the Trust), the Indenture Trustee and the Stock

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Purchase Contract Agent (clauses (a) through (e) applying only if the Remarketing is Successful and clause (f) applying only in the case of a Failed Remarketing):

(a)whether the Stated Maturity Date of the Debentures underlying the Trust Preferred Securities will remain at June 1, 2043 or will be changed to an earlier date (specifying such date if applicable);

(b)whether the date after which the Debentures (and, accordingly, the Trust Preferred Securities) will be redeemable at the Sponsor’s option will be changed and whether the redemption price or prices will be changed;

(c)whether, in connection with an Early Remarketing that is not the first scheduled Remarketing, the Company is exercising its right under Section 2 of the Indenture to cause the subordination provisions in the Indenture and the Guarantee Agreement to cease to apply to the Debentures from and after the Remarketing Settlement Date , if the Remarketing is Successful, and if so, whether it also elects that the Debentures shall no longer be subject to the interest deferral provisions of Section 1.6 of the Indenture;

(d)whether the Debentures will be remarketed as fixed rate notes or floating rate notes;

(e)if the Debentures will be remarketed as floating rate notes, the applicable index and the interest payment dates and manner of calculation of interest on the Debentures (and, accordingly, the Trust Preferred Securities), which the Company may change to correspond with the market conventions applicable to notes bearing interest at rates based on the applicable index; and

(f)whether following a Failed Remarketing:

(i)the Stated Maturity Date will remain at June 1, 2043 or will be changed to an earlier date; and

(ii)the date after which the Debentures (and, accordingly, the Trust Preferred Securities) will be redeemable at the Company’s option will be changed and the redemption price or prices will be changed;

SECTION 13.3.  Reset of Interest Rate on Debentures in Connection with Remarketings and Related Changes in Terms.

(a)As part of and in connection with each Remarketing, the Remarketing Agent shall determine the interest rate on the Debentures (and, accordingly, the Distribution Rate on the Trust Preferred Securities), subject to Sections 13.3(b) through (e), pursuant to the Remarketing Agreement and in accordance with the other provisions of this Article XIII, that will apply to all outstanding Trust Preferred Securities (whether or not sold in the Remarketing) if such Remarketing is Successful commencing on or after the  Remarketing Settlement Date.

(b)If the Remarketing has been determined to be Successful in accordance with Section 13.5(a), by approximately 4:30 P.M., New York City time, on the date of such

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Successful Remarketing, the Remarketing Agent shall notify the Sponsor, the Property Trustee (on behalf of the Trust), the Indenture Trustee and the Stock Purchase Contract Agent that the Remarketing was Successful and the Reset Rate or Reset Spread determined as part of such Remarketing in accordance with this Article XIII and Section 2 of the Supplemental Indenture.

(c)If a Remarketing is Successful, then commencing with the related Remarketing Settlement Date the interest rate on the Debentures (and, accordingly, the Distribution Rate on the Trust Preferred Securities) shall be reset to the rate, determined in accordance with this Article XIII and Section 2 of the Supplemental Indenture pursuant to such Remarketing and the other changes, if any, in the terms of the Debentures and the Trust Preferred Securities as notified by the Sponsor pursuant to Section 13.2, shall become effective in accordance with this Article XIII (or in accordance with the Indenture in the case of the Debentures).

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

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

(ii)the interest rate on the Debentures (and, accordingly, the Distribution Rate on the Trust Preferred Securities) will remain unchanged unless and until it is reset pursuant to a subsequent Remarketing in accordance with this Article XIII and Section 2 of the Supplemental Indenture;

(iii)the other changes, if any, in the terms of the Debentures and the Trust Preferred Securities, as applicable, as notified by the Sponsor pursuant to Section 13.2, shall not become effective (whether pursuant to this Agreement in the case of the Trust Preferred Securities or pursuant to the Indenture in the case of the Debentures); and

(iv)the Sponsor, the Trust and the Remarketing Agent shall attempt another Remarketing during the next Remarketing Period.

(e)Upon the occurrence of a Failed Remarketing:

(i)no Trust Preferred Securities will be sold in such Remarketing and no further attempts at Remarketing shall be made;

(ii)the interest rate on the Debentures (and, accordingly, the Distribution Rate on the Trust Preferred Securities) will be reset to a quarterly floating rate set forth in Section 2 of the Supplemental Indenture.

(iii)the other changes, if any, in the terms of the Debentures and the Trust Preferred Securities as notified by the Sponsor pursuant to clauses (a) through (e) of the second sentence of Section 13.2 shall not become effective (whether pursuant to this Agreement in the case of the Trust Preferred Securities or pursuant to the Indenture in the case of the Debentures);

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(iv)the stated maturity date of the Debentures and early redemption date for the Debentures and Trust Preferred Securities will change in accordance with clause (f) of the second sentence of Section 13.2, as applicable;

(v)in the case of Trust Preferred Securities that are included in Normal MCAPS, such Trust Preferred Securities will be applied in satisfaction of the Holders’ obligations under Stock Purchase Contracts in accordance with the Collateral Agreement; and

(vi)in the case of Separate Trust Preferred Securities, such Trust Preferred Securities will be returned to the related Holders in accordance with the Collateral Agreement.

SECTION 13.4.  Early Remarketing.

If an Early Remarketing Event occurs prior to the Stock Purchase Date, the Remarketing Periods shall be the five Business Day periods commencing on the seventh Business Day prior to the Remarketing Settlement Date (or if any such day is not a business day, the immediately preceding business day) that is at least 30 days after the occurrence of such Early Remarketing Event, and concluding with the earlier to occur of the fifth such date and a Successful Remarketing, and if the Remarketing conducted on such date is not Successful, it shall be a Failed Remarketing and the Stock Purchase Date shall be the next succeeding Remarketing Settlement Date  (or if such day is not a Business Day, the next Business Day).

SECTION 13.5.  Remarketing Procedures.

(a)The Sponsor will give notice to the Property Trustee of a Remarketing at least 28 days prior to the first day of the related Remarketing Period. Upon written instruction of the Sponsor, the Property Trustee will give holders of MCAPS or Trust Preferred Securities, and will request that the Depositary give to its participants holding MCAPS or Trust Preferred Securities, and the Stock Purchase Contract Agreement provides that the Stock Purchase Agent will give Holders (as defined therein) of MCAPS, notice of a Remarketing at least 21 calendar days prior to the first day of the related Remarketing Period. Such notices will set forth:

(i)the beginning and ending dates of the Remarketing Period and the applicable Remarketing Settlement Date and Stock Purchase Date in the event the Remarketing is successful;

(ii)the applicable distribution dates and record dates for cash distributions on the Debentures  (and accordingly, on the Trust Preferred Securities) the applicable reference rate if the company is electing a floating rate an any changes in the method of computation of the amount of distributions;

(iii)any change to the stated maturity date of the Debentures and, if applicable, the date on and after which the Company will have the right to redeem the Debentures (which is subject to Section 2 of the Supplemental Indenture);

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(iv)whether, in connection with an Early Remarketing that is not the first scheduled Remarketing, or any other Remarketing after a Remarketing that is not successful during the first scheduled Remarketing Period, whether the Company’s obligations under the Debentures and the Guarantee Agreement will remain subordinated to Senior Debt (as defined in the Supplemental Indenture) after the Remarketing Settlement Date;

(v)any other changes in the terms of the Debentures or the Trust Preferred Securities notified by the Sponsor in connection with such Remarketing pursuant to Section 13.2 (including on a Final Remarketing that is a Failed Remarketing, any change in the stated maturity date of the Debentures and, if applicable, the date on or after which the Sponsor will have the right to redeem the Debentures (resulting in a redemption by the Trust of the Trust Preferred Securities), which is subject to Section 8.2);

(vi)the procedures a beneficial owner must follow if it holds its Trust Preferred Securities as a component of Normal MCAPS to elect not to participate in the Remarketing and the date by which such election must be made; and

(vii)the procedures a beneficial owner must follow if it holds Separate Trust Preferred Securities to elect to participate in the Remarketing and the date by which such election must be made;

(b)On any Remarketing Date, all outstanding Trust Preferred Securities included in Normal MCAPS will be tendered or deemed tendered to the Remarketing Agent for Remarketing unless the Holder thereof elects not to participate in the Remarketing. Each Holder of Trust Preferred Securities included in Normal MCAPS, by purchasing such Normal MCAPS agrees to have such Trust Preferred Securities remarketed on any Remarketing Date (unless such Holder elects not to participate in the Remarketing as provided herein) and authorizes the Remarketing Agent to take any and all action on its behalf necessary to effect the Remarketing. On any Remarketing Date, each Holder of Trust Preferred Securities included in Normal MCAPS will have the right to elect not to have its Trust Preferred Securities remarketed by giving notice and taking the other actions provided for in Section 5 of the Collateral Agreement.

(c)Each Holder of Separate Trust Preferred Securities may elect to have such Holder’s Separate Trust Preferred Securities remarketed in any Remarketing. A Holder making such an election must, pursuant to the Collateral Agreement, notify the Collateral Agent and deliver such Separate Trust Preferred Securities to the Collateral Agent on or prior to 5:00 P.M., New York City time, on or prior to the second Business Day immediately preceding the beginning of any Remarketing Period (but no earlier than the Distribution Date immediately preceding the applicable Remarketing Date). Any such notice and delivery may not be conditioned upon the level at which the Reset Rate or the Reset Spread, as applicable, is established in the Remarketing or any other condition. Any such notice and delivery may be withdrawn on or prior to 5:00 P.M., New York City time, on the second Business Day immediately preceding the beginning of any Remarketing Period in accordance with the provisions set forth in the Collateral Agreement. Any such notice and delivery not withdrawn by such time will be irrevocable with respect to such Remarketing. Pursuant to Section 5.7(c) of the Collateral Agreement, promptly after 11:00 A.M., New York City time, on the first Business

72

Day immediately preceding the beginning of any Remarketing Period, the Collateral Agent, based on the notices and deliveries received by it prior to such time, shall notify the Remarketing Agent of the liquidation amount of Separate Trust Preferred Securities to be tendered for Remarketing and shall cause such Separate Trust Preferred Securities to be presented to the Remarketing Agent.

(d)If the Remarketing on a Remarketing Date is Successful, then the Remarketing Agent shall deduct the Remarketing Fee to which it is entitled as provided in Section 13.1 and the related Remarketing Agreement from the proceeds of such Remarketing and remit the remaining proceeds to the Property Trustee in accordance with Section 13.1(a)(iii) for application as provided therein.

(e)If by 4:00 P.M., New York City time, on any Business Day during a Remarketing Period the Remarketing Agent has found buyers for all of the Trust Preferred Securities offered in the Remarketing in accordance with this Article XIII, a “Successful” Remarketing shall be deemed to have occurred. In the event of a Successful Remarketing, the Sponsor shall issue a press release through Bloomberg Business News or other reasonable means of distribution stating that such Remarketing was Successful and specifying the Reset Rate or Reset Spread and shall post such information on its website on the World Wide Web.

(f)If, by 4:00 P.M., New York City time, on the last day of any Remarketing Period the Remarketing Agent is unable to find buyers for all of the Trust Preferred Securities offered in such Remarketing, including any Remarketing that would qualify as a Final Remarketing, in accordance with this Article XIII, an “Unsuccessful” Remarketing shall be deemed to have occurred. In the event of an Unsuccessful Remarketing, the Sponsor shall issue a press release through Bloomberg Business News or other reasonable means of distribution stating that such Remarketing was an Unsuccessful Remarketing, and publish such information on its website on the World Wide Web.

(g)If on any Business Day during a Remarketing Period other than the last day thereof the Sponsor has determined to postpone the Remarketing until the next Business Day, the Sponsor shall issue a press release through Bloomberg Business News or other reasonable means of distribution stating that such Remarketing has been postponed and shall post such information on its website on the World Wide Web.

(h)The right of each Holder (whether of Separate Trust Preferred Securities or of Trust Preferred Securities included in Normal MCAPS) to have its Trust Preferred Securities remarketed and sold in connection with any Remarketing shall be limited to the extent that (i) the Remarketing Agent conducts a Remarketing pursuant to the terms of the Remarketing Agreement, (ii) the Remarketing Agent is able to find a purchaser or purchasers for the Trust Preferred Securities offered in the Remarketing in accordance with this Article XIII and the Remarketing Agreement, and (iii) the purchaser or purchasers deliver the purchase price therefor to the Remarketing Agent as and when required.

(i)Neither the Property Trustee, the Sponsor nor the Remarketing Agent shall be obligated in any case to provide funds to make payment upon tender of Trust Preferred Securities for remarketing.

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ARTICLE XIV

OTHER MCAPS RELATED PROVISIONS

SECTION 14.1.  Agreed Tax Treatment.

Each Holder of Trust Preferred Securities agrees, by acceptance of Trust Preferred Securities, and each Owner agrees, by acceptance of a beneficial interest in Trust Preferred Securities, to treat for all U.S. federal income tax purposes (i) the Trust as one or more grantor trusts or agency arrangements, (ii) itself as the owner of the Stock Purchase Contracts and the related ownership interest in the Trust Preferred Securities or treasury securities pledged under the Collateral Agreement, as the case may be, (iii) the Debentures as indebtedness of the Sponsor, and (iii) the fair market value of each $1,000 liquidation amount of the Trust Preferred Securities included in Normal MCAPS as $1,000 and the fair market value of each Stock Purchase Contract as $0.

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ARTICLE XV

MISCELLANEOUS

SECTION 15.1.  Notices.

All notices provided for in this Declaration of Trust 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 Holders of the Trust Securities):

c/o Lehman Brothers Holdings Inc.

745 Seventh Avenue
New York, New York 10019
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 other Trustees):

U.S. Bank Trust National Association
300 Delaware Avenue

9^th Floor, EX-AE-WDAW

Wilmington, Delaware 19801
Attention:  Corporate Trust Services

Facsimile:  (302) 576-3717

(c)if given to the Property Trustee, at its Corporate Trust Office to the attention of Earl Dennison (or such other address as the Property Trustee may give notice of to the Holders of the Trust Securities and the other Trustee)

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

Lehman Brothers Holdings Inc.

745 Seventh Avenue
New York, New York 10019
Attention: Corporate Counsel

Facsimile:  (212) 526-0339

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

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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 15.2.  Governing Law.

This Declaration of Trust and the rights of the parties hereunder shall be governed by and construed in accordance with the internal laws of the State of Delaware and all rights and remedies shall be governed by such laws without regard to principles of conflict of laws.

SECTION 15.3.  Headings.

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

SECTION 15.4.  Successors and Assigns.

Whenever in this Declaration of Trust 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 of Trust by the Sponsor and the Trustees shall bind and inure to the benefit of their respective successors and assigns, whether so expressed.

SECTION 15.5.  Partial Enforceability.

If any provision of this Declaration of Trust, or the application of such provision to any Person or circumstance, shall be held invalid, the remainder of this Declaration of Trust, 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 15.6.  Counterparts.

This Declaration of Trust may contain more than one counterpart of the signature page and this Declaration of Trust may be executed by the affixing of the signature of each of the Trustees and a duly Authorized Officer of the Sponsor 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.

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

/s/ Barrett S. DiPaolo
Barrett S. DiPaolo, as Regular Trustee
/s/ Andrew Yeung
Andrew Yeung, as Regular Trustee
/s/ James Killerlane
James Killerlane, as Regular Trustee
U.S. Bank Trust National Association,
as Delaware Trustee
By:	/s/ Earl Dennison
	Name:
	Title:
U.S. Bank National Association,
as Property Trustee
By:	/s/ Earl Dennison
	Name:
	Title:
Lehman Brothers Holdings Inc.,
as Sponsor
By:	/s/ Barrett S. DiPaolo
	Name: Barrett S. DiPaolo
	Title: Vice President

EXHIBIT A-1

FORM OF GLOBAL TRUST PREFERRED SECURITY CERTIFICATE

[Intentionally left blank]

PS-[    ]

CUSIP No. 52521KAB2

Certificate Evidencing Trust Preferred Securities

of

LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VII

$

Trust Preferred Securities
(Liquidation Amount $1,000 per Trust Preferred Security)

THIS TRUST PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION OF TRUST HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), OR A NOMINEE OF DTC. THIS TRUST PREFERRED SECURITY IS EXCHANGEABLE FOR TRUST PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION OF TRUST. UNLESS THIS GLOBAL CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY TRUST PREFERRED SECURITY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. (“CEDE”) OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE, HAS AN INTEREST HEREIN.

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

A1 - 2

IN WITNESS WHEREOF, the Trust has executed this certificate this 17th day of May, 2007.

LEHMAN BROTHERS HOLDINGS CAPITAL

TRUST VII

Name:

(See reverse for additional terms)

A1 - 3

CERTIFICATE OF AUTHENTICATION

This is the Trust Preferred Security described in the within-mentioned Declaration of Trust.

U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By:
	Authorized Officer

A1 - 4

[FORM OF REVERSE OF SECURITY]

Holders of Trust Preferred Securities shall be entitled to receive cumulative cash distributions at such times and in such amounts as the Trust receives cash payments from the Company on the Debentures or the Guarantee. Distributions on the Trust Preferred Securities shall be payable only to the extent that the Trust has funds available for the payment of such distributions in the Property Account. If and to the extent that the Company makes an interest payment on the Debentures held by the Property Trustee or a payment under the Guarantee, the Trust shall and the Property Trustee is directed, to the extent funds are available for that purpose, to make a Pro Rata distribution of such amounts to Holders; provided, however, that if on any date on which amounts are payable on distribution or redemption an Indenture Event of Default shall have occurred and be continuing, no payment of any Redemption Price of any of the Trust Common Securities, and no other payment on account of the redemption, liquidation or other acquisition of such Trust Common Securities, shall be made unless payment in full in cash of all Distributions on all of the outstanding Trust Preferred Securities for all semiannual 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 Trust 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 Trust Preferred Securities then due and payable.

Except as otherwise described herein, distributions on the Trust Preferred Securities shall be cumulative, shall accumulate from the date of initial issuance and shall be payable semiannually in arrears, on May 31 and November 30 of each year, commencing on November 30, 2007, or such other dates as may be specified by the Trust following a Remarketing, if, as and when available for payment by the Property Trustee. If the Trust Preferred Securities are in book-entry only form, distributions shall be payable to the Holders of record of Trust Preferred Securities as they appear on the books and records of the Trust on the relevant record dates, which shall be determined by the Regular Trustees and shall at be at least one Business Day prior to the relevant payment dates. If the Trust Preferred Securities are issued in definitive form, or if issued in book-entry form, do not remain in book-entry only form, the relevant record dates shall be the date determined by the Regular Trustees and shall be at least one Business Day before the relevant payment dates. If distributions are not paid when scheduled, the accumulated distributions will be paid to the Holders of Trust Securities as they appear on the books and records of the Trust on the record date with respect to the payment date for the Trust Securities that corresponds to the payment date fixed by the Company with respect to the payment date for the Trust Securities that corresponds to the payment date fixed by the Company with respect to the payment of cumulative interest payments on the Debentures. In the event that any date on which distributions are payable is not a Business Day, payment of such distribution shall be made on the next succeeding day which is a Business Day. Payments of accumulated distributions shall be payable to Holders of record of Trust Preferred Securities as they appear on the books and records of the Trust on the record date with respect to the payment date for the Trust Preferred Securities which corresponds to the payment date fixed by the Company with respect to the payment of cumulative interest payments on the Debentures.

The Trust Preferred Securities shall be redeemable as provided in the Declaration of Trust.

A1 - 5

The Holder of this Trust Preferred Security, by its acceptance hereof, agrees that the arrangement created by the Declaration of Trust shall be treated as a grantor trust for federal income tax purposes and to take no action inconsistent with the treatment of the Trust Preferred  Securities as undivided beneficial interest in the assets of the Trust.

A1 - 6

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust Preferred Security Certificate to:

(Insert assignee’s social security or tax identification number)

(Insert address and zip code of assignee)

and irrevocably appoints

agent to transfer this Trust Preferred Security Certificate on the books of the Trust. The agent may substitute another to act for him or her.

Date:

Signature:

(Sign exactly as your name appears on the other side of this Trust Preferred Security Certificate)

A1 - 7

EXHIBIT A-2

FORM OF TRUST PREFERRED SECURITY CERTIFICATE

[Intentionally left blank]

PS-[    ]

Certificate Evidencing Trust Preferred Securities

of

LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VII

$

Trust Preferred Securities
(Liquidation Amount $1,000 per Trust Preferred Security)

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

LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VII, a statutory trust formed under the laws of the State of Delaware (the “Trust”), hereby certifies that U.S. Bank National Association, in its capacity as Stock Purchase Contract Agent (the “Holder”) under that certain Stock Purchase Contract Agreement dated as of May 17, 2007 between Lehman Brothers Holdings Inc. and U.S. Bank National Association, is the registered owner of TWO HUNDRED AND FIFTY (250,000) Trust Preferred Securities of the Trust representing undivided beneficial ownership interests in the assets of the Trust designated the Trust Preferred Securities (liquidation amount $1,000 per security) (the “Trust Preferred Securities”). The Trust Preferred Securities shall mature on June 1, 2043. The designation, rights, powers, privileges, restrictions, preferences and other terms and provisions of the Trust Preferred Securities represented hereby are set forth in, issued under and shall in all respects be subject to the provisions of the Declaration of Trust dated as of May 17, 2007, as the same may be amended from time to time (the “Declaration of Trust”). Capitalized terms used herein but not defined shall have the meaning given them in the Declaration of Trust. The Holder is entitled to the benefits of the Trust Preferred Securities Guarantee to the extent provided therein. Each Holder of a Trust Preferred Security, by acceptance of this Certificate, agrees to treat the Debentures as indebtedness for United States federal income tax purposes. The Sponsor shall provide a copy of the Declaration of Trust and the Trust Common Securities Guarantee to a Holder without charge upon written request to the Sponsor at its principal place of business. THE TRUST PREFERRED SECURITIES ARE TRANSFERABLE ON THE BOOKS AND RECORDS OF THE TRUST ONLY IN ACCORDANCE WITH THE TERMS OF THE DECLARATION.

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

A2 - 2

IN WITNESS WHEREOF, the Trust has executed this certificate this 17th day of May, 2007.

	LEHMAN BROTHERS HOLDINGS CAPITAL
	TRUST VII
Name:

(See reverse for additional terms)

A2 - 3

CERTIFICATE OF AUTHENTICATION

This is the Trust Preferred Security described in the within-mentioned Declaration of Trust.

U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:
	Authorized Officer

A2 - 4

[FORM OF REVERSE OF SECURITY]

Holders of Trust Preferred Securities shall be entitled to receive cumulative cash distributions at such times and in such amounts as the Trust receives cash payments from the Company on the Debentures or the Guarantee. Distributions on the Trust Preferred Securities shall be payable only to the extent that the Trust has funds available for the payment of such distributions in the Property Account. If and to the extent that the Company makes an interest payment on the Debentures held by the Property Trustee or a payment under the Guarantee, the Trust shall and the Property Trustee is directed, to the extent funds are available for that purpose, to make a Pro Rata distribution of such amounts to Holders; provided, however, that if on any date on which amounts are payable on distribution or redemption an Indenture Event of Default shall have occurred and be continuing, no payment of any Redemption Price of any of the Trust Common Securities, and no other payment on account of the redemption, liquidation or other acquisition of such Trust Common Securities, shall be made unless payment in full in cash of all Distributions on all of the outstanding Trust Preferred Securities for all semiannual 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 Trust 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 Trust Preferred Securities then due and payable.

Except as otherwise described herein, distributions on the Trust Preferred Securities shall be cumulative, shall accumulate from the date of initial issuance and shall be payable semiannually in arrears, on May 31 and November 30 of each year, commencing on November 30, 2007, or such other dates as may be specified by the Trust following a Remarketing, if, as and when available for payment by the Property Trustee. If the Trust Preferred Securities are in book-entry only form, distributions shall be payable to the Holders of record of Trust Preferred Securities as they appear on the books and records of the Trust on the relevant record dates, which shall be determined by the Regular Trustees and shall at be at least one Business Day prior to the relevant payment dates. If the Trust Preferred Securities are issued in definitive form, or if issued in book-entry form, do not remain in book-entry only form, the relevant record dates shall be the date determined by the Regular Trustees and shall be at least one Business Day before the relevant payment dates. If distributions are not paid when scheduled, the accumulated distributions will be paid to the Holders of Trust Securities as they appear on the books and records of the Trust on the record date with respect to the payment date for the Trust Securities that corresponds to the payment date fixed by the Company with respect to the payment date for the Trust Securities that corresponds to the payment date fixed by the Company with respect to the payment of cumulative interest payments on the Debentures. In the event that any date on which distributions are payable is not a Business Day, payment of such distribution shall be made on the next succeeding day which is a Business Day. Payments of accumulated distributions shall be payable to Holders of record of Trust Preferred Securities as they appear on the books and records of the Trust on the record date with respect to the payment date for the Trust Preferred Securities which corresponds to the payment date fixed by the Company with respect to the payment of cumulative interest payments on the Debentures.

The Trust Preferred Securities shall be redeemable as provided in the Declaration of Trust.

A2 - 5

The Holder of this Trust Preferred Security, by its acceptance hereof, agrees that the arrangement created by the Declaration of Trust shall be treated as a grantor trust for federal income tax purposes and to take no action inconsistent with the treatment of the Trust Preferred  Securities as undivided beneficial interest in the assets of the Trust.

A2 - 6

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust Preferred Security Certificate to:

(Insert assignee’s social security or tax identification number)

(Insert address and zip code of assignee)

and irrevocably appoints

 agent to transfer this Trust Preferred Security Certificate on the books of the Trust. The agent may substitute another to act for him or her.

Date:

Signature:

(Sign exactly as your name appears on the other side of this Trust Preferred Security Certificate)

A2 - 7

EXHIBIT A-3

FORM OF TRUST COMMON SECURITY CERTIFICATE

[Intentionally left blank]

CS-1

Certificate Evidencing Trust Common Securities

of

LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VII

$1,000

Trust Common Securities
(Liquidation Amount $1,000 per Trust Common Security)

LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VII, a statutory trust formed under the laws of the State of Delaware (the “Trust”), hereby certifies that Lehman Brothers Holdings Inc., a Delaware corporation (the “Holder”) is the registered owner of [ONE (1)] Trust Common Securities of the Trust representing undivided beneficial ownership interests in the assets of the Trust designated the Trust Common Securities (liquidation amount $1,000 per security) (the “Trust Common Securities”). The Trust Securities shall mature on June 1, 2043. The designation, rights, powers, privileges, restrictions, preferences and other terms and provisions of the Trust Common Securities represented hereby are set forth in, issued under and shall in all respects be subject to the provisions of the Declaration of Trust dated as of May 17, 2007, as the same may be amended from time to time (the “Declaration of Trust”). Capitalized terms used herein but not defined shall have the meaning given them in the Declaration of Trust. The Holder is entitled to the benefits of the Trust Common Securities Guarantee to the extent provided therein. Each Holder of a Trust Common Security, by acceptance of this Certificate, agrees to treat the Debentures as indebtedness for United States federal income tax purposes. The Sponsor shall provide a copy of the Declaration of Trust and the Trust Common Securities Guarantee to a Holder without charge upon written request to the Sponsor at its principal place of business. THE TRUST COMMON SECURITIES ARE TRANSFERABLE ON THE BOOKS AND RECORDS OF THE TRUST ONLY IN ACCORDANCE WITH THE TERMS OF THE DECLARATION.

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

C-1

IN WITNESS WHEREOF, the Trust has executed this certificate this 17th day of May, 2007.

LEHMAN BROTHERS HOLDINGS CAPITAL

TRUST VII

Name:

(See reverse for additional terms)

C-2

CERTIFICATE OF AUTHENTICATION

This is the Trust Common Security described in the within-mentioned Declaration of Trust.

U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:
	Authorized Officer

C-3

[FORM OF REVERSE OF SECURITY]

Holders of Trust Common Securities shall be entitled to receive cumulative cash distributions at such times and in such amounts as the Trust receives cash payments from the Company on the Debentures or the Guarantee. Distributions on the Trust Common Securities shall be payable only to the extent that the Trust has funds available for the payment of such distributions in the Property Account. If and to the extent that the Company makes a interest payment on the Debentures held by the Property Trustee or a payment under the Guarantee, the Trust shall and the Property Trustee is directed, to the extent funds are available for that purpose, to make a Pro Rata distribution of such amounts to Holders; provided, however, that if on any date on which amounts are payable on distribution or redemption an Indenture Event of Default shall have occurred and be continuing, no payment of any Redemption Price of any of the Trust Common Securities, and no other payment on account of the redemption, liquidation or other acquisition of such Trust Common Securities, shall be made unless payment in full in cash of all Distributions on all of the outstanding Trust Preferred Securities for all seminannual 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 Trust 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 Trust Preferred Securities then due and payable.

Except as otherwise described herein, distributions on the Trust Common Securities shall be cumulative, shall accumulate from the date of initial issuance and shall be payable semiannually in arrears, on May 31 and November 30 of each year, commencing on November 30, 2007, or such other dates as may be specified by the Trust following a Remarketing, if, as and when available for payment by the Property Trustee. Distributions shall be payable to the Holders of record of Trust Common Securities as they appear on the books and records of the Trust on the relevant record dates, which shall be one Business Day prior to the relevant payment dates. If distributions are not paid when scheduled, the accumulated distributions will be paid to the Holders of Trust Securities as they appear on the books and records of the Trust on the record date with respect to the payment date for the Trust Securities that corresponds to the payment date fixed by the Company with respect to the payment date for the Trust Securities that corresponds to the payment date fixed by the Company with respect to the payment of cumulative interest payments on the Debentures. In the event that any date on which distributions are payable is not a Business Day, payment of such distribution shall be made on the next succeeding day which is a Business Day. Payments of accumulated distributions shall be payable to Holders of record of Trust Common Securities as they appear on the books and records of the Trust on the record date with respect to the payment date for the Trust Common Securities which corresponds to the payment date fixed by the Company with respect to the payment of cumulative interest payments on the Debentures.

The Trust Common Securities shall be redeemable as provided in the Declaration of Trust.

The Holder of this Trust Common Security, by its acceptance hereof, agrees that the arrangement created by the Declaration of Trust shall be treated as a grantor trust for federal

C-4

income tax purposes and to take no action inconsistent with the treatment of the Trust Common  Securities as undivided beneficial interest in the assets of the Trust.

C-5

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust Common Security Certificate to:

(Insert assignee’s social security or tax identification number)

(Insert address and zip code of assignee)

and irrevocably appoints

 agent to transfer this Trust Common Security Certificate on the books of the Trust. The agent may substitute another to act for him or her.

Date:

Signature:

(Sign exactly as your name appears on the other side of this Trust Common Security Certificate)

C-6

EX-4.06

Exhibit 4.06

AMENDED AND RESTATED

DECLARATION OF TRUST

LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VIII

Dated as of May 17, 2007

TABLE OF CONTENTS

		Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1.	Interpretation and Definitions.	2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1.	Trust Indenture Act; Application.	12
SECTION 2.2.	Lists of Holders of Trust Securities.	12
SECTION 2.3.	Reports by the Property Trustee.	12
SECTION 2.4.	Periodic Reports to Property Trustee.	13
SECTION 2.5.	Evidence of Compliance with Conditions Precedent.	13
SECTION 2.6.	Trust Enforcement Events; Waiver.	13
SECTION 2.7.	Trust Enforcement Event; Notice.	15
ARTICLE III
ORGANIZATION
SECTION 3.1.	Name.	16
SECTION 3.2.	Office.	16
SECTION 3.3.	Purpose.	16
SECTION 3.4.	Authority.	16
SECTION 3.5.	Title to Property of the Trust.	17
SECTION 3.6.	Powers and Duties of the Regular Trustees.	17
SECTION 3.7.	Prohibition of Actions by the Trust and the Trustees.	20
SECTION 3.8.	Powers and Duties of the Property Trustee.	21
SECTION 3.9.	Certain Duties and Responsibilities of the Property Trustee.	23
SECTION 3.10.	Certain Rights of Property Trustee.	24
SECTION 3.11.	Delaware Trustee.	27
SECTION 3.12.	Execution of Documents.	27
SECTION 3.13.	Not Responsible for Recitals or Issuance of Trust Securities.	27
SECTION 3.14.	Duration of Trust.	27
SECTION 3.15.	Mergers.	27
SECTION 3.16.	Property Trustee May File Proofs of Claim.	29

i

ARTICLE IV
SPONSOR
SECTION 4.1.	Responsibilities of the Sponsor.	31
SECTION 4.2.	Indemnification and Fees and Expenses of the Trustees	31
ARTICLE V
TRUST COMMON SECURITIES HOLDER
SECTION 5.1.	Company’s Purchase of Trust Common Securities.	32
SECTION 5.2.	Covenants of the Trust Common Securities Holder.	32
ARTICLE VI
TRUSTEES
SECTION 6.1.	Number of Trustees.	33
SECTION 6.2.	Delaware Trustee.	33
SECTION 6.3.	Property Trustee; Eligibility.	33
SECTION 6.4.	Qualifications of Regular Trustees and Delaware Trustee Generally.	34
SECTION 6.5.	Regular Trustees.	35
SECTION 6.6.	Delaware Trustee.	35
SECTION 6.7.	Appointment, Removal and Resignation of Trustees.	35
SECTION 6.8.	Vacancies among Trustees.	37
SECTION 6.9.	Effect of Vacancies.	37
SECTION 6.10.	Meetings.	37
SECTION 6.11.	Delegation of Power.	37
SECTION 6.12.	Merger, Conversion, Consolidation or Succession to Business.	38
ARTICLE VII
TERMS OF SECURITIES
SECTION 7.1.	General Provisions Regarding Securities.	39
SECTION 7.2.	Distributions.	41
SECTION 7.3.	Redemption of Trust Securities.	41
SECTION 7.4.	Redemption Procedures.	42
SECTION 7.5.	Voting and Enforcement Rights of Trust Preferred Securities.	43
SECTION 7.6.	Voting and Enforcement Rights of Trust Common Securities	45
SECTION 7.7.	Paying Agent and Security Registrar.	47
SECTION 7.8.	Certificates of Trust Securities.	47
SECTION 7.9.	Transfer of Trust Securities.	49
SECTION 7.10.	Mutilated, Destroyed, Lost or Stolen Certificates.	50
SECTION 7.11.	Deemed Security Holders.	50
SECTION 7.12.	Global Securities.	50

ii

ARTICLE VIII
DISSOLUTION AND LIQUIDATION OF THE TRUST
SECTION 8.1.	Dissolution and Termination of Trust.	53
SECTION 8.2.	Liquidation Distribution Upon Dissolution and Termination of the Trust.	53
ARTICLE IX
LIMITATION OF LIABILITY OF
HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS
SECTION 9.1.	Liability.	55
SECTION 9.2.	Exculpation.	55
SECTION 9.3.	Fiduciary Duty.	56
SECTION 9.4.	Indemnification.	57
SECTION 9.5.	Outside Businesses.	59
ARTICLE X
ACCOUNTING AND TAX MATTERS
SECTION 10.1.	Fiscal Year.	60
SECTION 10.2.	Certain Accounting Matters; Returns and Information.	60
SECTION 10.3.	Banking.	60
SECTION 10.4.	Withholding.	61
SECTION 10.5.	Treatment as Grantor Trust for Federal Income Tax Purposes.	61
ARTICLE XI
AMENDMENTS AND MEETINGS
SECTION 11.1.	Amendments of this Declaration of Trust.	62
SECTION 11.2.	Meetings of the Holders of Trust Securities; Action by Written Consent.	64
ARTICLE XII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 12.1.	Representations and Warranties of Property Trustee.	66
SECTION 12.2.	Representations and Warranties of Delaware Trustee.	67

iii

ARTICLE XIII
REMARKETING AND RESET RATE MECHANICS
SECTION 13.1.	Obligation to Conduct Remarketing and Related Requirements	68
SECTION 13.2.	Company Decisions in Connection with Remarketing.	68
SECTION 13.3.	Reset of Interest Rate on Debentures in Connection with Remarketings and Related Changes in Terms.	69
SECTION 13.4.	Early Remarketing.	71
SECTION 13.5.	Remarketing Procedures.	71
ARTICLE XIV
OTHER MCAPS RELATED PROVISIONS
SECTION 14.1.	Agreed Tax Treatment.	74
ARTICLE XV
MISCELLANEOUS
SECTION 15.1.	Notices.	75
SECTION 15.2.	Governing Law.	76
SECTION 15.3.	Headings.	76
SECTION 15.4.	Successors and Assigns.	76
SECTION 15.5.	Partial Enforceability.	76
SECTION 15.6.	Counterparts.	76

EXHIBIT A-1	Form of Global Trust Preferred Security Certificate
EXHIBIT A-2	Form of Trust Preferred Security
EXHIBIT A-2	Form of Trust Common Security Certificate

iv

CROSS-REFERENCE TABLE*

Section of Trust Indenture Act of 1939, as amended	Section of Declaration of Trust
310(a)	6.3(a)
310(b)	6.3(c)
310(c)	Inapplicable
311(a)	2.2(b)
311(b)	2.2(b)
311(c)	Inapplicable
312(a)	2.2(a)
312(b)	2.2(b)
313	2.3
314(a)	2.4
314(b)	Inapplicable
314(c)	2.5
314(d)	Inapplicable
314(f)	Inapplicable
315(a)	3.9(b)
315(c)	3.9(a)
315(d)	3.9(a)
316(a)	2.6(a)
316(c)	3.6(e)

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

v

AMENDED AND RESTATED DECLARATION OF TRUST
OF
LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VIII

May 17, 2007

AMENDED AND RESTATED DECLARATION OF TRUST (the “Declaration of Trust”) dated and effective as of May 17, 2007 by and among Lehman Brothers Holdings Inc., a Delaware corporation, as Sponsor, and Barrett S. DiPaolo, James Killerlane and Andrew Yeung, as the Regular Trustees, U.S. Bank National Association, as the Property Trustee and U.S. Bank Trust National Association, as the Delaware Trustee, not in their individual capacities but solely as Trustees, and by the Holders, from time to time, of undivided beneficial ownership interests in the Trust to be issued pursuant to this Declaration of Trust.

WHEREAS, certain initial trustees of the Trust and the Sponsor have heretofore duly declared and established Lehman Brothers Holdings Capital Trust VIII (the “Trust”) pursuant to the Delaware Statutory Trust Act (as hereinafter defined) by entering into that certain Declaration of Trust, dated November 23, 2004 (the “Original Declaration of Trust”), and by the execution and filing with the Secretary of State of the State of Delaware the Certificate of Trust, filed on December 8, 2004 (the “Certificate of Trust”); 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 Sponsor 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 I

INTERPRETATION AND DEFINITIONS

SECTION 1.1.  Interpretation and Definitions.

Unless the context otherwise requires:

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

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

(c)           all references in this Declaration of Trust to Articles and Sections and Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits to this Declaration of Trust unless otherwise specified;

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

(e)           a reference to the singular includes the plural and vice versa; and

“10% in Liquidation Amount” means, except as provided by the Trust Indenture Act, Holder(s) of outstanding Trust Securities, voting together as a single class, or, as the context may require, Holders of outstanding Trust Preferred Securities or Holders of outstanding Trust Common Securities, voting separately as a class, who are the record owners of 10% or more of the aggregate liquidation amount of all outstanding Trust Securities of the relevant class (excluding any Trust Preferred Securities held by the Company or any of its Affiliates).

“Affiliate” means, with respect to any specified Person, any other Person that directly or indirectly controls or is controlled by, or is under common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Certificate, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.

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

“Business Day” means any day other than a Saturday or Sunday or a day on which banking institutions generally in The City of New York are authorized or required by law, regulation or executive order to close.

2

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

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

“Closing Date” means the date on which the Normal MCAPS are issued and sold.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor legislation.

“Commission” means the Securities and Exchange Commission.

“Company” means Lehman Brothers Holdings Inc., a Delaware corporation, and any of its successors.

“Company 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, director, shareholder, member, partner, employee, representative or agent of the Trust or any of its Affiliates.

“Collateral Account” has the meaning set forth in the Collateral Agreement.

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

“Collateral Agreement” means the Collateral Agreement, dated as of the date hereof, among the Sponsor, the Collateral Agent, the Securities Intermediary, and U.S. Bank National Association, as Stock Purchase Contract Agent and attorney-in-fact for the Holders (as defined in the Stock Purchase Contract Agreement) of the Stock Purchase Contracts, as amended from time to time.

“Corporate Trust Office” means the principal corporate trust office of the Property Trustee at which, at any particular time, its corporate trust business shall be administered, which office at the date hereof is located at 100 Wall Street, Suite 1600, Mail Station EX-NY-WALL, New York, New York 10005.

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

“Creditor” has the meaning set forth in Section 4.2(c) hereof.

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

3

“Debentures” means the $500,001,000 initial aggregate principal amount of the Company’s Floating Rate Remarketable Junior Subordinated Debentures due 2043 issued pursuant to the Indenture.

“Declaration of Trust” means this Amended and Restated Declaration of Trust, as it may be amended, modified or supplemented from time to time.

“Delaware Trustee” has the meaning set forth in Section 6.2 hereof.

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

“Determination Date” means the 20th business day prior to the last day of each fiscal quarter.

“Direct Action” has the meaning set forth in Section 3.8(e) hereof.

“DTC” means The Depository Trust Company, the initial Depositary.

“Early Remarketing” has the meaning set forth in Section 13.4 hereof.

“Early Remarketing Event” shall occur if on any Determination Date, both of the following conditions exist:

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

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

“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.

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

4

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

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

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

“Floating Rate Reset Cap” means 3.00%, per annum.

 “Fiscal Year” has the meaning set forth in Section 10.1 hereof.

“Global Certificate” means a fully registered, global certificate representing Trust Preferred Securities.

“Global Certificate Legend” means the legend set forth in Section 7.12 hereof, which is required to be placed on all Global Certificates issued under this Declaration of Trust.

“Guarantee” means the Guarantee Agreement dated as of May 17, 2007 entered into by the Company, as Guarantor, for the benefit of the Holders of the Trust Securities.

“Holder” means a Person in whose name a Certificate representing a Trust Security is registered in the books and records of the Trust, such Person being a beneficial owner within the meaning of the Statutory Trust Act.

“Indemnified Person” means a Company Indemnified Person or a Fiduciary Indemnified Person.

“Indenture” means the Base Indenture, dated as of February 1, 1996, between the Company and JPMorgan Chase Bank, N.A., as trustee, as supplemented by the First Supplemental Indenture, dated as of February 1, 1996, and the Supplemental Indenture, as further amended or supplemented from time to time.

“Indenture Event of Default” means any event of default under the Indenture.

“Indirect Participant” means a Person who holds a beneficial interest in a Global Certificate through a Participant.

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

“Legal Action” has the meaning set forth in Section 3.6(h) hereof.

5

“Liquidation” has the meaning set forth in Section 8.2 hereof.

“List of Holders” has the meaning set forth in Section 2.2(a) hereof.

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

 “Majority in Liquidation Amount” means, except as provided by the Trust Indenture Act, Holder(s) of outstanding Trust Securities, voting together as a single class, or, as the context may require, Holders of outstanding Trust Preferred Securities or Holders of outstanding Trust Common Securities, voting separately as a class, who are the record owners of more than 50% of the aggregate liquidation amount of all outstanding Trust Securities of the relevant class (excluding any Trust Preferred Securities held by the Company or any of its Affiliates).

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

“Normal MCAPS” means the collective rights and obligations of a Holder of a Normal MCAPS Certificate in respect of one Trust Preferred Security subject to the Pledge thereof, and the related Stock Purchase Contract.

“Normal MCAPS Certificate” means a certificate evidencing the rights and obligations of a Holder in respect of the number of Normal MCAPS specified on such certificate.

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

(a)           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;

(b)           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;

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

(d)           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;

6

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 that otherwise satisfies the foregoing requirements.

“Opinion of Counsel” means a written opinion from legal counsel who is acceptable to the Security Registrar.

“Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream)

“Paying Agent” has the meaning set forth in Section 3.8(g) hereof.

“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.

“Property Account” has the meaning set forth in Section 3.8(c)(i) hereof.

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

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

“Redemption Notice” has the meaning set forth in Section 7.4(a) hereof.

“Redemption Price” means such amount as each Trust Security would receive if all the assets then held by the Trust were paid in full in cash in accordance with their terms and the Trust were liquidated in accordance with its terms.

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

“Remarketing” means a remarketing of Trust Preferred Securities pursuant to Article XIII hereof and the related Remarketing Agreement.

“Remarketing Agent” means, as to a Remarketing and Remarketing Agreement, the remarketing agent and any successor or replacement remarketing agent appointed by the Sponsor.

 “Remarketing Agreement” means the remarketing agreement to be entered into prior to the first Remarketing among the Sponsor, the Trust (acting through the Property Trustee) and the Remarketing Agent, as amended or supplemented from time to time pursuant with respect to such Remarketing of Trust Preferred Securities.

7

“Remarketing Date” means, as to a Remarketing Settlement Date, the third business day immediately preceding such Remarketing Settlement Date.

“Remarketing Fee” means, as to a Remarketing, the fee payable to the Remarketing Agent provided for in the Remarketing Agreement.

 “Remarketing Period” means the five Business Day Period beginning on the seventh Business Day preceding each of May 31, 2012, August 31, 2012, November 30, 2012, February 28, 2013 and May 31, 2013 (or if any such day is not a Business Day, the preceding Business Day) until the settlement of a Successful Remarketing, or if an Early Remarketing Event shall have occurred, each of the periods determined in accordance with Section 13.4.

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

“Reset Date” means the first date that is a Remarketing Settlement Date or a Final Remarketing that is not Successful.

 “Reset Rate” means, if the Debentures are remarketed as fixed rate notes, the rate of interest on the Debentures, if any, set in a Remarketing, as set forth in Section 2 of the Supplemental Indenture.

“Reset Spread” means, if the Debentures are remarked as floating rate notes, the spread, if any, set in a Remarketing, as set forth in Section 2 of the Supplemental Indenture.

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

“Securities Act” means the Securities Act of 1933, as amended.

“Securities Intermediary” means The Bank of New York, and any successor thereto as securities intermediary under the Collateral Agreement.

“Security Register” has the meaning set forth in Section 7.7(a) hereof.

“Security Registrar” has the meaning set forth in Section 7.7(c) hereof.

“Separate Trust Preferred Securities” means Trust Preferred Securities that are no longer a component of Normal MCAPS.

“Special Event” has the meaning set forth in the Indenture.

“Sponsor” means the Company or any successor entity in a merger, consolidation or amalgamation, in its capacity as sponsor of the Trust.

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“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.

“Stock Purchase Contract” has the meaning set forth in the Stock Purchase Contract Agreement.

“Stock Purchase Contract Agent” means U.S. Bank National Association, and any successor thereto as stock purchase contract agent under the Stock Purchase Contract Agreement.

“Stock Purchase Contract Agreement” means the Stock Purchase Contract Agreement, dated as of the date hereof, between the Sponsor and the Stock Purchase Contract Agent.

“Stock Purchase Date” has the meaning set forth in the Stock Purchase Contract Agreement.

“Successful” means, as to a Remarketing, that the Remarketing is conducted in accordance with Article XIII and the Remarketing Agent finds buyers for all Trust Preferred Securities offered in the Remarketing by 4:00 PM, New York City time, on the Remarketing Date.

“Successor Delaware Trustee” has the meaning set forth in Section 6.7(c) hereof.

“Successor Entity” has the meaning set forth in Section 3.15(b)(i) hereof.

“Successor Property Trustee” has the meaning set forth in Section 6.7(b) hereof.

“Successor Trust Preferred Securities” has the meaning set forth in Section 3.15(b)(i)(B) hereof.

“Super Majority” has the meaning set forth in Section 2.6(a)(ii) hereof.

“Supplemental Indenture” means the Twelfth Supplemental Indenture, dated as of May 17, 2007, between Lehman Brothers Holdings Inc. and U.S. Bank National Association, to the Indenture, as further amended or supplemented from time to time with respect to the Debentures.

“Tangible Common Stockholders’ Equity Amount” means, as of any quarter end and subject to the adjustments below, the Sponsor’s common stockholders’ equity minus identifiable intangible assets and goodwill, in each case as reflected on the company’s consolidated GAAP balance sheets as of such quarter end.

All financial terms in the preceding paragraph and in the definition of “Trailing Two Quarters Consolidated Net Income Amount” below shall be determined in accordance with GAAP as applied to and reflected in the Company’s consolidated financial statements as of the relevant dates, except (i) that the Company’s common stockholders’ equity and consolidated net income at any date and for any period shall be adjusted to exclude extraordinary items, unusual

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items and infrequently occurring items as defined in Accounting Principles Bulletin 30, goodwill impairment as defined in Financial Accounting Standards Board Statements of Financial Accounting Standards No. 142 and amounts relating to discontinued operations as defined in Financial Accounting Standards Board Statements of Financial Accounting Standards No. 144 or, in ech case, in any successor accounting bulletins or statements and (ii) as provided in the next sentence. If because of a change in GAAP that results in a cumulative effect of a change in accounting principle or a restatement, either (i) the Company’s consolidated net income is higher or lower than it would have been absent such change, then, for purposes of calculating the calculations described in “Early Remarketing Event,” commencing with the fiscal quarter for which such changes in GAAP becomes effective, such consolidated net income shall be calculated on a pro forma basis as if such changes had not occurred; or (ii) the Tangible Common Stockholders’ Equity Amount as of a fiscal quarter end is higher or lower than it would have been absent such change, then, for purposes of the calculations described in the preceding paragraph, the Tangible Common Stockholders’ Equity Amount shall be calculated on a pro forma basis as if such change had not occurred.

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

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

“Trust” has the meaning set forth in the recitals hereto.

“Trust Common Security” has the meaning set forth in Section 7.1(a)(ii) hereof.

“Trust Common Security Certificate” means a definitive certificate in fully registered form representing a Trust Common Security substantially in the form of Exhibit A-2 hereto.

“Trust Enforcement Event” means (i) a default by the Company in respect of any of its obligations under the Guarantee or (ii) an Indenture Event of Default.

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

“Trust Preferred Security” has the meaning set forth in Section 7.1(a)(i) hereof.

“Trust Preferred Security Certificate” means a certificate in fully registered form representing a Trust Preferred Security substantially in the form of Exhibit A-1 hereto.

“Trust Securities” has the meaning set forth in Section 7.1(a)(ii) hereof.

“Trustee” or “Trustees” means each Person who has signed this Declaration of Trust as a trustee, so long as such Person shall continue as a trustee in accordance with the terms

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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 U.S. Person as defined in Rule 902(k) promulgated under the Securities Act.

“Underwriters” means the underwriters named in Schedule II to the Underwriting Agreement.

“Underwriting Agreement” means the underwriting agreement by and among the Sponsor, the Trust and Lehman Brothers Inc. as representative of the Underwriters, dated as of May 8, 2007.

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ARTICLE II

TRUST INDENTURE ACT

SECTION 2.1.  Trust Indenture Act; Application.

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

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

(c)           If and to the extent that any provision of this Declaration of Trust 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 Trust Securities.

(a)           Each of the Sponsor and the Regular Trustees on behalf of the Trust shall provide the Property Trustee (i), except while the Trust Preferred Securities are represented by one or more Global Certificates, 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 Trust 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 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 Trust Preferred Securities), the Property Trustee shall provide to the Holders of the Trust Preferred Securities such reports as are required by Section 313 of the Trust

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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 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 of Trust 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 Trust Preferred Securities may, by vote or written consent, on behalf of the Holders of all of the Trust Preferred Securities, waive any past Trust Enforcement Event in respect of the Trust 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 simple 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 Trust Preferred Securities that the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding.

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 of Trust and the Trust 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 Trust Preferred Securities arising therefrom shall be deemed to have been cured, for every purpose of this Declaration of Trust, but no such waiver shall extend to any subsequent or other default or Trust Enforcement Event with respect to the Trust Preferred Securities or impair any right consequent thereon. Any waiver by the Holders of the Trust Preferred Securities of Trust Enforcement Events with respect to the Trust Preferred Securities shall also be deemed to constitute a waiver by the Holders of the Trust Common Securities of any such Trust Enforcement Event with respect to the Trust Common Securities for

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all purposes of this Declaration of Trust without any further act, vote, or consent of the Holders of the Trust Common Securities.

(b)           The Holders of a Majority in Liquidation Amount of the Trust Common Securities may, by vote or written consent, on behalf of the Holders of all of the Trust Common Securities, waive any past Trust Enforcement Event in respect of the Trust 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 Trust 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 Trust Common Securities that the relevant Super Majority represents of the aggregate principal amount of the Debentures outstanding;

provided further, each Holder of Trust Common Securities shall be deemed to have waived any such Trust Enforcement Event and all Trust Enforcement Events with respect to the Trust Common Securities and its consequences until all Trust Enforcement Events with respect to the Trust Preferred Securities have been cured, waived or otherwise eliminated, and until such Trust Enforcement Events have been so cured, waived or otherwise eliminated, the Property Trustee shall be deemed to be acting solely on behalf of the Holders of the Trust Preferred Securities and only the Holders of the Trust Preferred Securities shall have the right to direct the Property Trustee in accordance with the terms of the Trust 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 of Trust and the Trust Securities, as permitted by the Trust Indenture Act. Subject to the foregoing provisions of this Section 2.6(b), upon such waiver, any such default shall cease to exist and any Trust Enforcement Event with respect to the Trust Common Securities arising therefrom shall be deemed to have been cured for every purpose of this Declaration of Trust, but no such waiver shall extend to any subsequent or other default or Trust Enforcement Event with respect to the Trust 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 Trust Preferred Securities constitutes a waiver of the corresponding Trust Enforcement Event with respect to the Trust Preferred Securities under this Declaration of Trust. 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 of Trust and the Trust Securities, as permitted by the Trust Indenture Act.

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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 Trust Securities, notices of all defaults with respect to the Trust 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 being hereby defined to be defaults as defined in the Guarantee or any 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 the Debentures or in the payment of any sinking fund installment established for 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 Trust Securities.

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

(i)            a default under Section 501(1) 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 of Trust shall have actual knowledge.

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ARTICLE III

ORGANIZATION

SECTION 3.1.  Name.

The Trust is named “Lehman Brothers Holdings Capital Trust VIII,” as such name may be modified from time to time by the Regular Trustees following written notice to the Holders of Trust 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.

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, NY 10019. On ten Business Days written notice to the Holders of Trust Securities, the Property Trustee, the Delaware Trustee and the Regular Trustees may designate another principal office.

SECTION 3.3.  Purpose.

The exclusive purposes and functions of the Trust are (a) to issue and sell Trust 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 not to be classified for United States federal income tax purposes as a grantor trust.

By the acceptance of this Trust, the Trustees, the Sponsor, the Holders of the Trust Preferred Securities and Trust Common Securities 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.

(a)           Subject to the limitations provided in this Declaration of Trust and to the specific duties of the Property Trustee, the Regular Trustees shall have exclusive and complete 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 of Trust.

(b)           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

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power to act, any power of the Regular Trustees may be exercised by, or with the consent of, any one such Regular Trustee.

(c)           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)(iii), including any amendments thereto, shall be signed by or on behalf of a majority of the Regular Trustees; and

(d)           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 that such natural person is a U.S. Person.

SECTION 3.5.  Title to Property of the Trust.

Except as provided in Section 3.8 with respect to the Property Account or as otherwise provided in this Declaration of Trust, 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 Trust Preferred Securities and the Trust Common Securities in the manner specified in Section 7.1(a) and issue and sell the Trust Preferred Securities and the Trust Common Securities in accordance with this Declaration of Trust; provided, however, that the Trust may issue no more than one series of Trust Preferred Securities and no more than one series of Trust Common Securities; provided, further, that there shall be no interests in the Trust other than the Trust Securities, and the issuance of Trust Securities shall be limited to a one-time, simultaneous issuance of both Trust Preferred Securities and Trust Common Securities on the Closing Date;

(b)           in connection with the issue and sale of the Trust 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 Trust Preferred Securities, the Guarantee and the Debentures;

(ii)           issue the Trust Preferred Securities in exchange for the Debentures and to take any action as may be necessary or desirable in connection with the consummation of the Underwriting Agreement and the Remarketing Agreement;

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(iii)          cause the Trust to execute, deliver and perform its obligations under Remarketing Agreements entered into pursuant to Article XIII and, except as otherwise expressly provided in Article XIII, causing the Trust to take such actions with respect to Remarketings as are provided for in Article XIII or as may be necessary or, as determined by the Regular Trustees, useful in connection with Remarketings;

(iv)          execute and file with the Commission a registration statement on Form S-3 or Form S-4, as applicable, or any amendment or supplement thereto prepared by the Sponsor, pertaining to the Trust Preferred Securities and the Guarantee including any amendments thereto;

(v)           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 Trust Preferred Securities in any state in which the Sponsor has determined to qualify or register such Trust Preferred Securities for sale; and

(vi)          execute and file with the Commission a registration statement on Form 8-A, including any amendments thereto, prepared by the Sponsor, relating to the registration of the Trust Preferred Securities and the Guarantee under Section 12(b) of the Exchange Act;

(c)           to acquire the Debentures with the proceeds of the sale of the Trust Preferred Securities and the Trust 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 Trust Preferred Securities and the Holders of Trust Common Securities;

(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 a 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 Trust Preferred Securities and Holders of Trust Common Securities as to such actions and applicable record dates;

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

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

(h)           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

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pursuant to Section 3.8(h), the Property Trustee has the exclusive power to bring such Legal Action;

(i)            subject to Section 6.11, to employ or otherwise engage employees and agents (who may be designated as officers with titles) and managers, contractors, advisors, and consultants and pay reasonable compensation for such services; provided that such delegates are U.S. Persons and conduct only those services that the Regular Trustees have authority to conduct directly;

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

(k)           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;

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

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

(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 Trust Preferred Securities or to enable the Trust to effect the purposes for which the Trust was created;

(o)           to take any action, not inconsistent with this Declaration of Trust or 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 Sponsor as the issuer of the Debentures to ensure that the Debentures will be treated as indebtedness of the Sponsor 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.

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(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 must 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 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 Sponsor pursuant to Article IV hereof.

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

(a)           The Trust shall not, and the Trustees (including the Property Trustee) shall cause the Trust not to, engage in any activity other than as required or authorized by this Declaration of Trust. In particular, the Trust shall not and the Trustees (including the Property Trustee) shall cause the Trust not to:

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

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

(iii)          possess Trust property for other than a purpose stated in Section 3.3 of this Declaration of Trust;

(iv)          make any loans or incur any indebtedness or acquire any securities other than the Debentures;

(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 Trust Securities in any way whatsoever, except to the extent expressly authorized in this Declaration of Trust or by the terms of the Trust Securities;

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

(viii)        other than as provided in this Declaration or by the terms of the Trust Securities, (A) direct the time, method and place of exercising any trust or power conferred upon the Indenture 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

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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 authorized or approved by vote of the Holders of the Trust Preferred Securities;

(xi)           other than in connection with the liquidation of the Trust pursuant to a Special Event or upon redemption of all the Trust Securities, file a certificate of cancellation of the Trust.

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 Holders of the Trust 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 6.7. 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 of the Property Trustee on behalf of the Holders of the Trust Securities and, upon the receipt of payments of funds from the Company on the Debentures or the Guarantee, deposit such funds into the Property Account and make payments to the Holders of the Trust Preferred Securities and Holders of the Trust Common Securities from the Property Account in accordance with Sections 7.3 and 8.2. Funds in the Property Account shall be held uninvested until disbursed in accordance with this Declaration of Trust. The Property Account shall be an account that is maintained with a banking institution authorized to exercise corporate trust powers and having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal or state authority, and the rating on whose long term unsecured indebtedness is at least equal to the rating assigned to the Trust Preferred Securities by a “nationally recognized statistical rating organization”, within the meaning of Rule 436(g)(2) under the Securities Act; and

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(ii)           engage in such ministerial activities as shall be necessary or appropriate to effect the redemption of the Trust Preferred Securities and the Trust 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 Trust 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 Trust Securities upon the occurrence of a Special Event in accordance with the provisions.

(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 of Trust and the Trust 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.

(f)            The Property Trustee shall have the legal power to exercise all of the rights, powers and privileges of a Holder of Debentures and, if a Trust Enforcement Event occurs and is continuing, the Property Trustee shall, for the benefit of Holders of the Trust Securities, enforce its rights as Holder of the Debentures subject to the rights of the Holders pursuant to the terms of such Trust Securities, including requiring the delivery of a Payment Notice to the Company upon written direction of Holders of a Majority in Liquidation Amount of the outstanding Trust Securities.

(g)           Subject to Section 7.8(a), 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 Trust 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.

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

(i)            the Trust has been completely liquidated and the assets of the Trust available for distribution have been distributed to the Holders of Trust Securities pursuant to the terms of this Declaration of Trust or the Trust Securities; or

(ii)           a Successor Property Trustee has been appointed and has accepted that appointment in accordance with Section 6.7.

(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 must 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

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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 or waiver of all Trust Enforcement Events that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Declaration of Trust and no implied covenants shall be read into this Declaration of Trust 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 of Trust, 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 of Trust 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 of Trust 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 of Trust, and no implied covenants or obligations shall be read into this Declaration of Trust 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 of Trust; 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 of Trust;

(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 Trust Securities relating to the time, method and place of conducting any proceeding for any

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remedy available to the Property Trustee, or exercising any trust or power conferred upon the Property Trustee under this Declaration of Trust;

(iv)          no provision of this Declaration of Trust 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 of Trust 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 of Trust 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;

(vii)         the Property Trustee shall not be liable for any interest in 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 of Trust, 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 acting on behalf of the Trust contemplated by this Declaration of Trust shall be sufficiently evidenced by an Officers’ Certificate;

(iii)          whenever in the administration of this Declaration of Trust, the Property Trustee shall deem it desirable that a matter be proved or established before taking,

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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 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 and 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 the right at any time to seek instructions concerning the administration of this Declaration of Trust 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 of Trust 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)(vi) shall be taken to relieve the Property Trustee, upon the occurrence of a Trust Enforcement Event, of its obligation to exercise the rights and powers vested in it by this Declaration of Trust;

(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 Trust Securities, and the signature of the Property Trustee or its agents alone shall be sufficient and effective to perform any such action and

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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 of Trust, 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 of Trust 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 Trust Securities which instructions may only be given by the Holders of the same proportion in liquidation amount of the Trust Securities as would be entitled to direct the Property Trustee under the terms of the Trust 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 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 of Trust, the Property Trustee shall not be under any obligation to take any action that is discretionary under the provisions of this Declaration of Trust;

(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 of Trust;

(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 received written notice of such event from Holders holding more than a Majority in Liquidation Amount of the Trust 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 agent 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 of Trust, 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 of Trust 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

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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 provision of this Declaration of Trust 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 of Trust. 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 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 cause the Trust to execute pursuant to Section 3.6; provided that the registration statement referred to in Section 3.6(b)(iii), 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 Trust Securities.

The recitals contained in this Declaration of Trust and the Trust 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 of Trust or the Trust Securities.

SECTION 3.14.  Duration of Trust.

The Trust, unless terminated pursuant to the provisions of Article VIII hereof, shall have perpetual existence.

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 Trust Securities, the Delaware Trustee or the Property Trustee,

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consolidate, amalgamate, merge with or into, or be replaced by or convey, transfer or leave its properties substantially as an entirety to a trust organized as such under the laws of any State of the United States; provided that:

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

(A)          expressly assumes all of the obligations of the Trust under the Trust Securities; or

(B)           substitutes for the Trust Preferred Securities other securities having substantially the same terms as the Trust Preferred Securities (the “Successor Trust Preferred Securities”) so long as the Successor Trust Preferred Securities rank the same as the Trust Preferred Securities rank with respect to distributions, assets and payments upon liquidation, redemption and otherwise;

(ii)           the Company expressly acknowledges a trustee of the Successor Entity that possesses the same powers and duties as the Property Trustee as the Holder of the Debentures;

(iii)          such merger, consolidation, amalgamation or replacement does not cause the Trust Preferred Securities (including any Successor Trust Preferred Securities) or the MCAPS to be downgraded by any “nationally recognized statistical rating organization” as defined by the Commission;

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

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

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

(A)          such merger, consolidation, amalgamation, replacement conveyance, transfer or lease shall not adversely affect the rights, preferences and privileges of the Holders of the Trust Preferred Securities (including any Successor Trust Preferred Securities) in any material respect (other than with respect to any dilution of the Holders’ interest in the new entity); and

(B)           following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease the Trust (or the Successor Entity) shall not be required to register as an investment company under the Investment Company Act; and

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(C)           following such merger, consolidation, amalgamation, replacement, conveyance, transfer or lease the Trust (or the Successor Entity) shall not be classified as other than a grantor trust for United States federal income tax purposes.

(vii)         the Sponsor or any permitted successor or assignee owns all of the Trust Common Securities and guarantees the obligations of such Successor Entity under the Successor Securities at least to the extent provided by the Securities Guarantee; and

(viii)        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 Trust Preferred 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.

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 Trust 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 Trust 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 Trust Securities (or, if the Trust Securities are original issue discount Trust Securities, such portion of the liquidation amount as may be specified in the terms of such Trust 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

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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, arrangement adjustment or compensation affecting the Trust 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.

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ARTICLE IV

SPONSOR

SECTION 4.1.Responsibilities of the Sponsor.

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

(a)           to negotiate the terms of an underwriting agreement providing for the sale of the Trust Preferred Securities to the underwriters in connection with the issuance of Mandatory Capital Advantages Preferred Securities;

(b)           to register the Trust Preferred Securities under the Securities Act and under state securities or blue sky laws and the qualification of this Declaration of Trust as a trust indenture under the Trust Indenture Act;

(c)           to determine the States in which to take appropriate action to qualify or register for sale all or part of the Trust 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;

(d)           to list the Trust Preferred securities upon such national securities exchange of exchanges, if any, and to register the Trust Preferred Securities under the Exchange Act, if required, and prepare for filing by the Trust with the Commission a registration statement on Form 8-A, including any amendments thereto.

SECTION 4.2.              Indemnification and Fees and Expenses of the Trustees

(a)           The Sponsor 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 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(a) shall survive the resignation or removal of the Delaware Trustee or the Property Trustee or the termination of the Declaration of Trust.

(b)           The foregoing obligations of the Sponsor are for the benefit of, and shall be enforceable by, any Person to whom any such debts, obligations, costs, expenses and taxes are owed (each, a “Creditor”) whether or not such Creditor has received notice thereof.  Any such Creditor may enforce such obligations of the Sponsor directly against the Sponsor, and the Sponsor irrevocably waives any right or remedy to require that any such Creditor take any action against the Trust or any other Person before proceeding against the Sponsor.

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ARTICLE V

TRUST COMMON SECURITIES HOLDER

SECTION 5.1.Company’s Purchase of Trust Common Securities.

On the Closing Date, the Company shall receive all of the Trust Common Securities and all of the Trust Preferred Securities issued by the Trust in exchange for the Debentures issued to the Trust by the Company.  The Trust Common Securities will be issued in an amount equal to $1,000.

SECTION 5.2.Covenants of the Trust Common Securities Holder.

For so long as the Trust Preferred Securities remain outstanding, the Company shall covenant (i) to maintain directly 100% ownership of the Trust 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 of Trust, (iii) to use its commercially reasonable efforts to ensure that the Trust shall not be an investment company for purposes of the Investment Company Act and (iv) to take no action that would be reasonably likely to cause the Trust to be classified as other than a grantor trust for United States federal income tax purposes.

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ARTICLE VI

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 Trust Securities, the Sponsor may, by written instrument, increase or decrease the number of Trustees;

(b)           after the issuance of any Trust Securities, the number of Trustees may be increased or decreased by vote of the Holders of a Majority in Liquidation Amount of the Trust Common Securities voting as a class at a meeting of the Holders of the Trust Common Securities (or, if there is only one Holder, by written instrument); provided however, that the number of Trustees shall in no event be less than three; provided further, that all Trustees shall be U.S. Persons and (1) if required by the Statutory Trust Act, one Trustee is the Delaware Trustee; (2) there shall be at least one Regular Trustee who is an employee or officer of, or is affiliated with the Company; and (3) one Trustee shall be the Property Trustee for so long as this Declaration of Trust is required to qualify as an indenture under the Trust Indenture Act, and such Property 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.

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

(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 may also be the Delaware Trustee (in which case Section 3.11 shall have no application).

SECTION 6.3.Property Trustee; Eligibility.

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

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

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(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 Person permitted by the Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least US$50,000,000, and subject to supervi­sion or examination by Federal, State, Territorial or District of Columbia banking 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.

Pursuant to the Original Declaration of Trust, JPMorgan Chase Bank, N.A. was named Property Trustee. Effective immediately prior to the issuance of the Trust Securities, U.S. Bank National Association is hereby appointed by the Sponsor as Property Trustee.

(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 6.7(d).

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

(e)           Nothing herein shall prevent the Trustee from filing with the Commission the application referred to in the penultimate paragraph of Section 310(b) of the Trust Indenture Act.

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.

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SECTION 6.5.Regular Trustees.

(a)           Pursuant to the Original Declaration of Trust, Jeffrey A. Welikson, Barrett S. DiPaolo and Oliver Budde were named as the Regular Trustees. Effective immediately prior to the issuance of the Trust Securities, Barrett S. DiPaolo, James Killerlane and Andrew Yeung are hereby appointed by the Sponsor as the Regular Trustees.

(b)           Except as expressly set forth in this Declaration of Trust 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.

(c)           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 that the Regular Trustees have the power and authority to cause the Trust to execute pursuant to Section 3.6; provided that the registration statement referred to in Section 3.6(b)(iii), including any amendments thereto, shall be signed by or on behalf of a majority of the Regular Trustees.

SECTION 6.6.Delaware Trustee.

Pursuant to the Original Declaration of Trust, J.P.Morgan Chase Bank, N.A. was named Delaware Trustee. Effective immediately prior to the issuance of the Trust Securities, U.S. Bank Trust National Association is hereby appointed by the Sponsor as Delaware Trustee.

SECTION 6.7.Appointment, Removal and Resignation of Trustees.

(a)           Subject to Section 6.7(b), Trustees may be appointed or removed without cause at any time:

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

(ii)           after the issuance of any Trust Securities, by vote of the Holders of a Majority in Liquidation Amount of the Trust Common Securities voting as a class at a meeting of the Holders of the Trust Common Securities (or, if there is only one Holder, by written instrument); and

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

(b)           The Trustee that acts as Property Trustee shall not be removed in accordance with Section 6.7(a) until a successor Trustee possessing the qualifications to act as Property Trustee under Section 6.3 (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.

(c)           The Trustee that acts as Delaware Trustee shall not be removed in accordance with Section 6.7(a) until a successor Trustee possessing the qualifications to act as

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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.

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

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

(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 Trust 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.

(e)           The Holders of the Trust 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 6.7.

(f)            If no Successor Property Trustee or Successor Delaware Trustee shall have been appointed and accepted appointment as provided in this Section 6.7 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. Such court may thereupon, after prescribing such notice, if any, as it may deem proper and prescribe, appoint a Successor Property Trustee or Successor Delaware Trustee, as the case may be.

(g)           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.

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SECTION 6.8.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 6.7.

SECTION 6.9.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 6.7, 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 of Trust.

SECTION 6.10.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 or any committee thereof 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 of Trust, 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. Notwithstanding the foregoing, any and all actions of the Regular Trustees may be taken by the unanimous written consent of all Regular Trustees.

SECTION 6.11.Delegation of Power.

(a)           Any 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 purpose of executing any documents contemplated in Section 3.6, including any registration statement or amendment thereto filed with the Commission, or making any other governmental filing; provided that such person is a U.S. Person; and

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

SECTION 6.12.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, as the case may be, may be merged or converted or with which either may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Property Trustee or the Delaware Trustee, as the case may be, shall be a party, or any corporation succeeding to all or sub­stantially all the corporate trust business of the Property Trustee or the Delaware Trustee, as the case may be, shall be the successor of the Property Trustee or the Delaware Trustee, as the case may be, 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.

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ARTICLE VII

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 and one class of Trust Common Securities, each representing undivided beneficial ownership interests in the assets of the Trust, as follows:

(i)            Trust Preferred Securities. 500,000 Trust Preferred Securities of the Trust with an aggregate liquidation amount with respect to the assets of the Trust of $1,000 per Trust Preferred Security are hereby designated for the purposes of identification only as Trust Preferred Securities (the “Trust Preferred Securities”). The Trust Preferred Securities shall have an aggregate liquidation amount not greater than $500,000,000.  The Trust Preferred Securities may be issued in the form of one or more Global Certificates or in fully registered, definitive form as set forth in Section 7.12 hereof.  The Global Trust Preferred Security Certificates evidencing the Trust Preferred Securities shall be substantially in the form of Exhibit A-1 to this Declaration of Trust and the Trust Preferred Securities in registered, definitive form shall be substantially in the form of Exhibit A-2 to this Declaration of Trust, in each case, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice.

(ii)           Trust Common Securities. $1,000 in Trust Common Securities of the Trust are hereby designated for the purposes of identification only as Trust Common Securities (the “Trust Common Securities” and, together with the Trust Preferred Securities, the “Trust Securities”). The Trust Common Security Certificate evidencing the Trust Common Securities shall be substantially in the form of Exhibit A-3 to this Declaration of Trust, with such changes and additions thereto or deletions therefrom as may be required by ordinary usage, custom or practice.

(b)           The Certificates shall be signed on behalf of the Trust by any Regular Trustee. In case any Regular Trustee of the Trust who shall have signed any of the Trust Securities shall cease to be a 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 Trust Security, shall be the Regular Trustees of the Trust, although at the date of the execution and delivery of this Declaration of Trust 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 Trust Securities may be listed, or to conform to usage.

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A Trust Security 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 the Trust Security has been authenticated under this Declaration of Trust.

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

The Property Trustee may appoint an authenticating agent acceptable to the Trust to authenticate Trust Securities; provided that such authenticating agent is a U.S. Person. An authenticating agent may authenticate Trust Preferred Securities whenever the Property Trustee may do so. Each reference in this Declaration of Trust 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.

(c)           The Trust shall issue no securities or other interests in the assets of the Trust other than the Trust Preferred Securities and the Trust Common Securities.

(d)           The Trust Preferred Securities rank pari passu and payment thereon shall be made Pro Rata with the Trust Common Securities; provided that if an Indenture Event of Default shall have occurred and be continuing, (i) no payment of any distribution on any of the Trust Common Securities shall be made unless payment in full in cash of the Distributions on all outstanding Trust Preferred Securities for all quarterly distribution periods terminating on or prior thereto and (ii) no payment on account of the redemption, liquidation or other acquisition of Trust Common Securities shall be made unless the full amount of the Redemption Price for all of the outstanding Trust Preferred Securities then called for redemption or, in the case of amounts payable upon liquidation of the Trust in accordance with Section 8.2 hereof, assets in an amount equal to the Redemption Price for all outstanding Trust Preferred Securities shall have been made or provided for, and all funds available to the Property Trustee shall first be applied to the payment in full of, or the Redemption Price of, or all liquidation amounts on the Trust Preferred Securities then due and payable. 

(e)           Upon issuance of the Trust Securities as provided herein, the Trust Securities so issued shall be deemed to be validly issued, fully paid and non-assessable beneficial ownership interests in the assets of the Trust, subject to Section 9.1(b) with respect to the Trust Common Securities.

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

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

(h)           The Holders of the Trust Securities shall have no preemptive rights.

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SECTION 7.2.Distributions.

(a)           Holders of Trust Securities shall be entitled to receive cumulative cash distributions at such times and in such amounts as the Trust receives cash payments from the Company on the Debentures and the Guarantee. If and to the extent that the Trust receives any such cash payments, the Trust shall and the Property Trustee is directed, to the extent funds are available for that purpose, to make a distribution of such cash payment on the Trust Preferred Securities and the Trust Common Securities on a Pro Rata basis. 

(b)           Distributions on the Trust Securities shall be payable only to the extent that the Trust has funds available for the payment of such distributions in the Property Account.  Amounts available to the Trust for distribution to the Holders of the Trust Securities shall be limited to payments received by the Trust from the Company on the Debentures and the Guarantee. If the Property Trustee, as the holder of the Debentures for the benefit of the Holders of the Trust Securities, receives notice of any determination by the Company to defer interest on such Debentures, the Property Trustee shall give notice of such determination to the Holders promptly.

(c)           All distributions on the Trust Securities shall be payable to the Holders thereof as they appear on the books and records of the Trust on the relevant record dates, which relevant record dates, as long as the Trust Preferred Securities remain in book-entry only form, shall be one Business Day prior to the relevant payment dates. In the event that the Trust Securities are issue in definitive form or if issued in book-entry form, do not remain in book-entry only form, the relevant record dates shall be determined by the Regular Trustees and shall be at least one Business Day before the relevant payment dates.  All distributions shall be paid through the Property Trustee out of funds held in the Property Account for the benefit of the Holders of the Trust Securities. If distributions are not paid when scheduled, the accumulated distributions will be paid to the Holders of Trust Securities as they appear on the books and records of the Trust on the record date with respect to the payment date for the Trust Securities that corresponds to the payment date fixed by the Company with respect to the payment date for the Trust Securities that corresponds to the payment date fixed by the Company with respect to the payment of cumulative interest on the Debentures.

(d)           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 Trust Securities.

SECTION 7.3.Redemption of Trust Securities.

(a)           Upon a redemption for cash of the Debentures by the Company, the proceeds from such redemption shall be simultaneously applied on a Pro Rata basis, except as otherwise provided in Section 7.1(d), to redeem Trust Securities having an aggregate liquidation amount equal to the aggregate liquidation preference of the Debentures so redeemed, at the Redemption Price on a Pro Rata basis.  Holders shall be given not less than 30 nor more than 60 days’ notice of such redemption.

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(b)           On any date fixed for distribution of Debentures upon dissolution of the Trust, (i) the Trust Securities shall no longer be deemed to be outstanding and (ii) certificates representing Trust Securities shall be deemed to represent their Pro Rata portion of the Debentures until such certificates are presented to the Sponsor or its agent for exchange for such securities.

SECTION 7.4.Redemption Procedures.

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

(b)           In the event that fewer than all the outstanding Trust Securities are to be redeemed, the Trust Securities to be redeemed shall be redeemed Pro Rata from each Holder of Trust Securities; provided that in respect of Trust Preferred Securities registered in the name of and held of record by DTC or its nominee (or any successor Depositary or its nominee) or any nominee, the distribution of the proceeds of such redemption shall be made to each Participant (or Person on whose behalf such nominee holds such securities) in accordance with the procedures applied by such agency or nominee. The Trust may not redeem the Trust Securities in part unless all accumulated and unpaid distributions to the date of redemption have been paid in full on all Trust Securities then outstanding.  For all purposes of this Declaration of Trust, unless the context otherwise requires, all provisions relating to the redemption of Trust Preferred Securities shall relate, in the case of any Trust Preferred Security redeemed or to be redeemed only in part, to the portion of the aggregate liquidation amount of Trust Preferred Securities that has been or is to be redeemed.

(c)           If Trust Securities are to be redeemed and the Trust gives a Redemption Notice (which notice shall be irrevocable), then (A) while the Trust Preferred Securities are in book-entry only form, by 12:00 noon, New York City time, on the redemption date, the Property Trustee shall deposit irrevocably with the DTC or its nominee (or successor Depositary or its nominee) funds sufficient to pay the applicable Redemption Price with respect to the Trust Preferred Securities and shall give the DTC irrevocable instructions and authority to pay the Redemption Price to the Holders of the Trust Preferred Securities, and (B) with respect to Trust Preferred Securities issued in definitive form and Trust Common Securities, the Property Trustee shall pay the relevant Redemption Price to the Holders of such Trust Securities by check mailed to the address of the relevant Holder appearing on the books and records of the Trust on the redemption date. If a Redemption Notice shall have been given and funds deposited as required, if applicable, then immediately prior to the close of business on the date of such deposit, or on the redemption date, as applicable, distributions shall cease to accumulate on the Trust Securities so called for redemption and all rights of Holders of such Trust Securities shall cease, except the

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right of the Holders of such Trust Securities to receive the Redemption Price, but without interest on such Redemption Price. If any date fixed for redemption of Trust Securities is not a Business Day, then payment of the Redemption Price payable on such date shall be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date fixed for redemption. If payment of the Redemption Price in respect of any Trust Securities is improperly withheld or refused and not paid either by the Property Trustee or by the Sponsor as guarantor pursuant to the relevant Guarantee, distributions on such Trust Securities shall 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 shall 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. Upon satisfaction of the foregoing conditions, then immediately prior to the close of business on the date of such deposit or payment, all rights of Holders of such Trust Preferred Securities so called for redemption shall cease, except the right of the Holders to received the Redemption Price, but without interest on such Redemption Price, and from and after the date fixed for redemption, such Trust Preferred Securities shall not accumulate distributions or bear interest.

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

SECTION 7.5.Voting and Enforcement Rights of Trust Preferred Securities.

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

(b)           The Holders of a Majority in liquidation amount of the Trust Preferred 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 of Trust, 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, including the right to enforce (x) the Company’s creditors rights and other rights with respect to the Debentures, (y) the rights of the Holders of the Debentures under the Indenture and (z) the rights of the Holders of the Debentures to receive interest payments on the Debentures; (ii) consent to any amendment, modification, or termination 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 Trust 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

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the aggregate stated liquidation amount of the Trust Preferred Securities which is at least equal to the percentage required under the Indenture may direct the Property Trustee to give such consent to take such action.

(c)           If the Property Trustee fails to enforce its rights under the Indenture after a Holder of record of Trust Preferred Securities has made a written request, such Holder of record of Trust Preferred Securities may institute a legal proceeding directly against the Company to (i) enforce the Property Trustee’s rights under the Indenture or (ii) enforce the Property Trustee’s rights under the Guarantee, without first instituting any legal proceeding against the Property Trustee or any other Person or entity.

(d)           Notwithstanding anything to the contrary in this Declaration of Trust, (i) if the Company fails to comply with its obligations under the Indenture, including its obligation under Section 1.7 of the Supplemental Indenture to issue Qualifying APM Securities (as defined therein), or (ii) if a Trust Enforcement Event has occurred and is continuing and such event is attributable to the failure of the Company to pay interest, principal or other required payments on the Debentures or the Guarantee on the date such interest, principal or other required payments are otherwise payable, then a Holder of Trust Preferred Securities may directly institute a proceeding against the Company (a “Direct Action”) for enforcement of such obligation or payment to such Holder of the principal of or interest on Debentures or the Guarantee having a principal amount equal to the aggregate liquidation amount of the Trust Preferred Securities of such Holder on or after the respective due date specified in the Debentures.

(e)           The Property Trustee shall notify all Holders of the Trust 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. 

(f)            In the event that the consent of the Property Trustee, as the Holder of the Debentures, is required under the Indenture with respect to any amendment, modification or waiver of the Indenture, the Property Trustee shall request the direction of the Holders of the Trust Preferred Securities with respect to such amendment, modification or waiver and shall vote with respect to such amendment, modification or waiver as directed by not less than 66-2/3% of the aggregate liquidation amount of the Trust 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 Trust Preferred Securities.

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

(h)           Any required approval or direction of Holders of Trust Preferred Securities may be given at a separate meeting of Holders of Trust Preferred Securities convened for such purpose, at a meeting of all of the Holders of Trust Securities or pursuant to written consent. The Regular Trustees shall cause a notice of any meeting at which Holders of Trust Preferred Securities are entitled to vote, or of any matter upon which action by written consent of

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such Holders is to be taken, to be mailed to each Holder of record of Trust 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.

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

(j)            Notwithstanding that Holders of Trust Preferred Securities are entitled to vote or consent under any of the circumstances described above, any of the Trust Preferred Securities that are owned at such time by the Sponsor, any Regular Trustee or any of their Affiliates, shall not be entitled to vote or consent and shall, for purposes of such vote or consent, be treated as if such Trust Preferred Securities were not outstanding; provided, however, that Persons otherwise eligible to vote to whom the Sponsor or any of its subsidiaries have pledged Trust Preferred Securities may vote or consent with respect to such pledged Trust Preferred Securities under any of the circumstances described herein.

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

(l)            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 Trust Preferred Securities.

SECTION 7.6.Voting and Enforcement Rights of Trust Common Securities

(a)           Except as provided under Section 6.1, this Section 7.6, 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 of Trust, the Holders of the Trust Common Securities shall have no voting rights.

(b)           The Holders of the Trust Common Securities are entitled, in accordance with Sections 6.1(b) and 6.7(a) hereof, to vote to appoint, remove or replace any Trustee or to increase or decrease the number of Trustees.

(c)           Subject to Section 2.6 hereof and only after all Trust Enforcement Events with respect to the Trust Preferred Securities have been cured, waived, or otherwise eliminated, the Holders of a Majority in liquidation amount of the Trust 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 of Trust, 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, including (A) the right to enforce the rights of the Holders of the Debentures under the Indenture or (B) consent to any amendment, modification or waiver of the Indenture or the

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Debentures where such consent shall be required or (iii) waive any past default and its consequences that is waivable under Section 513 of the Indenture; provided, however, that where a consent or action under the Indenture would require the consent or act of the Holders of more than a majority of the aggregate principal amount of Debentures affected thereby, only the Holders of the percentage of the aggregate stated liquidation amount of the Trust 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.

(d)           If the Property Trustee fails to enforce its rights under the Indenture after a Holder of record of Trust Common Securities has made a written request (and is permitted to do so pursuant to Section 7.6(c)), such Holder of record of Trust Common Securities may directly institute a legal proceeding directly against the Company, 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 Company to make any required payment when due on the Debentures or on the Guarantee, then a Holder of Trust Common Securities may directly institute a proceeding against the Company for enforcement of payment with respect to such Debentures or the Guarantee.  

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

(f)            Any required approval or direction of Holders of Trust Common Securities may be given at a separate meeting of Holders of Trust Common Securities convened for such purpose, at a meeting of all of the Holders of Trust Securities or pursuant to written consent. The Regular Trustees shall cause a notice of any meeting at which Holders of Trust Common Securities are entitled to vote, or of any matter upon which action by written consent of such Holders is to be taken, to be mailed to each Holder of record of Trust Common 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.

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

(h)           Notwithstanding that Holders of Trust Common Securities are entitled to vote or consent under any of the circumstances described above, if Trust Common Securities are voting together with the Trust Preferred Securities as a single class, any of the Trust Common Securities that are owned at such time by the Sponsor or any of its Affiliates, shall not be entitled to vote or consent and shall, for purposes of such vote or consent, be treated as if such Trust Common Securities were not outstanding; provided, however, that Persons otherwise eligible to vote to whom the Sponsor or any of its subsidiaries have pledged Trust Preferred Securities may vote or consent with respect to such pledged Trust Preferred Securities under any of the circumstances described herein.

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SECTION 7.7.Paying Agent and Security Registrar.

(a)           The Trust shall maintain in the Borough of Manhattan, City of New York, State of New York, (i) the Paying Agent’s office or agency where the Trust Preferred Securities may be presented for payment in the event that the Trust Preferred Securities are not in book-entry only form and (ii) an office or agency where the Trust Preferred Securities may be presented for registration of transfer or exchange (“Security Register”).

(b)           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 any Holder. The Trust shall notify the Property Trustee of the name and address of any Paying Agent not a party to this Declaration of Trust. If the Trust fails to appoint or maintain another entity as Paying Agent, the Property Trustee shall act as such. The Trust or any of its Affiliates may act as Paying Agent.  The Property Trustee shall initially act as Paying Agent for the Trust Preferred Securities and the Trust Common Securities. 

(c)           The Security Register shall initially be kept at the Corporate Trust Office of the Property Trustee.  Subject to such reasonable regulations as it may prescribe, the Trust shall provide for the registration of Trust Preferred Securities and of transfers of Trust Preferred Securities.  The Property Trustee shall initially act as Security Registrar (the “Security Registrar”) for the purpose of registering Trust Preferred Securities and transfers of Trust Preferred Securities as herein provided.

SECTION 7.8.Certificates of Trust Securities.

(a)           The Trust Preferred Securities may be issued in the form of one or more Global Certificates or in fully registered, definitive form as set forth in Section 7.12 hereof.  If the Trust Preferred Securities are to be issued in the form of one or more Global Certificates, then the Regular Trustee on behalf of the Trust shall execute and the Property Trustee shall authenticate and deliver one or more Global Certificates that (i) shall represent and shall be denominated in an amount equal to the aggregate liquidation amount of all of the Trust Preferred Securities to be issued in the form of Global Certificates and not yet cancelled, (ii) shall be registered in the name of the Depositary for such Global Certificate or Trust 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 Certificates shall bear a legend as set forth in Section 7.12 hereof.

(b)           Trust Preferred Securities Certificates that are no longer a component of Normal MCAPS and are released from the Collateral Account will be issued in the form of a Trust Preferred Security Certificate or Certificates representing a book-entry Trust Preferred Security Certificate, to be delivered to, or on behalf of the Depositary, by, or on behalf of, the Trust.  Such Trust Preferred Security Certificate or Certificates shall initially be registered on the Securities Register in the name of Cede & Co., the nominee of the Depositary, and no Holder will receive a Trust Preferred Security Certificate in definitive form representing such Holder’s interest in such Trust Preferred Securities, except as provided in Sections 7.8(e) and 7.8(f).

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(c)           A single Trust Common Securities Certificate representing the Trust Common Securities shall be issued to the Sponsor in the form of a definitive Trust Common Securities Certificate.

(d)           Trust Preferred Securities not represented by a Global Certificate issued in exchange for all or a part of a Global Certificate pursuant to Section 7.12 hereof shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its Participant or Indirect Participants or otherwise, shall instruct the Property Trustee.  Upon execution and authentication, the Property Trustee shall deliver such Trust Preferred Securities not represented by a Global Certificate to the Persons in whose names such definitive Trust Preferred Securities are so registered in the form of Trust Preferred Securities Certificates.

(e)           If at any time the Depositary for any Trust Preferred Securities represented by one or more Global Certificates notifies the Trust that it is unwilling or unable to continue as Depositary for such Trust Preferred Securities or if at any time the Depositary for such Trust Preferred Securities shall no longer be eligible under this Section 7.8, the Trust shall appoint a successor Depositary with respect to such Trust Preferred Securities.  If a successor Depositary for such Trust 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 Trust Preferred Securities be represented by one or more Global Certificates shall no longer be effective and the Trust shall execute, and the Property Trustee shall authenticate and deliver, Trust Preferred Securities in definitive registered form, in any authorized denominations, in an aggregate liquidation amount equal to the principal amount of the Global Certificate or Trust Preferred Securities representing such Trust Preferred Securities in exchange for such Global Certificate or Trust Preferred Securities.

(f)            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 Certificates shall no longer be represented by a Global Certificate or Trust Preferred Securities.  In such event the Trust shall execute, and the Property Trustee shall authenticate and deliver, Trust Preferred Securities in definitive registered form, in any authorized denominations, in an aggregate liquidation amount equal to the principal amount of the Global Certificate or Trust Preferred Securities representing such Preferred Securities, in exchange for such Global Certificate or Trust Preferred Securities.

(g)           Notwithstanding any other provisions of this Declaration of Trust (other than the provisions set forth in Section 7.9 hereof), Global Certificates 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.

(h)           Interests of beneficial owners in a Global Certificate may be transferred or exchanged for Trust Preferred Securities Certificates and Trust Preferred Securities Certificates may be transferred or exchange for Global Certificates in accordance with rules of the Depositary, the Applicable Procedures and the provisions of Section 7.9.

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SECTION 7.9.Transfer of Trust Securities.

(a)           Trust 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 VII, 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 Trust Preferred Securities and of transfers of Trust Preferred Securities.  The Property Trustee is hereby appointed “Security Registrar” for the purpose of registering Trust Preferred Securities and transfers of Trust Preferred Securities as herein provided.

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

(f)            Every Trust 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 Trust 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 Trust Securities, but the Trust may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Trust Securities.

(h)           If the Trust Securities are to be redeemed in part, the Trust shall not be required (A) to issue, register the transfer of or exchange any Trust 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.

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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 Trust 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 Trust 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 Trust Preferred Securities will initially be issued in the form of definitive certificates registered in the name of the Stock Purchase Contract Agent. To the extent that Holders of Normal MCAPS create Treasury MCAPS and hold their Trust Preferred Securities separately, such Trust Preferred Securities may be issued in the form of one or more Global Securities.  If Trust Preferred Securities are to be issued in the form of one or more Global Securities, then the Regular Trustee on behalf of the Trust shall execute and the Property Trustee shall authenticate and deliver one or more Global Securities that (i) shall represent and shall be denominated in an amount equal to the aggregate liquidation amount of all of the Preferred Securities to be issued in the form of Global Securities and not yet cancelled, (ii) shall be registered in the name of the Depositary for such Global Security or Trust 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 TRUST PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION OF TRUST HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST

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COMPANY, A NEW YORK CORPORATION (“DTC”), OR A NOMINEE OF DTC.  THIS TRUST PREFERRED SECURITY IS EXCHANGEABLE FOR TRUST PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION OF TRUST.  UNLESS THIS GLOBAL CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY TRUST PREFERRED SECURITY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. (“CEDE”) OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE, HAS AN INTEREST HEREIN.”

Trust 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 Trust Preferred Securities not represented by a Global Security to the Persons in whose names such definitive Trust 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 Trust Preferred Securities not represented by a Global Security, redeemed, cancelled or transferred to a transferee who receives Trust Preferred Securities not represented by a Global Security therefor or any Trust 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.

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

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If at any time the Depositary for any Trust Preferred Securities represented by one or more Global Securities notifies the Trust that it is unwilling or unable to continue as Depositary for such Trust Preferred Securities or if at any time the Depositary for such Trust 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 Trust 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 Trust 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, Trust 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 Trust Preferred Securities representing such Trust Preferred Securities in exchange for such Global Security or Trust Preferred Securities.

The Trust may at any time and in its sole discretion determine that the Trust Preferred Securities issued in the form of one or more Global Securities shall no longer be represented by a Global Security or Trust Preferred Securities.  In such event the Trust shall execute, and the Property Trustee, shall authenticate and deliver, Trust 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 Trust Preferred Securities, in exchange for such Global Security or Preferred Securities.

Notwithstanding any other provisions of this Declaration of Trust (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 Trust Preferred Securities not represented by a Global Security and Trust 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.

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ARTICLE VIII

DISSOLUTION AND LIQUIDATION OF THE 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 Trust Common Securities or the Sponsor;

(ii)           the filing of a certificate of dissolution or its equivalent with respect to the Sponsor 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 filing of a certificate of cancellation with respect to the Trust after having obtained the consent of at least a Majority in Liquidation Amount of the Trust Securities, voting together as a single class, to file such certificate of cancellation, with respect to the Trust;

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

(v)           the time when all of the Trust Securities shall have been called for redemption and the amounts necessary for redemption thereof shall have been paid to the Holders in accordance with the terms of the Trust Securities;

(vi)          upon the election of the Regular Trustees, following the occurrence and continuation of a Special Event; provided that the Trust shall have been dissolved and the Debentures distributed to the Holders of the Trust Securities in exchange for the Trust Securities; or

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

(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 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 3.9 and Article IX shall survive the termination of the Trust.

SECTION 8.2.Liquidation Distribution Upon Dissolution and Termination of the Trust.

(a)           In the event of any voluntary or involuntary liquidation, dissolution, winding-up or termination of the Trust (a “Liquidation”), the Holders of the Trust Securities on the date of the Liquidation shall be entitled to receive all assets of the Trust available for

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distribution to Holders of Trust Securities after satisfaction of the Trust’s 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 $1,000 per Trust 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 Trust Securities shall be distributed on a Pro Rata basis to the Holders of the Trust Securities in exchange for such Trust 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 Trust Securities shall be paid on a Pro Rata basis.  The Holders of the Trust Common Securities will be entitled to receive distributions upon any such Liquidation Pro Rata with the Holders of the Trust Preferred Securities except that if an Indenture Event of Default has occurred and is continuing, the Trust Preferred Securities shall have a preference over the Trust Common Securities with regard to such distributions.

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ARTICLE IX

LIMITATION OF LIABILITY OF
HOLDERS OF TRUST SECURITIES, TRUSTEES OR OTHERS

SECTION 9.1.Liability.

(a)           Except as expressly set forth in this Declaration of Trust, the Guarantee and the terms of the Trust Securities, the Sponsor and the Trustees shall not be:

(i)            personally liable for the return of any portion of the capital contributions (or any return thereon) of the Holders of the Trust Securities, which shall be made solely from assets of the Trust; and

(ii)           required to pay to the Trust or to any Holder of Trust 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 Trust 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, that the Holders of the Trust Common Securities, by entering into this Agreement, shall be liable directly to any creditor or claimant of or against the Trust for the entire amount of all of the debts and obligations of the Trust (other than obligations to the Holders of Trust Securities in their capacities as Holders) 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 Trust Preferred Securities shall be entitled to the same limitation of personal liability extended to shareholders of private corporations for profit organized under the General Corporation Law of the State of Delaware.

SECTION 9.2.Exculpation.

(a)           No Company 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 Company Indemnified Person in good faith on behalf of the Trust and in a manner such Company Indemnified Person reasonably believed to be within the scope of the authority conferred on such Company Indemnified Person by this Declaration of Trust or by law, except that a Company Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Company Indemnified Person’s gross negligence (or, in the case of the Property Trustee, 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

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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 Trust 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 of Trust shall not be liable to the Trust or to any other Covered Person for its good faith reliance on the provisions of this Declaration of Trust. The provisions of this Declaration of Trust, 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 an Indemnified Person and any Covered Person; or

(ii)           whenever this Declaration of Trust 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 Trust Securities,

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

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SECTION 9.4.Indemnification.

(a)           To the fullest extent permitted by applicable law, the Sponsor shall indemnify and hold harmless any Company 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 Company Indemnified Person against expenses (including attorneys’ 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 Company 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.

(i)            The Sponsor shall indemnify, to the fullest extent permitted by law, any Company 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 Company Indemnified Person against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Trust and except that no such indemnification shall be made in respect of any claim, issue or matter as to which such Company 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.

(ii)           To the extent that a Company Indemnified Person shall be successful on the merits or otherwise (including dismissal of an action without prejudice or the settlement of an action without admission of liability) in defense of any action, suit or proceeding referred to in paragraphs (i) and (ii) of this Section 9.4(a), or in defense of any claim, issue or matter therein, he shall be indemnified, to the fullest extent permitted by law, against expenses (including attorneys’ fees) actually and reasonably, incurred by him in connection therewith.

(iii)          Any indemnification under paragraphs (i) and (ii) of this Section 9.4(a) (unless ordered by a court) shall be made by the Sponsor only as authorized in the specific case upon a determination that indemnification of the Company 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

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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 Holder of the Trust Common Securities.

(iv)          Expenses (including attorneys’ fees) incurred by a Company 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 Sponsor in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such Company Indemnified Person to repay such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Sponsor as authorized in this Section 9.4(a). Notwithstanding the foregoing, no advance shall be made by the Sponsor 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 Holder of the Trust Common Securities, that, based upon the facts known to the Regular Trustees, counsel or the Holder of the Trust Common Securities at the time such determination is made, such Company 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 Company 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 Holder of the Trust Common Securities reasonably determine that such Person deliberately breached his duty to the Holders of Trust Common Securities or the Holders of Trust Preferred Securities.

(v)           The indemnification and advancement of expenses provided by, or granted pursuant to, the other paragraphs of this Section 9.4(a) shall not be deemed exclusive of any other rights to which those seeking indemnification and advancement of expenses may be entitled under any agreement, vote of shareholders or disinterested directors of the Spon­sor or Holders of the Trust Preferred Securities 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 Sponsor and each Company 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 Sponsor or the Trust may purchase and maintain insurance on behalf of any Person who is or was a Company 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 Sponsor 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

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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 Company Indemnified Person and shall inure to the benefit of the heirs, executors and administrators of such a Person.

(b)           The Sponsor agrees to indemnify the (i) Property Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee and the Delaware Trustee, and (iv) any officers, directors, shareholders, members, partners, employees, representatives, custodians, nominees or agents of the Property Trustee and 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, damage, claim, liability or expense including taxes (other than taxes based on the income of the Trustee) incurred without negligence or bad faith on the part of the Trustee arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses (including reasonable legal fees and expenses) of defending itself against or investigating any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The obligation to indemnify as set forth in this Section 9.4(b) shall survive the satisfaction and discharge of this Declaration of Trust.

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 business of the Trust, and the Trust and the Holders of Trust Securities shall have no rights by virtue of this Declaration of Trust 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 business of the Trust, shall not be deemed wrongful or improper. No Covered Person, the Sponsor, the Delaware Trustee, nor 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.

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ARTICLE X

ACCOUNTING AND TAX MATTERS

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 or the Treasury Regulations.

SECTION 10.2.Certain Accounting Matters; Returns and Information.

(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 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)           Within 60 days after December 31 of each year, the Property Trustee shall provide to the Holders of the Trust 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.

(c)           The Regular Trustees shall cause to be duly prepared and delivered to each of the Holders of Trust Securities, any annual United States federal income tax information statement required by the Code containing such information with regard to the Trust 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.

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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 (or beneficial owner of Trust Securities), 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 or beneficial owner of Trust Securities, shall remit amounts withheld with respect to the Holder or beneficial owner 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 or beneficial owner, the amount withheld shall be deemed to be a distribution in the amount of the withholding to such Holder or beneficial owner. In the event of any claimed over-withholding, Holders or beneficial owners 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 to such Holder or beneficial owner by the amount of such withholding.

SECTION 10.5.Treatment as Grantor Trust for Federal Income Tax Purposes.

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 of Trust shall be interpreted to further this intention of the parties.  Holders of Trust Securities by virtue of accepting delivery thereof, agree that the arrangement created by this Declaration of Trust shall be treated as a grantor trust under Subpart E of the Code, for United States federal income tax purposes and that the Trustees shall be authorized to take any action consistent with such treatment.  Neither the Trustee, nor any other Person shall make any check-the-box election for the Trust to be treated as an association under Treas. Reg. § 301.7701-3 or take any other action inconsistent with the treatment of the Trust as a grantor trust for United States federal income tax purposes.

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ARTICLE XI

AMENDMENTS AND MEETINGS

SECTION 11.1.Amendments of this Declaration of Trust.

(a)           Except as otherwise provided in this Declaration of Trust or by any applicable terms of the Trust Securities, this Declaration of Trust 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);

(ii)           the Property Trustee, if the amendment affects the rights, powers, duties, obligations or immunities of the Property Trustee; and

(iii)          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 of Trust (including the terms of the Trust Securities);

(ii)           unless, in the case of any proposed amendment that affects the rights, powers, duties, obligations or immunities of the Property Trustee, the Property Trustee shall have first received an Officers’ Certificate from each of the Trust and Sponsor and opinion of counsel (who may be counsel to the Sponsor or the Trust), in each case stating that such amendment is permitted by, and conforms to, the terms of this Declaration of Trust (including the terms of the Trust 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 fail to continue to be classified as a grantor trust for purposes of United States federal income tax purposes;

(B)           reduce or otherwise adversely affect the rights, powers, duties, obligations or immunities of the Property Trustee in contravention of the Trust Indenture Act;

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

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(c)           Any amendment that would (i) change the amount or timing of any distribution of the Trust Securities or otherwise adversely affect the amount of any distribution required to be made in respect of the Trust Securities as of a specified date or (ii) restrict the right of a Holder of Trust Securities to institute suit for the enforcement of any such payment on or after such date, may be effected only with the approval of each of the Holders of the Trust Securities affected thereby (excluding any Trust Securities held by the Sponsor of any of its Affiliates).

(d)           Any amendment that would adversely affect the rights, preferences or privileges of the Trust Securities, including any amendment of this Section 11.1, or (ii) provide for the dissolution, winding-up or termination of the Trust other than pursuant to the terms of this Declaration of Trust, may be effected only with the approval of the Holders of at least 66 2/3% in Liquidation Amount of the Trust Securities affected thereby (except in the case of an amendment affecting only Trust Common Securities, excluding any Trust Securities held by the Sponsor of any of its Affiliates); provided that if any amendment or proposal referred to in clause (i) hereof would adversely affect only the Trust Preferred Securities or the Trust Common Securities, then only the affected class (excluding any Trust Preferred Securities held by the Sponsor of any of its Affiliates) shall be entitled to vote on such amendment or proposal and such amendment or proposal shall not be effective except with the approval of 66 2/3% in Liquidation Amount of such class of Trust Securities.

(e)           Section 9.1(c) shall not be amended without the consent of all of the Holders of the Trust Securities.

(f)            Article VI and the rights of the Holders of the Trust Common Securities under Article VI to increase or decrease the number of, and appoint and remove, Trustees shall not be amended without the consent of the Holders of 66 2/3%in Liquidation Amount of the Trust Common Securities.

(g)           Notwithstanding Section 11.1(d), this Declaration of Trust may be amended by the Sponsor without the consent of the Holders of the Trust Securities to:

(i)            cure any ambiguity or to correct or supplement any provision in this Declaration of Trust that may be defective or inconsistent with any other provision of this Declaration of Trust;

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

(iii)          comply with the requirements of the Commission in order to effect or maintain qualification of this Declaration of Trust under the Trust Indenture Act or ensure that the Trust is not required to register as an investment company under the Investment Company Act;

(iv)          modify, eliminate and add to any provision of this Declaration of Trust to such extent as may be deemed necessary or desirable by the Sponsor; provided that such modification, elimination or addition does not have a material adverse effect on the rights, preferences or privileges of the Holders of the Trust Securities; or

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(v)           conform the terms of this Declaration of Trust to the terms of the Trust Securities as set forth in the Prospectus dated May 8, 2007 of the Trust and the Company relating to the Trust Preferred Securities (the “Prospectus”); provided, however, that in connection with such amendment, each of the Sponsor and the Trust shall deliver to the Property Trustee an Officers’ Certificate and an opinion of counsel (who may be counsel to the Sponsor or the Trust), in each case confirming that such amendment has the effect of conforming the terms of this Declaration of Trust to the terms of the Trust Securities as set forth in the Prospectus.

(h)           In the event that the consent of the Property Trustee, as the Holder of the Debentures, is required under the Indenture with respect to any amendment, modification or waiver of the Indenture, the Property Trustee shall request the direction of the Holders of the Trust Preferred Securities with respect to such amendment, modification or waiver and shall vote with respect to such amendment, modification or waiver as directed by a Majority in Liquidation Amount of the Trust Preferred 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 a simple majority 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 Trust Preferred Securities.

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

(a)           Meetings of the Holders of any class of Trust Securities may be_. called at any time by the Regular Trustees (or as provided in the terms of the Trust Securities) to consider and act on any matter on which Holders of such class of Trust Securities are entitled to act under the terms of this Declaration of Trust, the terms of the Trust Securities, the rules of any stock exchange on which the Trust Preferred Securities are listed or admitted for trading, the Statutory Trust Act or other applicable law. 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 Trust 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 Trust Securities wish to call a meeting and indicating the general or specific purpose for which the meeting is to be called. Any Holders of Trust Securities calling a meeting shall specify in writing the Certificates held by the Holders of Trust Securities exercising the right to call a meeting and only those Trust 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 Trust Securities, the following provisions shall apply to meetings of Holders of Trust Securities:

(i)            notice of any such meeting shall be given to all the Holders of Trust Securities having a right to vote thereat at least seven days and not more than 60 days before the date of such meeting. Whenever a vote, consent or approval of the Holders of Trust Securities is permitted or required under this Declaration of Trust, such vote, consent or approval may be given at a meeting of the Trust Securities.  Any action that may be taken at a meeting of the Holders of Trust Securities may be taken without a meeting if a consent in writing setting forth the action so taken is signed by the Holders

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of Trust Securities owning not less than the minimum amount of Trust Securities that would be necessary to authorize or take such action at a meeting at which all Holders of Trust Securities having a right to vote thereon were present and voting. Prompt notice of the taking of action without a meeting shall be given to the Holders of Trust Securities entitled to vote who have not consented in writing. The Regular Trustees may specify that any written ballot submit­ted to the Holder 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 Trust Security may authorize any Person to act for it by proxy on all matters in which a Holder of Trust 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 Trust Securities executing it. 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 Trust Securities were shareholders of a Delaware corporation;

(iii)          each meeting of the Holders of the Trust 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 of Trust, the terms of the Trust Securities, the Trust Indenture Act otherwise provides, the Regular Trustees, in their sole discretion, shall establish all other provisions relating to meetings of Holders of Trust 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 Trust 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.

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ARTICLE XII

REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE

SECTION 12.1.Representations and Warranties of 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 of Trust, and each Successor Property Trustee represents and warrants to the Trust and the Sponsor at the time of the Successor Property Trustee’s acceptance of its appointment as Property Trustee that:

(a)           the Property Trustee is a national banking association with trust powers, 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, the Declaration of Trust;

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

(c)           the execution, delivery and performance by the Property Trustee of the Declaration of Trust have been duly authorized by all necessary corporate action on the part of the Property Trustee. The Declaration of Trust 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 the Declaration of Trust by the Property Trustee does not conflict with or constitute a breach of the Articles of Organization or By-laws (or other similar organizational documents) of the Property Trustee;

(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 the Declaration of Trust; and

(f)            the Property Trustee, pursuant to this Declaration of Trust, shall hold legal title to, and valid ownership interest on behalf of the Holders of the Trust Securities, in the Debentures and agrees that, except as expressly provided or contemplated by this Agreement, it shall not create, incur or assume, or suffer to exist any mortgage, pledge, hypothecation, encumbrance, lien or other charge or security interest upon the Debentures.

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SECTION 12.2.Representations and Warranties of 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 of Trust, 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 is a national banking association with trust powers, duly organized, validly existing ^.and in good standing under the laws of the jurisdiction of its incorporation or organization, with power and authority to execute and deliver, and to carry out and perform its obligations under the terms of, the Declaration of Trust.

(b)           The Delaware Trustee has been authorized to perform its obligations under the Certificate of Trust and the Declaration of Trust. The Declaration of Trust 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).

(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 the Declaration of Trust.

(d)           The Delaware Trustee is an entity which has its principal place of business in the State of Delaware.

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ARTICLE XIII

REMARKETING AND RESET RATE MECHANICS

SECTION 13.1.Obligation to Conduct Remarketing and Related Requirements

(a)           The Sponsor and the Property Trustee (on behalf of the Trust) shall appoint the Remarketing Agent and enter into a Remarketing Agreement prior to the first Remarketing to effect the Remarketing of the Trust Preferred Securities upon the terms, conditions and other provisions to substantially the following effect:

(i)            provide that that the Sponsor and the Remarketing Agent agree to use commercially reasonable efforts to effect the Remarketing of the Trust Preferred Securities as described in this Article XIII and Section 2 of the Supplemental Indenture;

(ii)           provide that the Remarketing Fee for the Remarketing will be as agreed among the Sponsor, the Trust and the Remarketing Agent and set forth in the Remarketing Agreement.

(iii)          provide that the Remarketing Agent will deduct the Remarketing Fee from the proceeds of the Remarketing and remit any proceeds remaining after such deduction to or at the direction of the Property Trustee, who will apply such proceeds (or will have given the Remarketing Agent instructions to remit such proceeds in a manner that will result in their application) as follows (allocated to the Trust Preferred Securities that participated in the Remarketing on a pro rata basis in proportion to their liquidation amounts):

(a)           to the extent such proceeds relate to Trust Preferred Securities that are a part of Normal MCAPS, to pay such proceeds up to the aggregate liquidation amount of such Trust Preferred Securities to the Collateral Agent for application in accordance with the Stock Purchase Contract Agreement and to pay the balance, if any, to the applicable selling Holders; and

(b)           to the extent the proceeds relate to Separate Trust Preferred Securities, to pay such proceeds to the applicable selling Holders.

(b)           On any day other than the last day of a Remarketing Period, the Sponsor shall have the right, in its absolute discretion and without prior notice to the Holders, to postpone the Remarketing until the following Business Day.

SECTION 13.2.Company Decisions in Connection with Remarketing.

In connection with Remarketings, the Company shall have the right under Section 2 of the Supplemental Indenture to make changes in certain terms of the Debentures underlying the Trust Preferred Securities, without the consent of any Holder of the Trust Preferred Securities. By not later than the 21st day prior to the first day of each Remarketing Period, the Sponsor will specify the following information or decisions in a notice to the Remarketing Agent, the Property Trustee (on behalf of the Trust), the Indenture Trustee and the Stock

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Purchase Contract Agent (clauses (a) through (e) applying only if the Remarketing is Successful and clause (f) applying only in the case of a Failed Remarketing):

(a)           whether the Stated Maturity Date of the Debentures underlying the Trust Preferred Securities will remain at June 1, 2043 or will be changed to an earlier date (specifying such date if applicable);

(b)           whether the date after which the Debentures (and, accordingly, the Trust Preferred Securities) will be redeemable at the Sponsor’s option will be changed and whether the redemption price or prices will be changed;

(c)           whether, in connection with an Early Remarketing that is not the first scheduled Remarketing, the Company is exercising its right under Section 2 of the Indenture to cause the subordination provisions in the Indenture and the Guarantee Agreement to cease to apply to the Debentures from and after the Remarketing Settlement Date , if the Remarketing is Successful, and if so, whether it also elects that the Debentures shall no longer be subject to the interest deferral provisions of Section 1.6 of the Indenture;

(d)           whether the Debentures will be remarketed as fixed rate notes or floating rate notes;

(e)           if the Debentures will be remarketed as floating rate notes, the applicable index and the interest payment dates and manner of calculation of interest on the Debentures (and, accordingly, the Trust Preferred Securities), which the Company may change to correspond with the market conventions applicable to notes bearing interest at rates based on the applicable index; and

(f)            whether following a Failed Remarketing:

(i)            the Stated Maturity Date will remain at June 1, 2043 or will be changed to an earlier date; and

(ii)           the date after which the Debentures (and, accordingly, the Trust Preferred Securities) will be redeemable at the Company’s option will be changed and the redemption price or prices will be changed;

SECTION 13.3.Reset of Interest Rate on Debentures in Connection with Remarketings and Related Changes in Terms.

(a)           As part of and in connection with each Remarketing, the Remarketing Agent shall determine the interest rate on the Debentures (and, accordingly, the Distribution Rate on the Trust Preferred Securities), subject to Sections 13.3(b) through (e), pursuant to the Remarketing Agreement and in accordance with the other provisions of this Article XIII, that will apply to all outstanding Trust Preferred Securities (whether or not sold in the Remarketing) if such Remarketing is Successful commencing on or after the Remarketing Settlement Date.

(b)           If the Remarketing has been determined to be Successful in accordance with Section 13.5(a), by approximately 4:30 P.M., New York City time, on the date of such

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Successful Remarketing, the Remarketing Agent shall notify the Sponsor, the Property Trustee (on behalf of the Trust), the Indenture Trustee and the Stock Purchase Contract Agent that the Remarketing was Successful and the Reset Rate or Reset Spread determined as part of such Remarketing in accordance with this Article XIII and Section 2 of the Supplemental Indenture.

(c)           If a Remarketing is Successful, then commencing with the related Remarketing Settlement Date the interest rate on the Debentures (and, accordingly, the Distribution Rate on the Trust Preferred Securities) shall be reset to the rate, determined in accordance with this Article XIII and Section 2 of the Supplemental Indenture pursuant to such Remarketing and the other changes, if any, in the terms of the Debentures and the Trust Preferred Securities as notified by the Sponsor pursuant to Section 13.2, shall become effective in accordance with this Article XIII (or in accordance with the Indenture in the case of the Debentures).

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

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

(ii)           the interest rate on the Debentures (and, accordingly, the Distribution Rate on the Trust Preferred Securities) will remain unchanged unless and until it is reset pursuant to a subsequent Remarketing in accordance with this Article XIII and Section 2 of the Supplemental Indenture;

(iii)          the other changes, if any, in the terms of the Debentures and the Trust Preferred Securities, as applicable, as notified by the Sponsor pursuant to Section 13.2, shall not become effective (whether pursuant to this Agreement in the case of the Trust Preferred Securities or pursuant to the Indenture in the case of the Debentures); and

(iv)          the Sponsor, the Trust and the Remarketing Agent shall attempt another Remarketing during the next Remarketing Period.

(e)           Upon the occurrence of a Failed Remarketing:

(i)            no Trust Preferred Securities will be sold in such Remarketing and no further attempts at Remarketing shall be made;

(ii)           the interest rate on the Debentures (and, accordingly, the Distribution Rate on the Trust Preferred Securities) will be reset to a quarterly floating rate set forth in Section 2 of the Supplemental Indenture.

(iii)          the other changes, if any, in the terms of the Debentures and the Trust Preferred Securities as notified by the Sponsor pursuant to clauses (a) through (e) of the second sentence of Section 13.2 shall not become effective (whether pursuant to this Agreement in the case of the Trust Preferred Securities or pursuant to the Indenture in the case of the Debentures);

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(iv)          the stated maturity date of the Debentures and early redemption date for the Debentures and Trust Preferred Securities will change in accordance with clause (f) of the second sentence of Section 13.2, as applicable;

(v)           in the case of Trust Preferred Securities that are included in Normal MCAPS, such Trust Preferred Securities will be applied in satisfaction of the Holders’ obligations under Stock Purchase Contracts in accordance with the Collateral Agreement; and

(vi)          in the case of Separate Trust Preferred Securities, such Trust Preferred Securities will be returned to the related Holders in accordance with the Collateral Agreement.

SECTION 13.4.Early Remarketing.

If an Early Remarketing Event occurs prior to the Stock Purchase Date, the Remarketing Periods shall be the five Business Day periods commencing on the seventh Business Day prior to the Remarketing Settlement Date (or if any such day is not a business day, the immediately preceding business day) that is at least 30 days after the occurrence of such Early Remarketing Event, and concluding with the earlier to occur of the fifth such date and a Successful Remarketing, and if the Remarketing conducted on such date is not Successful, it shall be a Failed Remarketing and the Stock Purchase Date shall be the next succeeding Remarketing Settlement Date  (or if such day is not a Business Day, the next Business Day).

SECTION 13.5.Remarketing Procedures.

(a)           The Sponsor will give notice to the Property Trustee of a Remarketing at least 28 days prior to the first day of the related Remarketing Period. Upon written instruction of the Sponsor, the Property Trustee will give holders of MCAPS or Trust Preferred Securities, and will request that the Depositary give to its participants holding MCAPS or Trust Preferred Securities, and the Stock Purchase Contract Agreement provides that the Stock Purchase Agent will give Holders (as defined therein) of MCAPS, notice of a Remarketing at least 21 calendar days prior to the first day of the related Remarketing Period. Such notices will set forth:

(i)            the beginning and ending dates of the Remarketing Period and the applicable Remarketing Settlement Date and Stock Purchase Date in the event the Remarketing is successful;

(ii)           the applicable distribution dates and record dates for cash distributions on the Debentures  (and accordingly, on the Trust Preferred Securities) the applicable reference rate if the company is electing a floating rate an any changes in the method of computation of the amount of distributions;

(iii)          any change to the stated maturity date of the Debentures and, if applicable, the date on and after which the Company will have the right to redeem the Debentures (which is subject to Section 2 of the Supplemental Indenture);

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(iv)          whether, in connection with an Early Remarketing that is not the first scheduled Remarketing, or any other Remarketing after a Remarketing that is not successful during the first scheduled Remarketing Period, whether the Company’s obligations under the Debentures and the Guarantee Agreement will remain subordinated to Senior Debt (as defined in the Supplemental Indenture) after the Remarketing Settlement Date;

(v)           any other changes in the terms of the Debentures or the Trust Preferred Securities notified by the Sponsor in connection with such Remarketing pursuant to Section 13.2 (including on a Final Remarketing that is a Failed Remarketing, any change in the stated maturity date of the Debentures and, if applicable, the date on or after which the Sponsor will have the right to redeem the Debentures (resulting in a redemption by the Trust of the Trust Preferred Securities), which is subject to Section 8.2);

(vi)          the procedures a beneficial owner must follow if it holds its Trust Preferred Securities as a component of Normal MCAPS to elect not to participate in the Remarketing and the date by which such election must be made; and

(vii)         the procedures a beneficial owner must follow if it holds Separate Trust Preferred Securities to elect to participate in the Remarketing and the date by which such election must be made;

(b)           On any Remarketing Date, all outstanding Trust Preferred Securities included in Normal MCAPS will be tendered or deemed tendered to the Remarketing Agent for Remarketing unless the Holder thereof elects not to participate in the Remarketing. Each Holder of Trust Preferred Securities included in Normal MCAPS, by purchasing such Normal MCAPS agrees to have such Trust Preferred Securities remarketed on any Remarketing Date (unless such Holder elects not to participate in the Remarketing as provided herein) and authorizes the Remarketing Agent to take any and all action on its behalf necessary to effect the Remarketing. On any Remarketing Date, each Holder of Trust Preferred Securities included in Normal MCAPS will have the right to elect not to have its Trust Preferred Securities remarketed by giving notice and taking the other actions provided for in Section 5 of the Collateral Agreement.

(c)           Each Holder of Separate Trust Preferred Securities may elect to have such Holder’s Separate Trust Preferred Securities remarketed in any Remarketing. A Holder making such an election must, pursuant to the Collateral Agreement, notify the Collateral Agent and deliver such Separate Trust Preferred Securities to the Collateral Agent on or prior to 5:00 P.M., New York City time, on or prior to the second Business Day immediately preceding the beginning of any Remarketing Period (but no earlier than the Distribution Date immediately preceding the applicable Remarketing Date). Any such notice and delivery may not be conditioned upon the level at which the Reset Rate or the Reset Spread, as applicable, is established in the Remarketing or any other condition. Any such notice and delivery may be withdrawn on or prior to 5:00 P.M., New York City time, on the second Business Day immediately preceding the beginning of any Remarketing Period in accordance with the provisions set forth in the Collateral Agreement. Any such notice and delivery not withdrawn by such time will be irrevocable with respect to such Remarketing. Pursuant to Section 5.7(c) of the Collateral Agreement, promptly after 11:00 A.M., New York City time, on the first Business

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Day immediately preceding the beginning of any Remarketing Period, the Collateral Agent, based on the notices and deliveries received by it prior to such time, shall notify the Remarketing Agent of the liquidation amount of Separate Trust Preferred Securities to be tendered for Remarketing and shall cause such Separate Trust Preferred Securities to be presented to the Remarketing Agent.

(d)           If the Remarketing on a Remarketing Date is Successful, then the Remarketing Agent shall deduct the Remarketing Fee to which it is entitled as provided in Section 13.1 and the related Remarketing Agreement from the proceeds of such Remarketing and remit the remaining proceeds to the Property Trustee in accordance with Section 13.1(a)(iii) for application as provided therein.

(e)           If by 4:00 P.M., New York City time, on any Business Day during a Remarketing Period the Remarketing Agent has found buyers for all of the Trust Preferred Securities offered in the Remarketing in accordance with this Article XIII, a “Successful” Remarketing shall be deemed to have occurred. In the event of a Successful Remarketing, the Sponsor shall issue a press release through Bloomberg Business News or other reasonable means of distribution stating that such Remarketing was Successful and specifying the Reset Rate or Reset Spread and shall post such information on its website on the World Wide Web.

(f)            If, by 4:00 P.M., New York City time, on the last day of any Remarketing Period the Remarketing Agent is unable to find buyers for all of the Trust Preferred Securities offered in such Remarketing, including any Remarketing that would qualify as a Final Remarketing, in accordance with this Article XIII, an “Unsuccessful” Remarketing shall be deemed to have occurred. In the event of an Unsuccessful Remarketing, the Sponsor shall issue a press release through Bloomberg Business News or other reasonable means of distribution stating that such Remarketing was an Unsuccessful Remarketing, and publish such information on its website on the World Wide Web.

(g)           If on any Business Day during a Remarketing Period other than the last day thereof the Sponsor has determined to postpone the Remarketing until the next Business Day, the Sponsor shall issue a press release through Bloomberg Business News or other reasonable means of distribution stating that such Remarketing has been postponed and shall post such information on its website on the World Wide Web.

(h)           The right of each Holder (whether of Separate Trust Preferred Securities or of Trust Preferred Securities included in Normal MCAPS) to have its Trust Preferred Securities remarketed and sold in connection with any Remarketing shall be limited to the extent that (i) the Remarketing Agent conducts a Remarketing pursuant to the terms of the Remarketing Agreement, (ii) the Remarketing Agent is able to find a purchaser or purchasers for the Trust Preferred Securities offered in the Remarketing in accordance with this Article XIII and the Remarketing Agreement, and (iii) the purchaser or purchasers deliver the purchase price therefor to the Remarketing Agent as and when required.

(i)            Neither the Property Trustee, the Sponsor nor the Remarketing Agent shall be obligated in any case to provide funds to make payment upon tender of Trust Preferred Securities for remarketing.

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ARTICLE XIV

OTHER MCAPS RELATED PROVISIONS

SECTION 14.1.Agreed Tax Treatment.

Each Holder of Trust Preferred Securities agrees, by acceptance of Trust Preferred Securities, and each Owner agrees, by acceptance of a beneficial interest in Trust Preferred Securities, to treat for all U.S. federal income tax purposes (i) the Trust as one or more grantor trusts or agency arrangements, (ii) itself as the owner of the Stock Purchase Contracts and the related ownership interest in the Trust Preferred Securities or treasury securities pledged under the Collateral Agreement, as the case may be, (iii) the Debentures as indebtedness of the Sponsor, and (iii) the fair market value of each $1,000 liquidation amount of the Trust Preferred Securities included in Normal MCAPS as $1,000 and the fair market value of each Stock Purchase Contract as $0.

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ARTICLE XV

MISCELLANEOUS

SECTION 15.1.Notices.

All notices provided for in this Declaration of Trust 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 Holders of the Trust Securities):

c/o Lehman Brothers Holdings Inc.

745 Seventh Avenue
New York, New York 10019
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 other Trustees):

U.S. Bank Trust National Association
300 Delaware Avenue
9^th Floor, EX-AE-WDAW
Wilmington, Delaware 19801
Attention:  Corporate Trust Services
Facsimile:  (302) 576-3717

(c)           if given to the Property Trustee, at its Corporate Trust Office to the attention of Earl Dennison (or such other address as the Property Trustee may give notice of to the Holders of the Trust Securities and the other Trustee)

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

Lehman Brothers Holdings Inc.
745 Seventh Avenue
New York, New York 10019
Attention: Corporate Counsel
Facsimile:  (212) 526-0339

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

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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 15.2.Governing Law.

This Declaration of Trust and the rights of the parties hereunder shall be governed by and construed in accordance with the internal laws of the State of Delaware and all rights and remedies shall be governed by such laws without regard to principles of conflict of laws.

SECTION 15.3.Headings.

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

SECTION 15.4.Successors and Assigns.

Whenever in this Declaration of Trust 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 of Trust by the Sponsor and the Trustees shall bind and inure to the benefit of their respective successors and assigns, whether so expressed.

SECTION 15.5.Partial Enforceability.

If any provision of this Declaration of Trust, or the application of such provision to any Person or circumstance, shall be held invalid, the remainder of this Declaration of Trust, 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 15.6.Counterparts.

This Declaration of Trust may contain more than one counterpart of the signature page and this Declaration of Trust may be executed by the affixing of the signature of each of the Trustees and a duly Authorized Officer of the Sponsor 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.

76

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

/s/ BARRETT S. DIPAOLO
Barrett S. DiPaolo, as Regular Trustee
/s/ ANDREW YEUNG
Andrew Yeung, as Regular Trustee
/s/ JAMES KILLERLANE
James Killerlane, as Regular Trustee
U.S. Bank Trust National Association,
as Delaware Trustee
By:	/s/ EARL DENNISON
	Name:
	Title:
	U.S. Bank National Association,
	as Property Trustee
By:	/s/ EARL DENNISON
	Name:
	Title:
Lehman Brothers Holdings Inc.,
as Sponsor
By:	/s/ BARRETT S. DIPAOLO
	Name: Barrett S. DiPaolo
	Title: Vice President

EXHIBIT A-1

FORM OF GLOBAL TRUST PREFERRED SECURITY CERTIFICATE

[Intentionally left blank]

PS-[    ]

CUSIP No. 52521KAA4 

Certificate Evidencing Trust Preferred Securities

of

LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VIII

$

Trust Preferred Securities
(Liquidation Amount $1,000 per Trust Preferred Security)

THIS TRUST PREFERRED SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE DECLARATION OF TRUST HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), OR A NOMINEE OF DTC.  THIS TRUST PREFERRED SECURITY IS EXCHANGEABLE FOR TRUST PREFERRED SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION OF TRUST.  UNLESS THIS GLOBAL CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC, TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY TRUST PREFERRED SECURITY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. (“CEDE”) OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE, HAS AN INTEREST HEREIN.

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

A1 - 2

IN WITNESS WHEREOF, the Trust has executed this certificate this 17th day of May, 2007.

	LEHMAN BROTHERS HOLDINGS CAPITAL
	TRUST VIII
Name:

(See reverse for additional terms)

A1 - 3

CERTIFICATE OF AUTHENTICATION

This is the Trust Preferred Security described in the within-mentioned Declaration of Trust.

U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By:
	Authorized Officer

A1 - 4

[FORM OF REVERSE OF SECURITY]

Holders of Trust Preferred Securities shall be entitled to receive cumulative cash distributions at such times and in such amounts as the Trust receives cash payments from the Company on the Debentures or the Guarantee.  Distributions on the Trust Preferred Securities shall be payable only to the extent that the Trust has funds available for the payment of such distributions in the Property Account.  If and to the extent that the Company makes an interest payment on the Debentures held by the Property Trustee or a payment under the Guarantee, the Trust shall and the Property Trustee is directed, to the extent funds are available for that purpose, to make a Pro Rata distribution of such amounts to Holders; provided, however, that if on any date on which amounts are payable on distribution or redemption an Indenture Event of Default shall have occurred and be continuing, no payment of any Redemption Price of any of the Trust Common Securities, and no other payment on account of the redemption, liquidation or other acquisition of such Trust Common Securities, shall be made unless payment in full in cash of all Distributions on all of the outstanding Trust Preferred Securities for all quarterly 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 Trust 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 Trust Preferred Securities then due and payable. 

Except as otherwise described herein, distributions on the Trust Preferred Securities shall be cumulative, shall accumulate from the date of initial issuance and shall be payable quarterly in arrears, on February 28, May 31, August 31 and November 30 of each year, commencing on August 31, 2007, or such other dates as may be specified by the Trust following a Remarketing, if, as and when available for payment by the Property Trustee. If the Trust Preferred Securities are in book-entry only form, distributions shall be payable to the Holders of record of Trust Preferred Securities as they appear on the books and records of the Trust on the relevant record dates, which shall be determined by the Regular Trustees and shall at be at least one Business Day prior to the relevant payment dates.  If the Trust Preferred Securities are issued in definitive form, or if issued in book-entry form, do not remain in book-entry only form, the relevant record dates shall be the date determined by the Regular Trustees and shall be at least one Business Day before the relevant payment dates. If distributions are not paid when scheduled, the accumulated distributions will be paid to the Holders of Trust Securities as they appear on the books and records of the Trust on the record date with respect to the payment date for the Trust Securities that corresponds to the payment date fixed by the Company with respect to the payment date for the Trust Securities that corresponds to the payment date fixed by the Company with respect to the payment of cumulative interest payments on the Debentures.  In the event that any date on which distributions are payable is not a New York or London Business Day, payment of such distribution shall be made on the next succeeding day which is a New York and London Business Day unless such day falls in the next calendar month in which case the Interest Payment Date will be the immediately preceding New York and London Business Day.  Payments of accumulated distributions shall be payable to Holders of record of Trust Preferred Securities as they appear on the books and records of the Trust on the record date with respect to the payment date for the Trust Preferred Securities which corresponds to the payment date fixed by the Company with respect to the payment of cumulative interest payments on the Debentures.

A1 - 5

The Trust Preferred Securities shall be redeemable as provided in the Declaration of Trust.

The Holder of this Trust Preferred Security, by its acceptance hereof, agrees that the arrangement created by the Declaration of Trust shall be treated as a grantor trust for federal income tax purposes and to take no action inconsistent with the treatment of the Trust Preferred Securities as undivided beneficial interest in the assets of the Trust.

A1 - 6

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust Preferred Security Certificate to:

(Insert assignee’s social security or tax identification number)

(Insert address and zip code of assignee)

and irrevocably appoints

                                                                                                                                                                                                                                                                                                                                     &nb sp;                                                                                                           

                                                                                                                                                               agent to transfer this Trust Preferred Security Certificate on the books of the Trust. The agent may substitute another to act for him or her.

Date:

Signature:

(Sign exactly as your name appears on the other side of this Trust Preferred Security Certificate)

A1 - 7

EXHIBIT A-2

FORM OF TRUST PREFERRED SECURITY CERTIFICATE

[Intentionally left blank]

PS-[    ]

Certificate Evidencing Trust Preferred Securities

of

LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VIII

$

Trust Preferred Securities
(Liquidation Amount $1,000 per Trust Preferred Security)

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

LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VIII, a statutory trust formed under the laws of the State of Delaware (the “Trust”), hereby certifies that U.S. Bank National Association, in its capacity as Stock purchase Contract Agent (the “Holder”) under that certain Stock Purchase Contract Agreement dated as of May 17, 2007 between Lehman Brothers Holdings Inc. and U.S. Bank National Association, is the registered owner of TWO HUNDRED AND FIFTY THOUSAND (250,000) Trust Preferred Securities of the Trust representing undivided beneficial ownership interests in the assets of the Trust designated the Trust Preferred Securities (liquidation amount $1,000 per security) (the “Trust Preferred Securities”). The Trust Preferred Securities shall mature on June 1, 2043.  The designation, rights, powers, privileges, restrictions, preferences and other terms and provisions of the Trust Preferred Securities represented hereby are set forth in, issued under and shall in all respects be subject to the provisions of the Declaration of Trust dated as of May 17, 2007, as the same may be amended from time to time (the “Declaration of Trust”). Capitalized terms used herein but not defined shall have the meaning given them in the Declaration of Trust. The Holder is entitled to the benefits of the Trust Preferred Securities Guarantee to the extent provided therein.  Each Holder of a Trust Preferred Security, by acceptance of this Certificate, agrees to treat the Debentures as indebtedness for United States federal income tax purposes. The Sponsor shall provide a copy of the Declaration of Trust and the Trust Common Securities Guarantee to a Holder without charge upon written request to the Sponsor at its principal place of business. THE TRUST PREFERRED SECURITIES ARE TRANSFERABLE ON THE BOOKS AND RECORDS OF THE TRUST ONLY IN ACCORDANCE WITH THE TERMS OF THE DECLARATION.

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

2

IN WITNESS WHEREOF, the Trust has executed this certificate this 17th day of May, 2007.

	LEHMAN BROTHERS HOLDINGS CAPITAL
	TRUST VIII
Name:

(See reverse for additional terms)

3

CERTIFICATE OF AUTHENTICATION

This is the Trust Preferred Security described in the within-mentioned Declaration of Trust.

U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By:
	Authorized Officer

4

[FORM OF REVERSE OF SECURITY]

Holders of Trust Preferred Securities shall be entitled to receive cumulative cash distributions at such times and in such amounts as the Trust receives cash payments from the Company on the Debentures or the Guarantee.  Distributions on the Trust Preferred Securities shall be payable only to the extent that the Trust has funds available for the payment of such distributions in the Property Account.  If and to the extent that the Company makes an interest payment on the Debentures held by the Property Trustee or a payment under the Guarantee, the Trust shall and the Property Trustee is directed, to the extent funds are available for that purpose, to make a Pro Rata distribution of such amounts to Holders; provided, however, that if on any date on which amounts are payable on distribution or redemption an Indenture Event of Default shall have occurred and be continuing, no payment of any Redemption Price of any of the Trust Common Securities, and no other payment on account of the redemption, liquidation or other acquisition of such Trust Common Securities, shall be made unless payment in full in cash of all Distributions on all of the outstanding Trust Preferred Securities for all quarterly 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 Trust 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 Trust Preferred Securities then due and payable. 

Except as otherwise described herein, distributions on the Trust Preferred Securities shall be cumulative, shall accumulate from the date of initial issuance and shall be payable quarterly in arrears, on February 38, May 31, August 31 and November 30 of each year, commencing on August 31, 2007, or such other dates as may be specified by the Trust following a Remarketing, if, as and when available for payment by the Property Trustee. If the Trust Preferred Securities are in book-entry only form, distributions shall be payable to the Holders of record of Trust Preferred Securities as they appear on the books and records of the Trust on the relevant record dates, which shall be determined by the Regular Trustees and shall at be at least one Business Day prior to the relevant payment dates.  If the Trust Preferred Securities are issued in definitive form, or if issued in book-entry form, do not remain in book-entry only form, the relevant record dates shall be the date determined by the Regular Trustees and shall be at least one Business Day before the relevant payment dates. If distributions are not paid when scheduled, the accumulated distributions will be paid to the Holders of Trust Securities as they appear on the books and records of the Trust on the record date with respect to the payment date for the Trust Securities that corresponds to the payment date fixed by the Company with respect to the payment date for the Trust Securities that corresponds to the payment date fixed by the Company with respect to the payment of cumulative interest payments on the Debentures.  In the event that any date on which distributions are payable is not a New York or London Business Day, payment of such distribution shall be made on the next succeeding day which is a New York and London Business Day unless such day falls in the next calendar month in which case the Interest Payment Date will be the immediately preceding New York or London Business Day.  Payments of accumulated distributions shall be payable to Holders of record of Trust Preferred Securities as they appear on the books and records of the Trust on the record date with respect to the payment date for the Trust Preferred Securities which corresponds to the payment date fixed by the Company with respect to the payment of cumulative interest payments on the Debentures.

5

The Trust Preferred Securities shall be redeemable as provided in the Declaration of Trust.

The Holder of this Trust Preferred Security, by its acceptance hereof, agrees that the arrangement created by the Declaration of Trust shall be treated as a grantor trust for federal income tax purposes and to take no action inconsistent with the treatment of the Trust Preferred Securities as undivided beneficial interest in the assets of the Trust.

6

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust Preferred Security Certificate to:

(Insert assignee’s social security or tax identification number)

(Insert address and zip code of assignee)

and irrevocably appoints

                                                                                                                                                                        agent to transfer this Trust Preferred Security Certificate on the books of the Trust. The agent may substitute another to act for him or her.

Date:

Signature:

(Sign exactly as your name appears on the other side of this Trust Preferred Security Certificate)

7

EXHIBIT A-3

FORM OF TRUST COMMON SECURITY CERTIFICATE

[Intentionally left blank]

CS-1

Certificate Evidencing Trust Common Securities

of

LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VIII

$1,000

Trust Common Securities
(Liquidation Amount $1,000 per Trust Common Security)

LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VIII, a statutory trust formed under the laws of the State of Delaware (the “Trust”), hereby certifies that Lehman Brothers Holdings Inc., a Delaware corporation (the “Holder”) is the registered owner of ONE (1) Trust Common Security of the Trust representing undivided beneficial ownership interests in the assets of the Trust designated the Trust Common Securities (liquidation amount $1,000 per security) (the “Trust Common Securities”). The Trust Securities shall mature on June 1, 2043.  The designation, rights, powers, privileges, restrictions, preferences and other terms and provisions of the Trust Common Securities represented hereby are set forth in, issued under and shall in all respects be subject to the provisions of the Declaration of Trust dated as of May 17, 2007, as the same may be amended from time to time (the “Declaration of Trust”). Capitalized terms used herein but not defined shall have the meaning given them in the Declaration of Trust. The Holder is entitled to the benefits of the Trust Common Securities Guarantee to the extent provided therein.  Each Holder of a Trust Common Security, by acceptance of this Certificate, agrees to treat the Debentures as indebtedness for United States federal income tax purposes. The Sponsor shall provide a copy of the Declaration of Trust and the Trust Common Securities Guarantee to a Holder without charge upon written request to the Sponsor at its principal place of business. THE TRUST COMMON SECURITIES ARE TRANSFERABLE ON THE BOOKS AND RECORDS OF THE TRUST ONLY IN ACCORDANCE WITH THE TERMS OF THE DECLARATION.

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

C-1

IN WITNESS WHEREOF, the Trust has executed this certificate this 17th day of May, 2007.

	LEHMAN BROTHERS HOLDINGS CAPITAL
	TRUST VIII
Name:

(See reverse for additional terms)

C-2

CERTIFICATE OF AUTHENTICATION

This is the Trust Common Security described in the within-mentioned Declaration of Trust.

U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By:
	Authorized Officer

C-3

[FORM OF REVERSE OF SECURITY]

Holders of Trust Common Securities shall be entitled to receive cumulative cash distributions at such times and in such amounts as the Trust receives cash payments from the Company on the Debentures or the Guarantee.  Distributions on the Trust Common Securities shall be payable only to the extent that the Trust has funds available for the payment of such distributions in the Property Account.  If and to the extent that the Company makes a interest payment on the Debentures held by the Property Trustee or a payment under the Guarantee, the Trust shall and the Property Trustee is directed, to the extent funds are available for that purpose, to make a Pro Rata distribution of such amounts to Holders; provided, however, that if on any date on which amounts are payable on distribution or redemption an Indenture Event of Default shall have occurred and be continuing, no payment of any Redemption Price of any of the Trust Common Securities, and no other payment on account of the redemption, liquidation or other acquisition of such Trust Common Securities, shall be made unless payment in full in cash of all Distributions on all of the outstanding Trust Preferred Securities for all quarterly 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 Trust 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 Trust Preferred Securities then due and payable. 

Except as otherwise described herein, distributions on the Trust Common Securities shall be cumulative, shall accumulate from the date of initial issuance and shall be payable quarterly in arrears, on February 28, May 31, August 31 and November 30 of each year, commencing on August 31, 2007, or such other dates as may be specified by the Trust following a Remarketing, if, as and when available for payment by the Property Trustee.  Distributions shall be payable to the Holders of record of Trust Common Securities as they appear on the books and records of the Trust on the relevant record dates, which shall be one Business Day prior to the relevant payment dates. If distributions are not paid when scheduled, the accumulated distributions will be paid to the Holders of Trust Securities as they appear on the books and records of the Trust on the record date with respect to the payment date for the Trust Securities that corresponds to the payment date fixed by the Company with respect to the payment date for the Trust Securities that corresponds to the payment date fixed by the Company with respect to the payment of cumulative interest payments on the Debentures.  In the event that any date on which distributions are payable is not a New York or London Business Day, payment of such distribution shall be made on the next succeeding day which is a New York and London Business Day unless such day falls in the next calendar month in which case the Interest Payment Date will be the immediately preceding New York and London Business Day.  Payments of accumulated distributions shall be payable to Holders of record of Trust Common Securities as they appear on the books and records of the Trust on the record date with respect to the payment date for the Trust Common Securities which corresponds to the payment date fixed by the Company with respect to the payment of cumulative interest payments on the Debentures.

The Trust Common Securities shall be redeemable as provided in the Declaration of Trust.

The Holder of this Trust Common Security, by its acceptance hereof, agrees that the arrangement created by the Declaration of Trust shall be treated as a grantor trust for federal

C-4

income tax purposes and to take no action inconsistent with the treatment of the Trust Common Securities as undivided beneficial interest in the assets of the Trust.

C-5

ASSIGNMENT

FOR VALUE RECEIVED, the undersigned assigns and transfers this Trust Common Security Certificate to:

(Insert assignee’s social security or tax identification number)

(Insert address and zip code of assignee)

and irrevocably appoints

                                                                                                                                                                               agent to transfer this Trust Common Security Certificate on the books of the Trust. The agent may substitute another to act for him or her.

Date:

Signature:

(Sign exactly as your name appears on the other side of this Trust Common Security Certificate)

C-6

EX-4.07

Exhibit 4.07

GUARANTEE AGREEMENT

LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VII

Dated as of May 17, 2007

CROSS REFERENCE TABLE*

Section of Trust	Section of
Indenture Act of	Guarantee
1939, as amended	Agreement
310(a)	4.1(a)
310(b)	2.8; 4.1(c)
310(c)	Inapplicable
311(a)	2.2(b)
311(b)	2.2(b)
311(c)	Inapplicable
312(a)	2.2(a); 2.9
312(b)	2.2(b); 2.9
312(c)	2.9
313(a)	2.3
313(b)	2.3
313(c)	2.3
313(d)	2.3
314(a)	2.4
314(b)	Inapplicable
314(c)	2.5
314(d)	Inapplicable
314(e)	2.5
314(f)	Inapplicable
315(a)	3.1(d); 3.2(a)
315(b)	2.7(a)
315(c)	3.1(c)
315(d)	3.1(d)
316(a)	2.6; 5.4(a)
316(b)	5.3
316(c)	Inapplicable
317(a)	2.10
317(b)	Inapplicable
318(a)	2.1(b)

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

i

Table of Contents

		Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1.	Interpretation and Definitions	1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1.	Trust Indenture Act; Application	4
SECTION 2.2.	Lists of Holders of Securities	5
SECTION 2.3.	Reports by the Trust Guarantee Trustee	5
SECTION 2.4.	Periodic Reports to Trust Guarantee Trustee	5
SECTION 2.5.	Evidence of Compliance with Conditions Precedent	5
SECTION 2.6.	Events of Default; Waiver	6
SECTION 2.7.	Event of Default; Notice	6
SECTION 2.8.	Conflicting Interests	6
SECTION 2.9.	Disclosure of Information	6
SECTION 2.10.	Trust Guarantee Trustee May File Proofs of Claim	7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TRUST GUARANTEE TRUSTEE
SECTION 3.1.	Powers and Duties of the Trust Guarantee Trustee	7
SECTION 3.2.	Certain Rights of Trust Guarantee Trustee	8
SECTION 3.3.	Not Responsible for Recitals or Issuance of Trust Guarantee	10
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1.	Guarantee Trustee; Eligibility	10
SECTION 4.2.	Appointment, Removal and Resignation of Trust Guarantee Trustee	11
ARTICLE V
GUARANTEE
SECTION 5.1.	Guarantee	12
SECTION 5.2.	Waiver of Notice and Demand	12
SECTION 5.3.	Obligations Not Affected	12
SECTION 5.4.	Rights of Holders	13
SECTION 5.5.	Guarantee of Payment	14
SECTION 5.6.	Subrogation	14
SECTION 5.7.	Independent Obligations	14

ii

ARTICLE VI
SUBORDINATION
SECTION 6.1.	Ranking	14
SECTION 6.2.	Subordination of Common Securities	14
ARTICLE VII
TERMINATION
SECTION 7.1.	Termination	15
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1.	Exculpation	15
SECTION 8.2.	Indemnification	15
ARTICLE IX
MISCELLANEOUS
SECTION 9.1.	Successors and Assigns	16
SECTION 9.2.	Amendments	16
SECTION 9.3.	Notices	16
SECTION 9.4.	Benefit	17
SECTION 9.5.	Governing Law	17

iii

GUARANTEE AGREEMENT

This GUARANTEE AGREEMENT (the “Guarantee”), dated as of May 17, 2007, is executed and delivered by Lehman Brothers Holdings Inc., a Delaware corporation (the “Guarantor”), and U.S. Bank National Association, as trustee (the “Guarantee Trustee”), for the benefit of the Holders (as defined herein) from time to time of the Trust Securities (as defined herein) of Lehman Brothers Holdings Capital Trust VII, a Delaware statutory trust (the “Trust”).

WHEREAS, pursuant to the Declaration of Trust (as defined herein), the Trust is issuing preferred securities having a liquidation amount of $1,000 per security (the “Trust Preferred Securities”) and common securities, having a liquidation amount of $1,000 per security and designated the Trust Common Securities (the “Trust Common Securities” and, together with the Trust Preferred Securities, the “Trust Securities”);

WHEREAS, as incentive for the Holders to purchase the Trust Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth in this Guarantee, to pay to the Holders of the Trust Securities the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein.

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

ARTICLE I
INTERPRETATION AND DEFINITIONS

SECTION 1.1.Interpretation and Definitions

In this Guarantee, unless the context otherwise requires:

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

(b)           capitalized terms used in this Guarantee but not otherwise defined herein shall have the meanings assigned to them in the Declaration of Trust or the Subordinated Indenture, as the case may be;

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

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

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

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

(g)           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 such term, as applicable; and

(h)           the following terms have the following meanings:

“Affiliate” means, with respect to any specified Person, any other Person that directly or indirectly controls or is controlled by, or is under common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Business Day” means any day other than a Saturday or Sunday or a day on which banking institutions in the City of New York are authorized or required by law, regulation or executive order to close.

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

“Debentures” means the $1,000,001,000 initial aggregate principal amount of the Guarantor’s Remarketable Junior Subordinated Debentures due 2043 issued pursuant to the Indenture.

“Declaration of Trust” means the Amended and Restated Declaration of Trust by and among Lehman Brothers Holdings Inc., as Sponsor, U.S. Bank National Association, as Property Trustee and Delaware Trustee, and the Regular Trustees named therein, dated as of May 17, 2007, as it may be amended, modified or supplemented from time to time.

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

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

“Guarantee Payments” means the following payments or distributions, without duplication, with respect to the Trust Securities, to the extent not paid by or on behalf of the Trust: (i) any accumulated and unpaid distributions on such Trust Securities to the extent the Trust has sufficient funds available therefor at the time, (ii) the Redemption Price with respect to any Trust Securities called for redemption by the Trust to the extent the Trust has sufficient funds available therefor at the time and (iii) upon a voluntary or involuntary dissolution, winding up or termination of the Trust (other than in connection with the redemption of all of the Trust Preferred Securities), the lesser of (a) the aggregate of the liquidation amount and all accumulated and unpaid Distributions (as defined in the Declaration of Trust) on the Trust Securities to the date of payment, to the extent the Trust has sufficient funds available therefor at the time and (b) the amount of assets of the Trust, after satisfaction of all liabilities, remaining

2

available for distribution to Holders upon dissolution of the Trust (the “Liquidation Distribution”).

“Holder” means any holder of Trust Securities, as registered on the books and records of the Trust; provided, however, that, in determining whether the Holders of the requisite percentage of Trust Preferred Securities have given any request, notice, consent or waiver hereunder, “Holder” shall not include the Guarantor or any Affiliate of the Guarantor or any other obligor on the Trust Securities.

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

“Underwriters” means Lehman Brothers Inc. and the other underwriters listed in Schedule II to the Underwriting Agreement, dated May 8, 2007 among the Guarantor, the Trust and the underwriters named therein.

“Majority in Liquidation Amount of the Trust Preferred Securities” means, except as provided in the terms of the Trust Preferred Securities or by the Trust Indenture Act, Holder(s) of outstanding Trust Preferred Securities, voting together as a single class, who are the record owners of more than 50% of the aggregate liquidation amount of all outstanding Trust Preferred Securities. In determining whether the Holders of the requisite amount of Trust Preferred Securities have voted, Trust Preferred Securities that are owned by the Guarantor or any Affiliate of the Guarantor or any other obligor on the Trust Securities shall be disregarded for the purpose of any such determination.

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

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

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

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

(d)           a statement as to whether, in the opinion of each such officer on behalf of such Person, such condition or covenant has been complied with.

“Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust,

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unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature.

“Property Trustee” means the Trustee meeting the eligibility requirements set forth in Section 6.3 of the Declaration of Trust until a Successor Property Trustee has been appointed and has accepted such appointment pursuant to the terms of the Declaration of Trust and thereafter means each such Successor Property Trustee. The Property Trustee shall initially be U.S. Bank National Association.

“Underwriting Agreement” means the Underwriting Agreement dated as of May 17, 2007 by and among the Guarantor, the Trust and the Underwriters.

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

“Subordinated Indenture” means the Indenture governing the Debentures.

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

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

ARTICLE II
TRUST INDENTURE ACT

SECTION 2.1.Trust Indenture Act; Application

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

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

SECTION 2.2.Lists of Holders of Securities

(a)           The Guarantor shall provide the Guarantee Trustee (i) except while the Trust Preferred Securities are represented by one or more Global Securities at least one Business Day prior to the date for payment of distributions, a list, in such form as the Guarantee Trustee may reasonably require, of the names and addresses of the Holders of the Trust Preferred Securities (“List of Holders”) as of the record date relating to the payment of such distributions and (ii) at any other time, within 30 days of receipt by the Guarantor of a written request from the Guarantee Trustee for a List of Holders as of a date no more than 15 days before such List of Holders is given to the Guarantee Trustee; provided that the Guarantor shall not be obligated to

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provide such List of Holders at any time the List of Holders does not differ from the most recent List of Holders given to the Guarantee Trustee by the Guarantor. The Guarantee Trustee shall preserve, in as current a form as is reasonably practicable, all information contained in Lists of Holders given to it, provided that the Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders.

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

SECTION 2.3.Reports by the Guarantee Trustee

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

SECTION 2.4.Periodic Reports to Guarantee Trustee

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

SECTION 2.5.Evidence of Compliance with Conditions Precedent

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

SECTION 2.6.Events of Default; Waiver

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

SECTION 2.7.Event of Default; Notice

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

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as a Responsible Officer of the Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Trust Preferred Securities.

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

SECTION 2.8.Conflicting Interests

The Declaration of Trust shall be deemed to be specifically described in this Guarantee for the purposes of clause (i) of the first proviso contained in Section 310(b)(1) of the Trust Indenture Act. Nothing herein shall prevent the Guarantee 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 Guarantee Trustee has a conflicting interest as defined in Section 310(b) of the Trust Indenture Act with respect to the Trust Securities or the Guarantee in respect of such Trust Securities, there shall be excluded (i) all series of securities of any Investment Affiliate issued or issuable under an Indenture, (ii) this Guarantee and (iii) the Declaration of Trust.

SECTION 2.9.Disclosure of Information

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

SECTION 2.10.Guarantee Trustee May File Proofs of Claim

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

ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE

SECTION 3.1.Powers and Duties of the Guarantee Trustee

(a)           This Guarantee shall be held by the Guarantee Trustee for the benefit of the Holders of the Trust Securities, and the Guarantee Trustee shall not transfer this Guarantee to any Person except a Holder of Trust Securities exercising his or her rights pursuant to Section 5.4(b) or to a Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee

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of its appointment to act as Successor Guarantee Trustee. The right, title and interest of the Guarantee Trustee in and to this Guarantee shall automatically vest in any Successor Guarantee Trustee, and such vesting and succession of title shall be effective whether or not conveyance documents have been executed and delivered pursuant to the appointment of such Successor Guarantee Trustee.

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

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

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

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

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

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

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

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(iii)          the Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a Majority in Liquidation Amount of Trust Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee, or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee; and

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

SECTION 3.2.Certain Rights of Guarantee Trustee

(a)           Subject to the provisions of Section 3.1 hereof:

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

(ii)           Any direction or act of the Guarantor contemplated by this Guarantee shall be sufficiently evidenced by an Officers’ Certificate.

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

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

(v)           The Guarantee Trustee may consult with counsel of its selection, and the advice or opinion of such counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or opinion. Such counsel may be counsel to the Guarantor or any of its Affiliates and may include any of its employees. The Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Guarantee from any court of competent jurisdiction.

(vi)          The Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Guarantee at the request or direction of any Holder,

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unless such Holder shall have provided to the Guarantee Trustee such security and indemnity, reasonably satisfactory to the Guarantee Trustee, against the costs, expenses (including attorneys’ fees and expenses and the expenses of the Guarantee Trustee’s agents, nominees or custodians) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Guarantee Trustee; provided that nothing contained in this Section 3.2(a)(vi) shall be taken to relieve the Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Guarantee.

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

(viii)        The Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, nominees, custodians or attorneys, and the Guarantee Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.

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

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

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

SECTION 3.3.Not Responsible for Recitals or Issuance of Guarantee

The recitals contained in this Guarantee shall be taken as the statements of the Guarantor, and the Guarantee Trustee does not assume any responsibility for their correctness.

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The Guarantee Trustee makes no representations as to the validity or sufficiency of this Guarantee.

ARTICLE IV
GUARANTEE TRUSTEE

SECTION 4.1.Guarantee Trustee; Eligibility

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

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

(ii)           be a corporation organized and doing business under the laws of the United States of America or any state or territory thereof or of the District of Columbia, or a corporation or Person permitted by the Securities and Exchange Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least US$50,000,000, and subject to supervision or examination by federal, state, territorial or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then, for the purposes of this Section 4.1(a)(ii), the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

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

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

SECTION 4.2.Appointment, Removal and Resignation of Guarantee Trustee

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

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

(c)           The Guarantee Trustee appointed to office shall hold office until a Successor Guarantee Trustee shall have been appointed or until its removal or resignation. The Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Guarantee Trustee and delivered to the Guarantor,

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which resignation shall not take effect until a Successor Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee.

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

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

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

ARTICLE V
GUARANTEE

SECTION 5.1.Guarantee

The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by the Trust), if, as and when due, regardless of any defense, right of set-off or counterclaim that the Trust may have or assert. The Guarantor’s obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing the Trust to pay such amounts to the Holders.

SECTION 5.2.Waiver of Notice and Demand

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

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SECTION 5.3.Obligations Not Affected

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

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

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

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

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

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

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

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

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

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

SECTION 5.4.Rights of Holders

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

(b)           If the Guarantee Trustee fails to enforce this Guarantee, then any Holder of Trust Preferred Securities may, subject to the subordination provisions of Section 6.2, institute a legal proceeding directly against the Guarantor to enforce the Guarantee Trustee’s rights under this Guarantee, without first instituting a legal proceeding against the Trust, the Guarantee Trustee or any other Person or entity. In addition, if the Guarantor has failed to make a Guarantee Payment, a Holder of Trust Securities may, subject to the subordination provisions of Section 6.2, directly institute a proceeding against the Guarantor for enforcement of the Guarantee for such payment to such Holder. The Guarantor hereby waives any right or remedy to require that any action on this Guarantee be brought first against the Trust or any other Person or entity before proceeding directly against the Guarantor.

SECTION 5.5.Guarantee of Payment

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

SECTION 5.6.Subrogation

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

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SECTION 5.7.Independent Obligations

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

ARTICLE VI
SUBORDINATION

SECTION 6.1.Ranking

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

SECTION 6.2.Subordination of Common Securities

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

ARTICLE VII
TERMINATION

SECTION 7.1.Termination

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

ARTICLE VIII
INDEMNIFICATION

SECTION 8.1.Exculpation

(a)           No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Guarantor or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith in accordance with this Guarantee and in a manner that such Indemnified Person

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reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Guarantee or by law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person’s negligence or willful misconduct with respect to such acts or omissions.

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

SECTION 8.2.Indemnification

The Guarantor agrees to indemnify each Indemnified Person for, and to hold each Indemnified Person harmless against any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses (including reasonable legal fees and expenses) of defending itself against, or investigating, any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The obligation to indemnify as set forth in this Section 8.2 shall survive the termination of this Guarantee.

ARTICLE IX
MISCELLANEOUS

SECTION 9.1.Successors and Assigns

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

SECTION 9.2.Amendments

Except with respect to any changes that do not materially adversely affect the rights of the Holders (in which case no consent of the Holders will be required), this Guarantee may not be amended without the prior approval of the Holders of a Majority in Liquidation Amount of the Trust Preferred Securities voting together as a single class (excluding any Trust Securities held by the Sponsor or any of its Affiliates). The provisions of Article 11.2 of the Declaration of Trust with respect to meetings of Holders of Trust Securities apply to the giving of such approval.

SECTION 9.3.Notices

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

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

U.S. Bank National Association

300 Delaware Avenue

9^th Floor, EX-AE-WDAW

Wilmington, Delaware 19801

Attention:  Corporate Trust Services

Facsimile:  (302) 576-3717

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

Lehman Brothers Holdings Inc.

1301 Avenue of the Americas
New York, New York 10019
Attention: Corporate Counsel

Facsimile:  (212) 526-0339

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

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

SECTION 9.4.Benefit

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

SECTION 9.5.Governing Law

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

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THIS GUARANTEE is executed as of the day and year first above written.

LEHMAN BROTHERS HOLDINGS INC.,
as Guarantor
By:	/s/ BARRETT S. DIPAOLO
	Name:	Barrett S. DiPaolo
	Title:	Vice President
U.S. BANK NATIONAL ASSOCIATION,
as Guarantee Trustee
By:	/s/ EARL DENNISON
	Name:
	Title:

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EX-4.08

Exhibit 4.08

GUARANTEE AGREEMENT

LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VIII

Dated as of May 17, 2007

CROSS REFERENCE TABLE*

Section of Trust	Section of
Indenture Act of	Guarantee
1939, as amended	Agreement
310(a)	4.1(a)
310(b)	2.8; 4.1(c)
310(c)	Inapplicable
311(a)	2.2(b)
311(b)	2.2(b)
311(c)	Inapplicable
312(a)	2.2(a); 2.9
312(b)	2.2(b); 2.9
312(c)	2.9
313(a)	2.3
313(b)	2.3
313(c)	2.3
313(d)	2.3
314(a)	2.4
314(b)	Inapplicable
314(c)	2.5
314(d)	Inapplicable
314(e)	2.5
314(f)	Inapplicable
315(a)	3.1(d); 3.2(a)
315(b)	2.7(a)
315(c)	3.1(c)
315(d)	3.1(d)
316(a)	2.6; 5.4(a)
316(b)	5.3
316(c)	Inapplicable
317(a)	2.10
317(b)	Inapplicable
318(a)	2.1(b)

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

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Table of Contents

		Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1.	Interpretation and Definitions	1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1.	Trust Indenture Act; Application	4
SECTION 2.2.	Lists of Holders of Securities	4
SECTION 2.3.	Reports by the Trust Guarantee Trustee	5
SECTION 2.4.	Periodic Reports to Trust Guarantee Trustee	5
SECTION 2.5.	Evidence of Compliance with Conditions Precedent	5
SECTION 2.6.	Events of Default; Waiver	5
SECTION 2.7.	Event of Default; Notice	5
SECTION 2.8.	Conflicting Interests	6
SECTION 2.9.	Disclosure of Information	6
SECTION 2.10.	Trust Guarantee Trustee May File Proofs of Claim	6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TRUST GUARANTEE TRUSTEE
SECTION 3.1.	Powers and Duties of the Trust Guarantee Trustee	6
SECTION 3.2.	Certain Rights of Trust Guarantee Trustee	8
SECTION 3.3.	Not Responsible for Recitals or Issuance of Trust Guarantee	9
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1.	Guarantee Trustee; Eligibility	10
SECTION 4.2.	Appointment, Removal and Resignation of Trust Guarantee Trustee	10
ARTICLE V
GUARANTEE
SECTION 5.1.	Guarantee	11
SECTION 5.2.	Waiver of Notice and Demand	11
SECTION 5.3.	Obligations Not Affected	12
SECTION 5.4.	Rights of Holders	13
SECTION 5.5.	Guarantee of Payment	13
SECTION 5.6.	Subrogation	13
SECTION 5.7.	Independent Obligations	14

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ARTICLE VI
SUBORDINATION
SECTION 6.1.	Ranking	14
SECTION 6.2.	Subordination of Common Securities	14
ARTICLE VII
TERMINATION
SECTION 7.1.	Termination	14
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1.	Exculpation	14
SECTION 8.2.	Indemnification	15
ARTICLE IX
MISCELLANEOUS
SECTION 9.1.	Successors and Assigns	15
SECTION 9.2.	Amendments	15
SECTION 9.3.	Notices	15
SECTION 9.4.	Benefit	16
SECTION 9.5.	Governing Law	16

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GUARANTEE AGREEMENT

This GUARANTEE AGREEMENT (the “Guarantee”), dated as of May 17, 2007, is executed and delivered by Lehman Brothers Holdings Inc., a Delaware corporation (the “Guarantor”), and U.S. Bank National Association, as trustee (the “Guarantee Trustee”), for the benefit of the Holders (as defined herein) from time to time of the Trust Securities (as defined herein) of Lehman Brothers Holdings Capital Trust VIII, a Delaware statutory trust (the “Trust”).

WHEREAS, pursuant to the Declaration of Trust (as defined herein), the Trust is issuing preferred securities having a liquidation amount of $1,000 per security (the “Trust Preferred Securities”) and common securities, having a liquidation amount of $1,000 per security and designated the Trust Common Securities (the “Trust Common Securities” and, together with the Trust Preferred Securities, the “Trust Securities”);

WHEREAS, as incentive for the Holders to purchase the Trust Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth in this Guarantee, to pay to the Holders of the Trust Securities the Guarantee Payments (as defined herein) and to make certain other payments on the terms and conditions set forth herein.

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

ARTICLE I
INTERPRETATION AND DEFINITIONS

SECTION 1.1.Interpretation and Definitions

In this Guarantee, unless the context otherwise requires:

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

(b)           capitalized terms used in this Guarantee but not otherwise defined herein shall have the meanings assigned to them in the Declaration of Trust or the Subordinated Indenture, as the case may be;

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

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

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

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

(g)           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 such term, as applicable; and

(h)           the following terms have the following meanings:

“Affiliate” means, with respect to any specified Person, any other Person that directly or indirectly controls or is controlled by, or is under common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Business Day” means any day other than a Saturday or Sunday or a day on which banking institutions in the City of New York are authorized or required by law, regulation or executive order to close.

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

“Debentures” means the $500,001,000 initial aggregate principal amount of the Guarantor’s Remarketable Junior Subordinated Debentures due 2043 issued pursuant to the Indenture.

“Declaration of Trust” means the Amended and Restated Declaration of Trust by and among Lehman Brothers Holdings Inc., as Sponsor, U.S. Bank National Association, as Property Trustee and Delaware Trustee, and the Regular Trustees named therein, dated as of May 17, 2007, as it may be amended, modified or supplemented from time to time.

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

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

“Guarantee Payments” means the following payments or distributions, without duplication, with respect to the Trust Securities, to the extent not paid by or on behalf of the Trust: (i) any accumulated and unpaid distributions on such Trust Securities to the extent the Trust has sufficient funds available therefor at the time, (ii) the Redemption Price with respect to any Trust Securities called for redemption by the Trust to the extent the Trust has sufficient funds available therefor at the time and (iii) upon a voluntary or involuntary dissolution, winding up or termination of the Trust (other than in connection with the redemption of all of the Trust Preferred Securities), the lesser of (a) the aggregate of the liquidation amount and all accumulated and unpaid Distributions (as defined in the Declaration of Trust) on the Trust Securities to the date of payment, to the extent the Trust has sufficient funds available therefor at the time and (b) the amount of assets of the Trust, after satisfaction of all liabilities, remaining

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available for distribution to Holders upon dissolution of the Trust (the “Liquidation Distribution”).

“Holder” means any holder of Trust Securities, as registered on the books and records of the Trust; provided, however, that, in determining whether the Holders of the requisite percentage of Trust Preferred Securities have given any request, notice, consent or waiver hereunder, “Holder” shall not include the Guarantor or any Affiliate of the Guarantor or any other obligor on the Trust Securities.

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

“Underwriters” means Lehman Brothers Inc. and the other underwriters listed in Schedule II to the Underwriting Agreement, dated May 8, 2007 among the Guarantor, the Trust and the underwriters named therein.

“Majority in Liquidation Amount of the Trust Preferred Securities” means, except as provided in the terms of the Trust Preferred Securities or by the Trust Indenture Act, Holder(s) of outstanding Trust Preferred Securities, voting together as a single class, who are the record owners of more than 50% of the aggregate liquidation amount of all outstanding Trust Preferred Securities. In determining whether the Holders of the requisite amount of Trust Preferred Securities have voted, Trust Preferred Securities that are owned by the Guarantor or any Affiliate of the Guarantor or any other obligor on the Trust Securities shall be disregarded for the purpose of any such determination.

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

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

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

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

(d)           a statement as to whether, in the opinion of each such officer on behalf of such Person, such condition or covenant has been complied with.

“Person” means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust,

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unincorporated association, or government or any agency or political subdivision thereof, or any other entity of whatever nature.

“Property Trustee” means the Trustee meeting the eligibility requirements set forth in Section 6.3 of the Declaration of Trust until a Successor Property Trustee has been appointed and has accepted such appointment pursuant to the terms of the Declaration of Trust and thereafter means each such Successor Property Trustee. The Property Trustee shall initially be U.S. Bank National Association.

“Underwriting Agreement” means the Underwriting Agreement dated as of May 17, 2007 by and among the Guarantor, the Trust and the Underwriters.

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

“Subordinated Indenture” means the Indenture governing the Debentures.

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

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

ARTICLE II
TRUST INDENTURE ACT

SECTION 2.1.Trust Indenture Act; Application

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

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

SECTION 2.2.Lists of Holders of Securities

(a)           The Guarantor shall provide the Guarantee Trustee (i) except while the Trust Preferred Securities are represented by one or more Global Securities at least one Business Day prior to the date for payment of distributions, a list, in such form as the Guarantee Trustee may reasonably require, of the names and addresses of the Holders of the Trust Preferred Securities (“List of Holders”) as of the record date relating to the payment of such distributions and (ii) at any other time, within 30 days of receipt by the Guarantor of a written request from the Guarantee Trustee for a List of Holders as of a date no more than 15 days before such List of Holders is given to the Guarantee Trustee; provided that the Guarantor shall not be obligated to

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provide such List of Holders at any time the List of Holders does not differ from the most recent List of Holders given to the Guarantee Trustee by the Guarantor. The Guarantee Trustee shall preserve, in as current a form as is reasonably practicable, all information contained in Lists of Holders given to it, provided that the Guarantee Trustee may destroy any List of Holders previously given to it on receipt of a new List of Holders.

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

SECTION 2.3.Reports by the Guarantee Trustee

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

SECTION 2.4.Periodic Reports to Guarantee Trustee

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

SECTION 2.5.Evidence of Compliance with Conditions Precedent

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

SECTION 2.6.Events of Default; Waiver

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

SECTION 2.7.Event of Default; Notice

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

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as a Responsible Officer of the Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Trust Preferred Securities.

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

SECTION 2.8.Conflicting Interests

The Declaration of Trust shall be deemed to be specifically described in this Guarantee for the purposes of clause (i) of the first proviso contained in Section 310(b)(1) of the Trust Indenture Act. Nothing herein shall prevent the Guarantee 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 Guarantee Trustee has a conflicting interest as defined in Section 310(b) of the Trust Indenture Act with respect to the Trust Securities or the Guarantee in respect of such Trust Securities, there shall be excluded (i) all series of securities of any Investment Affiliate issued or issuable under an Indenture, (ii) this Guarantee and (iii) the Declaration of Trust.

SECTION 2.9.        Disclosure of Information

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

SECTION 2.10.Guarantee Trustee May File Proofs of Claim

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

ARTICLE III
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE

SECTION 3.1.Powers and Duties of the Guarantee Trustee

(a)           This Guarantee shall be held by the Guarantee Trustee for the benefit of the Holders of the Trust Securities, and the Guarantee Trustee shall not transfer this Guarantee to any Person except a Holder of Trust Securities exercising his or her rights pursuant to Section 5.4(b) or to a Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee

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of its appointment to act as Successor Guarantee Trustee. The right, title and interest of the Guarantee Trustee in and to this Guarantee shall automatically vest in any Successor Guarantee Trustee, and such vesting and succession of title shall be effective whether or not conveyance documents have been executed and delivered pursuant to the appointment of such Successor Guarantee Trustee.

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

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

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

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

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

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

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

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(iii)          the Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a Majority in Liquidation Amount of Trust Preferred Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee, or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee; and

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

SECTION 3.2.Certain Rights of Guarantee Trustee

(a)           Subject to the provisions of Section 3.1 hereof:

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

(ii)           Any direction or act of the Guarantor contemplated by this Guarantee shall be sufficiently evidenced by an Officers’ Certificate.

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

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

(v)           The Guarantee Trustee may consult with counsel of its selection, and the advice or opinion of such counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or opinion. Such counsel may be counsel to the Guarantor or any of its Affiliates and may include any of its employees. The Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Guarantee from any court of competent jurisdiction.

(vi)          The Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Guarantee at the request or direction of any Holder,

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unless such Holder shall have provided to the Guarantee Trustee such security and indemnity, reasonably satisfactory to the Guarantee Trustee, against the costs, expenses (including attorneys’ fees and expenses and the expenses of the Guarantee Trustee’s agents, nominees or custodians) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Guarantee Trustee; provided that nothing contained in this Section 3.2(a)(vi) shall be taken to relieve the Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Guarantee.

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

(viii)        The Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, nominees, custodians or attorneys, and the Guarantee Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.

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

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

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

SECTION 3.3.Not Responsible for Recitals or Issuance of Guarantee

The recitals contained in this Guarantee shall be taken as the statements of the Guarantor, and the Guarantee Trustee does not assume any responsibility for their correctness.

9

The Guarantee Trustee makes no representations as to the validity or sufficiency of this Guarantee.

ARTICLE IV
GUARANTEE TRUSTEE

SECTION 4.1.Guarantee Trustee; Eligibility

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

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

(ii)           be a corporation organized and doing business under the laws of the United States of America or any state or territory thereof or of the District of Columbia, or a corporation or Person permitted by the Securities and Exchange Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least US$50,000,000, and subject to supervision or examination by federal, state, territorial or District of Columbia authority. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then, for the purposes of this Section 4.1(a)(ii), the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

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

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

SECTION 4.2.Appointment, Removal and Resignation of Guarantee Trustee

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

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

(c)           The Guarantee Trustee appointed to office shall hold office until a Successor Guarantee Trustee shall have been appointed or until its removal or resignation. The Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Guarantee Trustee and delivered to the Guarantor,

10

which resignation shall not take effect until a Successor Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee.

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

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

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

ARTICLE V
GUARANTEE

SECTION 5.1.Guarantee

The Guarantor irrevocably and unconditionally agrees to pay in full to the Holders the Guarantee Payments (without duplication of amounts theretofore paid by the Trust), if, as and when due, regardless of any defense, right of set-off or counterclaim that the Trust may have or assert. The Guarantor’s obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing the Trust to pay such amounts to the Holders.

SECTION 5.2.Waiver of Notice and Demand

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

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SECTION 5.3.Obligations Not Affected

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

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

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

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

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

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

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

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

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

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

SECTION 5.4.Rights of Holders

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

(b)           If the Guarantee Trustee fails to enforce this Guarantee, then any Holder of Trust Preferred Securities may, subject to the subordination provisions of Section 6.2, institute a legal proceeding directly against the Guarantor to enforce the Guarantee Trustee’s rights under this Guarantee, without first instituting a legal proceeding against the Trust, the Guarantee Trustee or any other Person or entity. In addition, if the Guarantor has failed to make a Guarantee Payment, a Holder of Trust Securities may, subject to the subordination provisions of Section 6.2, directly institute a proceeding against the Guarantor for enforcement of the Guarantee for such payment to such Holder. The Guarantor hereby waives any right or remedy to require that any action on this Guarantee be brought first against the Trust or any other Person or entity before proceeding directly against the Guarantor.

SECTION 5.5.Guarantee of Payment

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

SECTION 5.6.Subrogation

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

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SECTION 5.7.Independent Obligations

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

ARTICLE VI
SUBORDINATION

SECTION 6.1.Ranking

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

SECTION 6.2.Subordination of Common Securities

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

ARTICLE VII
TERMINATION

SECTION 7.1.Termination

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

ARTICLE VIII
INDEMNIFICATION

SECTION 8.1.Exculpation

(a)           No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Guarantor or any Covered Person for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith in accordance with this Guarantee and in a manner that such Indemnified Person

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reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Guarantee or by law, except that an Indemnified Person shall be liable for any such loss, damage or claim incurred by reason of such Indemnified Person’s negligence or willful misconduct with respect to such acts or omissions.

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

SECTION 8.2.Indemnification

The Guarantor agrees to indemnify each Indemnified Person for, and to hold each Indemnified Person harmless against any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses (including reasonable legal fees and expenses) of defending itself against, or investigating, any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The obligation to indemnify as set forth in this Section 8.2 shall survive the termination of this Guarantee.

ARTICLE IX
MISCELLANEOUS

SECTION 9.1.Successors and Assigns

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

SECTION 9.2.Amendments

Except with respect to any changes that do not materially adversely affect the rights of the Holders (in which case no consent of the Holders will be required), this Guarantee may not be amended without the prior approval of the Holders of a Majority in Liquidation Amount of the Trust Preferred Securities voting together as a single class (excluding any Trust Securities held by the Sponsor or any of its Affiliates). The provisions of Article 11.2 of the Declaration of Trust with respect to meetings of Holders of Trust Securities apply to the giving of such approval.

SECTION 9.3.Notices

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

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

U.S. Bank National Association

300 Delaware Avenue

9^th Floor, EX-AE-WDAW

Wilmington, Delaware 19801

Attention:  Corporate Trust Services

Facsimile:  302-576-3717

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

Lehman Brothers Holdings Inc.

1301 Avenue of the Americas
New York, New York 10019
Attention: Corporate Counsel

Facsimile:  (212) 526-0339

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

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

SECTION 9.4.Benefit

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

SECTION 9.5.Governing Law

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

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THIS GUARANTEE is executed as of the day and year first above written.

LEHMAN BROTHERS HOLDINGS INC.,
as Guarantor
By:	/s/ BARRETT S. DIPAOLO
	Name:	Barrett S. DiPaolo
	Title:	Vice President
U.S. BANK NATIONAL ASSOCIATION,
as Guarantee Trustee
By:	/s/ EARL DENNISON
	Name:
	Title:

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EX-4.09

Exhibit 4.09

LEHMAN BROTHERS HOLDINGS INC.

AND

U.S. BANK NATIONAL ASSOCIATION

as Trustee

ELEVENTH SUPPLEMENTAL INDENTURE

Dated as of May 17, 2007

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

W  I  T  N  E  S  S  E  T  H

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1.5           Global Debentures; Adjustments of Global Debentures.

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

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

1.6           Deferral of Interest; Payment Restrictions

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

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

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

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

1.7           Alternative Payment Mechanism

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

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

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

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

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

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

1.8           Payment of Trust Costs and Expenses

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

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SECTION 2.   REMARKETING AND RATE RESET PROCEDURES

2.1           Company Elections in Connection with Remarketing.

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

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

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

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

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

(e)           whether following a Failed Remarketing:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(e)           Upon the occurrence of a Failed Remarketing:

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

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

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

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

2.3           Early Remarketing.

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

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

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

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

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

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

2.4           Remarketing Procedures

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

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

SECTION 3.   AMENDMENTS TO THE INDENTURE

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

21

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

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

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

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

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

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

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

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

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

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

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

22

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

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

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

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

SECTION 4.   ADDITIONAL PROVISION

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

23

Section 1412.         Company Election to End Subordination.

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

SECTION 5.   MISCELLANEOUS

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

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

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

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

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

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

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

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

24

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

LEHMAN BROTHERS HOLDINGS INC.
By:	/s/ BARRETT S. DIPAOLO
	Name:
	Title:
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:	/s/ EARL DENNISON
	Name:

25

EXHIBIT A

[FORM OF FACE OF DEBENTURE]

No. D- $1,000,001,000

LEHMAN BROTHERS HOLDINGS INC.

5.707% REMARKETABLE JUNIOR SUBORDINATED DEBENTURES DUE 2043

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

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

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

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

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

	LEHMAN BROTHERS HOLDINGS INC.
	By:
		Name:
		Title:
Attest:
Name:
Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

Dated:

U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
	Authorized Signatory

[FORM OF REVERSE OF DEBENTURE]

(Reverse of Debenture)

LEHMAN BROTHERS HOLDINGS INC.

5.707% REMARKETABLE JUNIOR SUBORDINATED DEBENTURE DUE 2043

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

TEN COM –	as tenants in common
TEN ENT –	as tenants by their entireties
JT TEN –	as joint tenants with right of survivorship and not as tenants in common

UNIF GIFT MIN ACT  –                          Custodian                     under Uniform Gifts to

(Cust)     (Minor)

Minors Act                      

(State)

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

ASSIGNMENT

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

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

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

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

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

Date:
	Signature:
	NOTICE: The signature to this assignment must correspond
	with the name as it appears upon the face of the within Debenture in
	every particular, without alteration or enlargement or any change

whatever.

Signature(s) Guaranteed:

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

EX-4.10

Exhibit 4.10

LEHMAN BROTHERS HOLDINGS INC.

AND

U.S. BANK NATIONAL ASSOCIATION

as Trustee

TWELFTH SUPPLEMENTAL INDENTURE

Dated as of May 17, 2007

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

W  I  T  N  E  S  S  E  T  H

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

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

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

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

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

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

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

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

1.1           Designation, Principal Amount and Terms.     There is hereby authorized and established pursuant to Section 301 of the Indenture a series of Securities designated the “Floating Rate Remarketable Junior Subordinated Debentures due 2043” of the Company. The Junior Subordinated Debentures shall be issued initially in an aggregate principal amount of $500,001,000, and shall have the terms provided for herein, including those set forth in Exhibit A hereto. The Company may create and issue additional notes ranking pari passu in right of payment to the Junior Subordinated Debentures and otherwise with the same terms as the Junior Subordinated Debentures other than the Issue Date, Issue Price and the payment of additional interest accruing prior to the Issue Date of such notes, which notes shall form a single series with the Junior Subordinated Debentures. No such additional notes shall be issued if an Event of Default has occurred with respect to the Junior Subordinated Debentures.

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

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

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

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

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

1.5           Global Debentures; Adjustments of Global Debentures.

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

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

1.6           Deferral of Interest; Payment Restrictions.

(a)           The Company shall have the right at any time, on one or more occasions, so long as an Event of Default has not occurred and is not continuing under the Indenture, to defer payment of interest on the Junior Subordinated Debentures, for up to 20 consecutive quarterly Interest Periods (or the equivalent thereof, if the Interest Periods are not then quarterly) or until June 2, 2014, if later, with respect to each deferral period (each an “Deferral Period”), during which Deferral Periods the Company shall have the right to make partial payments of interest on any Interest Payment Date, and at the end of which the Company shall pay all interest then accrued and unpaid (together with Additional Interest thereon to the extent permitted by applicable law); provided that no Deferral Period shall extend beyond the Stated Maturity of the principal of this Debenture. Prior to the termination of any such Deferral Period, the Company may further extend the interest payment period, provided that no Deferral Period shall exceed 20 consecutive quarterly Interest Periods (or the equivalent thereof if this Debenture is not then bearing interest quarterly) or until June 2, 2014, if later, or extend beyond the Stated Maturity of the principal of this Debenture. Upon the termination of any such Deferral Period and upon the payment of all accrued and unpaid interest then due, the Company may elect to begin a new Deferral Period, subject to the above requirements. Subject to the last sentence of this paragraph,

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

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

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

1.7           Alternative Payment Mechanism.

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

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

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

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

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

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

1.8           Payment of Trust Costs and Expenses.

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

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SECTION 2.   REMARKETING AND RATE RESET PROCEDURES

2.1           Company Elections in Connection with Remarketing.

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

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

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

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

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

(e)           whether following a Failed Remarketing:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(e)           Upon the occurrence of a Failed Remarketing:

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

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

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

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

2.3           Early Remarketing.

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

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

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

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

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

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

2.4           Remarketing Procedures

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

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

SECTION 3.   AMENDMENTS TO THE INDENTURE

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

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

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

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

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

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

“Commercially Reasonable Efforts” by the Company to sell Qualifying APM Securities means commercially reasonable efforts to complete the offer and sale of Qualifying APM Securities to third parties that are not affiliates of the Company in public offerings or private placements; provided that the Company

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shall be deemed to have used such Commercially Reasonable Efforts if a Market Disruption Event occurs and for so long as it continues regardless of whether the Company makes any offers or sales during such period.

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

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

“Declaration of Trust” means the Amended and Restated Declaration of Trust, dated as of May 17, 2007, among the Company, as Sponsor, the Property Trustee, the Delaware Trustee, the Regular Trustees (each as named therein) and the several Holders of the Trust Securities.

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

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

“Eligible Proceeds” means, for each relevant Interest Payment Date, the net proceeds (after underwriters’ or placement agents’ fees, commissions or discounts and other expenses relating to the issuance or sale) the Company has received during the 180-day period prior to such Interest Payment Date from the issuance

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or sale of Qualifying APM Securities to persons that are not the Company’s Subsidiaries.

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

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

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

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

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

“Intent-Based Replacement Disclosure” means, as to any Qualifying Preferred Stock that the Company has publicly stated its intention, either in the prospectus or other offering document under which such Qualifying Preferred Stock was initially offered for sale or in filings with the SEC made by the Company under the Exchange Act prior to or contemporaneously with the issuance of such securities, that the Company, to the extent the Qualifying Preferred Stock provides it with equity credit, will repay, redeem or purchase such Qualifying Preferred Stock only with the proceeds of replacement capital securities that have terms and provisions at the time of repayment, redemption or purchase that are as or more equity-like than the Qualifying Preferred Stock then being repaid, redeemed or purchased, raised within 180 days prior to the applicable repayment, redemption or purchase date.

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

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

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

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

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

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

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

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

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

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

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

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

(vii) An event occurs and is continuing as a result of which the offering document for such offer and sale of Qualifying APM Securities would, in the reasonable judgment of the Company, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and either (x) the disclosure of that event at such time, in the reasonable judgment of the Company, is not otherwise required by law and would have a material adverse effect on the business of the Company or (y) the disclosure relates to a previously undisclosed proposed or pending material business transaction, provided that no single suspension period contemplated by this clause (vii) shall exceed 90 consecutive days and multiple suspension periods contemplated by this clause (vii) shall not exceed an aggregate of 180 days in any 360-day period; or

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“Responsible Officer” means, when used with respect to U.S. Bank National Association in its capacity as Paying Agent, any officer within the Corporate Trust Department (or any successor department, unit or division of U.S. Bank National Association) assigned to the Paying Agent Office of U.S. Bank National Association, in its capacity as Paying Agent, who has direct responsibility for the administration of the Paying Agent functions of the Indenture and this Supplemental Indenture.

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

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

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

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

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

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

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

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

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

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“Supervisory Event” means, with respect to the issuance or sale of Qualifying APM Securities pursuant to Section 1.6, that the Company shall have notified the SEC of its intention and affirmatively requested SEC approval both (1) to sell Qualifying APM Securities and (2) to apply the net proceeds of such sale to pay deferred interest on the Junior Subordinated Debentures, and the Company has been notified that the SEC disapproves of either action mentioned in that notice. A Supervisory Event shall cease on the business day following the earlier to occur of (a) the fifth anniversary of the commencement of any deferral period (or, if later, May 31, 2014), or (b) the day on which the SEC notifies the Company in writing that it no longer disapproves of the Company’s intention to both (i) issue or sell Qualifying APM Securities and (ii) apply the net proceeds from such sale to pay deferred interest on the Junior Subordinated Debentures.

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

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

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

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

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

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

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

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

(1) failure to pay interest for 30 days after deferral for 20 or more consecutive quarterly Interest  Periods or the equivalent thereof, in the event that Interest Periods are other than quarterly provided such failure occurs on or after June 2, 2014.

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

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

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and overdue interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company’s obligations in respect of the payment of the principal of and interest (including Additional Interest), if any, on this Debenture shall terminate.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

This Article 14 shall constitute a continuing offer to all persons who, in reliance upon such provisions, become holders of, or continue to hold, Senior

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Debt and Other Financial Obligations, and such provisions are made for the benefit of the holders of Senior Debt and Other Financial Obligations, and such holders and/or each of them may enforce such provisions.”

SECTION 4.   ADDITIONAL PROVISION

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

Section 1412.   Company Election to End Subordination.

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

SECTION 5.   MISCELLANEOUS

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

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

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

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

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

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

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

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

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

LEHMAN BROTHERS HOLDINGS INC.
By:	/s/ BARRETT S. DIPAOLO
	Name:
	Title:
U.S. BANK NATIONAL ASSOCIATION, as Trustee
By:	/s/ EARL DENNISON
	Name:

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EXHIBIT A

[FORM OF FACE OF DEBENTURE]

No. D- $500,001,000

LEHMAN BROTHERS HOLDINGS INC.

FLOATING RATE REMARKETABLE

JUNIOR SUBORDINATED DEBENTURES DUE 2043

Lehman Brothers Holdings Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein referred to as the “Company”), for value received, hereby promises to pay to U.S. BANK NATIONAL ASSOCIATION, as Property Trustee (the “Property Trustee”), or registered assigns, at the office or agency of the Company in the Borough of Manhattan, the City of New York, the principal sum of FIVE HUNDRED MILLION AND ONE THOUSAND DOLLARS ($500,001,000) on June 1, 2043 or such earlier date as may be specified by the Company following a Remarketing, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest on said principal sum at said office or agency, in like coin or currency, at the rate per annum of three-month LIBOR plus 0.68%, subject to reset as set forth below, until the principal hereof becomes due and payable, and on any overdue principal and (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum during the period in which such principal is overdue, compounded quarterly, to the registered holder of this Debenture, until payment of said principal sum has been made or duly provided for.

The Stated Maturity of the Debenture shall be June 1, 2043 or such earlier date as may be specified by the Company following a Remarketing. Interest on this Debenture (computed as set forth herein) shall be payable quarterly (subject to deferral as set forth herein) in arrears on February 28, May 31, August 31 and November 30 of each year (each an “Interest Payment Date”), commencing August 31, 2007 from the Interest Payment Date next preceding the date of this Debenture to which interest has been paid or duly provided for or such other dates as may be specified by the Company following a Remarketing. Interest on this Debenture shall be payable to the holder in whose name the Debenture is registered at the close of business on the applicable Record Date. The Record Date for any Interest Payment Date for the Debenture will be the date, whether or not a Business Day, 15 calendar days immediately preceding the Interest Payment Date. Notwithstanding the foregoing, any Interest Payment Date that would otherwise be a day that is not a New York or London Business Day shall instead be the next succeeding New York or London Business Day unless such day falls in the next calendar month in which case the Interest Payment Date will be the immediately preceding New York and London Business Day.

Interest on the Debenture shall be computed on the basis of the actual number of days elapsed in the related payment period using a 360-day year.

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

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

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

LEHMAN BROTHERS HOLDINGS INC.
By:
	Name:
	Title:

Attest:

Name:

Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

Dated:

U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By:
	Authorized Signatory

(Reverse of Debenture)

LEHMAN BROTHERS HOLDINGS INC.

FLOATING RATE REMARKETABLE JUNIOR SUBORDINATED DEBENTURE DUE 2043

This Debenture is one of a duly authorized series of Securities of the Company designated as the Floating Rate Remarketable Junior Subordinated Debentures due 2043 of the Company (herein called the “Debentures”), limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to $500,001,000. The Debentures are one of an indefinite number of series of debt securities of the Company (herein collectively called the “Securities”), issued or issuable under and pursuant to an indenture, dated as of February 1, 1996, as amended and supplemented from time to time and as amended and supplemented with respect to the Debentures herein by the Twelfth Supplemental Indenture dated as of May 17, 2007 between the Company and U.S. Bank National Association, as Trustee (herein called the “Trustee”) (as so amended and supplemented, the “Indenture”), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the holders of the Debentures. The separate series of Securities may be issued in various aggregate principal amounts, may mature at different times, may bear interest (if any) at different rates, may be subject to different redemption provisions or repayment or repurchase rights (if any), may be subject to different sinking, purchase or analogous funds (if any), may be subject to different covenants and Events of Default, as defined in the Indenture, and may otherwise vary as provided in the Indenture.

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

As provided in the Indenture and subject to certain limitations therein set forth, the Company may at its option redeem the Debentures in whole or from time to time in part at any time on or after May 31, 2016. In connection with a Remarketing, the Company may change the date after which it may redeem the Junior Subordinated Debentures to a later date or change the Redemption Price in accordance with Section 2 of the Indenture.

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

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

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

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

The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than 662/3% in aggregate principal amount of each series of the Securities at the time Outstanding to be affected (each series voting as a class), evidenced as provided in the Indenture, to execute supplemental indentures adding any provisions to, or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the holders of the Securities of all such series; provided, however, that no such supplemental indenture shall, among other things, (i) change the fixed maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon or reduce any premium payable on redemption, or make the principal thereof, or premium, if any, or interest thereon payable in any coin or currency other than that hereinabove provided, or amend the Indenture to modify its provisions relating to the subordination of each Security in a manner adverse to the holder thereof, without the consent of the holder of each Security so affected, or (ii) change the place of payment on any Security, or impair the right to institute suit for payment on any Security, or reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of each Security so affected. It is also provided in the Indenture that, prior to any declaration accelerating the maturity of any

series of Securities, the holders of a majority in aggregate principal amount of the Securities of such series Outstanding may on behalf of the holders of all the Securities of such series waive any past default or Event of Default under the Indenture with respect to such series and its consequences, except a default in the payment of interest, if any, on or the principal of, or premium, if any, on any of the Securities of such series. Any such consent or waiver by the holder of this Debenture shall be conclusive and binding upon such holder and upon all future holders and owners of this Debenture and any Debentures which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Debenture or such other Debentures. In addition, if the Debentures are held by the Trust, the consent of not less than 662/3% of the aggregate liquidation amount of the securities issued by the Trust shall be required in order for such supplemental indenture to be effective.

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

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

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

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

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

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

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

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

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

The Company and, by its acceptance of this Debenture or a beneficial interest therein, the Holder of, and any Person that acquires a beneficial interest in, this Debenture agree to treat for

United States Federal income tax purposes (i) the Debentures as indebtedness of the company, and (ii) the stated interest on the Debentures as ordinary interest income that is includible in the Holder’s or beneficial owner’s gross income at the time the interest is paid or accrued in accordance with the Holder’s or beneficial owner’s regular method of tax accounting, and otherwise to treat the Debentures as described in the Prospectus.

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

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

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

TEN COM -	as tenants in common
TEN ENT -	as tenants by their entireties
JT TEN -	as joint tenants with right of survivorship and
not as tenants in common

UNIF GIFT MIN ACT  -                 Custodian                 under Uniform Gifts to

(Cust)                              (Minor)

Minors Act                                 

(State)

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

ASSIGNMENT

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

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

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

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

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

Date:
	Signature:
	NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Debenture in every particular, without alteration or enlargement or any change
whatever.
Signature(s) Guaranteed:

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

EX-4.11

Exhibit 4.11

CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF TRUST
OF
LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VII

This Certificate of Amendment of Lehman Brothers Holdings Capital Trust VII (the “Trust”), is being duly executed and filed by the undersigned trustee to amend the certificate of trust of a statutory trust formed under the Delaware Statutory Trust Act (12 Del. C. § 3801 et seq.)(the “Act”).

1.             Name.     The name of the statutory trust amended hereby is Lehman Brothers Holdings Capital Trust VII.

2.             Amendment of Certificate.  The Certificate of Trust of the Trust is hereby amended by changing the name and address of the Trustee in the State of Delaware to the following:

U.S. Bank Trust National Association
300 Delaware Avenue, 9^th Floor
Wilmington, Delaware  19801
Attention:  Corporate Trust Services

3.             Effective Date.  This Certificate of Amendment shall be effective upon filing.

IN WITNESS WHEREOF, the undersigned trustee of the Trust has executed this Certificate of Amendment in accordance with Section 3811(a)(2) of the Act.

U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Property Trustee
By:	/s/ EARL DENNISON
	Name:	Earl Dennison
	Title:	Vice President
U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity but solely as Delaware Trustee
By:	/s/ EARL DENNISON
	Name:	Earl Dennison
	Title:	Vice President

By:	/s/ BARRETT DIPAOLO
	Barrett DiPaolo, not in his individual capacity but solely as Regular Trustee
By:	/s/ JAMES KILLERLANE
	James Killerlane, not in his individual capacity but solely as Regular Trustee
By:	/s/ ANDREW YEUNG
	Andrew Yeung, not in his individual capacity but solely as Regular Trustee

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EX-4.12

Exhibit 4.12

CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF TRUST
OF
LEHMAN BROTHERS HOLDINGS CAPITAL TRUST VIII

This Certificate of Amendment of Lehman Brothers Holdings Capital Trust VIII (the “Trust”), is being duly executed and filed by the undersigned trustee to amend the certificate of trust of a statutory trust formed under the Delaware Statutory Trust Act (12 Del. C. § 3801 et seq.)(the “Act”).

1.             Name.     The name of the statutory trust amended hereby is Lehman Brothers Holdings Capital Trust VIII.

2.             Amendment of Certificate.  The Certificate of Trust of the Trust is hereby amended by changing the name and address of the Trustee in the State of Delaware to the following:

U.S. Bank Trust National Association
300 Delaware Avenue, 9^th Floor
Wilmington, Delaware  19801
Attention:  Corporate Trust Services

3.             Effective Date. This Certificate of Amendment shall be effective upon filing.

IN WITNESS WHEREOF, the undersigned trustee of the Trust has executed this Certificate of Amendment in accordance with Section 3811(a)(2) of the Act.

U.S. BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Property Trustee
By:	/s/ Earl Dennison
	Name:
	Title:
U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity but solely as Delaware Trustee
By:	/s/ Earl Dennison
	Name:
	Title:

By:	/s/ Barrett DiPaolo
	Barrett DiPaolo, not in his individual capacity but solely as Regular Trustee
By:	/s/ James Killerlane
	James Killerlane, not in his individual capacity but solely as Regular Trustee
By:	/s/ Andrew Yeung
	Andrew Yeung, not in his individual capacity but solely as Regular Trustee

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EX-8.01

Exhibit 8.01

May 23, 2007

Re:Issuance and Sale of $1,000,000,000 5.857% Fixed Rate MCAPS and $500,000,000 Floating Rate MCAPS, Lehman Brothers Holdings, Inc.

Lehman Brothers Holdings, Inc.

745 Seventh Avenue

New York, NY 10019

Ladies and Gentlemen:

We have acted as special tax counsel to Lehman Brothers Holdings, Inc., a Delaware corporation (the “Company”), Lehman Brothers Holdings Capital Trust VII (“Trust VII”) and Lehman Brothers Holdings Capital Trust VIII (“Trust VIII” and together, the “Trusts”), each a Delaware statutory trust, in connection with the preparation and filing by the Company and the Trusts with the Securities and Exchange Commission (the “Commission”) of Post-Effective Amendment No. 3 (“Post-Effective Amendment No. 3”) to the Automatic Shelf Registration Statement (the “Registration Statement”) on Form S-3 (File No. 333-134553), under the Securities Act of 1933, as amended (the “Act”), as it became effective under the Act, and relating to (A) $1,000,000,000 of 5.857% Fixed Rate Mandatory Capital Advantaged Preferred Securities; and (B) $500,000,000 of Floating Rate Normal Mandatory Capital Advantaged Preferred Securities (together, the “Normal MCAPS”); The Normal MCAPS will be offered for sale to investors pursuant to the Company’s prospectuses dated May 8, 2007 (the “Prospectuses”), filed by the Company pursuant to Rule 424(b) of the rules and regulations of the Commission under the Act.

The Trust Securities are guaranteed by the Company with respect to the payment of distributions and payments upon liquidation, redemption and otherwise pursuant to, and to the extent set forth in, the Trust Guarantees (as defined below) delivered by the Company, as Guarantor, and U.S. Bank National Association, as trustee (the “Guarantee Trustee”), for the benefit of the holders of the Trust Securities of Trust VII and Trust VIII. All capitalized terms used in this opinion letter and not otherwise defined herein shall have the meaning ascribed to such terms in the Prospectuses.

In delivering this opinion letter, we have reviewed and relied upon: (i) the Registration Statement, including Post-Effective Amendment No. 3; (ii) the Prospectuses; (iii) the Indenture (the “Indenture”) dated February 1, 1996 between the Company and JPMorgan Chase Bank, N.A. (as successor to The Chase Manhattan Bank), as trustee, as supplemented by (1) the Eleventh Supplemental Indenture, dated as of May 17, 2007, between the Company and U.S. Bank National Association, as trustee (the “Indenture Trustee”), and (2) the Twelfth Supplemental Indenture dated as of May 17, 2007, between the Company and the Indenture Trustee (and together, the “Indentures”); (iv) the Amended and Restated Declaration of Trust of Lehman Brothers Holdings Capital Trust VII (the “Declaration of Trust VII”), dated as of May 17, 2007, among the Company, as Sponsor, U.S. Bank National Association, as Property Trustee, U.S. Bank Trust National Association, as the Delaware Trustee, and the Regular Trustees as named therein; (v) the Amended and Restated Declaration of Trust of Lehman Brothers Holdings Capital Trust VIII (the “Declaration of Trust VIII,” and, together with the Declaration of Trust VII, the “Declarations of Trust”), dated as of May 17, 2007, among the

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Company, as Sponsor, U.S. Bank National Association, as Property Trustee, U.S. Bank Trust National Association, as the Delaware Trustee, and the Regular Trustees as named therein; (vi) the Guarantee Agreement of Lehman Brothers Holdings Capital Trust VII (the “Trust VII Guarantee”), delivered by the Company, as Guarantor, and the Guarantee Trustee,  for the benefit of the holders of the Trust Securities of Lehman Brothers Holdings Capital Trust VII; (vii) the Guarantee Agreement of Lehman Brothers Holdings Capital Trust VII (the “Trust VIII Guarantee,” and, together with the Trust VII Guarantee, the “Trust Guarantees”), delivered by the Company, as Guarantor, and the Guarantee Trustee,  for the benefit of the holders of the Trust Securities of Lehman Brothers Holdings Capital Trust VIII; (viii) the Stock Purchase Contract Agreement (the “Fixed Rate MCAPS Stock Purchase Contract Agreement”), dated as of May 17, 2007, between the Company and U.S. Bank National Association, as stock purchase contract agent (the “Stock Purchase Contract Agent”); (ix) the Stock Purchase Contract Agreement (the “Floating Rate MCAPS Stock Purchase Contract Agreement,” and, together with the Fixed Rate MCAPS Stock Purchase Contract Agreement, the “Stock Purchase Contract Agreements”), dated as of May 17, 2007, between the Company and the Stock Purchase Contract Agent; (x) the Collateral Agreement (the “Fixed Rate MCAPS Collateral Agreement”), dated as of May 17, 2007, among the Company, the Bank of New York, as collateral agent and securities intermediary (the “Collateral Agent”), and the Stock Purchase Contract Agent; and (xi) the Collateral Agreement (the “Floating Rate MCAPS Collateral Agreement,” and, together with the Fixed Rate MCAPS Collateral Agreement, the “Collateral Agreements”), dated as of May 17, 2007, among the Company, the Collateral Agent, and the Stock Purchase Contract Agent; and

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have made such other investigations as we have deemed necessary or appropriate as a basis for the opinions set forth herein.

In rendering the opinions described below, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed copies, and the authenticity of the originals of such latter documents. We also have assumed that the transactions related to the issuance of the Normal MCAPS will be consummated in accordance with the terms of the documents and forms of documents described herein.

Based on the foregoing and subject to the qualifications, assumptions and limitations stated herein and in the Prospectuses, we are of the opinion that, (i) assuming that the Trusts were formed and will be maintained in compliance with the terms of the Declarations of Trust, the Trusts will be classified as grantor trusts and not as associations taxable as  corporations for United States federal income tax purposes, and (ii) the statements made in the Prospectuses under the caption, “Certain United States Federal Income Tax Consequences” insofar as they purport to constitute summaries of matters of United States federal tax law and regulations or legal conclusions with respect thereto, constitute accurate summaries of the matters described therein in all material respects.

We express no opinions with respect to the transactions referred to herein or in the Prospectuses other than as expressly set forth herein. Moreover, we note that there is no authority directly on point dealing with securities such as the Normal MCAPS or transactions of

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the type described herein and that our opinions are not binding on the Internal Revenue Service or the courts, either of which could take a contrary position. Nevertheless, we believe that the opinions expressed herein, if challenged, would be sustained by a court with jurisdiction in a properly presented case.

We do not express any opinion herein concerning any law other than the federal law of the United States.

We hereby consent to the filing of this opinion letter as an exhibit to the Corporation’s report on Form 8-K (which is deemed incorporated by reference into the prospectus constituting part of Post-Effective Amendment No. 3) and to the use of our name under the captions “Certain United States Federal Income Tax Consequences” and “Legal Matters” in the Prospectuses.

Very truly yours,

/s/ Simpson Thacher & Bartlett LLP

SIMPSON THACHER & BARTLETT LLP

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EX-99.1

Exhibit 99.1

Replacement Capital Covenant, dated as of May 17, 2007 (this “Replacement Capital Covenant”), by Lehman Brothers Holdings Inc., a Delaware corporation (together with its successors and assigns, the “Corporation”), in favor of and for the benefit of each Covered Debtholder (as defined below).

Recitals

A.On the date hereof, the Corporation is issuing $1,000,000,000 aggregate stated amount of 5.857% Mandatory Capital Advantaged Preferred Securities (the “Normal MCAPS”). Each Normal MCAPS is a unit with a stated amount of $1,000 initially consisting of (i) a stock purchase contract between the holder and the Corporation under which the holder agrees to purchase, and the Corporation agrees to sell, on the “Stock Purchase Date” determined pursuant to the stock purchase contract, one depositary share (a “Depositary Share”) representing 1/100th of a share of the Corporation’s Non-Cumulative Perpetual Preferred Stock, Series H, $100,000 liquidation preference per share (the “Preferred Stock”) and (ii) a trust preferred security of Lehman Brothers Holdings Capital Trust VII, a Delaware statutory trust (the “Trust”), with a liquidation amount of $1,000 (a “Trust Preferred Security”), which represents an interest in the Corporation’s Junior Subordinated Debentures due 2043 (the “Debentures”) held by the Trust. The Normal MCAPS, together with the Trust Preferred Securities and the Debentures that are held as part of the Normal MCAPS, the “Treasury MCAPS” as defined in the Prospectus referred to in Recital B, and the Depositary Shares and the Preferred Stock are referred to collectively as the “Securities.”

B.This Replacement Capital Covenant is the Replacement Capital Covenant referred to in the Prospectus, dated May 8, 2007 (the “Prospectus”), relating to the Securities.

C.The Corporation is entering into and disclosing the content of this Replacement Capital Covenant in the manner provided below with the intent that the covenants provided for in this Replacement Capital Covenant be enforceable by each Covered Debtholder and that the Corporation be estopped from disregarding the covenants in this Replacement Capital Covenant, in each case to the fullest extent permitted by applicable law.

D.The Corporation acknowledges that reliance by each Covered Debtholder upon the covenants in this Replacement Capital Covenant is reasonable and foreseeable by the Corporation and that, were the Corporation to disregard its covenants in this Replacement Capital Covenant, each Covered Debtholder would have sustained an injury as a result of its reliance on such covenants.

NOW, THEREFORE, the Corporation hereby covenants and agrees as follows in favor of and for the benefit of each Covered Debtholder.

SECTION 1.  Definitions. Capitalized terms used in this Replacement Capital Covenant (including the Recitals) have the meanings set forth in Schedule I hereto.

SECTION 2.  Limitations on Repayment, Redemption and Purchase of Securities. The Corporation hereby promises and covenants to and for the benefit of each Covered

Debtholder that neither the Corporation nor any Subsidiary of the Corporation (including the Trust) shall repay, redeem or purchase (a) any of the Securities prior to the Stock Purchase Date or (b) the Depositary Shares or Preferred Stock on or after the Stock Purchase Date, except in either case to the extent that (1) the amount repaid, or the applicable redemption or purchase price, does not exceed the sum of the following amounts:

(i)100% of the aggregate amount of (A) net cash proceeds received by the Corporation and its Subsidiaries from the sale of Common Stock and rights to acquire Common Stock (including Common Stock or rights to acquire Common Stock issued pursuant to the Corporation’s dividend reinvestment plan or employee benefit plans), (B) the Market Value of any Common Stock that the Corporation or its Subsidiaries have delivered as consideration for property or assets in an arm’s-length transaction and (C) the Market Value of any Common Stock that the Corporation and its Subsidiaries have issued in connection with the conversion or exchange of any convertible or exchangeable securities, other than securities for which the Corporation or any of its Subsidiaries has received equity credit from any NRSRO; plus

(ii)100% of the aggregate amount of net cash proceeds received by the Corporation and its Subsidiaries from the sale of Qualifying Non-Cumulative Perpetual Preferred Stock;

in each case within the applicable Measurement Period (without double counting proceeds received in any prior Measurement Period) to Persons other than the Corporation and its Subsidiaries or (2) the Securities are exchanged for at least an equal aggregate Market Value of Common Stock or liquidation preference of Qualifying Non-Cumulative Perpetual Preferred Stock; provided that the provisions of this Section 2 shall not apply to (i) purchases of the Securities or any portion thereof in connection with the distribution thereof or in connection with market-making or other secondary-market activities and (ii) any distribution of the Debentures to holders of the Trust Preferred Securities upon a dissolution of the Trust. For purposes of this Replacement Capital Covenant, the term “repay” includes the defeasance by the Corporation of the Debentures as well as the satisfaction and discharge of its obligations under the Indenture with respect to the Debentures.

SECTION 3.  Covered Debt. (a)  The Corporation represents and warrants that the Initial Covered Debt is Eligible Debt.

(b)On or during the 30-day period immediately preceding any Redesignation Date with respect to the Covered Debt then in effect, the Corporation shall identify the series of Eligible Debt that will become the Covered Debt on and after such Redesignation Date in accordance with the following procedures:

(i)the Corporation shall identify each series of its then outstanding long-term indebtedness for money borrowed that is Eligible Debt;

(ii)if only one series of the Corporation’s then outstanding long-term indebtedness for money borrowed is Eligible Debt, such series shall become the Covered Debt commencing on the related Redesignation Date;

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(iii)if the Corporation has more than one outstanding series of long-term indebtedness for money borrowed that is Eligible Debt, then the Corporation shall identify the series that has the latest occurring final maturity date as of the date the Corporation is applying the procedures in this Section 3(b) and such series shall become the Covered Debt on the related Redesignation Date;

(iv)the series of outstanding long-term indebtedness for money borrowed that is determined to be Covered Debt pursuant to clause (ii) or (iii) above shall be the Covered Debt for purposes of this Replacement Capital Covenant for the period commencing on the related Redesignation Date and continuing to but not including the Redesignation Date as of which a new series of outstanding long-term indebtedness is next determined to be the Covered Debt pursuant to the procedures set forth in this Section 3(b); and

(v)in connection with such identification of a new series of Covered Debt, the Corporation shall, as provided for in Section 3(c), give a notice and file with the Commission a current report on Form 8-K including or incorporating by reference this Replacement Capital Covenant as an exhibit within the time frame provided for in such section.

(c)Notice. In order to give effect to the intent of the Corporation described in Recital C, the Corporation covenants that:

(i)simultaneously with the execution of this Replacement Capital Covenant or as soon as practicable after the date hereof, it shall (x) give notice to the Holders of the Initial Covered Debt, in the manner provided in the indenture relating to the Initial Covered Debt, of this Replacement Capital Covenant and the rights granted to such Holders hereunder and (y) file a copy of this Replacement Capital Covenant with the Commission as an exhibit to a Form 8-K under the Securities Exchange Act;

(ii)so long as the Corporation is a reporting company under the Securities Exchange Act, the Corporation shall include in each annual report filed with the Commission on Form 10-K under the Securities Exchange Act a description of the covenant set forth in Section 2 and identify the series of long-term indebtedness for borrowed money that is Covered Debt as of the date such Form 10-K is filed with the Commission;

(iii)if a series of the Corporation’s long-term indebtedness for money borrowed (1) becomes Covered Debt or (2) ceases to be Covered Debt, the Corporation shall give notice of such occurrence within 30 days to the holders of such long-term indebtedness for money borrowed in the manner provided for in the indenture, fiscal agency agreement or other instrument under which such long-term indebtedness for money borrowed was issued and report such change in a current report on Form 8-K including or incorporating by reference this Replacement Capital Covenant, and in the Corporation’s next quarterly report on Form 10-Q or annual report on Form 10-K, as applicable;

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(iv)if, and only if, the Corporation ceases to be a reporting company under the Securities Exchange Act, the Corporation shall (A) post on its website the information otherwise required to be included in Securities Exchange Act filings pursuant to clauses (ii) and (iii) of this Section 3(c) and (B)to the extent permitted by Bloomberg and any other similar third-party vendor the Corporation reasonably believes is appropriate that makes available to the marketplace information with respect to securities that are Covered Debt by posting such information on an electronically accessible screen (each an “Investor Screen”), cause a notation to be included on each such Investor Screen identifying the relevant series of indebtedness of the Corporation or a Subsidiary that is Covered Debt from time to time as Covered Debt for purposes of this Replacement Capital Covenant and cause a hyperlink to a definitive copy of this Replacement Capital Covenant to be included on the Investor Screen for each series of Covered Debt (but only so long as such series is Covered Debt); and

(v)promptly upon request by any Holder of Covered Debt, the Corporation shall provide such Holder with an executed copy of this Replacement Capital Covenant.

SECTION 4.  Termination, Amendment and Waiver. (a)  The obligations of the Corporation pursuant to this Replacement Capital Covenant shall remain in full force and effect until the first date after the Stock Purchase Date on which no shares of Preferred Stock are outstanding or, if earlier, the earliest date to occur (such date or earlier date, the “Termination Date”) of:

(i)the date, if any, on which the Holders of a majority in principal amount of the then-effective series of Covered Debt consent or agree in writing to the termination of this Replacement Capital Covenant and the obligations of the Corporation hereunder;

(ii)the date on which the Corporation has no series of outstanding Eligible Senior Debt or Eligible Subordinated Debt (in each case without giving effect to the rating requirement in clause (b) of the definition of each such term); and

(iii)the occurrence of an event of default that results in the acceleration of the Debentures prior to the Stock Purchase Date.

From and after the Termination Date, the obligations of the Corporation pursuant to this Replacement Capital Covenant shall be of no further force and effect.

(b)This Replacement Capital Covenant may be amended or supplemented from time to time by a written instrument signed by the Corporation with the consent of the Holders of a majority in principal amount of the then-effective series of Covered Debt; provided that this Replacement Capital Covenant may be amended or supplemented from time to time by a written instrument signed only by the Corporation (and without the consent of the Holders of the then-effective series of Covered Debt) if:

(i)such amendment or supplement eliminates Common Stock or rights to acquire Common Stock as a Replacement Capital Security, if after the date of this Replacement Capital Covenant, an accounting standard or interpretive guidance of an existing accounting standard issued by an organization or regulator that has responsibility

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for establishing or interpreting accounting standards in the United States becomes effective such that there is more than an insubstantial risk that failure to eliminate Common Stock or rights to acquire Common Stock as a Replacement Capital Security would result in a reduction in the Corporation’s earnings per share as calculated in accordance with generally accepted accounting principles in the United States;

(ii)such amendment or supplement is not adverse to the Holders of the then-effective series of Covered Debt and an officer of the Corporation has delivered to the Holders of the then-effective series of Covered Debt in the manner provided for in the indenture, fiscal agency agreement or other instrument with respect to such Covered Debt a written certificate stating that, in his or her determination, such amendment or supplement is not adverse to the Holders of the then-effective series of Covered Debt;

(iii)the effect of such amendment or supplement is solely to impose additional restrictions on, or eliminate certain of, the types of securities qualifying as Replacement Capital Securities (other than the securities covered by clause (i) above), and an officer of the Corporation has delivered to the Holders of the then-effective series of Covered Debt in the manner provided for in the indenture, fiscal agency agreement or other instrument with respect to such Covered Debt a written certificate to that effect; or

(iv)the effect of such amendment or supplement is solely to impose additional restrictions on the ability of the Corporation or its Subsidiaries to repay, redeem or purchase Securities in any circumstance.

(c)For purposes of Sections 4(a) and 4(b), the Holders whose consent or agreement is required to terminate, amend or supplement the obligations of the Corporation under this Replacement Capital Covenant shall be the Holders of the then-effective Covered Debt as of a record date established by the Corporation that is not more than 30 days prior to the date on which the Corporation proposes that such termination, amendment or supplement becomes effective.

SECTION 5.  Miscellaneous. (a)  This Replacement Capital Covenant shall be governed by and construed in accordance with the laws of the State of New York.

(b)This Replacement Capital Covenant shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit of the Covered Debtholders as they exist from time-to-time (it being understood and agreed by the Corporation that (i) any Person who is a Covered Debtholder at the time such Person acquires, holds or sells Covered Debt shall retain its status as a Covered Debtholder for so long as the series of long-term indebtedness for borrowed money owned by such Person is Covered Debt and, if such Person initiates a claim or proceeding to enforce its rights under this Replacement Capital Covenant after the Corporation has violated its covenants in Section 2 and before the series of long-term indebtedness for money borrowed held by such Person is no longer Covered Debt, such Person’s rights under this Replacement Capital Covenant shall not terminate by reason of such series of long-term indebtedness for money borrowed no longer being Covered Debt and (ii) if at any time the Covered Debt is held by a trust, a holder of the securities of such trust may institute a legal proceeding directly against the issuer for the enforcement of the this Replacement Capital

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Covenant, and such securities shall be deemed to be “Covered Debt” so long as the Covered Debt held by such trust remains Covered Debt).

(c)All demands, notices, requests and other communications to the Corporation under this Replacement Capital Covenant shall be deemed to have been duly given and made if in writing and (i) if served by personal delivery upon the Corporation, on the day so delivered (or, if such day is not a Business Day, the next succeeding Business Day), (ii) if delivered by registered post or certified mail, return receipt requested, or sent to the Corporation by a national or international courier service, on the date of receipt by the Corporation (or, if such date of receipt is not a Business Day, the next succeeding Business Day), or (iii) if sent by telecopier, on the day telecopied, or if not a Business Day, the next succeeding Business Day, provided that the telecopy is promptly confirmed by telephone confirmation thereof, and in each case to the Corporation at the address set forth below, or at such other address as the Corporation may thereafter notify to Covered Debtholders or post on its website as the address for notices under this Replacement Capital Covenant:

Lehman Brothers Holdings Inc.
745 Seventh Avenue
New York, New York  10019
Attention: General Counsel
Facsimile No: (212) 526-0339

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IN WITNESS WHEREOF, the Corporation has caused this Replacement Capital Covenant to be executed by its duly authorized officer, as of the day and year first above written.

LEHMAN BROTHERS HOLDINGS INC.
By	/s/ BARRETT S. DIPAOLO
	Name:
	Title:

Schedule 1

Definitions

“Alternative Payment Mechanism” means, with respect to any Qualifying Non-Cumulative Perpetual Preferred Stock, provisions in the terms thereof or of the related transaction documents that, during the continuation of the failure to satisfy one or more financial tests set forth in the terms of thereof or of the related transaction documents, permit the issuer of such securities to make payment of dividends on such securities only from the “eligible proceeds” of one or more types of Qualifying APM Securities unless (if the Corporation elects to so provide in the terms of such securities) the Commission directs otherwise, and that:

(a)define “eligible proceeds” to mean, for purposes of such Alternative Payment Mechanism, the net proceeds (after underwriters’ or placement agents’ fees, commissions or discounts and other expenses relating to the issuance or sale of the relevant securities, where applicable, and including the fair market value of property received by the Corporation or any of its Subsidiaries as consideration for such securities) that the Corporation has received during the 180 days prior to the related dividend payment date from the issuance of Qualifying APM Securities, up to the Preferred Cap in the case of Qualifying APM Securities that are Qualifying Non-Cumulative Perpetual Preferred Stock, where the “Preferred Cap” is an amount from the issuance thereof pursuant to such Alternative Payment Mechanism (including at any point in time from all prior issuances thereof pursuant to such Alternative Payment Mechanism) equal to 25% of the initial liquidation amount of the securities that are the subject of such Alternative Payment Mechanism;

(b)if such restriction on the payment of dividends continues for more than one year, require the Corporation and its Subsidiaries not to redeem or purchase any securities of the Corporation that on a bankruptcy or liquidation of the Corporation rank pari passu with or junior to the most senior Qualifying APM Securities the proceeds of which were used to pay dividends during the relevant dividend restriction period until at least one year after such Qualifying APM Securities have been issued;

(c)notwithstanding the foregoing provision, if the Commission disapproves the issuer’s sale of Qualifying APM Securities, may (if the Corporation elects to so provide in the term of such securities) permit the Corporation to pay dividends from any source without a breach of its obligations under the transaction documents; and

(d)if the Commission does not disapprove the Corporation’s issuance and sale of Qualifying APM Securities but disapproves the use of the proceeds thereof to pay deferred dividends, may (if the Corporation elects to so provide in the terms of such securities) permit the Corporation to use such proceeds for other purposes.

“Business Day” means each day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in The City of New York are authorized or required by law or executive order to remain closed.

“Commission” means the United States Securities and Exchange Commission.

“Common Stock” means common stock of the Corporation (including common stock issued pursuant to the Corporation’s dividend reinvestment plan and employee benefit plans).

“Corporation” has the meaning specified in the introduction to this instrument.

“Covered Debt” means (a) at the date of this Replacement Capital Covenant and continuing to but not including the first Redesignation Date, the Initial Covered Debt and (b) thereafter, commencing with each Redesignation Date and continuing to but not including the next succeeding Redesignation Date, the Eligible Debt identified pursuant to Section 3(b) as the Covered Debt for such period.

“Covered Debtholder” means each Person (whether a Holder or a beneficial owner holding through a participant in a clearing agency) that buys, holds or sells long-term indebtedness for money borrowed of the Corporation during the period that such long-term indebtedness for money borrowed is Covered Debt, provided that, except as provided in Section 5(b), a Person who has sold all of its right, title and interest in Covered Debt shall cease to be a Covered Debtholder at the time of such sale if, at such time, the Corporation has not breached or repudiated, or threatened to breach or repudiate, its obligations hereunder.

“Debentures” has the meaning specified in Recital A.

“Eligible Debt” means, at any time, Eligible Subordinated Debt or, if no Eligible Subordinated Debt is then outstanding, Eligible Senior Debt.

“Eligible Senior Debt” means, at any time in respect of any issuer, each series of outstanding unsecured long-term indebtedness for money borrowed of such issuer that (a) upon a bankruptcy, liquidation, dissolution or winding up of the issuer, ranks most senior among the issuer’s then outstanding classes of unsecured indebtedness for money borrowed, (b) is then assigned a rating by at least one NRSRO (provided that this clause (b) shall apply on a Redesignation Date only if on such date the issuer has outstanding senior long-term indebtedness for money borrowed that satisfies the requirements of clauses (a), (c) and (d) that is then assigned a rating by at least one NRSRO), (c) has an outstanding principal amount of not less than $100,000,000, and (d) was issued through or with the assistance of a commercial or investment banking firm or firms acting as underwriters, initial purchasers or placement or distribution agents. For purposes of this definition as applied to securities with a CUSIP number, each issuance of long-term indebtedness for money borrowed that has (or, if such indebtedness is held by a trust or other intermediate entity established directly or indirectly by the issuer, the securities of such intermediate entity that have) a separate CUSIP number shall be deemed to be a series of the issuer’s long-term indebtedness for money borrowed that is separate from each other series of such indebtedness.

“Eligible Subordinated Debt” means, at any time in respect of any issuer, each series of the issuer’s then-outstanding unsecured long-term indebtedness for money borrowed that (a) upon a bankruptcy, liquidation, dissolution or winding up of the issuer, ranks subordinate to the issuer’s then outstanding series of unsecured indebtedness for money borrowed that ranks most senior and ranks senior to the Debentures, (b) is then assigned a rating by at least one

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NRSRO (provided that this clause (b) shall apply on a Redesignation Date only if on such date the issuer has outstanding subordinated long-term indebtedness for money borrowed that satisfies the requirements in clauses (a), (c) and (d) that is then assigned a rating by at least one NRSRO), (c) has an outstanding principal amount of not less than $100,000,000, and (d) was issued through or with the assistance of a commercial or investment banking firm or firms acting as underwriters, initial purchasers or placement or distribution agents. For purposes of this definition as applied to securities with a CUSIP number, each issuance of long-term indebtedness for money borrowed that has (or, if such indebtedness is held by a trust or other intermediate entity established directly or indirectly by the issuer, the securities of such intermediate entity that have) a separate CUSIP number shall be deemed to be a series of the issuer’s long-term indebtedness for money borrowed that is separate from each other series of such indebtedness.

“Holder” means, as to the Covered Debt then in effect, each holder of such Covered Debt as reflected on the securities register maintained by or on behalf of the Corporation with respect to such Covered Debt.

“Initial Covered Debt” means the Corporation’s 6.24% Junior Subordinated Notes due 2054 underlying the 6.24% Preferred Securities, Series N of Lehman Brothers Holdings Capital Trust VI, which have CUSIP No. 52520X208.

“Intent-Based Replacement Disclosure” means, as to any security or combination of securities (together in this definition, “securities”), that the issuer has publicly stated its intention, either in the prospectus or other offering document under which such securities were initially offered for sale or in filings with the Commission made by the issuer under the Exchange Act prior to or contemporaneously with the issuance of such securities, that the issuer, to the extent the securities provide the issuer with equity credit, will repay, redeem or purchase such securities only with the proceeds of replacement capital securities that have terms and provisions at the time of repayment, redemption or purchase that are as or more equity-like than the securities then being repaid, redeemed or purchased, raised within 180 days prior to the applicable repayment, redemption or purchase date.

“Mandatory Trigger Provision” means, as to any Qualifying Preferred Stock, provisions in the terms thereof or of the related transaction documents that during the continuation of the failure to satisfy one or more financial tests set forth in the terms of such securities or related transaction documents, permit the issuer of such securities to make payment of dividends on such securities only pursuant to an Alternative Payment Mechanism. No remedy other than Permitted Remedies will arise by the terms of such securities or related transaction documents in favor of the holders of such securities as a result of the issuer’s failure to pay dividends because of the Mandatory Trigger Provision.

“Market Value” means, on any date, the closing sale price per share of Common Stock (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions by the New York Stock Exchange or, if the Common Stock is not then listed on the New York Stock Exchange, as reported by the principal U.S. securities exchange on which the Common Stock is traded or quoted. If the Common Stock is not listed on any U.S. securities exchange on the relevant date, the “current stock market price” shall be the

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last quoted bid price for the Common Stock in the over-the-counter market on the relevant date as reported by the National Quotation Bureau or similar organization. If the Common Stock is not so quoted, the “current stock market price” shall be the average of the mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Corporation for this purpose.

“Measurement Period” with respect to any notice date or purchase or defeasance date, means the period (i) beginning on the date that is 180 days prior to delivery of notice of such redemption or the date of such purchase or defeasance and (ii) ending on such notice date or purchase date. Measurement Periods cannot run concurrently.

“Normal MCAPS” has the meaning specified in Recital A.

“NRSRO” means a nationally recognized statistical rating organization within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Securities Exchange Act.

“Permitted Remedies” means, with respect to any securities, one or more of the following remedies:

(a)rights in favor of the holders of such securities permitting such holders to elect one or more directors of the issuer (including any such rights required by the listing requirements of any stock or securities exchange on which such securities may be listed or traded); and

(b)complete or partial prohibitions on the issuer paying dividends on or repurchasing common stock or other securities that rank pari passu with or junior as to dividends to such securities for so long as distributions on such securities, including unpaid distributions, remain unpaid.

“Person” means any individual, corporation, partnership, joint venture, trust, limited liability company or corporation, unincorporated organization or government or any agency or political subdivision thereof.

“Preferred Stock” has the meaning specified in Recital A (and includes the depositary shares for the Preferred Stock referred to in the Prospectus).

“Prospectus” has the meaning specified in Recital B.

“Qualifying APM Securities” means, with respect to an Alternative Payment Mechanism, one or more of the following (as designated in the transaction documents for the Qualifying Non-Cumulative Perpetual Preferred Stock that include an Alternative Payment Mechanism):

(a)Common Stock;

(b)Qualifying Warrants; or

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(c)Qualifying Preferred Stock;

provided that if the Qualifying APM Securities for any Alternative Payment Mechanism include both Common Stock and Qualifying Warrants, such Alternative Payment Mechanism may permit, but need not require, the Corporation to issue Qualifying Warrants.

“Qualifying Non-Cumulative Perpetual Preferred Stock” means non-cumulative preferred stock of the Corporation (a) that is perpetual and is subject to a Qualifying Replacement Capital Covenant, (b) that is subject to a Mandatory Trigger Provision and (c) as to which the transaction documents provide for no remedies as a consequence of non-payment of dividends other than Permitted Remedies. Qualifying Non-Cumulative Perpetual Preferred Stock may be convertible into Common Stock at a conversion ratio within a range established at the time of its issuance.

“Qualifying Preferred Stock“ means the Corporation’s non-cumulative perpetual preferred stock that ranks pari passu with or junior to all of the Corporation’s other preferred stock and (a) is subject to a Qualifying Replacement Capital Covenant or (b) is subject to both (i) a Mandatory Trigger Provision and (ii) Intent-Based Replacement Disclosure. Additionally, in the case of both clauses (a) and (b) the transaction documents shall provide for no remedies as a consequence of non-payment of distributions other than Permitted Remedies.

“Qualifying Replacement Capital Covenant” means a replacement capital covenant, as identified by the Corporation’s Board of Directors acting in good faith and in its reasonable discretion and reasonably construing the definitions and other terms of this Replacement Capital Covenant, (i) entered into by a company that at the time it enters into such replacement capital covenant is a reporting company under the Exchange Act and (ii) that restricts the related issuer from redeeming, repaying or purchasing identified securities except to the extent of the applicable percentage of the net proceeds from the issuance of specified replacement capital securities that have terms and provisions at the time of redemption, repayment or purchase that are as or more equity-like than the securities then being redeemed, repaid or purchased within the 180-day period prior to the applicable redemption, repayment or purchase date.

“Qualifying Warrants” means any net share settled warrants to purchase Common Stock that (i) have an exercise price greater than the “Market Value” of the Common Stock on a date within five days of the issuance of such warrants, and (ii) the Corporation is not entitled to redeem for cash and the holders of which are not entitled to require the Corporation to purchase for cash in any circumstances.

“Redesignation Date” means, as to the Covered Debt in effect at any time, the earliest of (a) the date that is two years prior to the final maturity date of such Covered Debt, (b) if the Corporation elects to redeem, or the Corporation or a Subsidiary of the Corporation elects to purchase, such Covered Debt either in whole or in part with the consequence that after giving effect to such redemption or purchase the outstanding principal amount of such Covered Debt is less than $100,000,000, the applicable redemption or purchase date and (c) if such Covered Debt is not Eligible Subordinated Debt of the Corporation, the date on which the Corporation issues long-term indebtedness for money borrowed that is Eligible Subordinated Debt.

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“Replacement Capital Covenant” has the meaning specified in the introduction to this instrument.

“Replacement Capital Securities” means Common Stock, rights to acquire Common Stock or Qualifying Non-Cumulative Perpetual Preferred Stock.

“Securities” has the meaning specified in Recital A.

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Stock Purchase Date” has the meaning specified in Recital A.

“Subsidiary” means, at any time, any Person the shares of stock or other ownership interests of which having ordinary voting power to elect a majority of the board of directors or other managers of such Person are at the time owned, or the management or policies of which are otherwise at the time controlled, directly or indirectly through one or more intermediaries (including other Subsidiaries) or both, by another Person.

“Termination Date” has the meaning specified in Section 4(a).

“Treasury MCAPS” has the meaning specified in Recital A.

“Trust” has the meaning specified in Recital A.

“Trust Preferred Securities” has the meaning specified in Recital A.

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EX-99.2

Exhibit 99.2

Replacement Capital Covenant, dated as of May 17, 2007 (this “Replacement Capital Covenant”), by Lehman Brothers Holdings Inc., a Delaware corporation (together with its successors and assigns, the “Corporation”), in favor of and for the benefit of each Covered Debtholder (as defined below).

Recitals

A.On the date hereof, the Corporation is issuing $500,000,000 aggregate stated amount of Floating Rate Mandatory Capital Advantaged Preferred Securities (the “Normal MCAPS”). Each Normal MCAPS is a unit with a stated amount of $1,000 initially consisting of (i) a stock purchase contract between the holder and the Corporation under which the holder agrees to purchase, and the Corporation agrees to sell, on the “Stock Purchase Date” determined pursuant to the stock purchase contract, one depositary share (a “Depositary Share”) representing 1/100th of a share of the Corporation’s Non-Cumulative Perpetual Preferred Stock, Series I, $100,000 liquidation preference per share (the “Preferred Stock”) and (ii) a trust preferred security of Lehman Brothers Holdings Capital Trust VIII, a Delaware statutory trust (the “Trust”), with a liquidation amount of $1,000 (a “Trust Preferred Security”), which represents an interest in the Corporation’s Junior Subordinated Debentures due 2043 (the “Debentures”) held by the Trust. The Normal MCAPS, together with the Trust Preferred Securities and the Debentures that are held as part of the Normal MCAPS, the “Treasury MCAPS” as defined in the Prospectus referred to in Recital B, and the Depositary Shares and the Preferred Stock are referred to collectively as the “Securities.”

B.This Replacement Capital Covenant is the Replacement Capital Covenant referred to in the Prospectus, dated May 8, 2007 (the “Prospectus”), relating to the Securities.

C.The Corporation is entering into and disclosing the content of this Replacement Capital Covenant in the manner provided below with the intent that the covenants provided for in this Replacement Capital Covenant be enforceable by each Covered Debtholder and that the Corporation be estopped from disregarding the covenants in this Replacement Capital Covenant, in each case to the fullest extent permitted by applicable law.

D.The Corporation acknowledges that reliance by each Covered Debtholder upon the covenants in this Replacement Capital Covenant is reasonable and foreseeable by the Corporation and that, were the Corporation to disregard its covenants in this Replacement Capital Covenant, each Covered Debtholder would have sustained an injury as a result of its reliance on such covenants.

NOW, THEREFORE, the Corporation hereby covenants and agrees as follows in favor of and for the benefit of each Covered Debtholder.

SECTION 1.  Definitions.  Capitalized terms used in this Replacement Capital Covenant (including the Recitals) have the meanings set forth in Schedule I hereto.

SECTION 2.  Limitations on Repayment, Redemption and Purchase of Securities. The Corporation hereby promises and covenants to and for the benefit of each Covered

Debtholder that neither the Corporation nor any Subsidiary of the Corporation (including the Trust) shall repay, redeem or purchase (a) any of the Securities prior to the Stock Purchase Date or (b) the Depositary Shares or Preferred Stock on or after the Stock Purchase Date, except in either case to the extent that (1) the amount repaid, or the applicable redemption or purchase price, does not exceed the sum of the following amounts:

(i)100% of the aggregate amount of (A) net cash proceeds received by the Corporation and its Subsidiaries from the sale of Common Stock and rights to acquire Common Stock (including Common Stock or rights to acquire Common Stock issued pursuant to the Corporation’s dividend reinvestment plan or employee benefit plans), (B) the Market Value of any Common Stock that the Corporation or its Subsidiaries have delivered as consideration for property or assets in an arm’s-length transaction and (C) the Market Value of any Common Stock that the Corporation and its Subsidiaries have issued in connection with the conversion or exchange of any convertible or exchangeable securities, other than securities for which the Corporation or any of its Subsidiaries has received equity credit from any NRSRO; plus

(ii)100% of the aggregate amount of net cash proceeds received by the Corporation and its Subsidiaries from the sale of Qualifying Non-Cumulative Perpetual Preferred Stock;

in each case within the applicable Measurement Period (without double counting proceeds received in any prior Measurement Period) to Persons other than the Corporation and its Subsidiaries or (2) the Securities are exchanged for at least an equal aggregate Market Value of Common Stock or liquidation preference of Qualifying Non-Cumulative Perpetual Preferred Stock; provided that the provisions of this Section 2 shall not apply to (i) purchases of the Securities or any portion thereof in connection with the distribution thereof or in connection with market-making or other secondary-market activities and (ii) any distribution of the Debentures to holders of the Trust Preferred Securities upon a dissolution of the Trust. For purposes of this Replacement Capital Covenant, the term “repay” includes the defeasance by the Corporation of the Debentures as well as the satisfaction and discharge of its obligations under the Indenture with respect to the Debentures.

SECTION 3.  Covered Debt. (a)  The Corporation represents and warrants that the Initial Covered Debt is Eligible Debt.

(b)On or during the 30-day period immediately preceding any Redesignation Date with respect to the Covered Debt then in effect, the Corporation shall identify the series of Eligible Debt that will become the Covered Debt on and after such Redesignation Date in accordance with the following procedures:

(i)the Corporation shall identify each series of its then outstanding long-term indebtedness for money borrowed that is Eligible Debt;

(ii)if only one series of the Corporation’s then outstanding long-term indebtedness for money borrowed is Eligible Debt, such series shall become the Covered Debt commencing on the related Redesignation Date;

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(iii)if the Corporation has more than one outstanding series of long-term indebtedness for money borrowed that is Eligible Debt, then the Corporation shall identify the series that has the latest occurring final maturity date as of the date the Corporation is applying the procedures in this Section 3(b) and such series shall become the Covered Debt on the related Redesignation Date;

(iv)the series of outstanding long-term indebtedness for money borrowed that is determined to be Covered Debt pursuant to clause (ii) or (iii) above shall be the Covered Debt for purposes of this Replacement Capital Covenant for the period commencing on the related Redesignation Date and continuing to but not including the Redesignation Date as of which a new series of outstanding long-term indebtedness is next determined to be the Covered Debt pursuant to the procedures set forth in this Section 3(b); and

(v)in connection with such identification of a new series of Covered Debt, the Corporation shall, as provided for in Section 3(c), give a notice and file with the Commission a current report on Form 8-K including or incorporating by reference this Replacement Capital Covenant as an exhibit within the time frame provided for in such section.

(c)Notice. In order to give effect to the intent of the Corporation described in Recital C, the Corporation covenants that:

(i)simultaneously with the execution of this Replacement Capital Covenant or as soon as practicable after the date hereof, it shall (x) give notice to the Holders of the Initial Covered Debt, in the manner provided in the indenture relating to the Initial Covered Debt, of this Replacement Capital Covenant and the rights granted to such Holders hereunder and (y) file a copy of this Replacement Capital Covenant with the Commission as an exhibit to a Form 8-K under the Securities Exchange Act;

(ii)so long as the Corporation is a reporting company under the Securities Exchange Act, the Corporation shall include in each annual report filed with the Commission on Form 10-K under the Securities Exchange Act a description of the covenant set forth in Section 2 and identify the series of long-term indebtedness for borrowed money that is Covered Debt as of the date such Form 10-K is filed with the Commission;

(iii)if a series of the Corporation’s long-term indebtedness for money borrowed (1) becomes Covered Debt or (2) ceases to be Covered Debt, the Corporation shall give notice of such occurrence within 30 days to the holders of such long-term indebtedness for money borrowed in the manner provided for in the indenture, fiscal agency agreement or other instrument under which such long-term indebtedness for money borrowed was issued and report such change in a current report on Form 8-K including or incorporating by reference this Replacement Capital Covenant, and in the Corporation’s next quarterly report on Form 10-Q or annual report on Form 10-K, as applicable;

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(iv)if, and only if, the Corporation ceases to be a reporting company under the Securities Exchange Act, the Corporation shall (A) post on its website the information otherwise required to be included in Securities Exchange Act filings pursuant to clauses (ii) and (iii) of this Section 3(c) and (B) to the extent permitted by Bloomberg and any other similar third-party vendor the Corporation reasonably believes is appropriate that makes available to the marketplace information with respect to securities that are Covered Debt by posting such information on an electronically accessible screen (each an “Investor Screen”), cause a notation to be included on each such Investor Screen identifying the relevant series of indebtedness of the Corporation or a Subsidiary that is Covered Debt from time to time as Covered Debt for purposes of this Replacement Capital Covenant and cause a hyperlink to a definitive copy of this Replacement Capital Covenant to be included on the Investor Screen for each series of Covered Debt (but only so long as such series is Covered Debt); and

(v)promptly upon request by any Holder of Covered Debt, the Corporation shall provide such Holder with an executed copy of this Replacement Capital Covenant.

SECTION 4.  Termination, Amendment and Waiver. (a)  The obligations of the Corporation pursuant to this Replacement Capital Covenant shall remain in full force and effect until the first date after the Stock Purchase Date on which no shares of Preferred Stock are outstanding or, if earlier, the earliest date to occur (such date or earlier date, the “Termination Date”) of:

(i)the date, if any, on which the Holders of a majority in principal amount of the then-effective series of Covered Debt consent or agree in writing to the termination of this Replacement Capital Covenant and the obligations of the Corporation hereunder;

(ii)the date on which the Corporation has no series of outstanding Eligible Senior Debt or Eligible Subordinated Debt (in each case without giving effect to the rating requirement in clause (b) of the definition of each such term); and

(iii)the occurrence of an event of default that results in the acceleration of the Debentures prior to the Stock Purchase Date.

From and after the Termination Date, the obligations of the Corporation pursuant to this Replacement Capital Covenant shall be of no further force and effect.

(b)This Replacement Capital Covenant may be amended or supplemented from time to time by a written instrument signed by the Corporation with the consent of the Holders of a majority in principal amount of the then-effective series of Covered Debt; provided that this Replacement Capital Covenant may be amended or supplemented from time to time by a written instrument signed only by the Corporation (and without the consent of the Holders of the then-effective series of Covered Debt) if:

(i)such amendment or supplement eliminates Common Stock or rights to acquire Common Stock as a Replacement Capital Security, if after the date of this Replacement Capital Covenant, an accounting standard or interpretive guidance of an existing accounting standard issued by an organization or regulator that has responsibility

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for establishing or interpreting accounting standards in the United States becomes effective such that there is more than an insubstantial risk that failure to eliminate Common Stock or rights to acquire Common Stock as a Replacement Capital Security would result in a reduction in the Corporation’s earnings per share as calculated in accordance with generally accepted accounting principles in the United States;

(ii)such amendment or supplement is not adverse to the Holders of the then-effective series of Covered Debt and an officer of the Corporation has delivered to the Holders of the then-effective series of Covered Debt in the manner provided for in the indenture, fiscal agency agreement or other instrument with respect to such Covered Debt a written certificate stating that, in his or her determination, such amendment or supplement is not adverse to the Holders of the then-effective series of Covered Debt;

(iii)the effect of such amendment or supplement is solely to impose additional restrictions on, or eliminate certain of, the types of securities qualifying as Replacement Capital Securities (other than the securities covered by clause (i) above), and an officer of the Corporation has delivered to the Holders of the then-effective series of Covered Debt in the manner provided for in the indenture, fiscal agency agreement or other instrument with respect to such Covered Debt a written certificate to that effect; or

(iv)the effect of such amendment or supplement is solely to impose additional restrictions on the ability of the Corporation or its Subsidiaries to repay, redeem or purchase Securities in any circumstance.

(c)For purposes of Sections 4(a) and 4(b), the Holders whose consent or agreement is required to terminate, amend or supplement the obligations of the Corporation under this Replacement Capital Covenant shall be the Holders of the then-effective Covered Debt as of a record date established by the Corporation that is not more than 30 days prior to the date on which the Corporation proposes that such termination, amendment or supplement becomes effective.

SECTION 5.  Miscellaneous. (a)  This Replacement Capital Covenant shall be governed by and construed in accordance with the laws of the State of New York.

(b)This Replacement Capital Covenant shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit of the Covered Debtholders as they exist from time-to-time (it being understood and agreed by the Corporation that (i) any Person who is a Covered Debtholder at the time such Person acquires, holds or sells Covered Debt shall retain its status as a Covered Debtholder for so long as the series of long-term indebtedness for borrowed money owned by such Person is Covered Debt and, if such Person initiates a claim or proceeding to enforce its rights under this Replacement Capital Covenant after the Corporation has violated its covenants in Section 2 and before the series of long-term indebtedness for money borrowed held by such Person is no longer Covered Debt, such Person’s rights under this Replacement Capital Covenant shall not terminate by reason of such series of long-term indebtedness for money borrowed no longer being Covered Debt and (ii) if at any time the Covered Debt is held by a trust, a holder of the securities of such trust may institute a legal proceeding directly against the issuer for the enforcement of the this Replacement Capital

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Covenant, and such securities shall be deemed to be “Covered Debt” so long as the Covered Debt held by such trust remains Covered Debt).

(c)All demands, notices, requests and other communications to the Corporation under this Replacement Capital Covenant shall be deemed to have been duly given and made if in writing and (i) if served by personal delivery upon the Corporation, on the day so delivered (or, if such day is not a Business Day, the next succeeding Business Day), (ii) if delivered by registered post or certified mail, return receipt requested, or sent to the Corporation by a national or international courier service, on the date of receipt by the Corporation (or, if such date of receipt is not a Business Day, the next succeeding Business Day), or (iii) if sent by telecopier, on the day telecopied, or if not a Business Day, the next succeeding Business Day, provided that the telecopy is promptly confirmed by telephone confirmation thereof, and in each case to the Corporation at the address set forth below, or at such other address as the Corporation may thereafter notify to Covered Debtholders or post on its website as the address for notices under this Replacement Capital Covenant:

Lehman Brothers Holdings Inc.
745 Seventh Avenue
New York, New York  10019
Attention: General Counsel
Facsimile No: (212) 526-0339

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IN WITNESS WHEREOF, the Corporation has caused this Replacement Capital Covenant to be executed by its duly authorized officer, as of the day and year first above written.

LEHMAN BROTHERS HOLDINGS INC.
By	/s/ BARRETT S. DIPAOLO
	Name:
	Title:

Schedule 1

Definitions

“Alternative Payment Mechanism” means, with respect to any Qualifying Non-Cumulative Perpetual Preferred Stock, provisions in the terms thereof or of the related transaction documents that, during the continuation of the failure to satisfy one or more financial tests set forth in the terms of thereof or of the related transaction documents, permit the issuer of such securities to make payment of dividends on such securities only from the “eligible proceeds” of one or more types of Qualifying APM Securities unless (if the Corporation elects to so provide in the terms of such securities) the Commission directs otherwise, and that:

(a)define “eligible proceeds” to mean, for purposes of such Alternative Payment Mechanism, the net proceeds (after underwriters’ or placement agents’ fees, commissions or discounts and other expenses relating to the issuance or sale of the relevant securities, where applicable, and including the fair market value of property received by the Corporation or any of its Subsidiaries as consideration for such securities) that the Corporation has received during the 180 days prior to the related dividend payment date from the issuance of Qualifying APM Securities, up to the Preferred Cap in the case of Qualifying APM Securities that are Qualifying Non-Cumulative Perpetual Preferred Stock, where the “Preferred Cap” is an amount from the issuance thereof pursuant to such Alternative Payment Mechanism (including at any point in time from all prior issuances thereof pursuant to such Alternative Payment Mechanism) equal to 25% of the initial liquidation amount of the securities that are the subject of such Alternative Payment Mechanism;

(b)if such restriction on the payment of dividends continues for more than one year, require the Corporation and its Subsidiaries not to redeem or purchase any securities of the Corporation that on a bankruptcy or liquidation of the Corporation rank pari passu with or junior to the most senior Qualifying APM Securities the proceeds of which were used to pay dividends during the relevant dividend restriction period until at least one year after such Qualifying APM Securities have been issued;

(c)notwithstanding the foregoing provision, if the Commission disapproves the issuer’s sale of Qualifying APM Securities, may (if the Corporation elects to so provide in the term of such securities) permit the Corporation to pay dividends from any source without a breach of its obligations under the transaction documents; and

(d)if the Commission does not disapprove the Corporation’s issuance and sale of Qualifying APM Securities but disapproves the use of the proceeds thereof to pay deferred dividends, may (if the Corporation elects to so provide in the terms of such securities) permit the Corporation to use such proceeds for other purposes.

“Business Day” means each day other than (a) a Saturday or Sunday or (b) a day on which banking institutions in The City of New York are authorized or required by law or executive order to remain closed.

“Commission” means the United States Securities and Exchange Commission.

“Common Stock” means common stock of the Corporation (including common stock issued pursuant to the Corporation’s dividend reinvestment plan and employee benefit plans).

“Corporation” has the meaning specified in the introduction to this instrument.

“Covered Debt” means (a) at the date of this Replacement Capital Covenant and continuing to but not including the first Redesignation Date, the Initial Covered Debt and (b) thereafter, commencing with each Redesignation Date and continuing to but not including the next succeeding Redesignation Date, the Eligible Debt identified pursuant to Section 3(b) as the Covered Debt for such period.

“Covered Debtholder” means each Person (whether a Holder or a beneficial owner holding through a participant in a clearing agency) that buys, holds or sells long-term indebtedness for money borrowed of the Corporation during the period that such long-term indebtedness for money borrowed is Covered Debt, provided that, except as provided in Section 5(b), a Person who has sold all of its right, title and interest in Covered Debt shall cease to be a Covered Debtholder at the time of such sale if, at such time, the Corporation has not breached or repudiated, or threatened to breach or repudiate, its obligations hereunder.

“Debentures” has the meaning specified in Recital A.

“Eligible Debt” means, at any time, Eligible Subordinated Debt or, if no Eligible Subordinated Debt is then outstanding, Eligible Senior Debt.

“Eligible Senior Debt” means, at any time in respect of any issuer, each series of outstanding unsecured long-term indebtedness for money borrowed of such issuer that (a) upon a bankruptcy, liquidation, dissolution or winding up of the issuer, ranks most senior among the issuer’s then outstanding classes of unsecured indebtedness for money borrowed, (b) is then assigned a rating by at least one NRSRO (provided that this clause (b) shall apply on a Redesignation Date only if on such date the issuer has outstanding senior long-term indebtedness for money borrowed that satisfies the requirements of clauses (a), (c) and (d) that is then assigned a rating by at least one NRSRO), (c) has an outstanding principal amount of not less than $100,000,000, and (d) was issued through or with the assistance of a commercial or investment banking firm or firms acting as underwriters, initial purchasers or placement or distribution agents. For purposes of this definition as applied to securities with a CUSIP number, each issuance of long-term indebtedness for money borrowed that has (or, if such indebtedness is held by a trust or other intermediate entity established directly or indirectly by the issuer, the securities of such intermediate entity that have) a separate CUSIP number shall be deemed to be a series of the issuer’s long-term indebtedness for money borrowed that is separate from each other series of such indebtedness.

“Eligible Subordinated Debt” means, at any time in respect of any issuer, each series of the issuer’s then-outstanding unsecured long-term indebtedness for money borrowed that (a) upon a bankruptcy, liquidation, dissolution or winding up of the issuer, ranks subordinate to the issuer’s then outstanding series of unsecured indebtedness for money borrowed that ranks most senior and ranks senior to the Debentures, (b) is then assigned a rating by at least one

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NRSRO (provided that this clause (b) shall apply on a Redesignation Date only if on such date the issuer has outstanding subordinated long-term indebtedness for money borrowed that satisfies the requirements in clauses (a), (c) and (d) that is then assigned a rating by at least one NRSRO), (c) has an outstanding principal amount of not less than $100,000,000, and (d) was issued through or with the assistance of a commercial or investment banking firm or firms acting as underwriters, initial purchasers or placement or distribution agents. For purposes of this definition as applied to securities with a CUSIP number, each issuance of long-term indebtedness for money borrowed that has (or, if such indebtedness is held by a trust or other intermediate entity established directly or indirectly by the issuer, the securities of such intermediate entity that have) a separate CUSIP number shall be deemed to be a series of the issuer’s long-term indebtedness for money borrowed that is separate from each other series of such indebtedness.

“Holder” means, as to the Covered Debt then in effect, each holder of such Covered Debt as reflected on the securities register maintained by or on behalf of the Corporation with respect to such Covered Debt.

“Initial Covered Debt” means the Corporation’s 6.24% Junior Subordinated Notes due 2054 underlying the 6.24% Preferred Securities, Series N of Lehman Brothers Holdings Capital Trust VI, which have CUSIP No. 52520X208.

“Intent-Based Replacement Disclosure” means, as to any security or combination of securities (together in this definition, “securities”), that the issuer has publicly stated its intention, either in the prospectus or other offering document under which such securities were initially offered for sale or in filings with the Commission made by the issuer under the Exchange Act prior to or contemporaneously with the issuance of such securities, that the issuer, to the extent the securities provide the issuer with equity credit, will repay, redeem or purchase such securities only with the proceeds of replacement capital securities that have terms and provisions at the time of repayment, redemption or purchase that are as or more equity-like than the securities then being repaid, redeemed or purchased, raised within 180 days prior to the applicable repayment, redemption or purchase date.

“Mandatory Trigger Provision” means, as to any Qualifying Preferred Stock, provisions in the terms thereof or of the related transaction documents that during the continuation of the failure to satisfy one or more financial tests set forth in the terms of such securities or related transaction documents, permit the issuer of such securities to make payment of dividends on such securities only pursuant to an Alternative Payment Mechanism. No remedy other than Permitted Remedies will arise by the terms of such securities or related transaction documents in favor of the holders of such securities as a result of the issuer’s failure to pay dividends because of the Mandatory Trigger Provision.

“Market Value” means, on any date, the closing sale price per share of Common Stock (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average ask prices) on that date as reported in composite transactions by the New York Stock Exchange or, if the Common Stock is not then listed on the New York Stock Exchange, as reported by the principal U.S. securities exchange on which the Common Stock is traded or quoted. If the Common Stock is not listed on any U.S. securities exchange on the relevant date, the “current stock market price” shall be the

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last quoted bid price for the Common Stock in the over-the-counter market on the relevant date as reported by the National Quotation Bureau or similar organization. If the Common Stock is not so quoted, the “current stock market price” shall be the average of the mid-point of the last bid and ask prices for the Common Stock on the relevant date from each of at least three nationally recognized independent investment banking firms selected by the Corporation for this purpose.

“Measurement Period” with respect to any notice date or purchase or defeasance date, means the period (i) beginning on the date that is 180 days prior to delivery of notice of such redemption or the date of such purchase or defeasance and (ii) ending on such notice date or purchase date. Measurement Periods cannot run concurrently.

 “Normal MCAPS” has the meaning specified in Recital A.

“NRSRO” means a nationally recognized statistical rating organization within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Securities Exchange Act.

“Permitted Remedies” means, with respect to any securities, one or more of the following remedies:

(a)rights in favor of the holders of such securities permitting such holders to elect one or more directors of the issuer (including any such rights required by the listing requirements of any stock or securities exchange on which such securities may be listed or traded); and

(b)complete or partial prohibitions on the issuer paying dividends on or repurchasing common stock or other securities that rank pari passu with or junior as to dividends to such securities for so long as distributions on such securities, including unpaid distributions, remain unpaid.

“Person” means any individual, corporation, partnership, joint venture, trust, limited liability company or corporation, unincorporated organization or government or any agency or political subdivision thereof.

“Preferred Stock” has the meaning specified in Recital A (and includes the depositary shares for the Preferred Stock referred to in the Prospectus).

“Prospectus” has the meaning specified in Recital B.

“Qualifying APM Securities” means, with respect to an Alternative Payment Mechanism, one or more of the following (as designated in the transaction documents for the Qualifying Non-Cumulative Perpetual Preferred Stock that include an Alternative Payment Mechanism):

(a)Common Stock;

(b)Qualifying Warrants; or

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(c)Qualifying Preferred Stock;

provided that if the Qualifying APM Securities for any Alternative Payment Mechanism include both Common Stock and Qualifying Warrants, such Alternative Payment Mechanism may permit, but need not require, the Corporation to issue Qualifying Warrants.

“Qualifying Non-Cumulative Perpetual Preferred Stock” means non-cumulative preferred stock of the Corporation (a) that is perpetual and is subject to a Qualifying Replacement Capital Covenant, (b) that is subject to a Mandatory Trigger Provision and (c) as to which the transaction documents provide for no remedies as a consequence of non-payment of dividends other than Permitted Remedies. Qualifying Non-Cumulative Perpetual Preferred Stock may be convertible into Common Stock at a conversion ratio within a range established at the time of its issuance.

“Qualifying Preferred Stock” means the Corporation’s non-cumulative perpetual preferred stock that ranks pari passu with or junior to all of the Corporation’s other preferred stock and (a) is subject to a Qualifying Replacement Capital Covenant or (b) is subject to both (i) a Mandatory Trigger Provision and (ii) Intent-Based Replacement Disclosure. Additionally, in the case of both clauses (a) and (b) the transaction documents shall provide for no remedies as a consequence of non-payment of distributions other than Permitted Remedies.

“Qualifying Replacement Capital Covenant” means a replacement capital covenant, as identified by the Corporation’s Board of Directors acting in good faith and in its reasonable discretion and reasonably construing the definitions and other terms of this Replacement Capital Covenant, (i) entered into by a company that at the time it enters into such replacement capital covenant is a reporting company under the Exchange Act and (ii) that restricts the related issuer from redeeming, repaying or purchasing identified securities except to the extent of the applicable percentage of the net proceeds from the issuance of specified replacement capital securities that have terms and provisions at the time of redemption, repayment or purchase that are as or more equity-like than the securities then being redeemed, repaid or purchased within the 180-day period prior to the applicable redemption, repayment or purchase date.

“Qualifying Warrants” means any net share settled warrants to purchase Common Stock that (i) have an exercise price greater than the “Market Value” of the Common Stock on a date within five days of the issuance of such warrants, and (ii) the Corporation is not entitled to redeem for cash and the holders of which are not entitled to require the Corporation to purchase for cash in any circumstances.

“Redesignation Date” means, as to the Covered Debt in effect at any time, the earliest of (a) the date that is two years prior to the final maturity date of such Covered Debt, (b) if the Corporation elects to redeem, or the Corporation or a Subsidiary of the Corporation elects to purchase, such Covered Debt either in whole or in part with the consequence that after giving effect to such redemption or purchase the outstanding principal amount of such Covered Debt is less than $100,000,000, the applicable redemption or purchase date and (c) if such Covered Debt is not Eligible Subordinated Debt of the Corporation, the date on which the Corporation issues long-term indebtedness for money borrowed that is Eligible Subordinated Debt.

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“Replacement Capital Covenant” has the meaning specified in the introduction to this instrument.

“Replacement Capital Securities” means Common Stock, rights to acquire Common Stock or Qualifying Non-Cumulative Perpetual Preferred Stock.

“Securities” has the meaning specified in Recital A.

“Securities Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Stock Purchase Date” has the meaning specified in Recital A.

“Subsidiary” means, at any time, any Person the shares of stock or other ownership interests of which having ordinary voting power to elect a majority of the board of directors or other managers of such Person are at the time owned, or the management or policies of which are otherwise at the time controlled, directly or indirectly through one or more intermediaries (including other Subsidiaries) or both, by another Person.

“Termination Date” has the meaning specified in Section 4(a).

“Treasury MCAPS” has the meaning specified in Recital A.

“Trust” has the meaning specified in Recital A.

“Trust Preferred Securities” has the meaning specified in Recital A.

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