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Free
Writing Prospectus
Filed
Pursuant to Rule 433
Registration
No. 333−136666
January
30, 2007
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New
Issue
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STRUCTURED
EQUITY PRODUCTS
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Indicative
Terms
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The
Bear Stearns Companies Inc.
Notes
Linked to the Performance of the U.S. Adagio Strategy
Index
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Due
February [l],
2010
INVESTMENT
HIGHLIGHTS
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·
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Three-year
term to maturity.
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·
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The
Notes are Accelerated Market Participation Securities linked
to the
performance of the U.S. Adagio Strategy Index (with [150]%
Upside
Participation).
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·
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The
Notes are not principal protected.
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The
Notes are direct obligations of The Bear Stearns Companies
Inc. (Rated
“A1” by Moody’s / “A+” by S&P).
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·
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Issue
Price: 100.00% of the principal amount (99% for investors
who purchase a
principal amount of at least $1,000,000).
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·
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The
U.S. Adagio Strategy Index (the “Index”) is dynamically weighted and is
comprised of the following three Components: (1) the S&P 500®
Index; (2) the iShares®
Dow Jones U.S. Real Estate Index Fund; and (3) the iShares®
Lehman Aggregate Bond
Fund.
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BEAR,
STEARNS & CO. INC.
STRUCTURED
PRODUCTS GROUP
(212)
272-6928
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The
issuer has filed a registration statement (including a prospectus)
with
the SEC for the offering to which this free writing prospectus
relates.
Before you invest, you should read the prospectus in that registration
statement and other documents the issuer has filed with the
SEC for more
complete information about the issuer and this offering. You
may get these
documents for free by visiting EDGAR on the SEC Web site at
www.sec.gov.
Alternatively, the issuer, any underwriter or any dealer participating
in
the offering will arrange to send you the prospectus if you
request it by
calling toll free 1-866-803-9204.
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STRUCTURED
PRODUCTS GROUP
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| GENERAL TERMS |
This
free
writing prospectus relates to a Note offering linked to the U.S. Adagio Strategy
Index. The Index replicates a strategy that selects dynamically from three
U.S.
asset classes (equities, real estate and investment-grade debt securities)
according to the previous 12 monthly returns of the S&P 500®
Index,
the iShares®
Dow
Jones U.S. Real Estate Index Fund and the iShares®
Lehman
Aggregate Bond Fund. We reserve the right to withdraw, cancel or modify any
offering and to reject orders in whole or in part. Defined
terms not defined herein shall have the same meaning as in the Prospectus
Supplement and Pricing Supplement discussed below.
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Issuer:
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The
Bear Stearns Companies Inc. (“BSC”).
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Issuer’s
Rating:
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“A1”
/ “A+” (Moody’s / S&P).
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CUSIP
Number:
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073928T60
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Issue
Price:
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100.00%
of the principal amount (the “Principal Amount”) (99% for investors who
purchase a Principal Amount of at least $1,000,000).
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Principal
Amount:
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To
be disclosed in the final pricing supplement.
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Denominations:
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$1,000
per Note.
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Selling
Period Ends:
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February
[l],
2007.
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Pricing
Date:
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February
[l],
2007.
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Settlement
Date:
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February
[l],
2007.
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Calculation
Date:
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February
[l],
2010. The Calculation Date is subject to adjustment as described
in the
Pricing Supplement under “Description of the Notes - Market Disruption
Events”.
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Maturity
Date:
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The
Notes are expected to mature on February
[l],
2010 (for a term of approximately three years);
provided that, if the Calculation Date is adjusted due to the occurrence
of a Market Disruption Event, the Maturity Date will be three Trading
Days
following the adjusted Calculation Date.
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Index
Level:
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The
Index Level will be calculated on each day the Closing Level of the
Equity
Component is published by its Component Sponsor and the Closing Level
of
each of the Real Estate Component and the Bond Component is available
on
its respective primary exchanges. The Index Level will equal the
sum of
(a) the Index Level last published and (b) the product of (x) the
Index
Level last published multiplied by (y) the sum of the product for
each
Component of (i) the daily percentage change in the Closing Level
of each
Component multiplied by (ii) its respective Component weighting in
the
Index as of such date. In addition, the Index Level will be adjusted
downwards by a monthly amount equal to 0.225% applied pro rata on
a daily
basis, as described in the Pricing Supplement under “Description of the
Notes—Index Level.”
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Initial
Index Level:
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[l],
representing the Index Level, as determined by the Strategy Sponsor
on the
Pricing Date.
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The
Index:
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The
Index replicates a strategy based on the relative weightings of the
three
U.S. asset classes (equities, real estate and government bonds) that
are
represented by the Components. Each Component in the Index is re-weighted
on a monthly basis. The percentage weightings of the Real Estate
Component
and the Equity Component in a given month are determined by a formula
which utilizes the monthly returns of the Real Estate Component and
the
Equity Component for each of the trailing 12 months. The percentage
weightings of the Real Estate Component and the Equity Component
are each
subject to a minimum weighting of 0% and a maximum weighting of 50%
each.
The Bond Component is the residual Component. Its weighting is the
percentage, if any, required to make the sum of all Component weightings
equal 100%.
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Components:
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• The
S&P 500®
Index
(the “Equity Component”) (Bloomberg Ticker: SPX
<Index>):
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- Standard
and Poor’s 500 Index is a capitalization-weighted index of 500 stocks. The
index is designed to measure the performance of the broad domestic
US
economy through changes in the aggregate market value of 500 stocks
representing all major industries.
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• The
iShares®
Dow Jones US Real Estate Index Fund
(the “Real Estate Component”) (Bloomberg Ticker: IYR
<Index>):
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- iShares®
Dow Jones US Real Estate Index Fund is an exchange-traded fund of
the
iShares Trust, a Delaware statutory trust. The fund’s objective is to
achieve investment results that correspond generally to the price
and
yield performance, before fees and expenses, of the Dow Jones US
Real
Estate Index. The fund is traded on the New York Stock
Exchange.
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• The
iShares®
Lehman
Aggregate Bond Fund
(the “Bond Component”) (Bloomberg Ticker: AGG US
<Equity>):
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- iShares®
Lehman Aggregate Bond Fund is an exchange-traded fund of the iShares
Trust, a Delaware statutory trust. The fund’s objective is to achieve
investment results that correspond generally to the price and yield
performance, before fees and expenses, of the total United States
investment grade bond market as defined by the Lehman Brothers U.S.
Aggregate Index. The fund is traded on the American Stock
Exchange.
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Strategy
Sponsor:
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Standard
& Poor’s, a division of The McGraw-Hill Companies, Inc.
(“S&P”).
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BEAR,
STEARNS & CO.
INC.
-
2 -
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STRUCTURED
PRODUCTS GROUP
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| ADDITIONAL TERMS SPECIFIC TO THE NOTES |
You
should read this document together with the prospectus and prospectus
supplement, each dated August 16, 2006 (the “Prospectus” and “Prospectus
Supplement,” respectively), and the more detailed information contained in the
Pricing Supplement, dated February [l],
2007
the “Pricing Supplement”. You should carefully consider, among other things, the
matters set forth in “Risk Factors” in the Prospectus Supplement and the Pricing
Supplement, as the Notes involve risks not associated with conventional debt
securities. We urge you to consult your investment, legal, tax, accounting
and
other advisers before you invest in the Notes. The Pricing Supplement and the
accompanying Prospectus and Prospectus Supplement may be accessed on the SEC
Web
site at www.sec.gov as follows:
| ILLUSTRATIVE EXAMPLES OF CASH SETTLEMENT VALUE |
The
examples set forth below and the related table depict the hypothetical Cash
Settlement Value of a Note based on the assumptions below. The examples, levels
and the related table do not purport to be representative of every possible
scenario concerning increases or decreases in the Index. You should not construe
these examples or the data included in the table as an indication or assurance
of the expected performance of the Notes.
| · |
Investor
purchases $1,000 aggregate principal amount of Notes at the initial
public
offering price of $1,000.
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| · |
Investor
holds the Notes to maturity.
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| · |
The
Initial Index Level is equal to
270.00.
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| · |
All
returns are based on a 3-year term; pre-tax
basis.
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| · |
No
Market Disruption Events or Events of Default
occur.
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Example
1: The Final Index Level is greater than the Initial Index
Level.
In
this
example, the Index generally rises over the term of the Notes. On the
Calculation Date, the Final Index Level is 324.00, representing a 20.00%
increase from the Initial Index Level. In this example, using the formula below,
the Cash Settlement Value will equal $1,300.00.
BEAR,
STEARNS & CO.
INC.
-
3 -
| |
STRUCTURED
PRODUCTS GROUP
|
Example
2: The Final Index Level equals the Initial Index Level.
In
this
example, the Index generally remains consistent over the term of the Notes.
On
the Calculation Date, the Final Index Level equals the Initial Index Level.
In
this example, using the formula below, the Cash Settlement Value will equal
$1,000.00.
Example
3: The Final Index Level is less than the Initial Index
Level.
In
this
example, the Index generally decreases over the term of the Notes. On the
Calculation Date, the Final Index Level is 216.00, representing a 20.00%
decrease from the Initial Index Level. In this example, using the formula below,
the Cash Settlement Value will equal $800.00.
BEAR,
STEARNS & CO.
INC.
-
4 -
| |
STRUCTURED
PRODUCTS GROUP
|
Summary
of Examples 1 Through 3
Reflecting
the Cash Settlement Value
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Example
1
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Example
2
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Example
3
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Hypothetical
Initial Index Level
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270.00
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270.00
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270.00
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Hypothetical
Final Index Level
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324.00
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270.00
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216.00
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Level
of Final Index Level relative to the Initial Index Level
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Higher
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Same
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Lower
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Index
Return
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20.00%
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0%
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-20.00%
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Cash
Settlement Value per Note
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$1,300.00
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$1,000.00
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$800.00
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Table
of Hypothetical Cash Settlement Values
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of
Index
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Percentage
Change
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Cash
Settlement
Value
Per
Note
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Return
if
Held
to
Maturity
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of
Index
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Percentage
Change
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Cash
Settlement
Value
Per Note
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Return
if
Held
to
Maturity
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540.00
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100%
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$2,500
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150.00%
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256.50
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-5%
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$950
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-5.00%
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526.50
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95%
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$2,425
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142.50%
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243.00
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-10%
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$900
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-10.00%
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513.00
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90%
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$2,350
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135.00%
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229.50
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-15%
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$850
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-15.00%
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499.50
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85%
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$2,275
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127.50%
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216.00
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-20%
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$800
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-20.00%
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486.00
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80%
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$2,200
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120.00%
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202.50
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-25%
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$750
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-25.00%
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472.50
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75%
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$2,125
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112.50%
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189.00
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-30%
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$700
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-30.00%
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459.00
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70%
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$2,050
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105.00%
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175.50
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-35%
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$650
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-35.00%
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445.50
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65%
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$1,975
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97.50%
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162.00
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-40%
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$600
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-40.00%
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432.00
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60%
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$1,900
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90.00%
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148.50
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-45%
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$550
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-45.00%
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418.50
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55%
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$1,825
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82.50%
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135.00
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-50%
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$500
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-50.00%
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405.00
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50%
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$1,750
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75.00%
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121.50
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-55%
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$450
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-55.00%
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391.50
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45%
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$1,675
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67.50%
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108.00
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-60%
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$400
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-60.00%
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378.00
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40%
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$1,600
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60.00%
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94.50
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-65%
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$350
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-65.00%
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364.50
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35%
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$1,525
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52.50%
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81.00
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-70%
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$300
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-70.00%
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351.00
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30%
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$1,450
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45.00%
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67.50
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-75%
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$250
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-75.00%
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337.50
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25%
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$1,375
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37.50%
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54.00
|
-80%
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$200
|
-80.00%
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324.00
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20%
|
$1,300
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30.00%
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40.50
|
-85%
|
$150
|
-85.00%
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310.50
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15%
|
$1,225
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22.50%
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27.00
|
-90%
|
$100
|
-90.00%
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297.00
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10%
|
$1,150
|
15.00%
|
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13.50
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-95%
|
$50
|
-95.00%
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283.50
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5%
|
$1,075
|
7.50%
|
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0.00
|
-100%
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$0
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-100.00%
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270.00
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0%
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$1,000
|
0.00%
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| HYPOTHETICAL HISTORICAL PERFORMANCE DATA |
The
following hypothetical historical information should not be taken as an
indication of the future performance of the Index over the term of the Notes
or
the Cash Settlement Value thereunder.
Neither
the Notes nor the Index have a trading history. As a consequence, the following
hypothetical historical performance data is based on the application of the
Index to the actual historical performance of the Components and to hypothetical
investments in the Index having varying maturities. No
future performance of the Notes or the Index may be inferred from any of the
historical simulations set forth herein.
For
the
period of time from and including September 26, 2003 to and including December
31, 2006, the hypothetical historical performance data set forth below was
derived from data provided on the Bloomberg Financial Service with respect
to
each Component, in each case, without independent verification from the Issuer.
BEAR,
STEARNS & CO.
INC.
-
5 -
| |
STRUCTURED
PRODUCTS GROUP
|
For
the
period of time from and including August 31, 1996 to and including September
25,
2003, the hypothetical historical performance data set forth below was derived
from data provided on the Bloomberg Financial Service with respect to the Equity
Component and the Real Estate Component, and Lehman Brothers Inc. with respect
to the Bond Component, in each case without independent verification from the
Issuer. Because the Bond Component commenced trading on September 26, 2003,
all
of the hypothetical historical performance data set forth with respect to the
Bond Component prior to that date reflects the performance of the Lehman
Brothers U.S. Aggregate Index and not the performance of the iShares®
Lehman
Aggregate Bond Fund. The iShares®
Lehman
Aggregate Bond Fund was created specifically to seek investment results that
correspond to the price and yield performance of the total U.S. investment-grade
bond market as defined by the Lehman Brothers U.S. Aggregate Index, and the
returns of the iShares®
Lehman
Aggregate Bond Fund have been highly correlated to the returns of the Lehman
Brothers U.S. Aggregate Index since the time of its inception. Nevertheless,
discrepancies may exist from time to time between the performance of the Bond
Component and the level of the Lehman Brothers U.S. Aggregate
Index.
The
hypothetical historical performance data presented in Figure 1 below represents
reconstructions of a series of hypothetical investments on every trading day
during the relevant periods described below. The
information presented in Figure 1 below does not include a [150]% upside
participation in the return on the Index and therefore does not reflect the
method of calculation of returns on the actual Notes.
The
performance of hypothetical investments is linked to a historical reconstruction
of the Index performance based on the actual historical performance of the
Components as described in the paragraph above. This historical reconstruction
of the Index performance uses a methodology identical to the methodology that
the Index will use for calculation of the Index Level under the Notes. This
means we used the same coefficients and Component minimum and maximum weighting
constraints and effected the same daily deduction of the Index Adjustment
Factor.
See
“Risk
Factors—The hypothetical historical performance data does not represent future
performance” in the Pricing Supplement.
Investors
should understand that historical performance is not indicative of future
results.
Figure
1 - 3 Year Total Returns on Hypothetical 3-Year Investments in the U.S. Adagio
Strategy Index
The
chart
and returns described below relate to a series of hypothetical investments
each
with a 3-year maturity created according to the parameters of the U.S. Adagio
Strategy Index on every Trading Day during the period beginning on August 31,
1996 and ending on December 31, 2003. These hypothetical investments matured
on
every Trading Day during the period beginning on August 31, 1999 and ending
on
December 31, 2006.
The
arithmetic average of the 3-year returns of each hypothetical investment was
34.80% with the greatest 3-year return of these hypothetical investments
returning 47.50% and the smallest 3-year return of these hypothetical
investments returning 23.34%.
The
information presented here does not include a [150]% upside participation in
the
return on the Index and therefore does not reflect the method of calculation
of
returns on the actual Notes.
BEAR,
STEARNS & CO.
INC.
-
6 -
| |
STRUCTURED
PRODUCTS GROUP
|
Figure
2
- Hypothetical Historical Index Statistics and Historical Component
Statistics
The
statistics in the column titled “Index” below relate to a hypothetical
investment in a basket of the Components from August 31, 1997 to December 31,
2006, had the basket been weighted in accordance with the formula for
calculating the Index on August 31, 1997. The statistics in the column for
each
Component relate to a separate hypothetical investment in each of the respective
Components from August 31, 1997 to December 31, 2006. The statistics in the
column titled “Static Basket” below relate to a hypothetical investment on
August 31, 1997 in a static equally-weighted basket of each of the Components,
which was not thereafter re-weighted or adjusted, through December 31,
2006.
The
below statistics relate to an investment in the Index from 31 August 1997 to
31
December 2006
|
Index
|
Equity
Component1
|
Real
Estate
Component1
|
Bond
Component2
|
Static
Basket
|
|
|
Annualized
Return3
|
10.41%
|
5.00%
|
6.84%
|
6.62%
|
6.69%
|
|
Volatility4
|
6.54%
|
18.32%
|
14.44%
|
4.17%
|
9.30%
|
|
Maximum
Drawdown5
|
-3.90%
|
-39.80%
|
-39.27%
|
-4.84%
|
-10.73%
|
|
Sharpe
Ratio
(with
Risk Free Rate of 0%)6
|
1.59
|
0.27
|
0.47
|
1.59
|
0.72
|
|
Best
Month Performance
|
3.92%
|
9.67%
|
10.86%
|
3.46%
|
5.40%
|
|
Worst
Month Performance
|
-3.03%
|
-14.58%
|
-14.50%
|
-4.33%
|
-7.85%
|
|
%
of
Profitable Months
|
74.11%
|
58.93%
|
61.61%
|
70.54%
|
64.29%
|
|
%
of
Non-Profitable Months
|
25.89%
|
41.07%
|
38.39%
|
29.46%
|
35.71%
|
|
Correlation
with Equity Component
|
16.99%
|
100.00%
|
38.58%
|
-34.09%
|
78.90%
|
|
Correlation
with Real Estate Component
|
39.78%
|
38.58%
|
100.00%
|
-7.44%
|
84.48%
|
|
Correlation
with Bond Component
|
54.89%
|
-34.09%
|
-7.44%
|
100.00%
|
-5.95%
|
1
Price
Return Performance.
2
Total
Return Performance.
3
The return
on
an investment over a period of time from August 31, 1997 to December 31, 2006
calculated to give the compounded annual growth rate.
4
The
relative rate at which the price of a security changes in value, found by
calculating the annualized standard deviation of daily changes in
price.
5
The
worst
performance an investor would have experienced given any starting
point.
6
A
measure
of a portfolio's or asset's excess return relative to the total variability
of
the portfolio.
BEAR,
STEARNS & CO.
INC.
-
7 -
| |
STRUCTURED
PRODUCTS GROUP
|
| SELECTED RISK CONSIDERATIONS |
The
following highlights some, but not all, of the risk considerations relevant
to
investing in the Notes. The
following must be read in conjunction with the sections “Risk Factors” beginning
on pages S-3 and PS-12, respectively, in the Prospectus Supplement and
Pricing Supplement. Defined terms not defined herein shall have the same meaning
as in the Prospectus Supplement and Pricing Supplement.
| · |
Suitability
of Notes for investment —
A
person should reach a decision to invest in the Notes after carefully
considering, with his or her advisors, the suitability of the Notes
in
light of his or her investment objectives and the information set
out in
the Pricing Supplement. Neither the Issuer nor any dealer participating
in
the offering makes any recommendation as to the suitability of the
Notes
for investment.
|
| · |
No
Secondary market—
The Notes will not be listed on any securities exchange, and we do
not
expect a trading market to develop, which may affect the price that
you
receive for your Notes upon any sale prior to
maturity.
|
| · |
Taxes
— The
U.S. federal income tax consequences of an investment in the Notes
are
uncertain. We intend to treat the Notes for all tax purposes as pre-paid
cash-settled forward contracts linked to the value of the Index and,
where
required, to file information returns with the Internal Revenue Service
in
accordance with such treatment. Assuming the Notes are treated as
pre-paid
cash-settled forward contracts, you should be required to recognize
capital gain or loss to the extent that the cash you receive on the
Maturity Date or upon a sale or exchange of the Notes prior to the
Maturity Date differs from your tax basis on the Notes (which will
generally be the amount you paid for the Notes). However, other treatments
are possible. You should review the discussion in the Pricing Supplement
under the section “Certain U.S. Federal Income Tax Considerations,” and
consult with your tax advisor regarding the U.S. federal income tax
consequences of an investment in the
Notes.
|
| · |
Hypothetical
Index performance does not represent actual
performance.—The
hypothetical historical performance data set forth in the “Hypothetical
Historical Performance Data” section should not be taken as an indication
of the future performance of the Index over the term of the Notes.
Neither
the Notes nor the Index have a trading history. As a consequence,
investors should understand that the historical simulations set forth
herein are based on the application of the strategy of the Index
to the
actual historical performance of the Components, subject to the
constraints set forth in “Hypothetical Historical Performance Data”
above.
|
| · |
Certain
ERISA Considerations—
The purchase of Notes with assets of an employee benefit plan or
similar
arrangement may be subject to complex rules and regulations governing
the
investment of such assets. Prospective investors are urged to consult
with
their own advisors and review the discussion under “Certain ERISA
Considerations” in the Pricing Supplement regarding the consequences under
the Employee Retirement Income Security Act of 1974, as amended,
the
Internal Revenue Code of 1986, as amended and any other applicable
law
with respect to the investment in the Notes with the assets of an
employee
benefit plan or similar
arrangement.
|
| LICENSE AGREEMENTS |
The
U.S.
Adagio Index is the exclusive property of Bear Stearns International Limited,
one of our affiliates, which has contracted with Standard & Poor’s, a
division of The McGraw-Hill Companies (“S&P”, or the “Strategy Sponsor”), to
maintain and calculate the Index. The Equity Component is a service mark or
trademark of S&P and, if required, has been licensed for use by The Bear
Stearns Companies Inc. S&P shall have no liability for any errors or
omissions in calculating the Index or the Equity Component. The Notes are not
sponsored, endorsed, sold or promoted by S&P; and S&P makes no
representations regarding the advisability of investing in the
Notes.
All
disclosures contained in this free writing prospectus regarding the Components,
including their make-up, methods of calculation and changes in their components,
are derived from publicly available information. We do not assume any
responsibility for the accuracy or completeness of such
information.
S&P
500®
Index
We
have
entered
into a
non-exclusive license agreement with Standard & Poor’s (“S&P”) providing
for the license to us, in exchange for a fee, of the right to use the S&P
500® Index (“SPX”), which is owned and published by S&P, in connection with
certain securities, including the Notes. The license agreement between S&P
and us provides that the following language must be set forth in this pricing
supplement:
The
Notes
are not sponsored, endorsed, sold or promoted by S&P. S&P makes no
representation or warranty, express or implied, to the owners of the Notes
or
any member of the public regarding the advisability of investing in securities
generally or in the Notes particularly. S&P’s only relationship to us is the
licensing of certain trademarks, trade names and service marks of S&P and of
the SPX, which is determined, composed and calculated by S&P without regard
to us or the Notes. S&P has no obligation to take our needs or the needs of
holders of the Notes into consideration in determining, composing, or
calculating the SPX. S&P is not responsible for and has not participated in
the determination of the timing of, prices at which Notes are sold, or
quantities of the Notes to be issued or in the determination or calculation
of
the amount payable at maturity. S&P has no obligation or liability in
connection with the administration, marketing, or trading of the
Notes.
BEAR,
STEARNS & CO.
INC.
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STRUCTURED
PRODUCTS GROUP
|
S&P
does not guarantee the accuracy and/or the completeness of the SPX or any data
included therein and S&P shall have no liability for any errors, omissions,
or interruptions therein. S&P makes no warranty, express or implied, as to
results to be obtained by us, owners of the Notes, or any other person or entity
from the use of the SPX or any data included therein. S&P makes no express
or implied warranties, and expressly disclaims all warranties of merchantability
or fitness for a particular purpose or use with respect to the Index or any
data
included therein. Without limiting any of the foregoing, in no event shall
S&P have any liability for any lost profits or indirect, punitive, special,
or consequential damages or losses, even if notified of the possibility thereof.
There are no third party beneficiaries or any agreements or arrangements between
S&P and us.
“Standard
& Poor’s®,” “S&P®,” “S&P 500®,” “Standard & Poor’s 500” and
“500” are trademarks of The McGraw-Hill Companies, Inc. and have been licensed
for use by us. The Notes are not sponsored, endorsed, sold or promoted by
S&P and S&P makes no representation regarding the advisability of
investing in the Notes.
Lehman
Brothers US Aggregate Index
We
have
entered into a non-exclusive license agreement with Lehman Brothers Inc.
(“Lehman”) providing for the license to us, in exchange for a fee, of the right
use the Lehman Brothers US Aggregate Index, which is owed and published by
Lehman, in connection with certain securities, including the Notes. The license
agreement between Lehman and us provides that the following language must be
set
for in this pricing supplement.
The
Product(s) is not sponsored, endorsed, sold or promoted by Lehman. Lehman makes
no representation or warranty, express or implied, to the owners of the
Products(s) or any member of the public regarding the advisability of investing
in securities generally or in the Product(s) particularly or the ability of
the
Lehman Indices, including without limitation, the Approved Indices, to track
general bond market performance. Lehman’s only relationship to the Licensee is
the licensing of the Approved Indices which is determined, composed and
calculated by Lehman without regard to the Licensee or the Product(s). Lehman
has no obligation to take the needs of the Licensee or the owners of the
Product(s) into consideration in determining, composing or calculating the
Approved Indices. Lehman is not responsible for and has not participated in
the
determination of the timing of, prices at, or quantities of the Product(s)
to be
issued or in the determination or calculation of the equation by which the
Product(s) is to be converted into cash. Lehman has no obligation or liability
in connection with the administration, marketing or trading of the
Product(s).
LEHMAN
BROTHERS DOES NOT GUARANTEE THE QUALITY, ACCURACY AND/OR THE COMPLETENESS OF
THE
LEHMAN INDICES, OR ANY DATA INCLUDED THEREIN, OR OTHERWISE OBTAINED BY THE
BEAR
STEARNS COMPANIES INC., OWNERS OF THE PRODUCTS(S), OR ANY OTHER PERSON OR ENTITY
FROM THE USE OF THE LEHMAN INDICES, INCLUDING WITHOUT LIMITATION, THE APPROVED
INDICES, IN CONNECTION WITH THE RIGHTS LICENSED HEREUNDER OR FOR ANY OTHER
USE.
LEHMAN MAKES NO EXPRESS OR IMPLIED WARRANTIES, AND HEREBY EXPRESSLY DISCLAIMS
ALL WARRANTIES OF MERCHANTABILITY OF FITNESS FOR A PARTICULAR PURPOSE OR USE
WITH RESPECT TO THE INDICES, INCLUDING WITHOUT LIMITATION, THE APPROVED INDICES,
OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE FOREGOING, IN NO
EVENT
SHALL LEHMAN HAVE ANY LIABILITY FOR ANY SPECIAL, PUNITIVE, INDIRECT, OR
CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS), EVEN IF NOTIFIED OF THE
POSSIBILITY OF SUCH DAMAGES.
BEAR,
STEARNS & CO.
INC.
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