Exhibit 4.15


 


MEDIUM-TERM NOTE – MASTER NOTE


 


	
   

  	
  May 30, 2006

  
	
   

  	
   

  	
  (Date of Issuance)

  



 


Lehman Brothers Holdings Inc. (“Issuer”), a
corporation organized and existing under the laws of the State of Delaware, for
value received, hereby promises to pay to Cede & Co. or its registered
assigns:  (i) on each principal
payment date, including each amortization date, redemption date, repayment
date, maturity date, and extended maturity date, as applicable, of each
obligation identified on the records of Issuer (which records are maintained by
Citibank, N.A. (“Paying Agent”)) as being evidenced by this Master Note, the
principal amount then due and payable for each such obligation, and (ii) on
each interest payment date, if any, the interest then due and payable on the principal
amount for each such obligation. Payment shall be made by wire transfer of
United States dollars to the registered owner, or in immediately available
funds or the equivalent to a party as authorized by the registered owner and in
the currency other than United States dollars as provided for in each such
obligation, by Paying Agent without the necessity of presentation and surrender
of this Master Note.


 


REFERENCE IS HEREBY MADE TO THE FURTHER
PROVISIONS OF THIS MASTER NOTE SET FORTH ON THE REVERSE HEREOF.


 


This Master Note is a valid and binding obligation of Issuer.


 


IN WITNESS WHEREOF, Issuer has caused this instrument to be duly
executed under its corporate seal.


 


	
  ATTEST:

  	
  Lehman Brothers Holdings Inc.

  	
   

  
	
   

  	
  (Issuer)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature)

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (Authorized Signature)

  	
   

  
	
  This is one of the Securities of the series designated
  therein referred to in the within-mentioned Indenture.

  
	
   

  
	
   

  	
   

  	
  Citibank, N.A.

  	
   

  
	
   

  	
   

  	
       (Trustee)

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  (Authorized Signature)

  	
   

  
							



 

















 


	
  This Master
  Note evidences indebtedness of Issuer of a single Series
                  
  C

  
	
   

  	
  (Series Designator)

  
	
  and Rank

  	
   

  	
    senior, which are designated
  Lehman Notes

  
	
   

  	
   

  	
  (Secured/Unsecured/Senior/Junior/Subordinated/Unsubordinated)

  
				



 


(the “Debt Obligations”), all issued or to be
issued under and pursuant to an Indenture dated as of


 


September 1, 1987, as amended (the “Indenture”),
duly executed and delivered by Issuer to


 


Citibank, N.A., as Trustee (“Trustee”), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, duties, and immunities thereunder of
Trustee and the rights thereunder of the holders of the Debt Obligations. As
provided in the Indenture, the Debt Obligations may mature at different
times, may bear interest, if any, at different rates, may be subject
to different redemption and repayment provisions, if any, may be subject
to different sinking, purchase, or analogous funds, if any, may be subject
to different covenants and events of default, any may otherwise vary as in
the Indenture provided or permitted. The Debt Obligations aggregated with any
other indebtedness of Issuer of this Series are indeterminate designated
as the Medium-Term Notes.


 


No reference herein to the Indenture and no provision of this Master
Note or of the Indenture shall alter or impair the obligation of Issuer, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest, if any, on each Debt Obligation at the times, places, and rates, and
in the coin or currency, identified on the records of Issuer.


 


At the request of the registered owner, Issuer shall promptly issue and
deliver one or more separate note certificates evidencing each Debt Obligation
evidenced by this Master Note. As of the date any such note certificate or certificates
are issued, the Debt Obligations which are evidenced thereby shall no longer be
evidenced by this Master Note.


 


FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto


	
   

  
	
  (Name, Address, and Taxpayer Identification
  Number of Assignee)

  



the Master Note and all rights thereunder, hereby irrevocably
constituting and appointing                       
attorney to transfer said Master Note on the books of Issuer with full power of
substitution in the premises.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Signature)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature(s) Guaranteed:

  	
  NOTICE: The signature on this assignment must

  correspond with the name as written upon the face of

  this Master Note, in every particular, without alteration

  or enlargement or any change whatsoever.

  



 


Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation (“DTC”), to Issuer or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of DTC (and any payment is made
to Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.


 


Reference is
hereby made to the further provisions of this Master Note set forth in the
Master Note Rider attached hereto.


 

















 


LEHMAN BROTHERS HOLDINGS INC.


 


RIDER


 


TO MASTER NOTE DATED MAY


 


LEHMAN NOTES, SERIES C


 


This RIDER forms a part of and is
incorporated into the Master Note dated May 30, 2006, of Lehman Brothers
Holdings Inc. (the “Issuer”) registered in the name of Cede & Co, or
its registered assigns, evidencing the Issuer’s Lehman Notes, Series C
(the “Debt Obligations”).


 


REFERENCE IS
HEREBY MADE TO THE FURTHER PROVISIONS OF SUCH MASTER NOTE (TOGETHER WITH THIS
RIDER, HEREIN REFERRED TO AS THIS “MASTER NOTE”) SET FORTH IN THE RECORDS OF
THE ISSUER MAINTAINED BY THE TRUSTEE, WHICH RECORDS CONSIST OF THE PRICING
SUPPLEMENT(S) TO THE PROSPECTUS SUPPLEMENT DATED MAY 30, 2006, AND
PROSPECTUS DATED MAY 30, 2006 (EACH, AS IT MAY BE AMENDED OR
SUPPLEMENTED, A “PRICING SUPPLEMENT”) RELATING TO EACH ISSUANCE OF DEBT
OBLIGATIONS, AS FILED BY THE ISSUER WITH THE SECURITIES AND EXCHANGE COMMISSION.
SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH
FULLY SET FORTH AT THIS PLACE.


 


THIS MASTER
NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE AND IS REGISTERED
IN THE NAME OF THE DEPOSITORY TRUST COMPANY (THE “DEPOSITORY”) OR A NOMINEE
THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN CERTIFICATED FORM, THIS 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 SUCH 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.


 


Section 1.
Defined Terms.


 


“Interest
payment date”, as used on the face of this Master Note, shall have the same
meaning as “Interest Payment Date”, as defined in the Indenture.


 


“Issuer”, as
used in this Master Note, shall have the same meaning as “Company”, as defined
in the Indenture.


 


“Principal
payment date”, as used on the face of this Master Note, shall have the same
meaning as “Maturity”, as defined in the Indenture.


 


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


 


Section 2.
General. This Note is one of a duly authorized series of Notes of
the Issuer designated as the Lehman Notes, Series C. The Debt Obligations
evidenced by this Master Note are one of an indefinite number of series of
debt securities of the Company (herein called the “Securities”) issued or
issuable under and pursuant to the Indenture. 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 repayment 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.


 


Each Pricing
Supplement shall specify the terms of a particular issuance of Debt Obligations
that are not set forth, or are different from those set forth, in this Master
Note, including, without limitation, the CUSIP


 

















 


Number, the
aggregate principal amount of such issuance (the “Principal Amount”), the issue
date, the interest rate per annum, the interest payment frequency, the first
Interest Payment Date, the Maturity, whether optional redemption applies to the
Debt Obligations, the terms of such optional redemption, if applicable, as set
forth below, whether optional repayment applies to the Debt Obligations, the
terms of such optional repayment, if applicable, as set forth below, and whether
the Survivor’s Option (as defined below) applies to the Debt Obligations. The
terms in a Pricing Supplement may vary from and supersede the terms
contained in this Master Note; if any terms in the applicable Pricing
Supplement are inconsistent with this Master Note, the terms in the Pricing
Supplement shall control.


 


The Issuer
may, without the consent of the holders of the Debt Obligations, create and
issue additional notes ranking equally with the Debt Obligations and otherwise
similar in all respects, except for the issue date, issue price and the payment
of interest accruing prior to the issue date of such additional notes, so that
such further notes shall be consolidated and form a single issuance with
the Debt Obligations; provided, however, that no additional notes
can be issued if an Event of Default has occurred with respect to the Debt
Obligations.


 


Section 3.
Payments of Principal and Interest. Unless otherwise stated in the
applicable Pricing Supplement, if the applicable Pricing Supplement provides
for monthly interest payments, the Interest Payment Date shall be the fifteenth
day of each calendar month, commencing in the calendar month that next succeeds
the month of the Issue Date; if the applicable Pricing Supplement provides for
quarterly interest payments, the Interest Payment Dates shall be the fifteenth
day of each third month, commencing in the third succeeding calendar month
following the month of the Issue Date; if the applicable Pricing Supplement
provides for semiannual interest payments, the Interest Payment Dates shall be
the fifteenth day of each sixth month, commencing in the sixth succeeding
calendar month following the month of the Issue Date; and if the applicable
Pricing Supplement provides for annual interest payments, the Interest Payment
Date shall be the fifteenth day of every twelfth month, commencing in the
twelfth succeeding calendar month following the month of the Issue Date. Interest
on a Debt
Obligation shall be computed on the basis of a 360-day year of twelve
30-day months or, in the case of an incomplete month, the number of days
elapsed. Each payment of interest hereon shall include interest accrued through
the day before the Interest Payment Date or date of Maturity, as the case may be.
In no event shall the interest rate of a Debt
Obligation be higher than the maximum rate permitted by applicable law,
as the same may be modified by United States law of general application.


 


Any payment of
principal, premium, if any, or interest to be made on any Interest Payment Date
or on a date of Maturity that is not a Business Day shall be made on the next
succeeding Business Day with the same force and effect as if made on such
Interest Payment Date or such date of Maturity, as the case may be, and no
additional interest shall accrue as a result of such delayed payment.


 


Unless
otherwise stated in the applicable Pricing Supplement, the interest so payable
on any Interest Payment Date shall, subject to certain exceptions provided in
the Indenture, be paid to the person in whose name a Debt Obligation is
registered at the close of business on the fifteenth day preceding the Interest
Payment Date (the “Regular Record Date”), whether or not a Business Day; provided,
however, that, notwithstanding any provision of the Indenture to the contrary,
interest payable on any date of Maturity shall be payable to the Person to whom
principal shall be payable; and provided, further, that, unless
otherwise specified in the applicable Pricing Supplement, in the case of a Debt
Obligation initially issued between a Regular Record Date and the Interest
Payment Date relating to such Regular Record Date, interest for the period
beginning on the Issue Date and ending on such Interest Payment Date shall be
paid on the Interest Payment Date following the next succeeding Regular Record
Date to the registered Holder on such next succeeding Regular Record Date.


 


Section 4.
Redemption. If so specified in the applicable Pricing Supplement, the
Issuer may at its option redeem a Debt Obligation (i) in whole or
from time to time in part, or (ii) in whole but not in part,  (a) on or after the date designated as
the initial Redemption Date in the applicable Pricing Supplement, or (b) on
the specific date or dates specified in the applicable Pricing Supplement, at
either a price based on a constant percentage of the Principal Amount of such
Debt Obligation as specified in the applicable Pricing Supplement or at prices
declining from the premium specified in the applicable Pricing Supplement, if
any, to 100% of the Principal Amount specified in the applicable Pricing
Supplement, together, in each case, with accrued interest to the Redemption
Date. The Issuer may exercise such option by causing the Trustee to mail
by first-class mail to the Holder hereof a notice of such redemption at
least 30 but not more than 60 days prior to the Redemption Date. Unless
otherwise specified in


 

















 


the applicable
Pricing Supplement, if less than all of the Debt Obligations with like tenor
and terms to a Debt Obligation are to be redeemed, the Debt Obligations to be
redeemed shall, in the case of Debt Obligations evidenced by this Master Note,
be determined by the Depository and its direct and indirect participants in
accordance with standing instructions and customary practices, and, in the case
of certificated Debt Obligations, be selected by the Trustee by such method as
the Trustee shall deem fair and appropriate in accordance with the provisions
of the Indenture.


 


Section 5.
Sinking Funds. Unless otherwise specified in the applicable Pricing
Supplement, no Debt Obligation shall be subject to any sinking fund.


 


Section 6.
Optional Repayment. If so specified in the applicable Pricing Supplement,
all or a specified part of a Debt Obligation shall be repayable prior to
the Maturity Date at the option of the Holder on the date or dates specified in
the applicable Pricing Supplement (each, an “Optional Repayment Date”) at the
price specified in the applicable Pricing Supplement (the “Optional Repayment
Price”), together with accrued interest to the applicable Optional Repayment
Date. If a Debt Obligation is in certificated form, in order for such Debt
Obligation to be so repaid, the Trustee must receive, at least 30 but not more
than 45 days prior to an Optional Repayment Date, either (i) such Debt
Obligation with the form below entitled “Option to Elect Repayment” duly
completed or (ii) a telegram, telex, fax or letter from a member of a
national securities exchange or the National Association of Securities Dealers, Inc.
or a commercial bank or trust issuer in the United States setting forth the
name of the Holder hereof, the Principal Amount, the Principal Amount to be
repaid, a description of the tenor and terms of such Debt Obligation, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that such Debt Obligation with the form below entitled “Option
to Elect Repayment” duly completed will be received by the Paying Agent not
later than five Business Days after the date of such telegram, telex, fax or
letter and such Debt Obligation and form duly completed are received by
the Paying Agent by such fifth Business Day. Exercise of this repayment option
shall be irrevocable. Unless otherwise stated in the applicable Pricing
Supplement, the repayment option may be exercised by the Holder of a Debt
Obligation with respect to less than the Principal Amount then outstanding; provided,
however, that the Principal Amount of the Debt Obligation remaining
outstanding after repayment is an authorized denomination.


 


Section 7.
Survivor’s Option. If so specified in the applicable Pricing Supplement,
the Representative (defined below) of a deceased beneficial owner of a Debt
Obligation shall have the option to elect to require repayment, in whole or
from time to time in part, of such Debt Obligation following the death of the
beneficial owner (a “Survivor’s Option”). The Survivor’s Option may not be
exercised unless the Debt Obligation was acquired by the beneficial owner at
least six months prior to the trustee’s receipt of written request for
repayment as provided below.


 


If the
Survivor’s Option is applicable to a Debt Obligation, upon the valid exercise
of the Survivor’s Option, the Issuer shall repay the Debt Obligation (or
portion thereof), properly tendered for repayment by or on behalf of the person
(the “Representative”) that has authority to act on behalf of the deceased
beneficial owner of a Debt Obligation under the laws of the appropriate
jurisdiction (including, without limitation, the personal representative or
executor of the deceased beneficial owner or the surviving joint owner of the
deceased beneficial owner) at a price equal to 100% of the principal amount of
the deceased beneficial owner’s beneficial interest in such Debt Obligation
plus accrued interest to the date of such repayment, subject to the following
limitations:


 


1.               The Issuer may, in
its sole discretion, (i) limit the aggregate principal amount of all
Lehman Notes, without regard to series, as to which exercises of the Survivor’s
Option shall be accepted from all deceased beneficial owners in any calendar
year (the “Annual Put Limitation”) to an amount equal to the greater of
$2,000,000 or 2% of the Outstanding principal amount of all Lehman Notes,
without regard to series, as of the end of the most recent calendar year, or
such greater amount as the Issuer in its sole discretion may determine for
such calendar year, and (ii) limit the aggregate principal amount of
Lehman Notes, without regard to series, as to which exercises of the Survivor’s
Option will be accepted in any calendar year from the authorized representative
for any individual deceased beneficial owner to $250,000, or such greater
amount as the Issuer in its sole discretion may determine for such
calendar year (the “Individual Put Limitation”).


 

















 


2.               The Issuer shall
not make principal repayments pursuant to exercise of the Survivor’s Option in
amounts that are less than the minimum authorized denomination, and, in the
event that any partial exercise of the Survivor’s Option or the limitations
described in the preceding sentence would result in the partial repayment of
any Debt Obligation, the principal amount of such Debt Obligation remaining
Outstanding after repayment must be at least the minimum authorized
denomination.


 


3.               A valid exercise of
the Survivor’s Option with respect to any Debt Obligation (or portion thereof) may not
be withdrawn.


 


Each Debt
Obligation (or portion thereof) that is tendered pursuant to a valid exercise
of the Survivor’s Option shall be accepted in the order of all such exercises
that are received by the Trustee, except for any Debt Obligation (or portion
thereof) the acceptance of which would contravene (i) the Annual Put
Limitation, if applied, or (ii) the Individual Put Limitation, if applied,
with respect to the relevant individual deceased beneficial owner. If, as of
the end of any calendar year, the aggregate principal amount of Debt
Obligations (or portions thereof) that have been tendered pursuant to the valid
exercise of the Survivor’s Option during such year has exceeded either the
Annual Put Limitation, if applied, or the Individual Put Limitation, if
applied, for such year, any exercise(s) of the Survivor’s Option with respect
to Debt Obligations (or portions thereof) not accepted during such calendar
year because such acceptance would have contravened either such limitation, if
applied, shall be deemed to be tendered in the following calendar year in the
order all such Debt Obligations (or portions thereof) were originally tendered.
Any Debt Obligation (or portion thereof) accepted for repayment pursuant to
exercise of the Survivor’s Option shall be repaid on the first Interest Payment
Date that occurs 20 or more calendar days after the date of such acceptance. In
the event that a Debt Obligation (or any portion thereof) tendered for
repayment pursuant to a valid exercise of the Survivor’s Option is not
accepted, the Trustee shall deliver a notice by first-class mail to the
registered holder thereof, at its last known address as indicated in the
Security Register, that states the reason such Debt Obligation (or portion
thereof) has not been accepted for payment.


 


In order for a
Survivor’s Option to be validly exercised with respect to any Debt Obligation
(or portion thereof), the Trustee must receive from the Representative (i) a
written request for repayment signed by the Representative, and such signature
must be guaranteed by a firm that is a participant in the Security Transfer
Agents Medallion Program, the New York Stock Exchange Medallion Signature Program
or the Stock Exchange Medallion Program, (ii) appropriate evidence
satisfactory to the Trustee that (A) the deceased was the beneficial owner
of such Debt Obligation at the time of death and the interest in such Debt
Obligation was acquired by the deceased beneficial owner at least six months
prior to the Trustee’s receipt of the request for repayment, (B) the death
of such beneficial owner has occurred, and the date of such death, and (C) the
Representative has authority to act on behalf of the deceased beneficial owner,
(iii) if the interest in such Debt Obligation is held by a nominee or
trustee of, custodian for, or another person in a similar capacity to, the
deceased beneficial owner, evidence satisfactory to the Trustee from such
nominee, trustee, custodian or similar person attesting to the deceased’s
beneficial ownership in such Debt Obligation, (iv) tax waivers and such
other instruments or documents that the Trustee reasonably requires in order to
establish the validity of the beneficial ownership of the Debt Obligations and
the claimant’s entitlement to payment, and (v) any additional information
the Trustee requires to evidence satisfaction of any conditions to the exercise
of such Survivor’s Option or to document beneficial ownership or authority to
make the election and to cause the repayment of such Debt Obligation. Subject
to the Issuer’s right hereunder to impose the Annual Put Limitation and the
Individual Put Limitation, all questions as to the eligibility or validity of
any exercise of the Survivor’s Option shall be determined by the Trustee, in
its sole discretion, which determination shall be final and binding on all
parties.


 


The death of a
person holding a beneficial ownership interest in a Debt Obligation: (a) with
any person in a joint tenancy with right of survivorship; or (b) with his
or her spouse in tenancy by the entirety, tenancy in common, as community
property or in any other joint ownership arrangement, shall be deemed the death
of a beneficial owner of that note, and the entire principal amount of the Debt
Obligation held in this manner shall be subject to repayment by the Issuer upon
valid exercise of the Survivor’s Option; provided, however, that
the death of a person holding a beneficial ownership interest in a Debt Obligation
as tenant in common with a person other than his or her spouse shall be deemed
the death of a beneficial owner only with respect to the such deceased person’s
interests in the Debt Obligation, and only the deceased beneficial owner’s
percentage interest in the principal amount of the Debt Obligation shall be
subject to repayment. If the ownership interest in a Debt Obligation is held by
a nominee for a


 

















 


beneficial owner or by a custodian under the Uniform Gifts to
Minors Act or Uniform Transfer to Minors Act, or by a trustee of a trust
that is wholly revocable by the beneficial owner, or by a guardian or committee
for a beneficial owner, the death of the beneficial owner of that Debt
Obligation shall constitute the death of the beneficial owner for purposes of
the Survivor’s Option, if the beneficial ownership interest can be established
to the satisfaction of the Trustee. In these cases, the death of the nominee,
custodian, trustee, guardian or committee shall not be deemed the death of the
beneficial owner of such Debt Obligation for purposes of the Survivor’s Option.


 


Section 8.
Principal Amount For Indenture Purposes. For the purpose of determining
whether Holders of the requisite amount of Debt Obligations outstanding under
the Indenture have made a demand, given a notice or waiver or taken any other
action, the outstanding principal amount of this Master Note shall be deemed to
be the aggregate principal amount outstanding of the Debt Obligations.


 


Section 9.
Modification and Waivers. The Indenture contains provisions permitting
the Issuer 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 principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon or reduce any
premium payable on redemption, or make the principal thereof, or premium, if
any, or interest thereon payable in any coin or currency other than the lawful
currency of the United States of America, 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 or the
principal of, 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 Master Note shall be conclusive and binding upon such Holder and upon
all future holders and owners of this Master Note and any Debt Obligations
which may be issued in exchange or substitution herefor, irrespective of
whether or not any notation thereof is made upon this Master Note or such other
Debt Obligations.


 


Section 10.
Defeasance. The Indenture contains provisions for the discharge of the
Indenture and defeasance at any time of the indebtedness on a Debt Obligation
upon compliance by the Issuer with certain conditions set forth therein, which
provisions apply to all Debt Obligations.


 


Section 11.
Authorized Form and Denominations. Unless otherwise set forth in
the applicable Pricing Supplement, Debt Obligations shall be issued in denominations
of $1,000 and any integral multiple of $1,000. Each Debt Obligation shall be
represented by this Master Note.


 


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, Debt Obligations may be exchanged for an
equal aggregate principal amount of Debt Obligations of like tenor and of other
authorized denominations, except that Debt Obligations in global form shall
not be exchangeable for Debt Obligations in definitive certificated form except
as provided below.


 


Section 12. Registration of Transfer.
If at any time the Depository notifies the Issuer 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 Issuer may appoint a successor
Depository. If (a) a successor depository for any Debt Obligations is not
appointed by the Issuer within 90 days after the Issuer receives such notice or
becomes aware of such ineligibility or (b) the Issuer in its sole
discretion decides to allow some or all Debt Obligations to be exchangeable for
definitive securities in registered form, the Issuer shall issue, and the
Trustee shall authenticate and deliver, Debt Obligations in definitive form in
an aggregate principal amount equal to the Principal Amount of each such Debt


 

















 


Obligation, registered in the name or names of the person or persons
specified by the Depository in a written instruction to the Security Registrar.


 


As provided in the Indenture and subject to
certain limitations as therein set forth, the transfer of a Debt Obligation is
registrable in the Security Register, upon surrender of such Debt Obligation
for registration of transfer, at the Corporate Trust Office or other office or
agency of the Issuer in a Place of Payment for such Debt Obligation, duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory
to the Issuer and the Security Registrar duly executed by, the Holder hereof or
the Holder’s attorney duly authorized in writing, and thereupon one or more new
Debt Obligations of this series of like tenor and of authorized
denominations and for the same aggregate principal amount, shall be issued to the
designated transferee or transferees.


 


No service
charge shall be made for any such registration of transfer or exchange, but the
Issuer 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 a Debt Obligation for registration of transfer, the Issuer, the
Trustee and any agent of the Issuer or of the Trustee may deem and treat
the person in whose name such Debt Obligation is registered as the absolute
owner hereof (whether or not such Debt Obligation shall be overdue and
notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment hereof, or on account hereof, and for all other
purposes, and neither the Issuer nor the Trustee nor any agent of the Issuer or
of the Trustee shall be affected by any notice to the contrary. All such
payments made to or upon the order of such registered holder shall, to the
extent of the sum or sums paid, effectually satisfy and discharge liability for
moneys payable on such Debt Obligation.


 


Section 13.
Events of Default. If an Event of Default with respect to this Master
Note shall occur and be continuing, the outstanding principal amount of this
Master Note may be declared due and payable in the manner and with the
effect provided in the Indenture. Upon payment (i) of the aggregate
applicable amounts of principal of this Master Note so declared due and payable
and (ii) of interest on any overdue principal and overdue interest (in each
case to the extent that the payment of such interest shall be legally
enforceable), all of the Issuer’s obligations in respect of the payment of the
principal of and interest, if any, on this Master Note shall terminate.


 


Section 14.
No Recourse Against Certain Persons. No recourse for the payment of the
principal of, or premium, if any, or interest on this Master Note or any Debt
Obligation, or for any claim based hereon or otherwise in respect hereof, and
no recourse under or upon any obligation, covenant or agreement of the Issuer
in the Indenture or any indenture supplemental thereto or in this Master Note
or any Debt Obligation, 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 Issuer or of any
successor corporation, either directly or through the Issuer 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 of each Debt Obligation and as part of
the consideration for the issue hereof and of each Debt Obligation, expressly
waived and released.


 


Section 15.
GOVERNING LAW. THIS MASTER NOTE AND THE DEBT OBLIGATIONS EVIDENCED BY IT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.


 

















 


LEHMAN NOTES, SERIES C


OPTION TO
ELECT REPAYMENT


 


The undersigned owner of the Debt Obligation
specified below hereby irrevocably elects to have the Issuer repay the
principal amount of such Debt Obligation or portion thereof below designated at
(i) the Optional Repayment Percentage multiplied by the principal amount
of such Debt Obligation to be repaid in respect of such principal amount plus
accrued interest to the Optional Repayment Date, if such Debt Obligation is to
be repaid pursuant to the Optional Repayment provision described in Section 6
of the Master Note Rider. Any such election is irrevocable.


 


	
  Dated:

  	
   

  	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
  Sign exactly as name appears on the front
  of this Debt

  Obligation [SIGNATURE GUARANTEED - required only if

  Debt Obligations are to be issued and delivered to other than

  the registered Holder]

  
	
   

  	
   

  
	
   

  	
   

  
	
  CUSIP No.:

  	
   

  	
   

  	
   

  
	
  Interest rate:

  	
   

  	
   

  	
   

  
	
  Maturity:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Principal Amount to be

  	
  Fill in for registration of

  
	
  repaid, if amount to be

  	
  Debt Obligations if to be issued otherwise

  
	
  repaid is less than the

  	
   

  	
  than to the registered Holder:

  
	
  Principal Amount of this

  	
   

  
	
  Debt Obligation (Principal Amount

  	
  Name:

  
	
  remaining must be an

  	
  Address:

  
	
  authorized denomination)

  	
   

  
	
   

  	
  (Please print name

  
	
  $

  	
   

  	
   

  	
  and address including

  
	
   

  	
  zip code)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SOCIAL SECURITY OR OTHER TAXPAYER

  
	
   

  	
  ID NUMBER