Exhibit 4.14


 


CUSIP NO.           


 


	
  REGISTERED

  	
  FACE AMOUNT:

  	
   

  
	
  No.   

  	
   

  	
   

  



 


If this Note
is an OID Note (as defined below) the following legend is applicable:


 


FOR PURPOSES
OF SECTIONS 1272, 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE OF
1986, AS AMENDED, THE ISSUE PRICE OF THIS NOTE IS      %
OF ITS PRINCIPAL AMOUNT, AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, THE YIELD
TO MATURITY COMPOUNDED              ,
AND THE ISSUE DATE ARE AS SET FORTH BELOW. IN THE CASE OF A NOTE SUBJECT TO THE
RULES OF TREASURY REGULATION SECTION 1.1275-4(b), THE COMPARABLE
YIELD AND PROJECTED PAYMENT SCHEDULE CAN BE OBTAINED BY SUBMITTING A
WRITTEN REQUEST TO: CONTROLLER’S OFFICE, LEHMAN BROTHERS HOLDINGS INC., 745
SEVENTH AVENUE, NEW YORK, NEW YORK 10019.


 


LEHMAN BROTHERS
HOLDINGS INC.

MEDIUM-TERM NOTE, SERIES I

(FLOATING RATE)


 


If the
registered owner of this Note (as indicated below) is The Depository Trust
Company (the “Depository”) or a nominee of the Depository, this Note is a Note
in global form (a “Global Security”) and the following legends are
applicable except as specified on the reverse hereof:


 


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 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,
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.


 


	
  ISSUE PRICE: $

  
	
   

  
	
  ISSUE DATE:

  
	
   

  
	
  MATURITY DATE:

  
	
   

  
	
  INTEREST RATE:

  
	
   

  
	
  INTEREST RATE
  BASIS:

  
	
   

  
	
  SPREAD:

  
	
   

  
	
  SPREAD
  MULTIPLIER:

  
	
   

  
	
  MAXIMUM
  INTEREST RATE:

  
	
   

  
	
  MINIMUM
  INTEREST RATE:

  
	
   

  
	
  INTEREST RESET
  DATES:

  
	
   

  
	
  INTEREST RESET
  PERIOD:

  
	
   

  
	
  INTEREST
  DETERMINATION DATES:

  
	
   

  
	
  INTEREST
  PAYMENT DATES:

  
	
   

  
	
  REGULAR RECORD
  DATES:

  
	
   

  
	
  EXCHANGE RATE
  AGENT:

  
	
   

  
	
  DEPOSITORY:

  
	
   

  
	
  DUAL CURRENCY
  NOTE:

  
	
  YES o  NO o

  
	
   

  
	
  OPTION
  ELECTION DATES:

  
	
   

  
	
  OPTIONAL
  PAYMENT CURRENCY:

  
	
   

  
	
  DESIGNATED
  EXCHANGE RATE:

  
	
   

  
	
  OTHER
  PROVISIONS:

  
	
   

  
	
  OPTION TO
  RECEIVE PAYMENTS IN

  
	
  THE SPECIFIED
  CURRENCY:

  
	
  YES o  NO o

  
	
   

  
	
  SPECIFIED
  CURRENCY:

  
	
   

  
	
  BUSINESS DAY:

  
	
   

  
	
  AMORTIZING
  NOTE:

  
	
  YES o  NO o

  
	
   

  
	
  SINKING FUND:

  
	
   

  
	
  OID NOTE:

  
	
  YES o  NO o

  
	
   

  
	
  AUTHORIZED
  DENOMINATIONS:

  
	
   

  
	
  EXTENSION OF
  MATURITY NOTE:

  
	
  YES o  NO o

  
	
   

  
	
  EXTENSION
  PERIOD:

  
	
   

  
	
  NUMBER OF
  EXTENSION PERIODS:

  
	
   

  
	
  OPTION TO ELECT
  REPAYMENT:

  
	
  YES o  NO o

  
	
   

  
	
  OPTIONAL
  REPAYMENT DATES:

  
	
   

  
	
  OPTIONAL
  REPAYMENT PRICES:

  
	
   

  
	
  OPTIONAL
  INTEREST RATE RESET:

  
	
  YES o  NO o

  
	
   

  
	
  OPTIONAL RESET
  DATES:

  
	
   

  
	
  OPTIONAL
  REDEMPTION:

  
	
  YES o  NO o

  
	
   

  
	
  INITIAL
  REDEMPTION DATE:

  
	
   

  
	
  INITIAL
  REDEMPTION PERCENTAGE:        %

  
	
   

  
	
  APPLICABILITY
  OF ANNUAL

  
	
  REDEMPTION
  PERCENTAGE

  
	
  REDUCTION:

  
	
  YES o  NO o

  
	
   

  
	
  If yes, state
  Annual Percentage Reduction:        %

  
	
   

  
	
  EXTENDIBLE
  NOTE:

  
	
  YES o  NO o

  
	
   

  
	
  INITIAL
  MATURITY DATE:

  
	
   

  
	
  SPECIAL
  ELECTION INTERVAL:

  
	
   

  
	
  SPECIAL
  ELECTION PERIOD:

  



 


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                          ,
or registered assigns, on the Maturity Date the Principal Amount hereof (as
defined below) and, if so specified above, to pay interest thereon from the
Issue Date specified above or from the most recent Interest Payment Date
specified above to which interest has been paid or duly provided for at the
rate per annum determined in accordance with the provisions on the reverse
hereof, depending on the Interest Rate Basis specified above, until the principal
hereof is paid or made available for payment and (to the extent that the
payment of such interest shall be legally enforceable) at such rate per annum
on any overdue principal and premium and on any overdue instalment of interest.
Unless otherwise specified above, and except as provided in Section 9 on
the reverse hereof if this Note is a Dual Currency Note (as hereinafter
defined), payments of principal, premium, if any, and interest hereon will be
made in U.S. dollars; if the Specified Currency set forth above is a currency
other than U.S. dollars (a “Foreign Currency”), such payments will be made in
U.S. dollars based on the equivalent of that Foreign Currency converted into
U.S. dollars in the manner set forth in Section 2 on the reverse hereof.
If the Specified Currency is a Foreign Currency and it is so provided above,
the Holder may elect to receive such payments in that Foreign Currency by
delivery of a written request to the Trustee (or to any duly appointed Paying
Agent) at the Corporate Trust Office (as defined below) not later than 10
calendar days prior to the applicable payment date, and such election will
remain in effect for the Holder until revoked by written notice to the Trustee
(or to any such Paying Agent) at the Corporate Trust Office received not later
than 10 calendar days prior to the applicable payment date; provided, however,


 


2

















 


no such
election or revocation may be made if, with respect to this Note, (i) an
Event of Default has occurred, (ii) the Company has exercised any
discharge or defeasance options or (iii) the Company has given a notice of
redemption. In the event the Holder makes any such election pursuant to the
preceding sentence, such election will not be effective on any transferee of
such Holder and such transferee shall be paid in U.S. dollars unless such
transferee makes an election pursuant to the preceding sentence; provided,
however, that such election, if in effect while funds are on deposit with the
Trustee to satisfy and discharge this Note, will be effective on any such
transferee unless otherwise specified above. The “Principal Amount” of this
Note at any time means (i) if this Note is an OID Note, the Amortized Face
Amount at such time as described in Section 8 on the reverse hereof and (ii) in
all other cases, the Face Amount hereof.


 


If this Note
is subject to an Annual Percentage Reduction as specified above, the Redemption
Price shall initially be the Initial Redemption Percentage of the Principal Amount
of this Note on the Initial Redemption Date and shall decline at each
anniversary of the Initial Redemption Date (each such date, a “Redemption Date”)
by the Annual Percentage Reduction of such Principal Amount until the
Redemption Price is 100% of such Principal Amount.


 


In the event
of any optional redemption by the Company, any repayment at the option of the
Holder, acceleration of the maturity of this Note or other prepayment of this
Note prior to the Maturity Date specified, the term “Maturity” when used herein
shall refer, where applicable, to the date of redemption, repayment,
acceleration or other prepayment of this Note.


 


Except as
provided in the following paragraph, the Company will pay interest on each
Interest Payment Date specified above, commencing with the first Interest
Payment Date next succeeding the Issue Date, and at Maturity; provided that 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 additional interest shall accrue as a result of such delayed payment up to,
but excluding, the date of Maturity, except that if this Note is a LIBOR Note
or a EURIBOR Note (as defined in Section 3 on the reverse hereof) and such
next succeeding Business Day falls in the next calendar month, such payment
shall be made on the preceding day that is a Business Day. The term “Business
Day” means any day, that is not a Saturday or Sunday, and that is not a day on
which banking institutions in New York City are generally authorized or
obligated by law or executive order to be closed; for LIBOR notes only,
is also a London Business Day; for notes having a specified currency other than
U.S. dollars only, other than notes denominated in Euros, is also not a day on
which banking institutions in the principal financial center (as defined below)
of the country of the specified currency generally are authorized or obligated
by law or executive order to close; and for EURIBOR notes, notes denominated in
Euros or LIBOR notes for which the index currency is Euros only, is also a Euro
business day. A principal financial center means the capital city of the
country issuing the specified currency. However, for U.S. dollars, Australian
dollars, Canadian dollars and Swiss francs, the principal financial center will
be New York City, Sydney, Toronto and Zurich, respectively. A “London Business
Day” means any day that is not a Saturday or Sunday and on which dealings in
deposits in U.S. dollars are transacted, or with respect to any future date are
expected to be transacted, in the London interbank market and a “Euro Business
Day” means any day that is not a Saturday or Sunday on which the Trans-European
Automated Real-Time Gross Settlement Express Transfer System is open. Unless


 


3

















 


otherwise
specified above, the interest payable on each Interest Payment Date or at
Maturity will be the amount of interest accrued from and including the Issue
Date or from and including the last Interest Payment Date to which interest has
been paid, as the case may be, to, but excluding, such Interest Payment
Date or the date of Maturity, as the case may be; provided, however, that
if interest on this Note is reset daily or weekly, interest payable on each
Interest Payment Date will be the amount of interest accrued from and including
the Issue Date or from and excluding the last date to which interest has been
paid, as the case may be, to, and including, the date 15 calendar days
prior to such Interest Payment Date (“Regular Record Date”) immediately
preceding such Interest Payment Date, except that at Maturity the interest
payable will include interest accrued to, but excluding, the date of Maturity.


 


Unless
otherwise specified above, the interest payable on any Interest Payment Date
will, as provided in the Indenture, be paid to the person in whose name this
Note (or one or more predecessor Notes) is registered at the close of business
on the Regular Record Date indicated above next preceding such Interest Payment
Date; provided 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 above, in the case of a Note 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.


 


Unless
otherwise indicated above, each Holder shall receive interest payments in
immediately available funds by check mailed to such Holder or by wire transfer,
but only if complete and appropriate instructions have been received in writing
by the Trustee (or any such Paying Agent) on or prior to the applicable Regular
Record Date. Simultaneously with any election by the Holder hereof to receive
payments in respect hereof in a Foreign Currency, such Holder may, if so
entitled (as provided above), elect to receive such payments in immediately
available funds by providing complete and appropriate instructions to the
Trustee (or any such Paying Agent), and all such payments will be made in
immediately available funds to an account maintained by the payee with a bank
located outside the United States or as otherwise provided above.


 


Unless
otherwise indicated above, and except as provided below if this Note is a
Global Security, payments of principal, premium, if any, and interest payable
at Maturity will be made in immediately available funds (unless otherwise
indicated above, payable to an account at a bank located outside the United
States if payable in a Foreign Currency) 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 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.


 


Unless
otherwise specified above, if this Note is a Global Security, payments of
interest hereon (other than at Maturity) will be made in same-day funds in
accordance with existing arrangements between the Trustee (or any duly
appointed Paying Agent) and the Depository. Unless otherwise specified above,
if this Note is a Global Security, any principal,


 


4

















 


premium and/or
interest payable hereon at Maturity will be paid by wire transfer in
immediately available funds to an account specified by the Depository (which
account, unless otherwise provided above, will be at a bank located outside the
United States if payable in a Foreign Currency).


 


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.


 


IN WITNESS
WHEREOF, Lehman Brothers Holdings Inc. has caused this instrument to be signed
by its Chairman of the Board, its President, 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:


 


[SEAL]


 


	
   

  	
  LEHMAN BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  [                    ]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
  Assistant Secretary

  	
   

  
					



 


5

















 


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

(Floating Rate)


 


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 (Floating Rate) of the Company (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 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.


 


Section 2. Currency Exchanges and
Payments. If the Holder elects to receive all or a portion of payments of
principal of, premium, if any, and interest on this Note, if denominated in a
Foreign Currency, in U.S. dollars, the Exchange Rate Agent specified on the
face hereof or a successor thereto (the “Exchange Rate Agent”) will convert
such payments into U.S. dollars. In the event of such an election, payment to
the Holder will be based upon the exchange rate as determined by the Exchange
Rate Agent based on the highest bid quotation in New York City received by such
Exchange Rate Agent at approximately 11:00 a.m., New York City time, on
the second Business Day preceding the applicable payment date from three
recognized foreign exchange dealers (one of which may be the Exchange Rate
Agent unless such Exchange Rate Agent is an affiliate of the Issuer) for the
purchase by the quoting dealer of the Foreign Currency for U.S. dollars for
settlement on such payment date in the amount of the Foreign Currency payable
in the absence of such an election to such Holder and at which the applicable
dealer commits to execute a contract. If such bid quotations are not available,
such payment will be made in the Foreign Currency. All currency exchange costs
will be borne by the holder of this Note by deductions from such payments.


 


Unless
otherwise specified on the face hereof, if payment hereon is required to be
made in a Foreign Currency and such currency is unavailable to the Company for
making payments thereof due to the imposition of exchange controls or other
circumstances beyond the Company’s control, or is no longer used by the
government of the country which issued such currency or for the settlement of
transactions by public institutions of or within the international banking
community, then the Company will be entitled to make payments with respect
hereto in U.S. dollars until such Foreign Currency is again available or so
used. The amount so payable on any date in such Foreign Currency shall be
converted into U.S. dollars at a rate determined by the Exchange Rate Agent on
the basis of the noon buying rate in New York City for cable


 


7

















 


transfers in
the Foreign Currency as certified for customs purposes by the Federal Reserve
Bank of New York (the “Market Exchange Rate”) for such Foreign Currency on the
second Business Day prior to such payment date, or on such other basis as may be
specified on the face hereof. In the event such Market Exchange Rate is not
then available, the Company will be entitled to make payments in U.S. dollars (i) if
such Foreign Currency is not a composite currency, on the basis of the most
recently available Market Exchange Rate for such Foreign Currency or (ii) if
such Foreign Currency is a composite currency in an amount determined by the
Exchange Rate Agent to be the sum of the results obtained by multiplying the
number of units of each component currency of such composite currency, as of
the most recent date on which such composite currency was used, by the Market Exchange
Rate for such component currency on the second Business Day prior to such
payment date (or if such Market Exchange Rate is not then available, by the
most recently available Market Exchange Rate for such component currency, or as
otherwise specified on the face hereof). Any payment in respect hereof made
under such circumstances in U.S. dollars will not constitute an Event of
Default under the Indenture.


 


If the
official unit of any component currency of a composite currency is altered by
way of combination or subdivision, the number of units of that currency as a
component shall be divided or multiplied in the same proportion. If two or more
component currencies are consolidated into a single currency, the amounts of
those currencies as components shall be replaced by an amount in such single
currency equal to the sum of the amounts of the consolidated component
currencies expressed in such single currency. If any component currency is
divided into two or more currencies, the amount of that original component
currency as a component shall be replaced by amounts of such two or more
currencies having an aggregate value on the date of division equal to the
amount of the former component currency immediately before such division.


 


In the event
of an official redenomination of the Specified Currency or the Optional Payment
Currency (including, without limitation, an official redenomination of any such
currency that is a composite currency), the obligations of the Company to make
payments in or with reference to such currency shall, in all cases, be deemed
immediately following such redenomination to be obligations to make payments in
or with reference to that amount of redenominated currency representing the
amount of such currency immediately before such redenomination. In no event
shall any adjustment be made to any amount payable hereunder as a result of any
redenomination of any component currency of any composite currency (unless such
composite currency is itself officially redenominated).


 


All
determinations referred to above made by the Exchange Rate Agent shall be at
its sole discretion (except to the extent expressly provided herein that any
determination is subject to approval by the Company) and, in the absence of
manifest error, shall be conclusive for all purposes and binding on the Holder
hereof, and the Exchange Rate Agent shall have no liability therefor.


 


All currency
exchange costs will be borne by the Holder hereof by deduction from the
payments made hereon.


 


Section 3. Determination of Interest
Rate. For the period from the Issue Date to the first Interest Reset Date
set forth on the face hereof, the interest rate hereon shall be the


 


8

















 


Initial Interest Rate specified on the face hereof. Thereafter, the
interest rate hereon will be reset on each Interest Reset Date; provided,
however, that the interest rate in effect for the two Business Days immediately
prior to Maturity will be that in effect on the second Business Day preceding
such Maturity. If any Interest Reset Date would otherwise be a day that is not
a Business Day, the Interest Reset Date shall be the next day that is a
Business Day. If this Note is a (1) LIBOR Note and an Interest Reset Date
would otherwise be a day that is not a London Business Day, the Interest Reset
Date shall be the next day that is a London Business Day or (2) EURIBOR
Note and an Interest Reset Date would otherwise be a day that is not a Euro
Business Day, the Interest Reset Date shall be the next day that is a Euro Business
Day; provided that, if this Note is a LIBOR Note or a EURIBOR Note and such
Business Day is in the next succeeding calendar month, the Interest Reset Date
shall be the immediately preceding London Business Day, in the case of a LIBOR
Note, or Euro Business Day, in the case of a EURIBOR Note. If this Note is a
Treasury Rate Note (as defined below) and an auction date for Treasury bills
shall fall on any Reset Date, then such Interest Reset Date shall instead be
the first Business Day immediately following such auction date. Subject to
applicable provisions of law and except as specified herein, on each Interest
Reset Date, the rate of interest on this Note on and after the first Interest
Reset Date shall be the rate determined in accordance with the provisions of
the heading below which has been designated as the Interest Rate Basis on the
face hereof plus or minus the Spread, if any, specified on the face hereof or
multiplied by the Spread Multiplier, if any, specified on the face hereof.


 


Commercial Paper
Rate Notes


 


If the
Interest Rate Basis is the Commercial Paper Rate, this Note is a “Commercial
Paper Rate Note.” A Commercial Paper Rate Note will bear interest at the
interest rate calculated with reference to the Commercial Paper Rate and the
Spread and/or Spread Multiplier and will be subject to the minimum interest
rate and the maximum interest rate, if any. Unless otherwise specified on the
face hereof, “Commercial Paper Rate” means, with respect to any Interest
Determination Date, the Money Market Yield (calculated as described below) of
the rate on that date for commercial paper having the applicable Index Maturity
as such rate is published in the publication entitled “Statistical Release
H.15(519), Selected Interest Rates,” or any successor publication, published by
the Board of Governors of the Federal Reserve System (“H.15(519)”) under the
heading “Commercial Paper—Nonfinancial”. If such rate is not published by 3:00 P.M.,
New York City time, on the Calculation Date (as defined below) pertaining to
such Interest Determination Date, then the Commercial Paper Rate shall be the
Money Market Yield of the rate on such Interest Determination Date for
commercial paper having the applicable Index Maturity as published in the daily
update of the Board of Governors of the Federal Reserve System at
http://www.federalreserve.gov/releases/H15/update, or any successor site or
publication (“H.15 Daily Update”) or another recognized electronic source used
for displaying this rate, under the heading “Commercial Paper—Nonfinancial”. If
such rate is not yet published in H.15(519), H.15 Daily Update or another
recognized electronic source by 3:00 P.M., New York City time, on such
Calculation Date, then the Commercial Paper Rate for such Interest
Determination Date shall be calculated by the Calculation Agent and shall be
the Money Market Yield of the arithmetic mean of the offered rates as of 11:00 A.M.
New York City time, on such Interest Determination Date of three leading
dealers of commercial paper in New York City selected by the Calculation Agent
after consultation with the Company for commercial paper having the applicable
Index Maturity, placed for industrial issuers whose bond


 


9

















 


rating is “AA”,
or the equivalent, from a nationally recognized securities rating agency;
provided, however, that if the dealers selected as aforesaid by the Calculation
Agent are not quoting as mentioned in this sentence, the Commercial Paper Rate
for the applicable period will be the Commercial Paper Rate in effect on such
Interest Determination Date. If there
was no Commercial Paper Rate in effect on such Interest Determination Date, the
Commercial Paper Rate will be the initial interest rate.


 


“Money Market
Yield” shall be a yield calculated in accordance with the following formula:


 


	
  Money Market
  Yield =

  	
   

  	
  D X 360

  	
   

  	
   x 100

  
	
   

  	
  360 – (D X
  M)

  	
   

  



 


where “D”
refers to the per annum rate for the commercial paper, quoted on a bank
discount basis expressed as a decimal; and “M” refers to the actual number of
days in the interest period for which interest is being calculated.


 


Federal Funds
(Effective) Rate Notes


 


If the
Interest Rate Basis is the Federal Funds (Effective) Rate, this Note is a “Federal
Funds (Effective) Rate Note.” A Federal Funds (Effective) Rate Note will bear
interest at the interest rate calculated with reference to the Federal Funds
(Effective) Rate and the Spread and/or Spread Multiplier and will be subject to
the minimum interest rate or the maximum interest rate, if any. Unless
otherwise specified on the face hereof, “Federal Funds (Effective) Rate” means,
with respect to any Interest Determination Date, the rate on that day for
Federal Funds as published in H.15(519) under the heading “Federal Funds
(Effective),” as displayed on Moneyline Telerate on page 120, or any
successor service or page (“Telerate Page 120”) or, if not so
published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the Federal Funds (Effective) Rate
will be the rate on such Interest Determination Date as published in the H.15
Daily Update, or another recognized electronic source used for displaying this
rate under the heading “Federal Funds (Effective).” If such rate is not yet
published in H.15(519), H.15 Daily Update, or another recognized electronic
source, by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Interest determination Date, then the Federal Funds
(Effective) Rate for such Interest Determination Date will be calculated by the
Calculation Agent and will be the arithmetic mean of the rates as of 11:00 A.M.,
New York City time, on such Interest Determination Date for the last
transactions in overnight Federal Funds arranged by three leading brokers of
Federal Funds transactions in New York City selected by the Calculation Agent
after consultation with the Company; provided, however, that if the brokers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Federal Funds (Effective) Rate for the applicable period
will be the Federal Funds Effective Rate in effect on such Interest
Determination Date. If there was no
Federal Funds (Effective) Rate in effect on such Interest Determination Date,
the Federal Funds (Effective) Rate will be the initial interest rate.


 


10

















 


Federal Funds
(Open) Rate Notes


 


If the
Interest Rate Basis is the Federal Funds (Open) Rate, this Note is a “Federal
Funds (Open) Rate Note.” A Federal Funds (Open) Rate Note will bear interest at
the interest rate calculated with reference to the Federal Funds (Open) Rate
and the Spread and/or Spread Multiplier and will be subject to the minimum
interest rate or the maximum interest rate, if any. Unless otherwise specified
on the face hereof, “Federal Funds (Open) Rate” means, with respect to any
Interest Determination Date, the rate on that day for Federal Funds as
published in H.15(519) under the heading “Federal Funds” and opposite the
caption “Open” as displayed on Moneyline Telerate on page 5, or any
successor service or page (“Telerate Page 5”), or, if not so
published by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the Federal Funds (Open) Rate
will be the rate on such Interest Determination Date as reported by Prebon
Yamane (or successor) on Bloomberg that appears on FEDSPREB Index (“FEDSREB”).
If such rate is not yet published in either Telerate Page 5 or FEDSPREB by
3:00 P.M., New York City time, on the Calculation Date pertaining to such
Interest determination Date, then the Federal Funds (Open) Rate for such
Interest Determination Date will be calculated by the Calculation Agent and
will be the arithmetic mean of the rates before 9:00 A.M., New York City
time, on such Interest Determination Date for the last transaction in overnight
Federal Funds arranged by three brokers of Federal Funds transactions in New
York City selected by the Calculation Agent after consultation with the
Company; provided, however, that if fewer than three brokers are selected as
mentioned in this sentence by the Calculation Agent, the Federal Funds (Open)
Rate for the applicable period will be the Federal Funds (Open) Rate in effect
on such Interest Determination Date. If
there was no Federal Funds (Open)
Rate in effect on such Interest Determination Date, the Federal Funds (Open) Rate will be the Federal Funds (Open) Rate will be the initial interest rate.


 


CD Rate Notes


 


If the
Interest Rate Basis is the CD Rate, this Note is a “CD Rate Note.” A CD Rate
Note will bear interest at the interest rate calculated with reference to the
CD Rate and the Spread and/or Spread Multiplier and will be subject to the
minimum interest rate or the maximum interest rate, if any. Unless otherwise
specified on the face hereof, “CD Rate” means, with respect to any Interest
Determination Date, the rate on such date for negotiable certificates of
deposit having the applicable Index Maturity as published in H.15(519) under
the heading “CDs (Secondary Market)” or, if not so published by 3:00 P.M.,
New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the CD Rate will be the rate on such Interest Determination
Date for negotiable certificates of deposit of the applicable Index Maturity as
published in the H.15 Daily Update, or another recognized electronic source
used for the purpose of displaying this rate, under the heading “CDs (Secondary
Market)”. If such rate is not yet published in H.15(519), the H.15 Daily Update
or another recognized electronic source by 3:00 P.M., New York City time,
on such Calculation Date, then the CD Rate for such Interest Determination Date
will be calculated by the Calculation Agent and will be the arithmetic mean of
the secondary market offered rates as of 10:00 A.M., New York City time,
on such Interest Determination Date, of three leading nonbank dealers in
negotiable U.S. dollar certificates of deposit in New York City selected by the
Calculation Agent after consultation with the Company for negotiable
certificates of deposit of major United States money center banks of the
highest credit standing (in the market for negotiable certificates of deposit)
with a remaining maturity


 


11

















 


closest to the
applicable Index Maturity in a denomination that is representative for a single
transaction in that market at that time; provided, however, that if the dealers
mentioned in this sentence by the Calculation Agent are not quoting as
mentioned in this sentence, the CD Rate for the applicable period will be the
CD Rate in effect on such Interest Determination Date. If there was no CD Rate in effect on such Interest Determination Date,
the CD Rate will be the initial interest rate.


 


LIBOR Notes


 


If the Interest
Rate Basis is LIBOR, this Note is a “LIBOR Note.” A LIBOR Note will bear
interest at the interest rate calculated with reference to LIBOR and the Spread
and/or Spread Multiplier and will be subject to the minimum interest rate and
maximum interest rate, if any. Unless otherwise indicated on the face hereof, “LIBOR”
means the rate determined by the Calculation Agent as follows:


 


(a)  With respect to an Interest
Determination Date, LIBOR will be, as specified on the face hereof, either (i) the
arithmetic mean of the offered rates for deposits in U.S. dollars or the
applicable Foreign Currency specified on the face hereof for the period
(commencing on the Interest Reset Date) of the applicable Index Maturity which
appears on the display designated as page “LIBO” on the Reuters Monitor
Money Rates Service, or any successor service or page for the purpose of
displaying London interbank offered rates of major banks (the “Reuters Screen
LIBO Page”), at approximately 11:00 A.M., London time, on such Interest
Determination Date, if at least two such offered rates appear on the Reuters
Screen LIBO Page (“LIBOR Reuters”)
(unless Reuters Screen LIBO Page by its terms provides only for a single
rate, in which case such single rate shall be used), or (ii) the offered rate
for deposits in U.S. dollars or the applicable Foreign Currency specified on
the face hereof for the period (commencing on the Interest Reset Date) of the
applicable Index Maturity which appears on Telerate Page 3750 (as defined
below), as applicable, at approximately 11:00 A.M., London time, on such
Interest Determination Date (“LIBOR Telerate”). If neither LIBOR Reuters nor
LIBOR Telerate is specified on the face hereof, LIBOR will be determined as if
LIBOR Telerate had been specified.


 


(b)  With respect to an Interest
Determination Date on which no rate appears on the Reuters Screen LIBO Page or
the Telerate Page 3750, as applicable, as specified in (a)(i) or (a)(ii) above,
as applicable, the Calculation Agent will request the principal London office
of each of four major banks in the London interbank market, as selected by the
Calculation Agent after consultation with the Company, to provide the
Calculation Agent with its offered quotation for deposits in the applicable
currency for the period (commencing on the Interest Reset Date) of the
applicable Index Maturity to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such Interest Determination Date
in a principal amount that is representative of a single transaction in such
market at such Interest Determination Date. If two or more quotations are
provided on such Interest Denomination Date, LIBOR in respect of such Interest
Determination Date will be the arithmetic mean of such quotations. If fewer
than two such quotations are provided, LIBOR in respect of such Interest
Determination Date will be the arithmetic mean of the rates quoted on such
Interest Determination Date by three leading European banks selected by the
Calculation Agent after consultation with the Company for loans in the
applicable currency to leading European banks, for the period (commencing on
the Interest Reset Date) of the applicable Index Maturity in a principal amount
that is representative of a


 


12

















 


single transaction in such market at such time, provided, however, that
if the European banks selected as aforesaid by the Calculation Agent are not
quoting as mentioned in this sentence, LIBOR for the applicable period will be
LIBOR as in effect on such Interest Determination Date. If
there was no LIBOR Rate in effect on such Interest Determination Date, the
LIBOR Rate will be the initial interest rate. If the specified index currency
on such Interest Determination Date is the U.S. dollar, the applicable
principal financial center will be New York City and the approximate time for
which quotes for loans in U.S. dollars would be requested from New York City
banks will be 3:00 p.m., New York City time.


 


The term “Telerate
Page 3750” means the display designated as page “3750” on the
Telerate Service, or such other service or services as may be nominated by
the British Bankers’ Association for the purpose of displaying London interbank
offered rates for deposits in U.S. Dollars, British Pounds Sterling, Swiss
Francs, Japanese Yen and Euros.


 


EURIBOR Notes


 


If the
Interest Rate Basis is EURIBOR, this Note is a “EURIBOR Note.” A EURIBOR Note
will bear interest at the interest rate calculated with reference to EURIBOR
and the Spread and/or Spread Multiplier and will be subject to the minimum
interest rate or maximum interest rate, if any. Unless otherwise indicated on
the face hereof, “EURIBOR” means the rate determined by the Calculation Agent
as follows:


 


(a)  With
respect to an Interest Determination Date, EURIBOR means the offered rate for
deposits in Euros (commencing on the Interest Reset Date) of the applicable
Index Maturity as sponsored, calculated and published jointly by the European
Banking Federation and ACI—the Financial Market Association or any company
established by them for purposes of establishing those rates having the Index
Maturity which appears on the Moneyline Telerate on page 248 or any
successor service use for the purpose of displaying this rate (“Telerate Page 248”)
on such Interest Determination Date (“EURIBOR Telerate”). If EURIBOR Telerate
is not specified on the face hereof, EURIBOR will be determined as if EURIBOR
Telerate had been specified.


 


(b)  If
such rate is not displayed on Telerate Page 248 as of 11:00 A.M.,
Brussels time, on the Calculation Date pertaining to such Interest
determination Date, then EURIBOR for such Interest Determination Date will be
determined on the basis of the rates, at approximately 11:00 A.M.,
Brussels time, at which Euro deposits having the relevant Index Maturity,
beginning on the relevant interest reset date, and in an amount representative
of a single transaction in Euros in such market are offered to prime banks in
the euro-zone interbank market by the principal London offices of each of four
major banks in that market selected by the Calculation Agent. The Calculation
Agent will request the principal euro-zone office of each of these banks
provide their offered quotations. If at least two quotations are provided,
EURIBOR for such Interest Determination Date will be the arithmetic mean of the
quotations as aforesaid. If fewer than two quotations are provided as aforesaid
by the Calculation Agent, EURIBOR in respect of such Interest Determination
Date will be the arithmetic mean of the rates quoted for the leading euro-zone
banks quoted at approximately 11:00 A.M., Brussels time on such Interest
Determination Date, by three major banks in the euro-zone selected by the
Calculation Agent for loans in Euros in a principal amount that is
representative of a single transaction in Euros in such


 


13

















 


market. If
fewer than three banks are selected as aforesaid by the Calculation Agent,
EURIBOR for the applicable period will be EURIBOR in effect on such Interest
Determination Date. If there was no
EURIBOR Rate in effect on such Interest Determination Date, the EURIBOR Rate
will be the initial interest rate.


 


Prime Rate
Notes


 


If the
Interest Rate Basis is the Prime Rate, this Note is a “Prime Rate Note.” A
Prime Rate Note will bear interest at the interest rate calculated with
reference to the Prime Rate and the Spread and/or Spread Multiplier and will be
subject to the minimum interest rate and the maximum interest rate, if any.
Unless otherwise specified on the face hereof, “Prime Rate” means, with respect
to any Interest Determination Date, the rate on that day as published in
H.15(519) under the heading “Bank Prime Loan” or, if not so published by 3:00 P.M.,
New York City time, on the Calculation Date pertaining to such Interest
Determination Date, the Prime Rate will be the rate on that day as published in
the H.15 Daily Update, or another recognized electronic source used for the
purpose of displaying this rate, under the heading “Bank Prime Loan.”  If
such rate is not yet published in H.15(519), the H.15 Daily Update or another
recognized electronic source by 3:00 P.M., New York City time, on the
Calculation Date pertaining to such Interest Determination Rate, the rate will
be determined by the Calculation Agent and will be the arithmetic mean
of the rates of interest publicly announced by each bank named on the display
designated on the Reuters Screen US PRIME1 Page as each such bank’s prime
rate or base lending rate for such Interest Determination Date, or such other page as
may replace such page on the service for the purpose of displaying
prime rates or base lending rates of major United States banks (the “US PRIME1
Page”), as such bank’s prime rate or base lending rate as in effect for such
Interest Determination Date. If fewer than four such rates but more than one
such rate appear on the US PRIME1 Page for such Interest Determination
Date, the Prime Rate will be determined by the Calculation Agent and will be
the arithmetic mean of the Prime Rates quoted on the basis of the actual number
of days in the year divided by 360 as of the close of business on such Interest
Determination Date by three major banks in New York City selected by the
Calculation Agent after consultation with the Company; provided, however, that
if the banks or trust companies selected as aforesaid are not quoting as
mentioned in this sentence, the Prime Rate for the applicable period will be
the Prime Rate in effect on such Interest Determination Date. If there was no Prime Rate in effect on such
Interest Determination Date, the Prime Rate will be the initial interest rate.


 


Treasury Rate
Notes


 


If the
Interest Rate Basis is the Treasury Rate, this Note is a “Treasury Rate Note.”
A Treasury Rate Note will bear interest at the interest rate calculated with
reference to the Treasury Rate and the Spread and/or Spread Multiplier and will
be subject to the minimum interest rate and the maximum interest rate, if any.
Unless otherwise specified on the face hereof “Treasury Rate” means, with respect
to any Interest Determination Date, the rate for the auction held on such
Interest Determination Date of U.S. Treasury Securities (“Treasury securities”)
having the applicable Index Maturity as it appears on the display on Moneyline
Telerate page 56 or 57, or any successor page or service, under the
heading “Investment Rate” or, if not so published by 3:00 P.M., New York
City time, on the Calculation Date pertaining to such Interest Determination
Date, the auction average rate for U.S. Treasury Securities (expressed as a
bond


 


14

















 


equivalent, on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) as otherwise announced by the United States Department of the Treasury.
In the event that the results of the auction of Treasury securities having the
applicable Index Maturity are not published or reported as provided by 3:00 P.M.,
New York City time, on such Calculation Date or if no such auction is held on
such Interest Determination Date, then the Treasury Rate shall be calculated by
the Calculation Agent and shall be the Index Maturity as published in H.15(519)
under the heading “U.S. Government Securities—Treasury Bills (Secondary Market)” or, if such rate is not yet published, in
H.15(519) by 3:00 P.M., New York City time, on the Calculation Date, then
the Treasury Rate shall be the Index Maturity as published in H.15 Daily
Update, or other recognized electronic source used for the purpose of
displaying such rate, under the caption “U.S. Government Securities—Treasury
Bills (Secondary Market).”  If
such Index Maturity is not published in H.15(519), H.15 Daily Update or another
recognized electronic source on the Calculation Date pertaining to such
Interest Determination Date, then the Treasury Rate shall be calculated by the
Calculation Agent and shall be the arithmetic mean of the secondary market bid
rates, as of approximately 3:30 P.M., New York City time, on such Interest
Determination Date, of three primary United States government securities
dealers selected by the Calculation Agent after consultation with the Company
for the issue of Treasury securities with a remaining maturity closest to the
applicable Index Maturity (expressed as
a bond equivalent, on the basis of a year of 365 or 366 days, as applicable,
and applied on a daily basis); provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Treasury Rate for the applicable period will be the Treasury
Rate in effect on such Interest Determination Date. If there was no Treasury Rate in effect on such Interest Determination
Date, the Treasury Rate will be the initial interest rate.


 


Constant
Maturity Treasury Rate Notes


 


If the
Interest Rate Basis is the Constant Maturity Treasury Rate, this Note is a “Constant
Maturity Treasury Rate Note.” A Constant Maturity Treasury Rate Note will bear
interest at the interest rate calculated with reference to the Constant
Maturity Treasury Rate (“CMT Rate”) and the Spread and/or Spread Multiplier and
will be subject to the minimum interest rate and the maximum interest rate, if
any. Unless otherwise specified on the face hereof CMT Rate means, with respect
to any Interest Determination Date, the rate for the applicable Index Maturity
specified under the caption “Treasury Constant Maturities” on the “Designated
Constant Maturity Treasury page” (as defined below) for (1) such Interest
Determination Date (if the Designated Constant Maturity Treasury page is
7051) or (2) the week, or the month, as set forth on the face hereof,
ended immediately preceding the week or month in which the applicable
Calculation Date pertaining to such Interest Determination Date occurs (if the
Constant Maturity Treasury is 7052). If the CMT Rate is not published as
described above by 3:00 P.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, then the CMT Rate shall be the
Treasury Constant Maturity rate as published in H.15(519). If such Treasury
Constant Maturity rate is not published in H.15(519) as provided by 3:00 P.M.,
New York City time, on such Calculation Date the CMT Rate will be the
Treasury Constant Maturity rate for the Index Maturity (or other United States
Treasury Rate for the specified Index Maturity) for such Interest Determination
Date published by either the Board of Governors of the Federal Reserve System
or the United States Department of the Treasury that the Calculation Agent
determines is comparable to the rate formerly displayed on the Designated
Constant Maturity Treasury page and published in the relevant H.15(519). If
the above information is not available by 3:00 P.M.,


 


15

















 


New York City
time, the CMT Rate will be calculated as a yield to maturity of the
arithmetic mean of the secondary market offer side prices as of approximately
3:30 p.m., New York City time, on such Interest Determination Date
reported, according to their written records, by three primary U.S. government securities
dealers in New York City (“Primary Dealers”). The three Primary Dealers will be
selected from five Primary Dealers selected by the Calculation Agent by
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest), for the most recently issued direct noncallable fixed rate U.S.
Treasury securities with an original maturity of approximately the specified
Index Maturity and a remaining term to maturity of not less than such specified
index maturity minus one year. If the Calculation Agent cannot obtain three
quotations as described above on the Calculation Date pertaining to such
Interest Determination Date, the
CMT Rate will be the yield to maturity based on the arithmetic mean of the
secondary market offer side prices as of approximately 3:30 p.m., New York
City time, on the applicable interest determination date of three Primary
Dealers selected as described above for U.S. treasury securities with an original
maturity of the number of years that is closest to but not less than the Index
Maturity and a remaining term to maturity closest to the Index Maturity and in
an amount of at least $100 million. If two of the aforesaid U.S. treasury
securities have remaining terms to maturity equally close to the Index
Maturity, the quotes for the U.S. Treasury security with the shorter remaining
term to maturity will be used on the Calculation Date pertaining to such
Interest Determination Date. If fewer than five but more than two Primary
Dealers are quoting as described above, then the CMT Rate will be based on the
arithmetic mean of the offer prices obtained and neither the highest nor lowest
of those quotes will be eliminated. If fewer than three primary dealers are
quoting as described above, then the CMT Rate for the new interest rate period
will be the same as that for the immediately preceding interest reset period. If there was no CMT Rate in effect on such
Interest Determination Date, the CMT Rate will be the initial interest rate.


 


“Designated Constant
Maturity Treasury page” means the display on Moneyline Telerate on the page designated on the face hereof, or any successor service
or page for the purpose of displaying Treasury Constant Maturities as
reported in H.15(519). If that page is not specified on the face hereof,
the designated Constant Maturity Treasury page will be 7052, for the most
recent week.


 


If no index maturity is
specified on the face
hereof, the index maturity will be 2 years.


 


Eleventh District Cost of Funds Rate Note


 


If the
Interest Rate Basis is the Eleventh District Cost of Funds Rate, this Note is
an “Eleventh District Cost of Funds Rate Note.” An Eleventh District Cost of
Funds Rate Note will bear interest at the interest rate calculated with
reference to the Eleventh District Cost of Funds Rate and the Spread and/or
Spread Multiplier and will be subject to the minimum interest rate or the
maximum interest rate, if any. Unless otherwise specified on the face hereof, “Eleventh
District Cost of Funds Rate” means, with respect to any Interest Determination
Date, the rate equal to the monthly weighted average cost of funds for
the calendar month preceding such Interest Determination Date as displayed
under the caption “Eleventh District” on Moneyline Telerate page 7058 or
any successor service or page, for the purpose of displaying the monthly
weighted average cost of funds paid by member institutions of the Eleventh
Federal


 


16

















 


Home Loan Bank District (“Telerate
Page 7058”) or, if not so published by 3:00 P.M., New York
City time, on the Calculation Date pertaining to such Interest Determination
Date, the Eleventh District Cost of Funds Rate will be such rate for the prior
Interest Reset Period. If there was no prior interest period, the Eleventh
District Cost of Funds Rate Index will be the initial interest rate.


 


The “Eleventh District Cost
of Funds Rate Index” will be the monthly weighted average cost of funds paid by
member institutions of the Eleventh Federal Home Loan Bank District that the
Federal Home Loan Bank of San Francisco most recently announced as the cost of
funds for the calendar month preceding the date of the announcement.


 


CMS Rate Note


 


If the Interest Rate Basis is the CMS Rate, this Note is a “CMS Rate
Note.” A CMS Rate Note will bear interest at the interest rate calculated with
reference to the CMS Rate and the Spread and/or Spread Multiplier and will be
subject to the minimum interest rate and the maximum interest rate, if any.
Unless otherwise specified on the face hereof, “CMS Rate “ means, with respect
to any Interest Determination Date, the rate that appears on Reuters Screen
ISDAFIX1 (“ISDAFIX1”) as of 11:00 a.m., New York city time, on the
Calculation Date pertaining to such Interest Determination Date. If such rate
is not published by 11:00 A.M., New York City time, on the Calculation
Date pertaining to such Interest Determination Date, then the CMS Rate shall be
the rate reported as if “USD-CMS-Reference Banks” was specified as the
applicable rate. “USD-CMS-Reference Banks” means, on any Interest Determination
Date, the rate determined on the basis of the mid-market semi-annual swap rate
quotations provided by the five leading swap dealers in the New York city interbank
market selected by the Calculation Agent in consultation with us for the
purposes of providing quotations as provided above at approximately 11:00 a.m.,
New York city time on such Interest Determination Date. The semi-annual swap
rate means the mean of the bid and offered rates for the semi-annual fixed leg,
calculated on a 30/360 day count basis, of a fixed-for-floating U.S. Dollar
interest rate swap transaction with a term equal to the designated maturity
commencing on that date and in an amount that is representative for a single
transaction in the relevant market at the relevant time with an acknowledged
dealer of good credit in the swap market, where the floating leg, calculated on
an actual/360 day count basis, is equivalent to USD-LIBOR-BBA with the
designated maturity specified in the applicable pricing supplement. The rate
for that date will be the arithmetic mean of the quotations, eliminating the
highest quotation (or, in the event of equality, one of the highest) and the
lowest quotation (or, in the event of equality, one of the lowest). If such
rate is not yet published on with “USD-CMS-Reference Banks” specified as
specified above or another recognized electronic source on such Calculation
Date, the CMS Rate for the applicable period will be the CMS Rate Rate in
effect on such Interest Determination Date. If there was no CMS Rate in effect
on such Interest Determination Date, the CMS Rate will be the initial interest
rate.


 


The term “Calculation
Date”, for an interest determination date, means the earlier of (1) the
tenth Business Day after the related Interest Determination Date, or if any
such day is not a Business day, the next Business Day and (2) the Business
Day preceding the applicable interest payment date or the stated maturity, unless
otherwise specified on the face hereof.


 


17

















 


Notwithstanding
the foregoing, the Interest rate hereof shall not be greater than the Maximum
Interest Rate, if any, or less than the Minimum Interest Rate, if any, shown on
the face hereof. The interest rate on this Note will in no event be higher than
the maximum rate permitted by New York law as the same may be modified by
United States law of general applicability.


 


The
Calculation Agent will, upon the request of the Holder of this Note, provide
the interest rate then in effect and, if determined, the interest rate which
will become effective as a result of a determination made on the most recent
Interest Determination Date with respect to this Note.


 


Unless otherwise
specified on the face hereof, the Interest Determination Date pertaining to an
Interest Reset Date will be (a) the day that is the Interest Reset Date
for a Federal Funds (Open) Rate Note (b) the first day preceding such
Interest Reset Date for a Prime Rate Note and Federal Funds (Effective) Rate
Note and (b) the second Business Day preceding such Interest Reset Date
for a Constant Maturity Treasury Rate Note, Commercial Paper Rate Note,
CD Rate Note and CMS Rate Note. Unless otherwise specified on the face hereof,
the Interest Determination Date relating to a particular Interest Reset Date
for an Eleventh District Cost of Funds Rate Note will be the last working day,
in the first calendar month before that interest reset date, on which the Federal
Home Loan Bank of San Francisco publishes the monthly average cost of funds
paid by member institutions of the Eleventh Federal Home Loan Bank District for
the second calendar month before that Interest Reset Date. Unless otherwise
specified on the face hereof, the Interest Determination Date pertaining to an
Interest Reset Date for a LIBOR Note will be the second London Business Day
preceding such Interest Reset Date, unless the index currency is pounds
sterling, in which case the Interest Determination Date pertaining to an
Interest Reset Date will be the day that is the Interest Reset Date. Unless
otherwise specified on the face hereof, the Interest Determination Date
pertaining to an Interest Reset Date for a EURIBOR Note will be the second Euro
Business Day preceding such Interest Reset Date. Unless otherwise specified on
the face hereof, the Interest Determination Date pertaining to an Interest
Reset Date for a Treasury Rate Note will be the day of the week in which such
Interest Reset Date falls on which Treasury bills of the applicable Index
Maturity would normally be auctioned. Treasury bills are usually sold at
auction on Monday of each week, unless that day is a legal holiday, in which
case the auction is usually held on the following Tuesday, except that such
auction may be held on the preceding Friday. If, as the result of a legal
holiday, an auction is so held on the preceding Friday, such Friday will be the
Interest Determination Date pertaining to the Interest Reset Date occurring in
the next succeeding week.


 


Accrued
interest from the Issue Date or from the last date to which interest has been
paid shall be calculated by multiplying the face amount of this Note by an
accrued interest factor. This accrued interest factor shall be computed by adding
the interest factors calculated for each day from the Issue Date or from the
last date to which interest has been paid, to the date for which accrued
interest is being calculated. The interest factor for each such day is computed
by dividing the interest rate applicable to such date by 360, in the case of
Commercial Paper Rate Notes, Federal Funds (Effective) Rate Notes, Federal
Funds (Open) Rate Notes, CD Rate Notes, LIBOR Notes, EURIBOR Notes, Prime Rate
Notes, Eleventh District Cost of Funds Rate Notes or CMS Rate Notes or by the
actual number of days in the year, in the case of Treasury Rate


 


18

















 


Notes. The
interest rate applicable to any day that is an Interest Reset Date is the
interest rate as determined, in accordance with the procedures set forth above,
with respect to the Interest Determination Date pertaining to such Interest
Reset Date. The interest rate applicable to any other day is the interest rate
for the immediately preceding Interest Reset Date (or, if none, the Initial
Interest Rate).


 


Unless
otherwise specified on the face hereof, all percentages resulting from any
calculation of the rate of interest on this Note will be rounded, if necessary,
to the nearest one hundred-thousandth of a percent (.0000001), with five
one-millionths of a percentage point rounded upward, and all currency amounts
used in or resulting from such calculation will be rounded to the nearest
one-hundredth of a unit (with five one-thousandths of a unit being rounded upwards).


 


Section 4. Redemption. If so
specified on the face hereof, the Company may at its option redeem this
Note in whole or from time to time in part on or after the date designated
as the Initial Redemption Date on the face hereof at either a price based on a
constant percentage of the Principal Amount of this Note as specified on the
face hereof or at prices declining from the premium specified on the face
hereof, if any, to 100% of the Principal Amount hereof, together, in each case,
with accrued interest to the Redemption Date. The Company 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. In the event of redemption of this Note in part only,
a new Note or Notes of this series for the unredeemed portion hereof shall
be issued in the name of the Holder hereof upon the cancellation hereof in
accordance with the terms of the Indenture. Unless otherwise specified on the
face hereof, if less than all of the Notes with like tenor and terms to this
Note are to be redeemed, the Notes to be redeemed shall be selected by the
Trustee by such method as the Trustee shall deem fair and appropriate.


 


Section 5. Sinking Funds and
Amortizing Notes. Unless otherwise specified on the face hereof this Note
will not be subject to any sinking fund.


 


Section 6. Optional Repayment. If
so specified on the face hereof, this Note will be repayable prior to the
Maturity Date at the option of the Holder on the Optional Repayment Dates
specified on the face hereof at the Optional Repayment Prices specified on the
face hereof, together with accrued interest to the applicable Optional
Repayment Date. Unless otherwise specified on the face hereof, in order for
this Note to be so repaid, the Company must receive, at least 30 but not more
than 45 days prior to an Optional Repayment Date, either (i) this Note
with the form below entitled “Option to Elect Repayment” duly completed or
(ii) a telegram, telex, facsimile transmission or letter from a member of
a national securities exchange or the National Association of Securities
Dealers, Inc. or a commercial bank or trust company in the United States
setting forth the name of the Holder hereof, the Face Amount hereof, the Face
Amount to be repaid, the certificate number hereof or a description of the
tenor and terms of this Note, a statement that the option to elect repayment is
being exercised thereby and a guarantee that this Note 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, facsimile transmission or letter and this Note and form duly
completed are received by the Paying Agent by such fifth Business Day. Exercise
of this repayment option shall be


 


19

















 


irrevocable, except as otherwise provided under Section 7 or Section 10.
The repayment option may be exercised by the Holder of this Note with
respect to less than the Face Amount then outstanding provided that the Face
Amount of the Note remaining outstanding after repayment is an authorized
denomination. Upon such partial repayment this Note shall be cancelled and a
new Note or Notes for the remaining Face Amount hereof shall be issued in the
name of the Holder of this Note.


 


Section 7. Optional Interest Reset or
Spread Multiplier Reset. If so specified on the face hereof, the Spread
and/or Spread Multiplier, if any, set forth on the face hereof may be
reset at the option of the Company, in the manner set forth below (unless
otherwise specified on the face hereof), on the Optional Reset Date or Optional
Reset Dates specified on the face hereof. The Company may exercise such option
by notifying the Trustee in writing of such exercise at least 45 but not more
than 60 days prior to an Optional Reset Date. Not later than five Business Days
after receipt thereof, the Trustee will mail by first-class mail to the
Holder of this Note a notice (the “Reset Notice”) setting forth (i) the
election of the Company to reset the Spread and/or Spread Multiplier, (ii) such
new Spread and/or Spread Multiplier and (iii) the provisions, if any, for
redemption during the period from such Optional Reset Date to the next Optional
Reset Date or, if there is no such next Optional Reset Date, to the Maturity
Date of this Note (each such period a “Subsequent Interest Period”), including
the date or dates on which or the period or periods during which and the price
or prices at which such redemption may occur during such Subsequent
Interest Period. The Reset Notice shall be substantially in the form of Exhibit A
to this Note. Upon the transmittal by the Trustee of a Reset Notice to the
Holder of this Note, such new Spread and/or Spread Multiplier shall take effect
automatically, and, except as modified by the Reset Notice and as described in
the next paragraph, this Note will have the same terms as prior to the
transmittal of such Reset Notice.


 


Notwithstanding
the foregoing, not later than 20 days prior to an Optional Reset Date, the
Company may, at its option, revoke the Spread or Spread Multiplier provided for
in the Reset Notice and establish the Spread and/or Spread Multiplier that is
higher than the interest rate provided for in the Reset Notice for the
Subsequent Interest Period commencing on such Optional Reset Date by causing
the Trustee to mail by first-class mail notice of such higher Spread or
Spread Multiplier to the Holder of this Note. Such notice shall be irrevocable
and shall be mailed by the Trustee within five Business Days after receipt
thereof. All Notes with respect to which the Spread and/or Spread Multiplier is
reset on an Optional Reset Date will bear such higher Spread and/or Spread Multiplier
for the Subsequent Interest Period.


 


If the Company
elects to reset the Spread and/or Spread Multiplier of this Note, the Holder of
this Note will have the option to elect repayment by the Company of this Note,
or any portion hereof, on any Optional Reset Date at a price calculated with
reference to the Face Amount hereof to be repaid, plus any interest accrued to,
such Optional Reset Date. In order to obtain repayment on an Optional Reset
Date, the Holder must follow the procedures set forth above in Section 6
for optional repayment except that the period for delivery or notification to
the Trustee shall be at least 25 but not more than 35 days prior to such
Optional Reset Date and except that, if the Holder has tendered this Note for
repayment pursuant to the Reset Notice, the Holder may, by written notice to
the Trustee, revoke such tender for repayment until the close of business on
the tenth day prior to such Optional Reset Date; provided, however, that if
such day is not a Business Day, then such notice may be given on the next
succeeding Business Day.


 


20

















 


Section 8. OID Notes. If this
Note is an OID Note, the amount payable in the event of redemption by the
Company, repayment at the option of the Holder or acceleration of Maturity
shall be the Amortized Face Amount of this Note as of the date of such
redemption, repayment or declaration of acceleration rather than the Face
Amount hereof. The “Amortized Face Amount” of this Note shall be the amount equal
to (a) the Issue Price (as set forth on the face hereof) plus (b) the
original issue discount amortized from the Issue Date to the date as of which
the Amortized Face Amount is calculated, which amortization shall be calculated
using the “interest method” (computed in accordance with generally accepted
accounting principles in effect on such date), but in no event shall the
Amortized Face Amount of this Note exceed the Face Amount.


 


Section 9. Dual Currency Notes. If
it is specified on the face hereof that this Note is a Dual Currency Note, the
Company has a one time option, exercisable on any one of the Option Election
Dates specified on the face hereof in whole, but not in part, with respect to
all Dual Currency Notes issued on the same day and having the same terms as
this Note (this “Tranche”), of thereafter making all payments of principal,
premium, if any, and interest (which payments would otherwise be made in the
Specified Currency of such Notes) in the Optional Payment Currency specified on
the face hereof. If the Company makes such an election, the amount of Optional
Payment Currency payable in respect hereof shall be determined by the Exchange
Rate Agent by converting the amount of Specified Currency that would otherwise
be payable into the Optional Payment Currency at the Designated Exchange Rate
specified on the face hereof.


 


The Company may exercise
such option by notifying the Trustee of such exercise on or prior to the Option
Election Date. The Trustee will mail by first-class mail to each holder of
a Note of this Tranche a notice of such election within five Business Days of
the Option Election Date which shall state (i) the first date, whether an
Interest Payment Date and/or the Maturity Date, on which scheduled payments in
the Optional Payment Currency will be made and (ii) the Designated
Exchange Rate. Any such notice by the Company, once given, may not be
withdrawn.


 


If this Note
is a Dual Currency Note, unless otherwise specified on the face hereof and
notwithstanding any prior election made by the Company, the amount payable
hereon in the event of any optional redemption by the Company, any repayment at
the option of the Holder, any acceleration of the Maturity of this Note or
other prepayment of this Note prior to the Maturity Date shall be an amount
equal to the Principal Amount hereof otherwise due and payable plus accrued
interest to but excluding the date of redemption, repayment, acceleration or
other prepayment minus the Total Option Value multiplied by a fraction, the
numerator of which is the Principal Amount hereof and the denominator of which
is the aggregate Principal Amount of all Dual Currency Notes of this Tranche. In
no event will such payment be less than zero. Notwithstanding any prior
election made by the Company, such payment shall be made in the Specified
Currency unless otherwise provided on the face hereof.


 


The term “Total
Option Value” means, with respect to any Dual Currency Note on any date, an
amount (calculated as of such date by the Option Value Calculation Agent) equal
to the sum of the Option Values (calculated as of such date by the Option Value
Calculation Agent) for all Interest Payment Dates occurring after the date of
calculation up to and including


 


21

















 


the Maturity
Date. The term “Option Value” means, with respect to an Interest Payment Date
or the Maturity Date, the amount calculated by the Option Value Calculation
Agent to be the arithmetic average of the prices quoted on the date of
calculation by three reference banks (which banks shall be selected by the
Option Value Calculation Agent and shall be reasonably acceptable to the
Company) for the right on the Option Election Date immediately preceding such
Interest Payment Date or Maturity Date to purchase for value on such Interest
Payment Date or Maturity Date from such reference banks (A) the aggregate
amount of the Specified Currency due on such Interest Payment Date or Maturity
Date with respect to all of the Dual Currency Notes of this Tranche in exchange
for (B) the amount of the Optional Payment Currency that would be received
if the amount in clause (A) were converted into the Optional Payment
Currency at the Designated Exchange Rate.


 


All
determinations referred to above made by the Exchange Rate Agent or the Option
Value Calculation Agent shall be at their sole discretion (except to the extent
expressly provided herein that any determination is subject to approval by the
Company) and, in the absence of manifest error, shall be conclusive for all purposes
and binding on the Holder hereof, and neither the Exchange Rate Agent nor the
Option Value Calculation Agent shall have any liability therefor.


 


Section 10. Extension of Maturity.
If it is specified on the face hereof that this Note is an Extension of
Maturity Note, the Company has the option to extend the Maturity Date hereof
for the number of Extension Periods set forth on the face hereof, each of which
Extension Periods shall be a period of from one to five whole years. Unless
otherwise specified on the face hereof, the following procedures shall apply if
this Note is an Extendible Note.


 


The Company may exercise
its option by notifying the Trustee of such exercise at least 45 but not more
than 60 days prior to the Maturity Date hereof in effect prior to the exercise
of such option (the “Original Stated Maturity”). Not later than five Business
Days after receipt thereof, the Trustee will mail to the Holder a notice (the “Extension
Notice”), first class, postage prepaid, setting forth (i) the election of
the Company to extend the Maturity Date, (ii) the new Maturity Date, (iii) the
Spread and/or Spread Multiplier applicable to the Extension Period and (iv) the
provisions, if any, for redemption during the Extension Period, including the
date on which or the period or periods during which and the price at which such
redemption may occur during the Extension Period. Upon the mailing by the
Trustee of an Extension Notice to the Holder, the Maturity Date hereof shall be
extended automatically, and, except as modified by the Extension Notice and as
described in the next paragraph, this Note will have the same terms as prior to
the mailing of such Extension Notice.


 


Notwithstanding
the foregoing, not later than 20 days prior to the Original Stated Maturity hereof,
the Company may, at its option, revoke the interest rate provided for in the
Extension Notice and establish a higher interest rate for the Extension Period
by causing the Trustee to mail notice of such higher interest rate, first
class, postage prepaid, to the Holder. Such notice shall be irrevocable and
shall be mailed by the Trustee within three Business Days after receipt thereof.
This Note will bear such higher interest rate for the Extension Period, whether
or not tendered for repayment.


 


22

















 


If the Company
extends the Maturity Date of this Note, the Holder will have the option to
elect repayment by the Company of this Note, or any portion hereof, on the
Original Stated Maturity at a price calculated with reference to the Face
Amount hereof to be repaid plus any accrued interest to such date. In order for
this Note to be so repaid on the Original Stated Maturity, the Holder must
follow the procedures set forth in Section 5 hereof for optional repayment,
except that the period for delivery of this Note or notification to the Trustee
shall be at least 25 but not more than 35 days prior to the Original Stated
Maturity and except that the Holder may, by written notice to the Trustee,
revoke any such tender for repayment until the close of business on the tenth
day prior to the Original Stated Maturity; provided, however, that if such day
is not a Business Day, then such notice may be given on the next
succeeding Business Day.


 


Section 11. Extendible Notes. If
it is specified on the face hereof that this Note is an Extendible Note, this
Note will mature on the Initial Maturity Date specified on the face hereof
unless the Maturity of all or any portion of this Note is extended in
accordance with the procedures described below.


 


On the
Interest Payment Date occurring in the sixth month (unless a different Special
Election Interval is specified on the face hereof) prior to the Initial
Maturity Date hereof (the “Initial Maturity Extension Date”) and on the Interest
Payment Date occurring in each sixth month (or the last month of each Special
Election Interval) after such Initial Maturity Extension Date (each, together
with the Initial Maturity Extension Date, a “Maturity Extension Date”), the
Maturity of this Note will be extended to the Interest Payment Date occurring
in the twelfth month (or, if a Special Election Interval is specified on the
face hereof, the last month in a period equal to twice the Special Election
Interval) after such Maturity Extension Date, unless the Holder elects to
terminate the automatic extension of the Maturity hereof or any portion hereof
as described below.


 


If the Holder
elects to terminate the automatic extension of the Maturity of any portion of
the principal amount of this Note during the specified period prior to any
Maturity Extension Date, such portion will become due and payable on the
Interest Payment Date occurring in the sixth month (or the last month in the
Special Election Interval) after such Maturity Extension Date (the “Extended
Maturity Date”).


 


The Holder may elect
to terminate the automatic extension of the Maturity of this Note, or if so
specified above, any portion hereof, by delivering a notice to such effect to
the Trustee (or any duly appointed Paying Agent) at the Corporate Trust Office
not less than 15 nor more than 30 days prior to such Maturity Extension Date
(unless another period is specified on the face hereof as the “Special Election
Period”). Such election will be irrevocable and will be binding upon each subsequent
Holder of this Note. An election to terminate the automatic extension of the
Maturity of this Note may be exercised with respect to less than the
entire Face Amount hereof only if so specified on the face hereof and only in
such Face Amount, or any integral multiple in excess thereof, as is specified
on the face hereof. Notwithstanding the foregoing, the Maturity of this Note
will not be extended beyond the Maturity Date specified on the face hereof.


 


23

















 


Unless
otherwise specified above, any such election to terminate will be effective
only if this Note, with the “Option to Elect Termination of Automatic Extension”
included herein duly executed, is presented to the Trustee (or any duly
appointed Paying Agent) simultaneously with notice of such election (or, in the
event notice of such election, together with a guarantee of delivery within
five Business Days, is transmitted on behalf of the Holder from a member of a
national securities exchange, the National Association of Securities Dealers, Inc.
or a commercial bank or trust company in the United States, within five
Business Days of the date of such notice). As soon as practicable following
receipt of this Note the Trustee (or any duly appointed Paying Agent) shall
issue in exchange herefor in the name of the Holder (i) a Note, in a face
amount equal to the face amount of this Note for which the election to
terminate the automatic extension of Maturity was exercised, with terms
identical to those specified herein (except for the Issue Date and the Initial
Interest Rate and except that such Note shall have a fixed, non- extendable
Maturity on the Extended Maturity Date) and (ii) if such election is made
with respect to less than the full Face Amount hereof, a replacement Renewable
Note, in a face amount equal to the Face Amount of this Note for which no
election was made, with terms identical to this Note.


 


Section 12. Principal Amount For
Indenture Purposes. For the purpose of determining whether Holders of the
requisite amount of Notes outstanding under the Indenture have made a demand,
given a notice or waiver or taken any other action, the outstanding principal
amount of this Note will be deemed to be the Principal Amount, provided,
however, if this Note is an OID Note, the outstanding principal amount of this
Note will be deemed to be the amount of the principal thereof that would be due
and payable as of the date of such determination upon a declaration of
acceleration of the maturity thereof.


 


Section 13. 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) extend 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 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 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


 


24

















 


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 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.


 


Section 14. 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 principal of, premium, if any, and
interest, if any, on this Note at the place, at the respective times, at the
rate, and in the coin or currency herein prescribed.


 


Section 15. 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 16. Authorized Form and
Denominations. The Notes of this series are issuable in registered
form, without coupons. Unless otherwise set forth on the face hereof, Notes
denominated in U.S. dollars will be issued in Face Amount denominations of U.S.
$100,000 and any integral multiple of U.S. $1,000 in excess thereof. Notes
denominated in a Foreign Currency will be issued in the denomination or
denominations set forth on the face hereof. Each Note will be issued initially
as either a Global Security or a Certificated Note, at the option of the
holders thereof, 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 Face Amount of Notes of this series of a different authorized
denomination, except that Global Securities will not be exchangeable for
Certificated Notes.


 


Section 17. 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 Face Amount, will be issued to the
designated transferee or transferees.


 


If this Note
is a Global Security and 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 Securities of
such series is not appointed by the Company within 90 days after the
Company receives such notice or becomes aware of such


 


25

















 


ineligibility,
the Company will issue, and the Trustee will authenticate and deliver, Notes in
definitive form in an aggregate Face Amount equal to the Face Amount
hereof.


 


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 18. Events of Default. If
an Event of Default with respect to Notes of this series shall occur and
be continuing, the principal of the Notes of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. In the event that this Note is an OID Note or a Dual Currency Note,
the amount of principal of this Note that becomes due and payable upon such
acceleration shall be equal to the amount calculated as set forth in Section 8
or Section 9, respectively, hereof. Upon payment (i) of the aggregate
applicable amounts of principal of the Notes of this series 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 Company’s obligations in respect of the
payment of the principal of and interest, if any, on the Notes of this series shall
terminate.


 


Section 19. No Recourse Against
Certain Persons. No recourse for the payment of the principal of, premium,
if any, or interest on this Note, 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 20. Defined Terms. All
terms used but not defined in this Note are used herein as defined in the
Indenture.


 


Section 21. GOVERNING LAW. THIS NOTE
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.


 


26

















 


OPTION TO
ELECT REPAYMENT


 


The
undersigned owner of this Note hereby irrevocably elects to have the Company repay
the Face Amount of this Note or portion hereof below designated at (i) the
Optional Repayment Percentage multiplied by the Principal Amount of this Note
to be repaid in respect of such Face Amount plus accrued interest to the
Optional Repayment Date, if this Note is to be repaid pursuant to the Optional
Repayment provision described in Section 6 hereof, or (ii) 100% of
the Principal Amount of this Note to be repaid in respect of such Face Amount
plus accrued interest to the Optional Reset Date, if this Note is to be repaid
pursuant to the Optional Interest Reset provision described in Section 7
hereof or the Extension of Maturity Notes provision described in Section 10
hereof. Any such election is irrevocable except as provided in Section 7
or Section 10 hereof.


 


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
  Sign exactly
  as name appears on the front of this

  Note [SIGNATURE GUARANTEED - required

  only if Notes are to be issued and delivered to other

  than the registered Holder]

  
	
   

  	
   

  	
   

  	
   

  
	
  Face Amount
  to be

  	
  Fill in for
  registration of repaid, if amount to be

  
	
  Notes if to
  be issued otherwise repaid is less than the                   than
  to the registered Holder: Face Amount of this

  
	
  Note (Face
  Amount

  	
  Name:

  	
   

  	
  remaining
  must be an

  
	
   

  	
  Address:

  	
   

  	
  authorized
  denomination)

  
	
   

  	
   

  
	
   

  
	
   

  	
   

  	
  (Please print
  name

  
	
  $

  	
   

  	
   

  	
   

  	
  and address
  including

  
	
   

  	
   

  	
   

  	
   

  	
  zip code)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  SOCIAL
  SECURITY OR OTHER TAXPAYER

  
	
   

  	
   

  	
   

  	
  ID NUMBER

  
	
   

  	
   

  	
   

  
																



 


27

















 


OPTION TO
ELECT TERMINATION OF AUTOMATIC EXTENSION


 


The
undersigned owner of this Note hereby irrevocably elects to terminate the
automatic extension of this Note or of the portion of the Face Amount of this
Note below designated. Any such election is irrevocable and will be binding on
any subsequent Holder hereof.


 


 


	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Signature

  
	
   

  	
   

  	
   

  	
  Sign exactly
  as name appears on the front of this

  Note [SIGNATURE GUARANTEED - required

  only if Notes are to be issued and delivered to other

  than the registered Holder]

  
	
   

  	
   

  	
   

  	
   

  
	
  Face Amount
  to be

  	
  Fill in for
  registration of terminated, if amount to be

  
	
  Notes if to
  be issued otherwise terminated is less than the
                    than
  to the registered Holder:

  
	
  Face Amount
  of this

  
	
  Note (such
  Face Amount

  	
  Name:

  	
   

  	
  must be an
  authorized

  
	
  Address:

  	
   

  	
  denomination)

  
	
   

  	
   

  
	
   

  
	
   

  	
   

  	
  (Please
  print name

  
	
  $

  	
   

  	
   

  	
   

  	
  and address
  including

  
	
   

  	
   

  	
   

  	
   

  	
  zip code)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  SOCIAL
  SECURITY OR OTHER TAXPAYER

  
	
   

  	
   

  	
   

  	
  ID NUMBER

  
	
   

  	
   

  	
   

  
															



 


28

















 


ABBREVIATIONS


 


The following
abbreviations, when used in the inscription on the face of this instrument,
shall be construed as though they were written out in full according to
applicable laws or regulations:


 


	
   

  	
  TEN COM

  	
  -

  	
   

  	
  as tenants in common 

  
	
   

  	
  TEN ENT

  	
  -

  	
   

  	
  as tenant by the entireties 

  
	
   

  	
  JT TEN

  	
  -

  	
   

  	
  as joint tenants with right of survivorship and not as tenants in
  common 

  
	
   

  	
  UNIF GIFT

  	
   

  	
   

  	
   

  
	
   

  	
  MIN ACT

  	
  -

  	
   

  	
              Custodian                

  	
   

  
	
   

  	
  MIN ACT

  	
   

  	
   

  	
  (Cust)                      (Minor)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Under Uniform Gifts to 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Minors Act

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (State)

  	
   

  
							



 


Additional
abbreviations may also be used though not in the above list.


 




	
   

  	
  FOR VALUE RECEIVED, the undersigned

  
	
   

  	
  hereby sell(s), assign(s) and transfer(s) unto

  






 


PLEASE INSERT
SOCIAL SECURITY OR OTHER

IDENTIFYING NUMBER OF ASSIGNEE


 


                                                                                                         
Please print or type name and address, including zip code of assignee


 


                                                                                                         
the within Note of LEHMAN BROTHERS HOLDINGS INC. and all rights thereunder and
does hereby irrevocably constitute and appoint


 


                                                                                             Attorney
to transfer the said Note on the books of the within-named Company, with full
power of substitution in the premises.


 


	
  Dated:

  	
   

  	
   

  
	
   

  	
   

  
	
  SIGNATURE
  GUARANTEED:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NOTICE: The
  signature to this

  
	
   

  	
  assignment
  must correspond with the

  
	
   

  	
  name as it
  appears upon the face of

  
	
   

  	
  the within
  Note in every particular,

  
	
   

  	
  without
  alteration or enlargement or

  
	
   

  	
  any change
  whatsoever.

  
					



 


29

















 


EXHIBIT A


 


RESET NOTICE


 


LEHMAN
BROTHERS HOLDINGS INC.

Medium-Term Notes, Series I

(Floating Rate)

CUSIP No.           

Registered Nos.    -    


 


LEHMAN
BROTHERS HOLDINGS INC., a corporation duly organized and existing under the
laws of the State of Delaware (the “Company”), is the issuer of the
above-referenced Notes (the “Notes”). Capitalized terms used herein and not
defined are used as defined in the Notes.


 


The Company
hereby elects to reset the [Spread] [Spread Multiplier] set forth on the face
of the Notes. On and after                            (1),
the [Spread] [Spread Multiplier] shall be                              .


 


Each Holder of
a Note has the option to elect repayment by the Company of such Note, or any
portion thereof, on any Optional Reset Date pursuant to the terms of such Note.
The Notes may be repaid on the dates and at the prices set forth below:


 


	
  Date

  	
   

  	
  Redemption Price

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  



 


IN WITNESS
WHEREOF, Lehman Brothers Holdings Inc. has caused this Reset Notice 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 and to be
attested by its Secretary or one of its Assistant Secretaries.


 


	
  Dated:

  	
  LEHMAN
  BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   Title:

  
						



 






(1)          Insert applicable
Optional Reset Date.