Exhibit 4.05


 


CUSIP NO. 5252M0DA2


ISIN NO. US5252M0DA23


 


	
  REGISTERED

  	
  PRINCIPAL AMOUNT: $2,223,000

  
	
  No. R-1

  	
   

  



 


LEHMAN BROTHERS HOLDINGS
INC.


 


MEDIUM-TERM NOTE, SERIES
I


 


FX
BASKET-LINKED NOTE


DUE
FEBRUARY 28, 2011


 


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


 


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


 

















 


LEHMAN BROTHERS HOLDINGS
INC., a corporation duly organized and existing under the laws of the State of
Delaware (herein called the “Company,” which term includes any successor
corporation under the Indenture referred to on the reverse hereof), for value
received, hereby promises to pay to CEDE & Co., or registered assigns,
on the Maturity Date, an amount
equal to the Redemption Amount.


 


The
“Maturity Date” is February 28, 2011, or if such day is not a Business
Day, on the next following Business Day.


 


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


 


The “Additional Amount”
is a single U.S. dollar amount equal to the principal amount of the notes
multiplied by the product of the Upside Leverage times the Basket Return, if
the Basket Return is greater than zero, and the Downside Return Rate times the
product of -1 times the Basket Return, if the Basket Return is less than or
equal to zero; provided that the minimum Additional Amount payable on the notes
shall be zero.


 


The “Upsize Leverage” is
100%.


 


The “Downside Return Rate”
is 60%.


 


The “Reference Currencies”
are the Brazilian Real (BRL), Russian Ruble (RUB), Indian Rupee (INR), Chinese
Renminbi (CNY) and South Korean Won (KRW).


 


The “Basket Return”
equals the sum of the Weighted Currency Returns for each Reference Currency.


 


The “Weighted Currency Return”
is, for each Reference
Currency, the product of the Weighting for such Reference Currency times a
quotient, the numerator of which is the difference of the Initial Reference
Currency Rate for such Reference Currency minus the Settlement Rate for such
Reference Currency and the denominator of which is the Initial Reference
Currency Rate for such Reference Currency.


 


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


 


	
  Reference Currency

  	
   

  	
  Weighting

  	
   

  	
  Initial Reference 

  Currency Rate

  	
   

  
	
  BRL

  	
   

  	
  20

  	
  %

  	
  1.6882

  	
   

  
	
  RUB

  	
   

  	
  20

  	
  %

  	
  24.4305

  	
   

  
	
  INR

  	
   

  	
  20

  	
  %

  	
  39.91

  	
   

  
	
  CNY

  	
   

  	
  20

  	
  %

  	
  7.1505

  	
   

  
	
  KRW

  	
   

  	
  20

  	
  %

  	
  947.40

  	
   

  



 


The
“Settlement Rate” for each Reference Currency is the Reference Exchange Rate on
the Valuation Date, determined in accordance with the applicable Settlement
Rate Option (subject to the occurrence of a Disruption Event).


 


2

















 


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


 


The “Valuation Date” is February 23,
2011; provided that, upon the occurrence of a Disruption Event with respect to
a Reference Currency, the Valuation Date for the affected Reference Currency
may be postponed (as described in “Disruption Events” below).


 


The “Issue Date” is February 29,
2008.


 


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


 


·                                          for each Reference Currency that did not
suffer a Disruption Event on the scheduled Valuation Date, the Settlement Rate
on the scheduled Valuation Date, and


 


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


 


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


 


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


 


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


 


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


 


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


 


(C)                                the Settlement Rate
being unavailable for the Reference Currency, or the occurrence of an event (i) in
the Reference Currency Jurisdiction for that Reference Currency that materially
disrupts the market for the Reference 


 


3

















 


Currency or (ii) that
generally makes it impossible to obtain the Settlement Rate for the Reference
Currency, on the Valuation Date.


 


A “Valuation Business Day”
means, with respect to each Reference Currency, any day, other than a Saturday
or Sunday, that is neither a legal holiday nor a day on which commercial banks
are authorized or required by law, regulation or executive order to close
(including for dealings in foreign exchange in accordance with the practice of
the foreign exchange market) in the city or jurisdiction indicated in the table
below:


 


	
  Reference Currency

  	
   

  	
  Screen Reference

  	
   

  	
  Valuation Business Day

  	
   

  
	
  BRL

  	
   

  	
  BRFR

  	
   

  	
  Brazilia, Rio de
  Janiero or São Paulo

  	
   

  
	
  RUB

  	
   

  	
  EMTA

  	
   

  	
  Moscow

  	
   

  
	
  INR

  	
   

  	
  RBIB

  	
   

  	
  Mumbai

  	
   

  
	
  CNY

  	
   

  	
  SAEC

  	
   

  	
  Beijing

  	
   

  
	
  KRW

  	
   

  	
  KFTC18

  	
   

  	
  Seoul

  	
   

  



 


The “Settlement Rate
Option” for the BRL is the Brazilian Real/U.S. dollar offered rate for U.S.
dollars, expressed as the amount of Brazilian Reals per one U.S. dollar, for
settlement in two Business Days reported by the Banco Central do Brasil on
SISBACEN Data System under transaction code PTAX-800 (“Consulta de Cambio” or
Exchange Rate Inquiry), Option 5 ( “Cotacoes para Contabilidade” or Rates for
Accounting Purposes), which appears on Reuters Screen BRFR Page under the
caption “Dolar PTAX” at approximately 6:30 pm Sao Paolo time on the Valuation
Date or such other relevant date.  The Settlement Rate Option for
the RUB is the Russian Ruble/U.S. Dollar Specified Rate, expressed as the
amount of Russian Rubles per one U.S. Dollar, for settlement in one Business
Day, calculated by the Chicago Mercantile Exchange (“CME”) and as published on
CME’s website, which appears on the Reuters Screen EMTA Page, at approximately
1:30 p.m., Moscow time, on the Valuation Date or such other relevant
date.  The Settlement Rate Option for the
INR is the Indian Rupee/U.S. dollar reference rate, expressed as the amount of
Indian Rupee per one U.S. dollar, for settlement in two Business Days reported
by the Reserve Bank of India which appears on the Reuters Screen RBIB Page at
approximately 2:30 p.m., Mumbai time, or as soon thereafter as practicable
on the on the Valuation Date or such other relevant date.  The
Settlement Rate Option for the CNY is the Chinese Renminbi/U.S. dollar official
fixing rate, expressed as the amount of Chinese Renminbi per one U.S. dollar,
for settlement in two Business Days reported by The State Administration of
Foreign Exchange of the People’s Republic of China, Beijing, which appears on
the Reuters Screen SAEC Page opposite the symbol “USDCNY=“ at
approximately 5:00 p.m., Beijing time, on the Valuation Date or other such
relevant date.  The Settlement Rate
Option for the KRW is the South Korean Won/U.S. Dollar market average Seoul
rate, expressed as the amount of South Korean Won per one U.S. Dollar, for
settlement in two Business Days reported by the Korea Financial
Telecommunications and Clearing Corporation which appears on the Reuters Screen
KFTC18 Page to the right of the caption “USD Today” that is available at
approximately 5:30 p.m., Seoul time, on the Valuation Date or as soon
thereafter as practicable, but in no event later than 9:00 a.m., Seoul
time, on the first Business Day following the relevant Valuation Date.


 


4

















 


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


 


The
“Fallback Rate Observation Methodology” means that the reference
exchange rate, Settlement Rate or other rate, as specified in the applicable
pricing supplement, in respect of a reference currency will equal the noon
buying rate in New York for cable transfers in foreign currencies as announced
by the Federal Reserve Bank of New York for customs purposes (the “Noon Buying
Rate”) on the relevant Valuation Date or such other date specified in the
applicable pricing supplement. If the Noon Buying Rate is not announced on that
date, the Reference Exchange Rate, Settlement Rate or other rate for such
Reference Currency will be calculated on the basis of the arithmetic mean of
the applicable spot quotations received by the Calculation Agent at
approximately 10:00 a.m., New York City time, on the Valuation Business
Day next succeeding the Valuation Date or such other date specified in the
applicable pricing supplement, for the purchase or sale for deposits in the
reference currency by the New York offices of three leading banks engaged in
the interbank market (selected in the sole discretion of the Calculation Agent)
(the “Reference Banks”). If fewer than three Reference Banks provide spot
quotations, then the Reference Exchange Rate, Settlement Rate or other rate, as
applicable, will be calculated on the basis of the arithmetic mean of the
applicable spot quotations received by the Calculation Agent at approximately
10:00 a.m., New York City time, on the relevant date from two Reference
Banks (selected in the sole discretion of the Calculation Agent), for the
purchase or sale for deposits in the Reference Currency. If these spot
quotations are available from only one Reference Bank, then the Calculation
Agent, in its sole discretion, will determine whether that quotation is
reasonable to be used. If no spot quotation is available, then the Reference
Exchange Rate, Settlement Rate or other rate, as applicable, for such Reference
Currency will be determined by the Calculation Agent in good faith and in a
commercially reasonable manner.


 


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


 


The “Calculation Agent”
means Lehman Brothers Inc.


 


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


 


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


 


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


 


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


 


5

















 


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


 


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


 


6

















 


IN WITNESS WHEREOF,
Lehman Brothers Holdings Inc. has caused this instrument to be signed by its
Chairman of the Board, its President, its Vice Chairman, its Chief Financial
Officer, one of its Vice Presidents or its Treasurer, by manual or facsimile
signature under its corporate seal, attested by its Secretary or one of its
Assistant Secretaries by manual or facsimile signature.


 


	
  Dated:  February 29,
  2008

  	
   

  



 


	
  [SEAL]

  	
  LEHMAN BROTHERS HOLDINGS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Andrew Yeung

  
	
   

  	
   

  	
  Title:   Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  
	
   

  	
   

  	
  Name: Cindy Buckholz

  
	
   

  	
   

  	
  Title:   Assistant
  Secretary

  



 


 


TRUSTEE’S CERTIFICATE OF
AUTHENTICATION


 


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


 


	
  CITIBANK, N.A.

  	
   

  	
   

  
	
    as Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
  Authorized Officer

  	
   

  	
   

  	
   

  	 

							



 


7

















 


[REVERSE OF NOTE]


 


LEHMAN BROTHERS HOLDINGS
INC.


MEDIUM-TERM NOTES, SERIES
I


FX
BASKET-LINKED NOTE
 DUE FEBRUARY 28, 2011


 


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


 


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


 


Section 3.  Modification and Waivers.  The Indenture contains provisions permitting
the Company and the Trustee, with the consent of the Holders of not less than
66-2/3% in aggregate principal amount of each series of the Securities at the
time Outstanding to be affected, evidenced as in the Indenture provided, to
execute supplemental indentures adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the holders of
the Securities of all such series; provided, however, that no such supplemental
indenture shall, among other things, (i) change the fixed maturity of any
Security, or reduce the Additional Amount or the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon or reduce any
premium or other amount payable on redemption, or make the Additional Amount or
the principal amount thereof, premium or other amount payable, if any, or
interest thereon payable in any coin or currency other than that herein above
provided, without the consent of the Holder of each Security so affected, or (ii) change
the place of payment on any Security, or impair the right to institute suit for
payment on any Security, or reduce the aforesaid percentage of Securities, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of each Security so affected.  It is also provided in the Indenture that,
prior to any declaration accelerating the maturity of any series of Securities,
the holders of a majority in aggregate principal amount of the Securities of
such series 


 

















 


Outstanding may on behalf of the holders of all the Securities of such
series waive any past default or Event of Default under the Indenture with
respect to such series and its consequences, except a default in the payment of
interest, if any, on the Additional Amount or the principal amount, or premium,
if any, on any of the Securities of such series, or in the payment of any
sinking fund installment or analogous obligation with respect to Securities of
such series.  Any such consent or waiver
by the Holder of this Note shall be conclusive and binding upon such Holder and
upon all future holders and owners of this Note and any Notes of this series
which may be issued in exchange or substitution herefor, irrespective of
whether or not any notation thereof is made upon this Note or such other Notes
of this series.


 


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


 


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


 


Section 6.  Authorized Form and Denominations.  The Notes of this series are issuable in registered
form, without coupons.  Each Note will be
issued initially as either a Global Security or a Certificated Note, at the
option of the Company, in denominations of $1,000 or whole multiples of $1,000,
either at the office or agency to be designated and maintained by the Company
for such purpose in the Borough of Manhattan, New York City, pursuant to the
provisions of the Indenture or at any of such other offices or agencies as may
be designated and maintained by the Company for such purpose pursuant to the
provisions of the Indenture, and in the manner and subject to the limitations
provided in the Indenture, but without the payment of any service charge,
except for any tax or other governmental charges imposed in connection
therewith.  Notes of this series are
exchangeable for a like aggregate principal amount of Notes of this series of a
different authorized denomination, except that Global Securities will not be
exchangeable for Certificated Notes of this series.


 


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


 


If at any time the
Depository notifies the Company that it is unwilling or unable to continue as
Depository or if at any time the Depository shall no longer be eligible under
the Indenture, the Company shall appoint a successor Depository.  If a successor Depository for the Notes of
this series is not appointed by the Company within 90 days after the Company
receives 


 

















 


such notice or becomes aware of such ineligibility, the Company will
issue, and the Trustee will authenticate and deliver, Notes of this series in
definitive form in an aggregate principal amount equal to the principal amount
of this Note.


 


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


 


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


 


Section 8.  Events of Default.  If an Event of Default with respect to Notes
of this series shall occur and be continuing, the amount that may be declared
due and payable upon any acceleration of the notes will be determined by the
Calculation Agent for the period from and including the Issue Date to but
excluding the date of early repayment and will equal, for each note, the
Redemption Amount, calculated as the date of early repayment were the Maturity
Date. If a bankruptcy proceeding is commenced in respect of Lehman Brothers
Holdings, the claim of the beneficial owner of a note for the period from and
including the Issue Date to but excluding the date of early repayment will be
capped at the Redemption Amount, calculated as though the date of the
commencement of the proceeding were the Maturity Date.


 


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


 


Section 10.  Defined
Terms.  All terms used but not
defined in this Note are used herein as defined in the Indenture.


 


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