Document:

Exhibit 4.03

 

	
  CUSIP
  NO. 5252M0BK2

  	
   

  	
   

  
	
  ISIN NO. US5252M0BK23

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  REGISTERED

  	
   

  	
  PRINCIPAL
  AMOUNT: $505,000

  
	
  No. R-1

  	
   

  	
   

  

 

LEHMAN BROTHERS HOLDINGS INC.

 

MEDIUM-TERM NOTE, SERIES I

 

NOTES LINKED TO AN INDIA AND CHINA CURRENCY BASKET
 DUE MARCH 20, 2012

 

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 March 20, 2012,
or if such day is not a Business Day, on the next following Business Day.

 

The “Valuation Date” is March 14, 2012; provided that, upon the
occurrence of a Disruption Event with respect to a Basket Currency, the
Valuation Date for the affected Basket Currency may be postponed (as described
in “Disruption Events” below).

 

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

 

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

 

The “Participation Rate” is 130%.

 

The “Basket” is the Indian Rupee (INR) and the Chinese Renminbi (CNY),
each a “Basket Currency” and collectively the “Basket Currencies”.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

	
  Basket

  Currency

  	
   

  	
  Weighting

  	
   

  	
  Initial Spot

  Rate

  	
   

  
	
  INR

  	
   

  	
  50

  	
  %

  	
  40.45

  	
   

  
	
  CNY

  	
   

  	
  50

  	
  %

  	
  7.0882

  	
   

  

 

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

 

The “Issue
Date” is March 20, 2008.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

3

 

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

 

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

 

	
  Basket Currency

  	
   

  	
  Screen Reference

  	
   

  	
  Valuation Business Day

  	
   

  
	
  INR

  	
   

  	
  RBIB

  	
   

  	
  Mumbai

  	
   

  
	
  CNY

  	
   

  	
  SAEC

  	
   

  	
  Beijing

  	
   

  

 

The “Spot Rate Source” for
the INR is the Indian Rupee/U.S. Dollar reference rate, expressed as the amount
of Indian Rupee per one U.S. Dollar, for settlement in two Business Days
reported by the Reserve Bank of India which appears on the Reuters Screen RBIB Page at
approximately 2:30 p.m., Mumbai time, or as soon thereafter as practicable
on the Trade Date or Valuation Date, as applicable.  The Spot Rate Source for the CNY is the
Chinese Renminbi/U.S. Dollar official Beijing fixing rate, expressed as the
amount of Chinese Renminbi per one U.S. Dollar, for settlement in two Business
Days reported by The State Administration of Foreign Exchange of the People’s
Republic of China, Beijing, which appears on the Reuters Screen SAEC Page opposite
the symbol “USDCNY=” at approximately 5:00 p.m., Beijing time, on the
relevant Valuation Date.  The term “business
day” solely as used in any Spot Rate Source described above 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 exchange market) in the Principal
Financial Center for both (a) the Basket Currency and (b) the
currency against which the Basket Currency is quoted (the “base currency”) in
accordance with the Reference Exchange Rate specified in the applicable pricing
supplement, in each case as specified for the applicable Basket Currency or
base currency in the table above.

 

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

 

The “Fallback
Rate Observation Methodology” means
that the Reference Exchange Rate, Final Spot Rate or other rate, as specified
in the applicable pricing supplement, in respect of a basket currency will
equal the noon buying rate in New York for cable transfers in foreign
currencies as announced by the Federal Reserve Bank of New York for customs
purposes (the “Noon Buying Rate”) on the relevant Valuation Date or such other
date specified in the applicable pricing supplement. If the Noon Buying Rate is
not announced on that date, the Reference Exchange Rate, Final Spot Rate or
other rate for such Basket Currency will be calculated on the basis of the
arithmetic mean of the applicable spot quotations received by the Calculation
Agent at approximately 10:00 a.m., New York City time, on the Valuation
Business Day next succeeding the Valuation Date or such other date specified in
the applicable pricing

 

4

 

supplement, for the purchase or
sale for deposits in the basket currency by the New York offices of three
leading banks engaged in the interbank market (selected in the sole discretion
of the Calculation Agent) (the “Reference Banks”). If fewer than three
Reference Banks provide spot quotations, then the Reference Exchange Rate,
Final Spot Rate or other rate, as applicable, will be calculated on the basis
of the arithmetic mean of the applicable spot quotations received by the
Calculation Agent at approximately 10:00 a.m., New York City time, on the
relevant date from two Reference Banks (selected in the sole discretion of the
Calculation Agent), for the purchase or sale for deposits in the Basket
Currency. If these spot quotations are available from only one Reference Bank,
then the Calculation Agent, in its sole discretion, will determine whether that
quotation is reasonable to be used. If no spot quotation is available, then the
Reference Exchange Rate, Final Spot Rate or other rate, as applicable, for such
Basket Currency will be determined by the Calculation Agent in good faith and
in a commercially reasonable manner.

 

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

 

The “Calculation Agent” means Lehman Brothers
Inc.

 

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

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

	
  Dated: March 20,
  2008

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  [SEAL]

  	
  LEHMAN BROTHERS
  HOLDINGS INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name: Andrew Yeung

  	
   

  
	
   

  	
   

  	
  Title:   Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  
	
   

  	
   

  	
  Name: Cindy Buckholz

  	
   

  
	
   

  	
   

  	
  Title:   Assistant Secretary

  
					

 

TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

 

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

 

CITIBANK, N.A.

  as Trustee

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Officer

  	
   

  

 

6

 

[REVERSE
OF NOTE]

 

LEHMAN BROTHERS
HOLDINGS INC.

MEDIUM-TERM NOTES,
SERIES I

NOTES LINKED TO AN INDIA AND CHINA CURRENCY BASKET
 DUE MARCH 20, 2012

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

 

authenticate and deliver, Notes of this series in
definitive form in an aggregate principal amount equal to the principal amount
of this Note.

 

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

 

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

 

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

 

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

 

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

 

Section 11.  GOVERNING LAW.  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.Exhibit 4.04

 

CUSIP NO. 5252M0DQ7

ISIN NO. US5252M0DQ74

 

	
  REGISTERED

  	
   

  	
  PRINCIPAL AMOUNT: $699,000

  
	
  No. R-1

  	
   

  	
   

  

 

LEHMAN BROTHERS
HOLDINGS INC.

 

MEDIUM-TERM NOTE,
SERIES I

 

NOTES
LINKED TO A BASKET OF COMMODITIES
 DUE SEPTEMBER 20, 2012

 

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 at
Maturity.

 

The “Maturity Date” is September 20,
2012, or if such day is not a Business Day, on the next following Business Day.

 

The “Valuation
Date” is September 13,
2012, or if such day is not a Valuation Business Day, the immediately preceding
Valuation Business Day; provided that
if a Disruption Event is in effect on the scheduled Valuation Date, the
Valuation Date may be postponed (as described below).

 

The “Redemption
Amount at Maturity” for each $1,000 note will be a single U.S. dollar payment
on the Maturity Date equal to:

 

(A)   $1,000, plus the product of $1,000 times
the Basket Return times the Participation Rate, if the Final Basket Level is
greater than the Initial Basket Level; or

 

(B)  
$1,000, if the Final Basket Level is equal to or less than the Initial Basket
Level.

 

The “Component
Commodities” and “Component Commodity Weightings” are as follows:

 

	
  Component Commodities

  	
   

  	
  Component

  Commodity

  Weighting

  	
   

  
	
  Light sweet
  crude oil (“Crude Oil”)

  	
   

  	
  10

  	
  %

  
	
  Brent crude oil
  (“Brent Crude Oil”)

  	
   

  	
  10

  	
  %

  
	
  No. 2 fuel heating oil (“Heating Oil”)

  	
   

  	
  10

  	
  %

  
	
  Copper – Grade A (“Copper”)

  	
   

  	
  10

  	
  %

  
	
  Primary Nickel (“Nickel”)

  	
   

  	
  10

  	
  %

  
	
  Special High Grade Zinc (“Zinc”)

  	
   

  	
  10

  	
  %

  
	
  Gold (“Gold”)

  	
   

  	
  10

  	
  %

  
	
  Cocoa (“Cocoa”)

  	
   

  	
  10

  	
  %

  
	
  Class III milk (“Milk”)

  	
   

  	
  10

  	
  %

  
	
  Soybeans (“Soybeans”)

  	
   

  	
  10

  	
  %

  

 

The “Participation
Rate” is 130%.

 

The “Basket
Return” is a quotient, the numerator of which is the difference of the Final
Basket Level minus the Initial Basket Level and the denominator of which is the
Initial Basket Level, expressed as a percentage rounded to three decimal
places.

 

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

 

2

 

The “Final
Basket Level” is the product of 100 times the sum of 1 plus the sum of the
Weighted Component Commodity Returns.

 

The “Trade
Date” is March 14, 2008.

 

The “Issue
Date” is March 20, 2008.

 

The “Weighted
Component Commodity Returns” are, for each Component Commodity, the product of
the Component Commodity Weighting times a quotient, the numerator of which is
the difference of the Final Commodity Price minus the Initial Commodity Price
and the denominator of which is the Initial Commodity Price for such Component
Commodity.

 

The “Initial
Commodity Price” and “Relevant Exchange” for each Component Commodity are as
follows:

 

	
  Component

  Commodity

  	
   

  	
  Initial
  Commodity

  Price

  	
   

  	
  Relevant
  Exchange

  
	
  Crude Oil

  	
   

  	
  $

  	
  110.21

  	
   

  	
  The NYMEX Division, or its successor, of the New
  York Mercantile Exchange, Inc. (“NYMEX”)

  
	
  Brent Crude Oil

  	
   

  	
  $

  	
  106.20

  	
   

  	
  The Intercontinental Exchange (“ICE”)

  
	
  Heating Oil

  	
   

  	
  $

  	
  3.1465

  	
   

  	
  NYMEX

  
	
  Copper

  	
   

  	
  $

  	
  8,611.00

  	
   

  	
  London Metals Exchange (“LME”)

  
	
  Nickel

  	
   

  	
  $

  	
  32,650.00

  	
   

  	
  LME

  
	
  Zinc

  	
   

  	
  $

  	
  2,585.00

  	
   

  	
  LME

  
	
  Gold

  	
   

  	
  $

  	
  1,003.50

  	
   

  	
  The market in London on which members of the London Bullion Market
  Association (“LBMA”) quote prices for the buying and selling of Gold.

  
	
  Cocoa

  	
   

  	
  $

  	
  2,904.00

  	
   

  	
  The New York Board of Trade (“NYBOT”)

  
	
  Milk

  	
   

  	
  $

  	
  18.03

  	
   

  	
  CME Group (“CME”) (as successor to The Chicago Board
  of Trade and the Chicago Mercantile Exchange)

  
	
  Soybeans

  	
   

  	
  $

  	
  1,352.75

  	
   

  	
  CME

  

 

The “Final
Commodity Price” is, for each Component Commodity, the Commodity Price of the
Component Commodity on the Valuation Date, subject to the occurrence of a
Disruption Event.

 

A “Valuation
Business Day” is a day, as determined in good faith by the Calculation Agent,
on which the Relevant Exchange for each Component Commodity is scheduled to be
(or, but for the occurrence of a Disruption Event, would have been) open for
trading during its regular trading session (notwithstanding the Relevant
Exchange or organized exchange or market, as applicable, closing prior to its
scheduled closing time).

 

If a
Disruption Event identified in clauses (A), (B) or (C) below relating
to one or more Component Commodities is in effect on the scheduled Valuation
Date, the Calculation Agent will calculate the Final Basket Level using:

 

3

 

·                                          for each such Component
Commodity that did not suffer a Disruption Event on the scheduled Valuation
Date, the Final Commodity Price for that Component Commodity on the scheduled
Valuation Date, and

 

·                                          for each such Component
Commodity that did suffer a Disruption Event on the scheduled Valuation Date,
the Final Commodity Price on the immediately succeeding trading day for such
Component Commodity on which no Disruption Event occurs or is continuing with
respect to such Component Commodity;

 

provided however that if a
Disruption Event has occurred or is continuing with respect to a Component
Commodity on each of the three scheduled trading days following the scheduled
Valuation Date, then (a) that third scheduled trading day shall be deemed
the Valuation Date for the affected Component Commodity; and (b) the
Calculation Agent will determine the Final Commodity Price for the affected Component
Commodity on such day in its sole and absolute discretion taking into account
the latest available quotation for the Commodity Price for the affected
Component Commodity and any other information that in good faith it deems
relevant.

 

If a Disruption Event identified
in clauses (D) or (E) below relating to one or more Component
Commodities (other than Gold) is in effect on the Valuation Date, the
Calculation Agent will determine the Final Commodity Price for the affected
Component Commodity on the scheduled Valuation Date in its sole and absolute
discretion taking into account the latest available quotation for the Commodity
Price for the affected Component Commodity and any other information that in
good faith it deems relevant.

 

A “Disruption
Event” for a Component Commodity means any of the following events, in each
case as determined in good faith by the Calculation Agent:

 

(A)          the suspension of or
material limitation on trading in the Component Commodity or futures contracts
or options related to the Component Commodity, on the Relevant Exchange for
that Component Commodity;

 

(B)           either (i) the
failure of trading to commence, or permanent discontinuance of trading, in the
Component Commodity, or futures contracts or options related to the Component
Commodity, on the Relevant Exchange for that Component Commodity, or (ii) the
disappearance of, or of trading in, the Component Commodity;

 

(C)           the failure of the Relevant Exchange for the
Component Commodity to publish the official daily settlement price of the
Component Commodity for that day (or the information necessary for determining
the settlement price); and

 

(D)          solely with respect to
Component Commodities other than Gold, the occurrence since the Trade Date of a
material change in the content, composition, or constitution of the Component
Commodity; or

 

(E)           solely with respect to
Component Commodities other than Gold, the occurrence since the Trade Date of a
material change in the formula for or 

 

4

 

the
method of calculating the settlement price of the Component Commodity.

 

For the
purpose of determining whether a Disruption Event for a Component Commodity has
occurred:

 

(1)                                 a limitation on the hours
in a trading day and/or number of days of trading will not constitute a
Disruption Event if it results from an announced change in the regular business
hours of the Relevant Exchange for the Component Commodity;

 

(2)                                 a suspension in trading in
a Component Commodity on the Relevant Exchange for that Component Commodity
(without taking into account any extended or after-hours trading session), by
reason of a price change reflecting the maximum permitted price change from the
previous trading day’s settlement price will constitute a Disruption Event; and

 

(3)                                 a suspension of or
material limitation on trading on a Relevant Exchange for a Component Commodity
will not include any time when the Relevant Exchange for that Component
Commodity is closed for trading under ordinary circumstances.

 

For purposes of calculating the Final Basket Level in the event of a
Disruption Event relating to one or more Component Commodities in accordance
with the above, “trading day” means a day, as determined in good faith by the
Calculation Agent, on which trading is generally conducted on the Relevant
Exchange applicable to the affected Component Commodity.

 

The “Calculation Agent” means Lehman Brothers Commodity Services Inc,
the determinations and calculations of which will be binding absent manifest
error.

 

Except as provided below, any Redemption Amount at Maturity 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 any Redemption Amount at Maturity will be made in
immediately available funds in accordance with the normal procedures of the
Trustee (or any duly appointed Paying Agent).

 

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

 

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

 

5

 

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

 

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

 

6

 

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

 

	
  Dated:

  	
  March 20, 2008

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [SEAL]

  	
  LEHMAN BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Andrew M.W. Yeung

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Cindy Buckholz

  
	
   

  	
   

  	
  Title:

  	
  Assistant Secretary

  
						

 

TRUSTEE’S
CERTIFICATE OF AUTHENTICATION

 

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

 

	
  CITIBANK, N.A.

  
	
  as Trustee

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  	 

	
   

  	
  Authorized Officer

  

 

7

 

[REVERSE
OF NOTE]

 

LEHMAN BROTHERS
HOLDINGS INC.

MEDIUM-TERM NOTES,
SERIES I

NOTES
LINKED TO A BASKET OF COMMODITIES  
 DUE SEPTEMBER 20, 2012

 

Section 1.  General.  This Note is one of a duly authorized series
of Notes of the Company designated as the Medium-Term Notes, Series I, Notes Linked to a Basket of Commodities
(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 Redemption Amount at Maturity 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
Redemption Amount at Maturity 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
Redemption Amount at Maturity 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 any
Redemption Amount at Maturity 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 Original Issue Date to
but excluding the date of early repayment and will equal, for each note, the
Redemption Amount at Maturity, calculated as the date of early repayment were
the Maturity Date. If a bankruptcy proceeding is commenced in respect of Lehman
Brothers Holdings, the claim of the beneficial owner of a note for the period
from and including the Original Issue Date to but excluding the date of early
repayment will be capped at the Redemption Amount at Maturity, 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 Redemption
Amount at Maturity 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.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]