Exhibit 4.04


 


CUSIP
NO. 5252M0AG2


ISIN NO. US5252M0AG20


 


	
  REGISTERED

  	
   

  	
  PRINCIPAL
  AMOUNT: $368,000

  
	
  No. R-1

  	
   

  	
   

  



 


LEHMAN BROTHERS HOLDINGS INC.


 


MEDIUM-TERM NOTE, SERIES I


 


NOTES LINKED TO AN ASIAN CURRENCY BASKET
 DUE JUNE 1, 2009


 


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 June
1, 2009, or if such day is not a Business Day, on the next following Business
Day.


 


The “Valuation Date” is May 26, 2009; provided that, upon the
occurrence of a Disruption Event with respect to a Basket Currency, the
Valuation Date for the affected Basket Currency may be postponed (as described
in “Disruption Events” below).


 


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


 


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


 


The “Participation Rate” is 210%.


 


The “Basket” is the Indonesian Rupiah (IDR), the Indian Rupee (INR),
the Malaysian Ringgit (MYR) and the Singapore Dollar (SGD), each a “Basket
Currency” and collectively the “Basket Currencies”.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


2

















 


	
  Basket

  Currency

  	
   

  	
  Weighting

  	
   

  	
  Initial Spot

  Rate

  	
   

  
	
  MYR

  	
   

  	
  25

  	
  %

  	
  3.3536

  	
   

  
	
  IDR

  	
   

  	
  25

  	
  %

  	
  9367

  	
   

  
	
  INR

  	
   

  	
  25

  	
  %

  	
  39.68

  	
   

  
	
  SGD

  	
   

  	
  25

  	
  %

  	
  1.4415

  	
   

  



 


The “Reference Exchange Rates” are, for each Basket
Currency, the spot exchange rates for that Basket Currency quoted against the
U.S. dollar, expressed as the number of units of the Basket Currency per USD 1.


 


The “Issue Date” is November 30, 2007.


 


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


 


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


 


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


 


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


 


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


 


A “Disruption Event” means any of the following events with respect to a
Basket Currency, as determined in good faith by the Calculation Agent:


 


(A)                              the occurrence and/or existence of an event on any
day that has the effect of (x) preventing or making impossible the delivery of
USD from accounts inside the Basket Currency Jurisdiction for that Basket
Currency to accounts outside that Basket Currency Jurisdiction, or (y) for SGD
only, the conversion of the Reference Currency into USD through customary legal
channels;


 


3

















 


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


 


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


 


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


 


	
  Basket Currency

  	
   

  	
  Screen Reference

  	
   

  	
  Valuation Business Day

  	
   

  
	
  MYR

  	
   

  	
  ABSIRFIX01

  	
   

  	
  Singapore

  	
   

  
	
  IDR

  	
   

  	
  ABSIRFIX01

  	
   

  	
  Singapore

  	
   

  
	
  INR

  	
   

  	
  RBIB

  	
   

  	
  Mumbai

  	
   

  
	
  SGD

  	
   

  	
  ABSIRFIX01

  	
   

  	
  Singapore

  	
   

  



 


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


 


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


 


4

















 


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.


 


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.


 


5

















 


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:  November 30, 2007


 


	
  [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

  	
   

  



 


6

















 


[REVERSE OF NOTE]


 


LEHMAN BROTHERS HOLDINGS INC.


MEDIUM-TERM NOTES, SERIES I


NOTES LINKED TO AN ASIAN CURRENCY BASKET
 DUE JUNE 1, 2009


 


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, Notes Linked to an
Asian Currency Basket (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.