Exhibit 4.01


 


CUSIP
NO. 5252M0BF3


ISIN NO. US5252M0BF38


 


REGISTERED                                                                                                                        PRINCIPAL
AMOUNT: $813,000


No. R-1


 


 


LEHMAN BROTHERS
HOLDINGS INC.


 


MEDIUM-TERM NOTE,
SERIES I


 


NOTES LINKED TO A LATIN AMERICAN CURRENCY BASKET
 DUE JANUARY 11, 2010


 


 


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
“Maturity Date” is January 11, 2010, or if such day is not a Business Day,
on the next following Business Day.


The “Valuation Date” is January 5, 2010;
provided that, upon the occurrence of a Disruption Event with respect to a
Basket Currency, the Valuation Date for the affected Basket Currency may be
postponed (as described in “Disruption Events” below).


The “Redemption Amount” is the amount equal
to the sum of the principal amount of the Notes of $1,000, plus the Additional
Amount, if any.


The “Additional Amount” is an amount per Note
equal to the greater of (a) zero and (b) $1,000 multiplied by the
product of the Basket Return times the Participation Rate.


The “Participation Rate” is 335%.


The “Basket” is the Brazilian Real (BRL), the
Argentine Peso (ARS), the Mexican Peso (MXN) and the Chilean Peso (CLP), each a
“Basket Currency” and collectively the “Basket Currencies”.


The “Basket Return” is a
quotient, the numerator of which is the difference of the Basket Ending Level
minus the Basket Starting Level and the denominator of which is the Basket
Starting Level.


The “Basket Starting
Level” is set equal to 100 on the Trade Date.


The “Basket Ending Level”
is the Basket closing level on the Valuation Date, equal to the product of 100
times the sum of 1 plus the sum of the Weighted Currency Returns.


The “Weighted Currency
Return” for each Basket Currency is the product of the Currency Return for such
Basket Currency times the Basket Currency Weighting for such Basket Currency.


The “Currency Return” for
each Basket Currency is a quotient, the numerator of which is the difference of
the Initial Spot Rate for such Basket Currency minus the Final Spot Rate for
such Basket Currency and the denominator of which is the Final Spot Rate for
such Basket Currency.


The “Final Spot Rate” for
each Basket Currency is the Reference Exchange Rate for that Basket Currency on
the Valuation Date, determined by the Calculation Agent in accordance with the
Spot Rate Source (subject to the occurrence of a Disruption Event).


The “Weighting” and
“Initial Spot Rate” for each Basket Currency are as follows:


2

















 




	
  Basket Currency

  	
   

  	
  Weighting

  	
   

  	
  Initial Spot Rate

  
	
  BRL

  	
   

  	
  25%

  	
   

  	
  1.7647

  
	
  ARS

  	
   

  	
  25%

  	
   

  	
  3.1375

  
	
  MXN

  	
   

  	
  25%

  	
   

  	
  10.9265

  
	
  CLP

  	
   

  	
  25%

  	
   

  	
  496.60

  






 


The
“Reference Exchange Rates” are, for each Basket Currency, the spot exchange
rates for that Basket Currency quoted against the U.S. dollar, expressed as the
number of units of the Basket Currency per one USD.


The “Issue Date” is January 11, 2008.


If a
Disruption Event relating to one or more of the Basket Currencies is in effect
on the scheduled Valuation Date, the Calculation Agent will calculate the
Basket Return using:


·                                          for each Basket Currency that did  not suffer a Disruption Event on the scheduled
Valuation Date, the Final Spot Rate on the scheduled Valuation Date, and


·                                          for each Basket Currency that did suffer a Disruption Event on the scheduled Valuation Date, the Final
Spot Rate on the immediately succeeding scheduled Valuation Business Day for
such Basket Currency on which no Disruption Event occurs or is continuing with
respect to such Basket Currency;


provided, however, that if a Disruption Event has occurred or is continuing
with respect to a Basket Currency on each of the three scheduled Valuation
Business Days following the scheduled Valuation Date, then (a) such third
scheduled Valuation Business Day shall be deemed the Valuation Date for the
affected Basket Currency; and (b) the Calculation Agent will determine the
Final Spot Rate for the affected Basket Currency on such day in accordance with
Fallback Rate Observation Methodology.


For
purposes of the above, “scheduled Valuation Business Day” means a day that is
or, in the judgment of the Calculation Agent, should have been, a Valuation
Business Day for the affected Basket Currency.


A
“Disruption Event” means any of the following events with respect to a Basket
Currency, 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 (x) the
delivery of USD from accounts inside the Basket Currency Jurisdiction for that
Basket Currency to accounts outside that Basket Currency Jurisdiction, or (y) for
MXN only, the conversion of the Basket Currency into USD through customary
legal channels;


(B)                                the
occurrence of any event causing the Reference Exchange Rate for the Basket
Currency to be split into dual or multiple currency exchange rates; or


 


3




















 


(C)                                the Final Spot Rate
being unavailable for the Basket Currency, or the occurrence of an event (i) in
the Basket Currency Jurisdiction for that Basket Currency that materially
disrupts the market for the Basket Currency or (ii) that generally makes
it impossible to obtain the Final Spot Rate for the Basket Currency, on the
Valuation Date.


A “Valuation Business Day” means, with respect to each
Basket Currency, 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 the
city or jurisdiction indicated in the table below:


 




	
  Basket Currency

  	
   

  	
  Screen Reference

  	
   

  	
  Valuation Business Day

  
	
  BRL

  	
   

  	
  BRFR

  	
   

  	
  Brazilia,
  Rio de Janiero or

  São Paulo; and New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARS

  	
   

  	
  ARS=

  	
   

  	
  Buenos Aires and New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MXN

  	
   

  	
  USDMXNFIX

  	
   

  	
  Mexico City and New York

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CLP

  	
   

  	
  CLOPB

  	
   

  	
  Santiago and New York

  






 


The “Spot Rate Source” for the
BRL 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 Trade Date or
Valuation Date, as applicable.  The Spot
Rate Source for the ARS is the Argentine Peso/U.S. dollar official fixing rate,
expressed as the amount of Argentine Pesos per one U.S. dollar for settlement
on the same day (or, if that day is not a business day in Buenos Aires and New
York, for settlement on the first succeeding day that is a business day in both
Buenos Aires and New York) which appears on the Reuters Screen ARS=
page at the close of business in Buenos Aires on that Valuation Date.  The Spot Source Rate for the MXN is the
Mexican Peso/U.S. Dollar official fixing rate, expressed as the amount of
Mexican Pesos per one U.S. Dollar, for settlement in two business days reported
by Banco de Mexico which appears on Reuters Screen MEX01 Page under the
heading “USDMXNFIX=“ at the close of business in Mexico City on the Start Date or such other relevant date. 
The Spot Source Rate for the CLP is the Chilean Peso/U.S. Dollar
observado rate, expressed as the amount of Chilean Pesos per one U.S. Dollar,
for settlement on the same day reported by the Banco Central de Chile which
appears on the Reuters Screen CLPOB=Page below the caption “Value” at
approximately 10:00 a.m., Santiago time, on the first Business Day
following the relevant Valuation Date. 
The term “business day” solely as used in any Spot Rate Source described
above shall mean 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 the
Principal Financial Center for both (a) the Basket Currency and
(b) the currency against which the Basket Currency is quoted (the “base
currency”) in accordance with the Reference Exchange 


 


4

















 


Rate specified in the
applicable pricing supplement, in each case as specified for the applicable
Basket Currency or base currency in the table above.


 


The screen or time of observation indicated in
relation to any Final Spot Rate above shall be deemed to refer to such screen or time of
observation as modified or amended from time to time, or to any substitute
screen thereto.


The “Fallback Rate
Observation Methodology” means that the Reference Exchange Rate, Final Spot
Rate or other rate, as specified in the applicable pricing supplement, in
respect of a basket currency will equal the noon buying rate in New York for
cable transfers in foreign currencies as announced by the Federal Reserve Bank
of New York for
customs purposes (the “Noon Buying Rate”) on the relevant Valuation Date or
such other date specified in the applicable pricing supplement. If the Noon Buying
Rate is not announced on that date, the Reference Exchange Rate, Final Spot
Rate or other rate for such Basket Currency 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 or such other date
specified in the applicable pricing supplement, for the purchase or sale for
deposits in the basket currency by the New York offices of three leading banks
engaged in the interbank market (selected in the sole discretion of the
Calculation Agent) (the “Reference Banks”). If fewer than three Reference Banks
provide spot quotations, then the Reference Exchange Rate, Final Spot Rate or
other rate, as applicable, 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 relevant date from
two Reference Banks (selected in the sole discretion of the Calculation Agent),
for the purchase or sale for deposits in the Basket Currency. If these spot
quotations are available from only one Reference Bank, then the Calculation
Agent, in its sole discretion, will determine whether that quotation is
reasonable to be used. If no spot quotation is available, then the Reference
Exchange Rate, Final Spot Rate or other rate, as applicable, for such Basket
Currency will be determined by the Calculation Agent in good faith and in a
commercially reasonable manner.


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.


The “Calculation Agent” means Lehman Brothers Inc.


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.


Payment of the 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.


 


5

















 


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.


 


6

















 


 


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 11, 2008


 




	
  [SEAL]

  	
  LEHMAN BROTHERS
  HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Andrew 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

  	
   

  






 


 


7






 












 


[REVERSE
OF NOTE]


 


LEHMAN BROTHERS
HOLDINGS INC.


MEDIUM-TERM NOTES,
SERIES I


NOTES LINKED TO A LATIN AMERICAN CURRENCY BASKET
 DUE JANUARY 11, 2010


 


 


                                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, FX Basket-Linked 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 Additional 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 Additional 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
Additional 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 Additional 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 $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 the date of early repayment were the Maturity
Date. If a bankruptcy proceeding is commenced in respect of Lehman Brothers
Holdings, 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 Additional 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.