Exhibit
4.03


CUSIP
NO. 52517PV24


ISIN NO. US52517PV244


	
  REGISTERED

  	
   

  	
  PRINCIPAL AMOUNT: $500,000

  
	
  No. R-1

  	
   

  	
   

  



 


LEHMAN BROTHERS HOLDINGS INC.


MEDIUM-TERM NOTE, SERIES I


FX MULTI-RANGE NOTE
 DUE OCTOBER 2, 2007


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 October 2, 2007, 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:


(A)                              6.25%, if, at all
times during the Observation Period, the Continuously Observed Exchange Rate
trades strictly within the Initial Range;


(B)                                6.25%, if (a) at
any time during the Observation Period the Continuously Observed Exchange Rate
trades at or below the Initial Range Lower Barrier (provided that the
Continuously Observed Exchange Rate has not previously traded at or above the Initial
Range’s Upper Barrier) but (b) during the remainder of the Observation Period,
the Continuously Observed Exchange Rate trades strictly within the Adjusted Low
Range;


(C)                                6.25%, if (a) at
any time during the Observation Period the Continuously Observed Exchange Rate
trades at or above the Initial Range Upper Barrier (provided that the
Continuously Observed Exchange Rate has not previously traded at or below the
Initial Range Lower Barrier) but (b) during the remainder of the Observation
Period, the Continuously Observed Exchange Rate trades strictly within the
Adjusted High Range; OR


(D)                               0%, if at any point
during the Observation Period, the Continuously Observed Exchange Rate trades
outside the Initial Range and then subsequently trades, as applicable, outside
the Adjusted Low Range (or on either the Adjusted Low Range Upper Barrier or
Adjusted Low Range Lower Barrier) or the Adjusted High Range (or on either the
Adjusted High Range Upper Barrier or Adjusted High Range Lower Barrier).


The “Start
Date” is March 27, 2007.


The “End
Date” is September 27, 2007.


The “Observation Period” is from and including 10:00 a.m. EST on the
Start Date to but excluding 10:00 a.m. EST on the End Date.


The “Continuously Observed Exchange Rate” is, at any time on any day during
the Observation Period, the most recent traded Reference Exchange Rate observed
on the 













 


continuous
trading EBS (Electronic Broking Service) Spot Dealing System (subject to the
occurrence of a Disruption Event or a Continuous Observation Unavailability
Event).


The “Reference Currency” is the British Pound Sterling (GBP).


The “Reference
Exchange Rate” is the spot exchange rate for the British Pound Sterling quoted
against the U.S. Dollar expressed as the number of U.S. Dollars per 1 British
Pound Sterling.


The “Initial
Exchange Rate” is 1.9649, the Reference Exchange Rate observed on the Start
Date in accordance with the Settlement Rate Option.


The “Initial
Range” is the range from (but excluding) the Initial Range Lower Boundary to
(but excluding) the Initial Range Upper Boundary.


The “Initial
Range Lower Boundary” is 1.9049.


The “Initial
Range Upper Boundary” is 2.0049.


The “Adjusted
Low Range” is the range from (but excluding) the Adjusted Low Range Lower
Boundary to (but excluding) the Adjusted Low Range Upper Boundary.


The “Adjusted
Low Range Lower Boundary” is 1.8549.


The “Adjusted
Low Range Upper Boundary” is 1.9549.


The “Adjusted
High Range” is the range from (but excluding) the Adjusted High Range Lower
Boundary to (but excluding) the Adjusted High Range Upper Boundary.


The “Adjusted
High Range Lower Boundary” is 1.9549.


The “Adjusted
High Range Upper Boundary” is 2.0549.


If the
Calculation Agent determines that a Disruption Event has occurred or is in
effect on any day during the Observation Period to but excluding the earlier of
(a) 10:00 a.m. EST on the End Date and (b) the time on any day during the
Observation Period at which the Continuously Observed Exchange Rate has first
traded outside both the Initial Range and either the Adjusted Low Range or
Adjusted High Range, as applicable, and for so long as such Disruption Event is
continuing, the Continuously Observed Exchange Rate for each such day will be a
single daily spot exchange rate determined by the Calculation Agent in
accordance with the Fallback Rate Observation Methodology.


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 conversion of
the Reference Currency into USD through customary legal channels; or


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













 


If the Calculation Agent
determines that a Continuous
Observation Unavailability Event has occurred or is in effect on any day during
the Observation Period to but excluding the earlier of (a) 10:00 a.m. EST on
the End Date and (b) the time on any day during the Observation Period at which
the Continuously Observed Exchange Rate has first traded outside both the
Initial Range and either the Adjusted Low Range or the Adjusted High Range, as
applicable, and for so long as such Continuous Observation Unavailability Event
is continuing, the Continuously Observed Exchange Rate for each such day will
be a single daily Reference Exchange Rate determined by the Calculation Agent
in accordance with the Settlement Rate Option on that day (subject to the
occurrence of a Settlement Rate Option Unavailability Event).


A “Continuous Observation
Unavailability Event” means, as determined in good faith by the Calculation
Agent, the Continuously Observed Exchange Rate being unavailable, or the
occurrence of an event (other than an event constituting a Disruption Event)
that generally makes it impossible to obtain the Continuously Observed Exchange
Rate, on the EBS Spot Dealing System.


If the Calculation Agent
determines that a Settlement Rate
Option Unavailability Event is in effect on any day during the Observation
Period on which the Continuously Observed Exchange Rate is to be a single
Reference Exchange Rate observed in accordance with the Settlement Rate Option
pursuant to Continuous Observation Unavailability Event above, the Calculation
Agent will determine the Reference Exchange Rate for such day in accordance
with the Fallback Rate Observation Methodology.


A “Settlement Rate Option
Unavailability Event” means, as determined in good faith by the Calculation
Agent, the Reference Exchange Rate being unavailable, or the occurrence of an
event (other than an event constituting a Disruption Event) that generally
makes it impossible to obtain the Reference Exchange Rate, in accordance with
the Settlement Rate Option on such day.


A “Valuation Business Day” means
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 New York.


The “Settlement Rate Option”
for the GBP is the U.S. Dollar/Sterling official fixing rate, expressed as the
amount of U.S. Dollar per one Sterling, for settlement in two Business Days
reported by the Federal Reserve Bank of New York, which appears on Reuters
Screen 1FED to the right of the caption “GBP” at approximately 10:00 a.m. New
York time on the End Date.


The screen or time of observation
indicated in relation to the 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.


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 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:  April 5, 2007


	
  

  	
  [SEAL]

  	
  LEHMAN BROTHERS HOLDINGS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attest:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  



 


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

  	
   

  



 


















[REVERSE
OF NOTE]


 


LEHMAN BROTHERS
HOLDINGS INC.

MEDIUM-TERM NOTES, SERIES I
 FX MULTI-RANGE NOTE
 DUE OCTOBER 2, 2007


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 Multi-Range 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 Start
Date to but excluding the date of early repayment and will equal, for each
note, the Redemption Amount, calculated as though 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 Start 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.