Document:

Form of senior debt security

 Exhibit 4.01 
 LEHMAN BROTHERS HOLDINGS INC. 
 100% Principal Protected Notes Linked to a Basket Consisting of a Foreign
Equity Component 
 and a Currency Component Due June 18, 2010 
  

			
	 Number R-1
	  	$10,287,000
	 ISIN US 524908XD75
	  	CUSIP 524908XD7

 See Reverse for Certain Definitions 
 THIS SECURITY (THIS “SECURITY”) IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A
NOMINEE OF THE DEPOSITORY TO SUCH DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TO LEHMAN BROTHERS HOLDINGS INC. OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 LEHMAN BROTHERS
HOLDINGS INC., a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the “Company”), for value received, hereby promises to pay to CEDE & CO. or registered assigns, at the
office or agency of the Company in the Borough of Manhattan, The City of New York, on the Maturity Date, in such coin or currency of the United States of America at the time of payment shall be legal tender for the payment of public and private
debts, for each $1,000 principal amount of the Securities represented hereby, an amount equal to the Payment at Maturity. THE SECURITIES REPRESENTED HEREBY SHALL NOT BEAR ANY INTEREST. 
 Any amount payable on the Maturity Date hereon will be paid only upon presentation and surrender of this Security. 
 REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY SET FORTH ON THE REVERSE HEREOF WHICH FURTHER 

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 PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. 
 Each Basket Index comprising the Equity Component of the Basket is a trademark of the sponsor of such Basket Index and has been licensed for use by the
Company. The Securities, linked in part to the performance of the Basket Indices, are not sponsored, endorsed, sold or promoted by the sponsors of the Basket Indices and the sponsors of the Basket Indices make no representation regarding the
advisability of investing in the Securities. 
 This Security 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 referred to on the reverse hereof. 

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 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: June 18, 2007 
  

					
	[SEAL]	 	LEHMAN BROTHERS HOLDINGS INC.
			
		 	By:	 	  

		 		 	Vice President
			
		 	Attest:	 	  

		 		 	Assistant Secretary

  
 TRUSTEE’S CERTIFICATE OF
AUTHENTICATION 
 This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. 
 CITIBANK, N.A. 
   as Trustee 
  

			
	By:	 	  

		 	Authorized Officer

 Reverse of Security 
 This Security is one of a duly authorized series of Securities of the Company designated as 100% Principal Protected Notes Linked to a Basket Consisting of a Foreign Equity Component and a Currency Component Due
June 18, 2010 (herein called the “Securities”). The Company may, without the consent of the holders of the Securities, create and issue additional notes ranking equally with the Securities and otherwise similar in all respects
so that such further notes shall be consolidated and form a single series with the Securities; provided that no additional notes can be issued if an Event of Default has occurred with respect to the Securities. This series of Securities is one of an
indefinite number of series of debt securities of the Company, issued and to be issued under an indenture, dated as of September 1, 1987, as amended (herein called the “Indenture”), duly executed and delivered by the Company
and Citibank N.A., as trustee (herein called the “Trustee”, which term includes any successor trustee under the Indenture), 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 Company, the Trustee and the Holders of the Securities. 
 The Payment at Maturity, at the request of the Trustee, shall be determined by the Calculation Agent pursuant to the Calculation Agency Agreement. The Trustee shall fully rely on the determination by the Calculation Agent of the Payment at
Maturity and shall have no duty to make any such determination. The Calculation Agent will provide written notice to the Trustee at its New York office, on which notice the Trustee may conclusively rely, of the Payment at Maturity on or prior to
11:00 a.m. on the Business Day preceding the Maturity Date. 
 All calculations with respect to the Ending Basket Level and the Basket
Return (including, without limitation, each Basket Index Return and each Basket Currency Return) will be rounded to the nearest one hundred-thousandth, with five one-millionths rounded upward (e.g., .876545 would be rounded to .87655); all
dollar amounts related to determination of the Additional Amount payable at maturity, if any, per $1,000 principal amount note will be rounded to the nearest ten-thousandth, with five one hundred-thousandths rounded upward (e.g., .76545 would
be rounded up to .7655); and all dollar amounts paid on the aggregate principal amount of Securities per Holder will be rounded to the nearest cent, with one-half cent rounded upward. 
 This Security is not subject to any sinking fund. 
 If an Event of Default with respect to the Securities shall occur and be continuing, the amounts payable on all of the Securities may be declared due and payable in the manner and with the effect provided in the Indenture. The amount
payable to the Holder hereof upon any acceleration permitted under the Indenture will be equal to $1,000, plus the Additional Amount. The Additional Amount will be calculated as though the date of acceleration were the Maturity Date and the fifth
Business Day immediately preceding the date of acceleration were the Final Valuation Date. If the maturity of the Securities is accelerated because of an Event of Default, the Company shall, or shall cause the Calculation Agent to, provide written
notice to the Trustee at its New York office, on which notice the Trustee may conclusively rely, and to The Depository Trust Company of the cash amount due with respect to the Securities as promptly as possible and in no event later than two
Business Days after the date of acceleration. 

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 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 Securities at the time
Outstanding to be affected (each series voting as a class), evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to, or changing in any manner or eliminating any of the provisions of the Indenture or of
any supplemental indenture or modifying in any manner the rights of the holders of the Securities of all such series; provided, however, that no such supplemental indenture shall, among other things, (i) change the fixed
maturity of any Security, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, if any, or reduce any premium payable on redemption, or make the principal thereof, or premium, if any, or
interest thereon, if any, 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, or the principal of, or premium, if any, on any
of the Securities of such series, or in the payment of any sinking fund installment or analogous obligation with respect to Securities of such series. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon
such Holder and upon all future holders and owners of this Security and any Securities which may be issued in exchange or substitution hereof, irrespective of whether or not any notation thereof is made upon this Security or such other Securities.

 No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal amount with respect to this Security. 
 The Securities are issuable
in denominations of $1,000 and any whole multiples of $1,000. 
 The Company, the Trustee, and any agent of the Company or of the Trustee
may deem and treat the registered holder (the “Holder”) hereof as the absolute owner of this Security (whether or not this Security shall be overdue and notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment hereof, or on account hereof, and for all other purposes and neither the Company nor the Trustee nor any agent of the Company or of the Trustee shall be affected by any notice to the contrary. All such payments made to
or upon the order of such registered holder shall, to the extent of the sum or sums paid, effectually satisfy and discharge liability for moneys payable on this Security. 
 No recourse for the payment of the principal of, premium, if any, or interest on this Security, 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 Security, or because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, officer or director, as 

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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. 
 As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable
in the Security Register, upon surrender of this Security for registration of transfer at the Corporate Trust Office or agency in a Place of Payment for this Security, duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, and thereupon one or more new Securities of this series or of like tenor and of authorized
denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. 
 The Company
agrees, and by acceptance of beneficial ownership interest in the Securities of this series, each Holder of such Securities will be deemed to have agreed, for United States federal income tax purposes, (i) to treat the Securities of this series
as indebtedness that is subject to Treas. Reg. Sec. 1.1275-4 (the “Contingent Payment Regulations”) and (ii) to be bound by the Company’s determination of the “comparable yield” and “projected payment
schedule,” within the meaning of the Contingent Payment Regulations, with respect to the Securities of this series. The Company has determined that the comparable yield is an annual rate of 5.6335% compounded semi-annually. Based on the
comparable yield, the projected payment schedule per $1,000 note is $1,181.36 due at maturity. 
 THE INDENTURE AND THIS SECURITY SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. 
 Definitions 
 Set forth below are definitions of the terms used in this Security. 
 “Additional Amount”, as calculated by the Calculation Agent, per $1,000 principal amount note paid at maturity shall equal $1,000 x the Basket Return x the Participation Rate; provided that the
Additional Amount will not be less than zero. 
 “Basket” means the basket comprised of the Equity Component and the
Currency Component. 
 “Basket Closing Level”, as calculated by the Calculation Agent, shall be calculated as follows:
Ending Equity Component Level + Ending Currency Component Level. 
 “Basket Currency Ending Level”, as calculated by the
Calculation Agent, shall be the Reference Exchange Rate on the Valuation Date, observed in accordance with the Settlement Rate Option (subject to the occurrence of a Disruption Event). 
  

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 “Basket Currency Return”, as calculated by the Calculation Agent, shall be calculated
as follows: 
 Basket Currency Ending Level – Basket Currency Starting Level 
 Basket Currency Starting Level 
 “Basket Currency Starting Level” is the closing level of the Basket Currency on June 13, 2007. The Basket Currency Starting Level for each of the four Basket Currencies is as follows: 
  

			
	 Euro
	  	1.329100
	 British pound sterling
	  	1.969500
	 Japanese yen
	  	0.008200
	 Australian dollar
	  	0.840200

 “Basket Currency Weighting” means the weighting assigned to each of the Basket
Currencies. The Basket Currency Weighting assigned to each of the Basket Currencies are as follows: 
  

				
	 Euro
	  	35.42	%
	 British pound sterling
	  	33.97	%
	 Japanese yen
	  	21.42	%
	 Australian dollar
	  	9.19	%

  
 “Basket Index
Ending Level”, as determined by the Calculation Agent, shall be the Index Level on the Valuation Date (subject to the occurrence of a Disruption Event.) 
 “Basket Index Return”, as calculated by the Calculation Agent, shall be calculated as follows: 
 Basket Index Ending Level – Basket Index Starting Level 
 Basket Index Starting Level 
 “Basket Index Starting Level” means the closing level of the Basket Indices on June 13, 2007. The Basket Index Starting Level for
each of the four Basket Indices is as follows: 
  

			
	 Dow Jones EURO STOXX 50® Index
	  	4,401.68
	 FTSE 100 Index®
	  	6,559.60
	 Nikkei 225 SM Index
	  	17,732.77
	 S&P®/ASX 200 Index
	  	6,180.70

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 “Basket Index Weighting” means the weighting assigned to each of the Basket Indices.
The Basket Index Weighting assigned to each of the Basket Indices are as follows: 
  

				
	 Dow Jones EURO STOXX 50® Index
	  	35.42	%
	 FTSE 100 Index®
	  	33.97	%
	 Nikkei 225 SM Index
	  	21.42	%
	 S&P®/ASX 200 Index
	  	9.19	%

 “Basket Return”, as calculated by the Calculation Agent, shall be calculated as
follows: 
 Ending Basket Level – Starting Basket Level 
 Starting Basket Level 
 “Business Day”, notwithstanding any provision
in the Indenture, shall mean any day that is not a Saturday, a Sunday or a day on which banking institutions generally are authorized or obligated by law or executive order to be closed in New York City and that is both (a) a Currency Business
Day and (b) an Index Trading Day. 
 “Calculation Agency Agreement” shall mean the Calculation Agency Agreement, dated
as of December 21, 2006 between the Company and the Calculation Agent, as amended from time to time, or any successor calculation agency agreement. 
 “Calculation Agent” shall mean the person that has entered into an agreement with the Company providing for, among other things, the determination of the Payment at Maturity, which term shall, unless
the context otherwise requires, include its successors and assigns. The initial Calculation Agent shall be Lehman Brothers Inc. 
 “Closing Currency Component Level”, as calculated by the Calculation Agent, shall be calculated as follows: 
 Starting Currency Component Level x [1 + (the sum of (Basket Currency Return x Basket Currency Weighting) for all Basket Currencies)]. 
 “Closing Equity Component Level”, as calculated by the Calculation Agent, shall be calculated as follows: 
 Starting Equity Component Level x [1 + (the sum of (Basket Index Return x Basket Index Weighting) for all Basket Indices)]. 
 “Company” shall have the meaning set forth on the face of this Security. 
 “Currency Business
Day” as used in any Settlement Rate Option shall mean 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 

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exchange market) in New York for both (a) the Basket Currency and (b) the US dollar in accordance with the Reference Exchange Rate. 
 “Currency Component” shall mean, collectively, the four currencies which comprise 50% of the Basket to which the Securities are linked.
The Currency Component consists of the Euro (EUR), the British pound sterling (GBP), the Japanese yen (JPY), and the Australian dollar (AUD) (each a “Basket Currency” and, collectively, “Basket Currencies”).

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

 (1) the occurrence and/or existence of an event on any day that has the effect of preventing or making impossible
(x) the conversion of any Basket Currency into USD through customary legal channels; or (y) the delivery of USD from accounts inside the country for which a Basket Currency is the lawful currency (such jurisdiction with respect to such
Basket Currency, the “Basket Currency Jurisdiction”) to accounts outside that Basket Currency Jurisdiction; 
 (2) the occurrence of any event causing the Reference Exchange Rate for any Basket Currency to be split into dual or multiple currency exchange rates; or 
 (3) a Reference Exchange Rate being unavailable, or the occurrence and/or existence of any event (other than those set forth in
(A) or (B) above) that (i) materially disrupts the market for a Basket Currency or (ii) makes it generally impossible to obtain a Reference Exchange Rate for a Basket Currency on the scheduled Valuation Date. 
 A “Disruption Event” means, for a Basket Index, a Market Disruption Event and, for a Basket Currency, a Currency Disruption Event.

 “Ending Basket Level”, as calculated by the Calculation Agent, shall be equal to the Basket Closing Level on the
Valuation Date. 
 “Ending Currency Component Level”, as calculated by the Calculation Agent, shall be equal to the Closing
Currency Component Level on the Valuation Date. 
 “Ending Equity Component Level”, as calculated by the Calculation Agent,
shall be equal to the Closing Equity Component Level on the Valuation Date. 
 “Equity Component” shall mean, collectively,
the four indices which comprise 50% of the Basket to which the Securities are linked. The Equity Component consists of the Dow Jones EURO STOXX 50® Index (SX5E), the FTSE
100 Index® (UKX), the Nikkei 225SM Index
(NKY) and the S&P®/ASX 200 Index (AS51) (each a “Basket Index” and, collectively, “Basket Indices”). 
 ‘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 

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currencies as announced by the Federal Reserve Bank of New York for customs purposes (the ‘Noon Buying Rate’) on the Valuation Date. If the Noon
Buying Rate is not announced on that date, the Reference Exchange 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, 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 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 for such reference currency will be determined solely by the calculation agent in good faith and in a commercially reasonable manner. 
 “Holder” shall have the meaning set forth on the reverse of this Security. 
 “Indenture” shall have the meaning set forth on the reverse of this Security. 
 “Index Closing Level”, as determined by the Calculation Agent, shall mean, with respect to any Trading Day, the closing level of any
Basket Index or any Successor Index, as the case may be, at the regular official weekday close of the principal trading session of the Relevant Exchange or market for the Index or the Successor Index, as the case may be, on such day, or as
determined by the Calculation Agent pursuant to the Calculation Agency Agreement as described below under “Discontinuation of a Basket Index; Alteration of Method of Calculation.” 
 “Index Level”, with respect to each Index Trading Day, shall be the closing level of the Basket Index, as determined and published by
the respective Index Sponsor (subject to the occurrence of a Disruption Event). 
 “Index Sponsor”, with respect to each
Basket Index shall be as follows: (A) STOXX Limited, a joint venture between Deutsche Börse AG, Dow Jones & Company and SWX Swiss Exchange, is responsible for calculating and maintaining The Dow Jones EURO STOXX 50 Index;
(B) FTSE International Limited (“FTSE”), the publisher of the FTSE 100 Index, is responsible for calculating and maintaining the FTSE 100 Index; (C) Nikkei Inc. is responsible for calculating and maintaining the Nikkei 225 Index;
and (D) Standard & Poor’s Australian Index Committee (“S&P/ASX Committee”), the publisher of the S&P/ASX 200 Index, is responsible for calculating and maintaining the S&P/ASX 200 Index. 
 “Market Disruption Event”, with respect to any of the Basket Indices (or any Successor Index) shall mean any of the following events
has occurred on any day as determined by the Calculation Agent: 

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 (1) a suspension, absence or material limitation of trading of stocks then constituting 20% or more of
the level of the Basket Index (or the relevant successor index) on the relevant exchanges (as defined below) for such securities at any time during the one hour period preceding the close of the principal trading session on such relevant exchange;

 (2) a breakdown or failure in the price and trade reporting systems of the primary market of any relevant exchange as a result of which
the reported trading prices for stocks then constituting 20% or more of the level of the Basket Index (or the relevant successor index) at any time during the one hour period preceding the close of the principal trading session on such relevant
exchange are materially inaccurate; 
 (3) a suspension, absence or material limitation of trading on any major securities exchange for
trading in futures or options contracts or exchange traded funds related to a Basket Index (or the relevant successor index) at any time during, or during the one hour period preceding the close of, the principal trading session on such exchange; or

 (4) a decision to permanently discontinue trading in the relevant futures or options contracts or exchange traded funds; 
 in each case as determined by the calculation agent in its sole discretion. 
 For the purpose of determining whether a market disruption event exists at any time, if trading in a security included in a Basket Index is materially
suspended or materially limited at that time, then the relevant percentage contribution of that security to the level of the Basket Index will be based on a comparison of: 
  

	 	•	 	 the portion of the level of the Basket Index attributable to that security relative to 

  

	 	•	 	 the overall level of the Basket Index, 

 in each case immediately before that suspension or limitation. 
 For purposes of determining whether a market disruption event has
occurred: 
 (1) a limitation on the hours or number of days of trading will not constitute a market disruption event if it results from an
announced change in the regular business hours of the relevant exchange or market; 
 (2) limitations pursuant to the rules of any relevant
exchange similar to NYSE Rule 80B (or any applicable rule or regulation enacted or promulgated by any other self-regulatory organization or any government agency of scope similar to NYSE Rule 80B as determined by the calculation agent in its sole
discretion) on trading during significant market fluctuations will constitute a suspension, absence or material limitation of trading; 
 (3) a suspension of trading in futures or options contracts on the Basket Index by the primary securities market trading in such contracts by reason of: 
 (A) a price change exceeding limits set by such exchange or market, 

 9 
  

 (B) an imbalance of orders relating to such contracts, or 
 (C) a disparity in bid and ask quotes relating to such contracts 
 will, in each such case, constitute a suspension, absence or material limitation of trading in futures or options contracts related to the Basket Index; and 
 (4) a suspension, absence or material limitation of trading on any relevant exchange or on the primary market on which futures or options contracts
related to the Basket Index are traded will not include any time when such market is itself closed for trading under ordinary circumstances. 
 “Maturity Date” shall mean June 18, 2010, unless that day is not a Business Day, in which case the amount equal to the Payment at Maturity that would otherwise be made on the scheduled Maturity Date will instead be due
on the next succeeding Business Day following such scheduled Maturity Date, with the same effect as if paid on the scheduled Maturity Date; provided, that if due to a non-Business Day or a Disruption Event, the Valuation Date is postponed so
that it falls less than three Business Days prior to the scheduled Maturity Date, the Maturity Date will be the third Business Day following the Valuation Date, as postponed. 
 “NYSE” shall mean The New York Stock Exchange, Inc. 
 “Participation Rate” shall be equal to 139%. 
 “Payment at Maturity”, as
calculated by the Calculation Agent, shall equal a cash payment per $1,000 principal amount note of $1,000 plus the Additional Amount (which may be zero). 
 “Place of Payment” shall mean the place or places where the Payment at Maturity on the Securities is payable. 
 “Pricing Date” shall mean June 13, 2007. 
 “Reference Exchange
Rate”, calculated by the Calculation Agent, shall be calculated as follows with reference to the listed Reuters page: 
  

			
	 Euro
	  	Spot rate on 1FED
	 British pound sterling
	  	Spot rate on 1FED
	 Japanese yen
	  	One divided by spot rate on 1FED
	 Australian dollar
	  	Spot rate on 1FEE

 “Relevant Exchange” shall mean, for any security (or any combination thereof)
then included in any Basket Index or any Successor Index, the primary exchange, quotation system (which includes bulletin board services) or other market of trading for such security. 
  

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 “scheduled Currency Trading Day” is a day that is or, in the judgment of the
Calculation Agent, should have been, an Currency Trading day. 
 “scheduled Index Trading Day” is a day that is or, in the
judgment of the Calculation Agent, should have been, an Index Trading day. 
 “Securities” shall have the meaning set forth
on the reverse of this Security. 
 “Security” shall have the meaning set forth on the face of this Security. 

“Settlement Rate Option” means, for a Basket Currency, the spot rate for the reference currency on the relevant Valuation Date
observed as per the Settlement Rate Option set forth in the following table. The screen or time of observation indicated in relation to any Settlement Rate Option set forth in the following table 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 as determined by the Calculation Agent. 
  

							
	 Basket
Currency
	  	 Reuters Screen
Reference
	  	 Description
	  	Principal Financial
Center
	Euro	  	1FED	  	The U.S. Dollar/Euro official fixing rate, expressed as the amount of U.S. Dollars per one Euro, 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 “EUR” at approximately 10.00 a.m., New York time, on the relevant Valuation Date.	  	TARGET
				
	British pound sterling	  	1FED	  	The U.S. Dollar/Sterling official fixing rate, expressed as the amount of U.S. Dollars 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 relevant Valuation Date.	  	London
				
	Japanese yen	  	1FED	  	The Yen/U.S. Dollar official fixing rate, expressed as the amount of Japanese Yen per one U.S. Dollar, 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 “JPY” at approximately 10.00 a.m., New York time, on the relevant Valuation Date.	  	Tokyo
				
	Australian dollar	  	1FEE	  	The U.S. Dollar/Australian Dollar official fixing rate, expressed as the amount of U.S. Dollars per one Australian Dollar, for settlement in two Business Days reported by the Federal Reserve
Bank of New York which appears on Reuters Screen 1FEE to the right of the caption “AUD” at approximately 12.00 p.m., New York time, on the relevant Valuation Date.	  	Sydney
and
Melbourne

  

 11 
  

 “Starting Basket Level” shall be set equal to 1,000 on the Pricing Date. 
 “Starting Currency Component Level” shall be equal to 500 on the Pricing Date. 
 “Starting Equity Component Level” shall be equal to 500 on the Pricing Date. 
 “Successor Index” shall have the meaning specified under “Discontinuation of a Basket Index; Alteration of Method of
Calculation” with respect to each Basket Index. 
 “Index Trading Day” means a day, as determined by the Calculation
Agent, on which trading is generally conducted on (i) the Relevant Exchanges for securities included in the Basket Indices (or the relevant Successor Indices) and (ii) the exchanges on which futures or options contracts related to the
Basket Indices are traded, other than a day on which trading is scheduled to close prior to its regular weekday closing time. 
 “Trustee” shall have the meaning set forth on the reverse of this Security. 
 “Valuation Date”
shall mean June 15, 2010; provided, that if a Disruption Event relating to any or all of the Basket Indices and/or Basket Currencies is in effect on the Valuation Date, the Calculation Agent will calculate the Basket Return using:

 • for each Basket Index and/or Basket Currency that did not suffer a Disruption Event on the Valuation Date, the Index Level or the
Reference Exchange Rate, as applicable, on the Valuation Date for such Basket Index and Basket Currency, and 
 • for each Basket Index
and/or Basket Currency that did suffer a Disruption Event on the Valuation Date, the Index Level and/or the Reference Exchange Rate, as applicable, on the immediately succeeding scheduled Index Trading Day or scheduled Currency Business Day, as
applicable, on which no Disruption Event occurs or is continuing with respect to the Basket Index and/or the Basket Currency; 
 provided however that if a Disruption Event has occurred or is continuing with respect to any or all of the Basket Indices and/or the Basket Currencies on each of the three scheduled Index Trading Days or scheduled Currency Business
Days, as applicable, following the scheduled Valuation Date, then (a) such third scheduled Index Trading Day or scheduled Currency Business Day, as applicable, shall be deemed the Valuation Date for the affected Basket Index or Basket Currency,
respectively, and (b) the Calculation Agent will determine, on such day, (i) in the case of a Basket Index, the Basket Index Ending Level, as set forth under “Market Disruption Event” herein or (ii) in the case of a Basket
Currency, the Reference Exchange Rate in accordance with the Fallback Rate Observation Methodology. 
 All terms used but not defined in
this Security are used herein as defined in the Calculation Agency Agreement or the Indenture. 
  

 12 
  

 Calculation Agent 
 The Calculation Agent will determine, among other things, the Ending Basket Level, the Basket Return, the Ending Equity Component Level, the Ending Currency Component Level, the Additional Amount, if any, and the
amount that we will pay you at maturity, as well as whether the Ending Basket Level is equal to or greater than the Starting Basket Level. The Calculation Agent will also be responsible for determining whether a Disruption Event has occurred,
whether any of the Basket Indices has been discontinued, whether there has been a material change in the method of calculation of any of the Basket Indices. All calculations, determinations and adjustments made by the Calculation Agent will be at
the sole discretion of the Calculation Agent and will, in the absence of manifest error, be conclusive for all purposes and binding on Holders and on the Company. The Company may appoint a different Calculation Agent from time to time after the date
of the original issue of the Securities without the Holders’ consent and without notifying Holders. 
 Discontinuation of a Basket Index; Alteration
of Method of Calculation 
 As used herein, “Closing Price” of a security, on any particular day, means the last reported
sales price for that security on the relevant exchange at the scheduled weekday closing time of the regular trading session of the Relevant Exchange. If, however, the security is not listed or traded on a bulletin board, then the Closing Price of
the security will be determined using the average execution price per share that an affiliate of Lehman Brothers Holdings pays or receives upon the purchase or sale of the security used to hedge Lehman Brothers Holdings’ obligations under the
Securities. 
 Dow Jones EURO STOXX 50® Index 
 STOXX Limited has
no obligation to continue to publish the Dow Jones EURO STOXX 50 Index, and may discontinue publication of the Dow Jones EURO STOXX 50 Index at any time in its sole discretion. If STOXX Limited discontinues publication of the Dow Jones EURO STOXX 50
Index and STOXX Limited or another entity publishes a successor or substitute index that the calculation agent determines, in its sole discretion, to be comparable to the discontinued Dow Jones EURO STOXX 50 Index (such index being referred to
herein as a “EURO STOXX successor index”), then any Index Closing Level will be determined by reference to the level of such EURO STOXX successor index at the close of trading on the relevant exchange or market for the EURO STOXX successor
index on each relevant Valuation Date, or other relevant date or dates as set forth herein. 
 Upon any selection by the calculation agent
of a EURO STOXX successor index, the calculation agent will cause written notice thereof to be promptly furnished to the trustee, to us and to the holders of the Securities. 
 If STOXX Limited discontinues publication of the Dow Jones EURO STOXX 50 Index prior to, and such discontinuance is continuing on a Valuation Date or
other relevant date 

 13 
  

 
or dates as set forth in the relevant terms supplement and the calculation agent determines, in its sole discretion, that no EURO STOXX successor index is
available at such time, or the calculation agent has previously selected a EURO STOXX successor index and publication of such EURO STOXX successor index is discontinued prior to, and such discontinuation is continuing on, such Basket Valuation Date,
Observation Date, Averaging Date, Review Date or other relevant date, or if STOXX Limited (or the publisher of any Dow Jones EURO STOXX 50 successor index) fails to calculate and publish a closing level for the Dow Jones EURO STOXX 50 Index (or any
Dow Jones EURO STOXX 50 successor index) on any date when it would ordinarily do so in accordance with its customary practice, then the calculation agent will determine the Index Closing Level for such date. The Index Closing Level will be computed
by the calculation agent in accordance with the formula for and method of calculating the Dow Jones EURO STOXX 50 Index or EURO STOXX successor index, as applicable, last in effect prior to such discontinuation or failure to calculate or publish a
closing level for the index, using the closing price (or, if trading in the relevant securities has been materially suspended or materially limited, its good faith estimate of the closing price that would have prevailed but for such suspension or
limitation) at the close of the principal trading session on such date of each security most recently comprising the Dow Jones EURO STOXX 50 Index or EURO STOXX successor index, as applicable. Notwithstanding these alternative arrangements,
discontinuation of the publication or failure to calculate or publish the closing level of the Dow Jones EURO STOXX 50 Index may adversely affect the value of the Securities. 
 If at any time the method of calculating the Dow Jones EURO STOXX 50 Index or a EURO STOXX successor index, or the level thereof, is changed in a
material respect, or if the Dow Jones EURO STOXX 50 Index or a EURO STOXX successor index is in any other way modified so that the Dow Jones EURO STOXX 50 Index or such EURO STOXX successor index does not, in the opinion of the calculation agent,
fairly represent the level of the Dow Jones EURO STOXX 50 Index or such EURO STOXX successor index had such changes or modifications not been made, then the calculation agent will, at the close of business in New York City on each date on which the
Dow Jones EURO STOXX 50 Index Closing Level is to be determined, make such calculations and adjustments as, in the good faith judgment of the calculation agent, may be necessary in order to arrive at a level of a stock index comparable to the Dow
Jones EURO STOXX 50 Index or such EURO STOXX successor index, as the case may be, as if such changes or modifications had not been made, and the calculation agent will calculate the Index Closing Level with reference to the Dow Jones EURO STOXX 50
Index or such EURO STOXX successor index, as adjusted. Accordingly, if the method of calculating the Dow Jones EURO STOXX 50 Index or a EURO STOXX successor index is modified so that the level of the Dow Jones EURO STOXX 50 Index or such EURO STOXX
successor index is a fraction of what it would have been if there had been no such modification (e.g., due to a split in the Dow Jones EURO STOXX 50 Index), then the calculation agent will adjust its calculation of the Dow Jones EURO STOXX 50 Index
or such EURO STOXX successor index in order to arrive at a level of the Dow Jones EURO STOXX 50 Index or such EURO STOXX successor index as if there had been no such modification (e.g., as if such split had not occurred). 
  

 14 
  

 FTSE 100 Index® 
 FTSE
has no obligation to continue to publish, and may discontinue the publication of, the FTSE 100 Index. If FTSE discontinues publication of the FTSE 100 Index and FTSE or another entity publishes a successor or substitute index that the calculation
agent determines, in its sole discretion, to be comparable to the discontinued FTSE 100 Index (such index being referred to herein as a “FTSE successor index”), then any Index Closing Level will be determined by reference to the level of
such FTSE successor index at the close of trading on the relevant exchange or market for the FTSE successor index on each relevant Valuation Date or other relevant date or dates as set forth herein. 
 Upon any selection by the calculation agent of a FTSE successor index, the calculation agent will cause written notice thereof to be promptly furnished
to the trustee, to us and to the holders of the Securities. 
 If FTSE discontinues publication of the FTSE 100 Index prior to, and such
discontinuance is continuing on a Valuation Date or other relevant date or dates as set forth in the relevant terms supplement and the calculation agent determines, in its sole discretion, that no FTSE successor index is available at such time, or
the calculation agent has previously selected an FTSE successor index and publication of such FTSE successor index is discontinued prior to, and such discontinuation is continuing on such Basket Valuation Date, Observation Date, Averaging Date,
Review Date or other relevant date, or if FTSE (or the publisher of any FTSE 100 successor index) fails to calculate and publish a closing level for the FTSE 100 Index (or any FTSE 100 successor index) on any date when it would ordinarily do so in
accordance with its customary practice, then the calculation agent will determine the Index Closing Level on such date. The Index Closing Level will be computed by the calculation agent in accordance with the formula for and method of calculating
the FTSE 100 Index or FTSE successor Index, as applicable, last in effect prior to such discontinuance or failure to calculate or publish a closing level for the index, using the closing price (or, if trading in the relevant securities has been
materially suspended or materially limited, its good faith estimate of the closing price that would have prevailed but for such suspension or limitation) at the close of the principal trading session on such date of each security most recently
comprising the FTSE 100 Index or FTSE successor index, as applicable. Notwithstanding these alternative arrangements, discontinuance of the publication or failure to calculate or publish the closing level of the FTSE 100 Index may adversely affect
the value of the Securities. 
 If at any time the method of calculating the FTSE 100 Index or a FTSE successor index, or the level thereof,
is changed in a material respect, or if the FTSE 100 Index or a FTSE successor index is in any other way modified so that the FTSE 100 Index or such FTSE successor index does not, in the opinion of the calculation agent, fairly represent the level
of the FTSE 100 Index or such FTSE successor index had such changes or modifications not been made, then the calculation agent will, at the close of business in New York City on each date on which the FTSE 100 Index Closing Level is to be
determined, make such calculations and adjustments as, in the good faith judgment of the calculation agent, may be necessary in order to arrive at a level of a stock index comparable to the FTSE 100 Index or such FTSE successor index, as the case
may be, as if such changes or modifications had not been made, and the 

 15 
  

 
calculation agent will calculate the Index Closing Level with reference to the FTSE 100 Index or such FTSE successor index, as adjusted. Accordingly, if the
method of calculating the FTSE 100 Index or a FTSE successor index is modified so that the level of such FTSE 100 Index or FTSE or successor index is a fraction of what it would have been if there had been no such modification (e.g., due to a split
in the FTSE 100 Index), then the calculation agent will adjust such FTSE 100 Index in order to arrive at a level of the FTSE 100 Index or such FTSE successor index as if there had been no such modification (e.g., as if such split had not occurred).

 Nikkei 225 SM Index 
 Nikkei Inc. has no obligation to continue to publish the Nikkei 225 Index, and may discontinue
publication of the Nikkei 225 Index at any time in its sole discretion. If Nikkei Inc. discontinues publication of the Nikkei 225 Index and Nikkei Inc. or another entity publishes a successor or substitute index that the calculation agent
determines, in its sole discretion, to be comparable to the discontinued Index (such index being referred to herein as a “Nikkei 225 successor index”), then any Index Closing Level will be determined by reference to the level of such
Nikkei 225 successor index at the close of trading on the TSE (2nd session) or the relevant exchange or market for the Nikkei 225 successor index on each relevant Valuation Date or other relevant date or dates as set forth herein. 
 Upon any selection by the calculation agent of a Nikkei 225 successor index, the calculation agent will cause written notice thereof to be promptly
furnished to the trustee, to us and to the holders of the Securities. 
 If Nikkei Inc. discontinues publication of the Nikkei 225 Index
prior to, and such discontinuation is continuing on a Valuation Date or other relevant date as set forth in the relevant terms supplement and the calculation agent determines, in its sole discretion, that no Nikkei 225 successor index is available
at such time, or the calculation agent has previously selected a Nikkei 225 successor index and publication of such Nikkei 225 successor index is discontinued prior to, and such discontinuation is continuing on, such Basket Valuation Date,
Observation Date, Averaging Date, Review Date or other relevant date, or if Nikkei Inc. (or the publisher of any Nikkei 225 successor index) fails to calculate and publish a closing level for the Nikkei 225 Index (or any Nikkei 225 successor index)
on any date when it would ordinarily do so in accordance with its customary practice, then the calculation agent will determine the Index Closing Level for such date. The Index Closing Level will be computed by the calculation agent in accordance
with the formula for and method of calculating the Nikkei 225 Index or Nikkei 225 successor index, as applicable, last in effect prior to such discontinuation or failure to calculate or publish a closing level for the index, using the closing price
(or, if trading in the relevant securities has been materially suspended or materially limited, its good faith estimate of the closing price that would have prevailed but for such suspension or limitation) at the close of the principal trading
session on such date of each security most recently composing the Nikkei 225 Index or Nikkei 225 successor index, as applicable. Notwithstanding these alternative arrangements, discontinuation of the publication or failure to calculate or publish
the closing level of the Nikkei 225 Index may adversely affect the value of the Securities. 
  

 16 
  

 If at any time the method of calculating the Nikkei 225 Index or a Nikkei 225 successor index, or the
level thereof, is changed in a material respect, or if the Nikkei 225 Index or a Nikkei 225 successor index is in any other way modified so that the Nikkei 225 Index or such Nikkei 225 successor index does not, in the opinion of the calculation
agent, fairly represent the level of the Nikkei 225 Index or such Nikkei 225 successor index had such changes or modifications not been made, then the calculation agent will, at the close of business in New York City on each date on which the Nikkei
225 Index Closing Level is to be determined, make such calculations and adjustments as, in the good faith judgment of the calculation agent, may be necessary in order to arrive at a level of a stock index comparable to the Nikkei 225 Index or such
Nikkei 225 successor index, as the case may be, as if such changes or modifications had not been made, and the calculation agent will calculate the Index Closing Level with reference to the Nikkei 225 Index or such Nikkei 225 successor index,
as adjusted. Accordingly, if the method of calculating the Nikkei 225 Index or a Nikkei 225 successor index is modified so that the level of the Nikkei 225 Index or such Nikkei 225 successor index is a fraction of what it would have been if there
had been no such modification (e.g., due to a split in the Nikkei 225 Index), then the calculation agent will adjust its calculation of the Nikkei 225 Index or such Nikkei 225 successor index in order to arrive at a level of the Nikkei 225 Index or
such Nikkei 225 successor index as if there had been no such modification (e.g., as if such split had not occurred). 
 S&P®/ASX 200 Index 
 The Standard & Poor’s Australian Index Committee has no obligation to continue to publish, and may discontinue the publication of, the
S&P/ASX 200 Index. If the Standard & Poor’s Australian Index Committee discontinues publication of the S&P/ASX 200 Index and Standard & Poor’s Australian Index Committee or another entity publishes a successor or
substitute index that the calculation agent determines, in its sole discretion, to be comparable to the discontinued S&P/ASX 200 Index (such index being referred to herein as a “ S&P/ASX 200 Index successor index”), then any Index
Closing Level will be determined by reference to the level of such S&P/ASX 200 Index successor index at the close of trading on the relevant exchange or market for the S&P/ASX 200 Index successor index on each relevant Valuation Date or
other relevant date or dates as set forth herein. 
 Upon any selection by the calculation agent of a S&P/ASX 200 Index successor index,
the calculation agent will cause written notice thereof to be promptly furnished to the trustee, to us and to the holders of the Securities. 
 If the Standard & Poor’s Australian Index Committee discontinues publication of the S&P/ASX 200 Index successor index prior to, and such discontinuance is continuing on a Valuation Date or other relevant date or dates as
set forth in the relevant terms supplement and the calculation agent determines, in its sole discretion, that no S&P/ASX 200 Index successor index successor index is available at such time, or the calculation agent has previously selected an
S&P/ASX 200 Index successor index and publication of such S&P/ASX 200 Index successor index successor index is discontinued prior to, and such discontinuation is continuing on such Basket Valuation Date, Observation Date, Averaging Date,
Review Date or other relevant date, or if the Standard & Poor’s Australian Index Committee (or the publisher of any S&P/ASX 200 Index successor index) fails to calculate and publish a closing level for the S&P/ASX 200 Index

 17 
  

 
(or any S&P/ASX 200 Index successor index) on any date when it would ordinarily do so in accordance with its customary practice, then the calculation
agent will determine the Index Closing Level on such date. The Index Closing Level will be computed by the calculation agent in accordance with the formula for and method of calculating the S&P/ASX 200 Index or S&P/ASX 200 Index successor
Index, as applicable, last in effect prior to such discontinuance or failure to calculate or publish a closing level for the index, using the closing price (or, if trading in the relevant securities has been materially suspended or materially
limited, its good faith estimate of the closing price that would have prevailed but for such suspension or limitation) at the close of the principal trading session on such date of each security most recently comprising the S&P/ASX 200 Index or
S&P/ASX 200 Index successor index, as applicable. Notwithstanding these alternative arrangements, discontinuance of the publication or failure to calculate or publish the closing level of the S&P/ASX 200 Index may adversely affect the value
of the Securities. 
 If at any time the method of calculating the S&P/ASX 200 Index or a S&P/ASX 200 Index successor index, or the
level thereof, is changed in a material respect, or if the S&P/ASX 200 Index or a S&P/ASX 200 Index successor index is in any other way modified so that the S&P/ASX 200 Index or such S&P/ASX 200 Index successor index does not, in the
opinion of the calculation agent, fairly represent the level of the S&P/ASX 200 Index or such S&P/ASX 200 Index successor index had such changes or modifications not been made, then the calculation agent will, at the close of business in New
York City on each date on which the S&P/ASX 200 Index Closing Level is to be determined, make such calculations and adjustments as, in the good faith judgment of the calculation agent, may be necessary in order to arrive at a level of a stock
index comparable to the S&P/ASX 200 Index or such S&P/ASX 200 Index successor index, as the case may be, as if such changes or modifications had not been made, and the calculation agent will calculate the Index Closing Level with reference
to the S&P/ASX 200 Index or such S&P/ASX 200 Index successor index, as adjusted. Accordingly, if the method of calculating the S&P/ASX 200 Index or a S&P/ASX 200 Index successor index is modified so that the level of such S&P/ASX
200 Index or S&P/ASX 200 Index or successor index is a fraction of what it would have been if there had been no such modification (e.g., due to a split in the S&P/ASX 200 Index), then the calculation agent will adjust such S&P/ASX 200
Index in order to arrive at a level of the S&P/ASX 200 Index or such S&P/ASX 200 Index successor index as if there had been no such modification (e.g., as if such split had not occurred). 
  

 18 
  

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

					
	TEN COM-	    	as tenants in common	  	UNIF GIFT MIN ACT -              Custodian
            
		    		  	                                       
     (Cust)                  (Minor)
	TEN ENT-	    	as tenants by the entireties	  	under Uniform Gifts to Minors
	JT TEN -	    	as joint tenants with right of	  	Act
                                        
                    
		    	Survivorship and not as tenants in common	  	                                (
State)

 Additional abbreviations may also be used though not in the above
list.                             
 __________________________________________ 
 FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto                             
 PLEASE INSERT SOCIAL SECURITY OR OTHER 
 IDENTIFYING NUMBER OF ASSIGNEE

  

			
	  
  
             
	  	 
	  	 

  

	
	  
	  
	(Name and Address of Assignee, including zip code, must be printed or typewritten.)
	
	
	 
	the within Security, and all rights thereunder, hereby irrevocably constituting and appointing
	
	
	 
	to transfer the said Security on the books of the Company, with full power of substitution in the premises.
	
	

 Dated: 

	
	  

 NOTICE: The signature to this assignment must correspond with the name as it appears upon
the face of the within Security in every particular, without alteration or enlargement or any change whatever. 
 Signature(s) Guaranteed: 
  
 ___________________________ 
 THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED MEDALLION SIGNATURE GUARANTEE PROGRAM),
PURSUANT TO S.E.C. RULE 17Ad-15.Transition Agreement and Release

 Exhibit 10.25 
 TRANSITION AGREEMENT AND RELEASE 
 1. Transition From Employment. Upon execution of this
Transition Agreement and Release (the “Agreement”), my last day of active employment with Sycamore Networks, Inc. (“Sycamore”) will be September 7, 2006, and my last day of employment will be September 7, 2007 (the
“Termination Date”). As a transition employee, I agree to be available to transition my duties and responsibilities as well as to be available for various projects and consulting assignments from time to time at the reasonable request of
the Chief Executive Officer. Effective September 7, 2006, I will no longer be an executive officer of Sycamore. 
 2.
Non-Compete. I acknowledge and agree that, in consideration of this Agreement with Sycamore, until the Termination Date I will not directly or indirectly engage in competition with Sycamore by working for or with the carrier business of Ciena
Corporation, Nortel Networks Corporation, Huawei, Lucent Technologies, Inc, and Alcatel SA or any subsidiary, business unit, division, successor thereof including any combination or merger thereof either as a consultant, contractor, proprietor,
partner, stockholder, officer, employee, director or otherwise interfere, in any manner, with the business of Sycamore or directly or indirectly solicit or recruit any of Sycamore’s employees or induce any employees to terminate their
employment with Sycamore. This provision shall replace and supersede any other non-competition/non-solicitation provision, but not other provisions, in any other agreements between Sycamore and me, including those provisions in any stock option
agreements. 
 3. Stock and Stock Options. I acknowledge and agree that any stock and/or stock options granted to me during my
employment with Sycamore will be governed by the applicable plan document and applicable grant agreement (and any amendments thereto) related to Sycamore stock, and/or stock options (“Stock Plans”) It is hereby agreed that all stock
options and restricted stock granted to me during my employment with the Company have and will continue to vest at the same rate through the Termination Date. I will have a period of three months following the Termination Date to exercise my
remaining vested stock options, if any. 
 4. Consideration. I understand that in consideration for my execution of this Agreement,
and my fulfillment of the promises made in this Agreement, Sycamore agrees to pay me (i) the amount of $200,000, plus $29,756.74 for accrued vacation, commissions, sick days, and payment in lieu of providing career transition services promptly
upon the expiration of the seven (7) revocation period set forth in Section 16 herein, and (ii) $200,000 (“Base Salary”), payable in accordance with Sycamore’s normal payroll practices, including reductions for any
statutory or other withholding amounts beginning on the last day of active employment and ending on the Termination Date. The balance of the Base Salary, if any, adjusted for statutory and other withholding amounts will be paid to me (or on my
behalf) within fifteen business days in a lump sum upon termination of my employment before the Termination Date solely on account of my death or disability. 
 Through the Termination Date, Sycamore will pay the premiums for the continuation of group health insurance coverage and matching contributions for my continued participation in Sycamore’s 401-K plan. . I understand and acknowledge
that COBRA will be triggered as of the Termination Date, and thereafter, I may continue such coverage under COBRA at my own expense. 
 5.
Change in Control Agreement. I understand and agree that in consideration of the agreements of Sycamore contained herein, the Change in Control Agreement between Sycamore and me dated as of August 5, 2002, is terminated as of the date
hereof and that such agreement is hereinafter of no 

  

 1 

 
further force and effect. We agree that the Indemnification Agreement between Sycamore and me dated as of August 5, 2002 shall remain in full force and
effect. 
 6. Conditions Applying to Payment of Benefits. I understand and agree that the additional consideration that I will receive
pursuant to Section 3 and Section 4 above is subject to my compliance with the terms and conditions set forth in this Agreement and the separation documents I have received. 
 7. General Release of Claims. I hereby voluntarily release Sycamore and any and all of its subsidiaries, branches, divisions, affiliates,
insurers, successors, assigns or related entities, as well as its or their present and former officers, directors, trustees, employees and agents, individually and in their official capacities, (collectively, the “Released Parties”), of
and from any and all claims, known and unknown, that I, my heirs, executors, administrators, successors, and assigns, have had or may have as of the date of execution of this Agreement, including, but not limited to, any alleged violation of:

  

	 	•	 	 The National Labor Relations Act, 29 U.S.C. § 151 et seq., as amended; 

  

	 	•	 	 Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., as amended; 

  

	 	•	 	 The Civil Rights Act of 1991, Pub. L. No. 102-166, as amended; 

  

	 	•	 	 Sections 1981 through 1988 of Title 42 of the United States Code, 42 U.S.C. §§1981-1988, as amended; 

  

	 	•	 	 The Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., as amended; 

  

	 	•	 	 The Equal Pay Act of 1963, 29 U.S.C. § 206(d), as amended; 

  

	 	•	 	 The Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq., as amended; 

  

	 	•	 	 The Immigration Reform Control Act, 8 U.S.C. § 1324a, et seq., as amended; 

  

	 	•	 	 The Immigration and Nationality Act, 8 U.S.C. § 1101 et seq., as amended; 

  

	 	•	 	 The Americans with Disabilities Act of 1990, 42 U.S.C § 12101 et seq., as amended; 

  

	 	•	 	 The Consolidated Omnibus Budget Reconciliation Act of 1985, I.R.C. § 4980B, as amended; 

  

	 	•	 	 The Rehabilitation Act of 1973, 29 U.S.C. § 791 et seq., as amended; 

  

	 	•	 	 The Fair Labor Standards Act, 29 U.S.C. § 201, et seq., as amended; 

  

	 	•	 	 The Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., as amended; 

  

	 	•	 	 The Occupational Safety and Health Act, 29 U.S.C. § 651 et seq., as amended; 

  

	 	•	 	 The Family and Medical Leave Act of 1993, 29 U.S.C. § 2601 et seq., as amended; 

  

	 	•	 	 The Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101, et seq., as amended; 

  

	 	•	 	 The Massachusetts Plant Closing Laws, M.G.L. c. 151A, § 71A, as amended; 

  

	 	•	 	 The Massachusetts Fair Employment Practices Act, M.G.L c. 151B, as amended; 

  

	 	•	 	 The Massachusetts State Wage and Hour Laws, M.G.L., c. 149-151, et seq.; 

  

	 	•	 	 The Massachusetts Occupational Safety and Health Laws; 

  

	 	•	 	 The Massachusetts Equal Rights Act, M.G.L. c. 93, § 102, as amended; 

  

	 	•	 	 The Massachusetts Equal Pay Act, M.G.L. c. 149, § 105A-C, as amended; 

  

	 	•	 	 The Massachusetts Maternity Leave Act, M.G.L. c. 149, § 105D, as amended; 

  

	 	•	 	 The Massachusetts Payment of Wages Law, M.G.L. c. 149, § 148 et seq., as amended; 

  

	 	•	 	 The Massachusetts Equal Rights for the Elderly and Disabled Law, M.G.L. c. 93, § 103, as amended; 

  

	 	•	 	 The Massachusetts AIDS Testing Law, M.G.L. c. 111, § 70F, as amended; 

  

	 	•	 	 The Massachusetts Civil Rights Act, M.G.L. c. 12, 11H & I, as amended; 

  

	 	•	 	 The Massachusetts Privacy Law, M.G.L. c. 214, § 1B, as amended; 

  

	 	•	 	 The Massachusetts Sexual Harassment Statute, M.G.L. c. 214, § 1C, as amended; 

  

 2 

	 	•	 	 The Massachusetts Consumer Protection Act, M.G.L. c. 93A, as amended; 

  

	 	•	 	 The Massachusetts Small Necessities Leave Act, M.G.L. c. 149, § 52D, as amended; 

  

	 	•	 	 any other federal, state or local civil or human rights law or any other local, state or federal law, regulation or ordinance; 

  

	 	•	 	 any public policy, contract, tort, or common law, or any claim based on theories of respondent superior and/or strict liability; or 

  

	 	•	 	 any allegation for costs, fees, or other expenses including attorneys’ fees incurred in these matters. 

 Notwithstanding the above, the foregoing release shall not extend to any rights I have under this Agreement or any rights to indemnification pursuant to the
Company’s certificate of incorporation, by-laws or the terms of the Indemnification Agreement between Sycamore and me dated as of August 5, 2002 or any rights I may have to vested benefits as of the date hereof (the “Retained
Rights”). 
 8. No Claims or Recovery and Affirmations. I confirm that I have not filed any claim, charge, complaint or action
against Sycamore in any forum or form. In the event that any claim, charge, or complaint is ever filed on my behalf, I hereby waive my right to accept any monetary relief or recovery therefrom, unless such waiver is prohibited by law, except with
respect to the Retained Rights. I understand that nothing herein is intended to or shall preclude me from filing a complaint and/or charge with any appropriate governmental or law enforcement agency and/or cooperating with said agency in its
investigation. I further affirm that I have been paid and/or have received all compensation, wages, bonuses, commissions, and/or benefits to which I may be entitled and that no other compensation, wages, bonuses, commissions and/or benefits are due
to me, except as provided in this Agreement. I furthermore affirm that I have no known workplace injuries and have been provided and/or have not been denied any leave requested under the Family and Medical Leave Act or related state or city laws.

 9. No Admission of Wrongdoing. I agree that neither this Agreement nor the furnishing of the consideration for the general release
set forth in this Agreement shall be deemed or construed at any time for any purpose as an admission by the Released Parties of any liability or unlawful conduct of any kind. 
 10. Confidentiality/Non-Disparagement. I expressly acknowledge and agree to the following: 
 (i) that on or before September 12, 2006, I shall return to Sycamore all Sycamore documents (and any copies thereof) and property, that I shall be
bound by the Sycamore Networks, Inc. Employee Agreement Regarding Confidentiality and Inventions (the “Confidentiality and Inventions Agreement”), except for the non-competition and non-solicitation provisions, as well as any Stock Plans
and that I will abide by any and all common law and/or statutory obligations relating to protection and non-disclosure of Sycamore’s trade secrets and/or confidential and proprietary documents and information; 
 (ii) that, in addition to and notwithstanding the terms of the Confidentiality and Inventions Agreement, I agree to keep strictly confidential, not to
make public and not to disclose to anyone in any manner the specific non-public terms of this Agreement except in accordance with federal and state securities laws or to my immediate family, state and federal tax authorities, my attorneys, tax
preparers or accountants, or except as may be necessary to enforce the Agreement or upon court order; 
 (iii) that a breach of this Section10
shall constitute a material breach of this Agreement and shall entitle Sycamore to all available legal or equitable relief available. I also acknowledge that the 

  

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provisions of this Section are reasonable and necessary to protect Sycamore’s business interests, and further acknowledge and agree that a breach or
threatened breach of the covenants set forth in this Section 8 would constitute a material breach of the Agreement, that Sycamore would suffer substantial irreparable harm and that Sycamore may not have an adequate remedy at law for such breach
or threatened breach. Therefore, in recognition of these acknowledgments, I agree that in the event of a breach or threatened breach of any of these covenants, in addition to such other remedies as Sycamore may have at law, Sycamore, without posting
any bond, shall be entitled to obtain, a request for equitable relief in the form of specific performance or temporary, preliminary or permanent injunctive relief, or any other equitable remedy which then may be available. The seeking of such
injunction or order shall not affect Sycamore’s right to seek and obtain damages or other equitable relief on account of any such actual or threatened breach; and 
 (iv) that I will not make or publish any statement which is, or may reasonably be considered to be, disparaging of Sycamore or any of its subsidiaries or affiliates, or directors, officers, employees or the operations
or products of Sycamore or any of its subsidiaries or affiliates, it being understood that it shall not be a violation of this Section 10(iv) for me to make any legally required filing or to give any required statements in connection with a
legal or regulatory proceeding. . Sycamore agrees that it will not publish, and will make reasonable efforts to cause its current corporate officers, while in office, not to make any statement which is, or may reasonably be considered to be,
disparaging of me, it being understood that it shall not be a violation of this Section 10(iv) for Sycamore to make any legally required filing or to give any required statements in connection with a legal or regulatory proceeding. 

11. Cooperation. I agree that I will reasonably assist and cooperate fully with Sycamore in resolution of any matters relating to my duties for
Sycamore. I further agree and acknowledge that I will reasonably assist and cooperate with Sycamore in connection with any matters in which I was involved during the course of my employment including, without limitation, in the defense or
prosecution of any claims or actions now in existence or which may be brought or threatened in the future against or on behalf of Sycamore (including any claims or actions against its officers, directors and employees) and in connection with any
investigation or proceeding by or before any regulatory agency or commission. My reasonable cooperation in connection with such matters, actions, claims, investigations and proceedings shall include, without limitation, being available to meet with
Sycamore regarding such matters in which I have been involved, and any contract matters or audits; preparing for any proceeding (including, without limitation, depositions, consultations, discovery or trials); providing truthful affidavits;
assisting with any audit, inspection, proceeding or other inquiry; and/or acting as a witness in connection with any litigation or other legal proceeding affecting Sycamore. Any out-of-pocket expenses which I reasonably incur in connection with
assisting or cooperating with Sycamore in accordance with the provisions of this section will be reimbursed by Sycamore promptly. 
 12.
Termination. This Agreement may be terminated by the Company only upon the occurrence of a violation of Section 2 or Section 10. 
 13. Governing Law and Interpretation. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts without regard to its conflict of laws provisions. Should any provision of the
Agreement be declared illegal or unenforceable by a court of competent jurisdiction and if it cannot be modified to be enforceable, excluding general release language, such provision shall immediately become null and void, leaving the remainder of
this Agreement in effect. 
 14. Entire Agreement. I acknowledge and agree that, with the exception of the Confidentiality and
Inventions Agreement , Retained Rights and any Stock Plans, this Agreement sets forth the entire agreement between me and the Released Parties and shall supersede any and all prior agreements or 

  

 4 

 
understandings, whether written or oral, between the parties, concerning the subject matter herein and except as otherwise specified in this Agreement. I
acknowledge that I have not relied on any representations, promises, or agreements of any kind made to me in connection with my decision to sign this Agreement, except for those set forth in this Agreement. 
 15. Amendment. This Agreement may not be amended except by a written agreement signed by authorized representatives of both parties. 

16. Right to Revoke. I understand that I have the right to revoke this Agreement at any time during the seven (7) day period following the
date on which I first sign the Agreement. 
 If I want to revoke, I must make a revocation in writing which states: “I hereby revoke my acceptance of
the Agreement and General Release”. This written revocation must be delivered by hand or sent by certified mail with a postmark dated before the end of the seven-day revocation period to Cheryl Moisan, Director of Human Resources, Sycamore
Networks, Inc., 220 Mill Road, Chelmsford, MA 01824, otherwise the revocation will not be effective. 
 17. Effective Date. This
Agreement shall not become effective or enforceable until the expiration of the 7-day revocation period described in Section 16 above. 
 18. Applicable Data. Sycamore agrees to provide, as available, updated statistical information and relevant criteria pursuant to the Older Workers Benefit and Protection Act, which will list the job titles and ages of all individuals
eligible and ineligible/not selected for separation pay. 
  

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 I UNDERSTAND THAT MY RIGHT TO RECEIVE BENEFITS SET FORTH ABOVE IS SUBJECT TO MY COMPLIANCE WITH THE TERMS AND CONDITIONS
SET FORTH IN THIS AGREEMENT AND THAT I WOULD NOT RECEIVE SUCH BENEFITS BUT FOR MY EXECUTION OF THIS AGREEMENT. 
 I ALSO UNDERSTAND THAT BY SIGNING THIS
AGREEMENT, I WILL BE WAIVING MY RIGHTS UNDER FEDERAL, STATE AND LOCAL LAW TO BRING ANY CLAIMS THAT I HAVE HAD OR MAY CURRENTLY HAVE AGAINST THE RELEASED PARTIES. BY RECEIVING AND READING THIS AGREEMENT I AM ADVISED IN WRITING THAT I HAVE UP TO FORTY
FIVE (45) DAYS TO CONSIDER THIS AGREEMENT AND AM HEREBY ADVISED IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT. I FURTHER AGREE AND ACKNOWLEDGE THAT ANY MODIFICATIONS, MATERIAL OR OTHERWISE, MADE TO THIS AGREEMENT DO NOT
RESTART OR AFFECT IN ANY MANNER THE ORIGINAL FORTY FIVE (45) DAY CONSIDERATION PERIOD. 
 HAVING ELECTED TO EXECUTE THIS AGREEMENT, TO FULFILL THE
PROMISES AND TO RECEIVE THE SUMS AND BENEFITS IN PARAGRAPHS 3 AND 4 ABOVE, I FREELY AND KNOWINGLY, AFTER DUE CONSIDERATION, ENTER INTO THIS AGREEMENT INTENDING TO WAIVE, SETTLE AND RELEASE ALL CLAIMS I MIGHT HAVE AGAINST THE RELEASED PARTIES.

 IN WITNESS WHEREOF, I have executed this Agreement as of the date set forth below. 
  

			
		
	Signed:	 	  
	Name:	 	Araldo Menegon
	Date:	 	September     , 2006
	
	ACKNOWLEDGED AND ACCEPTED BY SYCAMORE NETWORKS, INC.
		
	By:	 	  
	Name:	 	Daniel E. Smith
	Title:	 	President, CEO
	Date:	 	September     , 2006

  

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