Calculation Agency Agreement (2001)Full Document 

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                          CALCULATION AGENCY AGREEMENT


                  CALCULATION  AGENCY  AGREEMENT,  dated as of August 14, 2001
(the  "Agreement"),  between  Lehman Brothers Holdings Inc. (the "Company") and
 Lehman Brothers Inc., as Calculation Agent.


                  WHEREAS, the Company has authorized the issuance of
$10,000,000 aggregate principal amount of Portfolio RANGERSSM, Portfolio Risk
AdjustiNG Equity Range SecuritiesSM Notes Due August 14, 2003 (the
"Securities")*;

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

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

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

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

     2.  Calculations  and Information  Provided.  The  Calculation  Agent shall
determine  (a) the Maturity  Payment  Amount on the  Calculation  Date,  (b) the
Starting Price of each of the Underlying  Equity  Securities in the Basket,  (c)
the Ending Price of each of the Underlying Equity Securities in the Basket,  (d)

the Adjusted Value for each of the Underlying  Equity  Securities in the Basket,
(e) the sum of the Adjusted Values for all of the Underlying  Equity  Securities
in the Basket,  (f) the Starting  Multipliers and Ending Multipliers for each of
the Underlying Equity Securities in the Basket, (g) any required  adjustments to
the  Multipliers  of the  Underlying  Equity  Securities  in the  Basket and (h)
whether a Market  Disruption  Event has occurred.  The  Calculation  Agent shall
notify the Trustee of all such  determinations  and any such  adjustment or if a
Market  Disruption Event has occurred.  Annex A hereto sets forth the procedures
the Calculation  Agent will use to determine the  information  described in this
Section 2.

     3. Calculations.  Any calculation or determination by the Calculation Agent
pursuant  hereto shall (in the absence of manifest  error) be final and binding.

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Any calculation made by the Calculation  Agent hereunder shall, at the Trustee's
request, be made available at the Corporate Trust Office.

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

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

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

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

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

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

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

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

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

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