Exhibit 4.01


 


	
  CUSIP NO. 52517PD81

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  REGISTERED

  	
   

  	
  PRINCIPAL
  AMOUNT: $5,000,000

  
	
  No. R-1

  	
   

  	
   

  



 


LEHMAN BROTHERS HOLDINGS INC.


 


MEDIUM-TERM NOTE, SERIES H


 


FX DUAL CURRENCY NOTE
DUE APRIL 12, 2006


 


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


 


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


 





















 


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


 


The “Maturity Date” is April 12, 2006, or if such
day is not a Business Day, on the next following Business Day.


 


The “Redemption Amount” is the amount equal to the
product of (A) the sum of the principal amount of the Notes plus the
Interest Amount times (B) the Conversion
Rate, divided by the Settlement Rate.


 


The “Interest Amount” is the product of the principal
amount of the Notes times 16.00%
per annum times the Day Count Fraction.


 


The “Day Count Fraction” is computed on the basis of a
360-day year and the actual number of days elapsed.


 


The
“Conversion Rate” is 2.2710.


 


The
“Settlement Rate” is the Reference Exchange Rate on the Valuation Date,
observed as per the Settlement Rate Option, provided that the Settlement Rate
shall not be lower than the Settlement Rate Floor.


 


The
“Settlement Rate Floor” is 2.1900.


 


The
“Reference Exchange Rate” is the spot exchange rate for the Reference Currency
expressed as the number of units of Reference Currency per 1 U.S. Dollar (USD).


 


The
“Reference Currency” is the Brazilian Real (BRL).


 


The
“Settlement Rate Option” is the Brazilian Real/U.S. Dollar offered rate for
U.S. Dollars, expressed as the amount of Brazilian Reals per one U.S. Dollar,
for settlement in two Business Days reported by the Banco Central do Brasil on
SISBACEN Data System under transaction code PTAX-800 (“Consulta de Cambio” or
Exchange Rate Inquiry), Option 5 (“Cotacoes para Contabilidade” or Rates for
Accounting Purposes), which appears on Reuters Screen BRFR Page under the
caption “Dolar PTAX” at approximately 6:30 pm Sao Paolo time on the Valuation
Date.


 


The
“Valuation Date” is April 5, 2006, or if such day is not a Valuation
Business Day, the next succeeding Valuation Business Day.


 


Upon the occurrence of a Disruption Event with
respect to the Reference Currency on any day during the term of the Notes, the Calculation Agent shall determine the Redemption
Amount payable on the Maturity Date in good faith and in a commercially
reasonable manner.


 


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A “Disruption Event” means any of the following
events (other than a Price Source Unavailability Event), as determined in good
faith by the Calculation Agent:


 


(A)                              the occurrence and/or
existence of an event on any day that has the effect of preventing or making
impossible the delivery of USD from accounts inside Brazil to accounts outside
Brazil; or


 


(B)                                the occurrence and/or existence of any event
(other than those set forth in (A) above or those constituting a Price
Source Unavailability Event) with respect to the Reference Currency that prevents
or makes impossible (x) the Calculation Agent’s ability to calculate the
Redemption Amount, (y) the Company’s fulfillment of its obligations under the
notes, or (z) the ability of the Company or any of its affiliates through which
it hedges its position under the Notes to hedge such position or to unwind all or a material portion of such hedge.


 


Upon the occurrence of a Price Source Unavailability
Event, the Settlement Rate will be determined in accordance with the Fallback
Rate Observation Methodology.


 


A “Price Source Unavailability Event” means, as determined in good
faith by the Calculation Agent, the Settlement Rate being unavailable for the Reference Currency, or the occurrence of an event
(other than an event constituting a Disruption Event) that generally makes it
impossible to obtain the Settlement Rate, on the Valuation Date.


 


The “Fallback
Rate Observation Methodology” means that the Settlement Rate will be calculated
on the basis of the arithmetic mean of the applicable spot quotations received
by the Calculation Agent at approximately 10:00 a.m., New York City time,
on the Valuation Business Day next succeeding the Valuation Date for the
purchase or sale for deposits in the Reference Currency by the Reference
Banks.  If fewer than three Reference
Banks provide spot quotations then the Settlement Rate will be determined by
the Calculation Agent in good faith and in a commercially reasonable manner.


 


The “Reference
Banks” means the New York offices of three leading banks engaged in the
interbank market selected in the sole discretion of the Calculation Agent.


 


A “Valuation Business Day”,
with respect to the Reference Currency, is  any day, other than a
Saturday or Sunday, that is neither a legal holiday nor a day on which
commercial banks are authorized or required by law, regulation or executive
order to close (including for dealings in foreign exchange in accordance with
the practice of the foreign exchange market) in Sao Paolo, Brasilia or Rio de
Janeiro.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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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:  January 12, 2006


 


	
  [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

  	
   

  



 


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[REVERSE OF NOTE]


 


LEHMAN BROTHERS HOLDINGS INC.


MEDIUM-TERM NOTES, SERIES H


FX DUAL CURRENCY NOTE
DUE APRIL 12, 2006


 


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


 


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


 


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


 


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


 


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


 


Section 6.  Authorized Form and Denominations.  The Notes of this series are issuable in
registered form, without coupons.  Each
Note will be issued initially as either a Global Security or a Certificated
Note, at the option of the Company, in denominations of $100,000 or whole
multiples of $100,000, either at the office or agency to be designated and
maintained by the Company for such purpose in the Borough of Manhattan, New
York City, pursuant to the provisions of the Indenture or at any of such other
offices or agencies as may be designated and maintained by the Company for such
purpose pursuant to the provisions of the Indenture, and in the manner and
subject to the limitations provided in the Indenture, but without the payment of
any service charge, except for any tax or other governmental charges imposed in
connection therewith.  Notes of this
series are exchangeable for a like aggregate principal amount of Notes of this
series of a different authorized denomination, except that Global Securities
will not be exchangeable for Certificated Notes of this series.


 


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


 


If at
any time the Depository notifies the Company that it is unwilling or unable to
continue as Depository or if at any time the Depository shall no longer be
eligible under the Indenture, the Company shall appoint a successor
Depository.  If a successor Depository
for the


 





















 


Notes of this series is
not appointed by the Company within 90 days after the Company receives such
notice or becomes aware of such ineligibility, the Company will issue, and the
Trustee will authenticate and deliver, Notes of this series in definitive form
in an aggregate principal amount equal to the principal amount of this Note.


 


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


 


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


 


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


 


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


 


Section 10.  Tax Treatment.  The Company intends to treat and, by purchase of the Note, the Holder
hereof agrees to treat, for all tax purposes, this Note as a cash-settled
financial contract subject to the foreign currency rules of section 988
of the Internal Revenue Code of 1986, as amended, rather than as a debt
instrument.


 


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


 


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