0001104659-07-034445.txt : 20070501 0001104659-07-034445.hdr.sgml : 20070501 20070501171614 ACCESSION NUMBER: 0001104659-07-034445 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20070430 ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070501 DATE AS OF CHANGE: 20070501 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LEHMAN BROTHERS HOLDINGS INC CENTRAL INDEX KEY: 0000806085 STANDARD INDUSTRIAL CLASSIFICATION: SECURITY BROKERS, DEALERS & FLOTATION COMPANIES [6211] IRS NUMBER: 133216325 STATE OF INCORPORATION: DE FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09466 FILM NUMBER: 07807085 BUSINESS ADDRESS: STREET 1: LEHMAN BROTHERS STREET 2: 745 SEVENTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10019 BUSINESS PHONE: 2125267000 MAIL ADDRESS: STREET 1: LEHMAN BROTHERS STREET 2: 745 SEVENTH AVENUE CITY: NEW YORK STATE: NY ZIP: 10019 FORMER COMPANY: FORMER CONFORMED NAME: SHEARSON LEHMAN HUTTON HOLDINGS INC DATE OF NAME CHANGE: 19901017 8-K 1 a07-9677_528k.htm 8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (date of earliest event reported):
April 30, 2007

LEHMAN BROTHERS HOLDINGS INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

1-9466		13-3216325
(Commission File Number)		(IRS Employer Identification No.)

745 Seventh Avenue		10019
New York, New York		(Zip Code)
(Address of principal
executive offices)

Registrant’s telephone number, including area code:
(212) 526-7000

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o&nbs p; Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 9.01. Financial Statements and Exhibits

(d) Exhibits

The following Exhibits are incorporated by reference into Registration Statement on Form S-3 No. 333-134553 as exhibits thereto and are filed as part of this Report.

4.01 Form of senior debt security—medium-term note (Wedding Cake Crude Oil-Linked Note)

4.02 Form of senior debt security—medium-term note (Malaysian Ringgit Appreciation Note)

4.03 Form of senior debt security—medium-term note (FX Basket-Linked Note)

4.04 Supplemental Indenture dated as of May 1, 2007 between Lehman Brothers Holdings Inc. and The Bank of New York

4.05 Form of Lehman Brothers Holdings Inc.’s Fixed and Floating Rate Subordinated Notes due M ay 3, 2032

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	LEHMAN BROTHERS HOLDINGS INC.
	(Registrant)


	By:	/s/ James J. Killerlane III
		James J. Killerlane III
		Vice President

Date: April 30, 2007

EXHIBIT INDEX

Exhibit No.		Exhibits

4.01	Form of senior debt security—medium-term note (Wedding Cake Crude Oil-Linked Note)

4.02	Form of senior debt security—medium-term note (Malaysian Ringgit Appreciation Note)

4.03	Form of senior debt security—medium-term note (FX Basket-Linked Note)

4.04	Supplemental Indenture dated as of May 1, 2007 between Lehman Brothers Holdings Inc. and The Bank of New York

4.05	Form of Lehman Brothers Holdings Inc.’s Fixed and Floating Rate Subordinated Notes due May 3, 2032

EX-4.01 2 a07-9677_52ex4d01.htm EX-4.01

Exhibit 4.01

CUSIP NO. 52517PX30
ISIN NO. US52517PX307

REGISTERED

PRINCIPAL AMOUNT: $1,923,000

No. R-1

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTE, SERIES I

WEDDING CAKE CRUDE OIL-LINKED NOTE
DUE MAY 1, 2008

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 May 1, 2008, or if such day is not a Business Day, on the next following Business Day.

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

The “Supplemental Redemption Amount” is a single U.S. Dollar payment calculated by the Calculation Agent equal to the principal amount of the Notes multiplied by:

(A) 15.0%, if Crude OilREF is strictly within the First Barrier Range on each Exchange Business Day during the Observation Period;

(B) 7.5%, if Crude OilREF is outside the First Barrier Range on any Exchange Business Day during the Observation Period, but strictly within the Second Barrier Range on each Exchange Business Day during the Observation Period;

(C) 5.0%, if Crude OilREF is outside the First Barrier Range and the Second Barrier Range on any Exchange Business Day during the Observation Period, but strictly within the Third Barrier Range on each Exchange Business Day during the Observation Period; or

(D) 0%, if Crude OilREF is outside the First Barrier Range, the Second Barrier and the Third Barrier Range on any Exchange Business Day during the Observation Period.

The “Observation Period” is the period from and including the Trade Date to and including the Valuation Date.

The “Trade Date” is April 19, 2007.

The “Valuation Date” is 5 Exchange Business Days prior to the Maturity Date.

“Crude OilREF” is, for any Exchange Business Day within the Observation Period, the Crude Oil Price on such Exchange Business Day.

“Crude Oil” is light sweet crude oil.

The “Crude Oil Price” is the official settlement price of the Crude Oil Contract, expressed as the U.S. dollar price per barrel of Crude Oil, as made public by the Relevant Exchange (subject to the occurrence of a Disruption Event).

The “Crude Oil Contract” is the first nearby month futures contract (or, in the case of the last trading day of the first nearby month contract, the second nearby month contract) for Crude Oil traded on the Relevant Exchange.

For each “Barrier Range,” from (but not including) the Lower Barrier to (but not including) the Upper Barrier as follows:

	Barrier Range		Lower Barrier		Upper Barrier
First		$52.556 (equal to Crude Oil Strike * 85.0%)		$74.196 (equal to Crude Oil Strike * 120.0%)
Second		$49.464 (equal to Crude Oil Strike * 80.0%)		$77.288 (equal to Crude Oil Strike * 125.0%)
Third		$46.373 (equal to Crude Oil Strike * 75.0%)		$83.471 (equal to Crude Oil Strike * 135.0%)

The “Crude Oil Strike” is $61.83, equal to the Crude Oil Price on the Trade Date.

The “Relevant Exchange” is the NYMEX Division, or its successor, of the New York Mercantile Exchange, Inc., or its successor; or, if NYMEX is no longer the principal exchange or trading market for Crude Oil options or futures contracts, such other exchange or principal trading market for Crude Oil as determined in good faith by the Calculation Agent which serves as the source of prices for Crude Oil, and any principal exchanges where options or futures contracts on Crude Oil are traded.

An “Exchange Business Day” is a day, as determined by the Calculation Agent, on which the Relevant Exchange 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 closing prior to its scheduled closing time).

If a Disruption Event identified in clauses (A), (B) or (C) below is in effect on any Exchange Business Day during the Observation Period to but excluding the earlier of the earlier of (i) the Valuation Date and (ii) the Exchange Business Day on which Crude OilREF was first outside the Third Barrier Range, the Crude Oil Price for such Exchange Business Day will be the Crude Oil Price on the immediately preceding Exchange Business Day on which such Disruption Event was not in effect; provided that, if the Disruption Event is continuing for any consecutive period of five or more Exchange Business Days (measured from and including the first Exchange Business Day on which the Disruption Event was in effect), the Calculation Agent will determine the Crude Oil Price on the sixth consecutive Exchange Business Day, and for each consecutive Exchange Business Day thereafter, in its sole and absolute discretion taking into account the latest available quotation for the Crude Oil Price, and any other information that in good faith it deems relevant.

If a Disruption Event identified in clauses (D) or (E) below is in effect on any Exchange Business Day during the Observation Period to but excluding the earlier of the earlier of (i) the Valuation Date and (ii) the Exchange Business Day on which Crude OilREF was first outside the Third Barrier Range, the Calculation Agent will determine Crude OilREF applicable to

such Exchange Business Day in its sole and absolute discretion taking into account the latest available quotation for the Crude Oil Price and any other information that in good faith it deems relevant.

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

(A) the suspension of or material limitation on trading in the Crude Oil Contract or Crude Oil, or futures contracts or options related to the Crude Oil Contract or Crude Oil, on the Relevant Exchange;

(B) either (i) the failure of trading to commence, or permanent discontinuance of trading, in the Crude Oil Contract or Crude Oil, or futures contracts or options related to the Crude Oil Contract or Crude Oil, on the Relevant Exchange, or (ii) the disappearance of, or of trading in, Crude Oil;

(C) the failure of the Relevant Exchange to publish the official daily settlement price for that day for the Crude Oil Contract (or the information necessary for determining the settlement price);

(D) the occurrence since the Trade Date of a material change in the content, composition, or constitution of Crude Oil or the Crude Oil Contract; or

(E) the occurrence since the Trade Date of a material change in the formula for or the method of calculating the settlement price of the Crude Oil Contract.

For the purpose of determining whether a Disruption Event 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;

(2) a suspension in trading on the Relevant Exchange (without taking into account any extended or after-hours trading session), in the Crude Oil Contract, 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 the Relevant Exchange will not include any time when the Relevant Exchange is closed for trading under ordinary circumstances.

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

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

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

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

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

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

Dated: April 30, 2007

[SEAL]	LEHMAN BROTHERS HOLDINGS INC.

	By:
		Name:
		Title:

	Attest:
		Name:
		Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

CITIBANK, N.A.
as Trustee



By:
	Authorized Officer

[REVERSE OF NOTE]

LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTES, SERIES I
WEDDING CAKE CRUDE OIL-LINKED NOTE
DUE MAY 1, 2008

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

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

Section 3. Modification and Waivers. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of not less than 66-2/3% in aggregate principal amount of each series of the Securities at the time Outstanding to be affected, evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the holders of the Securities of all such series; provided, however, that no such supplemental indenture shall, among other things, (i) change the fixed maturity of any Security, or reduce the Redemption 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 Redemption 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 Redemption 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 Supplemental Redemption 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 Trade Date to but excluding the date of early repayment and will equal, for each note, the Redemption Amount, calculated as though the date of early repayment were the maturity and Valuation Date of the notes. 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 Trade 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 and Valuation Date of the notes.

Section 9. No Recourse Against Certain Persons. No recourse for the payment of the Redemption 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.

EX-4.02 3 a07-9677_52ex4d02.htm EX-4.02

Exhibit 4.02

CUSIP NO. 52517PT84

ISIN NO. US52517PT842

	REGISTERED		PRINCIPAL AMOUNT: $1,500,000
	No. R-1

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTE, SERIES I

MALAYSIAN RINGGIT APPRECIATION NOTE
DUE APRIL 30, 2008

The “Maturity Date” is April 30, 2008, or if such day is not a Business Day, on the next following Business Day.

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

The “Additional Amount” is a single U.S. Dollar amount equal to the principal amount of the Notes multiplied by the Leverage multiplied by the Reference Currency Return, provided that the minimum Additional Amount payable on the Notes shall be zero.

The “Leverage” is 135%.

The “Reference Currency” is the Malaysian Ringgit (MYR).

The “Reference Currency Return” is a quotient, the numerator of which is the difference of the Initial Rate minus the Settlement Rate and the denominator of which is the Settlement Rate.

The “Initial Rate” is 3.4203.

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

The “Reference Exchange Rate” is the spot exchange rate for the Reference Currency quoted against the U.S. dollar expressed as the number of MYR per USD 1.

The “Trade Date” is April 25, 2007.

The “Issue Date” is April 30, 2007.

The “Valuation Date” April 25, 2008 provided that, upon the occurrence of a Disruption Event, the Valuation Date may be postponed.

If the Calculation Agent determines that a Disruption Event is in effect on the Valuation Date, the Valuation Date will be postponed to, and the Calculation Agent will determine the Settlement Rate on, the first Valuation Business Day succeeding the Valuation Date on which no Disruption Event is occurring; provided that if a Disruption Event remains in effect on each of the three scheduled Valuation Business Days succeeding the Valuation Date or if such days are not but, in the good faith judgment of the Calculation Agent, should have been, Valuation Business Days, such third scheduled Valuation Business Day shall be deemed the Valuation Date and the Calculation Agent will determine the Settlement Rate on such day in accordance with “Fallback Rate Observation Methodology”.

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

(A) the occurrence and/or existence of an event on any day that has the effect of preventing or making impossible the delivery of USD from accounts inside the country for which the Reference Currency is the lawful currency (such jurisdiction with respect to such Reference Currency, the “Reference Currency Jurisdiction”) to accounts outside that Reference Currency Jurisdiction;

(B) the occurrence of any event causing the Reference Exchange Rate to be split into dual or multiple currency exchange rates; or the Settlement Rate being unavailable on the Valuation Date, or

(C) the occurrence of an event (i) in the Reference Currency Jurisdiction that materially disrupts the market for the Reference Currency or (ii) that generally makes it impossible to obtain the Settlement Rate on the Valuation Date.

A “Valuation Business Day” means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which commercial banks are authorized or required by law, regulation or executive order to close (including for dealings in foreign exchange in accordance with the practice of the foreign exchange market) in New York.

The “Settlement Rate Option” for the MYR is the Malaysian Ringgit/U.S. Dollar spot rate, expressed as the amount of Malaysian Ringgit per one U.S. Dollar, for settlement in two Business Days reported by the Association of Banks in Singapore, which appears on the Reuters Page ABSIRFIX01 to the right of the caption “Spot” under the column “MYR” at approximately 11:30 a.m. Singapore time on the Valuation Date.

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

The “Fallback Rate Observation Methodology” means that the reference exchange rate, Settlement Rate or other rate, as specified in the applicable pricing supplement, in respect of a reference currency will equal the noon buying rate in New York for cable transfers in foreign currencies as announced by the Federal Reserve Bank of New York for customs purposes (the “Noon Buying Rate”) on the relevant Valuation Date or such other date specified in the applicable pricing supplement. If the Noon Buying Rate is not announced on that date, the Reference Exchange Rate, Settlement Rate or other rate for such Reference Currency will be calculated on the basis of the arithmetic mean of the applicable spot quotations received by the Calculation Agent at approximately 10:00 a.m., New York City time, on the Valuation Business Day next succeeding the Valuation Date or such other date specified in the applicable pricing supplement, for the purchase or sale for deposits in the reference currency by the New York offices of three leading banks engaged in the interbank market (selected in the sole discretion of the Calculation Agent) (the “Reference Banks”). If fewer than three Reference Banks provide spot quotations, then the Reference Exchange Rate, Settlement Rate or other rate, as applicable, will be calculated on the basis of the arithmetic mean of the applicable spot quotations received by the Calculation Agent at approximately 10:00 a.m., New York City time, on the relevant date

from two Reference Banks (selected in the sole discretion of the Calculation Agent), for the purchase or sale for deposits in the Reference Currency. If these spot quotations are available from only one Reference Bank, then the Calculation Agent, in its sole discretion, will determine whether that quotation is reasonable to be used. If no spot quotation is available, then the Reference Exchange Rate, Settlement Rate or other rate, as applicable, for such Reference Currency will be determined by the Calculation Agent in good faith and in a commercially reasonable manner.

The “Calculation Agent” means Lehman Brothers Inc.

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.

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.

Dated: April 30, 2007

[SEAL]	LEHMAN BROTHERS HOLDINGS INC.



	By:
		Name:
		Title:



	Attest:
		Name:
		Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

CITIBANK, N.A.

as Trustee

	By:
		Authorized Officer

[REVERSE OF NOTE]

LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTES, SERIES I
MALAYSIAN RINGGIT APPRECIATION NOTE
DUE APRIL 30, 2008

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

Section 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 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 though the date of early repayment were the Maturity Date. If a bankruptcy proceeding is commenced in respect of Lehman Brothers Holdings, the claim of the beneficial owner of a note for the period from and including the 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.

EX-4.03 4 a07-9677_52ex4d03.htm EX-4.03

Exhibit 4.03

CUSIP NO. 52520W549

ISIN NO. US52520W5498

REGISTERED PRINCIPAL AMOUNT: $24,066,340

No. R-1

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTE, SERIES I

FX BASKET-LINKED NOTE
DUE APRIL 30, 2009

The “Maturity Date” is April 30, 2009, or if such day is not a Business Day, on the next following Business Day.

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

The “Additional Amount” is a single U.S. Dollar amount equal the principal amount of the Notes multiplied by the Participation Rate multiplied by the Basket Return, provided that the minimum Additional Amount payable on the Notes shall be zero.

The “Participation Rate” is 310%.

The “Basket Currencies” are the Brazilian Real (BRL), the Russian Ruble (RUB), the Indian Rupee (INR) and the Chinese Renminbi (CNY).

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

The “Basket Currency Weighting” is 25% for each Basket Currency.

The “Basket Return” equals 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 100.

The “Basket Ending Level” is equal to 100 multiplied by the sum of 1 plus the sum of the Weighted Currency Returns.

The “Weighted Currency Returns” are, for each Basket Currency, the Currency Return multiplied by the Basket Currency Weighting.

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

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

The “Initial Spot Rate” for each Basket Currency is the Reference Exchange Rate for that Basket Currency determined by the Calculation Agent on the Trade Date in accordance with the Spot Rate Source, as set forth below:

(i) for BRL, 2.0385,

(ii) for RUB, 25.7783,

(iii) for INR, 41.64 and

(iv) for CNY, 7.7293.

The “Trade Date” is April 24, 2007.

The “Valuation Date” is April 23, 2009; provided that, upon the occurrence of a Disruption Event with respect to a Basket Currency, the Valuation Date for the affected Basket Currency may be postponed (as described in “Disruption Events” below).

If the Calculation Agent determines that a Disruption Event relating to one or more of the Basket Currencies is in effect on the scheduled Valuation Date, the Calculation Agent will determine 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 as determined in good faith by the Calculation Agent:

(A) the occurrence and/or existence of an event on any day that has the effect of preventing or making impossible the delivery of USD from accounts inside the country for which a Basket Currency is the lawful currency (such jurisdiction with respect to such Basket Currency, the “Basket Currency Jurisdiction”) for that Basket Currency to accounts outside that Basket Currency Jurisdiction;

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

(C) the Final Spot Rate 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	Valuation Business Day	Principal Financial Center
BRL	Sao Paolo, Brasilia and Rio de Janeiro	Sao Paolo, Brasilia and Rio de Janeiro
RUB	Moscow	Moscow
INR	Mumbai	Mumbai
CNY	Beijing	Beijing

The “Spot Rate Source” for the BRL is the Brazilian Real/U.S. Dollar offered rate for U.S. Dollars, expressed as the amount of Brazilian Reals per one U.S. Dollar, for settlement in two Business Days reported by the Banco Central do Brasil on SISBACEN Data System under transaction code PTAX-800 (“Consulta de Cambio” or Exchange Rate Inquiry), Option 5 (“Cotacoes para Contabilidade” or Rates for Accounting Purposes), which appears on Reuters Screen BRFR Page under the caption “Dolar PTAX” at approximately 6:30 pm Sao Paolo time on the Valuation Date or such other relevant date. The Spot Rate Source for the RUB is the Russian Ruble/U.S. Dollar Specified Rate, expressed as the amount of Russian Rubles per one U.S. Dollar, for settlement in one Business Day, calculated by the Chicago Mercantile Exchange (“CME”) and as published on CME’s website, which appears on the Reuters Screen EMTA Page, at approximately 1:30 p.m., Moscow time, on the Valuation Date or such other relevant date. The 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 Valuation Date or such other relevant date. The Spot Rate Source for the CNY is the Chinese Renminbi/U.S. Dollar official fixing rate, expressed as the amount of Chinese Renminbi per one U.S. Dollar, for settlement in two Business Days reported by The State Administration of Foreign Exchange of the People’s Republic of China, Beijing, which appears on the Reuters Screen SAEC Page opposite the symbol “USDCNY=” at approximately 5:00 p.m., Beijing time, on the Valuation Date or such other relevant date.

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

The “Fallback Rate Observation Methodology” means that the reference exchange rate, Final Spot Rate or other rate, as specified in the applicable pricing supplement, in respect of a Basket Currency will equal the noon buying rate in New York for cable transfers in foreign currencies as announced by the Federal Reserve Bank of New York for customs purposes (the “Noon Buying Rate”) on the relevant Valuation Date or such other date specified in the applicable pricing supplement. If the Noon Buying Rate is not announced on that date, the Reference Exchange Rate, Final Spot Rate or other rate for such Basket Currency will be calculated on the basis of the arithmetic mean of the applicable spot quotations received by the Calculation Agent at approximately 10:00 a.m., New York City time, on the Valuation Business Day next succeeding the Valuation Date or such other date specified in the applicable pricing supplement, for the purchase or sale for deposits in the Basket Currency by the New York offices of three leading banks engaged in the interbank market (selected in the sole discretion of the Calculation Agent) (the “Reference Banks”). If fewer than three Reference Banks provide spot quotations, then the 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 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.

The “Calculation Agent” means Lehman Brothers Inc.

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).

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.

Dated: April 30, 2007

[SEAL]	LEHMAN BROTHERS HOLDINGS INC.

	By:
		Name:
		Title:

	Attest:
		Name:
		Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

CITIBANK, N.A.
as Trustee


By:
	Authorized Officer

[REVERSE OF NOTE]

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTES, SERIES I

FX BASKET-LINKED NOTE
DUE APRIL 30, 2009

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

Section 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 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 $10 or whole multiples of $10, 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.

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

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 Trade Date to but excluding the date of early repayment and will equal, for each note, the Redemption Amount, calculated as though the date of early repayment were the Maturity Date. If a bankruptcy proceeding is commenced in respect of Lehman Brothers Holdings, the claim of the beneficial owner of a note for the period from and including the Trade 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 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.

EX-4.04 5 a07-9677_52ex4d04.htm EX-4.04

Exhibit 4.04

LEHMAN BROTHERS HOLDINGS INC.

AND

THE BANK OF NEW YORK

as Trustee

TENTH SUPPLEMENTAL INDENTURE

Dated as of May 1, 2007

THIS TENTH SUPPLEMENTAL INDENTURE, dated as of May 1, 2007, is between LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of Delaware (the “Company”), and THE BANK OF NEW YORK (as successor trustee to JPMorgan Chase Bank, N.A.), a banking corporation duly organized and existing under the laws of the State of New York, acting as Trustee under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Company has duly authorized the execution and delivery of an Indenture dated as of February 1, 1996 (the “Indenture”), as amended and supplemented, to provide for the issuance from time to time of its unsecured notes or other evidences of indebtedness to be issued in one or more series (the “Securities”), as in the Indenture provided, up to such principal amount or amounts as may from time to time be authorized in or pursuant to one or more resolutions of the Board of Directors;

WHEREAS, the Company shall issue a series of Securities entitled the “Fixed and Floating Rate Subordinated Notes due 2032” (the “Subordinated Notes”);

WHEREAS, the Company has duly authorized the execution and delivery of this Tenth Supplemental Indenture in order to provide for certain supplements to the Indenture which shall only be applicable to the Subordinated Notes;

WHEREAS, all acts and things necessary to make this Tenth Supplemental Indenture a valid agreement of the Company according to its terms have been done and performed, and the execution and delivery of this Tenth Supplemental Indenture have in all respects been duly authorized;

NOW, THEREFORE, in consideration of the premises, of the purchase and acceptance of the Subordinated Notes by the Holders thereof, and of the sum of one dollar duly paid to it by the Trustee at the execution and delivery of these presents, the receipt whereof is hereby acknowledged, the Company covenants and agrees with the Trustee to supplement the Indenture, only for purposes of the Subordinated Notes, as follows:

SECTION 1. GENERAL TERMS AND CONDITIONS OF THE SUBORDINATED NOTES

1.1 Designation, Principal Amount and Terms. There is hereby authorized and established pursuant to Section 301 of the Indenture a series of Securities designated the “Fixed and Floating Rate Subordinated Notes Due 2032” of the Company. The Subordinated Notes shall be issued initially in an aggregate principal amount of $750,000,000, and shall have the terms provided for herein, including those set forth in Exhibit A hereto. The Company may create and issue additional notes ranking pari passu in right of payment to the Subordinated Notes and otherwise with the same terms as the Subordinated Notes other than the Issue Date, Issue Price and the payment of additional interest accruing prior to the Issue Date of such notes, which notes shall form a single series with the Subordinated Notes. No such additional notes shall be issued if an Event of Default has occurred with respect to the Subordinated Notes.

1.2 Optional Redemption. Pursuant to Section 1101 of the Indenture, the Company may elect to redeem the outstanding Subordinated Notes, in whole or in part, on May 3, 2027 (the “Redemption Date”) only, at a Redemption Price equal to 100% of the principal amount of the Subordinated Notes to be redeemed plus accrued interest on the Subordinated Notes to be redeemed to the Redemption Date.

1.3 Payment of Additional Amounts. The Company shall pay to a Holder who is a United States Alien (as defined below) such additional amounts (the “Additional Amounts”) as may be necessary so that every net payment of principal of and interest on the Subordinated Notes, after deduction or withholding for or on account of any present or future tax, assessment or other governmental charge imposed upon such Holder, or by reason of the making of such payment, by the United States or any taxing authority thereof or therein, shall not be less than the amount provided for in the Subordinated Notes to be then due and payable. The Company shall not be required, however, to make any payment of any Additional Amounts for or on account of:

a) any tax, assessment or other governmental charge which would not have been imposed but for (i) the existence of any present or former connection between such holder (or between a fiduciary, settlor, beneficiary of, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) and the United States, including, without limitation, such Holder (or such fiduciary, settlor, beneficiary, member, shareholder or possessor) being or having been a citizen or resident or treated as a resident thereof or being or having been engaged in trade or business or present therein, or having or having had a permanent establishment therein, or (ii) the presentation of the Subordinated Notes appertaining thereto for payment on a date more than 10 days after the date on which such payment becomes due and payable or the date on which payment thereof is duly provided for, whichever occurs later;

b) any estate, inheritance, gift, sales, transfer, excise, personal property or similar tax, assessment or other governmental charge;

c) any tax, assessment or other governmental charge imposed by reason of such Holder’s past or present status as a passive foreign investment company, a controlled foreign corporation, a personal holding company or foreign personal holding company with respect to the United States, or as a corporation which accumulates earnings to avoid United States federal income tax;

d) any tax, assessment or other governmental charge which is payable otherwise than by withholding from payment of principal of, or interest on, the Subordinated Notes;

e) any tax, assessment or other governmental charge required to be withheld by any paying agent from any payment of principal of, or interest on, the Subordinated Notes if such payment can be made without withholding by any other paying agent;

f) any tax, assessment or other governmental charge which would not have been imposed but for the failure to comply with certification, information, documentation or other reporting requirements concerning the nationality, residence, identity or connections with the United States of the Holder or beneficial owner of the Subordinated Notes, if such compliance is required by statute or by regulation of the United States Treasury Department as a precondition to relief or exemption from such tax, assessment or other governmental charge;

g) any tax, assessment or other governmental charge imposed on interest received by (i) a 10% shareholder (as defined in Section 871(h)(3)(B) of the United States Internal Revenue Code of 1986, as amended (the “Code”), and the regulations that may be promulgated thereunder) of the Company of (ii) a controlled foreign corporation with respect to the Company within the meaning of the Code; or

h) any combination of items (a), (b), (c), (d), (e), (f) and (g);

nor shall any Additional Amounts be paid to any Holder who is a fiduciary or partnership or other than the sole beneficial owner of such Subordinated Notes appertaining thereto to the extent that a beneficiary or settlor with respect to such fiduciary, or a member of such partnership or a beneficial owner thereof would not have been entitled to the payment of such Additional Amounts had such beneficiary, settlor, member or beneficial owner been the Holder of the Subordinated Notes appertaining thereto.

“United States Alien” means any corporation, partnership, individual or fiduciary that is, as to the United States, a foreign corporation, a nonresident alien individual, a nonresident fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, as to the United States, a foreign corporation, a nonresident alien individual or a nonresident fiduciary of a foreign estate or trust.

1.4 Redemption Upon a Tax Event. The Subordinated Notes may be redeemed at the option of the Company in whole, but not in part, on not more than 60 days’ and not less than 30 days’ notice prior to any Tax Redemption Date (as defined below) at a redemption price equal to 100% of the principal amount of the Subordinated Notes and accrued interest, if any, if the Company determines that as a result of any change in or amendment to the laws or treaties, or any regulations or rulings promulgated thereunder, of the United States or of any political subdivision or taxing authority thereof or therein affecting taxation, or any proposed change in such laws, treaties or regulations or rulings, or any change in the official application, enforcement or interpretation of such laws, treaties or regulations or filings (including a holding by a court of competent jurisdiction in the United States) or any other action (other than an action predicated on law generally known on or before the date specified in such Subordinated Note except for proposals before the Congress before such date) taken by any taxing authority or a court of competent jurisdiction in the United States, or the official proposal of any such action, whether or not such action or proposal was taken or made with respect to the Company, (A) the Company has or shall become obligated to pay any Additional Amounts pursuant to Section 1.3 on the Subordinated Notes or (B) there is a substantial possibility that the Company shall be

required to pay such Additional Amounts. Prior to the publication of any notice of redemption pursuant to this provision, the Company shall deliver to the Trustee (i) an Officers’ Certificate stating that the Company is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Company so to redeem have occurred, and (ii) an Opinion of Counsel to such effect based on such statement of facts. Notice may not be given prior to 60 days before the date on which the Company shall or, if applicable, there is a substantial possibility that the Company shall, become obligated to pay such Additional Amounts if a payment of interest were to be made on such date (the “Tax Redemption Date”).

SECTION 2. AMENDMENTS TO THE INDENTURE

2.1 Amendment to Section 101 of the Indenture. Section 101 of the Indenture is hereby amended solely with respect to the Subordinated Notes by adding the following new definitions thereto, in the appropriate alphabetical sequence:

“Excess Proceeds” has the meaning specified in Section 1412.

“Other Financial Obligations” has the meaning specified in Section 1401.

2.2 Amendment to Section 501 of the Indenture. Solely with respect to the Subordinated Notes, clauses (1) through (4) and (7) of Section 501 of the Indenture shall not apply.

2.3 Amendment to Section 1005 of the Indenture. Solely with respect to the Subordinated Notes, Section 1005 of the Indenture shall not apply.

2.4 Amendment to Section 1401 of the Indenture. Section 1401 is hereby amended solely with respect to the Subordinated Notes by deleting Section 1401 in its entirety and inserting in lieu thereof the following:

“Section 1401. Subordinated Notes Subordinated to Senior Debt and Other Financial Obligations

The Company agrees, and each Holder of the Subordinated Notes and related coupons by his acceptance thereof likewise agrees, that the payment of the principal of (and premium, if any) and interest, if any, on the Subordinated Notes and related coupons is subordinated, to the extent and in the manner provided in this Article 14, to the prior payment in full when due of the principal of (and premium, if any) and interest, if any, on (i) all Senior Debt and (ii) under the circumstances described in Section 1412, Other Financial Obligations.

For purposes of this Article 14, “Senior Debt” means all obligations (whether now outstanding or hereafter created, assumed or incurred) for the payment of which the Company is responsible or liable as obligor, guarantor or otherwise in respect of all principal of (and premium, if any) and interest if any (including any interest, if any, accruing subsequent to the commencement of a

proceeding in bankruptcy by or against the Company) on (i) any indebtedness for money borrowed or evidenced by bonds, notes, debentures or similar instruments, (ii) indebtedness under capitalized leases, (iii) any indebtedness representing the deferred and unpaid purchase price of any property or business, (iv) indebtedness for money borrowed by another person that the Company guarantees, and (v) all deferrals, renewals, extensions and refundings of any such indebtedness or obligation; provided, that the following shall not constitute Senior Debt: (a) indebtedness evidenced by the Subordinated Notes and related coupons, (b) indebtedness which is expressly made equal in right of payment with the Subordinated Notes or subordinate and subject in right of payment to the Subordinated Notes, (c) indebtedness for goods or materials purchased in the ordinary course of business or for services obtained in the ordinary course of business or indebtedness consisting of trade payables, or (d) indebtedness which is subordinated to any obligation of the type specified in clauses (i) through (v) above.

For purposes of this Article 14, “Other Financial Obligations” means all obligations (whether now outstanding or hereafter created, assumed or incurred) for the payment of which the Company is responsible or liable as obligor, guarantor or otherwise in respect of all principal of (and premium, if any) and interest if any (including any interest, if any, accruing subsequent to the commencement of a proceeding in bankruptcy by or against the Company) in respect to derivative products (including without limitation, interest and foreign exchange rate contracts, commodity contracts and similar arrangements) except any such obligations that are expressly stated to have the same rank as or not to be senior to the Subordinated Notes.

This Article 14 shall constitute a continuing offer to all persons who, in reliance upon such provisions, become holders of, or continue to hold, Senior Debt and Other Financial Obligations, and such provisions are made for the benefit of the holders of Senior Debt and Other Financial Obligations, and such holders and/or each of them may enforce such provisions.”

SECTION 3. ADDITIONAL PROVISION

The following Section 1412 is numbered to conform with the format of the Standard Provisions:

Section 1412. Subordinated Notes Subordinated to Prior Payment of all Other Financial Obligations on Dissolution, Liquidation or Reorganization of the Corporation.

Upon the occurrence of any of the events specified in the first paragraph of Section 1402, the provisions of Section 1402 shall be given effect to determine the amount of cash, property or securities which may be payable or deliverable as between the Holders of Subordinated Notes, on the one hand, and the Holders of

Senior Debt, on the other hand. Solely upon the occurrence of any distribution of the assets of the Company in connection with the dissolution, winding up, liquidation or reorganization of the Company (whether in bankruptcy, insolvency or receivership proceedings or upon an assignment for the benefit of creditors or any other marshalling of the assets and liabilities of the Company or otherwise), if after giving effect to the provisions of Section 1402, any amount of cash, property or securities shall be available for payment or distribution in respect of the Subordinated Notes (“Excess Proceeds”), then such Excess Proceeds shall be made available by the receiver, liquidating trustee or other Person making such payment or distribution of assets, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, for the ratable benefit of the Subordinated Notes; provided that if any creditors in respect of Other Financial Obligations shall not have received payment in full of all amounts due or to become due on or in respect of Other Financial Obligations (and provision shall not have been made for such payment in money or money’s worth), then the amount of Excess Proceeds available for payment or distribution in respect of Subordinated Notes shall first be applied to pay or provide for the ratable payment of Other Financial Obligations remaining unpaid, to the extent necessary to pay all Other Financial Obligations in full, after giving effect to any concurrent payment or distribution in respect of Other Financial Obligations. Any Excess Proceeds originally available in respect of Subordinated Notes remaining after the payment (or provision for payment) in full of all Other Financial Obligations shall continue to be available for payment or distribution in respect of Subordinated Notes.

If the Holders of Subordinated Notes, or any of them, shall fail to file a proper claim in the form required in any proceeding referred to in the first paragraph of Section 1402, prior to 30 days before the expiration of the time to file such claim or claims pursuant to the authority granted to the Trustee, then the holders of Other Financial Obligations are hereby authorized to file an appropriate claim or claims for and on behalf of the holders of Subordinated Notes in the form required in any such proceeding. If after giving effect to the provisions of Section 1402, in the event that, notwithstanding the foregoing provisions of this Section 1412, upon the occurrence of any of the events described in the first paragraph of Section 1402, any payment or distribution of assets of the Corporation of any kind or character in respect of the Subordinated Notes, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of the Corporation being subordinated to the payment of the Subordinated Notes, shall be received by the Trustee, any paying agent or the holders of the Subordinated Notes before all Other Financial Obligations are paid in full, then, subject to receipt by the Trustee or any paying agent of notice pursuant to Section 1406, such payment or distribution shall be held in trust for the benefit of and shall be paid over to the holders of such Other Financial Obligations or their representative or representatives, ratably as aforesaid for application to the payment of all Additional Other Financial Obligations remaining unpaid until all such Other Financial Obligations shall have been paid in full, after giving effect to any

concurrent payment or distribution to the holders of such Other Financial Obligations.

Subject to the payment in full of all Other Financial Obligations, the holders of the Subordinated Notes shall be subrogated to the rights of the holders of such Other Financial Obligations to receive payments or distributions of assets of the Corporation applicable to such Other Financial Obligations until the Subordinated Notes shall be paid in full, and none of the payments or distributions to the holders of such Other Financial Obligations to which the holders of the Subordinated Notes or the Trustee would be entitled except for the provisions of this Article or of payments over, pursuant to the provisions of this Article, to the holders of such Other Financial Obligations by the holders of the Subordinated Notes or the Trustee shall, as between the Corporation, its creditors other than the holders of such Other Financial Obligations and the holders of the Subordinated Notes, be deemed to be a payment by the Corporation to or on account of such Other Financial Obligations; it being understood by the parties hereto that the provisions of this Section are and are intended solely for the purpose of defining the relative rights of the holders of the Subordinated Notes, on the one hand, and the holders of the Other Financial Obligations, on the other hand.

SECTION 4. MISCELLANEOUS

4.1 Note. Attached hereto as Exhibit A is a form of the Subordinated Note.

4.2 Separability. In case any provision in this Tenth Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

4.3 Continuance of Indenture. This Tenth Supplemental Indenture supplements the Indenture and shall be a part of and subject to all the terms thereof. The Indenture, as supplemented by this Tenth Supplemental Indenture, shall continue in full force and effect.

4.4 The Trustee. The Trustee shall not be responsible in any manner for or in respect of the validity or sufficiency of this Tenth Supplemental Indenture, or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely.

4.5 Governing Law. This Tenth Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York.

4.6 Defined Terms. All capitalized terms used in this Tenth Supplemental Indenture which are defined in the Indenture, but not otherwise defined herein, shall have the same meanings assigned to them in the Indenture.

4.7 Counterparts. This Tenth Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, Lehman Brothers Holdings Inc. has caused this Tenth Supplemental Indenture to be signed and acknowledge by one of its Vice Presidents, and The Bank of New York, as Trustee, has caused this Tenth Supplemental Indenture to be signed as of the day and year first above written.

	LEHMAN BROTHERS HOLDINGS INC.

	By:
		Name:
		Title:

	THE BANK OF NEW YORK, as Trustee

	By:
		Name:

EXHIBIT A

[FORM OF FACE OF NOTE]

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.

UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY 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 HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE CO., HAS AN INTEREST HEREIN.

REPAYMENT OF THE NOTES IS NOT PROTECTED BY ANY FEDERAL AGENCY OR THE SECURITIES INVESTOR PROTECTION CORPORATION

NO. R-	$

CUSIP NO. 524908WH9

ISIN NO. US524908WH98

LEHMAN BROTHERS HOLDINGS INC.

FIXED AND FLOATING RATE SUBORDINATED NOTE DUE 2032

payable, and on any overdue principal and (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum during the period in which such principal is overdue, compounded quarterly at the rate of 3-month LIBOR plus 0.78%, to the registered holder of this Note, until payment of said principal sum has been made or duly provided for.

“Interest Reset Date” means May 3, 2027 and each Floating Rate Interest Payment Date.

“Interest Determination Date” means two London banking days before each Interest Reset Date.

“Calculation Agent” means Lehman Brothers Inc., in its capacity as calculation agent.

With respect to an Interest Determination Date, LIBOR will be the offered rate for deposits in U.S. dollars for the 3-month period (commencing on the Interest Reset Date) which appears on the display designated as page “LIBOR01” on the Reuters Monitor Money Rates Service, or any successor service or page for the purpose of displaying London interbank offered rates of major banks (the “Reuters Screen LIBOR01 Page”), at approximately 11:00 A.M., London time, on such Interest Determination Date.

With respect to an Interest Determination Date on which no rate appears on the Reuters Screen LIBOR01 Page, as specified above, the Calculation Agent will request the principal London office of each of four major banks in the London interbank market, as selected by the Calculation Agent after consultation with the Company, to provide the Calculation Agent with its offered quotation for deposits in U.S. dollars for the 3-month period (commencing on the Interest Reset Date) to prime banks in the London interbank market at approximately 11:00 A.M., London time, on such Interest Determination Date in a principal amount that is representative of a single transaction in such market at such Interest Determination Date. If two or more quotations are provided on such Interest Determination Date, LIBOR in respect of such Interest Determination Date will be the arithmetic mean of such quotations. If fewer than two such quotations are provided, LIBOR in respect of such Interest Determination Date will be the arithmetic mean of the rates quoted on such Interest Determination Date by three leading European banks selected by the Calculation Agent after consultation with the Company for loans in U.S. dollars to leading European banks, for the 3-month period (commencing on the Interest Reset Date) of in a principal amount that is representative of a single transaction in such market at such time, provided, however, that if the European banks selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, LIBOR for the applicable period will be LIBOR as in effect on such Interest Determination Date. If there was no LIBOR Rate in effect on such Interest Determination Date, the LIBOR Rate will be the initial interest rate. The applicable principal financial center will be New York City and the approximate time for which quotes for loans in U.S. dollars would be requested from New York City banks will be 3:00 p.m., New York City time.

Interest Payment Date for the Note will be the date, whether or not a Business Day, 15 calendar days immediately preceding the Interest Payment Date. Notwithstanding the foregoing, from May 1, 2007 to and including May 3, 2027, any Fixed Rate Interest Payment Date that would otherwise be a day that is not a Business Day shall instead be the next succeeding Business Day, no additional interest shall accrue as a result of such delayed payment, and interest on the Note shall be computed on the basis of a 360-day year of twelve 30-day months. Notwithstanding the foregoing, from but not including May 3, 2027 to and including the Stated Maturity of the Note, any Floating Rate Interest Payment Date other than the Stated Maturity of the Note that would otherwise be a day that is not a Business Day shall instead be the next succeeding Business Day, unless such next Business Day falls in the next calendar month in which case such payment shall be made on the immediately preceding day that is a Business Day, and interest shall accrue to the date that interest is actually paid, and interest on the Note shall be computed on the basis of a 360-day year and the actual number of days elapsed in each floating rate interest period. With respect to the period from but excluding May 3, 2027 to and including the Stated Maturity of the Note, Business Day shall also be a London Business Day. A “London Business Day” means any day that is not a Saturday or Sunday and on which dealings in deposits in U.S. dollars are transacted, or with respect to any future date are expected to be transacted, in the London interbank market.

REFERENCE IS 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 THOUGH FULLY 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 referred to on the reverse hereof.

IN WITNESS WHEREOF, LEHMAN BROTHERS HOLDINGS INC. has caused this instrument to be signed by its Chairman of the Board, its Vice Chairman, its President, 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.

	LEHMAN BROTHERS HOLDINGS INC.


	By:
		Name:
		Title:

Attest:


Name:
Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

Dated:

	THE BANK OF NEW YORK,
	as Trustee


	By:
		Authorized Signatory

[FORM OF REVERSE OF NOTE]

(Reverse of Note)

LEHMAN BROTHERS HOLDINGS INC.

FIXED AND FLOATING RATE SUBORDINATED NOTE, DUE 2032

This Note is one of a duly authorized series of Securities of the Company designated as the Fixed and Floating Rate Subordinated Notes Due 2032 of the Company (herein called the “Notes”), limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to $750,000,000. The Notes are one of an indefinite number of series of debt securities of the Company (herein collectively called the “Securities”), issued or issuable under and pursuant to an indenture, dated as of February 1, 1996, as amended and supplemented from time to time and as amended and supplemented with respect to the Notes herein by the Tenth Supplemental Indenture dated as of May 1, 2007 between the Company and the Trustee (as so amended and supplemented, the “Indenture”), between the Company and The Bank of New York, successor trustee to JPMorgan Chase Bank, N.A., as Trustee (herein called the “Trustee”), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the holders of the Notes. 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 repayment 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, as defined in the Indenture, and may otherwise vary as provided in the Indenture.

Payment of the principal of and interest on this Note is, to the extent provided in the Indenture, subordinated and subject in right of payment to the prior payment in full when due of the principal of (and premium, if any) and interest, if any, on all Senior Debt, as defined in the Indenture and this Note is issued subject to the provisions of the Indenture with respect thereto. In addition, upon the dissolution, winding-up, liquidation or reorganization of the Company, this Note is, to the extent provided in the Indenture, subordinated and subject in right of payment to the prior payment in full when due of the principal of (and premium, if any) and interest, if any, on all Other Financial Obligations, as defined in the Indenture. Each registered holder of this Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and expressly directs the Trustee on his or her behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided and (c) appoints the Trustee as his or her attorney-in-fact for any and all such purposes. Each registered holder hereof, by his or her acceptance hereof, hereby waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Debt and Other Financial Obligations, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions.

As provided in the Indenture and subject to certain limitations therein set forth, the Company may at its option redeem the Notes in whole or in part on the Redemption Date.

As provided in the Indenture and subject to certain limitations therein set forth, the Company will pay to a Holder who is a United States Alien such Additional Amounts as may be necessary so that every net payment of principal of and interest on the Notes, after deduction or withholding for or on account of

any present or future tax, assessment or other governmental charge imposed upon such Holder, or by reason of the making of such payment, by the United States or any taxing authority thereof or therein, will not be less than the amount provided for in the Notes to be then due and payable.

As provided in the Indenture and subject to certain limitations therein set forth, the Notes may be redeemed at the option of the Company in whole if the Company determines that as a result of any change in or amendment to the laws or treaties, or any regulations or rulings promulgated thereunder, of the United States or of any political subdivision or taxing authority thereof or therein affecting taxation, or any proposed change in such laws, treaties or regulations or rulings, or any change in the official application, enforcement or interpretation of such laws, treaties or regulations or filings (including a holding by a court of competent jurisdiction in the United States) or any other action (other than an action predicated on law generally known on or before the date specified in such Note except for proposals before the Congress before such date) taken by any taxing authority or a court of competent jurisdiction in the United States, or the official proposal of any such action, whether or not such action or proposal was taken or made with respect to the Company, (A) the Company has or will become obligated to pay any Additional Amounts referred to in the foregoing paragraph pursuant to the Indenture on the Note or (B) there is a substantial possibility that the Company will be required to pay such Additional Amounts.

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 (each series voting as a class), evidenced as provided in the Indenture, 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 or reduce any premium payable on redemption, or make the principal thereof, or premium, if any, or interest thereon payable in any coin or currency other than that hereinabove provided, or amend the Indenture to modify its provisions relating to the subordination of each Security in a manner adverse to the holder thereof, 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 or the principal of, or premium, if any, on any of the 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 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.

As provided in the Indenture and subject to certain limitations therein set forth, in case an Event of Default with respect to the Notes shall have occurred and be continuing, the principal hereof may be declared, and upon such declaration shall become due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture.

No reference herein to the Indenture and no provisions of this Note or of the Indenture shall alter or impair the obligations of the Company, which is absolute and unconditional, to pay the principal and interest of this Note at the place, at the time and in the coin or currency herein prescribed.

The Company may omit to comply with any term, provision or condition set forth in Section 801 of the Indenture, and any such omission with respect to such Section shall not be an Event of Default, in each case with respect to the Notes, provided that the conditions of Section 1009 of the Indenture have been satisfied.

The covenant set forth in Section 1005 of the Indenture shall not apply to the Notes.

Notwithstanding the provisions of Section 401(a)(B) of the Indenture, the Company may satisfy and discharge the entire indebtedness on all the Notes as provided therein only when the Notes are by their terms due and payable within one year.

The Company, the Trustee, and any agent of the Company or of the Trustee may deem and treat the registered holder hereof as the absolute owner of this Note (whether or not this Note 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 Note.

The Notes are issuable in registered form without coupons in denominations of $1,000 and any multiple of $1,000. At the option of the holders thereof, either at the office or agency to be designated and maintained by the Company for such purpose in the Borough of Manhattan, The City of New York, 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 may be exchanged for an equal aggregate principal amount of Notes of like tenor and of other authorized denominations.

As provided in the Indenture and subject to certain limitations 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 office or agency of the Company in any place where the principal of this Note is payable, 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 Notes of this series of like tenor and of authorized denominations and for the same aggregate principal amount will be issued to the designated transferee or transferees.

No recourse for the payment of the principal of or the interest on this Note, 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.

THE INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

All items used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

______________________________________

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

TEN COM –		as tenants in common

TEN ENT –		as tenants by their entireties

JT TEN –		as joint tenants with right of survivorship and not as tenants in common

UNIF GIFT MIN ACT –				Custodian	under Uniform Gifts to

(Cust)			(Minor)

Minors Act
	(State)


Additional abbreviations may also be used though not in the above list.

ASSIGNMENT

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 Note, and all rights thereunder, hereby irrevocably constituting and appointing

__________________________________________________________________________________________________

_____________ to transfer the said Note on the books of the Company, with full power of substitution in the premises.

Date:_____________

		Signature:

		NOTICE: The signature to this assignment must correspond
		with the name as it appears upon the face of the within Note 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.

EX-4.05 6 a07-9677_52ex4d05.htm EX-4.05

Exhibit 4.05

REPAYMENT OF THE NOTES IS NOT PROTECTED BY ANY FEDERAL AGENCY OR THE SECURITIES INVESTOR PROTECTION CORPORATION

NO. R-

$____________

CUSIP NO. 524908WH9

ISIN NO. US524908WH98

LEHMAN BROTHERS HOLDINGS INC.

FIXED AND FLOATING RATE SUBORDINATED NOTE DUE 2032

Lehman Brothers Holdings Inc., a corporation duly organized and existing under the laws of the State of Delaware (herein referred to as 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, the principal sum of _________________ DOLLARS on May 3, 2032, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest on said principal sum at said office or agency, in like coin or currency, from and including May 1, 2007 to but excluding May 3, 2027 at the rate per annum of 6.00%, and from and including May 3, 2027 to but excluding May 3, 2032 at the rate of 3-month LIBOR (Reuters Screen LIBOR01 Page) plus 0.78% until the principal hereof becomes due and payable, and on any overdue principal and (to the extent that payment of such interest is enforceable under applicable law) on any overdue installment of interest at the same rate per annum during the period in which such principal is overdue, compounded quarterly at the rate of 3-month LIBOR plus 0.78%, to the registered holder of this Note, until payment of said principal sum has been made or duly provided for.

“Interest Reset Date” means May 3, 2027 and each Floating Rate Interest Payment Date.

“Interest Determination Date” means two London banking days before each Interest Reset Date.

“Calculation Agent” means Lehman Brothers Inc., in its capacity as calculation agent.

With respect to an Interest Determination Date, LIBOR will be the offered rate for deposits in U.S. dollars for the 3-month period (commencing on the Interest Reset Date) which appears on the display designated as page “LIBOR01” on the Reuters Monitor Money Rates Service, or any successor service or page for the purpose of displaying London interbank offered rates of major banks (the “Reuters Screen LIBOR01 Page”), at approximately 11:00 A.M., London time, on such Interest Determination Date.

With respect to an Interest Determination Date on which no rate appears on the Reuters Screen LIBOR01 Page, as specified above, the Calculation Agent will request the principal London office of each of four major banks in the London interbank market, as selected by the Calculation Agent after consultation with the Company, to provide the Calculation Agent with its offered quotation for deposits in U.S. dollars for the 3-month period (commencing on the Interest Reset Date) to prime banks in the London interbank market at approximately 11:00 A.M., London time, on such Interest Determination Date in a principal amount that is representative of a single transaction in such market at such Interest Determination Date. If two or more quotations are provided on such Interest Determination Date, LIBOR in respect of such Interest Determination Date will be the arithmetic mean of such quotations. If fewer than two such quotations are provided, LIBOR in respect of such Interest Determination Date will be the arithmetic mean of the rates quoted on such Interest Determination Date by three leading European banks selected by the Calculation Agent after consultation with the Company for loans in U.S. dollars to leading European banks, for the 3-month period (commencing on the Interest Reset Date) of in a principal amount that is representative of a single transaction in such market at such time, provided, however, that if the European banks selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, LIBOR for the applicable period will be LIBOR as in effect on such Interest Determination Date. If there was no LIBOR Rate in effect on such Interest Determination Date, the LIBOR Rate will be the initial interest rate. The applicable principal financial center will be New York City and the approximate time for which quotes for loans in U.S. dollars would be requested from New York City banks will be 3:00 p.m., New York City time.

The Stated Maturity of the Note shall be May 3, 2032. From May 1, 2007 to and including May 3, 2027, interest on this Note (computed as set forth herein) shall be payable semi-annually in arrears on May 3 and November 3 of each year (each a “Fixed Rate Interest Payment Date”), commencing November 3, 2007, from the Fixed Rate Interest Payment Date next preceding the date of this Note to which interest has been paid or duly provided for. From but excluding May 3, 2027 to and including the Stated Maturity of the Note, interest on this Note (computed as set forth herein) shall be payable quarterly in arrears on February 3, May 3, August 3 and November 3 of each year (each a “Floating Rate Interest Payment Date”), commencing August 3, 2027, from the Floating Rate Interest Payment Date next preceding the date of this Note to which interest has been paid or duly provided for. Interest on this Note shall be payable to the holder in whose name the Note is registered at the close of business on the applicable Record Date. The Record Date for any Fixed Rate Interest Payment Date or Floating Rate Interest Payment Date for the Note will be the date, whether or not a Business Day, 15 calendar days immediately preceding the Interest Payment Date. Notwithstanding the foregoing, from May 1, 2007 to and including May 3, 2027, any Fixed Rate Interest Payment Date that would otherwise be a day that is not a Business Day shall instead be the next succeeding Business Day, no additional interest shall accrue as a result of such delayed payment, and interest on the Note shall be computed on the basis of a 360-day year of twelve 30-day months. Notwithstanding the foregoing, from but not including May 3, 2027 to and including the Stated Maturity of the Note, any Floating Rate Interest Payment Date other than the Stated Maturity of the Note that would otherwise be a day that is not a Business Day shall instead be the next

succeeding Business Day, unless such next Business Day falls in the next calendar month in which case such payment shall be made on the immediately preceding day that is a Business Day, and interest shall accrue to the date that interest is actually paid, and interest on the Note shall be computed on the basis of a 360-day year and the actual number of days elapsed in each floating rate interest period. With respect to the period from but excluding May 3, 2027 to and including the Stated Maturity of the Note, Business Day shall also be a London Business Day. A “London Business Day” means any day that is not a Saturday or Sunday and on which dealings in deposits in U.S. dollars are transacted, or with respect to any future date are expected to be transacted, in the London interbank market.

REFERENCE IS 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 THOUGH FULLY SET FORTH AT THIS PLACE.

	LEHMAN BROTHERS HOLDINGS INC.


	By:
		Name:
		Title:

Attest:



Name:
Title:

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

Dated:

	THE BANK OF NEW YORK,
	as Trustee



	By:
		Authorized Signatory

(Reverse of Note)

LEHMAN BROTHERS HOLDINGS INC.

FIXED AND FLOATING RATE SUBORDINATED NOTE, DUE 2032

As provided in the Indenture and subject to certain limitations therein set forth, the Company may at its option redeem the Notes in whole or in part on the Redemption Date.

reason of the making of such payment, by the United States or any taxing authority thereof or therein, will not be less than the amount provided for in the Notes to be then due and payable.

As provided in the Indenture and subject to certain limitations therein set forth, the Notes may be redeemed at the option of the Company in whole if the Company determines that as a result of any change in or amendment to the laws or treaties, or any regulations or rulings promulgated thereunder, of the United States or of any political subdivision or taxing authority thereof or therein affecting taxation, or any proposed change in such laws, treaties or regulations or rulings, or any change in the official application, enforcement or interpretation of such laws, treaties or regulations or filings (including a holding by a court of competent jurisdiction in the United States) or any other action (other than an action predicated on law generally known on or before the date specified in such Note except for proposals before the Congress before such date) taken by any taxing authority or a court of competent jurisdiction in the United States, or the official proposal of any such action, whether or not such action or proposal was taken or made with respect to the Company, (A) the Company has or will become obligated to pay any Additional Amounts referred to in the foregoing paragraph pursuant to the Indenture on the Note or (B) there is a substantial possibility that the Company will be required to pay such Additional Amounts.

The covenant set forth in Section 1005 of the Indenture shall not apply to the Notes.

THE INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

All items used in this Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

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

	TEN COM —		as tenants in common
	TEN ENT —		as tenants by their entireties
	JT TEN —		as joint tenants with right of survivorship and
			not as tenants in common

UNIF GIFT MIN ACT —			Custodian	under Uniform Gifts to
(Cust)		(Minor)

Minors Act
	(State)

Additional abbreviations may also be used though not in the above list.

ASSIGNMENT

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 Note, and all rights thereunder, hereby irrevocably constituting and appointing

_____________ to transfer the said Note on the books of the Company, with full power of substitution in the premises.

Date:_____________

Signature:_______________________________________

NOTICE: The signature to this assignment must correspond
with the name as it appears upon the face of the within Note in
every particular, without alteration or enlargement or any change whatever.

Signature(s) Guaranteed: _____________________________

FORM 8-K

CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Delaware (State or other jurisdiction of incorporation)

Registrant’s telephone number, including area code: (212) 526-7000

SECTION 1. GENERAL TERMS AND CONDITIONS OF THE SUBORDINATED NOTES

b) any estate, inheritance, gift, sales, transfer, excise, personal property or similar tax, assessment or other governmental charge;

d) any tax, assessment or other governmental charge which is payable otherwise than by withholding from payment of principal of, or interest on, the Subordinated Notes;

e) any tax, assessment or other governmental charge required to be withheld by any paying agent from any payment of principal of, or interest on, the Subordinated Notes if such payment can be made without withholding by any other paying agent;

h) any combination of items (a), (b), (c), (d), (e), (f) and (g);

SECTION 2. AMENDMENTS TO THE INDENTURE

2.1 Amendment to Section 101 of the Indenture. Section 101 of the Indenture is hereby amended solely with respect to the Subordinated Notes by adding the following new definitions thereto, in the appropriate alphabetical sequence:

2.2 Amendment to Section 501 of the Indenture. Solely with respect to the Subordinated Notes, clauses (1) through (4) and (7) of Section 501 of the Indenture shall not apply.

2.3 Amendment to Section 1005 of the Indenture. Solely with respect to the Subordinated Notes, Section 1005 of the Indenture shall not apply.

2.4 Amendment to Section 1401 of the Indenture. Section 1401 is hereby amended solely with respect to the Subordinated Notes by deleting Section 1401 in its entirety and inserting in lieu thereof the following:

SECTION 3. ADDITIONAL PROVISION

The following Section 1412 is numbered to conform with the format of the Standard Provisions:

Section 1412. Subordinated Notes Subordinated to Prior Payment of all Other Financial Obligations on Dissolution, Liquidation or Reorganization of the Corporation.

SECTION 4. MISCELLANEOUS

4.1 Note. Attached hereto as Exhibit A is a form of the Subordinated Note.

4.2 Separability. In case any provision in this Tenth Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

4.3 Continuance of Indenture. This Tenth Supplemental Indenture supplements the Indenture and shall be a part of and subject to all the terms thereof. The Indenture, as supplemented by this Tenth Supplemental Indenture, shall continue in full force and effect.

4.4 The Trustee. The Trustee shall not be responsible in any manner for or in respect of the validity or sufficiency of this Tenth Supplemental Indenture, or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely.

4.5 Governing Law. This Tenth Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York.

4.6 Defined Terms. All capitalized terms used in this Tenth Supplemental Indenture which are defined in the Indenture, but not otherwise defined herein, shall have the same meanings assigned to them in the Indenture.

4.7 Counterparts. This Tenth Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Delaware
(State or other jurisdiction of incorporation)

Registrant’s telephone number, including area code:
(212) 526-7000