SECTION 1 Representations and Warranties. The Company represents and warrants to the Agent as of the date hereof, as of the Closing Date referred to in Section 2(d) hereof, and as of the times referred to in Section 6(a) and 6(b) hereof (the Closing Date and each such time being hereinafter sometimes referred to as a “Representation Date”), as follows:

SECTION 2 Solicitations as Agent. (a) On the basis of the representations and warranties contained herein, but subject to the terms and conditions herein set forth, the Agent agrees, as exclusive agent of the Company, to use its reasonable best efforts to solicit offers to purchase the Securities upon the terms and conditions set forth in the Prospectus. The Agent shall not otherwise employ, pay or compensate any other person to solicit offers to purchase the Securities or to perform any of its functions as agent without the prior written consent of the Company. The Company reserves the right, in its sole discretion, to suspend solicitation of offers to purchase the Securities commencing at any time for any period of time or permanently. Upon receipt of at least one business day’s prior notice from the Company, the Agent will forthwith suspend solicitation of offers to purchase Securities from the Company until such time as the Company has advised the Agent that such solicitation may be resumed. For the purpose of the foregoing sentence, “business day” shall mean any day which is not a Saturday or Sunday and which in New York City is not a day on which banking institutions are generally authorized or obligated by law to close. The Agent is authorized to solicit offers to purchase the Securities only in denominations of $1,000 or any amount in excess thereof which is an integral multiple of $1,000, at a purchase price equal to 100% of the principal amount thereof, or such other denominations or purchase price as shall be specified by the Company. The Agent shall communicate to the Company, orally or in writing, each reasonable offer to purchase Securities received by it as Agent. The Company shall have the sole right to accept offers to purchase the Securities and may reject any such offer in whole or in part. The Agent shall have the right, in its discretion reasonably exercised without advising the Company, to reject any offer to purchase the Securities received by it in whole in part, and any such rejection shall not be deemed a breach of its agreement contained herein.

SECTION 3 Covenants of the Company. The Company covenants and agrees with the Agent that it will furnish (to the extent it has not already done so) to each of the Agent and Simpson Thacher & Bartlett LLP, counsel to the Agent, a copy of the Registration Statement, including all exhibits, in the form it became effective and all of the amendments thereto and that:

SECTION 4 Payment of Expenses. The Company will pay (i) the costs incident to the authorization, issuance, sale and delivery of the Securities and any taxes payable in that

connection, (ii) the costs incident to the preparation, printing and filing under the Securities Act of the Registration Statement and any amendments and exhibits thereto, (iii) the costs incident to the preparation, printing and filing of any document and any amendments and exhibits thereto required to be filed by the Company under the Exchange Act, (iv) the costs of distributing the Registration Statement, as originally filed, and each amendment and post-effective amendment thereof (including exhibits), any preliminary prospectus in any of the foregoing documents, (v) the fees and disbursements of the Trustee and its counsel, (vi) the cost of any filings with the National Association of Securities Dealers, Inc., (vii) the fees and disbursements of counsel to the Company and the Company’s accountants, (viii) the fees paid to rating agencies in connection with the rating of the Securities, (ix) the fees and expenses of qualifying the Securities under the securities laws of the several jurisdictions as provided in Section 3(e) hereof and of preparing and printing a Blue Sky Survey and a memorandum concerning the legality of the Securities as an investment (including fees and expenses of the Agent’s counsel in connection therewith) and (x) all other costs and expenses incident to the performance of the Company’s obligations under this Agreement. In addition, the Company agrees to reimburse the Agent for the fees and disbursements of its legal counsel.

SECTION 5 Conditions of Obligations. The obligation of the Agent, as agent of the Company, under this Agreement to solicit offers to purchase the Securities is subject to the accuracy in all material respects, on each Representation Date, of the representations and warranties on the part of the Company contained herein, to the accuracy of any material statements of officers of the Company made in any certificates, opinions, affidavits, written statements or letters furnished to the Agent or counsel to the Agent pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder, and to each of the following additional conditions precedent:

SECTION 6 Additional Covenants of the Company. The Company covenants and agrees that:

SECTION 7 Indemnification and Contribution. (a) The Company shall indemnify and hold harmless the Agent, its officers and employees and each person, if any, who controls the Agent within the meaning of the Securities Act, from and against any loss, claim, damage or liability, joint or several, or any action or pending action in respect thereof (including, but not limited to, any loss, claim, damage, liability or action relating to purchases and sales of Securities), to which the Agent, officer, employee or controlling person may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability, action or pending action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, as originally filed or in any amendment thereof, or in any Prospectus or in any amendment or supplement thereto, (ii) the omission or alleged omission to state therein any material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse the Agent and each such officer, employee or controlling person promptly upon demand for any legal or other expenses reasonably incurred by the Agent, officer, employee or controlling person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability, action or pending action as such expenses are incurred; provided, however, that (i) the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability, action or pending action arises out of, or is based upon, any untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information concerning the Agent furnished to the Company by or on behalf of the Agent specifically for use in connection with the preparation thereof, and (ii) such indemnity with respect to any Prospectus shall not inure to the benefit of the Agent (or any person controlling the Agent) from whom the person asserting any such loss, claim, damage or liability purchased the Securities which are the subject thereof if such person did not receive a copy of the Prospectus at or prior to the confirmation of the sale of such Securities to such person in any case where such delivery is required by the Securities Act and the untrue statement or omission of a material fact contained in the Prospectus was corrected in the Prospectus, unless such failure to deliver the Prospectus was a result of noncompliance by the Company with

Section 3(d) hereof. The foregoing indemnity agreement is in addition to any liability that the Company may otherwise have to the Agent or to any officer, employee or controlling person of the Agent.

SECTION 8 Status of the Agent. In soliciting offers to purchase the Securities from the Company pursuant to this Agreement (other than offers to purchase pursuant to Section 11(a)), the Agent is acting solely as agent for the Company and not as principal. The Agent will make reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Securities from the Company has been solicited by the Agent and accepted by the Company but the Agent shall have no liability to the Company in the event any such purchase is not consummated for any reason. If the Company shall default in its obligations to deliver Securities to a purchaser whose offer it has accepted, the Company shall (i) hold the Agent harmless against any loss, claim or damage arising from or as a result of such default by the Company and (ii), in particular, pay to the Agent any commission to which it would be entitled in connection with such sale.

SECTION 9 Representations and Warranties to Survive Delivery. All representations and warranties of the Company contained in this Agreement, or contained in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect, regardless of the termination or cancellation of this Agreement or any investigation made by or on behalf of the Agent or any person controlling the Agent or by or on behalf of the Company, and shall survive each delivery of and payment for any of the Securities.

SECTION 10 Termination. (a) This Agreement may be terminated for any reason, at any time, by either party hereto upon the giving of one day’s written notice of such termination to the other party hereto. The provisions of Sections 3(c), 3(e), 3(f), 3(g), 4, 7, 8, 9, 13 and 14 hereof shall survive any termination of this Agreement.

SECTION 11 (a) Purchases as Principal. From time to time the Agent or one or more additional financial institutions experienced in the distribution of securities similar to the Securities (each a “Purchaser”), may agree with the Company to purchase Securities from the Company as principal. Such agreement (a “Purchase Agreement”), if with the Agent only, may be oral (in which case a written confirmation of terms shall be delivered by the Agent to the Company) or may be made in accordance with the terms of a separate written agreement to be entered into between the Agent and/or the other Purchasers and the Company, substantially in the form attached hereto as Exhibit C or in such other form as the company and the Agent and/or the other Purchasers may agree. Each Purchaser executing a written Purchase Agreement shall become a party to this Agreement, vested with all the authority, rights and powers and subject to all the duties and obligations of the Agent when purchasing Securities as a principal, as if originally named as an Agent hereunder, but solely in connection with and for the purposes of the Issue of Securities identified in such Purchase Agreement. At the time of each purchase of Securities from the Company by the Agent or one or more other Purchasers as principal, the Lead Manager, in its sole discretion, shall specify the requirements for the officers’ certificate, opinion of counsel and comfort letter pursuant to Sections 5(b), 5(c) and 5(d) hereof.

SECTION 12 Notices. Except as otherwise provided herein, all notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Agent shall be directed to it as follows: Lehman Brothers Inc., 745 Seventh Avenue, New York, New York 10019, Attention: Fixed Income Syndicate, notices to the Company shall be directed to it as follows: Lehman Brothers Holdings Inc., 745 Seventh Avenue, New York, New York 10019, Attention: Treasurer.

SECTION 13 Binding Effect; Benefits. This Agreement shall be binding upon the Agent, the Company, and their respective successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those persons, except that (a) the representations, warranties, indemnities and agreements of the Company contained in this Agreement shall also be deemed to be for the benefit of the person or persons, if any, who control the Agent within the meaning of Section 15 of the Securities Act, and (b) the indemnity agreement of the Agent contained in Section 7 hereof shall be deemed to be for the benefit of directors of the Company, officers of the Company who have signed the Registration Statement and any person controlling the Company. Nothing in this Agreement is intended or shall be construed to give any person, other than the person referred to in this Section, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein.

SECTION 14 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of New York. This Agreement may be executed in counterparts and the executed counterparts shall together constitute a single instrument.

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

Section 2. Currency Exchanges and Payments. If the Holder elects to receive all or a portion of payments of principal of, premium, if any, and interest on this Note, if denominated in a Foreign Currency, in U.S. dollars, the Exchange Rate Agent specified on the face hereof or a successor thereto (the “Exchange Rate Agent”) will convert such payments into U.S. dollars. In the event of such an election, payment to the Holder will be based upon the exchange rate as determined by the Exchange Rate Agent based on the highest bid quotation in New York City received by such Exchange Rate Agent at approximately 11:00 a.m., New York City time, on the second Business Day preceding the applicable payment date from three recognized foreign exchange dealers (one of which may be the Exchange Rate Agent unless such Exchange Rate Agent is an affiliate of the Issuer) for the purchase by the quoting dealer of the Foreign Currency for U.S. dollars for settlement on such payment date in the amount of the Foreign Currency payable in the absence of such an election to such Holder and at which the applicable dealer commits to execute a contract. If such bid quotations are not available, such payment will be made in the Foreign Currency. All currency exchange costs will be borne by the holder of this Note by deductions from such payments.

Section 3. Redemption. If so specified on the face hereof, the Company may at its option redeem this Note in whole or from time to time in part on or after the date designated as the Initial Redemption Date on the face hereof at either a price based on a constant percentage of the Principal Amount of this Note as specified on the face hereof or at prices declining from the premium specified on the face hereof, if any, to 100% of the Principal Amount hereof, together, in each case, with accrued interest to the Redemption Date. The Company may exercise such option by causing the Trustee to mail by first-class mail to the Holder hereof a notice of such redemption at least 30 but not more than 60 days prior to the Redemption Date. In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof in accordance with the terms of the Indenture. Unless otherwise specified on the face hereof, if less than all of the Notes with like tenor and terms to this Note are to be redeemed, the Notes to be redeemed shall be selected by the Trustee by such method as the Trustee shall deem fair and appropriate.

Section 4. Sinking Funds and Amortizing Notes. Unless otherwise specified on the face hereof or unless this Note is an Amortizing Note, this Note will not be subject to any sinking fund. If it is specified on the face hereof that this Note is an Amortizing Note, the Company will make payments combining principal and interest on the dates and in the amounts set forth in the table appearing in Schedule I, attached to this Note. If this Note is an Amortizing Note, payments made hereon will be applied first to interest due and payable on each such payment date and then to the reduction of the Outstanding Face Amount. The term “Outstanding Face Amount” means, at any time, the amount of unpaid principal hereof at such time.

Section 5. Optional Repayment. If so specified on the face hereof, this Note will be repayable prior to the Maturity Date at the option of the Holder on the Optional Repayment Dates specified on the face hereof at the Optional Repayment Prices specified on the face hereof, together with accrued interest to the applicable Optional Repayment Date. Unless otherwise specified on the face hereof, in order for this Note to be so repaid, the Company must receive, at least 30 but not more than 45 days prior to an Optional Repayment Date, either (i) this Note with the form below entitled “Option to Elect Repayment” duly completed or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States setting forth the name of the Holder hereof, the Face Amount hereof, the Face Amount to be repaid, the certificate number hereof or a description of the tenor and terms of this Note, a statement that the option to elect repayment is being exercised thereby and a guarantee that this Note with the form below entitled “Option to Elect Repayment” duly completed will be received by the Paying Agent not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter and this Note and form duly completed are received by the Paying Agent by such fifth Business Day. Exercise of this repayment option shall be irrevocable, except as otherwise provided under Section 6 or Section 9. The repayment option may be exercised by the Holder of this Note with respect to less than the Face Amount then outstanding provided that the Face Amount of the Note remaining outstanding after repayment is an authorized denomination. Upon such partial

repayment this Note shall be cancelled and a new Note or Notes for the remaining Face Amount hereof shall be issued in the name of the Holder of this Note.

Section 6. Optional Interest Reset. If so specified on the face hereof, the Interest Rate on this Note may be reset at the option of the Company, in the manner set forth below (unless otherwise specified on the face hereof), on the Optional Reset Date or Optional Reset Dates specified on the face hereof. The Company may exercise such option by notifying the Trustee in writing of such exercise at least 45 but not more than 60 days prior to an Optional Reset Date. Not later than five Business Days after receipt thereof, the Trustee will mail by first-class mail to the Holder of this Note a notice (the “Reset Notice”) setting forth (i) the election of the Company to reset the interest rate, (ii) such new interest rate and (iii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date or, if there is no such next Optional Reset Date, to the Maturity Date of this Note (each such period a “Subsequent Interest Period”), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during such Subsequent Interest Period. The Reset Notice shall be substantially in the form of Exhibit A to this Note. Upon the transmittal by the Trustee of a Reset Notice to the Holder of this Note, such new interest rate shall take effect automatically, and, except as modified by the Reset Notice and as described in the next paragraph, this Note will have the same terms as prior to the transmittal of such Reset Notice.

Section 7. OID Notes. If this Note is an OID Note, unless otherwise specified on the face hereof, the amount payable in the event of redemption by the Company, repayment at the option of the Holder or acceleration of Maturity shall be the Amortized Face Amount of this Note as of the date of such redemption, repayment or acceleration rather than the Face Amount hereof. The “Amortized Face Amount” of this Note shall be the amount equal to (a) the Issue Price (as set forth on the face hereof) plus (b) that portion of the difference between the Issue Price and the Face Amount hereof that has accrued at the Yield to Maturity set forth on the face hereof (computed in accordance with generally accepted United States bond yield computation principles) at the date as of which the Amortized Face Amount is calculated, but in no event shall the Amortized Face Amount of this Note exceed the Face Amount.

Section 8. Dual Currency Notes. If it is specified on the face hereof that this Note is a Dual Currency Note, the Company has a one time option, exercisable on any one of the Option Election Dates specified on the face hereof in whole, but not in part, with respect to all Dual Currency Notes issued on the same day and having the same terms as this Note (this “Tranche”), of thereafter making all payments of principal, premium, if any, and interest (which payments would otherwise be made in the Specified Currency of such Notes) in the Optional Payment Currency specified on the face hereof. If the Company makes such an election, the amount of Optional Payment Currency payable in respect hereof shall be determined by the Exchange Rate Agent by converting the amount of Specified Currency that would otherwise be payable into the Optional Payment Currency at the Designated Exchange Rate specified on the face hereof.

Section 9. Extension of Maturity Notes. If it is specified on the face hereof that this Note is an Extension of Maturity Note, the Company has the option to extend the Maturity Date hereof for the number of Extension Periods set forth on the face hereof, each of which Extension Periods shall be a period of from one to five whole years. Unless otherwise specified on the face hereof, the following procedures shall apply if this Note is an Extension of Maturity Note.

Section 10. Extendible Notes. If it is specified on the face hereof that this Note is an Extendible Note, this Note will mature on the Initial Maturity Date specified on the face hereof unless the Maturity of all or any portion of this Note is extended in accordance with the procedures described below.

Section 11. Principal Amount For Indenture Purposes. For the purpose of determining whether Holders of the requisite amount of Notes outstanding under the Indenture have made a demand, given a notice or waiver or taken any other action, the outstanding principal amount of this Note will be deemed to be the Principal Amount, provided, however, if this Note is an OID Note, the outstanding principal amount of this Note will be deemed to be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof.

Section 12. Modification and Waivers. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than 66-2/3% in aggregate principal amount of each series of the Securities at the time Outstanding to be affected, evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the holders of the Securities of all such series; provided, however, that no such supplemental indenture shall, among other things, (i) extend 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, 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, or in the payment of any sinking fund installment or analogous obligation with respect to Securities of such series. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future holders and owners of this Note and any Notes which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Note or such other Notes.

Section 13. Obligations Unconditional. No reference herein to the Indenture and no provisions of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and interest, if any, on this Note at the place, at the respective times, at the rate, and in the coin or currency herein prescribed.

Section 14. Defeasance. The Indenture contains provisions for the discharge of the Indenture and defeasance at any time of the indebtedness on this Note upon compliance by the Company with certain conditions set forth therein, which provisions apply to this Note.

Section 15. Authorized Form and Denominations. The Notes of this series are issuable in registered form, without coupons. Unless otherwise set forth on the face hereof, Notes denominated in U.S. dollars will be issued in Face Amount denominations of U.S.$100,000 and any integral multiple of U.S.$1,000 in excess thereof. Notes denominated in a Foreign Currency will be issued in the denomination or denominations set forth on the face hereof. Each Note will be issued initially as either a Global Security or a Certificated Note, 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, New York City, pursuant to the provisions of the Indenture or at any of such other offices or agencies as may be designated and maintained by the Company for such purpose pursuant to the provisions of the Indenture, and in the manner and subject to the limitations provided in the Indenture, but without the payment of any service charge, except for any tax or other governmental charges imposed in connection therewith. Notes of this series are exchangeable for a like aggregate Face Amount of Notes of this series of a different authorized denomination, except that Global Securities will not be exchangeable for Certificated Notes.

Section 16. Registration of Transfer. As provided in the Indenture and subject to certain limitations as therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer, at the Corporate Trust Office or agency in a Place of Payment for this Note, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar requiring such written instrument of transfer duly executed by, the Holder hereof or his attorney duly

authorized in writing, and thereupon one or more new Notes of this series, of authorized denominations and for the same aggregate Face Amount, will be issued to the designated transferee or transferees.

Section 17. Events of Default. If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture. In the event that this Note is an OID Note or a Dual Currency Note, the amount of principal of this Note that becomes due and payable upon such acceleration shall be equal to the amount calculated as set forth in Section 7 or Section 8, respectively, hereof. Upon payment (i) of the aggregate applicable amounts of principal of the Notes of this series 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, if any, on the Notes of this series shall terminate.

Section 18. No Recourse Against Certain Persons. No recourse for the payment of the principal of, premium, if any, or interest on this Note, or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any Indenture supplemental thereto or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.

Section 19. Defined Terms. All terms used but not defined in this Note are used herein as defined in the Indenture.

Section 20. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

FORM 8-K

(a) The Company meets the requirements for the use of Form S-3 under the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations promulgated thereunder (the “Rules and Regulations”), and has carefully prepared and filed with the Securities and Exchange Commission (the “Commission”) one or more registration statements on Form S-3, which have become effective, for the registration of the Securities under the Securities Act. The registration statement, as amended at the date of this Agreement, meets the requirements set forth in Rule 415(a)(1)(ix) under the Securities Act and complies in all other material respects with such rule. The Company has filed with the Commission pursuant to Rule 424 under the Securities Act (“Rule 424”) a supplement to the form of prospectus included in the registration statement relating to the offering of the Securities and the plan of distribution thereof. The term “Registration Statement” means the registration statement, as amended at the date of this Agreement and as from time to time amended and supplemented hereafter, including the exhibits thereto, financial statements, and all documents incorporated therein by reference pursuant to Form S-3 (the “Incorporated Documents”). Such form of prospectus included in the

registration statement, including the Incorporated Documents, is hereinafter referred to as the “Basic Prospectus”; and such supplemented form of prospectus, in the form in which it was filed with the Commission pursuant to Rule 424 (including the Basic Prospectus as so supplemented), is hereinafter called the “Prospectus”. Any reference herein to the Registration Statement, the Basic Prospectus or the Prospectus shall be deemed to refer to and include the Incorporated Documents filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any reference herein to the terms “amend”, “amendment” or “supplement” with respect to the Registration Statement, the Basic Prospectus or the Prospectus shall be deemed to refer to and include the filing of any Incorporated Documents under the Exchange Act after the date of this Agreement or the issue date of the Basic Prospectus or the Prospectus, as the case may be, and deemed to be incorporated therein by reference.

(b) As of the applicable Representation Date and at all times during each period during which solicitations of offers to purchase Securities have not been suspended or during which, in the opinion of counsel to the Agent, a prospectus relating to the Securities is required to be delivered under the Securities Act (each a “Marketing Period”), the Registration Statement, the Prospectus and any such amendment or supplement will comply in all material respects with the applicable requirements of the Securities Act and the Rules and Regulations, and the Incorporated Documents will comply in all material respects with the requirements of the Exchange Act or the Securities Act, as applicable, and the rules and regulations adopted by the Commission thereunder and will have been timely filed as required thereby; the Indenture has been qualified under and complies in all material respects with the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”); on the date it became effective, the Registration Statement did not, and, on the date that any post-effective amendment to the Registration Statement becomes effective, the Registration Statement as amended by such post-effective amendment did not or will not, as the case may be, 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; the Prospectus, as it may be amended or supplemented, does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading; the Incorporated Documents comply in all material respects with the applicable provisions of the Exchange Act and rules and regulations of the Commission thereunder, and, when read together with the Prospectus, or the Prospectus as it may be then amended or supplemented, will not 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, in light of the circumstances under which they are made, not misleading; provided that the foregoing representations and warranties in this paragraph (b) shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the Company by the Agent specifically for use in connection with the preparation of the Registration Statement or the Prospectus, as they may be amended or supplemented, or to any statements in or omissions from the statement of eligibility and qualification on Form T-1 of the Trustee under the Trust Indenture Act (“Form T-1”). The Commission has not issued an order preventing or suspending the use of the Basic Prospectus or the Prospectus.

(c) The nationally recognized independent registered public accounting firm whose report appears in the Company’s most recent Annual Report on Form 10-K, which is incorporated by reference in the Prospectus, are independent public accountants as required by

the Securities Act and the Rules and Regulations. In the event that a report of a nationally recognized independent registered public accounting firm regarding historical financial information with respect to any entity acquired by the Company is required to be incorporated by reference in the Prospectus, such independent public accountants were independent public accountants, as required by the Securities Act and the Rules and Regulations, during the period of their engagement to examine the financial statements being reported on and at the date of their report.

(d) The audited consolidated financial statements of the Company included in the Prospectus and the Registration Statement present, and will present, as of the applicable Representation Date and during each Marketing Period, fairly on a consolidated basis the financial position, the results of operations, changes in common stock and stockholder’s equity and cash flows of the Company and its subsidiaries as of the respective dates and for the respective periods indicated, all in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved. The unaudited consolidated financial statements of the Company, if any, included in the Prospectus and the Registration Statement and the related notes are, and will be, as of the applicable Representation Date and during each Marketing Period, true, complete and correct, subject to normally recurring changes resulting from year-end audit adjustments, and prepared in accordance with Regulation S-X of the Rules and Regulations.

(e) Except as described in or contemplated by the Registration Statement and the Prospectus, there has not been any material adverse change in, or any adverse development which materially affects, the business, properties, financial condition or results of operations of the Company or the Company and its subsidiaries taken as a whole from the dates as of which information is given in the Registration Statement and the Prospectus.

(f) The Securities conform to the description thereof contained in the Prospectus, are duly and validly authorized, and, when validly authenticated, issued and delivered in accordance with the Indenture and sold as provided in this Agreement, will be validly issued and outstanding obligations of the Company entitled to the benefits of the Indenture.

(g) Neither the Company nor any of the Significant Subsidiaries (as defined below) is in violation of its organizational documents or in default under any agreement, indenture or instrument, the effect of which violation or default would be material to the Company and its subsidiaries taken as a whole. The execution, delivery and performance of this Agreement and the consummation of the related transactions described in the Registration Statement will not conflict with, result in the creation or imposition of any material lien, charge or encumbrance upon any of the assets of the Company or any of its Significant Subsidiaries pursuant to the terms of, or constitute a default under, any material agreement, indenture or instrument, or result in a violation of the organizational documents of the Company or any of its Significant Subsidiaries or any order, rule or regulation of any court or governmental agency having jurisdiction over the Company, any of its Significant Subsidiaries or their property. Except as set forth in the Prospectus or as required by the Securities Act, the Exchange Act, the Trust Indenture Act and applicable state securities laws, no consent, authorization or order of, or filing or registration with, any court or governmental agency is required for the execution, delivery and performance of this Agreement. “Significant Subsidiary” means any subsidiary of

the Company with assets greater than or equal to 7.5% of the assets of the Company and its subsidiaries determined on a consolidated basis in accordance with GAAP (the “Consolidated Assets”). For the purposes of this definition, the Consolidated Assets at any time shall be determined on the basis of the financial statements in the Company’s most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as the case may be, filed with the Commission.

(h) Each of the Company and the Significant Subsidiaries have been duly organized, are validly existing and in good standing under the laws of their respective jurisdictions of formation, are duly qualified to do business and in good standing as foreign corporations and are duly registered as a broker-dealer, broker, dealer or investment advisor, as the case may be, in each jurisdiction in which their respective ownership of property or the conduct of their respective businesses requires such qualification or registration and in which the failure to qualify or register would be reasonably likely, individually or in the aggregate, to have a material adverse effect on the business, condition or properties of the Company and its subsidiaries taken as a whole (a “Material Adverse Effect”). Each of the Company and the Significant Subsidiaries holds all material licenses, permits, and certificates from governmental authorities necessary for the conduct of its business and owns, or possesses adequate rights to use, all material rights necessary for the conduct of such business and has not received any notice of material conflict with the asserted rights of others in respect thereof, except in each case where the failure to do so would not be reasonably likely, individually or in the aggregate, to have a Material Adverse Effect; and each of the Company and the Significant Subsidiaries has the power and authority necessary to own or hold its properties and to conduct the businesses in which it is engaged. Except as may be disclosed in the Registration Statement and the Prospectus, all outstanding shares of capital stock of the Significant Subsidiaries have been duly authorized and are validly issued and outstanding, fully paid and non-assessable and, except for directors’ qualifying shares, are owned by the Company, directly or indirectly through subsidiaries, free and clear of any lien, pledge and encumbrance or any claim of any third party.

(i) Except as described in the Registration Statement and the Prospectus, there is no material litigation or governmental proceeding pending or, to the knowledge of the Company, threatened against the Company or any of its subsidiaries which might reasonably be expected to have a Material Adverse Effect or which is required to be disclosed in the Registration Statement and the Prospectus.

(j) The certificates delivered pursuant to paragraph (c) of Section 5 hereof and all other documents delivered by the Company or its representatives in connection with the issuance and sale of the Securities were on the dates on which they were delivered, or will be on the dates on which they are to be delivered, in all material respects true and complete.

(k) Any certificate signed by any officer of the Company and delivered to one or more Purchasers (as hereinafter defined) or to counsel for the Purchasers in connection with an offering of the Securities to one or more Purchasers as principal or through the Agent or an Additional Agent as agent shall be deemed a representation and warranty by the Company to such Purchasers, Agent or Additional Agents (as the case may be) as to the matters covered thereby on the date of such certificate and, unless subsequently amended or supplemented, at each Representation Date subsequent thereto.

(b) Promptly upon the closing of the sale of any Securities sold by the Company as a result of a solicitation made by the Agent, the Company agrees to pay the Agent a commission in accordance with the schedule set forth in Exhibit A hereto applicable to such Security.

(c) Administrative procedures respecting the sale of each of the Securities shall be agreed upon from time to time by the Agent and the Company (the “Procedures”). The Procedures initially shall include those procedures set forth in Exhibit B hereto. The Agent and the Company agree to perform the respective duties and obligations specifically provided to be performed by each of them herein and in the Procedures.

(d) The documents required to be delivered by Section 5 hereof shall be delivered at the offices of Lehman Brothers Inc., 745 Seventh Avenue, New York, New York 10019, no later than 10:00 A.M., New York City time, on the date of this Agreement or at such later time as may be mutually agreed the Company and the Agent, which in no event shall be later than the time at which the Agent commences solicitation of purchasers of Securities hereunder, such time and date be herein called the “Closing Date.”

(a) The Company shall advise the agent promptly (i) of any proposal to amend or supplement the Registration Statement or the Prospectus and will afford the Agent a reasonable opportunity to comment on any such proposed amendment or supplement and will advise the Agent of the filing of any such amendment or supplement; (ii) of any request or proposed request by the Commission for an amendment or supplement to the Registration Statement, the Prospectus, to any document incorporated by reference in any of the foregoing or for additional information; (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any part thereof or the initiation or threat of any stop order proceeding and will use its best efforts to prevent the issuance of any stop order and to obtain as soon as possible its lifting, if issued and (iv) of receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose.

(b) If, during any Marketing Period, any event occurs as a result of which the Prospectus would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the Securities Act, the Company will notify the Agent promptly to suspend solicitation of purchases of the Securities; and if the Company shall decide to amend or supplement the Registration Statement or the Prospectus, it will promptly advise the Agent by telephone (with confirmation in writing) and will promptly prepare and file with the Commission an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance and will use its reasonable best efforts to cause any amendment of the Registration Statement containing an amended Prospectus to be made effective as soon as possible.

(c) As soon as practicable, but not later than 18 months, after the date of each acceptance by the Company of an offer to purchase Securities hereunder, the Company will make generally available to its security holders an earnings statement which will satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations under the Securities Act.

(d) The Company will furnish to the Agent without charge copies of the Registration Statement, including all exhibits, the Prospectus and all amendments and supplements to such documents, in each case as soon as available and in such quantities as are reasonably requested.

(e) The Company will furnish such information, execute such instruments and take such actions as may be required to qualify the Securities for offering and sale under the laws of such jurisdictions as the Agent may designate and will maintain such qualifications in effect so long as required for the sale of the Securities; provided, however, that the Company shall not be required to qualify to do business in any jurisdiction where it is not now so qualified or to take any action which would subject it to general or unlimited service of process in any jurisdiction where it is not now so subject.

(a) No order suspending the effectiveness of the Registration Statement or suspending the qualification of the Indenture shall be in effect and no proceedings for such purpose shall be pending before or threatened by the Commission, and any requests for additional information on the part of the Commission (to be included in the Registration Statement or the Prospectus or otherwise) shall have been complied with to the reasonable satisfaction the Agent.

(b) At the Closing Date, the Company shall have furnished to the Agent the opinion of the Chief Legal Officer, General Counsel or an Associate General Counsel of the Company, addressed to the Agent and dated the Closing Date, to the effect that:

(c) At the Closing Date, the Agent shall have received from counsel to the Agent such opinion or opinions, dated the Closing Date, with respect to the issuance and sale of the Securities, the Registration Statement, the Prospectus and other related matters as the Agent may reasonably require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.

(d) The Company shall have furnished to the Agent on the Closing Date a certificate of its Chief Executive Officer, President, Chief Operating Officer, Chief Administrative Officer, any Executive Vice President, Senior Vice President or Vice President, and its Chief Financial Officer, its Treasurer, its Financial Controller or its Global Head of Asset Liability Management (or other officer performing substantially the same function), dated the day of the Closing Date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Prospectus and this Agreement, and that, to the best of their knowledge, after due inquiry:

(e) At the Closing Date, a nationally recognized independent registered public accounting firm shall have furnished to the Agent a letter, dated the day of the Closing Date, confirming that they are independent auditors with respect to the Company within the meaning of the Securities Act and in form and substance satisfactory to the Agent, stating in effect that:

(f) Subsequent to the execution and delivery of this Agreement (i) no downgrading shall have occurred in the rating accorded the Company’s debt securities by any “nationally recognized statistical rating organization”, as that term is defined by the Commission for purposes of Rule 436(g)(2) of the Rules and Regulations and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company’s debt securities.

(g) Since the date of the latest audited financial statements included in the Prospectus there shall not have been any change in the capital stock or long-term debt of the Company or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, stockholders’ equity or results of operations of the Company and its subsidiaries, otherwise than as set forth or

contemplated in the Prospectus, the effect of which is, in the judgment of the Agent, so material and adverse as to make it impracticable or inadvisable to proceed with the offering or the delivery of the Securities being delivered on such Delivery Date on the terms and in the manner contemplated in any Prospectus;

(h) Prior to the Closing Date, the Company shall have furnished to the Agent such further information, certificates and documents as the Agent or counsel to the Agent may reasonably request.

(a) Each acceptance by it of an offer for the purchase of Securities shall be deemed to be an affirmation that the representations and warranties of the Company contained in this Agreement are true and correct in all material respects at the time of such acceptance and an undertaking that such representations and warranties will be true and correct in all material respects at the time of delivery to the purchaser or his agent of the Securities relating to such acceptance as though made at and as of each such time (and it is understood that such representations and warranties shall relate to the Registration Statement and the Prospectus as amended or supplemented to each such time).

(b) During each Marketing Period, each time that the Registration Statement or the Prospectus shall be amended or supplemented or the Company shall file with the Commission any document incorporated by reference into the Prospectus (other than by filing with the Commission of an exhibit to the Registration Statement or Prospectus that does not relate to the Securities, a prospectus supplement not relating to the Securities or an amendment or supplement providing solely for a change in the interest rates, redemption provisions, amortization schedule or maturities of the Securities or a change in the principal amount of Securities remaining to be sold or other information contemplated by the Prospectus to be filed in a pricing supplement related to the Securities or similar changes, or any other change that the Agent reasonably deems immaterial), the Company shall, (i) within two (2) business days after such amendment, supplement or filing or (ii) if such amendment, supplement or filing was not filed during a Marketing Period, within two (2) business days after the first day of the next succeeding Marketing Period, furnish the Agent with a certificate of the Chairman of the Board, any Vice Chairman, the Chief Executive Officer, any Executive Vice President or any Vice President and the Treasurer, the Chief Financial Officer or the Senior Vice President and Director of Global Asset and Liability Management of the Company in form satisfactory to the Agent to the effect that the statements contained in the certificate referred to in
Section 5(d) hereof which was last furnished to the Agent are true and correct at the time of such amendment or supplement or filing, as the case may be, as though made at and as of such time (except that

such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such time) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in said Section 5(d), modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such certificate. If requested by the Lead Manager (which term shall have the meaning specified in the Purchase Agreement (as hereinafter defined), or, if there is only a single Purchaser, shall mean such Purchaser), in its sole discretion, pursuant to Section 11(a) of this Agreement in connection with the purchase of Securities from the Company by the Agent or one or more other Purchasers as principal, the Company shall deliver to the Lead Manager on behalf of the Purchasers on the Settlement Date (as defined in the applicable Purchase Agreement) a certificate of the type described in the previous sentence.

(c) During each Marketing Period, each time that the Registration Statement or the Prospectus shall be amended or supplemented or the Company shall file with the Commission any document incorporated by reference into the Prospectus (other than by filing with the Commission of an exhibit to the Registration Statement or Prospectus that does not relate to the Securities, an amendment or supplement to or document incorporated by reference in the Registration Statement or Prospectus setting forth only financial statements or other financial information (including any press release announcing earnings), a prospectus supplement not relating to the Securities or an amendment or supplement providing solely for a change in the interest rates, redemption provisions, amortization schedule or maturities of the Securities or a change in the principal amount of Securities remaining to be sold or other information contemplated by the Prospectus to be filed in a pricing supplement related to the Securities or similar changes, or any other change that the Agent reasonably deems immaterial), the Company shall, (i) within two (2) business days after such amendment, supplement or filing or (ii) if such amendment, supplement or filing was not filed during a Marketing Period, within two (2) business days after the first day of the next succeeding Marketing Period, furnish the Agent with the written opinion of an Associate General Counsel to the Company, addressed to the Agent and dated the date of delivery of such opinion, in form satisfactory to the Agent, of the same tenor as the opinion referred to in Section 5(b) hereof, but modified, as necessary, to relate to the Registration Statement and the Prospectus as amended or supplemented to the time of delivery of such opinion; provided, however, that in lieu of such opinion, such counsel may furnish the Agent with a letter to the effect that the Agent may rely on a prior opinion delivered under Section 5(b) or this Section 6(c) to the same extent as if it were dated the date of such letter authorizing reliance (except that statements in such prior opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented to the time of delivery of such letter authorizing reliance). If requested by the Lead Manager, in its sole discretion, pursuant to Section 11(a) of this Agreement in connection with the purchase of Securities from the Company by the Agent or one or more other Purchasers as principal, the Company shall deliver to the Lead Manager on behalf of the Purchasers on the Settlement Date an opinion of counsel of the type described in the previous sentence.

(d) During each Marketing Period, each time that the Registration Statement or the Prospectus shall be amended or supplemented to include additional financial information or the Company files with the Commission any document incorporated by reference into the Prospectus which contains additional financial information (other than information that the Agent reasonably deems immaterial), the Company shall cause the Company’s auditors to

furnish the Agent, (i) within two (2) business days after such amendment, supplement or filing or (ii) if such amendment, supplement or filing was not filed during a Marketing Period, within two (2) business days after the first day of the next succeeding marketing Period, a letter, addressed to the Agent and dated the date of delivery of such letter, in form and substance satisfactory to the Agent, of the same tenor as the letter referred to in Section 5(e) hereof but modified to relate to the Registration Statement and Prospectus, as amended and supplemented to the date of such letter, with such changes as may be necessary to reflect changes in the financial statements and other information derived from the accounting records of the Company; provided, however, that if the Registration Statement or the Prospectus is amended or supplemented solely to include financial information as of and for a fiscal quarter, the Company’s auditor may limit the scope of such letter to the unaudited financial statements included in such amendment or supplement unless there is contained therein any other accounting, financial or statistical information that, in the Agent’s reasonable judgment, should be covered by such letter, in which event such letter shall also cover such other information. If requested by the Lead Manager, in its sole discretion, pursuant to Section 11(a) of this Agreement in connection with the purchase of Securities from the Company by the Agent or one or more other Purchasers as principal, the Company shall deliver to the Lead Manager on behalf of the Purchasers on the Settlement Date a letter of the type described in the previous sentence.

(b) The Agent shall indemnify and hold harmless the Company, its officers, employees, each of its directors, and each person, if any, who controls the Company within the meaning of the Securities Act, from and against any loss, claim, damage or liability, joint or several, or any action or pending action in respect thereof, to which the Company or any such director, officer or controlling person may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability, action or pending action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus or in any amendment or supplement thereto, or (ii) the omission or alleged omission to state therein any material fact required to be stated therein or necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information concerning the Agent furnished to the Company by or on behalf of the Agent specifically for inclusion therein, and shall reimburse the Company and any such director, officer or controlling person for any legal or other expenses reasonably incurred by the Company or any such director, officer or controlling person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability, action or pending action as such expenses are incurred. The foregoing indemnity agreement is in addition to any liability that the Agent may otherwise have to the Company or any such director, officer, employee or controlling person. The statements with respect to the public offering of the Securities and the manner of distribution thereof and with respect to the Agent set forth on the cover page of the and under the headings “Plan of Distribution” in the Prospectus constitute the only information furnished in writing by the Agent for inclusion in the Registration Statement and the Prospectus, and you, as the Agent, confirm that such statements are correct.

(c) Promptly after receipt by an indemnified party under this Section 7 of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under this Section 7, notify the indemnifying party in writing of the claim or the commencement of that action; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section 7 except to the extent it has been materially prejudiced by such failure and, provided further, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 7. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and either (i) the indemnifying party or parties and the indemnified party or parties mutually agree or (ii) representation of both the indemnifying party or parties and the indemnified party or parties by the same counsel is inappropriate under applicable standards of professional conduct due to actual or potential differing interests between them, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and

to otherwise participate in the defense of such action on behalf of such indemnified party or parties. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 7 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed counsel in connection with the assumption of legal defenses in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel, approved by the Agent in the case of subparagraph (a) representing the indemnified parties under subparagraph (a), as the case may be, who are parties to such action), (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. No indemnifying party shall (i) without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding, or (ii) be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with the consent of the indemnifying party or if there be a final judgment of the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment.

(d) If the indemnification provided for in this Section 7 shall for any reason be unavailable to or insufficient to hold harmless an indemnified party under Section 7(a) or 7(b) in respect of any loss, claim, damage or liability, or any action or pending action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, action or pending action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Agent on the other from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Agent on the other with respect to the statements or omissions that resulted in such loss, claim, damage or liability, action or pending action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Agent on the other with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering of the Securities purchased under this Agreement (before deducting expenses) received by the Company, on the one hand, and the total underwriting discounts and commissions received by the Agent with respect to the Securities purchased under this Agreement, on the other hand, bear to the total gross proceeds from the offering of the Securities under this Agreement, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or

alleged omission to state a material fact relates to information supplied by the Company or the Agent, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Agent agree that it would not be just and equitable if contributions pursuant to this Section were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section shall be deemed to include, for purposes of this Section 7(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7(d), no Agent shall be required to contribute any amount in excess of the amount by which the total price at which the Securities purchased by it exceeds the amount of any damages which the Agent has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(b) The obligations of the Agent hereunder may be terminated by the Agent by notice given to and received by the Company prior to delivery of and payment for the Securities if, prior to that time, (i) trading in securities generally on the New York Stock Exchange or the American Stock Exchange or in the over-the-counter market, or trading in any securities of the Company on any exchange or in the over-the-counter market, 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 such market by the Commission, by such exchange or by any other regulatory body or governmental authority having jurisdiction, (ii) a banking moratorium shall have been declared by Federal or state authorities, (iii) the United States shall have become engaged in hostilities, there shall have been an escalation in hostilities involving the United States or there shall have been a declaration of a national emergency or war by the United States or (iv) there shall have occurred such a material adverse change in general economic, political or financial conditions, including without limitation as a result of terrorist activities after the date hereof, or the effect of international conditions on the financial markets in the United States shall be such as to make it, in the judgment of the Agent, impracticable or inadvisable to proceed with the public offering or delivery of the Securities being delivered on such date on the terms and in the manner contemplated in the Prospectus.

(b) Additional Agents. Subject to Section 11(a) and notwithstanding Section 2(a) above, the Company may from time to time appoint one or more additional financial institutions experienced in the distribution of securities similar to the Securities (each such additional institution herein referred to as an “Additional Agent”) as agent(s) hereunder on an issue by issue basis, pursuant to a letter (an “Agent Accession Letter”) substantially in the form of Exhibit D to this Agreement, whereupon each such Additional Agent shall, subject to the terms and conditions of this Agreement and the Agent Accession Letter, become a party to this Agreement as an agent, vested with all the authority, rights and powers and subject to all the duties and obligations of an Agent as if originally named as an Agent hereunder, but solely in connection with and for the purposes of the Issue of Securities identified in such Agent Accession Letter.

(a) The Company meets the requirements for the use of Form S-3 under the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations promulgated thereunder (the “Rules and Regulations”), and has carefully prepared and filed with the Securities and Exchange Commission (the “Commission”) one or more registration statements on
Form S-3 (file number 333-121067), which have become effective, for the

registration of the Securities under the Securities Act. The registration statement, as amended at the date of this Agreement, meets the requirements set forth in Rule 415(a)(1)(ix) under the Securities Act and complies in all other material respects with such rule. The Company has filed with the Commission pursuant to Rule 424 under the Securities Act (“Rule 424”) a supplement to the form of prospectus included in the registration statement relating to the offering of the Securities and the plan of distribution thereof. The term “Registration Statement” means the registration statement, as amended at the date of this Agreement and as from time to time amended and supplemented hereafter, including the exhibits thereto, financial statements, and all documents incorporated therein by reference pursuant to Form S-3 (the “Incorporated Documents”). Such form of prospectus included in the registration statement, including the Incorporated Documents, is hereinafter referred to as the “Basic Prospectus”; and such supplemented form of prospectus, in the form in which it was filed with the Commission pursuant to Rule 424 (including the Basic Prospectus as so supplemented), is hereinafter called the “Prospectus”. Any reference herein to the Registration Statement, the Basic Prospectus or the Prospectus shall be deemed to refer to and include the Incorporated Documents filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and any reference herein to the terms “amend”, “amendment” or “supplement” with respect to the Registration Statement, the Basic Prospectus or the Prospectus shall be deemed to refer to and include the filing of any Incorporated Documents under the Exchange Act after the date of this Agreement or the issue date of the Basic Prospectus or the Prospectus, as the case may be, and deemed to be incorporated therein by reference.

(b) As of the applicable Representation Date and at all times during each period during which solicitations of offers to purchase Securities have not been suspended or during which, in the opinion of counsel to the Agents, a prospectus relating to the Securities is required to be delivered under the Securities Act (each a “Marketing Period”), the Registration Statement, the Prospectus and any such amendment or supplement will comply in all material respects with the applicable requirements of the Securities Act and the Rules and Regulations, and the Incorporated Documents will comply in all material respects with the requirements of the Exchange Act or the Securities Act, as applicable, and the rules and regulations adopted by the Commission thereunder and will have been timely filed as required thereby; the Indenture has been qualified under and complies in all material respects with the Trust Indenture Act of 1939, as amended (the “Trust Indenture Act”); on the date it became effective, the Registration Statement did not, and, on the date that any post-effective amendment to the Registration Statement becomes effective, the Registration Statement as amended by such post-effective amendment did not or will not, as the case may be, 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; the Prospectus, as it may be amended or supplemented, does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading; the Incorporated Documents comply in all material respects with the applicable provisions of the Exchange Act and rules and regulations of the Commission thereunder, and, when read together with the Prospectus, or the Prospectus as it may be then amended or supplemented, will not 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, in light of the circumstances under which they are made, not misleading; provided that the foregoing representations and warranties in this paragraph (b) shall not apply to statements or omissions

made in reliance upon and in conformity with written information furnished to the Company by the Agents specifically for use in connection with the preparation of the Registration Statement or the Prospectus, as they may be amended or supplemented, or to any statements in or omissions from the statement of eligibility and qualification on Form T-1 of the Trustee under the Trust Indenture Act (“Form T-1”). The Commission has not issued an order preventing or suspending the use of the Basic Prospectus or the Prospectus.

(c) The nationally recognized independent registered public accounting firm whose report appears in the Company’s most recent Annual Report on Form 10-K, which is incorporated by reference in the Prospectus, are independent public accountants as required by the Securities Act and the Rules and Regulations. In the event that a report of a nationally recognized independent registered public accounting firm regarding historical financial information with respect to any entity acquired by the Company is required to be incorporated by reference in the Prospectus, such independent public accountants were independent public accountants, as required by the Securities Act and the Rules and Regulations, during the period of their engagement to examine the financial statements being reported on and at the date of their report.

(d) The audited consolidated financial statements of the Company included in the Prospectus and the Registration Statement present, and will present, as of the applicable Representation Date and during each Marketing Period, fairly on a consolidated basis the financial position, the results of operations, changes in common stock and stockholder’s equity and cash flows of the Company and its subsidiaries as of the respective dates and for the respective periods indicated, all in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved. The unaudited consolidated financial statements of the Company, if any, included in the Prospectus and the Registration Statement and the related notes are, and will be, as of the applicable Representation Date and during each Marketing Period, true, complete and correct, subject to normally recurring changes resulting from year-end audit adjustments, and prepared in accordance with Regulation S-X of the Rules and Regulations.

(e) Except as described in or contemplated by the Registration Statement and the Prospectus, there has not been any material adverse change in, or any adverse development which materially affects, the business, properties, financial condition or results of operations of the Company or the Company and its subsidiaries taken as a whole from the dates as of which information is given in the Registration Statement and the Prospectus.

(f) The Securities conform to the description thereof contained in the Prospectus, are duly and validly authorized, and, when validly authenticated, issued and delivered in accordance with the Indenture and sold as provided in this Agreement, will be validly issued and outstanding obligations of the Company entitled to the benefits of the Indenture.

(g) Neither the Company nor any of the Significant Subsidiaries (as defined below) is in violation of its organizational documents or in default under any agreement, indenture or instrument, the effect of which violation or default would be material to the Company and its subsidiaries taken as a whole. The execution, delivery and performance of this Agreement and the consummation of the related transactions described in the Registration

Statement will not conflict with, result in the creation or imposition of any material lien, charge or encumbrance upon any of the assets of the Company or any of its Significant Subsidiaries pursuant to the terms of, or constitute a default under, any material agreement, indenture or instrument, or result in a violation of the organizational documents of the Company or any of its Significant Subsidiaries or any order, law, rule or regulation of any court or governmental agency having jurisdiction over the Company, any of its Significant Subsidiaries or their property. Except as set forth in the Prospectus or as required by the Securities Act, the Exchange Act, the Trust Indenture Act and applicable state securities laws, no consent, authorization or order of, or filing or registration with, any court or governmental agency is required for the execution, delivery and performance of this Agreement. “Significant Subsidiary” means any subsidiary of the Company with assets greater than or equal to 7.5% of the assets of the Company and its subsidiaries determined on a consolidated basis in accordance with GAAP (the “Consolidated Assets”). For the purposes of this definition, the Consolidated Assets at any time shall be determined on the basis of the financial statements in the Company’s most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as the case may be, filed with the Commission.

(h) Each of the Company and the Significant Subsidiaries have been duly organized, are validly existing and in good standing under the laws of their respective jurisdictions of formation, are duly qualified to do business and in good standing as foreign corporations and are duly registered as a broker-dealer, broker, dealer or investment advisor, as the case may be, in each jurisdiction in which their respective ownership of property or the conduct of their respective businesses requires such qualification or registration and in which the failure to qualify or register would be reasonably likely, individually or in the aggregate, to have a material adverse effect on the business, condition or properties of the Company and its subsidiaries taken as a whole (a “Material Adverse Effect”). Each of the Company and the Significant Subsidiaries holds all material licenses, permits, and certificates from governmental authorities necessary for the conduct of its business and owns, or possesses adequate rights to use, all material rights necessary for the conduct of such business and has not received any notice of material conflict with the asserted rights of others in respect thereof, except in each case where the failure to do so would not be reasonably likely, individually or in the aggregate, to have a Material Adverse Effect; and each of the Company and the Significant Subsidiaries has the power and authority necessary to own or hold its properties and to conduct the businesses in which it is engaged. Except as may be disclosed in the Registration Statement and the Prospectus, all outstanding shares of capital stock of the Significant Subsidiaries have been duly authorized and are validly issued and outstanding, fully paid and non-assessable and, except for directors’ qualifying shares, are owned by the Company, directly or indirectly through subsidiaries, free and clear of any lien, pledge and encumbrance or any claim of any third party.

(i) Except as described in the Registration Statement and the Prospectus, there is no material litigation or governmental proceeding pending or, to the knowledge of the Company, threatened against the Company or any of its subsidiaries which might reasonably be expected to have a Material Adverse Effect or which is required to be disclosed in the Registration Statement and the Prospectus.

(j) The certificates delivered pursuant to paragraph (d) of Section 7 hereof and all other documents delivered by the Company or its representatives in connection with the issuance

and sale of the Securities were on the dates on which they were delivered, or will be on the dates on which they are to be delivered, in all material respects true and complete.

(k) Any certificate signed by any officer of the Company and delivered to the Lead Agent or to counsel for the Agents in connection with an offering of the Securities to one or more Agents through the Lead Agent shall be deemed a representation and warranty by the Company to such Agent or Agents as to the matters covered thereby on the date of such certificate and, unless subsequently amended or supplemented, at each Representation Date subsequent thereto.

(b) Administrative procedures relating to the issue and delivery of, the solicitation of purchases of and payment for, the Securities shall be as set forth in Exhibit A hereto (the “Procedures”). The provisions of the Procedures shall apply to all transactions contemplated hereunder. The Agents and the Company agree to perform the respective duties and obligations specifically provided to be performed by each of them herein and in the Procedures. The Procedures may only be amended by agreement of the Company and the Lead Agent, on behalf of the Agents.

(c) The documents required to be delivered by Section 7 hereof shall be delivered at the offices of Lehman Brothers Inc., 745 Seventh Avenue, New York, New York 10019, no later than 10:00 A.M., New York City time, on the date of this Agreement or at such later time as may be mutually agreed by the Company and the Lead Agent, which in no event shall be later than the time at which the Agents commence solicitation of purchasers of Securities hereunder, such time and date be herein called the “Closing Date.”

(d) The Company may from time to time appoint one or more additional financial institutions experienced in the distribution of securities similar to the Securities (each such additional institution herein referred to as an “Additional Agent”) as agent(s) hereunder pursuant to a letter (an “Agent Accession Letter”) substantially in the form attached hereto as Exhibit B to this Agreement, whereupon each such Additional Agent shall, subject to the terms and conditions of this Agreement and the Agent Accession Letter, become a party to this Agreement as an agent, vested with all the authority, rights and powers and subject to all the duties and obligations of an Agent as if originally named as an Agent hereunder. If the Company shall appoint any Additional Agent(s) pursuant to an Agent Accession Letter in accordance with this subsection (d), the Company shall provide each Agent with a copy of such executed Agent Accession Letter.

(e) Each Agent acknowledges and agrees, with respect to communications in accordance with the Procedures via live.lehman.com, or such other website as may be from time to time maintained for use in connection with the Securities (the “Lehman Notes Website”), (i) that it is responsible for maintaining the confidentiality of the log-on and password it uses to access the Lehman Notes Website, (ii) that it is fully responsible for all activities that occur using its log-on and password, (iii) to notify the Company and the Lead Agent immediately of any unauthorized use of its log-on or password or any other breach of security and (iv) that it will not use the log-on or password of any other person at any time.

(b) Upon the closing of the sale of any Securities sold by the Company to the Lead Agent pursuant to a Terms Agreement as a result of a solicitation made by the Agents, the Company agrees to pay the Lead Agent a concession in accordance with the schedule set forth in Exhibit D hereto applicable to such Security or such other concession upon which the Company

and the Lead Agent agree in the form of a discount on the principal amount of notes sold (the “Agents’ Concession”). The Agents’ Concession shall be set forth in the applicable Terms Agreement and Pricing Supplement (as defined below). The Lead Agent and the other Agents will share the Agents’ Concession in such proportions as they and the Company may agree.

(c) Unless otherwise agreed to by the Lead Agent, each Agent shall purchase from the Lead Agent as principal for resale to the public, or to other dealers as set forth in Section 3(c) below, such aggregate principal amount of Securities with respect to which it has communicated offers to purchase to the Lead Agent (the “Commitment Amount”). The agreement of each Agent to purchase Securities from the Lead Agent shall be deemed to be made on the basis of the representations, warranties and agreements of the Company herein contained and shall be subject to the terms and conditions herein set forth. Each Agent agrees to deliver to the Lead Agent on the Settlement Date (or on such later date as may be specified by the Lead Agent) and at the place specified by the Lead Agent immediately available funds, payable to the order of the Lead Agent, for (i) an amount equal to the Offering Price, less the applicable Agents’ Concession in respect of such Agent’s Commitment Amount or (ii) such other amount as the Lead Agent shall advise such Agent. The Lead Agent will make payment to the Company against delivery to the Lead Agent for each Agent’s account of the Securities to be purchased by each Agent, and the Lead Agent will deliver to each Agent the Securities paid for by such Agent. If the Lead Agent has determined that transactions in the Securities are to be settled through the facilities of DTC or another clearinghouse facility, payment for and delivery of Securities purchased by each Agent shall be made through such facilities, if such Agent is a member, or, if such Agent is not a member, settlement shall be made through such Agent’s ordinary correspondent who is a member.

(d) In connection with the resale of the Securities purchased, the Agents may engage the services of broker-dealers in connection with the resale of the Securities (each, a “Dealer”); and such Agent may sell Securities to a Dealer at a price not less than the Offering Price less the applicable concession to dealers set forth in the applicable Pricing Supplement (the “Dealers’ Concession”); provided, however, that:

(a) The Company shall advise the Agents promptly of (i) the filing and the effectiveness of any amendment to the Registration Statement, (ii) the filing of (x) any supplement to the Prospectus relating to the Securities (other than an amendment or supplement providing solely for interest rates, redemption provisions, maturities or other terms of Securities or other information contemplated by the Prospectus or required by the Securities Act or the Rules and Regulations to be filed in a Pricing Supplement) or (y) any document relating to the Securities pursuant to the Exchange Act which will be incorporated by reference in the Prospectus, (iii) the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any part thereof or the initiation or threat of any stop order proceeding and will use its best efforts to prevent the issuance of any stop order and to obtain as soon as possible its lifting, if issued or (vi) receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threat of any proceeding for that purpose.

(b) The Company will prepare, with respect to any Securities to be sold through or to the Agents pursuant to this Agreement, a pricing supplement with respect to such Securities in substantially the form attached hereto as Exhibit E (a “Pricing Supplement”) and will file such Pricing Supplement with the Commission pursuant to Rule 424(b) under the Securities Act not later than the time specified by such rule.

(c) The Company will not file any registration statement with respect to the registration of additional Securities or any amendment to the Registration Statement or any amendment or supplement to the Prospectus (other than a prospectus supplement not relating to the Securities or an amendment or supplement providing solely for the interest rates, redemption provisions, maturities or other terms of Securities or other information contemplated by the Prospectus or required by the Securities Act or the Rules and Regulations to be filed in a Pricing Supplement or an amendment or supplement effected by the filing of a document with the Commission pursuant to the Exchange Act) in a form as to which counsel to the Agents shall reasonably object.

(d) If, during any Marketing Period, any event occurs as a result of which the Prospectus would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the Securities Act, the Company will notify the Agents promptly to suspend solicitation of purchases of the Securities and to cease sale of any Securities by the Lead Agent, and the Company will promptly prepare and file with the Commission an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance and will use its reasonable best efforts to cause any amendment of the Registration Statement containing an amended Prospectus to be made effective as soon as possible.

(e) The Company will make generally available to its security holders an earnings statement which will satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations covering each fiscal period beginning the first day of its fiscal year and ending the last day of each of its fiscal quarters. Such earnings statement shall be made available within the period specified by the Commission (x) for Form 10-K in the case of the last fiscal quarter of the Company’s fiscal year, and (y) for Form 10-Q in the case of the first three fiscal quarters of the Company’s fiscal year.

(f) The Company will file promptly all documents required to be filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act.

(g) The Company will furnish to the Agents without charge copies of the Prospectus and all amendments and supplements thereto, in each case as soon as available and in such quantities as are reasonably requested.

(h) The Company will furnish such information, execute such instruments and take such actions as may be required to qualify the Securities for offering and sale under the laws of such jurisdictions as the Lead Agent may designate and will maintain such qualifications in effect so long as required for the sale of the Securities; provided, however, that the Company shall not be required to qualify to do business in any jurisdiction where it is not now so qualified or to take any action which would subject it to general or unlimited service of process in any jurisdiction where it is not now so subject.

(a) The Lead Agent has notified each Agent that, other than registering the Securities under the Securities Act, no action has been or will be taken by the Company that would permit the offer or sale of the Securities or possession or distribution of the Prospectus or any other offering material relating to the Securities in any jurisdiction where action for that purpose is required. Accordingly, each Agent agrees that it will comply in all material respects with all applicable laws, rules and regulations of all jurisdictions and regulatory bodies governing the use and distribution of prospectuses. Each Agent agrees that it will comply in all material respects with all applicable provisions of the Securities Act, provisions of the Rules and Regulations, provisions of the Exchange Act, provisions of the rules and regulations promulgated thereunder and regulations of self-regulatory bodies (including as to investor suitability)) and it

will obtain any requisite consent, approval or permission (other than those obtained by the Company pursuant to Section 4(h)) for the purchase, offer or sale by such Agent of Securities under the laws and regulations in force in any such jurisdiction to which it is subject or in which it makes such purchase, offer or sale. None of the Company, the Lead Agent or any other Agent shall have any responsibility for determining what compliance is necessary by any one Agent or for obtaining any consents, approvals or permissions applicable to such one Agent. Each Agent further agrees that it will take no action that will impose any obligations additional to those expressly stated in this Agreement on the Company, the Lead Agent or any other Agents. Subject to the above, each Agent shall, if required by applicable law, furnish to each person to whom it offers, sells or delivers Securities a copy of the Prospectus, as then amended or supplemented, or, unless delivery of the Prospectus is required by applicable law, inform each such person that a copy thereof, as then amended or supplemented, will be made available upon request. Each Agent understands and agrees that it is not authorized to give any information or to make any representation not contained in the Prospectus or the documents incorporated by reference or specifically referred to therein in connection with the offer and sale of the Securities.

(b) Each Agent agrees not to stabilize or engage in any syndicate covering transaction (as defined in Rule 100 of Regulation M under the Exchange Act) in connection with the offering of the Securities without the prior consent of the Lead Agent.

(c) Each Agent understands and agrees that nothing contained in this Agreement shall constitute a partnership with the Lead Agent or with the other Agents and the obligations of such Agent and each of the other Agents are several and not joint. Each Agent elects to be excluded from the application of Subchapter K, Chapter 1, Subtitle A, of the United States Internal Revenue Code of 1986, as amended. Each Agent authorizes the Lead Agent, on behalf of such Agent, to execute such evidence of such election as may be required by the United States Internal Revenue Service.

(a) No order suspending the effectiveness of the Registration Statement or suspending the qualification of the Indenture shall be in effect and no proceedings for such purpose shall be pending before or threatened by the Commission, and any requests for additional information on the part of the Commission (to be included in the Registration Statement or the Prospectus or otherwise) shall have been complied with to the reasonable satisfaction of the Lead Agent.

(b) At the Closing Date, the Company shall have furnished to the Agents the opinion of the Chief Legal Officer, General Counsel or an Associate General Counsel of the Company, addressed to the Agents and dated the Closing Date, to the effect that:

(c) At the Closing Date, the Agents shall have received from counsel to the Agents such opinion or opinions, dated the Closing Date, with respect to the issuance and sale of the Securities, the Registration Statement, the Prospectus and other related matters as the Agents may reasonably require, and the Company shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.

(d) The Company shall have furnished to the Agents a certificate of its Chief Executive Officer, President, Chief Operating Officer, Chief Administrative Officer, any

Executive Vice President, Senior Vice President or Vice President, and its Chief Financial Officer, its Treasurer, its Financial Controller or its Global Head of Asset Liability Management (or other officer performing substantially the same function), dated the day of the Closing Date, to the effect that the signers of such certificate have carefully examined the Registration Statement, the Prospectus and this Agreement, and that, to the best of their knowledge after due inquiry:

(e) At the Closing Date, a nationally recognized registered independent public accounting firm shall have furnished to the Agents a letter, dated the day of the Closing Date, confirming that they are independent auditors with respect to the Company within the meaning of the Securities Act and in form and substance satisfactory to the Agents, stating in effect that:

(f) Prior to the Closing Date, the Company shall have furnished to the Agents such further information, certificates and documents as the Agents or counsel to the Agents may reasonably request.

(a) Each acceptance by it of an offer for the purchase of Securities shall be deemed to be an affirmation that the representations and warranties of the Company contained in this Agreement are true and correct in all material respects at the time of such acceptance and an undertaking that such representations and warranties will be true and correct in all material respects at the time of delivery to the Lead Agent of the Securities relating to such acceptance as though made at and as of each such time (and it is understood that such representations and warranties shall relate to the Registration Statement and the Prospectus as amended or supplemented to each such time).

(b) During each Marketing Period, each time that the Registration Statement or the Prospectus shall be amended or supplemented or because the Company shall file with the Commission any document incorporated by reference into the Prospectus (other than by filing with the Commission: (i) information furnished to the Commission in a Current Report on Form 8-K pursuant to Item 7.01 of Form 8-K (or any successor item thereto), (ii) an exhibit to the Registration Statement or Prospectus that does not relate to the Securities, (iii) a prospectus supplement not relating to the Securities or an amendment or supplement providing solely for a change in the interest rates, redemption provisions, amortization schedule or maturities of the Securities or a change in the principal amount of Securities remaining to be sold or other information contemplated by the Prospectus to be filed in a Pricing Supplement, (iv)or any other change that the Lead Agent reasonably deems immaterial), the Company shall (i) within two (2) business days after such amendment, supplement or filing or (ii) if such amendment, supplement or filing was not filed during a Marketing Period, within two (2) business days after the first day of the next succeeding Marketing Period, furnish the Agents with a certificate of the Chairman of the Board, any Vice Chairman, the Chief Executive Officer, any Executive Vice President or any Vice President and the Treasurer, Chief Financial Officer, Senior Vice President and Director of Global Asset and Liability Management of the Company in form satisfactory to the Lead Agent to the effect that the statements contained in the certificate referred to in Section 7(d) hereof which was last furnished to the Agents are true and correct at the time of such amendment or supplement or filing, as the case may be, as though made at and as of such time (except that such statements shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to such time) or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in said Section 7(d), modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of delivery of such certificate. If requested by the Lead Agent on behalf of the Agents, in its sole discretion, pursuant to Section 3(a) of this Agreement in connection with the purchase of Securities from the Company by the Lead Agent as principal, the Company shall deliver to the Agents on the Settlement Date a certificate of the type described in the previous sentence.

(c) During each Marketing Period, each time that the Registration Statement or the Prospectus shall be amended or supplemented or because the Company shall file with the Commission any document incorporated by reference into the Prospectus (other than by filing with the Commission (i) information furnished to the Commission in a Current Report on Form 8-K pursuant to Item 7.01 of Form 8-K (or any successor item thereto), (ii) an exhibit to the Registration Statement or Prospectus that does not relate to the Securities, (iii) an amendment or

supplement to or document incorporated by reference in the Registration Statement or Prospectus setting forth only financial statements or other financial information (including any press release announcing earnings), (iv) a prospectus supplement not relating to the Securities or an amendment or supplement providing solely for a change in interest rates, redemption provisions, amortization schedule or maturities of the Securities or a change in the principal amount of Securities remaining to be sold or other information contemplated by the Prospectus to be filed in a Pricing Supplement or (v) similar changes, or any other change that the Lead Agent reasonably deems immaterial), the Company shall furnish the Agents (i) within two (2) business days after such amendment, supplement or filing or (ii) if such amendment, supplement or filing was not filed during a Marketing Period, within two (2) business days after the first day of the next succeeding Marketing Period, with the written opinion of an Associate General Counsel to the Company, addressed to the Agents and dated the date of delivery of such opinion, in form satisfactory to the Lead Agent, of the same tenor as the opinion referred to in Section 7(b) hereof, but modified, as necessary, to relate to the Registration Statement and the Prospectus as amended or supplemented to the time of delivery of such opinion; provided, however, that in lieu of such opinion, such counsel may furnish the Agents with a letter to the effect that the Agents may rely on a prior opinion delivered under Section 7(b) or this Section 8(c) to the same extent as if it were dated the date of such letter authorizing reliance (except that statements in such prior opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented to the time of delivery of such letter authorizing reliance). If requested by the Lead Agent on behalf of the Agents, in its sole discretion, pursuant to Section 3(a) of this Agreement in connection with the purchase of Securities from the Company by the Lead Agent as principal, the Company shall deliver to the Agents on the Settlement Date an opinion of counsel of the type described in the previous sentence.

(d) During each Marketing Period, each time that the Registration Statement or the Prospectus shall be amended or supplemented to include additional financial information or the Company files with the Commission any document incorporated by reference into the Prospectus which contains additional financial information (other than information that the Lead Agent reasonably deems immaterial), the Company shall cause the Company’s auditors to furnish the Agents (i) within two (2) business days after such amendment, supplement or filing or (ii) if such amendment, supplement or filing was not filed during a Marketing Period, within two (2) business days after the first day of the next succeeding Marketing Period, a letter, addressed to the Agents and dated the date of delivery of such letter, in form and substance satisfactory to the Lead Agent, of the same tenor as the letter referred to in Section 7(e) hereof but modified to relate to the Registration Statement and Prospectus, as amended and supplemented to the date of such letter, with such changes as may be necessary to reflect changes in the financial statements and other information derived from the accounting records of the Company; provided, however, that if the Registration Statement or the Prospectus is amended or supplemented solely to include financial information as of and for a fiscal quarter, the Company’s auditor may limit the scope of such letter to the unaudited financial statements included in such amendment or supplement unless there is contained therein any other accounting, financial or statistical information that, in the Lead Agent’s reasonable judgment, should be covered by such letter, in which event such letter shall also cover such other information. If requested by the Lead Agent on behalf of the Agents, in its sole discretion, pursuant to Section 3(a) of this Agreement in connection with the purchase of Securities from the

Company by the Lead Agent as principal, the Company shall deliver to the Agents on the Settlement Date a letter of the type described in the previous sentence.

(b) Each Agent severally agrees to indemnify and hold harmless the Company, its officers, employees, each of its directors, and each person, if any, who controls the Company within the meaning of the Securities Act, from and against any loss, claim, damage or liability, joint or several, or any action or pending action in respect thereof, to which the Company or any such director, officer or controlling person may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability, action or pending action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or the Prospectus or in any amendment or supplement thereto, or (ii) the omission or alleged omission to state therein any material fact required to be stated therein or necessary to make the statements therein not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information concerning any Agent furnished to

the Company by or on behalf of such indemnifying Agent through the Lead Agent specifically for inclusion therein, and shall reimburse the Company and any such director, officer or controlling person for any legal or other expenses reasonably incurred by the Company or any such director, officer or controlling person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability, action or pending action as such expenses are incurred. The foregoing indemnity agreement is in addition to any liability that such Agent may otherwise have to the Company or any such director, officer, employee or controlling person.

(c) Promptly after receipt by an indemnified party under this Section 9 of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under this Section 9, notify the indemnifying party in writing of the claim or the commencement of that action; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section 9 except to the extent it has been materially prejudiced by such failure and, provided further, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section 9. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel satisfactory to such indemnified party; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and either (i) the indemnifying party or parties and the indemnified party or parties mutually agree or (ii) representation of both the indemnifying party or parties and the indemnified party or parties by the same counsel is inappropriate under applicable standards of professional conduct due to actual or potential differing interests between them, the indemnified party or parties shall have the right to select separate counsel to assume such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party or parties. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section 9 for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof unless (i) the indemnified party shall have employed counsel in connection with the assumption of legal defenses in accordance with the proviso to the next preceding sentence (it being understood, however, that the indemnifying party shall not be liable for the expenses of more than one separate counsel, approved by the Agents in the case of subparagraph (a) representing the indemnified parties under subparagraph (a), as the case may be, who are parties to such action), (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of commencement of the action or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. No indemnifying party shall (i) without the prior written consent of the indemnified parties (which consent shall not be unreasonably withheld), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding,

or (ii) be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with the consent of the indemnifying party or if there be a final judgment of the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment.

(d) If the indemnification provided for in this Section 9 shall for any reason be unavailable to or insufficient to hold harmless an indemnified party under Section 9(a) or 9(b) in respect of any loss, claim, damage or liability, or any action or pending action in respect thereof, referred to therein, then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, action or pending action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and one or more Agents on the other from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and one or more Agents on the other with respect to the statements or omissions that resulted in such loss, claim, damage or liability, action or pending action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and one or more Agents on the other with respect to such offering shall be deemed to be in the same proportion as the total net proceeds from the offering of the Securities purchased under this Agreement (before deducting expenses) received by the Company, on the one hand, and the portion represented by the percentage that the underwriting discounts and commissions received by the Agent with respect to the Securities purchased under this Agreement, on the other hand, bear to the total gross proceeds from the offering of the Securities under this Agreement, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or one or more Agents, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Agents agree that it would not be just and equitable if contributions pursuant to this Section were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section shall be deemed to include, for purposes of this Section 9(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 9(d), no Agent shall be required to contribute any amount in excess of the amount by which the total price at which the Securities purchased by it exceeds the amount of any damages which the Agent has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

(b) Any Terms Agreement executed pursuant to Section 3(a) of this Agreement shall be subject to termination in the absolute discretion of the Lead Agent and upon the request of an Agent, after consultation with the Lead Agent and the Company, with respect to any Securities being purchased by such Agent, by notice given to the Company at or prior to delivery of and payment for all the Securities, if, prior to such time: (i) any order suspending the effectiveness of the Registration Statement or suspending the qualification of the Indenture shall be in effect or any proceedings for such purpose shall be pending before or threatened by the Commission, (ii) there shall have occurred a downgrading in the rating accorded the Company’s debt securities by any “nationally recognized statistical rating organization”, as that term is defined by the Commission for purposes of Rule 436(g)(2) of the Rules and Regulations, (iii) any new restriction materially affecting the distribution of the Securities shall have become effective, (iv) trading in securities generally on the New York Stock Exchange or the American Stock Exchange or in the over-the-counter market, or trading in any securities of the Company on any exchange or in the over-the-counter market, 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 such market by the Commission, by such exchange or by any other regulatory body or governmental authority having jurisdiction, (v) a banking moratorium shall have been declared by Federal or state authorities, (vi) the United States shall have become engaged in hostilities, there shall have been an escalation in hostilities involving the United States or there shall have been a declaration of a national emergency or war by the United States or (vii) there shall have occurred such a material adverse change in general economic, political or financial conditions, including without limitation as a result of terrorist activities after the date of such Terms Agreement hereof, or the effect of international conditions on the financial markets in the United States shall be such as to make it, in the judgment of the Lead Agent, impracticable or inadvisable to proceed with the public offering or delivery of the Securities. The provisions of Sections 4(d), 4(g), 6, 9, 10, 13 and 14 hereof shall survive any termination of the Terms Agreement and this Agreement.

(c) For the avoidance of doubt, in the event of termination of this Agreement or any Terms Agreement with respect to any Agent, such Agent shall not receive any compensation except in connection with a purchase by it of Securities actually consummated, provided that the foregoing shall in no way limit the provisions of Section 9, and that reimbursement by the Company to an Agent of out-of-pocket accountable expenses actually incurred by such Agent and to which such Agent is otherwise entitled as provided herein shall not be prohibited.

(a) With respect to an Interest Determination Date, LIBOR will be, as specified on the face hereof, either (i) the arithmetic mean of the offered rates for deposits in U.S. dollars or the applicable Foreign Currency specified on the face hereof for the period (commencing on the Interest Reset Date) of the applicable Index Maturity which appears on the display designated as page “LIBO” on the Reuters Monitor Money Rates Service, or any successor service or page for the purpose of displaying London interbank offered rates of major banks (the “Reuters Screen LIBO Page”), at approximately 11:00 A.M., London time, on such Interest Determination Date, if at least two such offered rates appear on the Reuters Screen LIBO Page (“LIBOR Reuters”) (unless Reuters Screen LIBO Page by its terms provides only for a single rate, in which case such single rate shall be used), or (ii) the offered rate for deposits in U.S. dollars or the applicable Foreign Currency specified on the face hereof for the period (commencing on the Interest Reset Date) of the applicable Index Maturity which appears on Telerate Page 3750 (as defined below), as applicable, at approximately 11:00 A.M., London time, on such Interest Determination Date (“LIBOR Telerate”). If neither LIBOR Reuters nor LIBOR Telerate is specified on the face hereof, LIBOR will be determined as if LIBOR Telerate had been specified.

(b) With respect to an Interest Determination Date on which no rate appears on the Reuters Screen LIBO Page or the Telerate Page 3750, as applicable, as specified in (a)(i) or (a)(ii) above, as applicable, the Calculation Agent will request the principal London office of each of four major banks in the London interbank market, as selected by the Calculation Agent after consultation with the Company, to provide the Calculation Agent with its offered quotation for deposits in the applicable currency for the period (commencing on the Interest Reset Date) of the applicable Index Maturity to prime banks in the London interbank market at approximately 11:00 A.M., London time, on such Interest Determination Date in a principal amount that is representative of a single transaction in such market at such Interest Determination Date. If two or more quotations are provided on such Interest Denomination Date, LIBOR in respect of such Interest Determination Date will be the arithmetic mean of such quotations. If fewer than two such quotations are provided, LIBOR in respect of such Interest Determination Date will be the arithmetic mean of the rates quoted on such Interest Determination Date by three leading European banks selected by the Calculation Agent after consultation with the Company for loans in the applicable currency to leading European banks, for the period (commencing on the Interest Reset Date) of the applicable Index Maturity in a principal amount that is representative of a

single transaction in such market at such time, provided, however, that if the European banks selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, LIBOR for the applicable period will be LIBOR as in effect on such Interest Determination Date. If there was no LIBOR Rate in effect on such Interest Determination Date, the LIBOR Rate will be the initial interest rate. If the specified index currency on such Interest Determination Date is the U.S. dollar, the applicable principal financial center will be New York City and the approximate time for which quotes for loans in U.S. dollars would be requested from New York City banks will be 3:00 p.m., New York City time.

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

(i) The Company has been duly incorporated and is validly existing and in good standing as a corporation under the law of the jurisdiction of its incorporation and has full corporate power to conduct the businesses in which it is engaged as described in the Prospectus. Each of the Significant Subsidiaries that is incorporated under the laws of the United States or any State or territory thereof (a “Domestic Significant Subsidiary”) is a duly incorporated and validly existing corporation in good standing under the law of its jurisdiction of incorporation, and has full corporate power and authority to conduct its business as described in the Prospectus. Each of the Company and the Domestic Significant Subsidiaries is duly qualified to do business as a foreign corporation, is in good standing in its jurisdiction of incorporation and is duly registered as a broker-dealer,

broker, dealer or investment advisor, as the case may be, in each jurisdiction in which the nature of the business conducted by it or in which the ownership or holding by lease of the properties owned or held by it requires such qualification or registration and where the failure to so qualify or register would have a Material Adverse Effect.

(ii) All the outstanding shares of capital stock of the Domestic Significant Subsidiaries have been duly authorized and are validly issued and outstanding and are fully paid and non-assessable and, except for directors’ qualifying shares, are owned by the Company or a subsidiary of the Company free and clear of any claims, liens, encumbrances and security interests.

(iii) The Securities and the Indenture conform in all material respects to the descriptions thereof contained in the Prospectus.

(iv) The Indenture has been duly authorized, executed and delivered by the Company, has been duly qualified under the Trust Indenture Act and constitutes a valid and legally binding instrument enforceable against the Company in accordance with its terms; and the Securities have been duly authorized, executed and issued by the Company, and, when executed and authenticated as specified in the Indenture and delivered against payment therefor in accordance with this Agreement, will constitute valid and legally binding obligations of the Company entitled to the benefits of the Indenture, provided, however, that the foregoing is subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally from time to time in effect, to general equitable principles (whether considered in a proceeding at law or in equity) and to an implied covenant of good faith and fair dealing).

(v) No consent, approval, authorization, order, registration or qualification of any court or governmental agency or body is required for the consummation of the transactions contemplated in this Agreement, except for (1) such consents, approvals, authorizations, orders registrations or qualifications as have been obtained under the Securities Act and such as may be required under the Exchange Act, under state securities laws and Blue Sky laws of any jurisdiction, and (2) the qualification of the Indenture under the Trust Indenture Act, which has been obtained.

(vi) Such counsel does not know of any contracts or other documents that are required to be filed as exhibits to the Registration Statement by the Securities Act or by the Rules and Regulations which have not been filed as exhibits to the Registration Statement or incorporated therein by reference as permitted by the Rules and Regulations.

(vii) Such counsel does not know of any litigation or any governmental proceeding pending or threatened against the Company or any of its subsidiaries which would affect the subject matter of this Agreement or is required to be disclosed in the Prospectus which is not disclosed and correctly summarized (by incorporation by reference or otherwise) therein.

(viii) To such counsel’s knowledge, neither the Company nor any of the Domestic Significant Subsidiaries is in violation of its corporate charter or by-laws, nor in default under any material agreement, indenture or instrument known to such counsel, the effect of which violation or default would be material to the Company and its subsidiaries taken as a whole.

(ix) This Agreement has been duly authorized, executed and delivered by the Company; the execution, delivery and performance of this Agreement by the Company will not conflict with, or result in the creation or imposition of any material lien, charge or encumbrance upon any of the assets of the Company or the Domestic Significant Subsidiaries pursuant to the terms of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument known to such counsel and to which the Company or the Domestic Significant Subsidiaries is a party or bound, or result in a violation of the corporate charter or by-laws of the Company or the Domestic Significant Subsidiaries or any statute, rule, regulation or any order known to such counsel of any court or governmental agency having jurisdiction over the Company, the Domestic Significant Subsidiaries or any of their respective properties, the effect of which conflict, default or violation would be material to the Company and its subsidiaries taken as a whole;

(x) The Registration Statement has become effective under the Securities Act, and, to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been instituted or threatened by the Commission.

(xi) The Registration Statement and the Prospectus (except that no opinion need be expressed as to the financial statements and notes thereto or the schedules or other financial or statistical data or the Form T-1 included or incorporated by reference therein), comply as to form in all material respects with the requirements of the Securities Act and the Rules and Regulations.

(i) The representations and warranties of the Company in this Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date.

(ii) No stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or threatened.

(iii) (i) the Registration Statement does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Prospectus does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (iii) since the effective date of the Registration Statement there has not occurred any event required to be set forth in an amended or supplemented Prospectus which has not been so set forth.

(i) In their opinion, the consolidated financial statements of the Company and its subsidiaries, and the supporting schedules, included in the Registration Statement and the Prospectus and audited by them comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Exchange Act and the related published rules and regulations thereunder.

(ii) On the basis of a reading of the unaudited consolidated financial statements of the Company and its subsidiaries, if any, included in the Registration Statement and the Prospectus and of the latest unaudited consolidated financial statements made available by the Company and Lehman Brothers Inc., carrying out certain specified procedures (but not an audit in accordance with generally accepted auditing standards), a reading of the minutes of the meetings of the directors of the Company and Lehman Brothers Inc., and inquiries of certain officials of the Company who have responsibility for financial and accounting matters of the Company and its subsidiaries, as to transactions and events subsequent to the date of the most recent audited consolidated financial statements included in the Registration Statement and the Prospectus, nothing came to their attention that caused them to believe that:

(iii) If pro forma financial statements are included in the Registration Statement or the Prospectus, (x) they have read such pro forma financial statements, (y) they have made inquiries of certain officials of the Company who have responsibility for financial and accounting matters of the Company as to the basis for their determination of the pro forma adjustments and whether such pro forma financial statements comply as to form in all material respects with the applicable accounting requirements of Rule 11-02 of Regulation S-X and (z) they have proved the arithmetic accuracy of the application of the pro forma adjustments to the historical amounts; and as a result thereof, nothing came to their attention that caused them to believe that such pro forma financial statements do not so comply with Rule 11-02 of Regulation S-X and that such pro forma adjustments have not been properly applied to the historical amounts in the compilation of those statements.

(iv) They have performed certain other specified procedures as a result of which they determined that certain information of an accounting, financial or statistical nature (which is expressed in dollars, or percentages derived from dollar amounts, and has been obtained from the general accounting records of the Company) set forth in the Registration Statement, as amended, and the Prospectus, as amended or supplemented, and in Exhibit 12 to the Registration Statement, including specified information, if any, included or incorporated from the Company’s Annual Report on Form 10-K incorporated therein or specified information, if any, included or incorporated from any of the Company’s Quarterly Reports on Form 10-Q or its Current Reports on Form 8-K incorporated therein, agrees with the accounting records of the Company and its subsidiaries or computations made therefrom, excluding any questions of legal interpretation.

i) Each Agent agrees that any Dealer it may engage will agree that (i) such Dealer is either (a) a member in good standing of the National Association of Securities Dealers, Inc. (the “NASD”) or (b) a foreign dealer foreign dealer not eligible for membership in the NASD and (ii) (a) if such Dealer is a member of the NASD, such Dealer will comply with the requirements of NASD Conduct Rule 2740 and Interpretive Material-2740 of the Conduct Rules of the NASD, and such Dealer will not grant any concessions, discounts or other allowances which are not permitted by that section or (b) if such Dealer is a foreign dealer not eligible for membership in the NASD, such Dealer will not make any sales of the Securities in, or to nationals or residents of, the United States, its territories or its possessions, and that in making any sales of the Securities such Dealer will comply, as though it is a member of the NASD, with (A) the requirements of the NASD Conduct Rule 2730 and Interpretive Material-2730, NASD Conduct Rule 2750 and Interpretive Material-2750, and NASD Conduct Rule 2420 and Interpretive Material 2420-1 and (B) to the extent applicable to such Dealer, the requirements of the NASD Conduct Rule 2420 and Interpretive Material 2420-1;

ii) Each Agent agrees that any Dealer it may engage will agree to comply with the duties and obligations of the Agents set forth in Sections 5(a) and 5(b) as if applicable to such Dealer; and

iii) Each Agent agrees that any Dealer it may engage will agree that (i) such Dealer will offer the Securities to the public at the Offering Price and (ii) such Dealer will not reallow a discount on sales to other dealers in an amount in excess of the reallowance set forth in the applicable Pricing Supplement, if any (the “Reallowance”).

i) The Company has been duly incorporated and is validly existing and in good standing as a corporation under the law of the jurisdiction of its incorporation and has full corporate power to conduct the businesses in which it is engaged as described in the Prospectus. Each of the Significant Subsidiaries that is incorporated under the laws of the United States or any State or territory thereof (a “Domestic Significant Subsidiary”) is a duly incorporated and validly existing corporation in good standing under the law of its jurisdiction of incorporation, and has full corporate power and authority to own and operate its properties and conduct its business as described in the Prospectus. Each of the Company and the Domestic Significant Subsidiaries is duly qualified to do business as a foreign corporation, is in good standing in its jurisdiction of incorporation and is duly registered as a broker-dealer, broker, dealer or investment advisor, as the case may be, in each jurisdiction in which the nature of the business conducted by it or in which the ownership or holding by lease of the properties owned or held by it requires such qualification or registration and where the failure to so qualify or register would have a Material Adverse Effect.

ii) All the outstanding shares of capital stock of the Domestic Significant Subsidiaries have been duly authorized and are validly issued and outstanding and are fully paid and non-assessable and, except for directors’ qualifying shares, are owned by the Company or a subsidiary of the Company free and clear of any claims, liens, encumbrances and security interests.

iii) The Securities and the Indenture conform in all material respects to the descriptions thereof contained in the Prospectus.

iv) The Indenture has been duly authorized, executed and delivered by the Company, has been duly qualified under the Trust Indenture Act, and

constitutes a valid and legally binding instrument enforceable against the Company in accordance with its terms; and the Securities have been duly authorized, executed and issued by the Company, and, when executed and authenticated as specified in the Indenture and delivered against payment therefor in accordance with this Agreement, will constitute valid and legally binding obligations of the Company entitled to the benefits of the Indenture; provided, however, that the foregoing is subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, from time to time in effect, to general equitable principles (whether considered in a proceeding at law or in equity) and by an implied covenant of good faith and fair dealing.

v) No consent, approval, authorization, order, registration or qualification of any court or governmental agency or body is required for the consummation of the transactions contemplated in this Agreement, except for (1) such consents, approvals, authorizations, registrations or qualifications orders as have been obtained under the Securities Act and such as may be required under the Exchange Act, under state securities and Blue Sky laws of any jurisdiction, and (2) the qualification of the Indenture under the Trust Indenture Act, which has been obtained.

vi) Such counsel does not know of any contracts or other documents which are required to be filed as exhibits to the Registration Statement by the Securities Act or by the Rules and Regulations which have not been filed as exhibits to the Registration Statement or incorporated therein by reference as permitted by the Rules and Regulations.

vii) Such counsel does not know of any litigation or any governmental proceeding pending or threatened against the Company or any of its subsidiaries which would affect the subject matter of this Agreement or is required to be disclosed in the Prospectus which is not disclosed and correctly summarized (by incorporation by reference or otherwise) therein.

viii) To such counsel’s knowledge, neither the Company nor any of the Domestic Significant Subsidiaries is in violation of its corporate charter or by-laws, nor in default under any material agreement, indenture or instrument known to such counsel, the effect of which violation or default would be material to the Company and its subsidiaries taken as a whole.

ix) This Agreement has been duly authorized, executed and delivered by the Company; the execution, delivery and performance of this Agreement by the Company will not conflict with, or result in the creation or imposition of the material lien, charge or encumbrance upon any of the assets of the Company or the Domestic Significant Subsidiaries pursuant to the terms of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or instrument known to such counsel and to which the Company or the Domestic Significant Subsidiaries is a party or bound, or result in a violation of the

corporate charter or by-laws of the Company or the Domestic Significant Subsidiaries or any statute, rule, regulation or any order known to such counsel of any court or governmental agency having jurisdiction over the Company, the Domestic Significant Subsidiaries or any of their respective properties, the effect of which conflict, default or violation would be material to the Company and its subsidiaries taken as a whole;

x) The Registration Statement has become effective under the Securities Act, and, to the best knowledge of such counsel, no stop order suspending the effectiveness of the Registration Statement has been issued and no proceeding for that purpose has been instituted or threatened by the Commission.

xi) The Registration Statement and the Prospectus (except that no opinion need be expressed as to the financial statements and notes thereto or the schedules or other financial or statistical data or the Form T-1 included or incorporated by reference therein), comply as to form in all material respects with the requirements of the Securities Act and the Rules and Regulations.

i) The representations and warranties of the Company in this Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date.

ii) No stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or threatened.

iii) (i) the Registration Statement does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) the Prospectus does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (iii) since the effective date of the Registration Statement there has not occurred any event required to be set forth in an amended or supplemented Prospectus which has not been so set forth.

i) In their opinion, the consolidated financial statements of the Company and its subsidiaries, and the supporting schedules, included in the Registration Statement and the Prospectus and audited by them comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the Exchange Act and the related published rules and regulations thereunder.

ii) On the basis of a reading of the unaudited consolidated financial statements of the Company and its subsidiaries, if any, included in the Registration Statement and the Prospectus and of the latest unaudited consolidated financial statements made available by the Company and Lehman Brothers Inc., carrying out certain specified procedures (but not an audit in accordance with generally accepted auditing standards), a reading of the minutes of the meetings of the directors of the Company and Lehman Brothers Inc., and inquiries of certain officials of the Company and its subsidiaries, who have responsibility for

financial and accounting matters of the Company and its subsidiaries, as to transactions and events subsequent to the date of the most recent audited consolidated financial statements included in the Registration Statement and the Prospectus, nothing came to their attention that caused them to believe that:

iii) If pro forma financial statements are included in the Registration Statement or the Prospectus, (x) they have read such pro forma financial statements, (y) they have made inquiries of certain officials of the Company who have responsibility for financial and accounting matters of the Company as to the basis for their determination of the pro forma adjustments and whether such pro forma financial statements comply as to form in all material respects with the applicable accounting requirements of Rule 11-02 of Regulation S-X and (z) they have proved the arithmetic accuracy of the application of the pro forma adjustments to the historical amounts; and as a result thereof, nothing came to their attention that caused them to believe that such pro forma financial statements do not so comply with Rule 11-02 of Regulation S-X and that such pro forma adjustments have not been properly applied to the historical amounts in the compilation of those statements.

iv) They have performed certain other specified procedures as a result of which they determined that certain information of an accounting, financial or statistical nature (which is expressed in dollars, or percentages derived from dollar amounts, and has been obtained from the general accounting records of the Company) set forth in the Registration Statement, as amended, and the Prospectus, as amended or supplemented, and in Exhibit 12 to the Registration Statement, including specified information, if any, included or incorporated from the Company’s Annual Report on Form 10-K incorporated therein or specified information, if any, included or incorporated from any of the Company’s Quarterly Reports on Form 10-Q or its Current Reports on Form 8-K incorporated therein, agrees with the accounting records of the Company and its subsidiaries or computations made therefrom, excluding any questions of legal interpretation.

(1) (a) In the case of a Settlement Value Security, a material suspension of, or limitation imposed on trading relating to, such Settlement Value Security, or (b) in the case of a Relevant Index, a suspension of, or limitation imposed on trading relating to, the securities that then comprise 20% or more of such Relevant Index, in each case, by the Relevant Exchange for each such security, at any time during the one-hour period that ends at the Close of Trading on such day, whether by reason of movements in price exceeding limits permitted by that Relevant Exchange or otherwise. Limitations on trading during significant market fluctuations imposed pursuant to NYSE Rule 80B or any applicable rule or regulation enacted or promulgated by the NYSE, any other exchange, quotation system or market, any other self regulatory organization or the Securities and Exchange Commission of similar scope or as a replacement for Rule 80B may be considered material.

(2) A material suspension of, or limitation imposed on, trading in futures or options contracts relating to such Settlement Value Security or to such Relevant Index, as the case may be, by the primary exchange or quotation system on which those futures or options contracts are traded, at any time during the one-hour period that ends at the Close of Trading on such day, whether by reason of movements in price exceeding limits permitted by that primary exchange or quotation system or otherwise.

(3) Any event, other than an early closure, that disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for, (a) in the case of a Settlement Value Security, that Settlement Value Security, or (b) in the case of a Relevant Index, the securities that then comprise 20% or more of such Relevant Index, in each case on the Relevant Exchanges for that Settlement Value Security or those securities, or in the case of a Settlement Value Security or a security not listed or quoted in the United States, on the primary exchange, quotation system or market for such Settlement Value Security or security, at any time during the one hour period that ends at the Close of Trading on such day.

(4) Any event, other than an early closure, that disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for, the futures or options contracts relating to such Settlement Value Security or to such Relevant Index, as the case may be, on the primary exchange or quotation system on which those futures or options contracts are traded at any time during the one hour period that ends at the Close of Trading on such day.

(5) The closure of, (a) in the case of a Settlement Value Security, the Relevant Exchange for that Settlement Value Security or the primary exchange or quotation system on which futures or options contracts relating to that Settlement Value Security are traded, or (b) in the case of a Relevant Index, the Relevant Exchanges for securities that then comprise 20% or more of such Relevant Index or the primary exchange or quotation system on which futures or options contracts relating to such Relevant Index is traded, in each case, prior to its scheduled closing time unless the earlier closing time is announced by the primary exchange or quotation system at least one hour prior to the earlier of (i) the actual closing time for the regular trading session on the exchanges or quotation system and (ii) the submission deadline for orders to be entered into the exchanges or quotation system for execution at the Close of Trading on such day.

(1) A material suspension of, or limitation imposed on trading relating to, such Settlement Value Security by the Relevant Exchange for the security, at any time during the one-hour period that ends at the Close of Trading on such day, whether by reason of movements in price exceeding limits permitted by that Relevant Exchange or otherwise. Limitations on trading during significant market fluctuations imposed pursuant to NYSE Rule 80B or any applicable rule or regulation enacted or promulgated by the NYSE, any other exchange, quotation system or market, any other self regulatory organization or the Securities and Exchange Commission of similar scope or as a replacement for Rule 80B may be considered material.

(2) A material suspension of, or limitation imposed on, trading in futures or options contracts relating to such Settlement Value Security by the primary exchange or quotation system on which those futures or options contracts are traded, at any time during the one-hour period that ends at the Close of Trading on such day, whether by reason of movements in price exceeding limits permitted by that primary exchange or quotation system or otherwise.

(3) Any event, other than an early closure, that disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for that Settlement Value Security on the Relevant Exchange for that Settlement Value Security, or in the case of a Settlement Value Security not listed or quoted in the United States, on the primary exchange, quotation system or market for such Settlement Value Security, at any time during the one hour period that ends at the Close of Trading on such day.

(4) Any event, other than an early closure, that disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for, the futures or options contracts relating to such Settlement Value Security on the primary exchange or quotation system on which those futures or options contracts are traded at any time during the one hour period that ends at the Close of Trading on such day.

(5) The closure of the Relevant Exchange on which that Settlement Value Security is traded or the primary exchange or quotation system on which futures or options contracts relating to that Settlement Value Security are traded prior to its scheduled closing time unless the earlier closing time is announced by the primary exchange or quotation system at least one hour prior to the earlier of (i) the actual closing time for the regular trading session on the exchanges or quotation system and (ii) the submission deadline for orders to be entered into the exchanges or quotation system for execution at the Close of Trading on such day.

(A) any material modifications should be made to the unaudited consolidated financial statements of the Company and its subsidiaries, if any, included in the Registration Statement and the Prospectus, for them to be in conformity with generally accepted accounting principles; and such financial statements do not comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the published instructions, rules and regulations thereunder.

(B) the unaudited capsule information of the Company and its subsidiaries, if any, included in the Registration Statement and the Prospectus does not agree with the amounts set forth in the unaudited consolidated financial statements of the Company from which it was derived or was not determined on a basis substantially consistent with that of the corresponding financial information in the latest audited financial statements of the Company included in the Registration Statement and the Prospectus.

(C) (I) as of the latest date as of which the Company and its subsidiaries have monthly financial statements, as compared to amounts shown in the most recent consolidated financial statements of the Company and its subsidiaries included in the Registration Statement and the Prospectus, there was any change in the capital stock (other than issuances of common stock upon the exercise of options or employee awards and the repurchase of common stock in the ordinary course of business to provide for common stock to be issued pursuant to the exercise of options or employee awards), or increase in long-term indebtedness, or decrease in net assets or stockholders’ equity of the Company and its subsidiaries and (II) from the the date of the most recent consolidated financial statements of the Company and its subsidiaries included in the Registration Statement and Prospectus to the latest date as of which the Company and its subsidiaries have monthly financial statements, there was any consolidated loss from operations before taxes or consolidated net loss of the Company and its subsidiaries.

(D) as of a specified date no more than three business days prior to the date of the letter, as compared to the date of the most recent consolidated financial statements of the Company and its subsidiaries included in the Registration Statement and Prospectus, there was any change in capital stock (other than issuances of

common stock upon the exercise of options or employee awards and the repurchase of common stock in the ordinary course of business to provide for common stock to be issued pursuant to the exercise of options or employee awards), or increase in long-term indebtedness, or decrease in net assets or stockholders’ equity of the Company and its subsidiaries; except in all instances for changes, increases or decreases set forth in such letter, in which case the letter shall be accompanied by an explanation by the Company as to the significance thereof, unless said explanation is not deemed necessary by the Agent.

(A) any material modifications should be made to the unaudited consolidated financial statements of the Company and its subsidiaries, if any, included in the Registration Statement and the Prospectus, for them to be in conformity with generally accepted accounting principles; and such financial statements do not comply as to form in all material respects with the applicable accounting requirements of the Securities Act and the published instructions, rules and regulations thereunder.

(B) the unaudited capsule information of the Company and its subsidiaries, if any, included in the Registration Statement and the Prospectus does not agree with the amounts set forth in the unaudited consolidated financial statements of the Company from which it was derived or was not determined on a basis substantially consistent with that of the corresponding financial information in the latest audited financial statements of the Company included in the Registration Statement and the Prospectus.

(C) (I) as of the latest date as of which the Company and its subsidiaries have monthly financial statements, as compared to amounts shown in the most recent consolidated financial statements of the Company and its subsidiaries included in the Registration Statement and the Prospectus, there was any change in the capital stock (other than issuances of common stock upon the exercise of options or employee awards and the repurchase of common stock in the ordinary course of business to provide for common stock to be issued pursuant to the exercise of options or employee awards), or increase in long-term indebtedness or decrease in net assets or stockholders’ equity of the Company and its subsidiaries and (II) from the latest date as of which the Company and its subsidiaries have monthly financial statements to the date of the most recent consolidated financial statements of the Company and its subsidiaries included in the Registration Statement and the Prospectus, there was any consolidated loss from operations before taxes or consolidated net loss of the Company and its subsidiaries;

(D) as of a specified date no more than three business days prior to the date of the letter as compared to the date of the most recent consolidated financial statements of the Company and its subsidiaries included in the Registration Statement and the Prospectus, (I) there was any change in capital stock (other than issuances of common stock upon the exercise of options or employee awards and the repurchase of common stock in the ordinary course of business to provide for common stock to be issued pursuant to the exercise of options or employee awards) or increase

in long-term indebtedness or decrease in net assets or stockholders’ equity of the Company and its subsidiaries;

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BmU+iEx8gk2hW+FpYUONsHSj4uFMTats4e1GXrLpNm+WfW/4HORsu+1M7Jz5AlNo jKtr7dXJOOhfEntvNLC6xQ== 0001104659-05-024479.txt : 20050519 0001104659-05-024479.hdr.sgml : 20050519 20050519141223 ACCESSION NUMBER: 0001104659-05-024479 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 15 CONFORMED PERIOD OF REPORT: 20050518 ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050519 DATE AS OF CHANGE: 20050519 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEHMAN BROTHERS HOLDINGS INC CENTRAL INDEX KEY: 0000806085 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 133216325 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09466 FILM NUMBER: 05844318 BUSINESS ADDRESS: STREET 1: LEHMAN BROTHERS STREET 2: 745 SEVENTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2125267000 MAIL ADDRESS: STREET 1: LEHMAN BROTHERS STREET 2: 745 SEVENTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: SHEARSON LEHMAN HUTTON HOLDINGS INC DATE OF NAME CHANGE: 19901017 8-K 1 a05-9645_18k.htm 8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

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 18, 2005

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)

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 9.01.		Financial Statements and Exhibits

	(c)	Exhibits

The following Exhibits are incorporated by reference into Registration Statement on Form S-3 No. 333-121067 as exhibits thereto and are filed as part of this Report.

1.01		Distribution Agreement, dated as of May 18, 2005, between Lehman Brothers Holdings Inc. (the “Corporation”) and Lehman Brothers Inc., as Agent, relating to the Corporation’s Medium-Term Notes, Series H (the “Series H Notes”)

1.02		Distribution Agreement, dated as of May 18, 2005, between the Corporation and Lehman Brothers Inc., as Lead Agent, and the other Agents named therein, relating to the Corporation’s Lehman Notes, Series B

4.01		Form of senior debt security—medium-term note (fixed rate)

4.02		Form of senior debt security—medium-term note (floating rate)

4.03		Form of senior debt security—medium-term note (Synthetic Convertible Securities)

4.04		Form of senior debt security—medium-term note (YEELDS^®)

4.05		Form of senior debt security—medium-term note (RANGERS^SM)

4.06		Form of senior debt security—medium-term note (RANGERS Plus^SM)

4.07		Form of senior debt security—Lehman Notes, Master Note

4.08		Calculation Agency Agreement, dated as of May 18, 2005, between the Corporation and Citibank, N.A., as Calculation Agent, relating to the Series H Notes

4.09		Calculation Agency Agreement, dated as of May 18, 2005, between the Corporation and Lehman Brothers Inc., as Calculation Agent, relating to notes, Performance Linked to the Value of a Common Stock, a Stock Index, a Basket of Common Stocks or a Basket of Stock Indices (“Synthetic Convertible Securities”)

4.10		Calculation Agency Agreement, dated as of May 18, 2005, between the Corporation and Lehman Brothers Inc., as Calculation Agent, relating to Yield Enhanced Equity Linked Debt Securities, Performance Linked to the Value of a Common Stock (“YEELDS^®”)

4.11		Calculation Agency Agreement, dated as of May 18, 2005, between the Corporation and Lehman Brothers Inc., as Calculation Agent, relating to Risk Adjusting Equity Range Securities^SM (“RANGERS^SM”)

4.12

Calculation Agency Agreement, dated as of May 18, 2005, between the Corporation and Lehman Brothers Inc., as Calculation Agent, relating to Risk Adjusting Equity Range Securities Plus^SM, Performance Linked to the Value of a Stock Index (“RANGERS Plus^SM”)

SIGNATURE

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.
	(Registrant)


	By:	/s/ Barrett S. DiPaolo
		Barrett S. DiPaolo
		Senior Vice President


Date: May 18, 2005

EXHIBIT INDEX

Exhibit No.		Exhibit

1.01		Distribution Agreement, dated as of May 18, 2005, between Lehman Brothers Holdings Inc. (the “Corporation”) and Lehman Brothers Inc., as Agent, relating to the Corporation’s Medium-Term Notes, Series H (the “Series H Notes”)

1.02		Distribution Agreement, dated as of May 18, 2005, between the Corporation and Lehman Brothers Inc., as Lead Agent, and the other Agents named therein, relating to the Corporation’s Lehman Notes, Series B

4.01		Form of senior debt security—medium-term note (fixed rate)

4.02		Form of senior debt security—medium-term note (floating rate)

4.03		Form of senior debt security—medium-term note (Synthetic Convertible Securities)

4.04		Form of senior debt security—medium-term note (YEELDS^®)

4.05		Form of senior debt security—medium-term note (RANGERS^SM)

4.06		Form of senior debt security—medium-term note (RANGERS Plus^SM)

4.07		Form of senior debt security—Lehman Notes, Master Note

4.08		Calculation Agency Agreement, dated as of May 18, 2005, between the Corporation and Citibank, N.A., as Calculation Agent, relating to the Series H Notes

4.09		Calculation Agency Agreement, dated as of May 18, 2005, between the Corporation and Lehman Brothers Inc., as Calculation Agent, relating to notes, Performance Linked to the Value of a Common Stock, a Stock Index, a Basket of Common Stocks or a Basket of Stock Indices (“Synthetic Convertible Securities”)

4.10		Calculation Agency Agreement, dated as of May 18, 2005, between the Corporation and Lehman Brothers Inc., as Calculation Agent, relating to Yield Enhanced Equity Linked Debt Securities, Performance Linked to the Value of a Common Stock (“YEELDS^®”)

4.11		Calculation Agency Agreement, dated as of May 18, 2005, between the Corporation and Lehman Brothers Inc., as Calculation Agent, relating to Risk Adjusting Equity Range Securities^SM (“RANGERS^SM”)

4.12

EX-1.01 2 a05-9645_1ex1d01.htm EX-1.01

Exhibit 1.01

LEHMAN BROTHERS HOLDINGS INC.

Medium-Term Notes, Series H

DISTRIBUTION AGREEMENT

May 18, 2005

Lehman Brothers Inc.
745 Seventh Avenue
New York, New York 10019

Ladies and Gentlemen:

Lehman Brothers Holdings Inc., a Delaware corporation (the “Company”), confirms its agreement with you (the “Agent”) with respect to the issue and sale by the Company of its Medium-Term Notes, Series H (the “Medium-Term Notes” or the “Securities”). The Securities are to be issued pursuant to an indenture, dated as of September 1, 1987, as amended and supplemented to date (as amended, the “Indenture”), between the Company and Citibank, N.A., as trustee (the “Trustee”).

Subject to the terms and conditions stated herein and subject to the reservation by the Company of the right to sell Securities directly on its own behalf at any time, and to any person, the Company hereby appoints the Agent as the exclusive agent of the Company for the purpose of soliciting offers to purchase the Securities from the Company by others. This Agreement shall only apply to sales of the Securities and not to sales of any other securities or evidences of indebtedness of the Company and only on the specific terms set forth herein.

Such counsel shall also have furnished a statement that although such counsel is not passing upon and does not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement and the Prospectus (except as to those matters stated in paragraph (iii) of this subsection (b)), such counsel has no reason to believe that (A) the Registration Statement, as of its effective date, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading or (B) the Prospectus contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (except that no statement need be made as to the financial statements and notes thereto or the schedules or other financial or statistical data or the Form T-1 included or incorporated by reference therein). In rendering such opinion and statement, such counsel may rely upon opinions of local counsel satisfactory to the Agent for matters not governed by New York law and may rely as to matters of fact, to the extent he or she deems proper, upon certificates or affidavits of officers of the Company, the Trustee and public officials. Such counsel may rely on a certificate of the Trustee

with respect to the execution of the Securities by the Company and the authentication thereof by the Trustee.

If any of the conditions specified in this Section 5 shall not have been fulfilled when and as required by this Agreement, or if any of the certificates or opinions furnished to the Agent or to counsel to the Agent pursuant to this Section 5 shall not be in all material respects reasonably satisfactory in form and substance to the Agent and to counsel to the Agent, this Agreement and all obligations of the Agent hereunder may be cancelled by the Agent. Notice of such cancellation shall be given to the Company in writing, or by telegraph confirmed in writing.

If the foregoing correctly sets forth our agreement, please indicate your acceptance hereof in the space provided for that purpose below.

	Very truly yours,

	LEHMAN BROTHERS HOLDINGS INC.

	By:
		Name: Barrett S. DiPaolo
		Title: Vice President

CONFIRMED AND ACCEPTED, as of the date first above written:
LEHMAN BROTHERS INC.

By:
	Name: Martin Goldberg
	Title: Senior Vice President

EXHIBIT A

Lehman Brothers Holdings Inc.
Schedule of Commissions

The Company agrees to pay the Agent a commission equal to the following percentage of the principal amount of the Securities sold through the Agent:

Medium-Term Notes, Series H

Term		Commission Rate

3 months to less than 12 months		All rates will be as negotiated at time of sale; not to be less than .125% nor more than .625% of the principal amount
12 months to less than 18 months
18 months to less than 2 years
2 years to less than 3 years
3 years to less than 4 years
4 years to less than 5 years
5 years to less than 7 years
7 years to less than 10 years
10 years and longer

A-1

EXHIBIT B

Lehman Brothers Holdings Inc.

Medium-Term Notes, Series H

ADMINISTRATIVE PROCEDURES

I. General Procedures

Medium-Term Notes, Series H (the “Notes”) are to be offered on a continuing basis by Lehman Brothers Holdings Inc. (the “Company”). Lehman Brothers Inc., as agent (the “Agent”), has agreed to use its reasonable best efforts to solicit offers to purchase the Notes. The Notes are being sold pursuant to a Distribution Agreement between the Company and the Agent dated May 18, 2005 (the “Distribution Agreement”) to which these administrative procedures are attached as an exhibit. Terms defined in the Distribution Agreement shall have the same meaning when used in this exhibit.

Each Note will be represented by a Global Security (as defined hereinafter) delivered to the Trustee, as agent for the Depository Trust Company (“DTC”), and recorded in the book-entry system maintained by DTC (a “Book-Entry Note”). An owner of a Book-Entry Note will not be entitled to receive a certificate representing such Note. In connection with the qualification of the Book-Entry Notes for eligibility in the book-entry system maintained by DTC, the Trustee will perform the custodial, document control and administrative functions described below, in accordance with its respective obligations under a Letter of Representation from the Company and the Trustee to DTC dated as of the date hereof and a Medium-Term Note Certificate Agreement between the Trustee and DTC dated October 31, 1988, and its obligations as a participant in DTC, including DTC’s Same-Day Funds Settlement System (“SDFS”). Except as otherwise set forth in this Exhibit B, Book-Entry Notes will be issued in accordance with the administrative procedures set forth below.

Price to Public

Each Note will be issued at 100% of principal amount, unless otherwise determined by the Company.

Date of Issuance

Each Note will be dated and issued as of the date of its authentication by the Trustee.

B-1

Maturities

Each Note will mature on a Business Day (as defined below) selected by the purchaser and agreed upon by the Company, such date generally being more than three months from the date of issuance.

“Business Day” shall have the meaning as set forth in the prospectus supplement unless otherwise indicated in the pricing supplement.

Denominations

The Notes will be issued in the denomination of $1,000 and any larger denomination which is an integral multiple of $1,000.

Registration

Notes will be issued only in fully registered form.

Interest Payments

Each Note bearing interest at a fixed rate will bear interest from its issue date at the annual rate stated on the face thereof. Unless otherwise indicated in the applicable Pricing Supplement, interest will be payable on February 15 and August 15 of each year (the “Interest Payment Dates”) and at maturity. Interest will be calculated and paid on the basis of a 360-day year of twelve 30-day months or, in the case of an incomplete month, the number of days elapsed. Interest will be payable to the person in whose name such Note is registered at the close of business on the February 1 or August 1, or such other dates as set forth in the applicable Pricing Supplement (the “Record Dates”), next preceding the respective Interest Payment Date; provided, however, that interest payable on a maturity date will be payable to the person to whom principal shall be payable. The first payment of interest on any Note originally issued between a Record Date and an Interest Payment Date will be made on the Interest Payment Date following the next succeeding Record Date. All interest payments (excluding interest payments made at maturity) will be made by wire transfer by the Trustee or by check mailed by the Trustee to the person entitled thereto as provided above.

On the fifth Business Day immediately preceding each Interest Payment Date, the Trustee will notify the Company as to the total amount of the interest payments to be made on such Interest Payment Date. The Trustee (or any duly selected paying agent) will provide monthly to the Company’s Treasury Department a list of the principal and interest to be paid on Notes maturing in the next succeeding month. The Company will provide to the Trustee not later than the payment date sufficient moneys to pay in full all principal and interest payments due on such payment date. The Trustee will assume responsibility for withholding taxes on interest paid as required by law.

For special provisions relating to Floating Rate Notes, see Appendix A hereto.

B-2

Acceptance and Rejection of Offers

The Company shall have the sole right to accept offers to purchase Notes and may reject any such offer in whole or in part. The Agent shall promptly communicate to the Company, orally or in writing, each reasonable offer to purchase Notes from the Company received by it other than those rejected by the Agent. The Agent shall have the right, in its discretion reasonably exercised, without notifying the Company, to reject any offers in whole or in part.

Settlement

The receipt of immediately available funds by the Company in payment for a Note (less the applicable commission) and the authentication and issuance of such Note shall, with respect to such Note, constitute “Settlement”. All offers accepted by the Company will be settled from one to five Business Days from the date of acceptance by the Company pursuant to the timetable for Settlement set forth below unless the Company and the purchaser agree to Settlement on a later date; provided, however, that the Company will notify the Trustee of any such later date on or before the Business Day immediately prior to the Settlement date. Except as otherwise may be agreed to by the Company and the Agent, no Settlement of a Note will occur between a Record Date and an Interest Payment Date for that Note.

Settlement Procedures

In the event of a purchase of Notes by the Agent or another Purchaser or Purchasers, as principal, appropriate Settlement details will be set forth in the applicable Purchase Agreement to be entered into between the Agent and the Company pursuant to the Distribution Agreement.

Settlement procedures with regard to each Note sold through the Agent shall be as follows:

A. The Agent will advise the Company and the Trustee in writing, by telex or facsimile, of the following Settlement information:

1. Exact name in which Note is to be registered (“Registered Owner”).

2. Exact address of the Registered Owner and address for payment of principal and interest, if any.

3. Taxpayer identification number of the Registered Owner.

4. Principal amount of the Note (and, if multiple Notes are to be issued, denominations thereof).

5. Settlement date.

6. Maturity date.

B-3

7. Interest rate:

a. Fixed Rate Notes:

i. interest rate

b. Floating Rate Notes:

i. base rate

ii. initial interest rate

iii. spread or spread multiplier, if any

iv. interest reset dates

v. interest payment dates

vi. index maturity

vii. maximum and minimum interest rates, if any

8. If applicable, the date on or after which the Notes are redeemable at the option of the Company and other terms of redemption.

9. If applicable, the date on or after which the Notes are terminable at the option of the holder.

10. Agent’s Commission (to be paid in the form of a discount from the proceeds remitted to the Company upon Settlement).

B. The Company will confirm the above Settlement information to the Trustee by telephone (confirmed in writing), telex or facsimile, and the Trustee will assign a Note number to the transaction. If the Company rejects an offer, the Company will promptly notify the Agent and the Trustee by telephone.

C. The Agent will deliver to the purchaser a copy of the most recent Prospectus applicable to the Note with or prior to any written offer of Notes and the confirmation and payment by the purchaser for the Note.

Settlement Procedures Timetable

For offers accepted by the Company, Settlement procedures “A” through “C” set forth above shall be completed, as applicable, to the extent practicable on or before the respective times set forth below:

B-4

Settlement Procedure		Time (New York City)
A		2 PM on date of sale
B		3 PM on date of sale
C		3 PM on the Settlement date

Fails

In the event that a purchaser of a Note shall either fail to accept delivery of or make payment for a Note on the date fixed by the Company for Settlement, the Agent will immediately notify the Trustee and the Company’s Treasurer by telephone, confirmed in writing, of such failure and return the Note to the Trustee. Upon the Trustee’s receipt of the Note from the Agent, the Company will promptly return to the Agent an amount of immediately available funds equal to any amount previously transferred to the Company in respect of the Note pursuant to advances made by the Agent. Such returns will be made on the Settlement date, if possible, and in any event not later than 12 noon (New York City time) on the Business Day following the Settlement date. The Company will reimburse the Agent on an equitable basis for its loss of the use of the funds during the period when the funds were credited to the account of the Company. Upon receipt of the Note in respect of which the default occurred, the Trustee will mark the Note “cancelled”, make appropriate entries in its records and deliver the Note to the Company with an appropriate debit advice. The Agent will not be entitled to any commission with respect to any Note which the purchaser does not accept or make payment for.

Maturity

Upon presentation of each Note at maturity the Trustee (or any duly appointed Paying Agent) will pay the principal amount thereof, together with accrued interest due at maturity. Such payment shall be made in immediately available funds, provided that the Note is presented to the Trustee (or any such Paying Agent) in time for the Trustee (or such Paying Agent) to make payments in such funds in accordance with its normal procedures. The Company will provide the Trustee (and any such Paying Agent) with funds available for immediate use for such purpose. Notes presented at maturity will be cancelled by the Trustee as provided in the Indenture.

Procedure for Rate Changes

The Company will establish interest rates from time to time for the Notes then being offered and when a decision has been reached to change the interest rates of the Notes being sold by the Company, the Company will promptly advise the Agent, which will forthwith suspend solicitation of offers. The Agent will telephone the Company with recommendations as to the changed interest rates.

Suspension of Solicitation; Amendment or Supplement

If, at any time when a prospectus relating to the Securities is required to be delivered under the Act, any event occurs as a result of which the Prospectus would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not

B-5

misleading, or if it is necessary at any time to amend the Prospectus to comply with the Act, the Company will notify the Agent promptly to suspend solicitation of purchases of the Securities and the Agent shall suspend its solicitations of purchases of securities; and if the Company shall decide to amend or supplement the Registration Statement or the Prospectus, it will promptly advise the Agent by telephone (with confirmation in writing) and will promptly prepare and file with the Commission an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance and will use its reasonable best efforts to cause any amendment of the Registration Statement containing an amended Prospectus to be made effective as soon as possible. Upon the Agent’s receipt of such amendment or supplement and advice from the Company that solicitations may be resumed, the Agent will resume solicitations of purchases of the Securities.

In addition, subject to its representations, warranties and covenants contained in the Distribution Agreement, the Company may instruct the Agent to suspend solicitation of offers to purchase at any time for a period of time or permanently. Upon receipt of such instructions the Agent will forthwith (but in any event within one Business Day) suspend solicitation of offers to purchase from the Company until such time as the Company has advised it that solicitation of offers to purchase may be resumed. If the Company decides to amend or supplement the Registration Statement or the Prospectus relating to the Notes (other than to change interest rates), it will promptly advise the Agent and the Trustee and will furnish the Agent and the Trustee with copies of the proposed amendment or supplement.

In the event that at the time the Agent, at the direction of the Company, suspends solicitation of offers to purchase from the Company there shall be any orders outstanding which have not been settled, the Company will promptly advise the Agent and the Trustee whether such orders may be settled and whether copies of the Prospectus as theretofore amended or supplemented as in effect at the time of the suspension may be delivered in connection with the Settlement of such orders. The Company will have the sole responsibility for such decision and for any arrangements which may be made in the event that the Company determines that such orders may not be settled or that copies of such Prospectus may not be so delivered.

Delivery of Prospectus

The Agent will, to the extent required by applicable law, rule or regulation, provide a copy of the relevant Prospectus, appropriately amended or supplemented, which must accompany or precede each written offer of a Note, if any, by the Agent, each written confirmation of a sale sent to a purchaser or his agent by the Agent and each Note delivered to a purchaser or his agent.

Authenticity of Signatures

The Company will cause the Trustee to furnish the Agent from time to time with the specimen signatures of each of the Trustee’s officers, employees and agents who have been authorized by the Trustee to authenticate Notes, but the Agent will have no obligation or liability to the Company or the Trustee in respect of the authenticity of the signature of any officer, employee or agent of the Company or the Trustee on any Note.

B-6

Advertising Costs

The Company will determine with the Agent the amount and nature of advertising that may be appropriate in offering the Notes. Advertising expenses in connection with solicitation of offers to purchase Notes from the Company will be paid by the Company.

II. Special Administrative Procedures for Book-Entry Notes Issuance

On any date of settlement (as defined under “Settlement” below) for one or more Fixed Rate Book-Entry Notes, the Company will issue a single global security in fully registered form without coupons (a “Global Security”) representing up to each $500,000,000 principal amount of all of such Notes that have the same original issuance date, interest rate, optional redemption dates and Stated Maturity. Similarly, on any settlement date for one or more Floating Rate Book-Entry Notes, the Company will issue a single Global security representing up to each $500,000,000 principal amount of all of such Notes that have the same interest rate basis, original issuance date, Initial Interest Rate, Interest Payment Dates, Index Maturity, Spread, Spread Multiplier, minimum interest rate (if any), maximum interest rate (if any), optional redemption dates (if any), Stated Maturity and other terms. Each Global Security will be dated and issued as of the date of its authentication by the Trustee. No Global Security will represent both Fixed Rate and Floating Rate Book-Entry Notes.

Identification Numbers

The Company will arrange, on or prior to commencement of a program for the offering of Book-Entry Notes, with the CUSIP Service Bureau of Standard & Poor’s Credit Market Services (the “CUSIP Service Bureau”) for the reservation of a series of CUSIP numbers (including tranche numbers), consisting of approximately 900 CUSIP numbers and relating to Global Securities representing the Book-Entry Notes. The Company has or will obtain from the CUSIP Service Bureau a written list of such series of reserved CUSIP numbers and will deliver to the Trustee and DTC such written list of 900 CUSIP numbers of such series. The Trustee will assign CUSIP numbers to Global Securities as described below under Settlement Procedure “B”. The Company will notify the CUSIP Service Bureau periodically of the CUSIP numbers that the Trustee has assigned to Global Securities. The Trustee will notify the Company at any time when fewer than 100 of the reserved CUSIP numbers remain unassigned to Global Securities, and if it deems necessary, the Company will reserve additional CUSIP numbers for assignment to Global Securities representing Book-Entry Notes. Upon obtaining such additional CUSIP numbers the Company shall deliver such additional CUSIP numbers to the Trustee and DTC.

Registration

Each Global Security will be registered in the name of Cede & Co., as nominee for DTC, on the Securities Register maintained under the Indenture. The

B-7

beneficial owner of a Book-Entry Note (or one or more indirect participants in DTC designated by such owner) will designate one or more participants in DTC (with respect to such Note, the “Participants”) to act as agent or agents for such owner in connection with the book-entry system maintained by DTC, and DTC will record in book-entry form, in accordance with instructions provided by such Participants, a credit balance with respect to such Note in the account of such Participants. The ownership interest of such beneficial owner in such Note will be recorded through the records of such Participants or through the separate records of such Participants and one or more indirect participants in DTC.

Transfers

Transfers of a Book-Entry Note will be accomplished by book entries made by DTC and, in turn, by Participants (and in certain cases, one or more indirect participants in DTC) acting on behalf of beneficial transferors and transferees of such Note.

Consolidation and Exchange

The Trustee may deliver to DTC and the CUSIP Service Bureau at any time a written notice of consolidation specifying (i) the CUSIP number of two or more Outstanding Global Securities that represent (A) Fixed Rate Book-Entry Notes having the same interest rate, optional redemption dates (if any) and Stated Maturity and with respect to which interest has been paid to the same date or (B) Floating Rate Book-Entry Notes having the same interest rate basis, optional redemption dates (if any), Initial Interest Rate, Interest Payment Dates, Index Maturity, Spread and/or Spread Multiplier, minimum interest rate (if any), maximum interest rate (if any) and with respect to which interest has been paid to the same date, (ii) a date, occurring at least thirty days after such written notice is delivered and at least thirty days before the next Interest Payment Date for such Book-Entry Notes, on which such Global Securities shall be exchanged for a single replacement Global Security and (iii) a new CUSIP number, obtained from the Trustee, to be assigned to such replacement Global Security. Upon receipt of such a notice, DTC will send to its participants (including the Trustee) a written reorganization notice to the effect that such exchange will occur on such date. Prior to the specified exchange date, the Trustee will deliver to the CUSIP Service Bureau a written notice setting forth such exchange date and the new CUSIP number and stating that, as of such exchange date, the CUSIP numbers of the Global Securities to be exchanged will no longer be valid. On the specified exchange date, the Trustee will exchange such Global Securities for a single Global Security bearing a new CUSIP number and dated the last Interest Payment Date to which interest has been paid or duly provided for on the exchanged Global Securities, and the CUSIP numbers of the exchanged Global Securities will, in accordance with CUSIP Service Bureau procedures, be cancelled and not immediately reassigned. Notwithstanding the foregoing, if the Global Securities to be exchanged exceed $500,000,000 in aggregate principal amount, one Global Security will be authenticated and issued to represent each $500,000,000 of

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principal amount of the exchanged Global Securities and an additional Global Security will be authenticated and issued to represent any remaining principal amount of such Global Securities (see “Denominations” below).

Maturities

Each Book-Entry Note generally will mature on a date not less than three months after the settlement date for such Note. A Floating Rate Book Entry Note will mature only on an Interest Payment Date for such Note.

Denominations

Book-Entry Notes will be issued in principal amounts of $1,000 or any amount in excess thereof that is an integral multiple of $1,000. Global Securities will be denominated in principal amounts not in excess of $500,000,000. If one or more Book-Entry Notes having an aggregate principal amount in excess of $500,000,000 would, but for the preceding sentence, be represented by a single Global Security, then one Global security will be issued to represent each $500,000,000 principal amount of such Book-Entry Note or Notes and an additional Global Security will be issued to represent any remaining principal amount of such Book-Entry Note or Notes. In such a case, each of the Global Securities representing such Book-Entry Note or Notes shall be assigned the same CUSIP number.

Interest

General. Interest on each Book-Entry Note will accrue from and including the last Interest Payment Date, except in the case of Floating Rate Notes which reset daily or weekly. Each payment of interest on a Book-Entry Note will include interest accrued through the day preceding, as the case may be, the Interest Payment Date or Maturity, except in the case of Floating Rate Book-Entry Notes which reset daily or weekly. In the case of Floating Rate Book-Entry Notes which reset daily or weekly, interest payments will include accrued interest from and including the original issuance date or from and including the last date in respect of which interest has been paid, as the case may be, to, and including the Record Date immediately preceding the applicable Interest Payment Date, provided that at Maturity the interest payable will include interest accrued from and including the original issuance date or from and including the last date in respect of which interest has been paid through the day preceding Maturity. Interest payable at the Maturity of a Book-Entry Note will be payable to the Person to whom the principal of such Note is payable. Standard & Poor’s Credit Market Services will use the information received in the pending deposit message described under Settlement Procedure “C” below in order to include the amount of any interest payable and certain other information regarding the related Global Security in the appropriate weekly bond report published by Standard & Poor’s Credit Market Services.

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Promptly after each Interest Determination Date (as defined in Appendix A hereto) for Floating Rate Notes, the Calculation Agent will notify the Trustee after confirmation with the Company, and the Trustee in turn will notify Standard & Poor’s Credit Market Services, of the interest rates determined on such Interest Determination Date.

Payments of Principal and Interest

Payments of Interest Only. Promptly after each Regular Record Date, the Trustee will deliver to the Company and DTC a written notice specifying by CUSIP number the amount of interest to be paid on each Global Security on the following Interest Payment Date (other than an Interest Payment Date coinciding with maturity) and the total of such amounts. DTC will confirm the amount payable on each Global Security on such Interest Payment Date by reference to the daily bond reports published by Standard & Poor’s Credit Market Services. The Company will pay to the Trustee, as paying agent, the total amount of interest due on such Interest Payment Date (other than at Maturity), and the Trustee will pay such amount to DTC at the times and in the manner set forth below under “Manner of Payment”.

Payments at Maturity. On or about the first Business Day of each month, the Trustee will deliver to the Company and DTC a written list of principal and interest to be paid on each Global Security maturing in the following month. The Company, the Trustee and DTC will confirm the amounts of such principal and interest payments with respect to each such Global Security on or about the fifth Business Day preceding the Maturity of such Global Security, except for Notes with a daily reset period in which case the Company, the Trustee and DTC will confirm the amount of the principal payable with respect to each such Global Security on or about the fifth Business Day preceding Maturity and the amount of interest payable with respect to such Global Security two Business Days preceding the maturity of such Global Security. The Company will pay to the Trustee, as the paying agent, the principal amount of such Global Security, together with interest due at such Maturity. The Trustee will pay such amount to DTC at the times and in the manner set forth below under “Manner of Payment”.

Promptly after payment to DTC of the principal and interest due at the Maturity of such Global Security, the Trustee will cancel such Global Security and deliver it to the Company with an appropriate debit advice.

Manner of Payment. The total amount of any principal and interest due on Global Securities on any Interest Payment Date or at Maturity shall be paid by the Company to the Trustee in funds available for use by the Trustee as of 9:30 A.M. (New York City time) on such date. The Company will make such payment on such Global Securities by instructing the Trustee to withdraw funds from an account maintained by the Company at the Trustee. The Company will confirm such instructions in writing to the Trustee. For maturity, redemption or any other principal payments: prior to 10 A.M. (New York City time) on such date or as

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soon as possible thereafter, the Trustee will make such payments to DTC in same day funds in accordance with DTC’s Same Day Funds Settlement Paying Agent Operating Procedures. For interest payments: the Trustee will make such payments to DTC in accordance with existing arrangements between DTC and the Trustee. DTC will allocate such payments to its participants in accordance with its existing operating procedures. Neither the Company nor the Trustee shall have any direct responsibility or liability for the payment by DTC to such Participants of the principal of and interest on the Book-Entry Notes.

Withholding Taxes. The amount of any taxes required under applicable law to be withheld from any interest payment on a Book-Entry Note will be determined and withheld by the Participant, indirect participant in DTC or other Person responsible for forwarding payments and materials directly to the beneficial owner of such Note.

Acceptance and Rejection of Offers

Unless otherwise instructed by the Company, the Agent will advise the Company promptly by telephone of all offers to purchase Book-Entry Notes received by the Agent, other than those rejected by it in whole or in part in the reasonable exercise of its discretion. Unless otherwise agreed by the Company and each of the Agent, the Company has the sole right to accept offers to purchase Book-Entry Notes and may reject any such offer in whole or in part.

Settlement

The receipt by the Company of immediately available funds in payment for a Book-Entry Note and the authentication and issuance of the Global Security representing such Note shall constitute “settlement” with respect to such Note. All orders accepted by the Company will be settled from one to five Business Days from the date of acceptance by the Company pursuant to the timetable set forth below unless the Company and the purchaser agree to settlement on a later date.

Settlement Procedures

Settlement Procedures with regard to each Book-Entry Note sold by the Company through the Agent, as agent, shall be as follows:

A. The Agent will advise the Company and the Trustee in writing, by telex or facsimile, the following Settlement information:

1. Exact name in which Note is to be registered (“Registered Owner”).

2. Exact address of the Registered owner and address for payment of principal and interest, if any.

3. Taxpayer identification number of the Registered Owner.

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4. Principal amount of the Note (and, if multiple Notes are to be issued, denominations thereof)

5. Settlement date.

6. Maturity date.

7. Interest rate:

a. Fixed Rate Notes

i. interest rate

b. Floating Rate Notes:

i. base rate

ii. initial interest rate

iii. interest reset period or interest reset dates

iv. interest payment dates

v. index maturity

vi. maximum and minimum interest rates, if any.

vii. spread or spread multiplier, if any

8. If applicable, the date on or after which the Notes are redeemable at the option of the Company and other terms of redemption.

9. If applicable, the date on or after which the Notes are terminable at the option of the holder.

10. Agent’s Commission (to be paid in the form of a discount from the proceeds remitted to the Company upon Settlement).

C. The Company shall communicate with the Trustee and Agent and each such communication by the Company shall constitute a representation and warranty by the Company to the Trustee and the Agent that (i) such Note is then, and at the time of issuance and sale thereof will be, duly authorized for issuance and sale by the Company and (ii) such Note, and the Global Security representing such Note, will conform with the terms of the Indenture pursuant to which such Note and

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Global Security, are issued.

D. The Trustee will assign a CUSIP number to the Global Security representing such Note and then advise the Company by telephone (confirmed in writing at any time on the same date) or electronic transmission of such CUSIP number.

E. The Trustee will enter a pending deposit message through DTC’s Participant Terminal System, providing the following settlement information to DTC, the Agent and Standard & Poor’s Credit Market Services:

1. The information set forth in Settlement Procedure “A”.

2. Identification as a Fixed Rate Book-Entry Note or a Floating Rate Book-Entry Note.

3. Initial Interest Payment Date for such Note, number of days by which such date succeeds the related “DTC Record Date” (which term means the Regular Record Date except in the case of Floating Rate Notes which reset daily and weekly in which case it means the date 5 calendar days immediately preceding the Interest Payment Date) and amount of interest per $1,000 principal amount payable on such Interest Payment Date.

4. Frequency of interest payments (monthly, semiannually, quarterly, etc.).

5. CUSIP number of the Global Security representing such Note.

6. Whether such Global Security will represent any other Book-Entry Note (to the extent known at such time).

F. The Trustee will complete the preprinted Global security representing such Note, the form of which was previously approved by the Company, the Agent and the Trustee.

G. The Trustee will authenticate the Global Security representing such Note.

H. DTC will credit such Note to the Trustee’s participant account at DTC.

I. The Trustee will enter an SDFS deliver order through DTC’s Participant Terminal System instructing DTC to (i) debit such Note to the Trustee’s participant account and credit such Note to the Agent’s participant account and (ii) debit the Agent’s settlement account and credit the Trustee’s settlement account for an amount equal to the price of such Note less the Agent’s commission. The entry of such a deliver order shall constitute a representation and warranty by the Trustee to DTC that (i) the Global Security representing such Book-Entry Note has been issued and authenticated and (ii) the Trustee is holding such Global Security pursuant to the Medium-Term Note Certificate Agreement between the Trustee and DTC (the “Certificate Agreement”).

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J. The Agent will enter an SDFS deliver order through DTC’s Participant Terminal System instructing DTC (i) to debit such Note to the Agent’s participant account and credit such Note to the participant accounts of the Participants with respect to such Note and (ii) to debit the settlement accounts of such Participants and credit the settlement account of the Agent for an amount equal to the price of such Note.

K. Transfers of funds in accordance with SDFS deliver orders described in Settlement Procedures “I” and “J” will be settled in accordance with SDFS operating procedures in effect on the settlement date.

L. The Trustee will credit to an account of the Company maintained at the Trustee funds available for immediate use in the amount transferred to the Trustee in accordance with Settlement Procedure “I”.

M. Monthly, the Trustee will send to the Company a statement setting forth the principal amount of Book-Entry Notes Outstanding as of that date under the Indenture and setting forth a brief description of any sales of which Company has advised the Trustee but which have not yet been settled.

N. The Agent will, to the extent required by applicable law, rule or regulation, deliver to the purchaser a copy of the most recent Prospectus applicable to the Note with or prior to any written offer of Notes and the confirmation and payment by the purchaser of the Note.

O. The Agent will confirm the purchase of such Note to the purchaser either by transmitting to the Participants with respect to such Note a confirmation order or orders through DTC’s institutional delivery system or by mailing a written confirmation to such purchaser.

Settlement Procedures Timetable

For orders of Book-Entry Notes solicited by the Agent, as agent, and accepted by the Company for settlement on the first Business Day after the sale date, Settlement Procedures “A” through “N” set forth above shall be completed as soon as possible but not later than the respective times (New York City time) set forth below:

Settlement Procedure Time

A-C		11:00 A.M. on the sale date
D, E		2:00 P.M. on the sale date
F		9:00 A.M. on settlement date
G, H		10:00 A.M. on settlement date
I,J		2:00 P.M. on settlement date
K		4:45 P.M. on settlement date
L,N		5:00 P.M. on settlement date (or earlier to the extent required by applicable law, rule or regulation)

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If a sale is to be settled more than one Business Day after the sale date, Settlement Procedures “A” “B” “C” “D” and “E” shall be completed as soon as practicable but no later than the times specified above on the first Business Day after the sale date. If the initial interest rate for a Floating Rate Book-Entry Note has not been determined at the time that Settlement Procedure “A” is completed, Settlement Procedures “B” “C”, “D” and “E” shall be completed as soon as such rate has been determined but no later than the times specified above on the second Business Day before the settlement date. Settlement Procedure “K” is subject to extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in the SDFS operating procedures in effect on the settlement date.

If settlement of a Book-Entry Note is rescheduled or cancelled, the Trustee will deliver to DTC, through DTC’s Participant Terminal System, a cancellation message to such effect by no later than 2:00 P.M. on the Business Day immediately preceding the scheduled settlement date.

Failure to Settle

If the Trustee has not entered an SDFS delivery order with respect to a Book-Entry Note pursuant to Settlement Procedure “I”, the Trustee shall immediately notify the Company thereof. Thereafter, upon written request of the Company (which may be evidenced by facsimile transmission), the Trustee shall deliver to DTC, through DTC’s Participant Terminal System, as soon as practicable a withdrawal message instructing DTC to debit such Note to the Trustee’s participant account. DTC will process the withdrawal message, provided that the Trustee’s participant account contains a principal amount of the Global Security representing such Note that is at least equal to the principal amount to be debited. If a withdrawal message is processed with respect to all the Book-Entry Notes represented by a Global Security, the Trustee will mark such Global Security “cancelled”, make appropriate entries in the Trustee’s records and send such cancelled Global Security to the Company. The CUSIP number assigned to such Global Security shall, in accordance with CUSIP Service Bureau procedures, be cancelled and not immediately reassigned. If a withdrawal message is processed with respect to one or more, but not all, of the Book-Entry Notes represented by a Global Security, the Trustee will exchange such Global Security for two Global Securities, one of which shall represent such Book-Entry Note or Notes and shall be cancelled immediately after issuance and the other of which shall represent the other Book-Entry Notes previously represented by the surrendered Global Security and shall bear the CUSIP number of the surrendered Global Security.

If the purchase price for any Book-Entry Note is not timely paid to any Participant with respect to such Note by the beneficial purchaser thereof (or a Person, including an indirect participant in DTC, acting on behalf of such purchaser), such Participant may enter a deliver order through DTC’s Participant Terminal System

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debiting such Note to such Participant’s participant account and crediting such Note free to the participant account of the Trustee and shall notify the Trustee and the Company thereof. Thereafter, the Trustee, (i) will immediately notify the Company thereof, once the Trustee has confirmed that such Note has been credited to its participant account, and the Company shall immediately transfer by Fedwire (immediately available funds) to such Participant an amount equal to the price of such Note which was previously credited to the account of the Company maintained at the Trustee in accordance with Settlement Procedure “L” and (ii) the Trustee will deliver the withdrawal message and take the related actions described in the preceding paragraph.

Notwithstanding the foregoing, upon any failure to settle with respect to a Book-Entry Note, DTC may take any actions in accordance with its SDFS operating procedures then in effect. In the event of a failure to settle with respect to one or more, but not all, of the Book-Entry Notes to have been represented by a Global Security, the Trustee will provide, in accordance with Settlement Procedures “F” and “G”, for the authentication and issuance of a Global Security representing the other Book-Entry Notes to have been represented by such Global Security and will make appropriate entries in its records.

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APPENDIX A

Special Provisions Relating to Floating Rate Notes

Interest Rate

Interest on Floating Rate Notes will be determined by reference to an “Interest Rate Basis”, which shall be the “CD Rate” (“CD Rate Notes”), the “Commercial Paper Rate” (“Commercial Paper Rate Notes”), the “Federal Funds (Effective) Rate” (“Federal Funds (Effective) Rate Notes”), the “Federal Funds (Open) Rate” (“Federal Funds Open Rate”), “LIBOR” (“LIBOR Notes”), “EURIBOR” (“EURIBOR Notes”) the “Treasury Rate” (“Treasury Rate Notes”), the “Prime Rate” (“Prime Rate Notes”), the Eleventh District Cost of Funds Rate (“Eleventh District Cost of Funds Rate”) or such other interest rate formula as may be designated in a Pricing Supplement, based upon the Index Maturity and adjusted by a Spread and/or Spread Multiplier, if any, as specified in the applicable Pricing Supplement setting forth the terms of each issuance of Notes (the “Pricing Supplement”). The “Index Maturity” is the particular maturity of the type of instrument or obligation from which the Interest Rate Basis is calculated (e.g., in the case of commercial paper, 30-day rather than 90-day commercial paper). The “Spread” is the number of basis points (100 basis points equals one percent) above or below the Interest Rate Basis applicable to such Floating Rate Note, and the “Spread Multiplier” is the percentage of the Interest Rate Basis applicable to the interest rate for such Floating Rate Note. The Spread, Spread Multiplier, Index Maturity and other variable terms as described below are subject to change by the Company from time to time, but no such change will affect any Floating Rate Note theretofore issued or as to which an offer has been accepted by the Company.

A Floating Rate Note may also have either or both of the following: (i) a maximum limit, or ceiling (“Maximum Interest Rate”), on the rate of interest which may apply during any Interest Period (as defined below) and (ii) a minimum limit, or floor (“Minimum Interest Rate”), on the rate of interest which may apply during any Interest Period. In addition to any Maximum Interest Rate which may be applicable to any Floating Rate Note pursuant to the above provisions, the interest rate on the Floating Rate Notes will in no event be higher than the maximum rate permitted by New York law, as the same may be modified by United States law of general application. Under present New York law, the maximum rate of interest is 16% for amounts less than $250,000 and 25% per annum on a simple interest basis for amounts between $250,000 and $2,500,000. The limit may not apply to Floating Rate Notes in which $2,500,000 or more has been invested.

The applicable Pricing Supplement will specify for each Floating Rate Note the following terms: Interest Rate Basis, optional redemption dates (if any), rate of interest for the initial Interest Period (the “Initial Interest Rate”), Issue Date, Interest Determination Dates (as defined below), Interest Reset Dates (as defined

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below), Interest Payment Dates (as defined below), Index Maturity, Maturity Date, Maximum Interest Rate and Minimum Interest Rate, if any, and the Spread and/or Spread Multiplier, if any.

Interest Payment Dates

Unless otherwise indicated in the applicable Pricing Supplement, interest on Floating Rate Notes will be payable as set forth in the Basic Prospectus, as supplemented by the prospectus supplement dated May 18, 2005 relating to the Medium-Term Notes (the “MTN Prospectus”) Each date on which interest is payable on a Floating Rate Note is referred to herein as an “Interest Payment Date.”

Interest Reset Date

Unless otherwise indicated in the applicable Pricing Supplement, the rate of interest on each Floating Rate Note will be reset as provided in the MTN Prospectus (each date an “Interest Reset Date”).

Interest Determination Date

Unless otherwise indicated in the applicable Pricing Supplement, the “Interest Determination Date” pertaining to an Interest Reset Date for a Floating Rate Note shall be as set forth in the MTN Prospectus.

CD Rate Notes

A CD Rate Note will bear interest at the interest rate (calculated with reference to the CD Rate and the Spread and/or Spread Multiplier and will be subject to the minimum interest rate or the maximum interest rate, if any) specified in the CD Rate Note and in the applicable Pricing Supplement. Unless otherwise indicated in the applicable Pricing Supplement, the “CD Rate” shall be calculated as set forth in the MTN Prospectus.

Commercial Paper Rate Notes

A Commercial Paper Rate Note will bear interest at the interest rate (calculated with reference to the Commercial Paper Rate and the Spread and/or Spread Multiplier and will be subject to the minimum interest rate or the maximum interest rate, if any) specified in the Commercial Paper Rate Note and in the applicable Pricing Supplement.

Unless otherwise indicated in the applicable Pricing Supplement, the “Commercial Paper Rate” shall be calculated as set forth in the MTN Prospectus.

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Federal Funds (Effective) Rate Notes

A Federal Funds (Effective) Rate Note will bear interest at the interest rate (calculated with reference to the Federal Funds (Effective) Rate and the spread and/or Spread Multiplier and will be subject to the minimum interest rate or the maximum interest rate, if any) specified in the Federal Funds (Effective) Rate Note and in the applicable Pricing Supplement.

Unless otherwise indicated in the applicable Pricing Supplement, the “Federal Funds Effective Rate” shall be calculated as set forth in the MTN Prospectus.

Federal Funds (Open) Rate Notes

A Federal Funds Open Rate Note will bear interest at the interest rate (calculated with reference to the Federal Funds Open Rate and the spread and/or Spread Multiplier and will be subject to the minimum interest rate or the maximum interest rate, if any) specified in the Federal Funds Open Rate Note and in the applicable Pricing Supplement.

Unless otherwise indicated in the applicable Pricing Supplement, the “Federal Funds Open Rate” shall be calculated as set forth in the MTN Prospectus.

LIBOR Notes

A LIBOR Note will bear interest at the interest rate (calculated with reference to LIBOR and the Spread and/or Spread Multiplier and will be subject to the minimum interest rate or the maximum interest rate, if any) specified in the LIBOR Note and in the applicable Pricing Supplement.

Unless otherwise indicated in the applicable Pricing Supplement, LIBOR shall be calculated as set forth in the MTN Prospectus.

EURIBOR Notes

A EURIBOR Note will bear interest at the interest rate (calculated with reference to EURIBOR and the Spread and/or Spread Multiplier and will be subject to the minimum interest rate or the maximum interest rate, if any) specified in the EURIBOR Note and in the applicable Pricing Supplement.

Unless otherwise indicated in the applicable Pricing Supplement, EURIBOR shall be calculated as set forth in the MTN Prospectus.

Eleventh District Cost of Funds Rate Notes

A Eleventh District Cost of Funds Rate Note will bear interest at the interest rate (calculated with reference to the Eleventh District Cost of Funds Rate and the Spread or Spread Multiplier and will be subject to the minimum interest rate or

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the maximum interest rate, if any) specified in the Eleventh District Cost of Funds Rate Note and in the applicable Pricing Supplement.

Unless otherwise indicated in the applicable Pricing Supplement, the “Eleventh District Cost of Funds Rate” shall be calculated as set forth in the MTN Prospectus.

Treasury Rate Notes

A Treasury Rate Note will bear interest at the interest rate (calculated with reference to the Treasury Rate and the Spread and/or Spread Multiplier and will be subject to the minimum interest rate or the maximum interest rate, if any) specified in the Treasury Rate Note and in the applicable Pricing Supplement.

Unless otherwise indicated in the applicable Pricing Supplement, the “Treasury Rate” or “CMT Rate” shall be calculated as set forth in the MTN Prospectus.

Prime Rate Notes

A Prime Rate Note will bear interest at the interest rate (calculated with reference to the Prime Rate and the Spread and/or Spread Multiplier and will be subject to the minimum interest rate or the maximum interest rate, if any) specified in the Prime Rate Note and in the applicable Pricing Supplement.

Unless otherwise indicated in the applicable Pricing Supplement, the “Prime Rate” shall be calculated as set forth in the MTN Prospectus.

Record Dates

Unless otherwise indicated in the applicable Pricing Supplement, interest payments on Floating Rate Notes will be made on the Interest Payment Dates to the registered owners at the close of business on the date 15 calendar days prior to such Interest Payment Date (the “Regular Record Date”). Interest payable at maturity will be paid to the same person to whom principal is payable. Interest will begin to accrue (except in the case of Floating Rate Notes which reset daily or weekly) on the Issue Date of a Note for the first interest period and from and including the last Interest Payment Date. Each payment of interest (except in the case of Floating Rate Notes which reset daily or weekly) shall include interest accrued from and including the next preceding Interest Payment Date in respect of which interest has been paid (or, if none, from and including the Issue Date) to but excluding the next Interest Payment Date (an “Interest Period”). In the case of Floating Rate Notes that reset daily or weekly, interest payments will include accrued interest from and including the Issue Date or from and including the last date in respect of which interest has been paid, as the case may be, to, and including the Regular Record Date immediately preceding the applicable Interest Payment Date, providing that at maturity the interest payable will include interest accrued from and including the Issue Date or from and including the last date in respect of which interest has been paid, as the case may be, to, but excluding, the

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date of maturity. The initial interest payment on Notes issued between a Regular Record Date and the Interest Payment Date immediately following such Regular Record Date will be made on the second Interest Payment Date following such issue (however, except as may otherwise be agreed to by the Company and the Agent, no Floating Rate Notes will be sold between a Regular Record Date and an Interest Payment Date).

Accrued Interest

Unless otherwise indicated in the applicable Pricing Supplement, accrued interest shall be calculated as set forth in the MTN Prospectus.

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EXHIBIT C

LEHMAN BROTHERS HOLDINGS INC.

Medium-Term Notes, Series H

PURCHASE AGREEMENT

[ ], 20

Lehman Brothers Holdings Inc.
745 Seventh Avenue
New York, New York 10019

Attention: Treasurer

Lehman Brothers Holdings Inc., a Delaware corporation (the “Company”), has previously entered into a Distribution Agreement dated May 18, 2005 (the “Distribution Agreement”), between the Company and Lehman Brothers Inc. (the “Agent”), with respect to the issue and sale by the Company of its Medium Term Notes, Series H (“Securities”), pursuant to an Indenture dated as of September 1, 1987, as amended, between the Company and Citibank, N.A., as Trustee. The Distribution Agreement permits the Company to enter into an agreement with the Agent and/or one or more additional persons to purchase Securities as principals.

[The undersigned] [Each of the purchasers identified on Schedule I attached hereto] ([the] [each a] “Purchaser”) agrees[, severally and not jointly,] to purchase, at the purchase price (equal to the Issue Price less the Agents’ Commission) set forth in the Pricing Supplement dated , 20 , attached as Schedule II hereto (the “Pricing Supplement”), [$ principal amount] [the principal amount] of Securities described below [set forth next on Schedule I attached hereto].

The Securities have the terms set forth in the Pricing Supplement.

Each Purchaser’s obligation to purchase Securities hereunder is subject to the accuracy, as of the Settlement Date, of your representations and warranties contained in the Distribution Agreement and to your performance and observance of all applicable covenants and agreements contained therein, and the satisfaction of all conditions precedent contained therein, including, without limitation, those pursuant to Sections 5, 6 and 7 thereof. Each Purchaser’s obligation to purchase Securities hereunder is subject to the further condition precedent that the Company shall have furnished to each Purchaser copies of the most recent documents (including any prior documents referred to therein) previously delivered to the Agent pursuant to Sections 5 and 6 of the Distribution Agreement and such further information, certificates and documents as the Lead Manager, in its sole discretion, or counsel to Purchasers may reasonably request.

The “Lead Manager” for the Securities described in this Agreement is [insert lead manager’s name]. [Pursuant to the last sentence of Section 11(a) of the Distribution Agreement,

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the Lead Manager hereby requests the delivery of, and it is hereby agreed that there shall be delivered, documents pursuant to
Section[s] [6(b)][6(c)][6(d)] of the Distribution Agreement.]

In accordance with Section 11(a) of the Distribution Agreement, each Purchaser (other than Lehman Brothers Inc.) hereby confirms that, with effect from the date hereof solely in respect of the issue of the Securities described above (the “Issue”), each Purchaser shall become a party to, and an Agent under, the Distribution Agreement, vested with all the authority, rights and powers, and subject to all duties and obligations of an Agent as if originally named as such under the Distribution Agreement.

Such appointment is limited to the Issue and is not for any other issue of Securities of the Company pursuant to the Distribution Agreement, and such appointment will terminate upon issue of the Securities comprising the Issue, but without prejudice to any rights, duties or obligations which have arisen prior to such termination.

Except as otherwise expressly provided herein, all terms used herein which are defined in the Distribution Agreement shall have the same meanings as in the Distribution Agreement, except that (i) the term “Agent,” as used in the Distribution Agreement, shall be deemed to refer, where applicable and for purposes of this Agreement, only to the Purchasers (except for references in the Distribution Agreement to Agent where such Agent has discretion, in which case Agent shall mean the Lead Manager) and (ii) any reference to the Registration Statement or the Prospectus shall be deemed to refer to such documents as amended or supplemented as of the date of this Agreement and as of the Settlement Date, including any supplement relating to the Securities and containing the name of the Purchasers. [For purposes of Section 12 of the Distribution Agreement, the Lead Manager confirms that its notice details are as set forth immediately beneath its name].

[IF THE OFFERING IS A GLOBAL OFFERING:

The Agent represents and warrants to the Company that:

• it and each of its affiliates have not offered or sold and will not offer or sell any Securities to persons in the United Kingdom prior to the expiry of a period of six months from the issue date of the Securities except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations of 1995;

• it and each of its affiliates have only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the “FSMA”) received by it in connection with the issue or sale of any Securities in circumstances in which Section 21(1) of the FSMA does not apply to Lehman Brothers Holdings; and

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• it and each of its affiliates have complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom.

The Agent has separately further agreed that it has not, directly or indirectly, offered or sold and will not, directly or indirectly, offer or sell in the Netherlands any Securities other than to persons who trade or invest in securities in the conduct of a profession or business (which include banks, stockbrokers, insurance companies, investment undertakings, pension funds, other institutional investors and finance companies and treasury departments of large enterprises).

Each Agent has agreed that it will comply with all applicable laws and regulations in force in any jurisdiction in which it offers or sells the Securities or possesses or distributes the prospectus supplement, the accompanying prospectus or any other offering material and will obtain any consent, approval or permission required by it for the offer or sale by it of the Securities under the laws and regulations in force in any jurisdiction to which it is subject or in which it makes such offers or sales.]

[The undersigned] [Each of the Purchasers] agrees to perform its duties and obligations specifically provided to be performed by [each of] the Purchasers in accordance with the terms and provisions of the Distribution Agreement and the Procedures, as amended or supplemented hereby.

This Agreement shall be subject to the termination provisions of Section 10 of the Distribution Agreement.

[If one or more of the Purchasers shall fail at the Settlement Date to purchase the Securities which it or they are obligated to purchase (the “Defaulted Securities”), then the non-defaulting Purchasers (the “non-defaulting Purchasers”) shall have the right, within 24 hours thereafter, to make arrangements for one or more of them to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; provided, however, that if such arrangements shall not have been completed within such 24-hour period, then:

(A) if the aggregate principal amount of Defaulted Securities does not exceed 9.09% of the aggregate principal amount of Securities to be so purchased hereunder on the Settlement Date, the non-defaulting Purchasers shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective initial underwriting obligations bear to the underwriting obligations of all non-defaulting Purchasers; or

(B) if the aggregate principal amount of Defaulted Securities exceeds 9.09% of the aggregate principal amount of Securities to be so purchased hereunder on the Settlement Date, this agreement shall terminate without liability on the part of any non-defaulting Purchaser.

No action taken pursuant to this paragraph shall relieve any defaulting Purchaser from liability in respect of its default. In the event of any such default which does not result in a termination of

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this agreement, either the non-defaulting Purchasers or the Company shall have the right to postpone the Settlement Date for a period not exceeding seven days in order to effect any required changes in the Registration Statement, the Prospectus Supplement, the Pricing Supplement or any other documents or arrangements.]

[Notwithstanding anything in the Distribution Agreement to the contrary, the obligations of the Purchasers under Section 7 of the Distribution Agreement are several and not joint, and in no case shall any Purchaser (except as may be provided in any agreement among them) be responsible under Section 7(d) to contribute any amount by which the total price at which the Securities purchased by it exceeds the amount of any damages which the Purchaser has otherwise paid or become liable to pay with respect to the Securities purchased by such Purchaser hereunder.]

This Agreement shall be governed by and construed in accordance with the laws of New York. This Agreement may be executed in one or more counterparts and the executed counterparts taken together shall constitute one and the same agreement.

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If the foregoing correctly sets forth the agreement among the parties hereto, please indicate your acceptance hereof in the space provided for that purpose below.

		[NAME OF LEAD MANAGER]
		[As Representative of the Purchasers named in Schedule I annexed hereto]


		By:
			Name:
			Title:

Accepted:	, 20

LEHMAN BROTHERS HOLDINGS INC.

By:
	Name:
	Title:

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SCHEDULE I

Purchaser		Principal Amount of Securities

		$
Total		$

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EXHIBIT D

LEHMAN BROTHERS HOLDINGS INC.

Medium-Term Notes, Series H

AGENT ACCESSION LETTER

[Name of Agent
Address of Agent]

Ladies and Gentlemen:

Lehman Brothers Holdings Inc., a Delaware corporation (the “Company”), has previously entered into a Distribution Agreement dated May 18, 2005 (the “Distribution Agreement”), between the Company and Lehman Brothers Inc. (the “Existing Agent”), with respect to the issue and sale by the Company of its Medium Term Notes, Series H pursuant to an Indenture dated as of September 1, 1987, as amended between the Company and Citibank, N.A., as Trustee. The Distribution Agreement permits the Company to appoint one or more additional persons to act as agent with respect to the Securities, on terms substantially the same as those contained in the Distribution Agreement. A copy of the Distribution Agreement, including the Procedures with respect to the issuance of the Securities attached thereto as Exhibit B, is attached hereto.

In accordance with Section 11(b) of the Distribution Agreement we hereby confirm that, with effect from the date hereof, solely in respect of the issue of Notes due (the “Issue”), you shall become a party to, and an Agent under, the Distribution Agreement, vested with all the authority, rights and powers, and subject to all duties and obligations of an Agent in relation to the Issue as if originally named as such under the Distribution Agreement. The undersigned agrees that it is acting as agent (not as principal) in connection with the Issue.

Such appointment is limited to the Issue and is not for any other issue of Securities of the Company pursuant to the Distribution Agreement, and such appointment will terminate upon issue of the Securities comprising the Issue but without prejudice to any rights, duties or obligations which have arisen prior to such termination.

Except as otherwise expressly provided herein, all terms used herein which are defined in the Distribution Agreement shall have the same meanings as in the Distribution Agreement, except that (i) the terms “Agent,” “Agents” and “Additional Agents” as used in the Distribution Agreement, shall be deemed to refer, where applicable and for purposes of this Agreement, only to you, (ii) your obligation to act as Agent hereunder shall subject to you having received copies of the most recent documents (including any prior documents referred to therein) previously delivered to the Existing Agent pursuant to Sections 5 and 6 of the Distribution Agreement, and (iii) any reference to the Registration Statement or the Prospectus shall be deemed to refer to such documents as amended or supplemented as of the date of this Agreement and as of the Settlement Date, including any supplement relating to the Securities and/or containing the name of the Agent and/or Additional Agents. By your signature below, you

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confirm that such documents are to your satisfaction. For purposes of Section 12 of the Distribution Agreement, you confirm that your notice details are as set forth immediately beneath your signature.

Each of the parties to this letter agrees to perform its respective duties and obligations specifically provided to be performed by each of the parties to in accordance with the terms and provisions of the Distribution Agreement and the Procedures, as amended or supplemented hereby.

[Notwithstanding anything in the Distribution Agreement to the contrary, the obligations of the Agent and Additional Agents under Section 7 of the Distribution Agreement are several and not joint, and in no case shall any Agent or Additional Agent (except as may be provided in any agreement among them) be responsible under Section 7(d) to contribute any amount by which the total price at which the Securities purchased by it exceeds the amount of any damages which the Purchaser has otherwise paid or become liable to pay from the offering of the Securities.]

This Agreement shall be governed by the laws of the State of New York. This Agreement may be executed in one or more counterparts and the executed counterparts taken together shall constitute one and the same agreement.

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If the foregoing correctly sets forth the agreement among the parties hereto, please indicate your acceptance hereof in the space provided for that purpose below.

	Very truly yours,

	LEHMAN BROTHERS HOLDINGS INC.


	By:
		Name:
		Title:

CONFIRMED AND ACCEPTED, as of
the date first above written

[Insert name of Additional Agent and information
pursuant to Section 12 of the Distribution Agreement]

By:
	Name:
	Title:

Notice information pursuant to Section 12 of the Distribution Agreement:

Name:

Address:

Contact Person:

Telephone:

Facsimile:

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EX-1.02 3 a05-9645_1ex1d02.htm EX-1.02

Exhibit 1.02

LEHMAN BROTHERS HOLDINGS INC.

Lehman Notes, Series B

DISTRIBUTION AGREEMENT

May 18, 2005

To the Agents listed on
the signature page hereto

Ladies and Gentlemen:

Lehman Brothers Holdings Inc., a Delaware corporation (the “Company”), confirms its agreement with you (the “Agents”) with respect to the issue and sale by the Company of up to $5,000,000,000 aggregate principal amount of its Lehman Notes, Series B, (the “Lehman Notes” or the “Securities”). The Securities are to be issued pursuant to an indenture, dated as of September 1, 1987, as amended and supplemented to date (as amended, the “Indenture”), between the Company and Citibank, N.A., as trustee (the “Trustee”).

Subject to the terms and conditions stated herein and subject to the reservation by the Company of the right to sell Securities directly on its own behalf at any time, to any person, and the right to enter into agreements substantially identical hereto with other agents, the Company hereby (i) appoints each of you as agent of the Company for the purpose of soliciting offers to purchase the Securities from the Company in accordance with the terms hereof and (ii) agrees that whenever the Company determines to sell Securities pursuant to this Agreement, such Securities shall be sold pursuant to a Terms Agreement (as defined herein) relating to such sale in accordance with the provisions of Section 3(a) hereof between the Company and Lehman Brothers Inc. (the “Lead Agent”), pursuant to which the Lead Agent shall purchase such Securities as principal for resale to the public or for resale to one or more of the other Agents or dealers, each of whom will purchase as principal for resale to the public or to other dealers, as further set forth in this Agreement. This Agreement shall only apply to sales of the Securities and not to sales of any other securities or evidences of indebtedness of the Company and only on the specific terms set forth herein.

SECTION 1. Representations and Warranties. The Company represents and warrants to the Agents as of the date hereof, as of the Closing Date referred to in Section 2(c) hereof, and as of the times referred to in Section 8(a) hereof (the Closing Date and each such time being hereinafter sometimes referred to as a “Representation Date”), as follows:

SECTION 2. Solicitations as Agent. (a) On the basis of the representations and warranties contained herein, but subject to the terms and conditions herein set forth, the Agents agree to use their reasonable best efforts to solicit offers to purchase the Securities upon the terms and conditions set forth herein and in the Prospectus. The Agents agree to solicit offers to purchase only as permitted or contemplated by the Prospectus and herein. The Company reserves the right, in its sole discretion, to suspend solicitation of offers to purchase the Securities commencing at any time for any period of time or permanently. Upon receipt of at least one business day’s prior notice from the Company, orally or in writing, the Agents will forthwith suspend solicitation of offers to purchase Securities from the Company until such time as the Company has advised the Agents that such solicitation may be resumed. The Agents are authorized to solicit offers to purchase the Securities only in denominations of $1,000 or any amount in excess thereof which is an integral multiple of $1,000, at a purchase price equal to 100% of the principal amount thereof, plus accrued interest, if any, or such other denominations or purchase price as shall be specified by the Company (the “Offering Price”). Unless otherwise instructed by the Company, the Lead Agent shall communicate to the Company, orally or in writing, each reasonable offer to purchase Securities received by the Agents. The Company shall have the sole right to accept offers to purchase the Securities and may reject any such offer in whole or in part. Each Agent shall have the right, in its discretion reasonably exercised without advising the Company, to reject any offer to purchase the Securities received by it in whole or in part, and any such rejection shall not be deemed a breach of its agreement contained herein. Unless authorized by the Lead Agent in each instance, each Agent agrees not to submit an offer to purchase Securities for which an order from a purchaser has not been received.

SECTION 3. Purchases as Principal. (a) Each sale of Securities shall be made in accordance with the terms of this Agreement and a separate agreement to be entered into between the Company and the Lead Agent which will provide for the sale of such Securities to, and the purchase of and reoffering thereof by, the Lead Agent as principal (a “Terms Agreement”). Each such Terms Agreement, which may be oral (in which case a written confirmation of terms shall be delivered by the Lead Agent to the Company), shall be substantially in the form attached hereto as Exhibit C or in such other form as the Company and the Lead Agent may agree. The agreement of the Lead Agent to purchase Securities pursuant to any Terms Agreement, unless otherwise set forth therein, shall be deemed to be made on the basis of the representations, warranties and agreements of the Company herein contained and shall be subject to the terms and conditions herein set forth. Each Terms Agreement shall describe the Securities to be purchased pursuant thereto by the Lead Agent as principal, and shall specify, among other things, the principal amount of Securities to be purchased, the interest rate and maturity date of such Securities, the interest payment dates, the Offering Price, the Agents’ Concession (as defined below) to be paid to the Lead Agent, the Dealers’ Concession (as defined below), the Reallowance (as defined below), if any, the net proceeds to the Company, the time of delivery of and payment for such Securities (the “Settlement Date”), whether the Securities are redeemable or repayable, including pursuant to a Survivor’s Option (as defined in the Prospectus), and on what terms and conditions, whether there are any additional conditions precedent to the obligations of the Lead Agent under such Terms Agreement and any other relevant terms.

SECTION 4. Covenants of the Company. The Company covenants and agrees with the Agents that it will furnish (to the extent it has not already done so) to each of the Agents and Simpson Thacher & Bartlett LLP, counsel to the Agents, a copy of the Registration Statement, including all exhibits, in the form it became effective and all of the amendments thereto and that:

SECTION 5. Covenants of the Agents. Each Agent covenants and agrees with the Lead Agent and each other Agent as follows:

SECTION 6. Payment of Expenses. The Company will pay (i) the costs incident to the authorization, issuance, sale and delivery of the Securities and any taxes payable in that connection, (ii) the costs incident to the preparation, printing and filing under the Securities Act of the Registration Statement and any amendments and exhibits thereto, (iii) the costs incident to the preparation, printing and filing of any document and any amendments and exhibits thereto required to be filed by the Company under the Exchange Act, (iv) the costs of distributing the Registration Statement, as originally filed, and each amendment and post-effective amendment thereof (including exhibits), any preliminary prospectus in any of the foregoing documents, (v) the fees and disbursements of the Trustee and its counsel, (vi) the cost of any filings with the National Association of Securities Dealers, Inc., (vii) the fees and disbursements of counsel to the Company and the Company’s accountants, (viii) the fees paid to rating agencies in connection with the rating of the Securities, (ix) the fees and expenses of qualifying the Securities under the securities laws of the several jurisdictions as provided in Section 4(h) hereof and of preparing and printing a Blue Sky Survey and a memorandum concerning the legality of the Securities as an investment (including fees and expenses of a single counsel to the Agents in connection therewith), (x) the fees and disbursements of a single counsel to the Agents, (xi) the costs relating to the development and maintenance of the Lehman Notes Website and (xii) all other costs and expenses incident to the performance of the Company’s obligations under this Agreement.

SECTION 7. Conditions of Obligations. The obligations of each Agent, under this Agreement shall be subject to the accuracy in all material respects, on each Representation Date, of the representations and warranties of the Company contained herein, to the accuracy of any material statements of officers of the Company made in any certificates, opinions, affidavits, written statements or letters furnished to the Agents or counsel to the Agents pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder, and to each of the following additional conditions precedent:

In rendering such opinion and statement, such counsel may rely upon opinions of local counsel satisfactory to the Lead Agent for matters not governed by New York law and may rely as to matters of fact, to the extent he or she deems proper, upon certificates or affidavits of officers of the Company, the Trustee and public officials. Such counsel may rely on a certificate of the Trustee with respect to the execution of the Securities by the Company and the authentication thereof by the Trustee.

except in all instances for changes, increases or decreases set forth in such letter, in which case the letter shall be accompanied by an explanation by the Company as to the significance thereof, unless said explanation is not deemed necessary by the Representatives.

If any of the conditions specified in this Section 7 shall not have been fulfilled when and as required by this Agreement, or if any of the certificates or opinions furnished to the Agents or to counsel to the Agents pursuant to this Section 7 shall not be in all material respects reasonably satisfactory in form and substance to the Agents and to counsel to the Agents, this Agreement and all obligations of the Agents hereunder may be cancelled by the Agents. Notice of such cancellation shall be given to the Company in writing, or by telegraph confirmed in writing.

SECTION 8. Additional Covenants of the Company. The Company covenants and agrees that:

SECTION 9. Indemnification and Contribution. (a) The Company shall indemnify and hold harmless each Agent, its officers and employees and each person, if any, who controls such Agent within the meaning of the Securities Act, from and against any loss, claim, damage or liability, joint or several, or any action or pending action in respect thereof (including, but not limited to, any loss, claim, damage, liability or action relating to purchases and sales of Securities), to which such Agent, officer, employee or controlling person may become subject, under the Securities Act or otherwise, insofar as such loss, claim, damage, liability, action or pending action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, as originally filed or in any amendment thereof, or in any Prospectus or in any amendment or supplement thereto, (ii) the omission or alleged omission to state therein any material fact required to be stated therein or necessary to make the statements therein not misleading, and shall reimburse such Agent and each such officer, employee or controlling person promptly upon demand for any legal or other expenses reasonably incurred by such Agent, officer, employee or controlling person in connection with investigating or defending or preparing to defend against any such loss, claim, damage, liability, action or pending action as such expenses are incurred; provided, however, that (i) the Company shall not be liable in any such case to the extent that any such loss, claim, damage, liability, action or pending action arises out of, or is based upon, any untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information concerning such Agent furnished to the Company by or on behalf of such Agent specifically for use in connection with the preparation thereof, and (ii) such indemnity with respect to any Prospectus shall not inure to the benefit of such Agent (or any person controlling such Agent) from whom the person asserting any such loss, claim, damage or liability purchased the Securities which are the subject thereof if such person did not receive a copy of the Prospectus at or prior to the confirmation of the sale of such Securities to such person in any case where such delivery is required by the Securities Act and the untrue statement or omission of a material fact contained in the Prospectus was corrected in the Prospectus, unless such failure to deliver the Prospectus was a result of noncompliance by the Company with Section 4(g) hereof. The foregoing indemnity agreement is in addition to any liability that the Company may otherwise have to each Agent or to any officer, employee or controlling person of such Agent.

SECTION 10. Representations and Warranties to Survive Delivery. All representations and warranties of the Company contained in this Agreement, or contained in

certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect, regardless of the termination or cancellation of this Agreement or any investigation made by or on behalf of the Agents or any person controlling the Agents or by or on behalf of the Company, and shall survive each delivery of and payment for any of the Securities.

SECTION 11. Termination. (a) The Company may elect to suspend or terminate the offering of Securities under this Agreement at any time. The Company also (as to any one or more of the Agents) or any Agent (as to itself) may terminate the appointment and arrangements described in this Agreement. Upon receipt of instructions from the Company, the Lead Agent shall suspend or terminate the participation of any Selected Dealer under the Master Selected Dealer Agreement attached hereto as Exhibit D. Such actions may be taken, in the case of the Company, by giving prompt written notice of suspension to all of the Agents and by giving not less than one day’s written notice of termination to all of the Agents, or, in the case of an Agent, by giving not less than one day’s written notice of termination to the Company and the Lead Agent. For the purpose of the foregoing sentence, “business day” shall mean any day which is not a Saturday or Sunday and which in New York City is not a day on which banking institutions are generally authorized or obligated by law to close. The provisions of Sections 4(d), 4(g), 6, 9, 10, 13 and 14 hereof shall survive any termination of this Agreement.

SECTION 12. Notices. Except as otherwise provided herein, all notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Agents shall be directed to them as follows: c/o Lehman Brothers, Inc., 745 Seventh Avenue, New York, New York 10019, Attention: Taxable Fixed Income Syndicate/Lehman Notes, notices to the Company shall be directed to it as follows: Lehman Brothers Holdings Inc., 745 Seventh Avenue, New York, New York 10019, Attention: Treasurer.

SECTION 13. Binding Effect; Benefits. This Agreement shall be binding upon the Agents, the Company, and their respective successors. This Agreement and the terms and provisions hereof are for the sole benefit of only those persons, except that (a) the representations, warranties, indemnities and agreements of the Company contained in this Agreement shall also be deemed to be for the benefit of the person or persons, if any, who control the each Agent within the meaning of Section 15 of the Securities Act, and (b) the indemnity agreement of each Agent contained in Section 9 hereof shall be deemed to be for the benefit of directors of the Company, officers of the Company who have signed the Registration Statement and any person controlling the Company. Nothing in this Agreement is intended or shall be construed to give any person, other than the person referred to in this Section, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision contained herein.

SECTION 14. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of New York. This Agreement may be executed in counterparts and the executed counterparts shall together constitute a single instrument.

If the foregoing correctly sets forth our agreement, please indicate your acceptance hereof in the space provided for that purpose below.

	Very truly yours,


	LEHMAN BROTHERS HOLDINGS INC.


	By:
		Title:

CONFIRMED AND ACCEPTED, as of the date first
above written:

LEHMAN BROTHERS INC.


By:
	Title:


A.G. EDWARDS & SONS, INC.


By:
	Title:


BANC OF AMERICA SECURITIES LLC


By:
	Title:


CHARLES SCHWAB & CO., INC.


By:
	Title:

CITIGROUP GLOBAL MARKETS INC.


By:
	Title:


EDWARD D. JONES & CO., L.P.


By:
	Title:

FIDELITY CAPITAL MARKETS,
a division of National Financial Services LLC


By:
	Title:


MORGAN STANLEY & CO. INCORPORATED


By:
	Title:


MURIEL SIEBERT & CO. INC.


By:
	Title:


RAYMOND JAMES & ASSOCIATES, INC.


By:
	Title:

RBC DAIN RAUSCHER


By:
	Title:


UBS FINANCIAL SERVICES INC.


By:
	Title:


WACHOVIA SECURITIES, LLC


By:
	Title:

EXHIBIT A

Lehman Brothers Holdings Inc.

Lehman Notes, Series B

ADMINISTRATIVE PROCEDURES

Lehman Notes, Series B (the “Notes”), are being offered on a continuous basis by Lehman Brothers Holdings Inc. (the “Company”). Lehman Brothers Inc. (the “Lead Agent”), A.G. Edward & Sons, Inc., Banc of America Securities LLC, Charles Schwab & Co., Inc., Citigroup Global Markets Inc., Edward D. Jones & Co., L.P., Fidelity Capital Markets, a division of National Financial Services LLC, Morgan Stanley & Co. Incorporated, Muriel Siebert & Co. Inc., Raymond James & Associates, Inc., UBS PaineWebber Inc. and Wachovia Securities, LLC, each as agents (collectively, the “Agents”), have agreed to use their reasonable best efforts to solicit offers to purchase the Notes pursuant to a Distribution Agreement dated May 18, 2005 (the “Distribution Agreement”) between the Company and the Agents to which these administrative procedures are attached as an exhibit. The Notes are being sold by the Company to the Lead Agent pursuant to the Distribution Agreement and one or more terms agreements substantially in the form attached to the Distribution Agreement as Exhibit C (each a “Terms Agreement”). The Notes are being resold by the Lead Agent to the other Agents and by each of the Agents (including the Lead Agent) (i) directly to their customers or (ii) to selected broker-dealers for distribution to their customers in accordance with the Section 3(d) of the Distribution Agreement. Terms defined in the Distribution Agreement shall have the same meaning when used in this exhibit.

Administrative responsibilities, document control and record-keeping functions to be performed by the Company will be performed by its Treasury Department. Administrative procedures for the offering are explained below. The Company will advise the Agents and the Trustee in writing of those persons handling administrative responsibilities with whom the Agents and the Trustee are to communicate regarding offers to purchase Notes and the details of their delivery.

Each Note will be issued in book-entry form only (each, a “Book-Entry Note”) and will be represented by one master global security in fully registered form (the “Master Global Note”) without coupons delivered to the Trustee, as agent for The Depository Trust Company (“DTC”), and recorded in the book-entry system maintained by DTC. The Master Global Note shall be in a form approved by the Company, the Agents, DTC and the Trustee. Prior to the issuance of any Notes, the Issuer shall execute, attest and deliver to the Trustee, and the Trustee, upon the Issuer’s order, shall authenticate, the Master Global Note and hold it as custodian for DTC. An owner of a beneficial interest in a Book-Entry Note will not be entitled to receive a certificate representing such Note except in certain limited circumstances described in the Indenture. In connection with the qualification of the Book-Entry Notes for eligibility in the book-entry system maintained by DTC, the Trustee will perform the custodial, document control and administrative functions described below, in accordance with its respective

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obligations under a Letter of Representation from the Company and the Trustee to DTC dated as of the date of the Distribution Agreement and a Medium-Term Note Certificate Agreement between the Trustee and DTC dated October 31, 1988 (the “Certificate Agreement”), and its obligations as a participant in DTC, including DTC’s Same-Day Funds Settlement System (“SDFS”). The procedures set forth below may be modified in compliance with DTC’s then-applicable procedures and upon agreement by the Company, the Trustee and the Lead Agent.

Unless otherwise agreed between the Company and the Lead Agent, the Notes will be issued in accordance with the administrative procedures set forth herein. To the extent the procedures set forth below conflict with or omit certain of the provisions of the Notes, the Indenture, the Distribution Agreement or the Prospectus, including the applicable Pricing Supplement, the relevant provisions of the Notes, the Indenture, the Distribution Agreement and the Prospectus shall control.

Price to Public:		Each Note will be offered to the public at 100% of the principal amount thereof, plus accrued interest, if any, or such other amount indicated in the applicable Pricing Supplement.

Issuance:		All Book-Entry Notes will be represented initially by a single Master Global Note in fully registered form without coupons. The Master Global Note will be dated and issued as of the date of its authentication by the Trustee. The Master Global Note will not represent any Note in certificated form.

Maturities:		Each Note will mature on a date (the “Maturity Date”) determined by the Company after prior notification to the Agents.

		“Maturity” when used with respect to any Note, means the date on which the outstanding principal amount of such Note becomes due and payable in full in accordance with its terms, whether at its Maturity Date or by declaration of acceleration, call for redemption, repayment or otherwise.

Identification Numbers:		The Company will arrange, on or prior to commencement of a program for the offering of the Notes, with the CUSIP Service Bureau (the “CUSIP Service Bureau”) of Standard & Poor’s Corporation (“Standard & Poor’s”) for the reservation of a series of CUSIP numbers (including tranche numbers), consisting of approximately 900 CUSIP numbers and for future assignment to the Book-Entry Notes. The Company has or will obtain from the CUSIP Service Bureau a written list of such series of reserved CUSIP numbers and will deliver to the Lead Agent, the Trustee and DTC such written list of 900 CUSIP numbers of such series.

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		The Company will assign CUSIP numbers to Notes as described below under “Procedure for Setting Terms of Notes and Posting”. The Company will notify the CUSIP Service Bureau periodically of the CUSIP numbers that it has assigned to the Notes. When necessary, the Company will reserve additional CUSIP numbers for assignment to the Book-Entry Notes. Upon obtaining such additional CUSIP numbers the Company shall deliver such additional CUSIP numbers to the Lead Agent, the Trustee and DTC.

Registration		The Master Global Note will be issued in fully registered form without coupons. The Master Global Note will be registered in the name of Cede & Co., as nominee for DTC, on the securities register maintained under the Indenture. The beneficial owner of a Book-Entry Note (or one or more indirect participants in DTC designated by such owner) will designate one or more participants in DTC (with respect to such Book-Entry Note, the “Participants”) to act as agent or agents for such owner in connection with the book-entry system maintained by DTC, and DTC will record in book-entry form, in accordance with instructions provided by such Participants, a credit balance with respect to such Book-Entry Note in the account of such Participants. The ownership interest of such beneficial owner in such Note will be recorded through the records of such Participants or through the separate records of such Participants and one or more indirect participants in DTC. So long as Cede & Co. is the registered owner of the Master Global Note, DTC will be considered the sole owner and holder of the Book-Entry Notes represented by the Master Global Note for all purposes under the Indenture.

Transfers:		Transfers of interests in a Book-Entry Note will be accomplished by book entries made by DTC and, in turn, by Participants or through the separate records of such Participants and one or more indirect participants in DTC acting on behalf of beneficial transferors and transferees of such interests.

Consolidation and Exchange:		The Trustee, at the Company’s request, may deliver to DTC and the CUSIP Service Bureau at any time a written notice of consolidation specifying (i) the CUSIP number of two or more outstanding Book-Entry Notes having the same interest rate, optional redemption dates (if any) and Maturity Date and with respect to which interest has been paid to the same date and which otherwise constitute Notes of the same tenor under the

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		Indenture, (ii) a date, occurring at least 30 days after such written notice is delivered and at least 30 days before the next Interest Payment Date for such Book-Entry Notes, on which such Book-Entry Notes shall be consolidated and (iii) a new CUSIP number, obtained from the Trustee, to be assigned to such consolidated Book-Entry Notes. Upon receipt of such a notice, DTC will send to its Participants and the Trustee a written reorganization notice to the effect that such consolidation will occur on such date. Prior to the specified consolidation date, the Trustee will deliver to the CUSIP Service Bureau a written notice setting forth such consolidation date and the new CUSIP number and stating that, as of such consolidation date, the CUSIP numbers of the Book-Entry Notes to be consolidated will no longer be valid. On the specified consolidation date, the Trustee will consolidate on its records such Book-Entry Notes as a single Book-Entry Note bearing a new CUSIP number and dated the last Interest Payment Date to which interest has been paid or duly provided for on the consolidated Book-Entry Notes, and the CUSIP numbers of the consolidated Book-Entry Notes will, in accordance with CUSIP Service Bureau procedures, be cancelled and not immediately reassigned.

Denominations:		Notes will be issued in principal amounts of $1,000 or any amount in excess thereof that is an integral multiple of $1,000.

Interest:		Each Note will bear interest at a fixed rate. Interest on each Note will accrue from and including the Issue Date of such Note for the first interest period and from the last Interest Payment Date to which interest has been paid for all subsequent interest periods. Each payment of interest on a Note will include interest accrued through the day preceding, as the case may be, the Interest Payment Date or the Maturity Date.

		Any payment of principal, premium, if any, or interest required to be made on a day that is not a Business Day (as defined below) may be made on the next succeeding Business Day and no interest shall accrue as a result of any such delayed payment.

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

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		The first payment of interest on any Note originally issued between a Record Date and an Interest Payment Date will be made on the Interest Payment Date following the next succeeding Record Date.

		Each Note will bear interest from, and including, its Issue Date at the rate per annum set forth thereon and in the applicable Pricing Supplement until the principal amount thereof is paid, or made available for payment, in full. Unless otherwise specified in the applicable Pricing Supplement, interest on each Note will be payable monthly, quarterly, semi-annually or annually on each Interest Payment Date and at Maturity. Interest will be payable to the person in whose name a Note is registered at the close of business on the Regular Record Date (as defined below) next preceding each Interest Payment Date; provided, however, interest payable at Maturity will be payable to the person to whom principal shall be payable.

		The interest rates the Company will agree to pay on newly-issued Notes are subject to change without notice by the Company from time to time, but no such change will affect any Notes already issued or as to which an offer to purchase has been accepted by the Company.

Calculation of Interest:		Interest on the Notes will be computed on the basis of a 360-day year of twelve 30-day months. Each Note will accrue interest from its issue date, or from the last Interest Payment Date to which interest has been paid or duly provided for, through the day before the relevant Interest Payment Date or Maturity, as the case may be.

Interest Payment Dates:		Unless otherwise specified in the applicable Pricing Supplement, the Interest Payment Dates for a Note that provides for monthly interest payments shall be the fifteenth day of each calendar month, commencing in the calendar month that next succeeds the month in which the Note is issued. In the case of a Note that provides for quarterly interest payments, the Interest Payment Dates shall be the fifteenth day of each third month, commencing in the third succeeding calendar month following the month in which the Note is issued. In the case of a Note that provides for semi-annual interest payments, the Interest Payment Dates shall be the fifteenth day of each sixth month, commencing in the sixth succeeding calendar month following the month in which the Note is issued. In the case of a Note that provides for annual interest payments, the Interest Payment Date shall be the

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		fifteenth day of every twelfth month, commencing in the twelfth succeeding calendar month following the month in which the Note is issued. The “Regular Record Date” means, with respect to any Interest Payment Date shall be the fifteenth day preceding such Interest Payment Date, except that the Regular Record Date with respect to the final Interest Payment Date shall be the final Interest Payment Date.

Payments of Principal and Interest:		Payments of Interest Only. Promptly after each Regular Record Date, the Trustee will deliver to the Company and DTC a written notice specifying by CUSIP number the amount of interest to be paid on each Book-Entry Note on the following Interest Payment Date (other than an Interest Payment Date coinciding with Maturity) and the total of such amounts. DTC will confirm the amount payable on each Book-Entry Note on such Interest Payment Date. The Company will pay to the Trustee, as paying agent, the total amount of interest due on such Interest Payment Date (other than at Maturity), and the Trustee will pay such amount to DTC at the times and in the manner set forth below under “Manner of Payment”.

		Payments at Maturity. On or about the first Business Day of each month, the Trustee will deliver to the Company and DTC a written list of principal, premium, if any, and interest to be paid on each Book-Entry Note maturing or subject to redemption or repayment in the following month. The Company, the Trustee and DTC will confirm the amounts of such principal, premium, if any, and interest payments with respect to each such Book-Entry Note on or about the fifth Business Day preceding the Maturity of such Book-Entry Note. The Company will pay to the Trustee, as the paying agent, the principal amount of such Book-Entry Note, together with premium, if any, and interest due at such Maturity. The Trustee will pay such amount to DTC at the times and in the manner set forth below under “Manner of Payment”.

		Promptly after payment to DTC of the principal and interest due at Maturity of such Book-Entry Note, the Trustee will cancel such Book-Entry Note in accordance with the provisions of the Indenture and record an appropriate debit advice on the Master Note.

		Manner of Payment. The total amount of any principal, premium, if any, and interest due on Book-Entry Notes on any Interest Payment Date or at Maturity shall be paid by the

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		Company to the Trustee in immediately available funds on such date. The Company will make such payment on such Book-Entry Notes to an account specified by the Trustee. At Maturity: prior to 10 A.M. (New York City time) on such date or as soon as possible thereafter, the Trustee will make such payments to DTC in accordance with DTC’s SDFS Paying Agent Operating Procedures. On Interest Payment Dates (other than at Maturity): the Trustee will make such payments to DTC in accordance with existing arrangements between DTC and the Trustee. DTC will allocate such payments to its Participants in accordance with its existing operating procedures. Neither the Company nor the Trustee shall have any direct responsibility or liability for the payment by DTC to such Participants of the principal of or premium, if any, or interest on the Book-Entry Notes.

		Withholding Taxes. The amount of any taxes required under applicable law to be withheld from any interest payment on a Book-Entry Note will be determined and withheld by the Participant, indirect participant in DTC or other person responsible for forwarding payments and materials directly to the beneficial owner of such Note.

Procedure for Setting Terms of Notes and Posting:		The Company and the Lead Agent will discuss, from time to time, the terms, including aggregate principal amounts, the Maturities and the prices to public of and the interest rates to be borne by such Notes, of the Notes that may be sold as a result of the solicitation of orders by the Agents. If the Company decides to set the terms of any Notes in respect of which the Agents are to solicit orders to purchase (the setting of the terms of such Notes to be referred to herein as “Posting”) or if the Company decides to change terms of Notes previously posted by it, it will promptly advise the Agents of the terms to be posted.

		The Company will assign a separate CUSIP number for each tranche of Notes to be posted, and will so advise and notify the Lead Agent and the Trustee of said assignment by telephone and/or by telecopier or other form of electronic transmission. The Lead Agent will include the assigned CUSIP number on all Posting notices communicated to the Agents.

Offering of Notes:		In the event that there is a Posting, the Lead Agent will communicate to each of the other Agents the terms, including aggregate principal amounts, the Maturities and the prices to public of and the interest rates to be borne by such Notes, of each

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		tranche of Notes that is the subject of the Posting. Thereafter, the Agents will solicit offers to purchase the Notes accordingly.

Acceptance and Rejection of Offers to Purchase:		Unless otherwise instructed by the Company, the Lead Agent will advise the Company promptly of all offers to purchase Notes received by each Agent, other than those rejected by an Agent in whole or in part in the reasonable exercise of its discretion. Each Agent shall have the right, in its discretion reasonably exercised, without notifying the Company, to reject any offers in whole or in part. Unless otherwise agreed by the Company and each of the Agents, the Company has the sole right to accept offers to purchase Notes and may reject any such offer in whole or in part.

Submission of Offers to Purchase:		Unless otherwise agreed, each Agent will, no later than 10:00 a.m. on the fourth day subsequent to the day of which the Posting occurs or if such fourth day is not a Business Day on the preceding Business Day, or on such other Business Day and time as shall be mutually agreed upon by the Lead Agent and the other Agents, communicate to the Lead Agent via the Lehman Notes Website or other acceptable form of electronic transmission of the aggregate amount of each tranche of Notes that such Agent is offering to purchase, with respect to which amount such Agent, unless otherwise authorized by the Lead Agent in each instance, must have received an order from a purchaser.

Purchase of Notes by the Lead Agent:		The Lead Agent will, no later than 12:00 noon (New York City time) on the fourth day subsequent to the day on which the Posting occurs, or if such fourth day is not a Business Day on the preceding Business Day, or on such other Business Day and time as shall be mutually agreed upon by the Company and the Lead Agent (any such day, a “Trade Date”), (i) complete, execute and deliver to the Company a Terms Agreement that sets forth, among other things, the amount of each tranche of Notes that the Lead Agent is offering to purchase or (ii) inform the Company that none of the Notes of a particular tranche will be purchased by the Lead Agent.

Terms Agreement:		Upon receipt of a completed and executed Terms Agreement from the Lead Agent, the Company will (i) promptly execute and return such Terms Agreement to the Lead Agent or (ii) inform the Lead Agent that its offer to purchase the Notes of a particular tranche has been rejected, in whole or in part. The Lead Agent will promptly inform the other Agents if any of their orders to purchase have not been accepted by the Company.

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Preparation of Pricing Supplement:		If any offer to purchase a Note is accepted by or on behalf of the Company, the Company will provide a Pricing Supplement (substantially in the form attached to the Distribution Agreement as Exhibit E) reflecting the terms of such Note and will file the Pricing Supplement with the SEC in accordance with the applicable paragraph of Rule 424(b) under the Act. The Company shall use its reasonable best efforts to send the Pricing Supplement by email or telecopy to the Lead Agent and the Trustee by 3:00 p.m. (New York City Time) on the applicable Trade Date. The Lead Agent shall use its reasonable best efforts to send the Pricing Supplement by email or telecopy or overnight express (for delivery by the close of business on the applicable Trade Date, but in no event later than 11:00 a.m. New York City time, on the Business Day following the applicable Trade Date) to each Agent and participating Dealer which made or presented the offer to purchase the applicable Note and the Trustee at the following applicable address:

		if to Lehman Brothers Inc., to: 745 Seventh Avenue, New York, NY 10019 Attention: Fixed Income Syndicate/Medium Term Note Desk Telephone: (212) 526-9664 Telecopier: (212) 526-0943

		if to A.G. Edward & Sons, Inc., to: One North Jefferson, St. Louis, MO 63103 Attention: Telephone: Telecopier:

		if to Charles Schwab & Co., Inc.,

		if to Citigroup Global Markets Inc., to: 388 Greenwich Street New York, NY 10013 Attention: Medium-Term Note Department Telephone: (212) 816-5831 Telecopier: (212) 816-0949

		if to Banc of America Securities LLC, to: 100 N. Tryon St. (nci-007-06-07) Charlotte, NC 28255

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		if to Edward D. Jones & Co., L.P., to: 12555 Manchester Road St. Louis, MO 63131 - 3729 Attention: Barbara Eshing Telephone: (314) 515-5119

		if to Fidelity Capital Markets, a division of National Financial Services LLC, to: 200 Seaport Blvd Mailzone Z2H Boston, MA 02210 Attention: Michael Prucher

		if to Morgan Stanley & Co. Incorporated, to: 1585 Broadway, 2nd Floor New York, NY 10036 - 8293 Attention: Manager - Continuously Offered Products Telephone: (212) 761-1872 Telecopier: (212) 761-0780

		if to Muriel Siebert & Co. Inc., to:

		if to Raymond James & Associates, Inc., to:


		Attention: Dam Dergarabedon Telephone: (727) 567-2992 Telecopier: (727) 567-8192


		if to UBS PaineWebber Inc., to: Taxable Fixed Income Department Attention: Corporate Desk 800 Harbor Blvd. Weehawken, NJ 07087 Telephone: (201) 352-7150 Telecopier: (201) 352-6900

		if to Wachovia Securities, LLC, to:

		Outdated Pricing Supplements and the Prospectuses to which they

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	are attached (other than those retained for files) will be destroyed.

Delivery of Confirmation and Prospectus to Purchaser by each Agent:	Subject to “Suspension of Solicitation; Amendment or Supplement” below, each Agent and participating Dealer, pursuant to the terms of the Distribution Agreement and as herein described, will cause to be delivered a copy of the Prospectus, including the applicable Pricing Supplement, to each purchaser of Notes from such Agent or Dealer.

	For each offer to purchase a Note accepted by or on behalf of the Company, the Lead Agent will confirm in writing, which writing may be by facsimile or electronic transmission, with each Agent or participating Dealer the terms of such Note, the amount being purchased by such Agent or Dealer and other applicable details described above and delivery and payment instructions.

	In addition, the relevant Agent or Dealer, as the case may be, will deliver to purchasers of the Notes the Prospectus, including the applicable Pricing Supplement, in relation to such Notes prior to or simultaneously with delivery of the confirmation of sale and delivery of the Note.

Settlement:	The receipt by the Company of immediately available funds in payment for a Note and entry by the Trustee of an SDFS deliver order through DTC’s Participant Terminal System to credit such Note to the account of a Participant purchasing, or acting for the purchase of, such Note, shall constitute “settlement” with respect to such Note. All orders accepted by the Company will be settled from one to three Business Days from the date of acceptance by the Company pursuant to the timetable set forth below, unless the Company and the Lead Agent agree to settlement on a later date, and shall be specified upon acceptance of such offer. In all cases the Company will notify the Trustee on the date issuance instructions are given.

Settlement Procedures:	Unless otherwise specified in the applicable Terms Agreement, Settlement Procedures with regard to each Book-Entry Note sold by the Company through the Agents shall be as follows:

A.	Before the acceptance of an offer by the Company with respect to a Note, the Lead Agent will communicate the following details of the terms of such offer to the Company by telephone confirmed in writing, which may be by facsimile or electronic transmission or other acceptable written means:

	(a)	Principal amount of the purchase;

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	(b)	Interest rate per annum;

	(c)	Interest Payment Dates;

	(d)	Trade Date

	(f)	Maturity Date;

	(e)	Issue Date;

	(g)	Price to public;

	(h)	Agents’ Concession, Dealers’ Concession and Reallowance, if any;

	(i)	Net proceeds to the Company;

	(j)	If a Note is redeemable by the Company or repayable by the Noteholder, such of the following as are applicable:

		i) The date on and after which such Note may be redeemed/repaid, and

		ii) The redemption/ repayment price (% of par).

	(k)	Whether the Note has a Survivor’s Option;

	(l)	DTC Participant Number of the institution through which the customer will hold the beneficial interest in the Book-Entry Note; and

	(m)	Such other terms as are necessary to complete the applicable Pricing Supplement.

B.	The Company will confirm the previously assigned CUSIP number to the Book-Entry Note and then advise the Trustee by telephone (confirmed in writing), telex, facsimile or electronic transmission or other acceptable written means of the information received in accordance with Settlement Procedure “A” above and the assigned CUSIP number. If the Company rejects an offer, the Company will promptly notify the Lead Agent and the Trustee by telephone.

C.	The Company shall communicate with the Trustee and Lead Agent and each such communication by the Company shall constitute a representation and warranty by the Company to the

A-12

	Trustee and the Agents that (i) such Note is then, and at the time of issuance and sale thereof will be, duly authorized for issuance and sale by the Company, (ii) such Note will conform with the terms of the Indenture pursuant to which such Note are issued and (iii) upon issuance of such Book-Entry Note, the aggregate initial offering price of all Notes issued under the Indenture will not exceed $5,000,000,000.

D.	The Trustee will enter a pending deposit message through DTC’s Participant Terminal System, specifying the following settlement information:

	1.	The information set forth in Settlement Procedure “A”.

	2.	The numbers of the participant accounts maintained by DTC on behalf of the Trustee and the Agents.

	3.	The initial Interest Payment Date for such Note, number of days by which such date succeeds the related “DTC Record Date” (which term means the Regular Record Date) and amount of interest per $1,000 principal amount payable on such Interest Payment Date.

	4.	The Interest Payment Dates.

	5.	CUSIP number of the Book-Entry Note representing such Note.

	6.	Whether such Book-Entry Note will represent any other Notes issued or to be issued (to the extent known at such time).

E.	The Trustee will complete the Master Global Note as it relates to such Note by filing the applicable Pricing Supplement relating to such Note in the records maintained by it, which records, taken with the Master Global Note, shall evidence such Note.

F.	DTC will credit such Note to the Trustee’s participant account at DTC.

G.	The Trustee will enter an SDFS deliver order through DTC’s Participant Terminal System instructing DTC to (i) debit such Note to the Trustee’s participant account and credit such Note to the Lead Agent’s participant account and (ii) debit the Lead Agent’s settlement account and credit the Trustee’s settlement account for an amount equal to the price of such Note less the Agents’ Concession.

H.	The Lead Agent will enter an SDFS deliver order through DTC’s Participant Terminal System instructing DTC (i) to debit such Note to the Lead Agent’s participant account and credit such Note

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	to the participant accounts of the Agents with respect to such Note and (ii) to debit the settlement accounts of such Agents and credit the settlement account of the Lead Agent for an amount equal to the price of such Note less the agreed upon portion of the Agents’ Concession.

I.	Transfers of funds in accordance with SDFS deliver orders described in Settlement Procedures “G” and “H” will be settled in accordance with SDFS operating procedures in effect on the settlement date.

J.	The Trustee will credit to an account of the Company maintained at the Trustee funds available for immediate use in the amount transferred to the Trustee in accordance with Settlement Procedure “G”.

K.	Each Agent and participating Dealer will deliver to the purchaser of such Note a copy of the most recent Prospectus applicable to the Note, including the applicable Pricing Supplement, prior to or simultaneously with delivery of the confirmation of sale and delivery of the Note and payment by the purchaser of the Note.

	Each Agent and participating Dealer will confirm the purchase of such Note to the purchaser either by transmitting to the Participants with respect to such Note a confirmation order or orders through DTC’s institutional delivery system or by mailing a written confirmation to such purchaser.

L.	Monthly, the Trustee will send to the Company a statement setting forth the principal amount of Notes outstanding as of that date under the Indenture and setting forth a brief description of any sales of which the Company has advised the Trustee but which have not yet been settled.

Settlement Procedures Timetable:	For purchases of Notes sold through the Agents and accepted by the Company for settlement, Settlement Procedures “A” through “L” set forth above shall be completed as soon as possible but not later than the respective times (New York City time) set forth below:

	Settlement Procedure	Time
	A	4:00 P.M. on the Trade Date
	B, C	5:00 P.M. on the Trade Date
	D	2:00 P.M. on the Business Day before the Settlement Date

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	E	9:00 A.M. on the Settlement Date
	F	10:00 A.M. on the Settlement Date
	G, H	2:00 P.M. on the Settlement Date
	I	4:45 P.M. on the Settlement Date
	J, K	5:00 P.M. on the Settlement Date
	L	Monthly or at request of the Company

	Settlement Procedure “I” is subject to extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in the SDFS operating procedures in effect on the Settlement Date.

	If settlement of a Book-Entry Note is rescheduled or cancelled, the Trustee will deliver to DTC, through DTC’s Participant Terminal System, a cancellation message to such effect by no later than 2:00 P.M. on the Business Day immediately preceding the scheduled Settlement Date.

Failure to Settle:	If the Trustee has not entered an SDFS delivery order with respect to a Book-Entry Note pursuant to Settlement Procedure “G”, the Trustee shall immediately notify the Company thereof. Thereafter, upon written request of the Company (which may be evidenced by facsimile transmission), the Trustee shall deliver to DTC, through DTC’s Participant Terminal System, as soon as practicable a withdrawal message instructing DTC to debit such Note to the Trustee’s participant account. DTC will process the withdrawal message, provided that the Trustee’s participant account contains a principal amount of Notes that is at least equal to the principal amount to be debited. If a withdrawal message is processed with respect to the Notes represented by a Book-Entry Note, the Trustee will mark the Pricing Supplement in its records relating to such Book-Entry Note “cancelled”, make appropriate entries in the Trustee’s records and record an appropriate debit advice on the Master Note.

	If the purchase price for any Note is not timely paid to any relevant Participant with respect to such Note by the beneficial purchaser thereof (or a Person, including an indirect participant in DTC, acting on behalf of such purchaser), such Participant may enter a deliver order through DTC’s Participant Terminal System debiting such Note to such Participant’s participant account and crediting such Note free to the participant account of the Trustee and shall notify the Trustee and the Company thereof. Thereafter, the Trustee, (i) will immediately notify the Company thereof, once the Trustee has confirmed that such

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		Note has been credited to its participant account, and the Company shall immediately transfer by Fedwire (immediately available funds) to such Participant an amount equal to the price of such Note which was previously credited to the account of the Company maintained at the Trustee in accordance with Settlement Procedure “J” and (ii) the Trustee will deliver the withdrawal message and take the related actions described in the preceding paragraph. If such failure shall have occurred for any reason other than default by the relevant Agent in the performance of its obligations hereunder or under the Distribution Agreement, the Company will reimburse such Agent on an equitable basis for its reasonable out-of-pocket accountable expenses actually incurred and loss of the use of funds during the period when they were credited to the account of the Company.

		Notwithstanding the foregoing, upon any failure to settle with respect to a Book-Entry Note, DTC may take any actions in accordance with its SDFS operating procedures then in effect. In the event of a failure to settle with respect to one or more, but not all, of the Notes to have been represented by a Book-Entry Note, the Trustee will make appropriate entries in its records, in accordance with Settlement Procedures “E”.

Procedure for Rate Changes:		Each time after a Posting a decision has been reached to change the interest rates of the Notes subject to such Posting, the Company will promptly advise the Lead Agent, which will in turn promptly advise the other Agents; and the Agents will forthwith suspend solicitation of offers to purchase Notes at the prior rates. The Lead Agent may telephone the Company with recommendations as to the changed interest rates.

Suspension of Solicitation Amendment or Supplement:		Subject to its representations, warranties and covenants contained in the Distribution Agreement, the Company may instruct the Agents to suspend solicitation of offers to purchase at any time for a period of time or permanently. Upon receipt of such instructions each Agent will promptly (but in any event within one Business Day) suspend solicitation of offers to purchase from the Company until such time as the Company has advised it that solicitation of offers to purchase may be resumed.

		In the event that at the time the Agents, at the direction of the Company, suspend solicitation of offers to purchase from the Company there shall be any orders outstanding which have not been settled, the Company will promptly advise the Agents and the Trustee whether such orders may be settled and whether

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		copies of the Prospectus as theretofore amended or supplemented as in effect at the time of the suspension may be delivered in connection with the Settlement of such orders. The Company will have the sole responsibility for such decision and for any arrangements which may be made in the event that the Company determines that such orders may not be settled or that copies of such Prospectus may not be so delivered.

Trustee Not to Risk Funds:		Nothing herein shall be deemed to require the Trustee to risk or expend its own funds in connection with any payment to the Company, or the Agents or the purchasers, it being understood by all parties that payments made by the Trustee to either the Company or the Agents shall be made only to the extent that funds are provided to the Trustee for such purpose.

Advertising Costs:		The Company will determine with the Lead Agent the amount and nature of advertising that may be appropriate in offering the Notes. Advertising expenses in connection with solicitation of offers to purchase Notes will be paid by the Company.

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EXHIBIT B

LEHMAN BROTHERS HOLDINGS INC.

Lehman Notes, Series B

FORM OF AGENT ACCESSION LETTER

[Name of Agent
Address of Agent]

Ladies and Gentlemen:

Lehman Brothers Holdings Inc., a Delaware corporation (the “Company”), has previously entered into a Distribution Agreement dated May 18, 2005 (the “Distribution Agreement”), among the Company and the other agents signatories thereto (the “Existing Agents”), with respect to the issue and sale by the Company of its Lehman Notes, Series B (the “Securities”) pursuant to an Indenture dated as of September 1, 1987, as amended between the Company and Citibank, N.A., as Trustee. The Distribution Agreement permits the Company to appoint one or more additional persons to act as agent with respect to the Securities, on terms substantially the same as those contained in the Distribution Agreement. A copy of the Distribution Agreement, including the Procedures with respect to the issuance of the Securities attached thereto as Exhibit A, is attached hereto.

In accordance with Section 2(d) of the Distribution Agreement we hereby confirm that, with effect from the date hereof, you shall become a party to, and an Agent under, the Distribution Agreement, vested with all the authority, rights and powers, and subject to all duties and obligations of an Agent as if originally named as such under the Distribution Agreement.

Except as otherwise expressly provided herein, all terms used herein which are defined in the Distribution Agreement shall have the same meanings as in the Distribution Agreement. Your obligation to act as Agent hereunder shall be subject to you having received copies of the most recent documents (including any prior documents referred to therein) previously delivered to the Existing Agents pursuant to Sections 7 and 8 of the Distribution Agreement. By your signature below, you confirm that such documents are to your satisfaction. For purposes of Section 12 of the Distribution Agreement, you confirm that your notice details are as set forth immediately beneath your signature.

Notwithstanding anything in the Distribution Agreement to the contrary, the obligations of each of the Existing Agents and the Additional Agent(s) under Section 9 of the Distribution

B-1

Agreement are several and not joint, and in no case shall any Existing Agent or Additional Agent (except as may be provided in any agreement among them) be responsible under Section 9(d) to contribute any amount by which the total price at which the Securities purchased by it exceeds the amount of any damages which such Existing Agent or Additional Agent has otherwise paid or become liable to pay with respect to the Securities purchased by such Existing Agent or Additional Agent hereunder.

If the foregoing correctly sets forth the agreement among the parties hereto, please indicate your acceptance hereof in the space provided for that purpose below.

	Very truly yours,


	LEHMAN BROTHERS HOLDINGS INC.


	By:

		Name:
		Title:

CONFIRMED AND ACCEPTED, as of the
date first above written

[Insert name of Additional Agent and information pursuant
to Section 12 of the Distribution Agreement]

By:
	Name:
	Title:

B-2

Notice information pursuant to Section 12 of the
Distribution Agreement:

Name:

Address:

Contact Person:

Telephone:

Facsimile:

B-3

EXHIBIT C

LEHMAN BROTHERS HOLDINGS INC.

Lehman Notes, Series B

FORM OF TERMS AGREEMENT

, 20

Lehman Brothers Holdings Inc.
745 Seventh Avenue
New York, New York 10019

Attention: Treasurer

Lehman Brothers Holdings Inc., a Delaware corporation (the “Company”), has previously entered into a Distribution Agreement dated May 18, 2005 (the “Distribution Agreement”), among the Company, Lehman Brothers Inc. (the “Lead Agent”) and the other agents party thereto, with respect to the issue and sale by the Company of its Lehman Notes, Series B (the “Securities”), pursuant to an Indenture dated as of September 1, 1987, as amended between the Company and Citibank, N.A., as Trustee. The Distribution Agreement provides that sales of Securities shall be made pursuant to the Distribution Agreement and a separate agreement between the Company and the Lead Agent as principal.

The Lead Agent agrees to purchase, at the purchase price set forth below, $ principal amount of Securities. The Securities have the terms indicated in the attached Pricing Supplement.

The Lead Agent’s obligation to purchase Securities hereunder is subject to the accuracy, as of the Settlement Date, of the Company’s representations and warranties contained in the Distribution Agreement and to the Company’s performance and observance of all applicable covenants and agreements contained therein, and the satisfaction of all conditions precedent contained therein, including, without limitation, those pursuant to Sections 7 and 8 thereof.

Except as otherwise expressly provided herein, all terms used herein which are defined in the Distribution Agreement shall have the same meanings as in the Distribution Agreement.

The undersigned agrees to perform its duties and obligations specifically provided to be performed by the Lead Agent in accordance with the terms and provisions of the Distribution Agreement and the Procedures, as amended or supplemented hereby.

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This Agreement shall be subject to the termination provisions of Section 11 of the Distribution Agreement.

C-2

If the foregoing correctly sets forth the agreement among the parties hereto, please indicate your acceptance hereof in the space provided for that purpose below.

	LEHMAN BROTHERS INC.


	By:

		Name:
		Title:

Accepted:		, 20
LEHMAN BROTHERS HOLDINGS INC.

By:
	Name:
	Title:

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EXHIBIT D

LEHMAN BROTHERS HOLDINGS INC.

Lehman Notes, Series B

SCHEDULE OF CONCESSIONS

Unless otherwise set forth in the applicable Pricing Supplement, the Company agrees to pay the Lead Agent the Agents’ Concession equal to the following percentage of the principal amount of the Securities sold through the Agents:

Term	Commission Rate
9 months to less than 3 years		0.600
3 years to less than 4 years		0.800
4 years to less than 5 years		0.950
5 years to less than 7 years		1.200
7 years to less than 10 years		1.500
10 years to less than 15 years		1.900 to 2.225
15 years to less than 25 years		2.375 to 2.875
25 years and longer		3.000

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EXHIBIT E

LEHMAN BROTHERS HOLDINGS INC.

Lehman Notes, Series B

FORM OF PRICING SUPPLEMENT

Filed Pursuant to Rule 424(b)(2)
Registration No. 333-121067

Pricing Supplement No. dated
(to Prospectus Supplement dated May 18, 2005
and Prospectus dated May 18, 2005)

LEHMAN BROTHERS HOLDINGS INC.

Lehman Notes, Series B

This Pricing Supplement supplements the terms and conditions in, and incorporates by reference, the Prospectus, dated May 18, 2005, as supplemented by the Prospectus Supplement, dated May 18, 2005, (as so supplemented, together with all documents incorporated by reference therein, the “Prospectus”), and should be read in conjunction with the Prospectus. Unless otherwise defined in this Pricing Supplement, terms used herein have the same meanings as are given to them in the Prospectus.

Trade Date:

Issue Date:

CUSIP
Number

Aggregate
Principal
Amount

Price to
Public

Agents’
Concession

Dealers’
Concession

Reallowance
(if any)

Net Proceeds to
Issuer

Interest Rate per

Annum

CUSIP Number		Interest Payment Dates		Maturity Date		Survivor’s Option (Yes/No)		Right of Issuer to Redeem Notes or of Holder to Require Repayment of Notes
								[The Note may not be redeemed prior to the Maturity Date at the option of Lehman Brothers Holdings.] [The Note may be redeemed prior to the Maturity Date at the option of Lehman Brothers Holdings [in whole but not in part][in whole or in part] at a price equal to % of the principal amount being redeemed, [on ][on or after ][on each ]. Notice of redemption will be given not more than [60] nor less than [30] days prior to the redemption date.] [The holder of the Note may not elect repayment of the Note by Lehman Brothers Holdings prior to the Maturity Date.] [The holder of the Note may elect repayment of the Note by Lehman Brothers Holdings prior to the Maturity Date in whole or in part at a price equal to % of the principal amount being repaid, [on ][on or after ][on each ]. Notice of election to require repayment must be given by the holder as provided in the Prospectus Supplement.]

Other Terms:

[IF THIS IS AN UPSIZE: The Notes will be issued in an aggregate principal amount of $[ ] and will form a single tranche with the $[ ] aggregate principal amount of Retail Notes, Series B, that Lehman Brothers Holdings will also issue on [ ], 20[ ], as described in Pricing Supplement No. [ ] dated [ ], 20[ ]. The Notes will have the same CUSIP number as the other notes of this tranche and will settle on the same date as, and trade interchangeably with, the other notes of this tranche. The issuance of the Notes will increase the aggregate principal amount of the outstanding notes of this tranche to $[ ].]

[IF UPSIZING IS INTENDED: In addition, on the Issue Date specified above, Lehman Brothers Holdings may (but is not required to) issue additional Notes similar in all respects (including with respect to the Price to Public and the Concessions specified above).]

Lehman Brothers Holdings may also issue additional Notes following the Issue Date at a new Price to Public and subject to new Concessions. All such additional Notes would form a single tranche with, have the same CUSIP number as and trade interchangeably with the Notes immediately upon settlement.

[IF SETTLEMENT PERIOD IS GREATER THAN T+3: It is expected that delivery of the Notes will be made against payment therefor more than three business days following the date of this pricing supplement. Trades in the secondary market generally are required to settle in three business days unless the parties to any such trade expressly agree otherwise. Accordingly, purchasers who wish to trade the securities on any day prior to the third business day before the settlement date will be required to specify an alternative settlement cycle at the time of any such trade to prevent failed settlement.]

EX-4.01 4 a05-9645_1ex4d01.htm EX-4.01

Exhibit 4.01

CUSIP NO.

REGISTERED		FACE AMOUNT:
No.

If this Note is an OID Note (as defined below) the following legend is applicable:

FOR PURPOSES OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE ISSUE PRICE OF THIS NOTE IS % OF ITS PRINCIPAL AMOUNT, AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE YIELD TO MATURITY COMPOUNDED , AND THE ISSUE DATE ARE AS SET FORTH BELOW. IN THE CASE OF A NOTE SUBJECT TO THE RULES OF TREASURY REGULATION SECTION 1.1275-4(b), THE COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE CAN BE OBTAINED BY SUBMITTING A WRITTEN REQUEST TO: CONTROLLER’S OFFICE, LEHMAN BROTHERS HOLDINGS INC., 745 SEVENTH AVENUE, NEW YORK, NEW YORK 10019.

LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTE, SERIES H
(FIXED RATE)

If the registered owner of this Note (as indicated below) is The Depository Trust Company (the “Depository”) or a nominee of the Depository, this Note is a Note in global form (a “Global Security”) and the following legends are applicable except as specified on the reverse hereof:

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

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

ISSUE PRICE: $

ISSUE DATE:

MATURITY DATE:

INTEREST RATE:

SPREAD:

SPREAD MULTIPLIER:

MAXIMUM INTEREST RATE:

MINIMUM INTEREST RATE:

INTEREST PAYMENT DATES:

REGULAR RECORD DATES:

EXCHANGE RATE AGENT:

DEPOSITORY:

DUAL CURRENCY NOTE:
o YES o NO

OPTION ELECTION DATES:

OPTIONAL PAYMENT CURRENCY:

DESIGNATED EXCHANGE RATE:

OPTION VALUE CALCULATION AGENT:

OTHER PROVISIONS:

OPTION TO RECEIVE PAYMENTS IN THE SPECIFIED CURRENCY:
o YES o NO

SPECIFIED CURRENCY:

BUSINESS DAY:

AMORTIZING NOTE:
o YES o NO

SINKING FUND:

TOTAL AMOUNT OF OID:

YIELD TO MATURITY:

INITIAL ACCRUAL PERIOD OID:

AUTHORIZED DENOMINATIONS:

EXTENSION OF MATURITY NOTE:
o YES o NO

EXTENSION PERIOD:

NUMBER OF EXTENSION PERIODS:

OPTION TO ELECT REPAYMENT:
o YES o NO

OPTIONAL REPAYMENT DATES:

OPTIONAL REPAYMENT PRICES:

OPTIONAL INTEREST RATE RESET:
o YES o NO

OPTIONAL RESET DATES:

OPTIONAL REDEMPTION:
o YES o NO

INITIAL REDEMPTION DATE:

INITIAL REDEMPTION PERCENTAGE: %

APPLICABILITY OF ANNUAL REDEMPTION PERCENTAGE REDUCTION:
o YES o NO

If yes, state Annual Percentage Reduction: %

EXTENDIBLE NOTE:
o YES o NO

INITIAL MATURITY DATE:

SPECIAL ELECTION INTERVAL:

RENEWABLE IN PART:
o YES o NO

AUTHORIZED RENEWABLE AMOUNTS:

SPECIAL ELECTION PERIOD:

set forth in Section 2 on the reverse hereof. If the Specified Currency is a Foreign Currency and it is so provided above, the Holder may elect to receive such payments in that Foreign Currency by delivery of a written request to the Trustee (or to any duly appointed Paying Agent) at the Corporate Trust Office (as defined below) not later than 10 calendar days prior to the applicable payment date, and such election will remain in effect for the Holder until revoked by written notice to the Trustee (or to any such Paying Agent) at the Corporate Trust Office received not later than 10 calendar days prior to the applicable payment date; provided, however, no such election or revocation may be made if, with respect to this Note, (i) an Event of Default has occurred, (ii) the Company has exercised any discharge or defeasance options or (iii) the Company has given a notice of redemption. In the event the Holder makes any such election pursuant to the preceding sentence, such election will not be effective on any transferee of such Holder and such transferee shall be paid in U.S. dollars unless such transferee makes an election pursuant to the preceding sentence; provided, however, that such election, if in effect while funds are on deposit with the Trustee to satisfy and discharge this Note, will be effective on any such transferee unless otherwise specified above. The “Principal Amount” of this Note at any time means (i) if this Note is an OID Note, the Amortized Face Amount at such time as described in Section 7 on the reverse hereof, (ii) if this Note is an Amortizing Note, the Outstanding Face Amount at such time as described in Section 4 on the reverse hereof, (iii) in all other cases, the Face Amount hereof.

If this Note is subject to an Annual Percentage Reduction as specified above, the Redemption Price shall initially be the Initial Redemption Percentage of the Principal Amount of this Note on the Initial Redemption Date and shall decline at each anniversary of the Initial Redemption Date (each such date, a “Redemption Date”) by the Annual Percentage Reduction of such Principal Amount until the Redemption Price is 100% of such Principal Amount.

In the event of any optional redemption by the Company, any repayment at the option of the Holder, acceleration of the maturity of this Note or other prepayment of this Note prior to the Maturity Date specified, the term “Maturity” when used herein shall refer, where applicable, to the date of redemption, repayment, acceleration or other prepayment of this Note.

An “OID Note” is any Note (a) that has been issued at an Issue Price lower, by more than a de minimis amount (as determined under United States federal income tax rules applicable to original issue discount), than the Face Amount thereof and (b) any other Note that for United States federal income tax purposes would be considered an original issue discount instrument.

Except as provided in the following paragraph, the Company will pay interest semiannually on February 15 and August 15 of each year (unless other Interest Payment Dates are specified above) (each an “Interest Payment Date”), commencing with the first Interest Payment Date next succeeding the Issue Date, and at Maturity; provided that any payment of principal, premium, if any, or interest to be made on any Interest Payment Date or on a date of Maturity that is not a Business Day shall be made on the next succeeding Business Day with the same force and effect as if made on such Interest Payment Date or such date of Maturity, as the case may be, and no additional interest shall accrue as a result of such delayed payment. The term “Business Day” means any day, that is not a Saturday or Sunday, and that is not a day on which banking institutions in New York City are generally authorized obligated or by law or executive order to be closed; for notes denominated in pounds sterling only, is also a London Business Day; for notes having a specified currency other than U.S. dollars only, other than notes denominated in Euros, is also not a day on which banking institutions in the principal financial center (as defined below) of the country of the specified currency generally are authorized or obligated by law or executive order to close; and for notes denominated in Euros, is also a Euro business day. A principal financial center means the capital city of the country issuing the specified currency. However, for U.S. dollars, Australian dollars, Canadian dollars and Swiss francs, the principal financial center will be New York City, Sydney, Toronto and Zurich, respectively. A ‘‘London Business Day’’ means any day that is not a Saturday or Sunday and 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 and a ‘‘Euro Business Day’’ means any day that is not a Saturday or Sunday on which the Trans-European Automated Real-Time Gross Settlement Express Transfer System is open. Each payment of interest hereon shall include interest accrued through the day before the Interest Payment Date or date of Maturity, as the case may be. Unless otherwise specified above, interest on this Note will be computed on the basis of a 360-day year of twelve 30-day months. In no event shall the interest rate of this Note be higher than the maximum rate permitted by applicable law, as the same may be modified by United States law of general application.

Unless otherwise specified above, the interest payable on any Interest Payment Date will, as provided in the Indenture, be paid to the person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the Regular Record Date indicated above (whether or not a Business Day) next preceding such Interest Payment Date; provided that, notwithstanding any provision of the Indenture to the contrary, interest payable on any date of Maturity shall be payable to the Person to whom principal shall be payable; and provided, further, that, unless otherwise specified above, in the case of a Note initially issued between a Regular Record Date and the Interest Payment Date relating to such Regular Record Date, interest for the period beginning on the Issue Date and ending on such Interest Payment Date shall be paid on the Interest Payment Date following the next succeeding Regular Record Date to the registered Holder on such next succeeding Regular Record Date.

Unless otherwise indicated above, and except as provided below if this Note is a Global Security, all payments of interest on this Note and all principal payments hereon if this Note is an Amortizing Note (other than interest and, in the case of Amortizing Notes, principal payable at Maturity) will be made by check (unless otherwise provided above, from an account at a bank located outside the United States if such amount is payable in a Foreign Currency); provided that, if the Holder hereof is the Holder of U.S.$10,000,000 or more in aggregate Principal Amount of Notes of this series of like tenor and term (or a Holder of the equivalent thereof in a Foreign Currency determined as provided in Section 2 on the reverse hereof), such Holder shall be entitled to receive interest payments (and principal payments, if this Note is an Amortizing Note) in immediately available funds, but only if complete and appropriate instructions have been received in writing by the Trustee (or any such Paying Agent) on or prior to the applicable Regular Record Date. Simultaneously with any election by the Holder hereof to receive payments in respect hereof in a Foreign Currency, such Holder may, if so entitled (as provided above), elect to receive such payments in immediately available funds by providing complete and appropriate instructions to the Trustee (or any such Paying Agent), and all such payments will be made in immediately available funds to an account maintained by the payee with a bank located outside the United States or as otherwise provided above.

Unless otherwise indicated above, and except as provided below if this Note is a Global Security, payments of principal, premium, if any, and interest payable at Maturity will be made in immediately available funds (unless otherwise indicated above, payable to an account at a bank located outside the United States if payable in a Foreign Currency) upon surrender of this Note at the corporate trust office or agency of the Trustee (or any duly appointed Paying Agent) maintained for that purpose in the Borough of Manhattan, New York City (the “Corporate Trust Office”), provided that this Note is presented to the Trustee (or any such Paying Agent) in time for the Trustee (or any such Paying Agent) to make such payments in such funds in accordance with its normal procedures.

Unless otherwise specified above, if this Note is a Global Security, payments of interest hereon and principal hereon if this Note is an Amortizing Note (in each case, other than at Maturity), will be made in same-day funds in accordance with existing arrangements between the Trustee (or any duly appointed Paying Agent) and the Depository. Unless otherwise specified above, if this Note is a Global Security, any principal, premium and/or interest payable hereon at Maturity will be paid by wire transfer in immediately available funds to an account specified by the Depository (which account, unless otherwise provided above, will be at a bank located outside the United States if payable in a Foreign Currency).

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

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

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

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

IN WITNESS WHEREOF, Lehman Brothers Holdings Inc. has caused this instrument to be signed by its Chairman of the Board, 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.

Dated:

[SEAL]	LEHMAN BROTHERS HOLDINGS INC.


	By:


	Attest:
		Assistant Secretary

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

CITIBANK, N.A.
as Trustee

By:
	Authorized Officer

[REVERSE OF NOTE]

LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTES, SERIES H
(Fixed Rate)

Unless otherwise specified on the face hereof, if payment hereon is required to be made in a Foreign Currency and such currency is unavailable to the Company for making payments thereof due to the imposition of exchange controls or other circumstances beyond the Company’s control, or is no longer used by the government of the country which issued such currency or for the settlement of transactions by public institutions of or within the international banking community, then the Company will be entitled to make payments with respect hereto in U.S. dollars until such Foreign Currency is again available or so used. The amount so payable on any date in such Foreign Currency shall be converted into U.S. dollars at a rate determined by the Exchange Rate Agent on the basis of the noon buying rate in New York City for cable transfers in the Foreign Currency as certified for customs purposes by the Federal Reserve Bank of New York (the “Market Exchange Rate”) for such Foreign Currency on the second Business Day prior to such payment date, or on such other basis as may be specified on the face hereof. In the event such Market Exchange Rate is not then available, the Company will be entitled to make payments in U.S. dollars (i) if such Foreign Currency is not a composite currency, on the basis of the most recently available Market Exchange Rate for such Foreign Currency or (ii) if such Foreign Currency is a composite currency in an amount determined by the Exchange Rate Agent to be the sum of the results obtained by multiplying the number of units of each component currency of such composite currency, as of the most recent date on which such composite currency was used, by the Market Exchange Rate for such component currency on the second Business Day prior to such payment date (or if such Market Exchange Rate is not then available, by the most recently available Market Exchange Rate for such component currency, or as otherwise specified on the face hereof). Any payment in respect hereof made under such circumstances in U.S. dollars will not constitute an Event of Default under the Indenture.

two or more currencies, the amount of that original component currency as a component shall be replaced by amounts of such two or more currencies having an aggregate value on the date of division equal to the amount of the former component currency immediately before such division.

In the event of an official redenomination of the Specified Currency or the Optional Payment Currency (including, without limitation, an official redenomination of any such currency that is a composite currency), the obligations of the Company to make payments in or with reference to such currency shall, in all cases, be deemed immediately following such redenomination to be obligations to make payments in or with reference to that amount of redenominated currency representing the amount of such currency immediately before such redenomination. In no event shall any adjustment be made to any amount payable hereunder as a result of any redenomination of any component currency of any composite currency (unless such composite currency is itself officially redenominated).

All determinations referred to above made by the Exchange Rate Agent shall be at its sole discretion (except to the extent expressly provided herein that any determination is subject to approval by the Company) and, in the absence of manifest error, shall be conclusive for all purposes and binding on the Holder hereof, and the Exchange Rate Agent shall have no liability therefor.

All currency exchange costs will be borne by the Holder hereof by deduction from the payments made hereon.

Notwithstanding the foregoing, not later than 20 days prior to an Optional Reset Date, the Company may, at its option, revoke the interest rate provided for in the Reset Notice and establish an interest rate that is higher than the interest rate provided for in the Reset Notice for the Subsequent Interest Period commencing on such Optional Reset Date by causing the Trustee to mail by first-class mail notice of such higher interest rate to the Holder of this Note. Such notice shall be irrevocable and shall be mailed by the Trustee within five Business Days after receipt thereof. All Notes with respect to which the interest rate is reset on an Optional Reset Date will bear such higher interest rate for the Subsequent Interest Period.

If the Company elects to reset the interest rate of this Note, the Holder of this Note will have the option to elect repayment by the Company of this Note, or any portion hereof, on any Optional Reset Date at a price calculated with reference to the Face Amount hereof to be repaid, plus any interest accrued to, such Optional Reset Date. In order to obtain repayment on an Optional Reset Date, the Holder must follow the procedures set forth above in Section 5 for optional repayment except that the period for delivery or notification to the Trustee shall be at least 25 but not more than 35 days prior to such Optional Reset Date and except that, if the Holder has tendered this Note for repayment pursuant to the Reset Notice, the Holder may, by written notice to the Trustee, revoke such tender for repayment until the close of business on the tenth day prior to such Optional Reset Date; provided, however, that if such day is not a Business Day, then such notice may be given on the next succeeding Business Day.

The Company may exercise such option by notifying the Trustee of such exercise on or prior to the Option Election Date. The Trustee will mail by first-class mail to each holder of a Note of this Tranche a notice of such election within five Business Days of the Option Election Date which shall state (i) the first date, whether an Interest Payment Date and/or the Maturity Date, on which scheduled payments in the Optional Payment Currency will be made and (ii) the Designated Exchange Rate. Any such notice by the Company, once given, may not be withdrawn.

If this Note is a Dual Currency Note, unless otherwise specified on the face hereof and notwithstanding any prior election made by the Company, the amount payable hereon in the event of any optional redemption by the Company, any repayment at the option of the Holder, any acceleration of the Maturity of this Note or other prepayment of this Note prior to the Maturity Date shall be an amount equal to the Principal Amount hereof otherwise due and payable plus accrued interest to but excluding the date of redemption, repayment, acceleration or other prepayment minus the Total Option Value multiplied by a fraction, the numerator of which is the Principal Amount hereof and the denominator of which is the aggregate Principal Amount of all Dual Currency Notes of this Tranche. In no event will such payment be less than zero. Notwithstanding any prior election made by the Company, such payment shall be made in the Specified Currency unless otherwise provided on the face hereof.

The term “Total Option Value” means, with respect to any Dual Currency Note on any date, an amount (calculated as of such date by the Option Value Calculation Agent) equal to the sum of the Option Values (calculated as of such date by the Option Value Calculation Agent) for all Interest Payment Dates occurring after the date of calculation up to and including the Maturity Date. The term “Option Value” means, with respect to an Interest Payment Date or the Maturity Date, the amount calculated by the Option Value Calculation Agent to be the arithmetic average of the prices quoted on the date of calculation by three reference banks (which banks shall be selected by the Option Value Calculation Agent and shall be reasonably acceptable to the Company) for the right on the Option Election Date immediately preceding such Interest Payment Date or Maturity Date to purchase for value on such Interest Payment Date or Maturity Date from such reference banks (A) the aggregate amount of the Specified Currency due on such Interest Payment Date or Maturity Date with respect to all of the Dual Currency Notes of this Tranche in exchange for (B) the amount of the Optional Payment Currency that would be received if the amount in clause (A) were converted into the Optional Payment Currency at the Designated Exchange Rate.

All determinations referred to above made by the Exchange Rate Agent or the Option Value Calculation Agent shall be at their sole discretion (except to the extent expressly provided herein that any determination is subject to approval by the Company) and, in the absence of manifest error, shall be conclusive for all purposes and binding on the Holder hereof, and neither the Exchange Rate Agent nor the Option Value Calculation Agent shall have any liability therefor.

The Company may exercise its option by notifying the Trustee of such exercise at least 45 but not more than 60 days prior to the Maturity Date hereof in effect prior to the exercise of such option (the “Original Stated Maturity”). Not later than five Business Days after receipt thereof, the Trustee will mail to the Holder a notice (the “Extension Notice”), first class, postage prepaid, setting forth (i) the election of the Company to extend the Maturity Date, (ii) the new Maturity Date, (iii) the Interest Rate applicable to the Extension Period and (iv) the provisions, if any, for redemption during the Extension Period, including the date on which or the period or periods during which and the price at which such redemption may occur during the Extension Period. Upon the mailing by the Trustee of an Extension Notice to the Holder, the Maturity Date hereof shall be extended automatically, and, except as modified by the Extension Notice and as described in the next paragraph, this Note will have the same terms as prior to the mailing of such Extension Notice.

Notwithstanding the foregoing, not later than 20 days prior to the Original Stated Maturity hereof, the Company may, at its option, revoke the interest rate provided for in the Extension Notice and establish a higher interest rate for the Extension Period by causing the Trustee to mail notice of such higher interest rate, first class, postage prepaid, to the Holder. Such notice shall be irrevocable and shall be mailed by the Trustee within three

Business Days after receipt thereof. This Note will bear such higher interest rate for the Extension Period, whether or not tendered for repayment.

If the Company extends the Maturity Date of this Note, the Holder will have the option to elect repayment by the Company of this Note, or any portion hereof, on the Original Stated Maturity at a price calculated with reference to the Face Amount hereof to be repaid plus any accrued interest to such date. In order for this Note to be so repaid on the Original Stated Maturity, the Holder must follow the procedures set forth in Section 5 hereof for optional repayment, except that the period for delivery of this Note or notification to the Trustee shall be at least 25 but not more than 35 days prior to the Original Stated Maturity and except that the Holder may, by written notice to the Trustee, revoke any such tender for repayment until the close of business on the tenth day prior to the Original Stated Maturity; provided, however, that if such day is not a Business Day, then such notice may be given on the next succeeding Business Day.

On the Interest Payment Date occurring in the sixth month (unless a different Special Election Interval is specified on the face hereof) prior to the Initial Maturity Date hereof (the “Initial Maturity Extension Date”) and on the Interest Payment Date occurring in each sixth month (or the last month of each Special Election Interval) after such Initial Maturity Extension Date (each, together with the Initial Maturity Extension Date, a “Maturity Extension Date”), the Maturity of this Note will be extended to the Interest Payment Date occurring in the twelfth month (or, if a Special Election Interval is specified on the face hereof, the last month in a period equal to twice the Special Election Interval) after such Maturity Extension Date, unless the Holder elects to terminate the automatic extension of the Maturity hereof or any portion hereof as described below.

If the Holder elects to terminate the automatic extension of the Maturity of any portion of the principal amount of this Note during the specified period prior to any Maturity Extension Date, such portion will become due and payable on the Interest Payment Date occurring in the sixth month (or the last month in the Special Election Interval) after such Maturity Extension Date (the “Extended Maturity Date”).

The Holder may elect to terminate the automatic extension of the Maturity of this Note, or if so specified above, any portion hereof, by delivering a notice to such effect to the Trustee (or any duly appointed Paying Agent) at the Corporate Trust Office not less than 15 nor more than 30 days prior to such Maturity Extension Date (unless another period is specified on the face hereof as the “Special Election Period”). Such election will be irrevocable and will be binding upon each subsequent Holder of this Note. An election to terminate the automatic extension of the Maturity of this Note may be exercised with respect to less than the entire Face Amount hereof only if so specified on the face hereof and only in such Face Amount, or any integral multiple in excess thereof, as is specified on the face hereof. Notwithstanding the foregoing, the Maturity of this Note will not be extended beyond the Maturity Date specified on the face hereof.

Unless otherwise specified above, any such election to terminate will be effective only if this Note, with the “Option to Elect Termination of Automatic Extension” included herein duly executed, is presented to the Trustee (or any duly appointed Paying Agent) simultaneously with notice of such election (or, in the event notice of such election, together with a guarantee of delivery within five Business Days, is transmitted on behalf of the Holder from a member of a national securities exchange, the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States, within five Business Days of the date of such notice). As soon as practicable following receipt of this Note the Trustee (or any duly appointed Paying Agent) shall issue in exchange herefor in the name of the Holder (i) a Note, in a face amount equal to the face amount of this Note for which the election to terminate the automatic extension of Maturity was exercised, with terms identical to those specified herein (except for the Issue Date and the Initial Interest Rate and except that such Note shall have a fixed, non-extendable Maturity on the Extended Maturity Date) and (ii) if such election is made with respect to less than the full Face Amount hereof, a replacement Renewable Note, in a face amount equal to the Face Amount of this Note for which no election was made, with terms identical to this Note.

If this Note is a Global Security and if at any time the Depository notifies the Company that it is unwilling or unable to continue as Depository or if at any time the Depository shall no longer be eligible under the Indenture, the Company shall appoint a successor Depository. If a successor Depository for the Securities of such series is not appointed by the Company within 90 days after the Company receives such notice or becomes aware of such ineligibility, the Company will issue, and the Trustee will authenticate and deliver, Notes in definitive form in an aggregate Face Amount equal to the Face Amount hereof.

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

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

OPTION TO ELECT REPAYMENT

The undersigned owner of this Note hereby irrevocably elects to have the Company repay the Face Amount of this Note or portion hereof below designated at (i) the Optional Repayment Percentage multiplied by the Principal Amount of this Note to be repaid in respect of such Face Amount plus accrued interest to the Optional Repayment Date, if this Note is to be repaid pursuant to the Optional Repayment provision described in Section 5 hereof, or (ii) 100% of the Principal Amount of this Note to be repaid in respect of such Face Amount plus accrued interest to the Optional Reset Date, if this Note is to be repaid pursuant to the Optional Interest Reset provision described in Section 6 hereof or the Extension of Maturity Notes provision described in Section 9 hereof. Any such election is irrevocable except as provided in Section 6 or Section 9 hereof.

Dated:
				Signature
				Sign exactly as name appears on the front of
				this Note [SIGNATURE GUARANTEED - required
				only if Notes are to be issued and delivered
				to other than the registered Holder]

Face Amount to be repaid, if amount to be repaid is less than the Face Amount of this Note (Face Amount				Fill in for registration of Notes if to be issued otherwise than to the registered Holder:
remaining must be an authorized denomination)
				Name:
$				Address:

				(Please print name and address including zip code)

				SOCIAL SECURITY OR OTHER TAXPAYER ID NUMBER

OPTION TO ELECT TERMINATION OF AUTOMATIC EXTENSION

The undersigned owner of this Note hereby irrevocably elects to terminate the automatic extension of this Note or of the portion of the Face Amount of this Note below designated. Any such election is irrevocable and will be binding on any subsequent Holder hereof.

Dated:
				Signature
				Sign exactly as name appears on the front of
				this Note [SIGNATURE GUARANTEED - required
				only if Notes are to be issued and delivered
				to other than the registered Holder]

Face Amount to be terminated, if amount to be terminated is less than the Face Amount of this Note (such Face Amount must be an authorized denomination)				Fill in for registration of Notes if to be issued otherwise than to the registered Holder:
				Name:
$				Address:

				(Please print name and address including zip code)

				SOCIAL SECURITY OR OTHER TAXPAYER ID NUMBER

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
TEN ENT	-	as tenant by the entireties
JT TEN	-	as joint tenants with right of survivorship and not as tenants in common
UNIF GIFT	-
MIN ACT	-		Custodian
		(Cust)		(Minor)
		Under Uniform Gifts to Minors Act


		(State)

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 OTHER IDENTIFYING NUMBER OF ASSIGNEE


Please print or type name and address, including zip code of assignee


the within Note of LEHMAN BROTHERS HOLDINGS INC. and all rights thereunder and does hereby irrevocably constitute and
appoint				Attorney to transfer the said Note on the books of the within-named
Company, with full power of substitution in the premises.

Dated:

SIGNATURE GUARANTEED:
	NOTICE: The signature to this
	assignment must correspond with the
	name as it appears upon the face of
	the within Note in every particular,
	without alteration or enlargement or
	any change whatsoever.

SCHEDULE I

Amortization Table

Date		Payment

EXHIBIT A

RESET NOTICE

LEHMAN BROTHERS HOLDINGS INC.
Medium-Term Notes, Series H
(Fixed Rate)
CUSIP No.
Registered Nos. -

LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of Delaware (the “Company”), is the issuer of the above-referenced Notes (the “Notes”). Capitalized terms used herein and not defined are used as defined in the Notes.

The Company hereby elects to reset the Interest Rate set forth on the face of the Notes. On and after (1), the Interest Rate shall be .

Each Holder of a Note has the option to elect repayment by the Company of such Note, or any portion thereof, on any Optional Reset Date pursuant to the terms of such Note. The Notes may be repaid on the dates and at the prices set forth below:

Date		Redemption Price

IN WITNESS WHEREOF, Lehman Brothers Holdings Inc. has caused this Reset Notice to be signed by its Chairman of the Board, its President, its Vice Chairman, its Chief Financial Officer, one of its Vice Presidents or its Treasurer and to be attested by its Secretary or one of its Assistant Secretaries.

Dated:	LEHMAN BROTHERS HOLDINGS INC.

	By:
		Title:

	Attest:
			Title:

(1) Insert applicable Optional Reset Date.

EX-4.02 5 a05-9645_1ex4d02.htm EX-4.02

Exhibit 4.02

CUSIP NO.

REGISTERED	FACE AMOUNT:
No.

If this Note is an OID Note (as defined below) the following legend is applicable:

LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTE, SERIES H
(FLOATING RATE)

TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.

ISSUE PRICE: $

ISSUE DATE:

MATURITY DATE:

INTEREST RATE:

INTEREST RATE BASIS:

SPREAD:

SPREAD MULTIPLIER:

MAXIMUM INTEREST RATE:

MINIMUM INTEREST RATE:

INTEREST RESET DATES:

INTEREST RESET PERIOD:

INTEREST DETERMINATION DATES:

INTEREST PAYMENT DATES:

REGULAR RECORD DATES:

EXCHANGE RATE AGENT:

DEPOSITORY:

DUAL CURRENCY NOTE:
o YES o NO

OPTION ELECTION DATES:

OPTIONAL PAYMENT CURRENCY:

DESIGNATED EXCHANGE RATE:

OPTION VALUE CALCULATION AGENT:

OTHER PROVISIONS:

OPTION TO RECEIVE PAYMENTS IN THE SPECIFIED CURRENCY:
o YES o NO

SPECIFIED CURRENCY:

BUSINESS DAY:

AMORTIZING NOTE:
o YES o NO

SINKING FUND:

TOTAL AMOUNT OF OID:

YIELD TO MATURITY:

INITIAL ACCRUAL PERIOD OID:

AUTHORIZED DENOMINATIONS:

EXTENSION OF MATURITY NOTE:
o YES o NO

EXTENSION PERIOD:

NUMBER OF EXTENSION PERIODS:

OPTION TO ELECT REPAYMENT:
o YES o NO

OPTIONAL REPAYMENT DATES:

OPTIONAL REPAYMENT PRICES:

OPTIONAL INTEREST RATE RESET:
o YES o NO

OPTIONAL RESET DATES:

OPTIONAL REDEMPTION:
o YES o NO

INITIAL REDEMPTION DATE:

INITIAL REDEMPTION PERCENTAGE: %

APPLICABILITY OF ANNUAL REDEMPTION PERCENTAGE REDUCTION:
o YES o NO
If yes, state Annual Percentage Reduction: %

EXTENDIBLE NOTE:
o YES o NO

INITIAL MATURITY DATE:

SPECIAL ELECTION INTERVAL:

RENEWABLE IN PART:
o YES o NO

AUTHORIZED RENEWABLE AMOUNTS:

SPECIAL ELECTION PERIOD:

LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company”, which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to , or registered assigns, on the Maturity Date the Principal Amount hereof (as defined below) and, if so specified above, to pay interest thereon from the Issue Date specified above or from the most recent Interest Payment Date specified above to which interest has been paid or duly provided for at the rate per annum determined in accordance with the provisions on the reverse hereof, depending on the Interest Rate Basis specified above, until the principal hereof is paid or made available for payment and (to the extent that the payment of such interest shall be legally enforceable) at such rate per annum on any overdue principal and premium and on any overdue instalment of interest. Unless otherwise specified above, and except as provided in Section 9 on the reverse hereof if this Note is a Dual Currency Note (as hereinafter defined), payments of principal, premium, if any, and interest hereon will be made in U.S. dollars; if the Specified Currency set forth above is a currency other than U.S. dollars (a “Foreign Currency”), such payments will be made in U.S. dollars based on the equivalent of that Foreign Currency converted into U.S. dollars in the manner set forth in Section 2 on the reverse hereof. If the Specified Currency is a Foreign Currency and it is so provided above, the Holder may elect to receive such payments in that Foreign Currency by delivery of a written request to the Trustee (or to any duly appointed Paying Agent) at the Corporate Trust Office (as defined below) not later than 10 calendar days prior to the applicable payment date, and such election will remain in effect for the Holder until revoked by written notice to the Trustee (or to any such Paying Agent) at the Corporate Trust Office received not later than 10 calendar days prior to the applicable payment date; provided, however,

no such election or revocation may be made if, with respect to this Note, (i) an Event of Default has occurred, (ii) the Company has exercised any discharge or defeasance options or (iii) the Company has given a notice of redemption. In the event the Holder makes any such election pursuant to the preceding sentence, such election will not be effective on any transferee of such Holder and such transferee shall be paid in U.S. dollars unless such transferee makes an election pursuant to the preceding sentence; provided, however, that such election, if in effect while funds are on deposit with the Trustee to satisfy and discharge this Note, will be effective on any such transferee unless otherwise specified above. The “Principal Amount” of this Note at any time means (i) if this Note is an OID Note, the Amortized Face Amount at such time as described in Section 8 on the reverse hereof and (ii) in all other cases, the Face Amount hereof.

Except as provided in the following paragraph, the Company will pay interest on each Interest Payment Date specified above, commencing with the first Interest Payment Date next succeeding the Issue Date, and at Maturity; provided that any payment of principal, premium, if any, or interest to be made on any Interest Payment Date or on a date of Maturity that is not a Business Day shall be made on the next succeeding Business Day with the same force and effect as if made on such Interest Payment Date or such date of Maturity, as the case may be, and additional interest shall accrue as a result of such delayed payment up to, but excluding, the date of Maturity, except that if this Note is a LIBOR Note or a EURIBOR Note (as defined in Section 3 on the reverse hereof) and such next succeeding Business Day falls in the next calendar month, such payment shall be made on the preceding day that is a Business Day. The term “Business Day” means any day, that is not a Saturday or Sunday, and that is not a day on which banking institutions in New York City are generally authorized or obligated by law or executive order to be closed; for LIBOR notes only, is also a London Business Day; for notes having a specified currency other than U.S. dollars only, other than notes denominated in Euros, is also not a day on which banking institutions in the principal financial center (as defined below) of the country of the specified currency generally are authorized or obligated by law or executive order to close; and for EURIBOR notes, notes denominated in Euros or LIBOR notes for which the index currency is Euros only, is also a Euro business day. A principal financial center means the capital city of the country issuing the specified currency. However, for U.S. dollars,

Australian dollars, Canadian dollars and Swiss francs, the principal financial center will be New York City, Sydney, Toronto and Zurich, respectively. A “London Business Day” means any day that is not a Saturday or Sunday and 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 and a “Euro Business Day” means any day that is not a Saturday or Sunday on which the Trans-European Automated Real-Time Gross Settlement Express Transfer System is open. Unless otherwise specified above, the interest payable on each Interest Payment Date or at Maturity will be the amount of interest accrued from and including the Issue Date or from and including the last Interest Payment Date to which interest has been paid, as the case may be, to, but excluding, such Interest Payment Date or the date of Maturity, as the case may be; provided, however, that if interest on this Note is reset daily or weekly, interest payable on each Interest Payment Date will be the amount of interest accrued from and including the Issue Date or from and excluding the last date to which interest has been paid, as the case may be, to, and including, the date 15 calendar days prior to such Interest Payment Date (“Regular Record Date”) immediately preceding such Interest Payment Date, except that at Maturity the interest payable will include interest accrued to, but excluding, the date of Maturity.

Unless otherwise specified above, the interest payable on any Interest Payment Date will, as provided in the Indenture, be paid to the person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the Regular Record Date indicated above next preceding such Interest Payment Date; provided that, notwithstanding any provision of the Indenture to the contrary, interest payable on any date of Maturity shall be payable to the Person to whom principal shall be payable; and provided, further, that, unless otherwise specified above, in the case of a Note initially issued between a Regular Record Date and the Interest Payment Date relating to such Regular Record Date, interest for the period beginning on the Issue Date and ending on such Interest Payment Date shall be paid on the Interest Payment Date following the next succeeding Regular Record Date to the registered Holder on such next succeeding Regular Record Date.

Unless otherwise indicated above, each Holder shall receive interest payments in immediately available funds by check mailed to such Holder or by wire transfer, but only if complete and appropriate instructions have been received in writing by the Trustee (or any such Paying Agent) on or prior to the applicable Regular Record Date. Simultaneously with any election by the Holder hereof to receive payments in respect hereof in a Foreign Currency, such Holder may, if so entitled (as provided above), elect to receive such payments in immediately available funds by providing complete and appropriate instructions to the Trustee (or any such Paying Agent), and all such payments will be made in immediately available funds to an account maintained by the payee with a bank located outside the United States or as otherwise provided above.

Unless otherwise indicated above, and except as provided below if this Note is a Global Security, payments of principal, premium, if any, and interest payable at Maturity will be made in immediately available funds (unless otherwise indicated above, payable to an account at a bank located outside the United States if payable in a Foreign Currency) upon surrender of this Note at the corporate trust office or agency of the Trustee (or any duly appointed Paying Agent) maintained for that purpose in New York City (the “Corporate Trust Office”), provided that this

Note is presented to the Trustee (or any such Paying Agent) in time for the Trustee (or any such Paying Agent) to make such payments in such funds in accordance with its normal procedures.

Unless otherwise specified above, if this Note is a Global Security, payments of interest hereon (other than at Maturity) will be made in same-day funds in accordance with existing arrangements between the Trustee (or any duly appointed Paying Agent) and the Depository. Unless otherwise specified above, if this Note is a Global Security, any principal, premium and/or interest payable hereon at Maturity will be paid by wire transfer in immediately available funds to an account specified by the Depository (which account, unless otherwise provided above, will be at a bank located outside the United States if payable in a Foreign Currency).

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

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

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

Dated:

[SEAL]

	LEHMAN BROTHERS HOLDINGS INC.


	By:


	Attest:
			Assistant Secretary

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

CITIBANK, N.A.
as Trustee

By:
	Authorized Officer

[REVERSE OF NOTE]

LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTES, SERIES H
(Floating Rate)

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

Section 2. Currency Exchanges and Payments. If the Holder elects to receive all or a portion of payments of principal of, premium, if any, and interest on this Note, if denominated in a Foreign Currency, in U.S. dollars, the Exchange Rate Agent specified on the face hereof or a successor thereto (the “Exchange Rate Agent”) will convert such payments into U.S. dollars. In the event of such an election, payment to the Holder will be based upon the exchange rate as determined by the Exchange Rate Agent based on the highest bid quotation in New York City received by such Exchange Rate Agent at approximately 11:00 a.m., New York City time, on the second Business Day preceding the applicable payment date from three recognized foreign exchange dealers (one of which may be the Exchange Rate Agent unless such Exchange Rate Agent is an affiliate of the Issuer) for the purchase by the quoting dealer of the Foreign Currency for U.S. dollars for settlement on such payment date in the amount of the Foreign Currency payable in the absence of such an election to such Holder and at which the applicable dealer commits to execute a contract. If such bid quotations are not available, such payment will be made in the Foreign Currency. All currency exchange costs will be borne by the holder of this Note by deductions from such payments.

transfers in the Foreign Currency as certified for customs purposes by the Federal Reserve Bank of New York (the “Market Exchange Rate”) for such Foreign Currency on the second Business Day prior to such payment date, or on such other basis as may be specified on the face hereof. In the event such Market Exchange Rate is not then available, the Company will be entitled to make payments in U.S. dollars (i) if such Foreign Currency is not a composite currency, on the basis of the most recently available Market Exchange Rate for such Foreign Currency or (ii) if such Foreign Currency is a composite currency in an amount determined by the Exchange Rate Agent to be the sum of the results obtained by multiplying the number of units of each component currency of such composite currency, as of the most recent date on which such composite currency was used, by the Market Exchange Rate for such component currency on the second Business Day prior to such payment date (or if such Market Exchange Rate is not then available, by the most recently available Market Exchange Rate for such component currency, or as otherwise specified on the face hereof). Any payment in respect hereof made under such circumstances in U.S. dollars will not constitute an Event of Default under the Indenture.

If the official unit of any component currency of a composite currency is altered by way of combination or subdivision, the number of units of that currency as a component shall be divided or multiplied in the same proportion. If two or more component currencies are consolidated into a single currency, the amounts of those currencies as components shall be replaced by an amount in such single currency equal to the sum of the amounts of the consolidated component currencies expressed in such single currency. If any component currency is divided into two or more currencies, the amount of that original component currency as a component shall be replaced by amounts of such two or more currencies having an aggregate value on the date of division equal to the amount of the former component currency immediately before such division.

All currency exchange costs will be borne by the Holder hereof by deduction from the payments made hereon.

Section 3. Determination of Interest Rate. For the period from the Issue Date to the first Interest Reset Date set forth on the face hereof, the interest rate hereon shall be the

Initial Interest Rate specified on the face hereof. Thereafter, the interest rate hereon will be reset on each Interest Reset Date; provided, however, that the interest rate in effect for the ten days immediately prior to Maturity will be that in effect on the tenth day preceding such Maturity. If any Interest Reset Date would otherwise be a day that is not a Business Day, the Interest Reset Date shall be the next day that is a Business Day. If this Note is a (1) LIBOR Note and an Interest Reset Date would otherwise be a day that is not a London Business Day, the Interest Reset Date shall be the next day that is a London Business Day or (2) EURIBOR Note and an Interest Reset Date would otherwise be a day that is not a Euro Business Day, the Interest Reset Date shall be the next day that is a Euro Business Day; provided that, if this Note is a LIBOR Note or a EURIBOR Note and such Business Day is in the next succeeding calendar month, the Interest Reset Date shall be the immediately preceding London Business Day, in the case of a LIBOR Note, or Euro Business Day, in the case of a EURIBOR Note. If this Note is a Treasury Rate Note (as defined below) and an auction date for Treasury bills shall fall on any Reset Date, then such Interest Reset Date shall instead be the first Business Day immediately following such auction date. Subject to applicable provisions of law and except as specified herein, on each Interest Reset Date, the rate of interest on this Note on and after the first Interest Reset Date shall be the rate determined in accordance with the provisions of the heading below which has been designated as the Interest Rate Basis on the face hereof plus or minus the Spread, if any, specified on the face hereof or multiplied by the Spread Multiplier, if any, specified on the face hereof.

Commercial Paper Rate Notes

If the Interest Rate Basis is the Commercial Paper Rate, this Note is a “Commercial Paper Rate Note.” A Commercial Paper Rate Note will bear interest at the interest rate calculated with reference to the Commercial Paper Rate and the Spread and/or Spread Multiplier and will be subject to the minimum interest rate and the maximum interest rate, if any. Unless otherwise specified on the face hereof, “Commercial Paper Rate” means, with respect to any Interest Determination Date, the Money Market Yield (calculated as described below) of the rate on that date for commercial paper having the applicable Index Maturity as such rate is published in the publication entitled “Statistical Release H.15(519), Selected Interest Rates,” or any successor publication, published by the Board of Governors of the Federal Reserve System (“H.15(519)”) under the heading “Commercial Paper––Nonfinancial”. If such rate is not published by 3:00 P.M., New York City time, on the Calculation Date (as defined below) pertaining to such Interest Determination Date, then the Commercial Paper Rate shall be the Money Market Yield of the rate on such Interest Determination Date for commercial paper having the applicable Index Maturity as published in the daily update of the Board of Governors of the Federal Reserve System at http://www.federalreserve.gov/releases/H15/update, or any successor site or publication (“H.15 Daily Update”) or another recognized electronic source used for displaying this rate, under the Leading “Commercial Paper––Nonfinancial”. If such rate is not yet published in H.15(519), H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on such Calculation Date, then the Commercial Paper Rate for such Interest Determination Date shall be calculated by the Calculation Agent and shall be the Money Market Yield of the arithmetic mean of the offered rates as of 11:00 A.M. New York City time, on such Interest Determination Date of three leading dealers of commercial paper in New York City selected by the Calculation Agent after consultation with the Company for commercial paper having the applicable Index Maturity, placed for industrial issuers whose bond

rating is “AA”, or the equivalent, from a nationally recognized securities rating agency; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Commercial Paper Rate for the applicable period will be the Commercial Paper Rate in effect on such Interest Determination Date. If there was no Commercial Paper Rate in effect on such Interest Determination Date, the Commercial Paper Rate will be the initial interest rate.

“Money Market Yield” shall be a yield calculated in accordance with the following formula:

Money Market Yield =	D X 360	x 100
	360 – (D X M)

where “D” refers to the per annum rate for the commercial paper, quoted on a bank discount basis expressed as a decimal; and “M” refers to the actual number of days in the interest period for which interest is being calculated.

Federal Funds (Effective) Rate Notes

If the Interest Rate Basis is the Federal Funds (Effective) Rate, this Note is a “Federal Funds (Effective) Rate Note.” A Federal Funds (Effective) Rate Note will bear interest at the interest rate calculated with reference to the Federal Funds (Effective) Rate and the Spread and/or Spread Multiplier and will be subject to the minimum interest rate or the maximum interest rate, if any. Unless otherwise specified on the face hereof, “Federal Funds (Effective) Rate” means, with respect to any Interest Determination Date, the rate on that day for Federal Funds as published in H.15(519) under the heading “Federal Funds (Effective),” as displayed on Moneyline Telerate on page 120, or any successor service or page (“Telerate Page 120”) or, if not so published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Interest Determination Date, the Federal Funds (Effective) Rate will be the rate on such Interest Determination Date as published in the H.15 Daily Update, or another recognized electronic source used for displaying this rate under the heading “Federal Funds (Effective).” If such rate is not yet published in H.15(519), H.15 Daily Update, or another recognized electronic source, by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Interest determination Date, then the Federal Funds (Effective) Rate for such Interest Determination Date will be calculated by the Calculation Agent and will be the arithmetic mean of the rates as of 11:00 A.M., New York City time, on such Interest Determination Date for the last transactions in overnight Federal Funds arranged by three leading brokers of Federal Funds transactions in New York City selected by the Calculation Agent after consultation with the Company; provided, however, that if the brokers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Federal Funds (Effective) Rate for the applicable period will be the Federal Funds Effective Rate in effect on such Interest Determination Date. If there was no Federal Funds (Effective) Rate in effect on such Interest Determination Date, the Federal Funds (Effective) Rate will be the initial interest rate.

Federal Funds (Open) Rate Notes

If the Interest Rate Basis is the Federal Funds (Open) Rate, this Note is a “Federal Funds (Open) Rate Note.” A Federal Funds (Open) Rate Note will bear interest at the interest rate calculated with reference to the Federal Funds (Open) Rate and the Spread and/or Spread Multiplier and will be subject to the minimum interest rate or the maximum interest rate, if any. Unless otherwise specified on the face hereof, “Federal Funds (Open) Rate” means, with respect to any Interest Determination Date, the rate on that day for Federal Funds as published in H.15(519) under the heading “Federal Funds” and opposite the caption “Open” as displayed on Moneyline Telerate on page 5, or any successor service or page (“Telerate Page 5”), or, if not so published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Interest Determination Date, the Federal Funds (Open) Rate will be the rate on such Interest Determination Date as reported by Prebon Yamane (or successor) on Bloomberg that appears on FEDSPREB Index (“FEDSREB”). If such rate is not yet published in either Telerate Page 5 or FEDSPREB by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Interest determination Date, then the Federal Funds (Open) Rate for such Interest Determination Date will be calculated by the Calculation Agent and will be the arithmetic mean of the rates before 9:00 A.M., New York City time, on such Interest Determination Date for the last transaction in overnight Federal Funds arranged by three brokers of Federal Funds transactions in New York City selected by the Calculation Agent after consultation with the Company; provided, however, that if fewer than three brokers are selected as mentioned in this sentence by the Calculation Agent, the Federal Funds (Open) Rate for the applicable period will be the Federal Funds (Open) Rate in effect on such Interest Determination Date. If there was no Federal Funds (Open) Rate in effect on such Interest Determination Date, the Federal Funds (Open) Rate will be the Federal Funds (Open) Rate will be the initial interest rate.

CD Rate Notes

If the Interest Rate Basis is the CD Rate, this Note is a “CD Rate Note.” A CD Rate Note will bear interest at the interest rate calculated with reference to the CD Rate and the Spread and/or Spread Multiplier and will be subject to the minimum interest rate or the maximum interest rate, if any. Unless otherwise specified on the face hereof, “CD Rate” means, with respect to any Interest Determination Date, the rate on such date for negotiable certificates of deposit having the applicable Index Maturity as published in H.15(519) under the heading “CDs (Secondary Market)” or, if not so published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Interest Determination Date, the CD Rate will be the rate on such Interest Determination Date for negotiable certificates of deposit of the applicable Index Maturity as published in the H.15 Daily Update, or another recognized electronic source used for the purpose of displaying this rate, under the heading “CDs (Secondary Market)”. If such rate is not yet published in H.15(519), the H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on such Calculation Date, then the CD Rate for such Interest Determination Date will be calculated by the Calculation Agent and will be the arithmetic mean of the secondary market offered rates as of 10:00 A.M., New York City time, on such Interest Determination Date, of three leading nonbank dealers in negotiable U.S. dollar certificates of deposit in New York City selected by the Calculation Agent after consultation with the Company for negotiable certificates of deposit of major United States money center banks of the highest credit standing (in the market for negotiable certificates of deposit) with a remaining maturity

closest to the applicable Index Maturity in a denomination that is representative for a single transaction in that market at that time; provided, however, that if the dealers mentioned in this sentence by the Calculation Agent are not quoting as mentioned in this sentence, the CD Rate for the applicable period will be the CD Rate in effect on such Interest Determination Date. If there was no CD Rate in effect on such Interest Determination Date, the CD Rate will be the initial interest rate.

LIBOR Notes

If the Interest Rate Basis is LIBOR, this Note is a “LIBOR Note.” A LIBOR Note will bear interest at the interest rate calculated with reference to LIBOR and the Spread and/or Spread Multiplier and will be subject to the minimum interest rate and maximum interest rate, if any. Unless otherwise indicated on the face hereof, “LIBOR” means the rate determined by the Calculation Agent as follows:

The term “Telerate Page 3750” means the display designated as page “3750” on the Telerate Service, or such other service or services as may be nominated by the British Bankers’ Association for the purpose of displaying London interbank offered rates for deposits in U.S. Dollars, British Pounds Sterling, Swiss Francs, Japanese Yen and Euros.

EURIBOR Notes

If the Interest Rate Basis is EURIBOR, this Note is a “EURIBOR Note.” A EURIBOR Note will bear interest at the interest rate calculated with reference to EURIBOR and the Spread and/or Spread Multiplier and will be subject to the minimum interest rate or maximum interest rate, if any. Unless otherwise indicated on the face hereof, “EURIBOR” means the rate determined by the Calculation Agent as follows:

(a) With respect to an Interest Determination Date, EURIBOR means the offered rate for deposits in Euros (commencing on the Interest Reset Date) of the applicable Index Maturity as sponsored, calculated and published jointly by the European Banking Federation and ACI––the Financial Market Association or any company established by them for purposes of establishing those rates having the Index Maturity which appears on the Moneyline Telerate on page 248 or any successor service use for the purpose of displaying this rate (“Telerate Page 248”) on such Interest Determination Date (“EURIBOR Telerate”). If EURIBOR Telerate is not specified on the face hereof, EURIBOR will be determined as if EURIBOR Telerate had been specified.

(b) If such rate is not displayed on Telerate Page 248 as of 11:00 A.M., Brussels time, on the Calculation Date pertaining to such Interest determination Date, then EURIBOR for such Interest Determination Date will be determined on the basis of the rates, at approximately 11:00 A.M., Brussels time, at which Euro deposits having the relevant Index Maturity, beginning on the relevant interest reset date, and in an amount representative of a single transaction in Euros in such market are offered to prime banks in the euro-zone interbank market by the principal London offices of each of four major banks in that market selected by the Calculation Agent. The Calculation Agent will request the principal euro-zone office of each of these banks provide their offered quotations. If at least two quotations are provided, EURIBOR for such Interest Determination Date will be the arithmetic mean of the quotations as aforesaid. If fewer than two quotations are provided as aforesaid by the Calculation Agent, EURIBOR in respect of such Interest Determination Date will be the arithmetic mean of the rates quoted for the leading euro-zone banks quoted at approximately 11:00 A.M., Brussels time on such Interest Determination Date, by three major banks in the euro-zone selected by the Calculation Agent for loans in Euros in a principal amount that is representative of a single transaction in Euros in such

market. If fewer than three banks are selected as aforesaid by the Calculation Agent, EURIBOR for the applicable period will be EURIBOR in effect on such Interest Determination Date. If there was no EURIBOR Rate in effect on such Interest Determination Date, the EURIBOR Rate will be the initial interest rate.

Prime Rate Notes

If the Interest Rate Basis is the Prime Rate, this Note is a “Prime Rate Note.” A Prime Rate Note will bear interest at the interest rate calculated with reference to the Prime Rate and the Spread and/or Spread Multiplier and will be subject to the minimum interest rate and the maximum interest rate, if any. Unless otherwise specified on the face hereof, “Prime Rate” means, with respect to any Interest Determination Date, the rate on that day as published in H.15(519) under the heading “Bank Prime Loan” or, if not so published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Interest Determination Date, the Prime Rate will be the rate on that day as published in the H.15 Daily Update, or another recognized electronic source used for the purpose of displaying this rate, under the heading “Bank Prime Loan.” If such rate is not yet published in H.15(519), the H.15 Daily Update or another recognized electronic source by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Interest Determination Rate, the rate will be determined by the Calculation Agent and will be the arithmetic mean of the rates of interest publicly announced by each bank named on the display designated on the Reuters Screen US PRIME1 Page as each such bank’s prime rate or base lending rate for such Interest Determination Date, or such other page as may replace such page on the service for the purpose of displaying prime rates or base lending rates of major United States banks (the “US PRIME1 Page”), as such bank’s prime rate or base lending rate as in effect for such Interest Determination Date. If fewer than four such rates but more than one such rate appear on the US PRIME1 Page for such Interest Determination Date, the Prime Rate will be determined by the Calculation Agent and will be the arithmetic mean of the Prime Rates quoted on the basis of the actual number of days in the year divided by 360 as of the close of business on such Interest Determination Date by three major banks in New York City selected by the Calculation Agent after consultation with the Company; provided, however, that if the banks or trust companies selected as aforesaid are not quoting as mentioned in this sentence, the Prime Rate for the applicable period will be the Prime Rate in effect on such Interest Determination Date. If there was no Prime Rate in effect on such Interest Determination Date, the Prime Rate will be the initial interest rate.

Treasury Rate Notes

If the Interest Rate Basis is the Treasury Rate, this Note is a “Treasury Rate Note.” A Treasury Rate Note will bear interest at the interest rate calculated with reference to the Treasury Rate and the Spread and/or Spread Multiplier and will be subject to the minimum interest rate and the maximum interest rate, if any. Unless otherwise specified on the face hereof “Treasury Rate” means, with respect to any Interest Determination Date, the rate for the auction held on such Interest Determination Date of U.S. Treasury Securities (“Treasury securities”) having the applicable Index Maturity as it appears on the display on Moneyline Telerate page 56 or 57, or any successor page or service, under the heading “Investment Rate” or, if not so published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Interest Determination Date, the auction average rate for U.S. Treasury Securities (expressed as a bond

equivalent, on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) as otherwise announced by the United States Department of the Treasury. In the event that the results of the auction of Treasury securities having the applicable Index Maturity are not published or reported as provided by 3:00 P.M., New York City time, on such Calculation Date or if no such auction is held on such Interest Determination Date, then the Treasury Rate shall be calculated by the Calculation Agent and shall be the Index Maturity as published in H.15(519) under the heading “U.S. Government Securities—Treasury Bills (Secondary Market)” or, if such rate is not yet published, in H.15(519) by 3:00 P.M., New York City time, on the Calculation Date, then the Treasury Rate shall be the Index Maturity as published in H.15 Daily Update, or other recognized electronic source used for the purpose of displaying such rate, under the caption “U.S. Government Securities—Treasury Bills (Secondary Market).” If such Index Maturity is not published in H.15(519), H.15 Daily Update or another recognized electronic source on the Calculation Date pertaining to such Interest Determination Date, then the Treasury Rate shall be calculated by the Calculation Agent and shall be the arithmetic mean of the secondary market bid rates, as of approximately 3:30 P.M., New York City time, on such Interest Determination Date, of three primary United States government securities dealers selected by the Calculation Agent after consultation with the Company for the issue of Treasury securities with a remaining maturity closest to the applicable Index Maturity (expressed as a bond equivalent, on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis); provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Treasury Rate for the applicable period will be the Treasury Rate in effect on such Interest Determination Date. If there was no Treasury Rate in effect on such Interest Determination Date, the Treasury Rate will be the initial interest rate.

Constant Maturity Treasury Rate Notes

If the Interest Rate Basis is the Constant Maturity Treasury Rate, this Note is a “Constant Maturity Treasury Rate Note.” A Constant Maturity Treasury Rate Note will bear interest at the interest rate calculated with reference to the Constant Maturity Treasury Rate (“CMT Rate”) and the Spread and/or Spread Multiplier and will be subject to the minimum interest rate and the maximum interest rate, if any. Unless otherwise specified on the face hereof CMT Rate means, with respect to any Interest Determination Date, the rate for the applicable Index Maturity specified under the caption “Treasury Constant Maturities” on the “Designated Constant Maturity Treasury page” (as defined below) for (1) such Interest Determination Date (if the Designated Constant Maturity Treasury page is 7051) or (2) the week, or the month, as set forth on the face hereof, ended immediately preceding the week or month in which the applicable Calculation Date pertaining to such Interest Determination Date occurs (if the Constant Maturity Treasury is 7052). If the CMT Rate is not published as described above by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Interest Determination Date, then the CMT Rate shall be the Treasury Constant Maturity rate as published in H.15(519). If such Treasury Constant Maturity rate is not published in H.15(519) as provided by 3:00 P.M., New York City time, on such Calculation Date the CMT Rate will be the Treasury Constant Maturity rate for the Index Maturity (or other United States Treasury Rate for the specified Index Maturity) for such Interest Determination Date published by either the Board of Governors of the Federal Reserve System or the United States Department of the Treasury that the Calculation Agent determines is comparable to the rate formerly displayed on the Designated Constant Maturity Treasury page and published in the relevant H.15(519). If the above information is not available by 3:00 P.M.,

New York City time, the CMT Rate will be calculated as a yield to maturity of the arithmetic mean of the secondary market offer side prices as of approximately 3:30 p.m., New York City time, on such Interest Determination Date reported, according to their written records, by three primary U.S. government securities dealers in New York City (“Primary Dealers”). The three Primary Dealers will be selected from five Primary Dealers selected by the Calculation Agent by eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest), for the most recently issued direct noncallable fixed rate U.S. Treasury securities with an original maturity of approximately the specified Index Maturity and a remaining term to maturity of not less than such specified index maturity minus one year. If the Calculation Agent cannot obtain three quotations as described above on the Calculation Date pertaining to such Interest Determination Date, the CMT Rate will be the yield to maturity based on the arithmetic mean of the secondary market offer side prices as of approximately 3:30 p.m., New York City time, on the applicable interest determination date of three Primary Dealers selected as described above for U.S. treasury securities with an original maturity of the number of years that is closest to but not less than the Index Maturity and a remaining term to maturity closest to the Index Maturity and in an amount of at least $100 million. If two of the aforesaid U.S. treasury securities have remaining terms to maturity equally close to the Index Maturity, the quotes for the U.S. Treasury security with the shorter remaining term to maturity will be used on the Calculation Date pertaining to such Interest Determination Date. If fewer than five but more than two Primary Dealers are quoting as described above, then the CMT Rate will be based on the arithmetic mean of the offer prices obtained and neither the highest nor lowest of those quotes will be eliminated. If fewer than three primary dealers are quoting as described above, then the CMT Rate for the new interest rate period will be the same as that for the immediately preceding interest reset period. If there was no CMT Rate in effect on such Interest Determination Date, the CMT Rate will be the initial interest rate.

“Designated Constant Maturity Treasury page” means the display on Moneyline Telerate on the page designated on the face hereof, or any successor service or page for the purpose of displaying Treasury Constant Maturities as reported in H.15(519). If that page is not specified on the face hereof, the designated Constant Maturity Treasury page will be 7052, for the most recent week.

If no index maturity is specified on the face hereof, the index maturity will be 2 years.

Eleventh District Cost of Funds Rate Note

If the Interest Rate Basis is the Eleventh District Cost of Funds Rate, this Note is an “Eleventh District Cost of Funds Rate Note.” An Eleventh District Cost of Funds Rate Note will bear interest at the interest rate calculated with reference to the Eleventh District Cost of Funds Rate and the Spread and/or Spread Multiplier and will be subject to the minimum interest rate or the maximum interest rate, if any. Unless otherwise specified on the face hereof, “Eleventh District Cost of Funds Rate” means, with respect to any Interest Determination Date, the rate equal to the monthly weighted average cost of funds for the calendar month preceding such Interest Determination Date as displayed under the caption “Eleventh District” on Moneyline Telerate page 7058 or any successor service or page, for the purpose of displaying the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal

Home Loan Bank District (“Telerate Page 7058”) or, if not so published by 3:00 P.M., New York City time, on the Calculation Date pertaining to such Interest Determination Date, the Eleventh District Cost of Funds Rate will be such rate for the prior Interest Reset Period. If there was no prior interest period, the Eleventh District Cost of Funds Rate Index will be the initial interest rate.

The “Eleventh District Cost of Funds Rate Index” will be the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that the Federal Home Loan Bank of San Francisco most recently announced as the cost of funds for the calendar month preceding the date of the announcement.

The term “Calculation Date”, for an interest determination date, means the earlier of (1) the tenth Business Day after the related Interest Determination Date, or if any such day is not a Business day, the next Business Day and (2) the Business Day preceding the applicable interest payment date or the stated maturity, unless otherwise specified on the face hereof.

Notwithstanding the foregoing, the Interest rate hereof shall not be greater than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate, if any, shown on the face hereof. The interest rate on this Note will in no event be higher than the maximum rate permitted by New York law as the same may be modified by United States law of general applicability.

The Calculation Agent will, upon the request of the Holder of this Note, provide the interest rate then in effect and, if determined, the interest rate which will become effective as a result of a determination made on the most recent Interest Determination Date with respect to this Note.

Unless otherwise specified on the face hereof, the Interest Determination Date pertaining to an Interest Reset Date will be (a) the first day preceding such Interest Reset Date for a Prime Rate Note, Federal Funds (Open) Rate Note and Federal Funds (Effective) Rate Note and (b) the second Business Day preceding such Interest Reset Date for a Constant Maturity Treasury Rate Note, Commercial Paper Rate Note and CD Rate Note. Unless otherwise specified on the face hereof, the Interest Determination Date relating to a particular Interest Reset Date for an Eleventh District Cost of Funds Rate Note will be the last working day, in the first calendar month before that interest reset date, on which the Federal Home Loan Bank of San Francisco publishes the monthly average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District for the second calendar month before that Interest Reset Date. Unless otherwise specified on the face hereof, the Interest Determination Date pertaining to an Interest Reset Date for a LIBOR Note will be the second London Business Day preceding such Interest Reset Date. Unless otherwise specified on the face hereof, the Interest Determination Date pertaining to an Interest Reset Date for a EURIBOR Note will be the second Euro Business Day preceding such Interest Reset Date. Unless otherwise specified on the face hereof, the Interest Determination Date pertaining to an Interest Reset Date for a Treasury Rate Note will be the day of the week in which such Interest Reset Date falls on which Treasury bills of the applicable Index Maturity would normally be auctioned. Treasury bills are usually sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is usually held on the following Tuesday, except that such auction may be held on the preceding Friday. If, as

the result of a legal holiday, an auction is so held on the preceding Friday, such Friday will be the Interest Determination Date pertaining to the Interest Reset Date occurring in the next succeeding week.

Accrued interest from the Issue Date or from the last date to which interest has been paid shall be calculated by multiplying the face amount of this Note by an accrued interest factor. This accrued interest factor shall be computed by adding the interest factors calculated for each day from the Issue Date or from the last date to which interest has been paid, to the date for which accrued interest is being calculated. The interest factor for each such day is computed by dividing the interest rate applicable to such date by 360, in the case of Commercial Paper Rate Notes, Federal Funds (Effective) Rate Notes, Federal Funds (Open) Rate, CD Rate Notes, LIBOR Notes, EURIBOR Notes, Prime Rate Notes or Eleventh District Cost of Funds Rate Notes, or by the actual number of days in the year, in the case of Treasury Rate Notes. The interest rate applicable to any day that is an Interest Reset Date is the interest rate as determined, in accordance with the procedures set forth above, with respect to the Interest Determination Date pertaining to such Interest Reset Date. The interest rate applicable to any other day is the interest rate for the immediately preceding Interest Reset Date (or, if none, the Initial Interest Rate).

Unless otherwise specified on the face hereof, all percentages resulting from any calculation of the rate of interest on this Note will be rounded, if necessary, to the nearest one hundred-thousandth of a percent (.0000001), with five one-millionths of a percentage point rounded upward, and all currency amounts used in or resulting from such calculation will be rounded to the nearest one-hundredth of a unit (with five one-thousandths of a unit being rounded upwards).

Section 4. Redemption. If so specified on the face hereof, the Company may at its option redeem this Note in whole or from time to time in part on or after the date designated as the Initial Redemption Date on the face hereof at either a price based on a constant percentage of the Principal Amount of this Note as specified on the face hereof or at prices declining from the premium specified on the face hereof, if any, to 100% of the Principal Amount hereof, together, in each case, with accrued interest to the Redemption Date. The Company may exercise such option by causing the Trustee to mail by first-class mail to the Holder hereof a notice of such redemption at least 30 but not more than 60 days prior to the Redemption Date. In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof in accordance with the terms of the Indenture. Unless otherwise specified on the face hereof, if less than all of the Notes with like tenor and terms to this Note are to be redeemed, the Notes to be redeemed shall be selected by the Trustee by such method as the Trustee shall deem fair and appropriate.

Section 5. Sinking Funds and Amortizing Notes. Unless otherwise specified on the face hereof this Note will not be subject to any sinking fund.

Section 6. Optional Repayment. If so specified on the face hereof, this Note will be repayable prior to the Maturity Date at the option of the Holder on the Optional Repayment Dates specified on the face hereof at the Optional Repayment Prices specified on the face hereof,

together with accrued interest to the applicable Optional Repayment Date. Unless otherwise specified on the face hereof, in order for this Note to be so repaid, the Company must receive, at least 30 but not more than 45 days prior to an Optional Repayment Date, either (i) this Note with the form below entitled “Option to Elect Repayment” duly completed or (ii) a telegram, telex, facsimile transmission or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States setting forth the name of the Holder hereof, the Face Amount hereof, the Face Amount to be repaid, the certificate number hereof or a description of the tenor and terms of this Note, a statement that the option to elect repayment is being exercised thereby and a guarantee that this Note with the form below entitled “Option to Elect Repayment” duly completed will be received by the Paying Agent not later than five Business Days after the date of such telegram, telex, facsimile transmission or letter and this Note and form duly completed are received by the Paying Agent by such fifth Business Day. Exercise of this repayment option shall be irrevocable, except as otherwise provided under Section 7 or Section 10. The repayment option may be exercised by the Holder of this Note with respect to less than the Face Amount then outstanding provided that the Face Amount of the Note remaining outstanding after repayment is an authorized denomination. Upon such partial repayment this Note shall be cancelled and a new Note or Notes for the remaining Face Amount hereof shall be issued in the name of the Holder of this Note.

Section 7. Optional Interest Reset or Spread Multiplier Reset. If so specified on the face hereof, the Spread and/or Spread Multiplier, if any, set forth on the face hereof may be reset at the option of the Company, in the manner set forth below (unless otherwise specified on the face hereof), on the Optional Reset Date or Optional Reset Dates specified on the face hereof. The Company may exercise such option by notifying the Trustee in writing of such exercise at least 45 but not more than 60 days prior to an Optional Reset Date. Not later than five Business Days after receipt thereof, the Trustee will mail by first-class mail to the Holder of this Note a notice (the “Reset Notice”) setting forth (i) the election of the Company to reset the Spread and/or Spread Multiplier, (ii) such new Spread and/or Spread Multiplier and (iii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date or, if there is no such next Optional Reset Date, to the Maturity Date of this Note (each such period a “Subsequent Interest Period”), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during such Subsequent Interest Period. The Reset Notice shall be substantially in the form of Exhibit A to this Note. Upon the transmittal by the Trustee of a Reset Notice to the Holder of this Note, such new Spread and/or Spread Multiplier shall take effect automatically, and, except as modified by the Reset Notice and as described in the next paragraph, this Note will have the same terms as prior to the transmittal of such Reset Notice.

Notwithstanding the foregoing, not later than 20 days prior to an Optional Reset Date, the Company may, at its option, revoke the Spread or Spread Multiplier provided for in the Reset Notice and establish the Spread and/or Spread Multiplier that is higher than the interest rate provided for in the Reset Notice for the Subsequent Interest Period commencing on such Optional Reset Date by causing the Trustee to mail by first-class mail notice of such higher Spread or Spread Multiplier to the Holder of this Note. Such notice shall be irrevocable and shall be mailed by the Trustee within five Business Days after receipt thereof. All Notes with

respect to which the Spread and/or Spread Multiplier is reset on an Optional Reset Date will bear such higher Spread and/or Spread Multiplier for the Subsequent Interest Period.

If the Company elects to reset the Spread and/or Spread Multiplier of this Note, the Holder of this Note will have the option to elect repayment by the Company of this Note, or any portion hereof, on any Optional Reset Date at a price calculated with reference to the Face Amount hereof to be repaid, plus any interest accrued to, such Optional Reset Date. In order to obtain repayment on an Optional Reset Date, the Holder must follow the procedures set forth above in Section 6 for optional repayment except that the period for delivery or notification to the Trustee shall be at least 25 but not more than 35 days prior to such Optional Reset Date and except that, if the Holder has tendered this Note for repayment pursuant to the Reset Notice, the Holder may, by written notice to the Trustee, revoke such tender for repayment until the close of business on the tenth day prior to such Optional Reset Date; provided, however, that if such day is not a Business Day, then such notice may be given on the next succeeding Business Day.

Section 8. OID Notes. If this Note is an OID Note, unless otherwise specified on the face hereof, the amount payable in the event of redemption by the Company, repayment at the option of the Holder or acceleration of Maturity shall be the Amortized Face Amount of this Note as of the date of such redemption, repayment or acceleration rather than the Face Amount hereof. The “Amortized Face Amount” of this Note shall be the amount equal to (a) the Issue Price (as set forth on the face hereof) plus (b) that portion of the difference between the Issue Price and the Face Amount hereof that has accrued at the Yield to Maturity set forth on the face hereof (computed in accordance with generally accepted United States bond yield computation principles) at the date as of which the Amortized Face Amount is calculated, but in no event shall the Amortized Face Amount of this Note exceed the Face Amount.

Section 9. Dual Currency Notes. If it is specified on the face hereof that this Note is a Dual Currency Note, the Company has a one time option, exercisable on any one of the Option Election Dates specified on the face hereof in whole, but not in part, with respect to all Dual Currency Notes issued on the same day and having the same terms as this Note (this “Tranche”), of thereafter making all payments of principal, premium, if any, and interest (which payments would otherwise be made in the Specified Currency of such Notes) in the Optional Payment Currency specified on the face hereof. If the Company makes such an election, the amount of Optional Payment Currency payable in respect hereof shall be determined by the Exchange Rate Agent by converting the amount of Specified Currency that would otherwise be payable into the Optional Payment Currency at the Designated Exchange Rate specified on the face hereof.

Section 10. Extension of Maturity. If it is specified on the face hereof that this Note is an Extension of Maturity Note, the Company has the option to extend the Maturity Date hereof for the number of Extension Periods set forth on the face hereof, each of which Extension Periods shall be a period of from one to five whole years. Unless otherwise specified on the face hereof, the following procedures shall apply if this Note is an Extendible Note.

(iv) the provisions, if any, for redemption during the Extension Period, including the date on which or the period or periods during which and the price at which such redemption may occur during the Extension Period. Upon the mailing by the Trustee of an Extension Notice to the Holder, the Maturity Date hereof shall be extended automatically, and, except as modified by the Extension Notice and as described in the next paragraph, this Note will have the same terms as prior to the mailing of such Extension Notice.

If the Company extends the Maturity Date of this Note, the Holder will have the option to elect repayment by the Company of this Note, or any portion hereof, on the Original Stated Maturity at a price calculated with reference to the Face Amount hereof to be repaid plus any accrued interest to such date. In order for this Note to be so repaid on the Original Stated Maturity, the Holder must follow the procedures set forth in Section 5 hereof for optional repayment, except that the period for delivery of this Note or notification to the Trustee shall be at least 25 but not more than 35 days prior to the Original Stated Maturity and except that the Holder may, by written notice to the Trustee, revoke any such tender for repayment until the close of business on the tenth day prior to the Original Stated Maturity; provided, however, that if such day is not a Business Day, then such notice may be given on the next succeeding Business Day.

Section 11. Extendible Notes. If it is specified on the face hereof that this Note is an Extendible Note, this Note will mature on the Initial Maturity Date specified on the face hereof unless the Maturity of all or any portion of this Note is extended in accordance with the procedures described below.

occurring in the sixth month (or the last month in the Special Election Interval) after such Maturity Extension Date (the “Extended Maturity Date”).

Unless otherwise specified above, any such election to terminate will be effective only if this Note, with the “Option to Elect Termination of Automatic Extension” included herein duly executed, is presented to the Trustee (or any duly appointed Paying Agent) simultaneously with notice of such election (or, in the event notice of such election, together with a guarantee of delivery within five Business Days, is transmitted on behalf of the Holder from a member of a national securities exchange, the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States, within five Business Days of the date of such notice). As soon as practicable following receipt of this Note the Trustee (or any duly appointed Paying Agent) shall issue in exchange herefor in the name of the Holder (i) a Note, in a face amount equal to the face amount of this Note for which the election to terminate the automatic extension of Maturity was exercised, with terms identical to those specified herein (except for the Issue Date and the Initial Interest Rate and except that such Note shall have a fixed, non- extendable Maturity on the Extended Maturity Date) and (ii) if such election is made with respect to less than the full Face Amount hereof, a replacement Renewable Note, in a face amount equal to the Face Amount of this Note for which no election was made, with terms identical to this Note.

Section 12. Principal Amount For Indenture Purposes. For the purpose of determining whether Holders of the requisite amount of Notes outstanding under the Indenture have made a demand, given a notice or waiver or taken any other action, the outstanding principal amount of this Note will be deemed to be the Principal Amount, provided, however, if this Note is an OID Note, the outstanding principal amount of this Note will be deemed to be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof.

Section 13. Modification and Waivers. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the holders of not less than 66-2/3% in aggregate principal amount of each series of the Securities at the time Outstanding to be affected, evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the holders of the Securities of all such series; provided, however, that no such supplemental indenture shall,

among other things, (i) extend 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, 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, or in the payment of any sinking fund installment or analogous obligation with respect to Securities of such series. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future holders and owners of this Note and any Notes which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Note or such other Notes.

Section 14. Obligations Unconditional. No reference herein to the Indenture and no provisions of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and interest, if any, on this Note at the place, at the respective times, at the rate, and in the coin or currency herein prescribed.

Section 15. Defeasance. The Indenture contains provisions for the discharge of the Indenture and defeasance at any time of the indebtedness on this Note upon compliance by the Company with certain conditions set forth therein, which provisions apply to this Note.

Section 16. Authorized Form and Denominations. The Notes of this series are issuable in registered form, without coupons. Unless otherwise set forth on the face hereof, Notes denominated in U.S. dollars will be issued in Face Amount denominations of U.S. $100,000 and any integral multiple of U.S. $1,000 in excess thereof. Notes denominated in a Foreign Currency will be issued in the denomination or denominations set forth on the face hereof. Each Note will be issued initially as either a Global Security or a Certificated Note, 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, New York City, pursuant to the provisions of the Indenture or at any of such other offices or agencies as may be designated and maintained by the Company for such purpose pursuant to the provisions of the Indenture, and in the manner and subject to the limitations provided in the Indenture, but without the payment of any service charge, except for any tax or other governmental charges imposed in connection therewith. Notes of this series are exchangeable for a like aggregate Face Amount of Notes of this series of a different authorized denomination, except that Global Securities will not be exchangeable for Certificated Notes.

Section 17. Registration of Transfer. As provided in the Indenture and subject to certain limitations as therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer, at the Corporate Trust Office or agency in a Place of Payment for this Note, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar requiring such written instrument of transfer duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series, of authorized denominations and for the same aggregate Face Amount, will be issued to the designated transferee or transferees.

Section 18. Events of Default. If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture. In the event that this Note is an OID Note or a Dual Currency Note, the amount of principal of this Note that becomes due and payable upon such acceleration shall be equal to the amount calculated as set forth in Section 8 or Section 9, respectively, hereof. Upon payment (i) of the aggregate applicable amounts of principal of the Notes of this series 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, if any, on the Notes of this series shall terminate.

Section 19. No Recourse Against Certain Persons. No recourse for the payment of the principal of, premium, if any, or interest on this Note, or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any Indenture supplemental thereto or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor

corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.

Section 20. Defined Terms. All terms used but not defined in this Note are used herein as defined in the Indenture.

Section 21. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

OPTION TO ELECT REPAYMENT

The undersigned owner of this Note hereby irrevocably elects to have the Company repay the Face Amount of this Note or portion hereof below designated at (i) the Optional Repayment Percentage multiplied by the Principal Amount of this Note to be repaid in respect of such Face Amount plus accrued interest to the Optional Repayment Date, if this Note is to be repaid pursuant to the Optional Repayment provision described in Section 5 hereof, or (ii) 100% of the Principal Amount of this Note to be repaid in respect of such Face Amount plus accrued interest to the Optional Reset Date, if this Note is to be repaid pursuant to the Optional Interest Reset provision described in Section 7 hereof or the Extension of Maturity Notes provision described in Section 10 hereof. Any such election is irrevocable except as provided in Section 7 or Section 10 hereof.

Dated:
			Signature Sign exactly as name appears on the front of this Note [SIGNATURE GUARANTEED - required only if Notes are to be issued and delivered to other than the registered Holder]

Face Amount to be Fill in for registration of repaid, if amount to be Notes if to be issued otherwise repaid is less than the than to the registered Holder: Face Amount of this

Note (Face Amount Name: remaining must be an Address: authorized denomination)

	(Please print name
$	and address including
	zip code)

	SOCIAL SECURITY OR OTHER TAXPAYER ID NUMBER

OPTION TO ELECT TERMINATION OF AUTOMATIC EXTENSION

Dated:
			Signature Sign exactly as name appears on the front of this Note [SIGNATURE GUARANTEED - required only if Notes are to be issued and delivered to other than the registered Holder]

Face Amount to be Fill in for registration of terminated, if amount to be Notes if to be issued otherwise terminated is less than the than to the registered Holder: Face Amount of this

Note (such Face Amount Name: must be an authorized Address: denomination)

	(Please print name
$	and address including
	zip code)

	SOCIAL SECURITY OR OTHER TAXPAYER ID NUMBER

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
TEN ENT	-	as tenant by the entireties
JT TEN	-	as joint tenants with right of survivorship and not as tenants in common
UNIF GIFT MIN ACT	-	Custodian
		(Cust) (Minor)
		Under Uniform Gifts to Minors Act

		(State)

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 OTHER
IDENTIFYING NUMBER OF ASSIGNEE

Please print or type name and address, including zip code of assignee

the within Note of LEHMAN BROTHERS HOLDINGS INC. and all rights thereunder and does hereby irrevocably constitute and appoint

Attorney to transfer the said Note on the books of the within-named Company, with full power of substitution in the premises.

EXHIBIT A

RESET NOTICE

LEHMAN BROTHERS HOLDINGS INC.
Medium-Term Notes, Series H
(Floating Rate)
CUSIP No.
Registered Nos. -

The Company hereby elects to reset the [Spread] [Spread Multiplier] set forth on the face of the Notes. On and after (1), the [Spread] [Spread Multiplier] shall be .

Date		Redemption Price

Dated:	LEHMAN BROTHERS HOLDINGS INC.

	By:
		Title:


	Attest:
			Title:

(1) Insert applicable Optional Reset Date.

EX-4.03 6 a05-9645_1ex4d03.htm EX-4.03

Exhibit 4.03

CUSIP NO.

REGISTERED		PRINCIPAL AMOUNT: $
No. R-

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTE, SERIES H

PERFORMANCE LINKED TO THE VALUE OF A COMMON STOCK, A
STOCK INDEX, A BASKET OF COMMON STOCKS OR A BASKET OF STOCK INDICES

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

ISSUE PRICE: % of the Principal Amount

AGGREGATE PRINCIPAL AMOUNT: $

AUTHORIZED DENOMINATIONS:

$[1,000] and integral multiples thereof

ISSUE DATE:

STATED MATURITY DATE:

INTEREST RATE: % per annum

ACCRUE TO PAY:

o YES o NO

INTEREST PAYMENT DATES:

and of each year, beginning on

REGULAR RECORD DATES:
calendar days prior to each Interest Payment Date

REFERENCE EQUITY:

INITIAL MULTIPLIER(S):

INITIAL BASE DIVIDEND:

MULTIPLIER ADJUSTMENT DATES FOR CHANGES IN DIVIDENDS:

INDEX WEIGHTS:

THRESHOLD VALUE:

DETERMINATION PERIOD:

Business Days

DEPOSITORY:

[The Depository Trust Company]

Currency Exchanges and Payments

SPECIFIED CURRENCY:

EXCHANGE RATE AGENT:

Redemption

REDEEMABLE NOTE:

ý YES o NO

INITIAL REDEMPTION DATE:

REDEMPTION NOTICE PERIOD:

Business Days

Sinking Funds and Amortizing Notes

SINKING FUND:

AMORTIZING NOTE:

o YES o NO

Optional Repurchase

OPTIONAL REPURCHASE:

ý YES o NO

OPTIONAL REPURCHASE CUTOFF PERIOD:
Business Days

Stock Settlement

STOCK SETTLEMENT:

o YES o NO

AT MATURITY:

o YES o NO

UPON REPURCHASE:

o YES o NO

AT OPTION OF THE COMPANY:

o YES o NO

AT OPTION OF THE HOLDER:

o YES o NO

MANDATORY:

o YES o NO

Optional Interest Reset

OPTIONAL INTEREST RATE RESET:

o YES o NO

OPTIONAL RESET DATES:

OID Notes

OID NOTE:

o YES o NO

TOTAL AMOUNT OF OID:

YIELD TO MATURITY:

INITIAL ACCRUAL PERIOD OID:

OID NOTE PREPAYMENT AMOUNT:

Dual Currency Notes

DUAL CURRENCY NOTE:

o YES o NO

OPTIONAL PAYMENT CURRENCY:

DESIGNATED EXCHANGE RATE:

OPTION ELECTION DATES:

OPTION TO RECEIVE PAYMENTS IN THE SPECIFIED CURRENCY:

o YES o NO

OPTION VALUE CALCULATION AGENT:

DUAL CURRENCY NOTE PREPAYMENT AMOUNT:

Extension of Maturity Notes

EXTENSION OF MATURITY NOTE:

o YES o NO

EXTENSION PERIOD:

NUMBER OF EXTENSION PERIODS:

Extendible Notes

EXTENDIBLE NOTE:

o YES o NO

INITIAL MATURITY DATE:

SPECIAL ELECTION INTERVAL:

EXTENDIBLE IN PART:

o YES o NO

AUTHORIZED EXTENDIBLE AMOUNTS:

SPECIAL ELECTION PERIOD:

Tax Matters

COMPARABLE YIELD: % per annum

PROJECTED PAYMENT SCHEDULE:

$ semi-annually and $ due at Stated
Maturity which includes the final interest
payment

Miscellaneous

OTHER TERMS:

LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company,” which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to CEDE & Co., or registered assigns, on the Stated Maturity Date, for each $1,000 principal amount of the Notes represented hereby not previously repurchased or redeemed, an amount equal to the Maturity Payment Amount and, if so specified above, to pay interest on the principal amount hereof from the Issue Date specified above or from the most recent Interest Payment Date specified above to which interest has been paid or duly provided for at the Interest Rate specified above until the amount due on the Stated Maturity Date, the Optional Repurchase Date or the Redemption Date, as the case may be, is paid in full or made available for payment and (to the extent that the payment of such interest shall be legally enforceable) at such rate per annum on any overdue Payment Amount, premium, if any, and overdue installment of interest.

Unless otherwise specified above, and except as provided in Section 9 on the reverse hereof if this Note is a Dual Currency Note, payments of the applicable Payment Amount, premium, if any, and interest hereon will be made in U.S. dollars; if the Specified Currency set forth above is a currency other than U.S. dollars (a “Foreign Currency”), such payments will be made in U.S. dollars based on the equivalent of that Foreign Currency converted into U.S. dollars in the manner set forth in Section 2 on the reverse hereof. If the Specified Currency is a Foreign Currency and it is so provided above, the Holder may elect to receive such payments in that Foreign Currency by delivery of a written request to the Trustee (or to any duly appointed Paying Agent) at the Corporate Trust Office (as defined below) not later than 10 calendar days prior to the applicable payment date, and such election will remain in effect for the Holder until revoked by written notice to the Trustee (or to any such Paying Agent) at the Corporate Trust Office received not later than 10 calendar days prior to the applicable payment date; provided, however, no such election or revocation may be made if, with respect to this Note, (i) an Event of Default has occurred, (ii) the Company has exercised any discharge or defeasance options or (iii) the Company has given a notice of redemption. In the event the Holder makes any such election pursuant to the preceding sentence, such election will not be effective on any transferee of such Holder and such transferee shall be paid in U.S. dollars unless such transferee makes an election pursuant to the preceding sentence; provided, however, that such election, if in effect while funds are on deposit with the Trustee to satisfy and discharge this Note, will be effective on any such transferee unless otherwise specified above.

Except as provided in the following paragraph, the Company will pay interest on the Interest Payment Dates specified above, commencing with the first Interest Payment Date next succeeding the Issue Date, and on the applicable Principal Payment Date; provided that any payment of the Payment Amount, premium, if any, or interest to be made on any Interest Payment Date or on the Principal Payment Date that is not a Business Day shall be made on the next succeeding Business Day, unless the next succeeding Business Day falls in the next calendar month, in which case payment will be made on the first preceding Business Day, in each case with the same force and effect as if made on such Interest Payment Date or such Principal Payment Date, as the case may be, and, unless Accrue to Pay is specified on the face of this Note, no additional interest shall accrue as a result of such delayed payment; provided further that if the applicable Principal Payment Date is postponed due to a Market Disruption Event, interest will continue to accrue during the period from the originally scheduled Principal Payment Date to but

excluding the postponed Principal Payment Date. If Accrue to Pay is specified on the face of this Note, any payment of interest on the Interest Payment Date will include interest accrued through the day before the Interest Payment Date. Each payment of interest hereon shall include interest accrued through the day before the Interest Payment Date or applicable Principal Payment Date, as the case may be. Unless otherwise specified above, interest on this Note will be computed on the basis of a 360-day year of twelve 30-day months or in the case of an incomplete month, the number of days elapsed. In no event shall the interest rate of this Note be higher than the maximum rate permitted by applicable law, as the same may be modified by United States law of general application.

Unless otherwise specified above, the interest payable on any Interest Payment Date will, as provided in the Indenture, be paid to the person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the Regular Record Date indicated above (whether or not a Business Day) next preceding such Interest Payment Date; provided that, notwithstanding any provision of the Indenture to the contrary, interest payable on a Principal Payment Date shall be payable to the Person to whom the related Payment Amount shall be payable; and provided, further, that, unless otherwise specified above, in the case of a Note initially issued between a Regular Record Date and the Interest Payment Date relating to such Regular Record Date, interest for the period beginning on the Issue Date and ending on such Interest Payment Date shall be paid on the Interest Payment Date following the next succeeding Regular Record Date to the registered Holder on such next succeeding Regular Record Date.

Unless otherwise specified above and except as provided below, all payments of interest on this Note may, at the option of the Company, be made by check mailed to the person entitled thereto at such person’s address as it appears on the registry books of the Company.

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

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

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

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

Dated:

[SEAL]	LEHMAN BROTHERS HOLDINGS INC.


	By:
		Name:
		Title:


	Attest:
		Name:
		Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

CITIBANK, N.A.

as Trustee

By:
	Authorized Officer

[REVERSE OF NOTE]

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTES, SERIES H

PERFORMANCE LINKED TO THE VALUE OF A COMMON STOCK, A
STOCK INDEX, A BASKET OF COMMON STOCKS OR A BASKET OF STOCK INDICES

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

Section 2. Currency Exchanges and Payments. If the Holder elects to receive all or a portion of payments of principal of, premium, if any, and interest on this Note, if denominated in a Foreign Currency, in U.S. dollars, the exchange rate agent specified on the face of this Note or a successor thereto (the “Exchange Rate Agent”), will convert such payments into U.S. dollars. In the event of such an election, payment to the Holder will be based upon the exchange rate as determined by the Exchange Rate Agent based on the highest bid quotation in New York City received by the Exchange Rate Agent at approximately 11:00 a.m., New York City time, on the second Business Day preceding the applicable payment date from three recognized foreign exchange dealers (one of which may be the Exchange Rate Agent unless the Exchange Rate Agent is an affiliate of the Company) for the purchase by the quoting dealer of the Foreign Currency for U.S. dollars for settlement on such payment date in the amount of the Foreign Currency payable in the absence of such an election to such Holder and at which the applicable dealer commits to execute a contract. If such bid quotations are not available, such payment will be made in the Foreign Currency. All currency exchange costs will be borne by the holder of this Note by deductions from such payments.

U.S. dollars until such Foreign Currency is again available or so used. The amount so payable on any date in such Foreign Currency shall be converted into U.S. dollars at a rate determined by the Exchange Rate Agent on the basis of the noon buying rate in New York City for cable transfers in the Foreign Currency as certified for customs purposes by the Federal Reserve Bank of New York (the “Market Exchange Rate”) for such Foreign Currency on the second Business Day prior to such payment date, or on such other basis as may be specified on the face of this Note. In the event such Market Exchange Rate is not then available, the Company will be entitled to make payments in U.S. dollars (i) if such Foreign Currency is not a composite currency, on the basis of the most recently available Market Exchange Rate for such Foreign Currency or (ii) if such Foreign Currency is a composite currency in an amount determined by the Exchange Rate Agent to be the sum of the results obtained by multiplying the number of units of each component currency of such composite currency, as of the most recent date on which such composite currency was used, by the Market Exchange Rate for such component currency on the second Business Day prior to such payment date (or if such Market Exchange Rate is not then available, by the most recently available Market Exchange Rate for such component currency, or as otherwise specified on the face of this Note). Any payment in respect hereof made under such circumstances in U.S. dollars will not constitute an Event of Default under the Indenture.

In the event of an official redenomination of the Specified Currency or the Optional Payment Currency (including, without limitation, an official redenomination of any such currency that is a composite currency), the obligations of the Company to make payments in or with reference to such currency shall, in all cases, be deemed immediately following such redenomination to be obligations to make payments in or with reference to that amount of redenominated currency representing the amount of such currency immediately before such redenomination. In no event shall any adjustment be made to any amount payable hereunder as a result of (i) any redenomination of any component currency of any composite currency (unless such composite currency is itself officially redenominated) or (ii) any change in the value of the specified currency or the Optional Payment Currency relative to any other currency due solely to fluctuations in exchange rates.

All currency exchange costs will be borne by the Holder hereof by deduction from the payments made hereon.

Section 3. Redemption. Unless otherwise specified on the face of this Note, the Company may, at its option, redeem this Note in whole or from time to time in part on or after the date designated as the Initial Redemption Date on the face of this Note at the Redemption Payment Amount, together with accrued interest to but excluding the Redemption Date.

The Company may exercise such option by causing the Trustee to mail by first-class mail to the Holder hereof a notice (the “Redemption Notice”) of such redemption at least 30 but not more than 60 days (or such other period as is specified as the “Redemption Notice Period” on the face of this Note) prior to the Redemption Date. In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof in accordance with the terms of the Indenture. Unless otherwise specified on the face of this Note, if less than all of the Notes of this series are to be redeemed, the Notes of this series to be redeemed shall be selected by the Trustee by such method as the Trustee shall deem fair and appropriate.

Section 4. Sinking Funds and Amortizing Notes. Unless otherwise specified on the face of this Note or unless this Note is an Amortizing Note, this Note will not be subject to any sinking fund. If it is specified on the face of this Note that this Note is an Amortizing Note, the Company will make payments combining Redemption Payment Amount and interest on the dates and in the amounts set forth in the table appearing in Schedule I attached to this Note or as otherwise specified on the face of this Note. If this Note is an Amortizing Note, payments made hereon will be applied first to interest due and payable on each such payment date and then to the reduction of the then outstanding principal amount.

Section 5. Optional Repurchase. Unless otherwise specified on the face of this Note, at any time until the earlier of (a) the date the Company gives notice of its intention to redeem this Note pursuant to Section 3 of this Note or (b) eight Business Days (or such other Optional Repurchase Cutoff Period specified on the face of this Note) before the Stated Maturity Date, the Holder may, at its option, cause the Company to repurchase this Note, subject to the conditions specified below, on the Optional Repurchase Date at the Optional Repurchase Amount, together with accrued interest to but excluding the Optional Repurchase Date.

In order for this Note to be so repurchased, the Trustee must receive, before the earlier of (a) the date the Company gives notice of its intention to redeem this Note pursuant to Section 3 of this Note or (b) eight Business Days (or such other period as is specified as the “Optional Repurchase Cutoff Period” on the face of this Note) before the Stated Maturity Date, either (i) this Note with the form below entitled “Option to Elect Repurchase” duly completed or (ii) a telegram, telex, fax or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States setting forth the name of the Holder hereof, the then outstanding principal amount of this Note, the principal amount of this Note to be repaid, the certificate number hereof or a description of the tenor and terms of this Note, a statement that the option to elect repurchase is being exercised thereby and a guarantee that this Note with the form below entitled “Option to Elect Repurchase” duly completed will be received by the Paying Agent not later than five Business Days after the date of such telegram, telex, fax or letter and this Note and form duly

completed are received by the Paying Agent by such fifth Business Day. Exercise of this repurchase option shall be irrevocable, except as otherwise provided under Section 7 of this Note or Section 10 of this Note. The repurchase option may be exercised by the Holder of this Note with respect to less than the principal amount of this Note then outstanding provided that the principal amount of this Note remaining outstanding after repurchase is an authorized denomination. Upon such partial repurchase this Note shall be cancelled and a new Note or Notes of this series for the remaining principal amount of this Note shall be issued in the name of the Holder of this Note.

If this Note is a Global Security, the Holder of this Note, the nominee of the Depositary, will be the only entity that can exercise a right to repurchase. In order to ensure that the nominee of the depositary will timely exercise a right to repurchase relating to this Note, the Holder must instruct the broker or other direct or indirect participant through which it holds an interest in this Note to notify the Depositary of its desire to exercise a right to repurchase.

Section 6. Stock Settlement. If the Reference Equity specified on the face of this Note is a single common stock and if “Stock Settlement” on the face of this Note is checked as applicable, this Note may be settled on the Stated Maturity Date or on the Optional Repurchase Date (but not upon any Redemption, acceleration of the maturity of this Note or other prepayment of this Note prior to the Stated Maturity Date unless otherwise specified herein), with shares of Settlement Value Securities at the Company’s option, at the Holder’s option or mandatorily, as indicated on the face of this Note.

If Stock Settlement is applicable, the Company will pay the applicable Payment Amount, subject to the following paragraphs, by delivering, for each $1,000 principal amount of the Notes represented hereby, (a) in the case of maturity, Settlement Value Securities having a value on the applicable Valuation Date equal to the Maturity Payment Amount; and (b) in the case of any Optional Repurchase, Settlement Value Securities having a value on the applicable Valuation Date equal to the Optional Repurchase Amount. The Calculation Agent will determine the number and kind of Settlement Value Securities to be delivered, and whether cash shall be delivered in lieu of, or in addition to, any Settlement Value Securities, in accordance with the Calculation Agency Agreement.

If the Company determines that it is prohibited from delivering Settlement Value Securities, or that it would be unduly burdensome to do so, the Company shall pay the applicable Payment Amount in cash.

Section 7. Optional Interest Reset. If so specified on the face of this Note, the Interest Rate on this Note may be reset at the option of the Company, in the manner set forth below (unless otherwise specified on the face of this Note), on the Optional Reset Date or Optional Reset Dates specified on the face of this Note. The Company may exercise such option by notifying the Trustee in writing of such exercise at least 45 but not more than 60 days prior to an Optional Reset Date. Not later than five Business Days after receipt thereof, the Trustee will

mail by first-class mail to the Holder of this Note a notice (the “Reset Notice”) setting forth (i) the election of the Company to reset the interest rate, (ii) such new interest rate and (iii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date or, if there is no such next Optional Reset Date, to the Stated Maturity Date of this Note (each such period a “Subsequent Interest Period”), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during such Subsequent Interest Period. The Reset Notice shall be substantially in the form of Exhibit A to this Note. Upon the transmittal by the Trustee of a Reset Notice to the Holder of this Note, such new interest rate shall take effect automatically, and, except as modified by the Reset Notice and as described in the next paragraph, this Note will have the same terms as prior to the transmittal of such Reset Notice.

Notwithstanding the foregoing, not later than 20 days prior to an Optional Reset Date, the Company may, at its option, revoke the interest rate provided for in the Reset Notice and establish an interest rate that is higher than the interest rate provided for in the Reset Notice for the Subsequent Interest Period commencing on such Optional Reset Date by causing the Trustee to mail by first-class mail notice of such higher interest rate to the Holder of this Note. Such notice shall be irrevocable and shall be mailed by the Trustee within five Business Days after receipt thereof. All Notes of this series with respect to which the interest rate is reset on an Optional Reset Date will bear such higher interest rate for the Subsequent Interest Period.

If the Company elects to reset the interest rate of this Note, the Holder of this Note will have the option to elect repurchase by the Company of this Note, or any portion hereof, on any Optional Reset Date at a price calculated with reference to (a) the then outstanding principal amount of this Note, (b) the Maturity Payment Amount calculated as though the Optional Reset Date were the Stated Maturity Date and the date that is a number of business days equal to the Determination Period before that date were the Valuation Date, or (c) such other amount or amounts, in each case as specified on the face of this Note, plus any interest accrued to, such Optional Reset Date. In order to obtain repurchase on an Optional Reset Date, the Holder must follow the procedures set forth above in Section 5 of this Note for Optional Repurchase except that the period for delivery or notification to the Trustee shall be at least 25 but not more than 35 days prior to such Optional Reset Date and except that, if the Holder has tendered this Note for repurchase pursuant to the Reset Notice, the Holder may, by written notice to the Trustee, revoke such tender for repurchase until the close of business on the tenth day prior to such Optional Reset Date; provided, however, that if such day is not a Business Day, then such notice may be given on the next succeeding Business Day.

Section 8. OID Notes. If this Note is an OID Note, the amount payable in the event of Redemption, Optional Repurchase or acceleration of maturity shall be (i) the Amortized Principal Amount of this Note as of the Redemption Date, Optional Repurchase Date or date of such acceleration, as the case may be, rather than the relevant Payment Amount of this Note or (ii) such other amount as specified on the face of this Note (such amount, the “OID Note Prepayment Amount”).

all Dual Currency Notes of this series, of thereafter making all payments of Maturity Payment Amount, premium, if any, and interest (which payments would otherwise be made in the Specified Currency of such Notes) in the Optional Payment Currency specified on the face of this Note. If the Company makes such an election, the amount of Optional Payment Currency payable in respect hereof shall be determined by the Exchange Rate Agent by converting the amount of Specified Currency that would otherwise be payable into the Optional Payment Currency at the Designated Exchange Rate specified on the face of this Note.

The Company may exercise such option by notifying the Trustee of such exercise on or prior to the Option Election Date. The Trustee will mail by first-class mail to each holder of a Note of this series a notice of such election within five Business Days of the Option Election Date which shall state (i) the first date, whether an Interest Payment Date and/or the Stated Maturity Date, on which scheduled payments in the Optional Payment Currency will be made and (ii) the Designated Exchange Rate. Any such notice by the Company, once given, may not be withdrawn.

If this Note is a Dual Currency Note, notwithstanding any prior election made by the Company, the amount payable hereon in the event of any Redemption, any Optional Repurchase, any acceleration of the maturity of this Note or other prepayment of this Note prior to the Stated Maturity Date shall be (a) an amount equal to the amount otherwise due and payable plus accrued interest to but excluding the Redemption Date, Optional Repurchase Date, date of acceleration or other prepayment minus the Total Option Value multiplied by a fraction, the numerator of which is the then outstanding principal amount of this Note and the denominator of which is the aggregate principal amount of all Dual Currency Notes of this series then outstanding or (b) such other amount as specified on the face of this Note (such amount, the “Dual Currency Note Prepayment Amount”). In no event will such payment be less than zero. Notwithstanding any prior election made by the Company, such payment shall be made in the Specified Currency unless otherwise provided on the face of this Note.

Section 10. Extension of Maturity Notes. If it is specified on the face of this Note that this Note is an Extension of Maturity Note, the Company has the option to extend the Stated Maturity Date hereof for the number of Extension Periods set forth on the face of this Note, each of which Extension Periods shall be a period of from one to five whole years. Unless otherwise specified on the face of this Note, the following procedures shall apply if this Note is an Extension of Maturity Note.

new Stated Maturity Date, (iii) the Interest Rate applicable to the Extension Period and (iv) the provisions, if any, for redemption during the Extension Period, including the date on which or the period or periods during which and the price at which such redemption may occur during the Extension Period. Upon the mailing by the Trustee of an Extension Notice to the Holder, the Stated Maturity Date hereof shall be extended automatically, and, except as modified by the Extension Notice and as described in the next paragraph, this Note will have the same terms as prior to the mailing of such Extension Notice.

If the Company extends the Stated Maturity Date of this Note, the Holder will have the option to elect repurchase by the Company of this Note, or any portion hereof, on the Original Stated Maturity at a price calculated with reference to (a) the then outstanding principal amount of this Note, (b) the Optional Repurchase Amount calculated as though the Original Stated Maturity were the Stated Maturity Date and the date that is a number of business days equal to the Determination Period before that date were the Valuation Date, or (c) such other amount or amounts, in each case as specified on the face of this Note. In order for this Note to be so repaid on the Original Stated Maturity, the Holder must follow the procedures set forth in Section 5 of this Note for Optional Repurchase, except that the period for delivery of this Note or notification to the Trustee shall be at least 25 but not more than 35 days prior to the Original Stated Maturity and except that the Holder may, by written notice to the Trustee, revoke any such tender for repurchase until the close of business on the tenth day prior to the Original Stated Maturity; provided, however, that if such day is not a Business Day, then such notice may be given on the next succeeding Business Day.

Section 11. Extendible Notes. If it is specified on the face of this Note that this Note is a Extendible Note, this Note will mature on the Stated Maturity Date specified on the face of this Note unless the maturity of all or any portion of this Note is extended in accordance with the procedures described below.

On the Interest Payment Date occurring in the sixth month (unless a different Special Election Interval is specified on the face of this Note) prior to the initial Stated Maturity Date specified on the face of this Note (the “Initial Maturity Extension Date”) and on the Interest Payment Date occurring in each sixth month (or the last month of each Special Election Interval) after such Initial Maturity Extension Date (each, together with the Initial Maturity Extension Date, a “Maturity Extension Date”), the Stated Maturity Date of this Note will be extended to the Interest Payment Date occurring in the twelfth month (or, if a Special Election Interval is specified on the face of this Note, the last month in a period equal to twice the Special Election Interval) after such Maturity Extension Date, unless the Holder elects to terminate the extension of the Stated Maturity Date hereof or any portion hereof as described below.

If the Holder elects to terminate the extension of the Stated Maturity Date of any portion of the principal amount of this Note during the specified period prior to any Maturity Extension Date, such portion will become due and payable on the Interest Payment Date occurring in the sixth month (or the last month in the Special Election Interval) after such Maturity Extension Date (the “Extended Stated Maturity Date”).

The Holder may elect to extend the Stated Maturity Date of this Note, or if so specified above, any portion hereof, by delivering a notice to such effect to the Trustee (or any duly appointed Paying Agent) at the Corporate Trust Office not less than 3 nor more than 15 days prior to such Maturity Extension Date (unless another period is specified on the face of this Note as the “Special Election Period”). Such election will be irrevocable and will be binding upon each subsequent Holder of this Note. An election to extend the Stated Maturity Date of this Note may be exercised with respect to less than the entire principal amount of this Note then outstanding only if so specified on the face of this Note and only in such principal amount, or any integral multiple in excess thereof, as is specified on the face of this Note. Notwithstanding the foregoing, the maturity of this Note will not be extended beyond the Stated Maturity Date specified on the face of this Note.

Unless otherwise specified above, any election not to extend will be effective only if this Note is presented to the Trustee (or any duly appointed Paying Agent) as soon as practicable. Following receipt of this Note the Trustee (or any duly appointed Paying Agent) shall issue in exchange herefor in the name of the Holder (i) a Note, in a face amount equal to the principal amount of this Note for which no election to extend was exercised, with terms identical to those specified herein (except for the Issue Date and the Initial Interest Rate and except that such Note shall have a fixed, non-extendable maturity on the Extended Stated Maturity Date) and (ii) if such election not to extend is made with respect to less than the principal amount of this Note then outstanding, a replacement Extendible Note, in a face amount equal to the principal amount of this Note for which an election to extend was made, with terms identical to this Note.

Section 12. Principal Amount for Indenture Purposes. For the purpose of determining whether Holders of the requisite amount of Notes of this series outstanding under the Indenture have made a demand, given a notice or waiver or taken any other action, the principal amount of this Note will be deemed to be the principal amount of this Note then outstanding; provided, however, if this Note is an OID Note, the outstanding principal amount of this Note will be deemed to be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof.

Amount or the principal amount thereof, premium or other amount payable, if any, or interest thereon payable in any coin or currency other than that hereinabove provided, without the consent of the Holder of each Security so affected, or (ii) change the place of payment on any Security, or impair the right to institute suit for payment on any Security, or reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of each Security so affected. It is also provided in the Indenture that, prior to any declaration accelerating the maturity of any series of Securities, the holders of a majority in aggregate principal amount of the Securities of such series Outstanding may on behalf of the holders of all the Securities of such series waive any past default or Event of Default under the Indenture with respect to such series and its consequences, except a default in the payment of interest, if any, on the Payment Amount or the principal amount, or premium, if any, on any of the Securities of such series, or in the payment of any sinking fund installment or analogous obligation with respect to Securities of such series. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future holders and owners of this Note and any Notes of this series which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Note or such other Notes of this series.

Section 14. Obligations Unconditional. No reference herein to the Indenture and no provisions of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the Payment Amount or the principal amount, premium, if any, and interest, if any, on this Note at the place, at the respective times, at the rate, and in the coin or currency herein prescribed.

Section 16. Authorized Form and Denominations. The Notes of this series are issuable in registered form, without coupons. Notes of this series denominated in U.S. dollars shall be issued in the principal amount denominations specified on the face of this Note. Notes of this series denominated in a Foreign Currency will be issued in a denomination approximately equivalent to Notes of this series denominated in U.S. dollars. Each Note will be issued initially as either a Global Security or a Certificated Note, at the option of the Company, either at the office or agency to be designated and maintained by the Company for such purpose in the Borough of Manhattan, New York City, pursuant to the provisions of the Indenture or at any of such other offices or agencies as may be designated and maintained by the Company for such purpose pursuant to the provisions of the Indenture, and in the manner and subject to the limitations provided in the Indenture, but without the payment of any service charge, except for any tax or other governmental charges imposed in connection therewith. Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized denomination, except that Global Securities will not be exchangeable for Certificated Notes of this series.

agency in a Place of Payment for this Note, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar requiring such written instrument of transfer duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

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

Section 18. Events of Default. If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Unless otherwise provided on the face of this Note, the amount payable to the Holder hereof upon any acceleration permitted under the Indenture will be equal to the Maturity Payment Amount calculated as though the date to which the maturity has been accelerated were the Stated Maturity Date and the date that is a number of business days equal to the Determination Period before that date were the Valuation Date. In any such case, even if Stock Settlement is applicable, the Notes of this series will be settled in cash. Upon payment (i) of the aggregate applicable amounts on the Notes of this series so declared due and payable and (ii) of interest on any overdue Payment Amount 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 Maturity Payment Amount of and interest, if any, on the Notes of this series shall terminate.

Section 19. No Recourse Against Certain Persons. No recourse for the payment of Payment Amount, premium, if any, or interest on this Note, or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any Indenture supplemental thereto or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of

any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.

Section 20. Tax Treatment. The Company agrees, and by acceptance of beneficial ownership interest in the Notes of this series, each Holder of such Notes will be deemed to have agreed, for United States federal income tax purposes, (i) to treat the Notes of this series as indebtedness that is subject to Treas. Reg. Sec. 1.1275-4 (the “Contingent Payment Regulations”) and (ii) to be bound by the Company’s determination of the “comparable yield” and “projected payment schedule,” within the meaning of the Contingent Payment Regulations, with respect to the Notes of this series. The “comparable yield” and the “projected payment schedule”, as determined by the Company per $1,000 note, are specified on the face of this Note.

Section 21. Defined Terms. All terms used but not defined in this Note are used herein as defined in the Indenture.

Section 22. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

Section 23. Definitions. Set forth below are definitions of certain of the terms used in this Note. The definitions set forth below are subject to the terms and provisions on the face of this Note. If any definition below is different than, or inconsistent with, the terms and provisions on the face of this Note, the terms and provisions on the face shall prevail.

“ADS” shall mean American Depositary Share.

“Alternative Redemption Amount” shall mean, for each $1,000 principal amount of the Notes represented hereby, the product of (a) $1,000 and (b) the Settlement Value on the applicable Valuation Date divided by the Threshold Value.

“AMEX” shall mean the American Stock Exchange LLC.

“Amortized Principal Amount” of this Note at any time shall mean the amount equal to (a) the Issue Price multiplied by the then outstanding principal amount of this Note plus (b) that portion of the difference between the amount calculated pursuant to clause (a) and the principal amount of this Note that has accrued at the Yield to Maturity set forth on the face of this Note (computed in accordance with generally accepted United States bond yield computation principles) at the date as of which the Amortized Principal Amount is calculated, but in no event shall the Amortized Principal Amount of this Note exceed the principal amount of this Note.

“Average Execution Price” shall mean, for a security or other property, the average per unit execution price that an affiliate of the Company receives or pays for such security or property, as the case may be, to hedge the Company’s obligations under the Notes of this series.

close, and, (a) if the Specified Currency is a Foreign Currency other than Euros, not a day on which banking institutions are authorized or required by law to close in the Principal Financial Center of the country issuing the Foreign Currency and (b) if the Specified Currency is Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer System is open. “Principal Financial Center” shall mean the capital city of the country issuing the specified currency. However, for U.S. dollars, Australian dollars, Canadian dollars and Swiss francs, the Principal Financial Center will be New York City, Sydney, Toronto and Zurich, respectively.

“Calculation Agency Agreement” shall mean the Calculation Agency Agreement, dated as of May 18, 2005, between the Company and the Calculation Agent, as amended from time to time, or any successor calculation agency agreement.

“Calculation Agent” shall mean the person that has entered into an agreement with the Company providing for, among other things, the determination of the Settlement Value and the Payment Amount, which term shall, unless the context otherwise requires, include its successors and assigns. The initial Calculation Agent shall be Lehman Brothers Inc.

“Close of Trading” shall mean, in respect of any Relevant Exchange or other exchange or quotation system, the scheduled weekday closing time on a day on which the Relevant Exchange or other exchange or quotation system is scheduled to be open for trading for its respective regular trading session, without regard to after hours or any other trading outside of the regular trading session hours.

“Closing Level”, shall mean, when used with respect to any Relevant Index on any particular day, (a) the closing level of the Relevant Index on such day as reported by the publisher of the Relevant Index, as determined and adjusted by the Calculation Agent pursuant to the Calculation Agency Agreement, or (b) as otherwise determined by the Calculation Agent pursuant to the Calculation Agency Agreement if the Relevant Index has been discontinued or in the circumstances described in the definition of the term “Valuation Date” herein.

“Closing Price” shall mean, for each Settlement Value Security, as determined by the Calculation Agent pursuant to the Calculation Agency Agreement on any particular day, based on information reasonably available to it:

(1) if the Settlement Value Security is listed on a Relevant Exchange, the last reported sale price per share at the Close of Trading on such day on the Relevant Exchange;

(2) if the Settlement Value Security is not listed on a national securities exchange or quotation system or is not a Nasdaq security, and is listed or traded on a bulletin board, the Average Execution Price per share of the Settlement Value Security; or

(3) as otherwise determined by the Calculation Agent pursuant to the Calculation Agency Agreement in the circumstances described in the definition of the term “Valuation Date” herein.

In the case of both (1) and (2) above, if the Settlement Value Security is listed or quoted on a non-United States Relevant Exchange or on a non-United States bulletin board, the Closing Price will then be converted into U.S. dollars using the Official W.M. Reuters Spot Closing Rate at 11:00 a.m., New York City time. If there are several quotes for the Official W.M. Reuters Spot Closing Rate at that time, the first quoted rate starting at 11:00 a.m. shall be the rate used. If there is no such Official W.M. Reuters Spot Closing Rate for a country’s currency at 11:00 a.m., New York City time, the Closing Price shall be converted into U.S. dollars using the last available U.S. dollar cross-rate quote before 11:00 a.m., New York City time.

“common stock” shall mean common stock or any other equity security (which may be an ADS).

“Company” shall have the meaning set forth on the face of this Note.

“Designated Exchange Rate” shall mean the exchange rate specified as such on the face of this Note.

“Determination Period” shall be the number of days specified as such on the face of this Note.

“Dual Currency Note” shall mean any Note designated as such on the face of this Note.

“Dual Currency Note Prepayment Amount” shall have the meaning set forth in Section 9 of this Note.

“Exchange Rate Agent” shall have the meaning set forth in Section 2 of this Note.

“Extended Stated Maturity Date” shall have the meaning set forth in Section 11 of this Note.

“Extension Notice” shall have the meaning set forth in Section 10 of this Note.

“Foreign Currency” shall mean any currency other than U.S. dollars.

“Global Security” shall have the meaning set forth on the face of this Note.

“Indenture” shall have the meaning set forth in Section 1 of this Note.

“Index Stock” shall mean the common stock specified as the Reference Equity on the face of this Note.

“Index Weight” shall mean, if the Reference Equity set forth on the face of this Note is a basket of stock indices, for each Relevant Index, the number by which the Closing Level of such Relevant Index will be multiplied in order to calculate the Settlement Value on a particular day. The Index Weight relating to each Relevant Index included in the Reference Equity shall be as specified on the fact of this Note.

“Initial Maturity Extension Date” shall have the meaning set forth in Section 11 of this Note.

“Initial Redemption Date” shall mean the date specified as such on the face of this Note.

“Interest Payment Date” shall have the meaning set forth on the face of this Note.

“Interest Rate” shall be the rate specified as such on the face of this Note.

“Issue Date” shall have the meaning set forth on the face of this Note.

“Issue Price” shall mean the price specified as such on the face of this Note.

“Market Disruption Event”, unless indicated otherwise on the face of this Note, with respect to a Settlement Value Security or a Relevant Index shall mean any of the following events has occurred on any day as determined by the Calculation Agent in accordance with the Calculation Agency Agreement:

If the Reference Equity specified on the face of this Note is a basket of common stocks or indices, a Market Disruption Event will occur if a Market Disruption Event occurs with respect to any of the Settlement Value Securities or Relevant Indices included in the basket.

For purposes of determining whether a Market Disruption Event has occurred, the relevant percentage contribution of a security to the level of a Relevant Index will be based on a comparison of (x) the portion of the level of the Relevant Index attributable to that security and (y) the overall level of the Relevant Index, in each case immediately before the occurrence of the Market Disruption Event.

“Market Exchange Rate” shall have the meaning set forth in Section 2 of this Note.

“Maturity Extension Date” shall have the meaning set forth in Section 11 of this Note.

“Maturity Payment Amount” shall mean, for each $1,000 principal amount of the Notes represented hereby, an amount equal to the greater of (a) $1,000 and (b) the Alternative Redemption Amount.

“Multiplier” shall mean, if the Reference Equity set forth on the face of this Note is a common stock or basket of common stocks, for each Settlement Value Security, the number of shares or other units (including ADSs) (or fraction of a share or other unit expressed as a decimal) of such Settlement Value Security included in the calculation of the Settlement Value on a particular day, as determined by the Calculation Agent pursuant to the Calculation Agency Agreement. The initial Multiplier relating to each Settlement Value Security initially included in the Reference Equity shall be specified as such on the face of this Note. The initial Multiplier for any security which may subsequently become a Settlement Value Security shall be the number of shares or other units of such security which are to be included in the calculation of the Settlement

Value at the time such security becomes a Settlement Value Security. Multipliers may be adjusted by the Calculation Agent in accordance with the Calculation Agency Agreement in certain circumstances.

“Nasdaq” shall mean The Nasdaq Stock Market, Inc.

“Notes” shall have the meaning set forth in Section 1 of this Note.

“NYSE” shall mean The New York Stock Exchange, Inc.

“Official W.M. Reuters Spot Closing Rate” shall mean the closing spot rate published on Reuters page ”WMRA” relevant for a Settlement Value Security.

“OID Note” shall mean any Note (a) that has been issued at an Issue Price less, by more than a de minimis amount (as determined under United States federal income tax rules applicable to original issue discount instruments), than 100% and (b) any other Note that for United States federal income tax purposes would be considered an original issue discount instrument.

“OID Note Prepayment Amount” shall have the meaning set forth in Section 8 of this Note.

“Option Election Dates” shall mean the date(s) specified as such on the face of this Note.

“Option Value” shall mean, with respect to an Interest Payment Date or the Stated Maturity Date, the amount calculated by the Option Value Calculation Agent to be the arithmetic average of the prices quoted on the date of calculation by three reference banks (which banks shall be selected by the Option Value Calculation Agent and shall be reasonably acceptable to the Company) for the right on the Option Election Date immediately preceding such Interest Payment Date or Stated Maturity Date to purchase for value on such Interest Payment Date or Stated Maturity Date from such reference banks (A) the aggregate amount of the Specified Currency due on such Interest Payment Date or Stated Maturity Date with respect to all of the Dual Currency Notes of this series in exchange for (B) the amount of the Optional Payment Currency that would be received if the amount in clause (A) were converted into the Optional Payment Currency at the Designated Exchange Rate.

“Optional Payment Currency” shall mean the currency specified as such on the face of this Note.

“Optional Repurchase” shall mean the option of a Holder to elect to require the Company to repurchase Notes of this series pursuant to Section 5 of this Note.

“Optional Repurchase Amount” shall mean, for each $1,000 principal amount of Notes represented hereby, the Alternative Redemption Amount.

“Optional Repurchase Cutoff Period” shall be the number of days specified as such on the face of this Note.

“Optional Repurchase Date” shall mean the eighth Business Day (or such other date as is specified on the face of this Note) following the Business Day on which the Company receives a written notice of election to require repurchase of this Note in the manner specified in Section 5 of this Note; provided, however, if the Calculation Agent determines that a Market Disruption Event with respect to any Settlement Value Security has occurred on the day that would otherwise be the applicable Valuation Date, or if the applicable Valuation Date is not a Scheduled Trading Day, then the Optional Repurchase Date shall be postponed by a number of Business Days equal to the number of Scheduled Trading Days by which the applicable Valuation Date is postponed.

“Optional Reset Dates” shall be the dates specified as such on the face of this Note.

“Original Stated Maturity” shall have the meaning set forth in Section 10 of this Note.

“Payment Amount” shall mean the Maturity Payment Amount, the Redemption Payment Amount or the Optional Repurchase Amount, as the case may be.

“Principal Payment Date” shall mean the Stated Maturity Date, the Redemption Date or the Optional Repurchase Date, as the case may be.

“Redemption” shall mean the option of the Company to redeem, at any time on or after the date specified on the face of this Note, in whole or from time to time in part, the Notes of this series pursuant to Section 3 of this Note.

“Redemption Date” shall mean the date specified as such in the notice demanded in Section 3 of this Note; provided, however, if the Calculation Agent determines that a Market Disruption Event with respect to any Reference Equity has occurred on a day that would otherwise be the applicable Valuation Date, or if the applicable Valuation Date is not a Scheduled Trading Day, then the Redemption Date shall be postponed by a number of Business Days equal to the number of Scheduled Trading Days by which the applicable Valuation Date is postponed.

“Redemption Notice” shall mean the notice of redemption mailed to the Holders pursuant to Section 3 of this Note.

“Redemption Notice Period” shall have the meaning set forth in Section 3 of this Note.

“Redemption Payment Amount” shall mean, for each $1,000 principal amount of Notes represented hereby, the greater of (a) $1,000 and (b) the Alternative Redemption Amount.

“Reference Equity” shall mean the common stock, stock index, basket of common stocks or basket of stock indices specified as such on the face of this Note.

“Relevant Exchange” shall mean, for any Settlement Value Security, the primary United States national securities exchange, quotation system, including any bulletin board

service, or market on which such Settlement Value Security is traded, or in case such Settlement Value Security is not listed or quoted in the United States, the primary exchange, quotation system or market for such Settlement Value Security.

“Relevant Index” shall mean, if the Reference Equity specified on the face of this Note is a stock index or basket of stock indices, any stock index included in the calculation of the Settlement Value by the Calculation Agent in accordance with the Calculation Agency Agreement, including any successor or substitute index selected by the Calculation Agent in accordance with the Calculation Agency Agreement upon discontinuance of an index. The Relevant Indices will initially consist of those indices designated as the Reference Equity on the face of this Note.

“Reset Notice” shall have the meaning specified in Section 7 of this Note.

“Scheduled Trading Day” means (a) in the case of any Settlement Value Security, any day on which the Relevant Exchange for such security is scheduled to be open for trading for its regular trading session and (b) in the case of a Relevant Index, any day on which the Relevant Index is published by its publisher or otherwise determined by the Calculation Agent pursuant to the Calculation Agency Agreement.

“Securities” shall have the meaning set forth in Section 1 of this Note.

“Settlement Value”, when used with respect to an applicable Valuation Date, shall equal:

(1) if the Reference Equity specified on the face of this Note is a common stock or a basket of common stocks, the sum of the products of the Closing Prices on the applicable Valuation Date and the applicable Multipliers (as adjusted from time to time by the Calculation Agent pursuant to the Calculation Agency Agreement prior to the Close of Trading on the Valuation Date) for each Settlement Value Security on the Valuation Date, together with any cash or other property included in the Settlement Value on the Valuation Date by the Calculation Agent pursuant to the Calculation Agency Agreement; provided that if the originally scheduled Valuation Date is postponed because of the occurrence of a Market Disruption Event, the Settlement Value will equal (a) the sum of the products of the Closing Prices on the postponed Valuation Date and the applicable Multipliers for each Settlement Value Security for which no Market Disruption Event occurred plus (b) the sum of the products of the average per share execution price an affiliate of the Company receives or pays on the postponed Valuation Date upon the sale or purchase of each Settlement Value Security for which a Market Disruption Event has occurred which was used to hedge the Company’s obligations under the Notes of this series and the applicable Multipliers (in case, as adjusted from time to time by the Calculation Agent pursuant to the Calculation Agency Agreement prior to the Close of Trading on the postponed Valuation Date), together with any cash or other property included in the Settlement Value on the Valuation Date by the Calculation Agent pursuant to the Calculation Agency Agreement;

(2) if the Reference Equity specified on the face of this Note is a stock index, the Closing Level of the Relevant Index on the Valuation Date; or

(3) if the Reference Equity specified on the face of this Note is a basket of stock indices, the sum of the products of the Closing Levels on the Valuation Date and the applicable Index Weight for each Relevant Index.

The Settlement Value, and any adjustments thereto, shall be determined by the Calculation Agent pursuant to the Calculation Agency Agreement.

“Settlement Value Securities” shall mean, if the Reference Equity specified on the face of this Note is a common stock or a basket of common stocks, the securities included in the calculation of the Settlement Value by the Calculation Agent pursuant to the Calculation Agency Agreement. The Settlement Value Securities will initially consist of the common stocks designated as the Reference Equity on the face of this Note.

“Special Election Interval” shall have the meaning set forth in Section 10 of this Note.

“Special Election Period” shall have the meaning set forth in Section 10 of this Note.

“Specified Currency” shall mean U.S. dollars or such other currency as is specified as such on the face of this Note.

“Stated Maturity Date” shall mean the date specified as such on the face of this Note (except as otherwise provided in the case of an Extension of Maturity Note or an Extendible Note); provided, that if a Market Disruption Event with respect to one or more of the Settlement Value Securities or Relevant Indices, as the case may be, occurs on the applicable Valuation Date, or if the applicable Valuation Date is not a Scheduled Trading Day, then the Stated Maturity Date shall be postponed by a number of Business Days equal to the number of Scheduled Trading Days by which the applicable Valuation Date is postponed. In the event of any acceleration of the maturity of this Note prior to the Stated Maturity Date specified on the face of this Note, the term “Stated Maturity Date” when used herein shall refer, where applicable, to the date of acceleration of this Note.

“Stock Settlement” shall mean the option or right to pay or receive the Maturity Payment Amount or Optional Repurchase Amount in shares of the Settlement Value Securities, as set forth in Section 6 of this Note.

“Subsequent Interest Period” shall have the meaning set forth in Section 7 of this Note.

“Threshold Value” shall have the meaning set forth on the face of this Note.

“Total Option Value” shall mean, with respect to any Dual Currency Note on any date, an amount (calculated as of such date by the Option Value Calculation Agent specified on the face of this Note) equal to the sum of the Option Values (calculated as of such date by the Option Value Calculation Agent) for all Interest Payment Dates occurring after the date of calculation up to and including the Stated Maturity Date.

“Trustee” shall have the meaning set forth in Section 1 of this Note.

“Valuation Date” shall mean, unless otherwise specified on the face of this Note, (a) in the case of payment on the Stated Maturity Date, the third Business Day prior to the Stated Maturity Date, (b) in the case of Redemption, the date that the Redemption Notice is mailed and (c) in the case of Optional Repurchase, the date that is a number of Business Days equal to the Determination Period before the Optional Repurchase Date; provided, however, in each case, if a Market Disruption Event occurs on any such date, as determined by the Calculation Agent pursuant to the Calculation Agency Agreement, or if such date is not a Scheduled Trading Day, the Valuation Date shall be postponed to the next Scheduled Trading Day on which no Market Disruption Event occurs; provided, further, if a Market Disruption Event occurs on each of the eight Scheduled Trading Days following the originally scheduled Valuation Date, then that eighth Scheduled Trading Day shall be deemed the Valuation Date and the Calculation Agent shall determine, in accordance with the Calculation Agency Agreement, the Closing Price of the affected Settlement Value Securities or the Closing Level of the Relevant Index, as the case may be, based upon its estimate of the value of the Settlement Value Security or Relevant Index, as of the Close of Trading on that eighth Scheduled Trading Day.

“Yield to Maturity” shall mean the percentage specified as such on the face of this Note.

OPTION TO ELECT REPURCHASE

The undersigned owner of this Note hereby irrevocably elects to have the Company repurchase the principal amount of this Note or portion hereof below designated at (i) the Optional Repurchase Amount plus accrued interest to but excluding the Optional Repurchase Date, if this Note is to be repurchased pursuant to the Optional Repurchase provision described in Section 5 of this Note, or (ii) the price specified pursuant to the Optional Interest Reset provision described in Section 7 of this Note or the Extension of Maturity Notes provision described in Section 10 of this Note. Any such election is irrevocable except as provided in Section 7 of this Note or Section 10 of this Note.

If the repurchase of this Note is pursuant to Section 5 of this Note and if the undersigned has the option to elect to have the repurchase settled in stock, the undersigned has indicated below if that option is being exercised.

Dated:
				Signature
				Sign exactly as name appears on the front of this Note [SIGNATURE GUARANTEED - required only if Notes of this series are to be issued and delivered to other than the registered Holder]


Principal Amount to be repurchased, if amount to be repurchased is less than the principal amount of this Note				Fill in for registration of Notes of this series if to be issued otherwise than to the registered Holder:
(principal amount remaining must be an authorized denomination)				Name:
				Address:
$

				(Please print name and address including zip code)


Stock Settlement option elected				SOCIAL SECURITY OR OTHER TAXPAYER ID NUMBER:

o YES o NO

OPTION TO ELECT TERMINATION OF AUTOMATIC EXTENSION

The undersigned owner of this Note hereby irrevocably elects to terminate the automatic extension of this Note or of the portion of the principal amount of this Note below designated. Any such election is irrevocable and will be binding on any subsequent Holder hereof.

Dated:
				Signature
				Sign exactly as name appears on the front of this Note [SIGNATURE GUARANTEED - required only if Notes of this series are to be issued and delivered to other than the registered Holder]

Principal Amount to be terminated, if amount to be terminated is less than the principal amount of this Note (such principal amount must be an authorized denomination)				Fill in for registration of Notes of this series if to be issued otherwise than to the registered Holder:
				Name:
$				Address:


				(Please print name and address including zip code)


				SOCIAL SECURITY OR OTHER TAXPAYER ID NUMBER

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
TEN ENT	—	as tenant by the entireties
JT TEN	—	as joint tenants with right of survivorship
		and not as tenants in common

UNIF GIFT
MIN ACT	—		Custodian
		(Cust)		(Minor)
		under Uniform Gifts to Minors Act
					(State)

	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 OTHER IDENTIFYING NUMBER OF ASSIGNEE)


	(PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

the within Note of LEHMAN BROTHERS HOLDINGS INC. and all rights thereunder and does hereby irrevocably constitute and appoint

Attorney to transfer the said Note on the books of the within-named Company, 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 Note in every particular, without alteration or enlargement or any change whatsoever.

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 signature guarantee medallion program), pursuant to SEC rule 17Ad-15.

Schedule I

Amortization Table

Date		Payment

EXHIBIT A

RESET NOTICE

LEHMAN BROTHERS HOLDINGS INC.

Medium-Term Notes, Series H

Performance Linked to the Value of a Common Stock, a
Stock Index, a Basket of Common Stocks or a Basket of Stock Indices

CUSIP No.

Registered Nos. -

The Company hereby elects to reset the Interest Rate set forth on the face of the Notes. On and after (1), the Interest Rate shall be .

Each Holder of a Note has the option to elect repurchase by the Company of such Note, or any portion thereof, on any Optional Reset Date pursuant to the terms of such Note. The Notes may be repaid on the dates and at the prices set forth below:

Date		Redemption Price

Dated:

	LEHMAN BROTHERS HOLDINGS INC.


	By:
	Title:


	Attest:
	Title:

(1) Insert applicable Optional Reset Date.

EX-4.04 7 a05-9645_1ex4d04.htm EX-4.04

Exhibit 4.04

CUSIP NO.

REGISTERED	PRINCIPAL AMOUNT: $
No. R-

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTE, SERIES H

YEELDS^®

YIELD ENHANCED EQUITY LINKED DEBT SECURITIES

PERFORMANCE LINKED TO THE VALUE OF A COMMON STOCK

ISSUE PRICE: $ per YEELDS

PRINCIPAL AMOUNT PER YEELDS: $

AGGREGATE PRINCIPAL
AMOUNT: $

AUTHORIZED DENOMINATIONS:

$ and integral multiples thereof

ISSUE DATE:

STATED MATURITY DATE:

COUPON RATE: % per annum

ACCRUE TO PAY:

o YES o NO

COUPON PAYMENT DATES:

and of each year, beginning on

REGULAR RECORD DATES:
calendar days prior to each Interest Payment Date

INITIAL VALUE: $

EQUITY CAP PRICE PER YEELDS: $

INDEX STOCK ISSUER:

INDEX STOCK:

INITIAL MULTIPLIER:

IDETERMINATION PERIOD:
Business Days

DEPOSITORY: [The Depository Trust Company]

Currency Exchanges and Payments

SPECIFIED CURRENCY:

EXCHANGE RATE AGENT:

Redemption

REDEEMABLE NOTE:

o YES o NO

INITIAL REDEMPTION DATE:

REDEMPTION NOTICE PERIOD:
Business Days

Sinking Funds and Amortizing Notes

SINKING FUND:

AMORTIZING NOTE:

o YES o NO

Optional Repurchase

OPTIONAL REPURCHASE:

o YES o NO

OPTIONAL REPURCHASE CUTOFF
PERIOD: Business Days

Stock Settlement

STOCK SETTLEMENT:

o YES o NO

AT MATURITY:

o YES o NO

UPON REPURCHASE:

o YES o NO

AT OPTION OF THE COMPANY:

o YES o NO

AT OPTION OF THE HOLDER:

o YES o NO

MANDATORY:

o YES o NO

Optional Interest Reset

OPTIONAL INTEREST RATE RESET:

o YES o NO

OPTIONAL RESET DATES:

OID Notes

OID NOTE:

o YES o NO

TOTAL AMOUNT OF OID:

YIELD TO MATURITY:

INITIAL ACCRUAL PERIOD OID:

OID NOTE PREPAYMENT AMOUNT:

Dual Currency Notes

DUAL CURRENCY NOTE:

o YES o NO

OPTIONAL PAYMENT CURRENCY:

DESIGNATED EXCHANGE RATE:

OPTION ELECTION DATES:

OPTION TO RECEIVE PAYMENTS IN THE SPECIFIED CURRENCY:

o YES o NO

OPTION VALUE CALCULATION AGENT:

DUAL CURRENCY NOTE PREPAYMENT AMOUNT:

Extension of Maturity Notes

EXTENSION OF MATURITY NOTE:

o YES o NO

EXTENSION PERIOD:

NUMBER OF EXTENSION PERIODS:

Extendible Notes

EXTENDIBLE NOTE:

o YES o NO

INITIAL MATURITY DATE:

SPECIAL ELECTION INTERVAL:

EXTENDIBLE IN PART:

o YES o NO

AUTHORIZED EXTENDIBLE AMOUNTS:

SPECIAL ELECTION PERIOD:

Miscellaneous

OTHER TERMS:

LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company,” which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to CEDE & Co., or registered assigns, on the Stated Maturity Date, for each principal amount of the Notes represented hereby equal to the principal amount per YEELDS specified above (such principal amount of Notes referred to herein as a “YEELDS”) not previously repurchased or redeemed, an amount equal to the Maturity Payment Amount and, if so specified above, to make coupon payments on the principal amount hereof from the Issue Date specified above or from the most recent Coupon Payment Date specified above to which coupon payments have been paid or duly provided for at the Coupon Rate specified above until the amount due on the Stated Maturity Date, the Optional Repurchase Date or the Redemption Date, as the case may be, is paid in full or made available for payment and (to the extent that the payment of such coupon payments shall be legally enforceable) at such rate per annum on any overdue Payment Amount, premium, if any, and overdue installment of coupon payments.

Unless otherwise specified above, and except as provided in Section 9 on the reverse hereof if this Note is a Dual Currency Note, payments of the applicable Payment Amount, premium, if any, and coupon payments hereon will be made in U.S. dollars; if the Specified Currency set forth above is a currency other than U.S. dollars (a “Foreign Currency”), such payments will be made in U.S. dollars based on the equivalent of that Foreign Currency converted into U.S. dollars in the manner set forth in Section 2 on the reverse hereof. If the Specified Currency is a Foreign Currency and it is so provided above, the Holder may elect to receive such payments in that Foreign Currency by delivery of a written request to the Trustee (or to any duly appointed Paying Agent) at the Corporate Trust Office (as defined below) not later than 10 calendar days prior to the applicable payment date, and such election will remain in effect for the Holder until revoked by written notice to the Trustee (or to any such Paying Agent) at the Corporate Trust Office received not later than 10 calendar days prior to the applicable payment date; provided, however, no such election or revocation may be made if, with respect to this Note, (i) an Event of Default has occurred, (ii) the Company has exercised any discharge or defeasance options or (iii) the Company has given a notice of redemption. In the event the Holder makes any such election pursuant to the preceding sentence, such election will not be effective on any transferee of such Holder and such transferee shall be paid in U.S. dollars unless such transferee makes an election pursuant to the preceding sentence; provided, however, that such election, if in effect while funds are on deposit with the Trustee to satisfy and discharge this Note, will be effective on any such transferee unless otherwise specified above.

Except as provided in the following paragraph, the Company will make coupon payments on the Coupon Payment Dates specified above, commencing with the first Coupon Payment Date next succeeding the Issue Date, and on the applicable Principal Payment Date; provided that any payment of the Payment Amount, premium, if any, or coupon payments to be made on any Coupon Payment Date or on the Principal Payment Date that is not a Business Day shall be made on the next succeeding Business Day, unless the next succeeding Business Day falls in the next calendar month, in which case payment will be made on the first preceding Business Day, in each case with the same force and effect as if made on such Coupon Payment Date or such Principal Payment Date, as the case may be, and, unless Accrue to Pay is specified

on the face of this Note, no additional coupon payments shall accrue as a result of such delayed payment; provided further that if the applicable Principal Payment Date is postponed due to a Market Disruption Event, coupon payments will continue to accrue during the period from the originally scheduled Principal Payment Date to but excluding the postponed Principal Payment Date. If Accrue to Pay is specified on the face of this Note, any coupon payment on the Coupon Payment Date will include coupon payments accrued through the day before the Coupon Payment Date. Each coupon payment hereon shall include coupon payments accrued through the day before the Coupon Payment Date or applicable Principal Payment Date, as the case may be. Unless otherwise specified above, coupon payments on this Note will be computed on the basis of a 360-day year of twelve 30-day months or in the case of an incomplete month, the number of days elapsed. In no event shall the coupon rate of this Note be higher than the maximum rate permitted by applicable law, as the same may be modified by United States law of general application.

Unless otherwise specified above, the coupon payments due on any Coupon Payment Date will, as provided in the Indenture, be paid to the person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the Regular Record Date indicated above (whether or not a Business Day) next preceding such Coupon Payment Date; provided that, notwithstanding any provision of the Indenture to the contrary, coupon payments due on a Principal Payment Date shall be payable to the Person to whom the related Payment Amount shall be payable; and provided, further, that, unless otherwise specified above, in the case of a Note initially issued between a Regular Record Date and the Coupon Payment Date relating to such Regular Record Date, coupon payments for the period beginning on the Issue Date and ending on such Coupon Payment Date shall be paid on the Coupon Payment Date following the next succeeding Regular Record Date to the registered Holder on such next succeeding Regular Record Date.

Unless otherwise specified above and except as provided below, all coupon payments on this Note may, at the option of the Company, be made by check mailed to the person entitled thereto at such person’s address as it appears on the registry books of the Company.

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

YEELDS is a registered trademark of Lehman Brothers Inc.

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

Dated:

[SEAL]	LEHMAN BROTHERS HOLDINGS INC.


	By:
		Name:
		Title:


	Attest:
		Name:
		Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

CITIBANK, N.A.

as Trustee

By:
	Authorized Officer

[REVERSE OF NOTE]

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTES, SERIES H

YEELDS^®

YIELD ENHANCED EQUITY LINKED DEBT SECURITIES

PERFORMANCE LINKED TO THE VALUE OF A COMMON STOCK

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

Section 2. Currency Exchanges and Payments. If the Holder elects to receive all or a portion of payments of principal of, premium, if any, and coupon payments on this Note, if denominated in a Foreign Currency, in U.S. dollars, the exchange rate agent specified on the face of this Note or a successor thereto (the “Exchange Rate Agent”), will convert such payments into U.S. dollars. In the event of such an election, payment to the Holder will be based upon the exchange rate as determined by the Exchange Rate Agent based on the highest bid quotation in New York City received by the Exchange Rate Agent at approximately 11:00 a.m., New York City time, on the second Business Day preceding the applicable payment date from three recognized foreign exchange dealers (one of which may be the Exchange Rate Agent unless the Exchange Rate Agent is an affiliate of the Company) for the purchase by the quoting dealer of the Foreign Currency for U.S. dollars for settlement on such payment date in the amount of the Foreign Currency payable in the absence of such an election to such Holder and at which the applicable dealer commits to execute a contract. If such bid quotations are not available, such payment will be made in the Foreign Currency. All currency exchange costs will be borne by the holder of this Note by deductions from such payments.

Unless otherwise specified on the face of this Note, if payment hereon is required to be made in a Foreign Currency and such currency is unavailable to the Company for making payments thereof due to the imposition of exchange controls or other circumstances beyond the Company’s control, or is no longer used by the government of the country which issued such currency or for the settlement of transactions by public institutions of or within the international banking community, then the Company will be entitled to make payments with respect hereto in U.S. dollars until such Foreign Currency is again available or so used. The amount so payable on any date in such Foreign Currency shall be converted into U.S. dollars at a rate determined by the Exchange Rate Agent on the basis of the noon buying rate in New York City for cable transfers

in the Foreign Currency as certified for customs purposes by the Federal Reserve Bank of New York (the “Market Exchange Rate”) for such Foreign Currency on the second Business Day prior to such payment date, or on such other basis as may be specified on the face of this Note. In the event such Market Exchange Rate is not then available, the Company will be entitled to make payments in U.S. dollars (i) if such Foreign Currency is not a composite currency, on the basis of the most recently available Market Exchange Rate for such Foreign Currency or (ii) if such Foreign Currency is a composite currency in an amount determined by the Exchange Rate Agent to be the sum of the results obtained by multiplying the number of units of each component currency of such composite currency, as of the most recent date on which such composite currency was used, by the Market Exchange Rate for such component currency on the second Business Day prior to such payment date (or if such Market Exchange Rate is not then available, by the most recently available Market Exchange Rate for such component currency, or as otherwise specified on the face of this Note). Any payment in respect hereof made under such circumstances in U.S. dollars will not constitute an Event of Default under the Indenture.

In the event of an official redenomination of the Specified Currency or the Optional Payment Currency (including, without limitation, an official redenomination of any such currency that is a composite currency), the obligations of the Company to make payments in or with reference to such currency shall, in all cases, be deemed immediately following such redenomination to be obligations to make payments in or with reference to that amount of redenominated currency representing the amount of such currency immediately before such redenomination. In no event shall any adjustment be made to any amount payable hereunder as a result of (i) any redenomination of any component currency of any composite currency (unless such composite currency is itself officially redenominated) or (ii) any change in the value of the specified currency or the Optional Payment Currency relative to any other currency due solely to fluctuations in exchange rates.

All currency exchange costs will be borne by the Holder hereof by deduction from the payments made hereon.

Section 3. Redemption. Unless otherwise specified on the face of this Note, this Note will not be subject to redemption by the Company. If it is specified on the face of this Note that this Note is subject to redemption, the Company may, at its option, redeem this Note in whole or from time to time in part on or after the date designated as the Initial Redemption Date on the face of this Note at the Redemption Payment Amount, together with accrued coupon payments to but excluding the Redemption Date.

Section 4. Sinking Funds and Amortizing Notes. Unless otherwise specified on the face of this Note or unless this Note is an Amortizing Note, this Note will not be subject to any sinking fund. If it is specified on the face of this Note that this Note is an Amortizing Note, the Company will make payments combining Redemption Payment Amount and coupon payments on the dates and in the amounts set forth in the table appearing in Schedule I attached to this Note or as otherwise specified on the face of this Note. If this Note is an Amortizing Note, payments made hereon will be applied first to coupon payments due and payable on each such payment date and then to the reduction of the then outstanding principal amount.

Section 5. Optional Repurchase. Unless otherwise specified on the face of this Note, this Note will not be subject to repurchase by the Company at the option of the Holder. If it is specified on the face of this Note that this Note is subject to optional repurchase, the Holder may, at its option, cause the Company to repurchase this Note, subject to the conditions specified below, on the Optional Repurchase Date at the Optional Repurchase Amount, together with accrued coupon payments to but excluding the Optional Repurchase Date.

Unless otherwise specified on the face of this Note, in order for this Note to be so repurchased, the Trustee must receive, before the earlier of (a) the date the Company gives notice of its intention to redeem this Note pursuant to Section 3 of this Note or (b) eight Business Days (or such other period as is specified as the “Optional Repurchase Cutoff Period” on the face of this Note) before the Stated Maturity Date, either (i) this Note with the form below entitled “Option to Elect Repurchase” duly completed or (ii) a telegram, telex, fax or letter from a member of a national securities exchange or the National Association of Securities Dealers, Inc. or a commercial bank or trust company in the United States setting forth the name of the Holder hereof, the then outstanding principal amount of this Note, the principal amount of this Note to be repaid, the certificate number hereof or a description of the tenor and terms of this Note, a statement that the option to elect repurchase is being exercised thereby and a guarantee that this Note with the form below entitled “Option to Elect Repurchase” duly completed will be received by the Paying Agent not later than five Business Days after the date of such telegram, telex, fax or letter and this Note and form duly completed are received by the Paying Agent by such fifth

Business Day. Exercise of this repurchase option shall be irrevocable, except as otherwise provided under Section 7 of this Note or Section 10 of this Note. The repurchase option may be exercised by the Holder of this Note with respect to less than the principal amount of this Note then outstanding provided that the principal amount of this Note remaining outstanding after repurchase is an authorized denomination. Upon such partial repurchase this Note shall be cancelled and a new Note or Notes of this series for the remaining principal amount of this Note shall be issued in the name of the Holder of this Note.

Section 6. Stock Settlement. If “Stock Settlement” on the face of this Note is checked as applicable, this Note may be settled on the Stated Maturity Date or any Optional Repurchase Date (but not upon any Redemption, acceleration of the maturity of this Note or other prepayment of this Note prior to the Stated Maturity Date unless otherwise specified herein), with shares of Settlement Value Securities at the Company’s option, at the Holder’s option or mandatorily, as indicated on the face of this Note.

If Stock Settlement is applicable, the Company will pay the applicable Payment Amount, subject to the following paragraph, by delivering, for each YEELDS represented hereby, Settlement Value Securities having a value on the applicable Valuation Date equal to the applicable Payment Amount. The Calculation Agent will determine the number and kind of Settlement Value Securities to be delivered, and whether cash shall be delivered in lieu of, or in addition to, any Settlement Value Securities, in accordance with the Calculation Agency Agreement.

If Stock Settlement is applicable and the calculations in the preceding paragraph result in fractional shares, the applicable Payment Amount shall be paid in cash in an amount equal to the value of fractional shares based upon the Closing Prices of the Settlement Value Securities on the applicable Valuation Date. If the Company determines that it is prohibited from delivering Settlement Value Securities, or that it would be unduly burdensome to do so, the Company shall pay the applicable Payment Amount in cash.

Section 7. Optional Coupon Reset. If so specified on the face of this Note, the Coupon Rate on this Note may be reset at the option of the Company, in the manner set forth below (unless otherwise specified on the face of this Note), on the Optional Reset Date or Optional Reset Dates specified on the face of this Note. The Company may exercise such option by notifying the Trustee in writing of such exercise at least 45 but not more than 60 days prior to an Optional Reset Date. Not later than five Business Days after receipt thereof, the Trustee will mail by first-class mail to the Holder of this Note a notice (the “Reset Notice”) setting forth (i) the election of the Company to reset the coupon rate, (ii) such new coupon rate and (iii) the provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date or, if there is no such next Optional Reset Date, to the Stated Maturity Date of this Note (each such period a “Subsequent Coupon Period”), including the date or dates on which or the period or periods during which and the price or prices at which such redemption

may occur during such Subsequent Coupon Period. The Reset Notice shall be substantially in the form of Exhibit A to this Note. Upon the transmittal by the Trustee of a Reset Notice to the Holder of this Note, such new coupon rate shall take effect automatically, and, except as modified by the Reset Notice and as described in the next paragraph, this Note will have the same terms as prior to the transmittal of such Reset Notice.

Notwithstanding the foregoing, not later than 20 days prior to an Optional Reset Date, the Company may, at its option, revoke the coupon rate provided for in the Reset Notice and establish a coupon rate that is higher than the coupon rate provided for in the Reset Notice for the Subsequent Coupon Period commencing on such Optional Reset Date by causing the Trustee to mail by first-class mail notice of such higher coupon rate to the Holder of this Note. Such notice shall be irrevocable and shall be mailed by the Trustee within five Business Days after receipt thereof. All Notes of this series with respect to which the coupon rate is reset on an Optional Reset Date will bear such higher coupon rate for the Subsequent Coupon Period.

If the Company elects to reset the coupon rate of this Note, the Holder of this Note will have the option to elect repurchase by the Company of this Note, or any portion hereof, on any Optional Reset Date at a price calculated with reference to (a) the then outstanding principal amount of this Note, (b) the Maturity Payment Amount calculated as though the Optional Reset Date were the Stated Maturity Date and the date that is a number of business days equal to the Determination Period before that date were the Valuation Date, or (c) such other amount or amounts, in each case as specified on the face of this Note, plus any coupon payments accrued to, such Optional Reset Date. In order to obtain repurchase on an Optional Reset Date, the Holder must follow the procedures set forth above in Section 5 of this Note for Optional Repurchase except that the period for delivery or notification to the Trustee shall be at least 25 but not more than 35 days prior to such Optional Reset Date and except that, if the Holder has tendered this Note for repurchase pursuant to the Reset Notice, the Holder may, by written notice to the Trustee, revoke such tender for repurchase until the close of business on the tenth day prior to such Optional Reset Date; provided, however, that if such day is not a Business Day, then such notice may be given on the next succeeding Business Day.

Section 9. Dual Currency Notes. If it is specified on the face of this Note that this Note is a Dual Currency Note, the Company has a one time option, exercisable on any one of the Option Election Dates specified on the face of this Note in whole, but not in part, with respect to all Dual Currency Notes of this series, of thereafter making all payments of Maturity Payment Amount, premium, if any, and coupon payments (which payments would otherwise be made in the Specified Currency of such Notes) in the Optional Payment Currency specified on the face of this Note. If the Company makes such an election, the amount of Optional Payment Currency payable in respect hereof shall be determined by the Exchange Rate Agent by converting the

amount of Specified Currency that would otherwise be payable into the Optional Payment Currency at the Designated Exchange Rate specified on the face of this Note.

The Company may exercise such option by notifying the Trustee of such exercise on or prior to the Option Election Date. The Trustee will mail by first-class mail to each holder of a Note of this series a notice of such election within five Business Days of the Option Election Date which shall state (i) the first date, whether a Coupon Payment Date and/or the Stated Maturity Date, on which scheduled payments in the Optional Payment Currency will be made and (ii) the Designated Exchange Rate. Any such notice by the Company, once given, may not be withdrawn.

If this Note is a Dual Currency Note, notwithstanding any prior election made by the Company, the amount payable hereon in the event of any Redemption, any Optional Repurchase, any acceleration of the maturity of this Note or other prepayment of this Note prior to the Stated Maturity Date shall be (a) an amount equal to the amount otherwise due and payable plus accrued coupon payments to but excluding the Redemption Date, Optional Repurchase Date, date of acceleration or other prepayment minus the Total Option Value multiplied by a fraction, the numerator of which is the then outstanding principal amount of this Note and the denominator of which is the aggregate principal amount of all Dual Currency Notes of this series then outstanding or (b) such other amount as specified on the face of this Note (such amount, the “Dual Currency Note Prepayment Amount”). In no event will such payment be less than zero. Notwithstanding any prior election made by the Company, such payment shall be made in the Specified Currency unless otherwise provided on the face of this Note.

Section 10. Extension of Maturity Notes. If it is specified on the face of this Note that this Note is an Extension of Maturity Note, the Company has the option to extend the Stated Maturity Date for the number of Extension Periods set forth on the face of this Note, each of which Extension Periods shall be a period of from one to five whole years. Unless otherwise specified on the face of this Note, the following procedures shall apply if this Note is an Extension of Maturity Note.

The Company may exercise its option by notifying the Trustee of such exercise at least 45 but not more than 60 days prior to the Stated Maturity Date hereof in effect prior to the exercise of such option (the “Original Stated Maturity”). Not later than five Business Days after receipt thereof, the Trustee will mail to the Holder a notice (the “Extension Notice”), first class, postage prepaid, setting forth (i) the election of the Company to extend the Stated Maturity Date, (ii) the new Stated Maturity Date, (iii) the Coupon Rate applicable to the Extension Period and (iv) the provisions, if any, for redemption during the Extension Period, including the date on which or the period or periods during which and the price at which such redemption may occur during the Extension Period. Upon the mailing by the Trustee of an Extension Notice to the Holder, the Stated Maturity Date hereof shall be extended automatically, and, except as modified

by the Extension Notice and as described in the next paragraph, this Note will have the same terms as prior to the mailing of such Extension Notice.

Notwithstanding the foregoing, not later than 20 days prior to the Original Stated Maturity hereof, the Company may, at its option, revoke the coupon rate provided for in the Extension Notice and establish a higher coupon rate for the Extension Period by causing the Trustee to mail notice of such higher coupon rate, first class, postage prepaid, to the Holder. Such notice shall be irrevocable and shall be mailed by the Trustee within three Business Days after receipt thereof. This Note will bear such higher coupon rate for the Extension Period, whether or not tendered for repurchase.

Section 11. Extendible Notes. If it is specified on the face of this Note that this Note is an Extendible Note, this Note will mature on the Stated Maturity Date specified on the face of this Note unless the maturity of all or any portion of this Note is extended in accordance with the procedures described below.

On the Coupon Payment Date occurring in the sixth month (unless a different Special Election Interval is specified on the face of this Note) prior to the initial Stated Maturity Date specified on the face of this Note (the “Initial Maturity Extension Date”) and on the Coupon Payment Date occurring in each sixth month (or the last month of each Special Election Interval) after such Initial Maturity Extension Date (each, together with the Initial Maturity Extension Date, a “Maturity Extension Date”), the Stated Maturity Date of this Note will be extended to the Coupon Payment Date occurring in the twelfth month (or, if a Special Election Interval is specified on the face of this Note, the last month in a period equal to twice the Special Election Interval) after such Maturity Extension Date, unless the Holder elects to terminate the extension of the Stated Maturity Date hereof or any portion hereof as described below.

If the Holder elects to terminate the extension of the Stated Maturity Date of any portion of the principal amount of this Note during the specified period prior to any Maturity Extension Date, such portion will become due and payable on the Coupon Payment Date occurring in the sixth month (or the last month in the Special Election Interval) after such Maturity Extension Date (the “Extended Stated Maturity Date”).

Unless otherwise specified above, any election not to extend will be effective only if this Note is presented to the Trustee (or any duly appointed Paying Agent) as soon as practicable. Following receipt of this Note the Trustee (or any duly appointed Paying Agent) shall issue in exchange herefor in the name of the Holder (i) a Note, in a face amount equal to the principal amount of this Note for which no election to extend was exercised, with terms identical to those specified herein (except for the Issue Date and the Initial Coupon Rate and except that such Note shall have a fixed, non-extendable maturity on the Extended Stated Maturity Date) and (ii) if such election not to extend is made with respect to less than the principal amount of this Note then outstanding, a replacement Extendible Note, in a face amount equal to the principal amount of this Note for which an election to extend was made, with terms identical to this Note.

Section 13. Modification and Waivers. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of not less than 66-2/3% in aggregate principal amount of each series of the Securities at the time Outstanding to be affected, evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the holders of the Securities of all such series; provided, however, that no such supplemental indenture shall, among other things, (i) change the fixed maturity of any Security, or reduce the Payment Amount or the principal amount thereof, or reduce the rate or extend the time to make coupon payments thereon or reduce any premium or other amount payable on redemption, or make the Payment Amount or the principal amount thereof, premium or other amount payable, if any, or coupon payments thereon payable in any coin or currency other than that hereinabove provided, without the consent of the Holder of each Security so affected, or (ii) change the place of payment on any Security, or impair the right to institute suit for payment on any Security, or reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of each Security so affected. It is also provided in

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

Section 14. Obligations Unconditional. No reference herein to the Indenture and no provisions of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the Payment Amount or the principal amount, premium, if any, and coupon payments, if any, on this Note at the place, at the respective times, at the rate, and in the coin or currency herein prescribed.

Section 17. Registration of Transfer. As provided in the Indenture and subject to certain limitations as therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer, at the Corporate Trust Office or agency in a Place of Payment for this Note, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar requiring such written instrument of transfer duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

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

Section 18. Events of Default. If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Unless otherwise provided on the face of this Note, the amount payable to the Holder hereof upon any acceleration permitted under the Indenture will be equal to the Maturity Payment Amount calculated as though the date to which the maturity has been accelerated were the Stated Maturity Date and the date that is a number of business days equal to the Determination Period before that date were the Valuation Date. In any such case, even if Stock Settlement is applicable, the Notes of this series will be settled in cash. Upon payment (i) of the aggregate applicable amounts on the Notes of this series so declared due and payable and (ii) of coupon payments on any overdue Payment Amount and overdue coupon payments (in each case to the extent that the payment of such coupon payments shall be legally enforceable), all of the Company’s obligations in respect of the payment of the Maturity Payment Amount of and coupon payments, if any, on the Notes of this series shall terminate.

Section 19. No Recourse Against Certain Persons. No recourse for the payment of Payment Amount, premium, if any, or coupon payments on this Note, or for any claim based hereon or otherwise in respect hereof, and no recourse under or upon any obligation, covenant or agreement of the Company in the Indenture or any Indenture supplemental thereto or in any Note, or because of the creation of any indebtedness represented thereby, shall be had against any incorporator, stockholder, officer or director, as such, past, present or future, of the Company or of any successor corporation, either directly or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released.

Section 20. Defined Terms. All terms used but not defined in this Note are used herein as defined in the Indenture.

Section 21. Tax Treatment. The Company intends to treat and, by purchasing this Note, the Holder hereof agrees to treat, for all tax purposes, this Note as a financial contract rather than as a debt instrument.

Section 22. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

“ADS” shall mean American Depositary Share.

“Alternative Redemption Amount” shall mean, for each YEELDS represented hereby, the product of (a) the principal amount per YEELDS and (b) the Settlement Value on the applicable Valuation Date, divided by the Initial Value.

“AMEX” shall mean the American Stock Exchange LLC.

“Business Day”, notwithstanding any provision in the Indenture, shall mean, unless otherwise set forth on the face of this Note, any day that is not a Saturday, a Sunday or a day on which the NYSE, the Nasdaq or the AMEX is not open for trading or banking institutions or trust companies in New York City are authorized or obligated by law or executive order to close, and, (a) if the Specified Currency is a Foreign Currency other than Euros, not a day on which banking institutions are authorized or required by law to close in the Principal Financial Center of the country issuing the Foreign Currency and (b) if the Specified Currency is Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer System is open. “Principal Financial Center” shall mean the capital city of the country issuing the specified currency. However, for U.S. dollars, Australian dollars, Canadian dollars and Swiss francs, the Principal Financial Center will be New York City, Sydney, Toronto and Zurich, respectively.

(1) if the Settlement Value Security is listed on a Relevant Exchange, the last reported sale price per share at the Close of Trading on such day on the Relevant Exchange;

(3) as otherwise determined by the Calculation Agent pursuant to the Calculation Agency Agreement in the circumstances described in the definition of the term “Valuation Date” herein.

“common stock” shall mean common stock or any other equity security (which may be an ADS).

“Company” shall have the meaning set forth on the face of this Note.

“Coupon Payment Date” shall have the meaning set forth on the face of this Note.

“Coupon Rate” shall have the meaning set forth on the face of this Note.

“Designated Exchange Rate” shall mean the exchange rate specified as such on the face of this Note.

“Determination Period” shall be the number of days specified as such on the face of this Note.

“Dual Currency Note” shall mean any Note designated as such on the face of this Note.

“Dual Currency Note Prepayment Amount” shall have the meaning set forth in Section 9 of this Note.

“Equity Cap Price per YEELDS” shall have the meaning set forth on the face of this Note.

“Exchange Rate Agent” shall have the meaning set forth in Section 2 of this Note.

“Extended Stated Maturity Date” shall have the meaning set forth in Section 11 of this Note.

“Extension Notice” shall have the meaning set forth in Section 10 of this Note.

“Foreign Currency” shall mean any currency other than U.S. dollars.

“Global Security” shall have the meaning set forth on the face of this Note.

“Indenture” shall have the meaning set forth in Section 1 of this Note.

“Index Stock” shall mean the common stock specified as such on the face of this Note.

“Index Stock Issuer” shall mean the issuer specified as such on the face of this Note.

“Initial Maturity Extension Date” shall have the meaning set forth in Section 11 of this Note.

“Initial Redemption Date” shall be the date specified as such on the face of this Note.

“Initial Value” shall have the meaning set forth on the face of this Note.

“Issue Date” shall have the meaning set forth on the face of this Note.

“Issue Price” shall mean the price specified as such on the face of this Note.

“Market Disruption Event”, unless indicated otherwise on the face of this Note, with respect to a Settlement Value Security shall mean any of the following events has occurred

on any day as determined by the Calculation Agent in accordance with the Calculation Agency Agreement:

SIGNATURE GUARANTEED:

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

“Market Exchange Rate” shall have the meaning set forth in Section 2 of this Note.

“Maturity Extension Date” shall have the meaning set forth in Section 10 of this Note.

“Maturity Payment Amount” shall mean, for each YEELDS represented hereby, the lesser of (a) the Alternative Redemption Amount and (b) the Equity Cap Price.

“Multiplier” shall mean, for each Settlement Value Security, the number of shares or other units (including ADSs) (or fraction of a share or other unit expressed as a decimal) of such Settlement Value Security included in the calculation of the Settlement Value on a particular day, as determined by the Calculation Agent pursuant to the Calculation Agency Agreement. The initial Multiplier for the Index Stock shall be 1.0, unless otherwise specified on the face of this Note. The initial Multiplier for any security which may subsequently become a Settlement Value Security shall be the number of shares or other units of such security which are to be included in the calculation of the Settlement Value at the time such security becomes a Settlement Value Security. Multipliers may be adjusted by the Calculation Agent in accordance with the Calculation Agency Agreement in certain circumstances.

“Nasdaq” shall mean The Nasdaq Stock Market, Inc.

“Notes” shall have the meaning set forth in Section 1 of this Note.

“NYSE” shall mean The New York Stock Exchange, Inc.

“Official W.M. Reuters Spot Closing Rate” shall mean the closing spot rate published on Reuters page “WMRA” relevant for a Settlement Value Security.

“OID Note Prepayment Amount” shall have the meaning set forth in Section 8 of this Note.

“Option Election Dates” shall mean the date(s) specified as such on the face of this Note.

“Option Value” shall mean, with respect to a Coupon Payment Date or the Stated Maturity Date, the amount calculated by the Option Value Calculation Agent to be the arithmetic average of the prices quoted on the date of calculation by three reference banks (which banks shall be selected by the Option Value Calculation Agent and shall be reasonably acceptable to the Company) for the right on the Option Election Date immediately preceding such Coupon Payment Date or Stated Maturity Date to purchase for value on such Coupon Payment Date or Stated Maturity Date from such reference banks (A) the aggregate amount of the Specified Currency due on such Coupon Payment Date or Stated Maturity Date with respect to all of the Dual Currency Notes of this series in exchange for (B) the amount of the Optional Payment Currency that would be received if the amount in clause (A) were converted into the Optional Payment Currency at the Designated Exchange Rate.

“Optional Payment Currency” shall mean the currency specified as such on the face of this Note.

“Optional Repurchase” shall mean the option of a Holder to elect to require the Company to repurchase Notes of this series pursuant to Section 5 of this Note.

“Optional Repurchase Amount” shall equal, for each YEELDS represented hereby, the Maturity Payment Amount calculated as though the date of repurchase were the Stated Maturity Date and the date that is a number of business days equal to the Determination Period before that date were the Valuation Date, as specified on the face of this Note, or such other amount or amounts, as specified on the face of this Note.

“Optional Repurchase Cutoff Period” shall be the number of days specified as such on the face of this Note.

“Optional Repurchase Date” shall mean the date specified as such on the face of this Note; provided, however, if the Calculation Agent determines that a Market Disruption Event with respect to any Settlement Value Security has occurred on the day that would otherwise be the applicable Valuation Date, or if the applicable Valuation Date is not a Scheduled Trading Day, then the Optional Repurchase Date shall be postponed by a number of Business Days equal to the number of Scheduled Trading Days by which the applicable Valuation Date is postponed.

“Optional Reset Dates” shall be the dates specified as such on the face of this Note.

“Original Stated Maturity” shall have the meaning set forth in Section 10 of this Note.

“Payment Amount” shall mean the Maturity Payment Amount, the Redemption Payment Amount or the Optional Repurchase Amount, as the case may be.

“Principal Payment Date” shall mean the Stated Maturity Date, the Redemption Date or the Optional Repurchase Date, as the case may be.

“Redemption Date” shall mean the date specified as such in the notice demanded in Section 3 of this Note; provided, however, if the Calculation Agent determines that a Market Disruption Event with respect to any Settlement Value Security has occurred on a day that would otherwise be the applicable Valuation Date, or if the applicable Valuation Date is not a Scheduled Trading Day, then the Redemption Date shall be postponed by a number of Business Days equal to the number of Scheduled Trading Days by which the applicable Valuation Date is postponed.

“Redemption Notice” shall mean the notice of redemption mailed to the Holders pursuant to Section 3 of this Note.

“Redemption Notice Period” shall have the meaning set forth in Section 3 of this Note.

“Redemption Payment Amount” shall mean, for each YEELDS represented hereby, the Maturity Payment Amount calculated as though the Redemption Date were the Stated Maturity Date and the date that is a number of Business Days equal to the Determination Period before that date were the Valuation Date, as specified on the face of this Note, or such other amount or amounts as specified on the face of this Note.

“Relevant Exchange” shall mean, for any Settlement Value Security, the primary United States national securities exchange, quotation system, including any bulletin board service, or market on which such Settlement Value Security is traded, or in case such Settlement Value Security is not listed or quoted in the United States, the primary exchange, quotation system or market for such Settlement Value Security.

“Reset Notice” shall have the meaning specified in Section 7 of this Note.

“Scheduled Trading Day” shall mean any day on which the Relevant Exchange for a Settlement Value Security is scheduled to be open for trading for its regular trading session.

“Securities” shall have the meaning set forth in Section 1 of this Note.

“Settlement Value” shall mean, when used with respect to an applicable Valuation Date, for each YEELDS represented hereby, the sum of the products of the Closing Prices and the applicable Multipliers (as adjusted from time to time by the Calculation Agent pursuant to the Calculation Agency Agreement prior to the Close of Trading on the Valuation Date) for each Settlement Value Security on the Valuation Date, together with any cash or other property included in the Settlement Value on the Valuation Date by the Calculation Agent pursuant to the Calculation Agency Agreement; provided that if the originally scheduled Valuation Date is postponed because of the occurrence of a Market Disruption Event, the Settlement Value will equal (a) the sum of the products of the Closing Prices on the postponed Valuation Date and the applicable Multipliers for each Settlement Value Security for which no Market Disruption Event occurred plus (b) the sum of the products of the average per share execution price an affiliate of the Company receives or pays on the postponed Valuation Date upon the sale or purchase of each Settlement Value Security for which a Market Disruption Event has occurred which was used to hedge the Company’s obligations under the Notes of this series and the applicable Multipliers (in case, as adjusted from time to time by the Calculation Agent pursuant to the Calculation Agency Agreement prior to the Close of Trading on the postponed Valuation Date), together with any cash or other property included in the Settlement Value on the Valuation Date by the Calculation Agent pursuant to the Calculation Agency Agreement. The Settlement Value, and any adjustments thereto, shall be determined by the Calculation Agent pursuant to the Calculation Agency Agreement.

“Settlement Value Securities” shall mean the securities included in the calculation of the Settlement Value by the Calculation Agent pursuant to the Calculation Agency Agreement.

The Settlement Value Securities will initially consist of the common stock designated as the Index Stock on the face of this Note.

“Special Election Interval” shall be the number of days specified as such on the face of this Note.

“Special Election Period” shall be the number of days specified as such on the face of this Note.

“Specified Currency” shall mean U.S. dollars or such other currency as is specified on the face of this Note.

“Stated Maturity Date” shall mean the date specified as such on the face of this Note (except as otherwise provided in the case of an Extension of Maturity Note or an Extendible Note); provided, that if a Market Disruption Event with respect to one or more of the Settlement Value Securities occurs on the applicable Valuation Date, or if the applicable Valuation Date is not a Scheduled Trading Day, then the Stated Maturity Date shall be postponed by a number of Business Days equal to the number of Scheduled Trading Days by which the applicable Valuation Date is postponed. In the event of any acceleration of the maturity of this Note prior to the Stated Maturity Date specified on the face of this Note, the term “Stated Maturity Date” when used herein shall refer, where applicable, to the date of acceleration of this Note.

“Subsequent Coupon Period” shall have the meaning set forth in Section 7 of this Note.

“Total Option Value” shall mean, with respect to any Dual Currency Note on any date, an amount (calculated as of such date by the Option Value Calculation Agent) equal to the sum of the Option Values (calculated as of such date by the Option Value Calculation Agent) for all Coupon Payment Dates occurring after the date of calculation up to and including the Stated Maturity Date.

“Trustee” shall have the meaning set forth in Section 1 of this Note.

pursuant to the Calculation Agency Agreement, or if such date is not a Scheduled Trading Day, the Valuation Date shall be postponed to the next Scheduled Trading Day on which no Market Disruption Event occurs; provided, further, if a Market Disruption Event occurs on each of the eight Scheduled Trading Days following the originally scheduled Valuation Date, then that eighth Scheduled Trading Day shall be deemed the Valuation Date and the Calculation Agent shall determine, in accordance with the Calculation Agency Agreement, the Closing Price of the affected Settlement Value Securities based upon its estimate of the value of the Settlement Value Security as of the Close of Trading on that eighth Scheduled Trading Day.

“YEELDS” shall have the meaning specified on the face of this Note.

“Yield to Maturity” shall mean the percentage specified as such on the face of this Note.

OPTION TO ELECT REPURCHASE

The undersigned owner of this Note hereby irrevocably elects to have the Company repurchase the principal amount of this Note or portion hereof below designated at (i) the Optional Repurchase Amount plus any accrued coupon payments to but excluding the Optional Repurchase Date, if this Note is to be repurchased pursuant to the Optional Repurchase provision described in Section 5 of this Note, or (ii) the price specified pursuant to the Optional Coupon Reset provision described in Section 7 of this Note or the Extension of Maturity Notes provision described in Section 10 of this Note. Any such election is irrevocable except as provided in Section 7 of this Note or Section 10 of this Note.

If the repurchase of this Note is pursuant to Section 5 of this Note and if the undersigned has the option to elect to have the repurchase settled in stock, the undersigned has indicated below if that option is being exercised.

Dated:
				Signature
				Sign exactly as name appears on the front of this Note [SIGNATURE GUARANTEED - required only if Notes of this series are to be issued and delivered to other than the registered Holder]


Principal Amount to be repurchased, if				Fill in for registration of Notes of this series if to be issued otherwise than
amount to be repurchased is less than				to the registered Holder:
the principal amount of this Note
(principal amount remaining must be an				Name:
authorized denomination)				Address:


				(Please print name and address including zip code)
$

Stock Settlement option
elected				SOCIAL SECURITY OR
				OTHER TAXPAYER ID NUMBER:
o YES o NO

OPTION TO ELECT TERMINATION OF AUTOMATIC EXTENSION

Dated:
				Signature
				Sign exactly as name appears on the front of this Note [SIGNATURE
				GUARANTEED - required only if Notes of this series are to be issued and
				delivered to other than the registered Holder]


Principal Amount to be terminated,				Fill in for registration of Notes of this series if to be issued otherwise than to the
if amount to be terminated is less than the				registered Holder:
principal amount of this Note (such principal
amount must be an authorized denomination)				Name:
				Address:


$				(Please print name and address including zip code)



				SOCIAL SECURITY OR
				OTHER TAXPAYER ID NUMBER:

The following abbreviations, when used in the inscription on the face of this Note, 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)
TEN ENT -	as tenants by the entireties	under Uniform Gifts to Minors
JT TEN -	as joint tenants with right of	Act
	Survivorship and not as tenants in common	(State)

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

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 Note of Lehman Brothers Holdings Inc., and all rights thereunder, hereby irrevocably constituting and appointing

to transfer the said Note on the books of the within-named Company, 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 Note in every particular, without alteration or enlargement or any change whatsoever.

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.

Schedule I

Amortization Table

Date		Payment

EXHIBIT A

RESET NOTICE

LEHMAN BROTHERS HOLDINGS INC.
Medium-Term Notes, Series H
YEELDS^®Yield Enhanced Equity Linked Debt Securities
Performance Linked to the Value of a Common Stock
CUSIP No.
Registered Nos. - -

The Company hereby elects to reset the Coupon Rate set forth on the face of the Notes. On and after (1), the Coupon Rate shall be .

Date

Redemption Price

Dated:
		LEHMAN BROTHERS HOLDINGS INC.


		By:
		Title:


		Attest:
		Title:

(1) Insert applicable Optional Reset Date.

EX-4.05 8 a05-9645_1ex4d05.htm EX-4.05

Exhibit 4.05

CUSIP NO.

REGISTERED		PRINCIPAL AMOUNT: $
No. R-

LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTE, SERIES H
RANGERS^SMRISK ADJUSTING EQUITY RANGE SECURITIES^SMPERFORMANCE LINKED TO THE VALUE OF A COMMON STOCK

ISSUE PRICE: % of the Principal Amount

AGGREGATE PRINCIPAL AMOUNT: $

AUTHORIZED DENOMINATIONS: $[1,000] and integral multiples thereof

ISSUE DATE:

STATED MATURITY DATE:

COUPON RATE: % per annum

ACCRUE TO PAY:
o YES o NO

COUPON PAYMENT DATES: and of each year, beginning on

REGULAR RECORD DATES: calendar days prior to each Interest Payment Date

INITIAL VALUE: $

THRESHOLD VALUE:

INDEX STOCK ISSUER:

INDEX STOCK:

INITIAL MULTIPLIER:

DETERMINATION PERIOD: Business Days

DEPOSITORY: [The Depository Trust Company]

Currency Exchanges and Payments

SPECIFIED CURRENCY:

EXCHANGE RATE AGENT:

Redemption

REDEEMABLE NOTE:
o YES o NO

INITIAL REDEMPTION DATE:

REDEMPTION NOTICE PERIOD: Business Days

Sinking Funds and Amortizing Notes

SINKING FUND:

AMORTIZING NOTE:
o YES o NO

Optional Repurchase

OPTIONAL REPURCHASE:
o YES o NO

OPTIONAL REPURCHASE CUTOFF PERIOD: Business Days

Stock Settlement

STOCK SETTLEMENT:
o YES o NO

AT MATURITY:
o YES o NO

UPON REPURCHASE:
o YES o NO

AT OPTION OF THE COMPANY:
o YES o NO

AT OPTION OF THE HOLDER:
o YES o NO

MANDATORY:
o YES o NO

Optional Interest Reset

OPTIONAL INTEREST RATE RESET:
o YES o NO

OPTIONAL RESET DATES:

OID Notes

OID NOTE:
o YES o NO

TOTAL AMOUNT OF OID:

YIELD TO MATURITY:

INITIAL ACCRUAL PERIOD OID:

OID NOTE PREPAYMENT AMOUNT:

Dual Currency Notes

DUAL CURRENCY NOTE:
o YES o NO

OPTIONAL PAYMENT CURRENCY:

DESIGNATED EXCHANGE RATE:

OPTION ELECTION DATES:

OPTION TO RECEIVE PAYMENTS

IN THE SPECIFIED CURRENCY:
o YES o NO

OPTION VALUE CALCULATION AGENT:

DUAL CURRENCY NOTE PREPAYMENT AMOUNT:

Extension of Maturity Notes

EXTENSION OF MATURITY NOTE:
o YES o NO

EXTENSION PERIOD:

NUMBER OF EXTENSION PERIODS:

Extendible Notes

EXTENDIBLE NOTE:
o YES o NO

INITIAL MATURITY DATE:

SPECIAL ELECTION INTERVAL:

EXTENDIBLE IN PART:
o YES o NO

AUTHORIZED EXTENDIBLE AMOUNTS:

SPECIAL ELECTION PERIOD:

Miscellaneous

OTHER TERMS::

LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company,” which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to CEDE & Co., or registered assigns, on the Stated Maturity Date for each $1,000 principal amount of the Notes represented hereby not previously repurchased or redeemed, an amount equal to the Maturity Payment Amount and, if so specified above, to make coupon payments on the principal amount hereof from the Issue Date specified above or from the most recent Coupon Payment Date specified above to which coupon payments have been paid or duly provided for at the Coupon Rate specified above until the amount due on the Stated Maturity Date, the Optional Repurchase Date or the Redemption Date, as the case may be, is paid in full or made available for payment and (to the extent that the payment of such coupon payments shall be legally enforceable) at such rate per annum on any overdue Payment Amount, premium, if any, and overdue installment of coupon payments.

Unless otherwise specified above, and except as provided in Section 9 on the reverse hereof if this Note is a Dual Currency Note, payments of the applicable Payment Amount, premium, if any, and coupon payments hereon will be made in U.S. dollars; if the Specified Currency set forth above is a currency other than U.S. dollars (a “Foreign Currency”), such payments will be made in U.S. dollars based on the equivalent of that Foreign Currency converted into U.S. dollars in the manner set forth in Section 2 on the reverse hereof. If the Specified Currency is a Foreign Currency and it is so provided above, the Holder may elect to receive such payments in that Foreign Currency by delivery of a written request to the Trustee (or to any duly appointed Paying Agent) at the Corporate Trust Office (as defined below) not later than 10 calendar days prior to the applicable payment date, and such election will remain in effect for the Holder until revoked by written notice to the Trustee (or to any such Paying Agent) at the Corporate Trust Office received not later than 10 calendar days prior to the applicable payment date; provided, however, no such election or revocation may be made if, with respect to this Note, (i) an Event of Default has occurred, (ii) the Company has exercised any discharge or defeasance options or (iii) the Company has given a notice of redemption. In the event the Holder makes any such election pursuant to the preceding sentence, such election will not be effective on any transferee of such Holder and such transferee shall be paid in U.S. dollars unless such transferee makes an election pursuant to the preceding sentence; provided, however, that such election, if in effect while funds are on deposit with the Trustee to satisfy and discharge this Note, will be effective on any such transferee unless otherwise specified above.

payment; provided further that if the applicable Principal Payment Date is postponed due to a Market Disruption Event, coupon payments will continue to accrue during the period from the originally scheduled Principal Payment Date to but excluding the postponed Principal Payment Date. If Accrue to Pay is specified on the face of this Note, any coupon payment on the Coupon Payment Date will include coupon payments accrued through the day before the Coupon Payment Date. Each coupon payment hereon shall include coupon payments accrued through the day before the Coupon Payment Date or applicable Principal Payment Date, as the case may be. Unless otherwise specified above, coupon payments on this Note will be computed on the basis of a 360-day year of twelve 30-day months or in the case of an incomplete month, the number of days elapsed. In no event shall the coupon rate of this Note be higher than the maximum rate permitted by applicable law, as the same may be modified by United States law of general application.

“RANGERS” and “Risk AdjustiNG Equity Range Securities” are service marks of Lehman Brothers Inc.

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

Dated:

[SEAL]	LEHMAN BROTHERS HOLDINGS INC.

	By:
		Name:
		Title:


	Attest:
		Name:
		Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

CITIBANK, N.A.
as Trustee


By:
	Authorized Officer

[REVERSE OF NOTE]

LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTES, SERIES H
RANGERS^SMRISK ADJUSTING EQUITY RANGE SECURITIES^SM

PERFORMANCE LINKED TO THE VALUE OF A COMMON STOCK

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

In the event of an official redenomination of the Specified Currency or the Optional Payment Currency (including, without limitation, an official redenomination of any such currency that is a composite currency), the obligations of the Company to make payments in or with reference to such currency shall, in all cases, be deemed immediately following such redenomination to be obligations to make payments in or with reference to that amount of redenominated currency representing the amount of such currency immediately before such redenomination. In no event shall any adjustment be made to any amount payable hereunder as a result of (i) any redenomination of any component currency of any composite currency (unless such composite currency is itself officially redenominated) or (ii) any change in the value of the specified currency or the Optional Payment Currency relative to any other currency due solely to fluctuations in exchange rates.

All currency exchange costs will be borne by the Holder hereof by deduction from the payments made hereon.

Section 3. Redemption. Unless otherwise specified on the face of this Note, this Note will not be subject to redemption by the Company. If it is specified on the face of this Note that this Note is subject to redemption, the Company may, at its option, redeem this Note in whole or from time to time in part on or after the date designated as the Initial Redemption Date on the face of this Note at the Redemption Payment Amount together with accrued coupon payments to but excluding the Redemption Date.

The Company may exercise such option by causing the Trustee to mail by first-class mail to the Holder hereof a notice (the “Redemption Notice”) of such redemption at least 30 but not more than 60 days (or such other period as is specified as the “Redemption Notice Period” on the face of this Note) prior to the Redemption Date. In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof in accordance with the terms of the Indenture. Unless otherwise specified on the face of this Note, if less than all of the Notes of this series are to be redeemed, the Notes to be redeemed shall be selected by the Trustee by such method as the Trustee shall deem fair and appropriate.

Section 4. Sinking Funds and Amortizing Notes. Unless otherwise specified on the face of this Note or unless this Note is an Amortizing Note, this Note will not be subject to any sinking fund. If it is specified on the face of this Note that this Note is an Amortizing Note, the Company will make payments combining Redemption Payment Amount and coupon payments on the dates and in the amounts set forth in the table appearing in Schedule I attached to this Note or as otherwise specified on the face of this Note. If this Note is an Amortizing Note, payments made hereon will be applied first to coupon payments due and payable on each such payment date and then to the reduction of the then outstanding principal amount.

by the Paying Agent not later than five Business Days after the date of such telegram, telex, fax or letter and this Note and form duly completed are received by the Paying Agent by such fifth Business Day. Exercise of this repurchase option shall be irrevocable, except as otherwise provided under Section 7 of this Note or Section 10 of this Note. The repurchase option may be exercised by the Holder of this Note with respect to less than the principal amount of this Note then outstanding provided that the principal amount of this Note remaining outstanding after repurchase is an authorized denomination. Upon such partial repurchase this Note shall be cancelled and a new Note or Notes of this series for the remaining principal amount of this Note shall be issued in the name of the Holder of this Note.

If Stock Settlement is applicable, the Company will pay the applicable Payment Amount, subject to the following paragraph, by delivering, for each $1,000 principal amount of the Notes represented hereby, Settlement Value Securities having a value on the applicable Valuation Date equal to the applicable Payment Amount. The Calculation Agent will determine the number and kind of Settlement Value Securities to be delivered, and whether cash shall be delivered in lieu of, or in addition to, any Settlement Value Securities, in accordance with the Calculation Agency Agreement.

provisions, if any, for redemption during the period from such Optional Reset Date to the next Optional Reset Date or, if there is no such next Optional Reset Date, to the Stated Maturity Date of this Note (each such period a “Subsequent Coupon Period”), including the date or dates on which or the period or periods during which and the price or prices at which such redemption may occur during such Subsequent Coupon Period. The Reset Notice shall be substantially in the form of Exhibit A to this Note. Upon the transmittal by the Trustee of a Reset Notice to the Holder of this Note, such new coupon rate shall take effect automatically, and, except as modified by the Reset Notice and as described in the next paragraph, this Note will have the same terms as prior to the transmittal of such Reset Notice.

Amount, premium, if any, and coupon payments (which payments would otherwise be made in the Specified Currency of such Notes) in the Optional Payment Currency specified on the face of this Note. If the Company makes such an election, the amount of Optional Payment Currency payable in respect hereof shall be determined by the Exchange Rate Agent by converting the amount of Specified Currency that would otherwise be payable into the Optional Payment Currency at the Designated Exchange Rate specified on the face of this Note.

The Company may exercise such option by notifying the Trustee of such exercise on or prior to the Option Election Date. The Trustee will mail by first-class mail to each holder of a Note of this series a notice of such election within five Business Days of the Option Election Date which shall state (i) the first date, whether a Coupon Payment Date and/or the Stated Maturity Date, on which scheduled payments in the Optional Payment Currency will be made and (ii) the Designated Exchange Rate. Any such notice by the Company, once given, may not be withdrawn.

If this Note is a Dual Currency Note, notwithstanding any prior election made by the Company, the amount payable hereon in the event of any Redemption, any Optional Repurchase, any acceleration of the maturity of this Note or other prepayment of this Note prior to the Stated Maturity Date shall be (a) an amount equal to the amount otherwise due and payable plus accrued coupon payments to but excluding the Redemption Date, Optional Repurchase Date, date of acceleration or other prepayment minus the Total Option Value multiplied by a fraction, the numerator of which is the then outstanding principal amount of this Note and the denominator of which is the aggregate principal amount of all Dual Currency Notes of this series then outstanding or (b) such other amount as specified on the face of this Note (such amount, the “Dual Currency Note Prepayment Amount”). In no event will such payment be less than zero. Notwithstanding any prior election made by the Company, such payment shall be made in the Specified Currency unless otherwise provided on the face of this Note.

Section 10. Extension of Maturity Notes. If it is specified on the face of this Note that this Note is an Extension of Maturity Note, the Company has the option to extend the Stated Maturity Date for the number of Extension Periods set forth on the face of this Note, each of which Extension Periods shall be a period of from one to five whole years. Unless otherwise specified on the face of this Note, the following procedures shall apply if this Note is an Extension of Maturity Note.

postage prepaid, setting forth (i) the election of the Company to extend the Stated Maturity Date, (ii) the new Stated Maturity Date, (iii) the Coupon Rate applicable to the Extension Period and (iv) the provisions, if any, for redemption during the Extension Period, including the date on which or the period or periods during which and the price at which such redemption may occur during the Extension Period. Upon the mailing by the Trustee of an Extension Notice to the Holder, the Stated Maturity Date hereof shall be extended automatically, and, except as modified by the Extension Notice and as described in the next paragraph, this Note will have the same terms as prior to the mailing of such Extension Notice.

Section 11. Renewable Notes. If it is specified on the face of this Note that this Note is a Renewable Note, this Note will mature on the Stated Maturity Date specified on the face of this Note unless the maturity of all or any portion of this Note is extended in accordance with the procedures described below.

Interval) after such Maturity Extension Date, unless the Holder elects to terminate the extension of the Stated Maturity Date hereof or any portion hereof as described below.

If the Holder elects to terminate the extension of the Stated Maturity Date of any portion of the principal amount of this Note during the specified period prior to any Maturity Extension Date, such portion will become due and payable on the Coupon Payment Date occurring in the sixth month (or the last month in the Special Election Interval) after such Maturity Extension Date (the “Extended Stated Maturity Date”).

Unless otherwise specified above, any election not to extend will be effective only if this Note is presented to the Trustee (or any duly appointed Paying Agent) as soon as practicable. Following receipt of this Note the Trustee (or any duly appointed Paying Agent) shall issue in exchange herefor in the name of the Holder (i) a Note, in a face amount equal to the principal amount of this Note for which no election to extend was exercised, with terms identical to those specified herein (except for the Issue Date and the Initial Coupon Rate and except that such Note shall have a fixed, non-extendable maturity on the Extended Stated Maturity Date) and (ii) if such election not to extend is made with respect to less than the principal amount of this Note then outstanding, a replacement Extendible Note, in a face amount equal to the principal amount of this Note for which an election to extend was made, with terms identical to this Note.

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 Payment Amount or the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon or reduce any premium or other amount payable on redemption, or make the Payment Amount or the principal amount thereof, premium or other amount payable, if any, or coupon payments thereon payable in any coin or currency other than that hereinabove provided, without the consent of the Holder of each Security so affected, or (ii) change the place of payment on any Security, or impair the right to institute suit for payment on any Security, or reduce the aforesaid percentage of Securities, the holders of which are required to consent to any such supplemental indenture, without the consent of the holders of each Security so affected. It is also provided in the Indenture that, prior to any declaration accelerating the maturity of any series of Securities, the holders of a majority in aggregate principal amount of the Securities of such series Outstanding may on behalf of the holders of all the Securities of such series waive any past default or Event of Default under the Indenture with respect to such series and its consequences, except a default in the payment of coupon payments, if any, on the Payment Amount, or the principal amount, or premium, if any, on any of the Securities of such series, or in the payment of any sinking fund installment or analogous obligation with respect to Securities of such series. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future holders and owners of this Note and any Notes of this series which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Note or such other Notes of this series.

Section 14. Obligations Unconditional. No reference herein to the Indenture and no provisions of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the Payment Amount or principal amount, premium, if any, and coupon payments, if any, on this Note at the place, at the respective times, at the rate, and in the coin or currency herein prescribed.

authorized denomination, except that Global Securities will not be exchangeable for Certificated Notes of this series.

Section 17. Registration of Transfer. As provided in the Indenture and subject to certain limitations as therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer, at the Corporate Trust Office or agency in a Place of Payment for this Note, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar requiring such written instrument of transfer duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of this series, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

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

Section 18. Events of Default. If an Event of Default with respect to Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Unless otherwise provided on the face of this Note, the amount payable to the Holder hereof upon any acceleration permitted under the Indenture will be equal to the Maturity Payment Amount calculated as though the date to which the maturity has been accelerated were the Stated Maturity Date and the date that is a number of business days equal to the Determination Period before that date were the Valuation Date. In any such case, even if Stock Settlement is applicable, the Notes of this series will be settled in cash. Upon payment (i) of the aggregate applicable amounts on the Notes of this series so declared due and payable and (ii) of coupon payments on any overdue Payment Amount and overdue coupon payments (in each case to the extent that the payment of such coupon payments shall be legally enforceable), all of the Company’s obligations in respect of the payment of the Maturity Payment Amount of and coupon payments, if any, on the Notes of this series shall terminate.

Section 20. Defined Terms. All terms used but not defined in this Note are used herein as defined in the Indenture.

Section 21. Tax Treatment. The Company intends to treat, for all tax purposes, this Note as a financial contract rather than as a debt instrument.

Section 22. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

“ADS” shall mean American Depositary Share.

“AMEX” shall mean the American Stock Exchange LLC.

(1) if the Settlement Value Security is listed on a Relevant Exchange, the last reported sale price per share at the Close of Trading on such day on the Relevant Exchange;

(3) as otherwise determined by the Calculation Agent pursuant to the Calculation Agency Agreement in the circumstances described in the definition of “Valuation Date” herein.