Exhibit 4.01


 


 


CUSIP
NO. 5252M0GF8


ISIN NO. US5252M0GF82


 


	
  REGISTERED

  	
   

  	
  PRINCIPAL
  AMOUNT: $4,400,000

  
	
  No. R-1

  	
   

  	
   

  



 


LEHMAN BROTHERS HOLDINGS INC.


 


MEDIUM-TERM NOTE, SERIES I


100% PRINCIPAL PROTECTED NOTES LINKED TO THE
DOW JONES-AIG


COMMODITY INDEXSM EXCESS RETURN


 


DUE AUGUST 15, 2011


 


 


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 “Trade Date” is the July, 31, 2008.


 


The “Issue Date” is the August 14, 2008.


 


The “Maturity Date” is August 15, 2011, or if such date is not a
Business Day, the next succeeding Business Day; provided that, if as a result
of a Market Disruption Event, the Valuation Date for one or more Index
Contracts is postponed so that it falls less than three Business Days prior to
the scheduled Maturity Date, the Maturity Date will be the third Business Day
following the latest occurring postponed Valuation Date for the affected Index
Contract.


 


The “Valuation Date” is August 8, 2011, or if such day is not a
scheduled Index Business Day, the immediately preceding scheduled Index
Business Day; provided that if a Market Disruption Event is in effect for one
or more Index Contracts on the scheduled Valuation Date, the Valuation Date may
be postponed as described below.


 


The “Redemption Amount” is, for each $1,000
denominated note, a single U.S. dollar payment on the Maturity Date equal to
$1,000 plus the Additional Amount.


 


The “Additional Amount” is, for each $1,000
denominated note, a single U.S. dollar payment equal to $1,000 multiplied by:


 


(A)   Max Return, if the Index Performance
is greater than or equal to 58.334%;


 


(B)   Index Performance × Participating
Rate, if the Index Performance is greater than 0.000% but less than 58.334%;


 


(C)   0.00%, if the Index Performance is
equal to or less than 0.000%.


 


The “Index”
is the Dow Jones-AIG Commodity IndexSM Excess Return published by Dow Jones &
Company, Inc. (“Dow Jones”) and calculated by the Index Sponsors subject
to adjustment in accordance with Index Adjustment.


 


The “Index Sponsors” are Dow Jones, AIG
International, Inc. and AIG Financial Products Corp.


 


The “Index Performance” is:    
Final Index Value - Initial Index Value


                                                                   Initial
Index Value


 


The “Final
Index Value” will be the closing value of the Index on the Valuation Date, as
determined and published by the Index Sponsors (subject to the occurrence of a
Market Disruption Event or an Index Unavailability Event), rounded to three
decimal places.


 


 


 


 


 


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The “Initial Index Value” is 205.103, which is equal to the closing value
of the Index on the Trade Date, as determined and published by the Index
Sponsors, rounded to three decimal places.


 


The “Participation Rate” is 120%.


 


The “Max Return” is 70%.


 


An “Index Business Day” is a day, as
determined in good faith by the Calculation Agent, on which trading is
generally conducted on the Relevant Exchange for each Index Contract then
comprising the Index or any Successor Index.


 


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.


 


If
a Market Disruption Event relating to one or more Index Contracts is in effect
on the scheduled Valuation Date, the Calculation Agent will calculate the Final
Index Value in good faith in accordance with the formula for and method of
calculating the Index last in effect prior to commencement of the Market
Disruption Event, using:


 


·                  for each Index
Contract that did not suffer a Market Disruption Event on the scheduled
Valuation Date, the settlement price on the applicable Relevant Exchange of
such Index Contract on the scheduled Valuation Date, and


 


·                  for each Index
Contract that did suffer a Market Disruption Event on the scheduled Valuation
Date, the settlement price of such Index Contract on the applicable Relevant
Exchange on the immediately succeeding trading day on which no Market
Disruption Event occurs or is continuing 
with respect to such Index Contract;


 


provided however that
if a Market Disruption Event has occurred or is continuing with respect to such
Index Contract on each of the eight scheduled trading days following the
scheduled Valuation Date, then (a) the eighth scheduled trading day shall
be deemed the Valuation Date for such Index Contract and (b) the
Calculation Agent will determine the price for such Index Contract on such
eighth scheduled trading day in its sole and absolute discretion taking into
account the latest available quotation for the price for such Index Contract
and any other information that in good faith it deems relevant.


 


A
“Market Disruption Event” means any of the following events as determined in
good faith by the Calculation Agent:


 


(A)      the termination or
suspension of, or material limitation or disruption in the trading on a
Relevant Exchange of any Index Contract;


 


(B)        the settlement price on a
Relevant Exchange of any Index Contract has increased or decreased by an amount
equal to the maximum permitted price change from the previous day’s settlement
price; or


 


 


 


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(C)              the settlement price of any
Index Contract is not published by the Relevant Exchange.


 


Notwithstanding
the foregoing, the following events will not constitute Market Disruption
Events:


 


(1)          a limitation on the hours in
a trading day and/or number of days of trading, if it results from an announced
change in the regular business hours of the Relevant Exchange; or


 


(2)          a decision to permanently
discontinue trading in the Index Contract or options or futures contracts
relating to the Index or the Index Contract.


 


For
purposes of the above, (a) “Index Contracts” means the commodities
contracts then underlying the Index or any Successor Index; (b) “Relevant
Exchange” means any organized exchange or market of trading for any futures
contract (or any combination thereof) then included in the Index or any
Successor Index; and (C) “trading day” means a day, as determined in good
faith by the Calculation Agent, on which trading is generally conducted on the
Relevant Exchange applicable to the affected Index Contract.


 


If
an Index Unavailability Event is in effect on the scheduled Valuation Date (and
no Market Disruption Event is then in effect), the Calculation Agent will
determine the Final Index Value on the Valuation Date in good faith in
accordance with the formula for and method of calculating the Index last in
effect prior to commencement of the Index Unavailability Event using the closing
price on the Relevant Exchanges of each Index Contract.


 


An
“Index Unavailability Event” means that the Index is not calculated and
published by the Index Sponsors or any Successor Index is not calculated and
published by the sponsors thereof.


 


If
the Index Sponsors discontinue publication of the Index and the Index Sponsors
or another entity publishes a successor or substitute index that the
Calculation Agent determines, in its sole discretion, to be comparable to the
discontinued Index (such index, a “Successor Index”), then the Final Index
Value will be determined by reference to the level of such Successor Index at
the close of trading on the Relevant Exchange or market of the Successor Index
last to close on the Valuation Date; provided, however, that the Calculation
Agent, in its sole discretion, may make such adjustments as it deems necessary
to the level of the Successor Index so that the level of the Successor Index
reflects the same level as that of the Index before it was discontinued.  Upon any selection by the Calculation Agent
of a Successor Index, the Calculation Agent will cause written notice thereof
to be promptly furnished to the trustee, to the Company and to the Holders of
the notes.


 


If
the Index Sponsors discontinue publication of the Index prior to, and such
discontinuation is continuing on, the Valuation Date, and the Calculation Agent
determines, in its sole discretion, that no Successor Index is available at
such time, then the Calculation Agent will determine the Final Index Value on
the Valuation Date.  The Final Index
Value will be computed by the Calculation Agent in accordance with the formula
for and method of calculating the Index last in effect prior to such
discontinuation, using the settlement prices on the Relevant Exchanges (or, if
trading in an Index Contract has been materially suspended or materially
limited, its good 


 


 


 


 


4

















 


 


faith estimate of the
settlement price that would have prevailed but for such suspension or limitation)
at the close of trading on the Valuation Date.


 


If
at any time the method of calculating the Index or a Successor Index, or the
level thereof, is, in the good faith judgment of the Calculation Agent, changed
or modified in a material respect, the Calculation Agent may (but is not
obligated to) make such adjustments to the Index or Successor Index or their
respective methods of calculation as, in the good faith judgment of the
Calculation Agent, may be necessary in order to arrive at a level of a commodity
index comparable to the Index or such Successor Index, as the case may be, as
if such changes or modifications had not been made, and the Calculation Agent
will calculate the Final Index Value with reference to the Index or such
Successor Index as adjusted. 
Accordingly, if the method of calculating the Index or a Successor Index
is modified or rebased so that the level of the Index or Successor Index is a
fraction or multiple of what it would have been if it had not been modified or
rebased, then the Calculation Agent will adjust the level of the Index or
Successor Index in order to arrive at a level of the Index or Successor Index
as if it has not been modified or rebased.


 


The
“Calculation Agent” means Lehman Brothers Commodity Services Inc., the determinations
and calculations of which will be binding in absence of manifest error.


 


Except as provided below,
any 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.


 


Payment of any Redemption
Amount will be made in immediately available funds in accordance with the
normal procedures of the Trustee (or any duly appointed Paying Agent).


 


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.$” or “$”
or “USD” 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:  August 14, 2008


 


	
  [SEAL]

  	
  LEHMAN BROTHERS
  HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Andrew M.W.
  Yeung

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Cindy Buckholz

  
	
   

  	
   

  	
  Title:

  	
  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

  



 


 


 


 


 


 


6

















 


 


[REVERSE
OF NOTE]


 


 


LEHMAN BROTHERS
HOLDINGS INC.


MEDIUM-TERM NOTES,
SERIES I


100% PRINCIPAL
PROTECTED NOTES LINKED TO THE DOW JONES-AIG 


COMMODITY INDEXSM EXCESS RETURN 
 DUE AUGUST 15, 2011


 


 


Section 1.  General.  This Note is one of a duly authorized series
of Notes of the Company designated as the Medium-Term Notes, Series I, 100% Principal Protected Notes Linked to the
Dow Jones-AIG Commodity IndexSM Excess Return (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 herein above 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 any
Redemption 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 $1,000 or whole
multiples of $1,000, 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 that may be declared
due and payable upon any acceleration of the notes will be determined by the
Calculation Agent for the period from and including the Issue Date to but
excluding the date of early repayment and will equal, for each note, the
Redemption Amount, calculated as if the date of early repayment were the
Maturity Date. If a bankruptcy proceeding is commenced in respect of the
Company, the claim of the beneficial owner of a note for the period from and
including the Issue Date to but excluding the date of early repayment will be capped
at the Redemption Amount, calculated as though the date of the commencement of
the proceeding were the Maturity Date.


 


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


 


Section 11.  GOVERNING LAW.  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.