-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IQits3hLgbLz7ks7kEBUFfNoDLflVw3ZeXrNY9paTiwIAhnUfE+g7+Bfr4z+5tiN 8d9XLwOaqrf9YguTh4T9Qw== 0001104659-08-015524.txt : 20080305 0001104659-08-015524.hdr.sgml : 20080305 20080305170115 ACCESSION NUMBER: 0001104659-08-015524 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20080228 ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20080305 DATE AS OF CHANGE: 20080305 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: 08668527 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 a08-7099_118k.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):

February 28, 2008

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
New York, New York		10019
(Address of principal		(Zip Code)
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 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 (FX Basket-Linked Note)

4.02 Form of senior debt security—medium-term note (Buffered Return Enhanced Notes Linked to MarQCuS Portfolio A (USD) Index)

4.03 Form of senior debt security—medium-term note (China Bull Notes)

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

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

4.06 Form of senior debt security—medium-term note (Notes Linked to an Asian Currency Basket)

4.07 Form of senior debt security—medium-term note (Notes Linked to an Asian Currency Basket)

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: March 5, 2008

EXHIBIT INDEX

Exhibit No.		Exhibit

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

4.02		Form of senior debt security—medium-term note (Buffered Return Enhanced Notes Linked to MarQCuS Portfolio A (USD) Index)

4.03		Form of senior debt security—medium-term note (China Bull Notes)

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

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

4.06		Form of senior debt security—medium-term note (Notes Linked to an Asian Currency Basket)

4.07		Form of senior debt security—medium-term note (Notes Linked to an Asian Currency Basket)

EX-4.01 2 a08-7099_11ex4d01.htm EX-4.01

Exhibit 4.01

CUSIP NO. 5252M0DU8

ISIN NO. US5252M0DU86

REGISTERED

PRINCIPAL AMOUNT: $1,200,000

No. R-1

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTE, SERIES I

FX BASKET-LINKED NOTE
DUE MARCH 2, 2009

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY OR A NOMINEE OF THE DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM (A “CERTIFICATED NOTE”), THIS GLOBAL SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.

LEHMAN BROTHERS HOLDINGS INC., a corporation duly organized and existing under the laws of the State of Delaware (herein called the “Company,” which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to CEDE & Co., or registered assigns, on the Maturity Date, an amount equal to the Redemption Amount.

The “Maturity Date” is March 2, 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 principal amount of the Notes plus the Adjustment Amount, if any.

The “Adjustment Amount” is a single U.S. dollar amount equal the principal amount of the Notes multiplied by (A) the product of the Leverage times the Basket Return, if the Basket Return is greater than or equal to zero; (B) the Basket Return, if the Basket Return is greater than –10.00% and less than zero; or (C) –10.00%, if the Basket Return is less than or equal to –10.00%; provided that the minimum Adjustment Amount shall be –10.00%.

The “Leverage” is 150%.

The “Reference Currencies” are the Chinese Renminbi (CNY), Indian Rupee (INR), Russian Ruble (RUB), Australian Dollar (AUD) and New Zealand Dollar (NZD).

The “Basket Return” equals the sum of the Weighted Currency Returns for the Reference Currencies.

The “Weighted Currency Return” for each of CNY, RUB and INR is the product of the Weighting for such Reference Currency times a quotient, the numerator of which is the difference of the Initial Reference Currency Rate for such Reference Currency minus the Settlement Rate for such Reference Currency and the denominator of which is the Initial Reference Currency Rate for such Reference Currency. The Weighted Currency Return for each of AUD and NZD is the product of the Weighting for such Reference Currency times a quotient, the numerator of which is the difference of the Settlement Rate for such Reference Currency minus the Initial Reference Currency Rate for such Reference Currency and the denominator of which is the Settlement Rate for such Reference Currency.

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

Reference Currency	Weighting		Initial Reference Currency Rate
CNY	20	%	7.1503
INR	20	%	40.07
RUB	20	%	24.5288
AUD	20	%	0.91815
NZD	20	%	0.79895

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

The “Reference Exchange Rates” are, for AUD and NZD, the spot exchange rates for each of AUD and NZD quoted against the U.S. dollar, expressed as the number of USD per unit of the Reference Currency. The Reference Exchange Rates for CNY, INR and RUB are the spot exchange rate for each of CNY, INR and RUB, respectively, quoted against the U.S. dollar, expressed as the number of units of the Reference Currency per one USD.

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

The “Issue Date” is February 28, 2008.

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

· for each Reference Currency that did not suffer a Disruption Event on the scheduled Valuation Date, the Settlement Rate on the scheduled Valuation Date, and

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

provided, however, that if a Disruption Event has occurred or is continuing with respect to a Reference 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 Reference Currency; and (b) the Calculation Agent will determine the Settlement Rate for the affected Reference 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 Reference 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 (x) the delivery of USD from accounts inside the Reference Currency Jurisdiction for that Reference Currency to accounts outside that Reference Currency Jurisdiction; or (y) for CNY and

INR only, the conversion of the Reference Currency into USD through customary legal channels;

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

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

A “Valuation Business Day” means, with respect to each Reference 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:

Reference Currency	Screen Reference	Valuation Business Day
CNY	SAEC	Beijing
INR	RBIB	Mumbai
RUB	EMTA	Moscow
AUD	USDAUDFIXM=WM* (as substitute for 1FEE)	London
NZD	USDNZDFIXM=WM* (as substitute for 1FEE)	London

*As observed at approximately 4:00 p.m. London time

The “Settlement Rate Option” for the CNY is the Chinese Renminbi/U.S. Dollar official Beijing fixing rate, expressed as the amount of Chinese Renminbi per one U.S. Dollar, for settlement in two Business Days reported by The State Administration of Foreign Exchange of the People’s Republic of China, Beijing, which appears on the Reuters Screen SAEC Page opposite the symbol “USDCNY=” at approximately 5:00 p.m., Beijing time, on the relevant Valuation Date. The Settlement Rate Option 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 relevant Valuation Date. The Settlement Rate Option 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 relevant Valuation Date. The Settlement Rate Option for the AUD is the U.S. Dollar/Australian Dollar official fixing rate, expressed as the amount of U.S. Dollars per one Australian Dollar, for settlement in two Business Days reported

by the Federal Reserve Bank of New York which appears on Reuters Screen 1FEE to the right of the caption “AUD” at approximately 12.00 p.m., New York time, on the relevant Valuation Date. The Settlement Rate for the NZD is the New Zealand Dollar/U.S. Dollar official fixing rate, expressed as the amount of New Zealand Dollars per one U.S. Dollar, for settlement in two Business Days reported by the Federal Reserve Bank of New York which appears on Reuters Screen 1FEE to the right of the caption “NZD” at approximately 12.00 p.m., New York time, on the relevant Valuation Date. The term “business day” solely as used in any Settlement Rate Option described above shall mean any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which commercial banks are authorized or required by law, regulation or executive order to close (including for dealings in foreign exchange in accordance with the practice of the foreign exchange market) in the Principal Financial Center for both (a) the Basket Currency and (b) the currency against which the Basket Currency is quoted (the “base currency”) in accordance with the Reference Exchange Rate specified in the applicable pricing supplement, in each case as specified for the applicable Basket Currency or base currency in the table above.

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

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

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

The “Calculation Agent” means Lehman Brothers Inc.

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

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

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

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

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

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

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

Dated: February 28, 2008

[SEAL]	LEHMAN BROTHERS HOLDINGS INC.


	By:
		Name: Andrew Yeung
		Title: Vice President


	Attest:
		Name: Cindy Buckholz
		Title: Assistant Secretary

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

CITIBANK, N.A.

as Trustee

By:
	Authorized Officer

[REVERSE OF NOTE]

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTES, SERIES I

FX BASKET-LINKED NOTE
DUE MARCH 2, 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 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 Adjustment 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 Adjustment 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 Adjustment 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 Adjustment 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 integral multiples of $1,000, either at the office or agency to be designated and maintained by the Company for such purpose in the Borough of Manhattan, New York City, pursuant to the provisions of the Indenture or at any of such other offices or agencies as may be designated and maintained by the Company for such purpose pursuant to the provisions of the Indenture, and in the manner and subject to the limitations provided in the Indenture, but without the payment of any service charge, except for any tax or other governmental charges imposed in connection therewith. Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized denomination, except that Global Securities will not be exchangeable for Certificated Notes of this series.

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

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

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

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

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

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

Section 9. No Recourse Against Certain Persons. No recourse for the payment of the Adjustment 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 a08-7099_11ex4d02.htm EX-4.02

Exhibit 4.02

CUSIP NO. 5252M0DN4

ISIN NO. US5252M0DN44

REGISTERED

PRINCIPAL AMOUNT: $20,000,000

No. R-1

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTE, SERIES I

BUFFERED RETURN ENHANCED NOTES LINKED TO

MARQCUS PORTFOLIO A (USD) INDEX
DUE MARCH 1, 2011

The “Maturity Date” is March 1, 2011, 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 Adjustment Amount, which may be negative, rounded to the nearest whole U.S. cent. If the Adjustment Amount is negative, the value of the Adjustment Amount will be subtracted from the principal amount of the notes for purposes of calculating the Redemption Amount.

The “Adjustment Amount” is, for each note, a single U.S. dollar payment calculated by the Calculation Agent equal to the principal amount of the note multiplied by:

(A) Leverage x Index Return, if the Index Return is greater than or equal to 0.0%; or

(B) 0%, if the Index Return is less than 0.0% but greater than the Buffer Level; or

The “Leverage” is 260%.

The “Buffer Level” is –5.0%.

The “Protection Percentage” is 5.0%.

The “Trade Date” is February 21, 2008.

The “Issue Date” is February 29, 2008.

The “Valuation Date” is February 22, 2011, or if such day is not an Index Business Day, the immediately preceeding Index Business Day; provided that if the Final Index Level is not available on the scheduled Valuation Date due to Index Unavailability, as described under “Index Unavailability” below, the Valuation Date may be postponed (as described below).

The “Index” is the Lehman Brothers Macro Quantitative Currency Trading Strategies (“MarQCuS”) Portfolio A (USD) Index, calculated and published by the Index Calculation Agent.

The “Index Return” is a quotient, the numerator of which is the Final Index Level minus the Initial Index Level and the denominator of which is the Initial Index Level, expressed as a percentage.

The “Final Index Level” is the closing value of the Index on the Valuation Date, as calculated by the Index Calculation Agent (subject to the occurrence of Index Unavailability).

The “Initial Index Level” is 194.43, which is equal to the closing value of the Index on the Trade Date, as calculated by the Index Calculation Agent.

The “Index Level” is the closing level of the Index, as calculated by the Index Calculation Agent and published on the Price Source, subject to adjustment in accordance with the Index Adjustment below.

An “Index Business Day” is a day on which commercial banks are open, including for dealings in foreign exchange in accordance with market practice of the foreign exchange market, in both London and New York.

“Index Unavailability” means that the Index Level for the Valuation Date is not published on the Price Source.

MarQCuS Index	Bloomberg Page (Price Source)*	Reuters Page (Fallback Price Source)*

Forward Bias G10 Index	LBMQMFG <INDEX>	.LBMQMFG
Forward Bias Emerging Market (EM) Index	LBMQMFE <INDEX>	.LBMQMFE
TurnRate Index and	LBMQMTR <INDEX>	.LBMQMTR
Major/Miner Index	LBMQMMM <INDEX>	.LBMQMMM
CoBALT Index LBFX GBP	LBMQMCO <INDEX>	.LBMQMCO
RAFT Index	LBMQMRF <INDEX>	.LBMQMRF

For purposes of calculating the MarQCuS Portfolio A Index, the term “Price Source” and “Fallback Price Source” includes any (a) successor page to or (b) solely in the event the Index Calculation Agent determines in good faith that the indicated Bloomberg or Reuters pages is no longer a materially accurate source for the level of any MarQCuS Index, any replacement page for, to the indicated Bloomberg and Reuters pages, respectively, on which the level of the relevant MarQCuS Index may be published, as determined in the Index Calculation Agent acting in good faith.

If the Index Calculation Agent determines in good faith that the Index Level for the Valuation Date was not published on the Price Source, the Calculation Agent will determine the Final Index Level using the Index Level published on the Fallback Price Source for such Valuation Date. If the Index Calculation Agent determines in good faith that the Index Level for the Valuation Date was also not published on the Fallback Price Source, the Calculation Agent will calculate the Index Return using as the Final Index Level the Index Level published for the first Index Business Day succeeding the scheduled Valuation Date; provided however that if no Index Level is published on the Price Source or Fallback Price Source for each of the three scheduled Index Business Days following the scheduled Valuation Date, then (a) the third scheduled Index Business Day shall be deemed the Valuation Date and (b) the Calculation Agent will determine the Final Index Level on such third scheduled Index Business Day in good faith in accordance with the formula for and method of calculating the Index last in effect prior to commencement of the Index Unavailability, taking in to account the latest available Index Level and any other information that it deems relevant.

If the Index Calculation Agent discontinues publication of the Index prior to, and such discontinuation is continuing on the Valuation Date, and the Index Calculation Agent or another entity publishes a successor or substitute index that the Calculation Agent determines in good faith to be comparable to the discontinued Index (such index, a “Successor Index”), then the Final Index Level will be determined by reference to the closing level of such Successor Index on the Valuation Date; provided, however, that the Calculation Agent may make such adjustments as it deems necessary, acting in good faith, to the level of the Successor Index so that the level of the Successor Index reflects the same level as that of the Index before it was discontinued. Upon any selection by the Calculation Agent of a Successor Index, the Calculation Agent will cause written notice thereof to be promptly furnished to the trustee, to the Issuer and to the holders of the notes.

If the Index Calculation Agent discontinues publication of the Index prior to, and such discontinuation is continuing on the Valuation Date, and the Calculation Agent determines in good faith that no Successor Index is available at such time, then the Calculation Agent will determine the Final Index Level on the Valuation Date. The Final Index Level will be computed by the Calculation Agent in accordance with the formula for and method of calculating the Index last in effect prior to such discontinuation, taking in to account the latest available Index Level and any other information that it deems relevant.

In the event that there is any error in relation to the calculation or publication of the Final Index Level and the Index Calculation Agent publishes an adjustment or correction to such Final Index Level on or prior to the Business Day immediately preceding the Maturity Date, the Calculation Agent will calculate the Redemption Amount using the Final Index Level as so adjusted or corrected.

If the Calculation Agent, acting in good faith, determines that the Index has been or will be rebased on or prior to the Valuation Date, the Index as so rebased will be used for purposes of calculating the Redemption Amount; provided, however, that the Calculation Agent may make such adjustments it considers necessary, if any, to the level of the Index so rebased so that the Final Index Level reflects the same Index Level for the Index on the Valuation Date before such rebasing.

If the Index Calculation Agent, acting in good faith, determines that on any Index Business Day that a component MarQCuS Index (a) is no longer available or (b) has been materially modified and such modification will have a materially adverse effect on the MarQCuS Portfolio A Index, the Index Calculation Agent shall remove or replace such affected component MarQCuS Index with an alternative index or rate, variable or other component, and may make such adjustments to the level of such replacement index or rate, variable or other component as it considers necessary so that the level of the MarQCuS Portfolio A Index after such removal or replacement reflects a similar level to that calculated prior to the removal or replacement, acting in good faith. Following the removal or replacement of a component MarQCuS Index, the Index Calculation Agent will promptly publish a notice which specifies the component MarQCuS Index removed or replaced and any designated replacement thereof.

The “Calculation Agent” means Lehman Brothers Inc.

The “Index Calculation Agent” means Lehman Brothers International (Europe).

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).

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: February 29, 2008

[SEAL]	LEHMAN BROTHERS HOLDINGS INC.


	By:
		Name: Andrew M.W. Yeung
		Title: Vice President

	Attest:
		Name: Cindy Buckholz
		Title: Assistant Secretary

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

CITIBANK, N.A.

as Trustee

By:
	Authorized Officer

[REVERSE OF NOTE]

LEHMAN BROTHERS HOLDINGS INC.
MEDIUM-TERM NOTES, SERIES I
BUFFERED RETURN ENHANCED NOTES LINKED TO MARQCUS PORTFOLIO A (USD) INDEX
DUE MARCH 1, 2011

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, Buffered Return Enhanced Notes Linked to MarQCuS Portfolio A (USD) Index (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 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 $100,000 or integral multiples of $100,000, 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.

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

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-4.03 4 a08-7099_11ex4d03.htm EX-4.03

Exhibit 4.03

CUSIP NO. 5252M0DF1

ISIN NO. US5252M0DF10

REGISTERED

PRINCIPAL AMOUNT: $3,260,000

No. R-1

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTE, SERIES I

CHINA BULL NOTES

DUE FEBRUARY 28, 2012

The “Maturity Date” is February 28, 2012, or if such day is not a Business Day, on the next following Business Day.

The “Valuation Date” is February 21, 2012; provided that, upon the occurrence of a Disruption Event with respect to a Basket Component, the Valuation Date for the affected Basket Component may be postponed (as described below under “Disruption Events”).

The “Original Trade Date” is February 25, 2008.

The “Issue Date” is February 28, 2008.

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

The “Additional Amount” is an amount per Note equal to the principal amount of each note multiplied by (a) 60.0%, if the Basket Return is greater than or equal to 60.0%; (b) the Basket Return, if the Basket Return is greater than zero, but less than 60.0%; or (c) 0.0%, if the Basket Return is less than or equal to zero.

The “Basket Return” is the sum of the Weighted Index Return, the Weighted Currency Return, the Weighted Copper Return and the Weighted Crude Oil Return.

The “Reference Index” is the Hang Seng® Index.

The “Index Level” is the daily closing level of the Reference Index, as determined and published by the Index Sponsor (subject to the occurrence of a Disruption Event).

The “Initial Index Level” is 23,269.14, which is the Index Level on the Original Trade Date.

The “Final Index Level” is the Index Level on the Valuation Date (subject to the occurrence of a Disruption Event).

The “Index Sponsor” is the Hang Seng Indexes Company Limited, a wholly owned subsidiary of the Hang Seng® Bank.

The “Weighted Index Return” is the Index Weight times the Index Return.

The “Index Weight” is 33.34%.

The “Index Return” is a quotient, the numerator of which is the difference of the Final Index Level minus the Initial Index Level and the denominator of which is the Initial Index Level.

The “Reference Currency” is the Chinese Renminbi (CNY).

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

The “Initial Currency Rate” is 7.146, which is the Reference Exchange Rate on the Original Trade Date, observed in accordance with the Settlement Rate Option.

The “Settlement Rate” is the Reference Exchange Rate on the Valuation Date, observed in accordance with the Settlement Rate Option (subject to the occurrence of a Disruption Event).

The “Weighted Currency Return” is the product of the Currency Weight times the Currency Return.

The “Currency Weight” is 33.34%.

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

The “Settlement Rate Option” is the CNY/USD official Beijing fixing rate, expressed as the amount of CNY per one USD, for settlement in two Beijing and New York business days reported by The State Administration of Foreign Exchange of the People’s Republic of China, Beijing, which appears on the Reuters Screen SAEC Page opposite the symbol “USDCNY=” at approximately 5:00 p.m., Beijing time, on the relevant day.

The “Reference Commodities” are Crude Oil and Copper together, each a “Reference Commodity”.

“Copper” is Copper – Grade A.

The “Copper Price” is the official settlement price of Copper for cash delivery, expressed as the U.S. dollar price per metric ton, as made public by the Relevant Commodity Exchange for Copper (subject to the occurrence of a Disruption Event).

The “Initial Copper Price” is $8,247, which is the Copper Price on the Original Trade Date.

The “Final Copper Price” is the Copper Price on the Valuation Date.

The “Weighted Copper Return” is the sum of Copper Weight times Copper Return.

The “Copper Weight” is 16.66%.

The “Copper Return” is a quotient, the numerator of which is the difference of the Final Copper Price minus the Initial Copper Price and the denominator of which is the Initial Copper Price.

“Crude Oil” is Light sweet crude oil.

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

The “Initial Crude Oil Price” is $99.23, which is the Crude Oil Price on the Original Trade Date.

The “Final Crude Oil Price” is the Crude Oil Price on the Valuation Date.

The “Weighted Crude Oil Return” is the sum of Crude Oil Weight times Crude Oil Return.

The “Crude Oil Weight” is 16.66%.

The “Crude Oil Return” is a quotient, the numerator of which is the difference of the Final Crude Oil Price minus the Initial Crude Oil Price and the denominator of which is the Initial Crude Oil Price.

The “Relevant Commodity Exchange” is, for each Reference Commodity, the exchange set forth opposite such Reference Commodity below, or its successor, or if the exchange set forth below is no longer the principal exchange or trading market for a Reference Commodity or options or futures contracts for such Reference Commodity, such other exchange or principal trading market for the relevant Reference Commodity as determined in good faith by the Calculation Agent which serves as the source of prices for that Reference Commodity, and any principal exchanges where options or futures contracts on that Reference Commodity are traded.

Reference Commodity		Relevant Commodity Exchange

Copper		London Metal Exchange (“LME”)

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

If a Disruption Event relating to one or more of the Reference Index, the Reference Currency or the Reference Commodities (with respect to a Commodity Disruption Event identified in clauses (A), (B) or (C) below) is in effect on the scheduled Valuation Date, the Calculation Agent will calculate the Basket Return using:

· If the Reference Index, the Reference Currency or a Reference Commodity did not suffer a Disruption Event on the scheduled Valuation Date, the Final Index Level, the Settlement Rate, the Final Copper Price or the Final Crude Oil Price, as applicable, on the scheduled Valuation Date, and

· If any or all of the Reference Index, the Reference Currency or a Reference Commodity did suffer a Disruption Event on the scheduled

Valuation Date, the Final Index Level, the Settlement Rate, the Final Copper Price and/or the Final Crude Oil Price, as the case may be, on the immediately succeeding Scheduled Index Trading Day, Scheduled Currency Business Day or scheduled Commodity Trading Day, as applicable, on which no Disruption Event occurs or is continuing with respect to the affected Reference Index, Reference Currency or Reference Commodity;

provided however that if a Disruption Event with respect to one or more of the Reference Index, the Reference Currency or a Reference Commodity has occurred or is continuing on each of the three Scheduled Index Trading Days, Scheduled Currency Business Days or scheduled Commodity Trading Days, as applicable, following the scheduled Valuation Date, then (a) such third Scheduled Index Trading Day, Scheduled Currency Business Day or Scheduled Commodity Trading Day, as applicable, shall be deemed the Valuation Date for the affected Reference Index, Reference Currency or Reference Commodity, respectively; and (b) the Calculation Agent will determine, on such day, (i) in the case of the Reference Index, its good faith estimate of the Final Index Level, based on the last available Index Level and any other information that in good faith it deems relevant, (ii) in the case of the Reference Currency, the Settlement Rate in accordance with the Fallback Rate Observation Methodology, or (iii) in the case of a Reference Commodity, the Final Copper Price or the Final Crude Oil Price, as applicable, for the affected Reference Commodity in its sole and absolute discretion, taking into account the latest available quotation for the Final Copper Price or the Final Crude Oil Price, as the case may be, for the affected Reference Commodity and any other information that in good faith it deems relevant.

If a Commodity Disruption Event identified in clauses (D) or (E) below relating to one or both of the Reference Commodities is in effect on the Valuation Date, the Calculation Agent will determine the Final Copper Price or the Final Crude Oil Price, as applicable, for the affected Reference Commodity on the scheduled Valuation Date in its sole and absolute discretion, taking into account the latest available quotation for the Copper Price and/or the Crude Oil Price, as the case may be, for the affected Reference Commodity and any other information that in good faith it deems relevant.

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, for the Reference Index, an Index Disruption Event, for the Reference Currency, a Currency Disruption Event and for the Reference Commodities, a Commodity Disruption Event.

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

(A) A material suspension of or limitation imposed on trading relating to the securities that then comprise 20% or more of the level of the Reference Index (or the successor index) by the Relevant Equity Exchanges (as

defined below) on which those securities are traded, at any time during the one hour period that ends at the close of trading on such day, whether by reason of movements in price exceeding limits permitted by that Relevant Equity Exchange or otherwise;

(B) A material suspension of or limitation imposed on trading in futures or options contracts related to the Reference Index (or the successor index) by the primary exchange or quotation system on which those futures or options contracts are traded at any time during the one hour period that ends at the close of trading on such day, whether by reason of movements in price exceeding limits permitted by the exchanges or otherwise;

(C) Any event, other than an early closure, that disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for the securities that then comprise 20% or more of the Reference Index (or the successor index) on the Relevant Equity Exchanges on which those securities are traded, at any time during the one hour period that ends at the close of trading on that day;

(D) Any event, other than an early closure, that disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for, the futures or options contracts relating to the Reference Index (or the successor index) on the primary exchange or quotation system on which those futures or options contracts are traded at any time during the one hour period that ends at the close of trading on such day;

(E) The closure of the Relevant Equity Exchanges on which the securities that then comprise 20% or more of the Reference Index (or the successor index) are traded or on which futures or options contracts relating to the Reference Index (or the successor index) are traded prior to its scheduled closing time unless the earlier closing time is announced by the Relevant Equity Exchanges at least one hour prior to the earlier of (1) the actual closing time for the regular trading session on the Relevant Equity Exchanges and (2) the submission deadline for orders to be entered into the Relevant Equity Exchanges for execution at the close of trading on such day.

For the purpose of determining whether an Index Disruption Event exists at any time:

(1) the relevant percentage contribution of a security to the level of the Reference Index (or the successor index) will be based on a comparison of (x) the portion of the level of the Reference Index (or the successor index) attributable to that security and (y) the overall level of the Reference Index (or the successor index), in each case immediately before the occurrence of the Index Disruption Event;

(2) “close of trading” means in respect of any Relevant Equity Exchange, the scheduled weekday closing time on a day on which the Relevant Equity Exchange is scheduled to be open for trading for its respective regular

trading session, without regard to after hours or any other trading outside of the regular trading session hours; and

(3) limitations pursuant to the rules of any Relevant Equity Exchange similar to NYSE Rule 80A (or any applicable rule or regulation enacted or promulgated by any other self-regulatory organization or any government agency of scope similar to NYSE Rule 80A as determined by the Calculation Agent) on trading during significant market fluctuations will constitute a suspension, absence or material limitation of trading.

For purposes of the above, “Relevant Equity Exchange” means the primary organized exchange or market of trading for any security (or any combination thereof) then included in the Reference Index or any successor index.

A “Currency 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 (x) 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 or (y) the conversion of the Reference Currency into USD through customary legal channels;

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

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

A “Commodity Disruption Event” with respect to a Reference Commodity 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 Reference Commodity or futures contracts or options related to the Reference Commodity, on the Relevant Commodity Exchange for that Reference Commodity;

(B) either (i) the failure of trading to commence, or permanent discontinuance of trading, in the Reference Commodity, or futures contracts or options

related to the Reference Commodity, on the Relevant Commodity Exchange for that Reference Commodity, or (ii) the disappearance of, or of trading in, the Reference Commodity;

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

(D) the occurrence since the Original Trade Date of a material change in the content, composition, or constitution of the Reference Commodity; or

(E) the occurrence since the Original Trade Date of a material change in the formula for or the method of calculating the settlement price of the Reference Commodity.

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

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

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

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

For purposes of the above, “scheduled Commodity Trading Day” means a day, as determined in good faith by the Calculation Agent, on which trading is generally conducted on the Relevant Commodity Exchange applicable to the affected Reference Commodity.

A “Valuation Business Day” means any day that is each of (a) a Scheduled Index Trading Day for the Reference Index (b) a Currency Business Day for the Reference Currency, and (c) a Commodity Business Day for the Reference Commodities.

A “Scheduled Index Trading Day” means any day on which the Hang Seng (or any successor index) is published by the Sponsor (or the publisher of such successor index) or otherwise determined by the Calculation Agent.

A “Currency Business Day” means any day that is not a Saturday, a Sunday or a day on which banking institutions generally are authorized or obligated by law or executive order to be closed (including for dealings in foreign exchange in accordance with the market practice of the foreign exchange market) in Beijing.

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

The “Fallback Rate Observation Methodology” means that the Reference Exchange Rate, Final Spot Rate or other rate, as specified in the applicable pricing supplement, in respect of a basket currency will equal the noon buying rate in New York for cable transfers in foreign currencies as announced by the Federal Reserve Bank of New York for customs purposes (the “Noon Buying Rate”) on the relevant Valuation Date or such other date specified in the applicable pricing supplement. If the Noon Buying Rate is not announced on that date, the Reference Exchange Rate, Final Spot Rate or other rate for such Basket Currency will be calculated on the basis of the arithmetic mean of the applicable spot quotations received by the Calculation Agent at approximately 10:00 a.m., New York City time, on the Valuation Business Day next succeeding the Valuation Date or such other date specified in the applicable pricing supplement, for the purchase or sale for deposits in the basket currency by the New York offices of three leading banks engaged in the interbank market (selected in the sole discretion of the Calculation Agent) (the “Reference Banks”). If fewer than three Reference Banks provide spot quotations, then the Reference Exchange Rate, Final Spot Rate or other rate, as applicable, will be calculated on the basis of the arithmetic mean of the applicable spot quotations received by the Calculation Agent at approximately 10:00 a.m., New York City time, on the relevant date from two Reference Banks (selected in the sole discretion of the Calculation Agent), for the purchase or sale for deposits in the Basket Currency. If these spot quotations are available from only one Reference Bank, then the Calculation Agent, in its sole discretion, will determine whether that quotation is reasonable to be used. If no spot quotation is available, then the Reference Exchange Rate, Final Spot Rate or other rate, as applicable, for such Basket Currency 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: February 28, 2008

[SEAL]	LEHMAN BROTHERS HOLDINGS INC.


	By:
		Name: Andrew Yeung
		Title: Vice President


	Attest:
		Name: Cindy Buckholz
		Title: Assistant Secretary

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

CITIBANK, N.A.
as Trustee


By:
Authorized Officer

[REVERSE OF NOTE]

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTES, SERIES I

CHINA BULL NOTES
DUE FEBRUARY 28, 2012

Section 1. General. This Note is one of a duly authorized series of Notes of the Company designated as the Medium-Term Notes, Series I, China Bull Notes (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 $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.

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

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-4.04 5 a08-7099_11ex4d04.htm EX-4.04

Exhibit 4.04

CUSIP NO. 5252M0DM6

ISIN NO. US5252M0DM60

REGISTERED

PRINCIPAL AMOUNT: $870,000

No. R-1

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTE, SERIES I

FX BASKET-LINKED NOTE
DUE MARCH 1, 2010

The “Maturity Date” is March 1, 2010, 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 product of the Leverage times the Basket Return, if the Basket Return is greater than zero; provided that the minimum Additional Amount payable on the notes shall be zero.

The “Leverage” is 100%.

The “Reference Currencies” are the Euro (EUR), Japanese Yen (JPY), British Pound (GBP), Canadian Dollar (CAD), Swedish Krona (SEK), and Swiss Franc (CHF).

The “Basket Return” equals the sum of the Weighted Currency Returns for each Reference Currency.

The “Weighted Currency Return” is, for EUR and GBP, the product of the Weighting for each of EUR and GBP times a quotient, the numerator of which is the difference of the Initial Reference Currency Rate for such Reference Currency minus the Settlement Rate for such Reference Currency and the denominator of which is the Settlement Rate for such Reference Currency. The Weighted Currency Return is, for JPY, CAD, SEK and CHF, the product of the Weighting for each of JPY, CAD, SEK and CHF times a quotient, the numerator of which is the difference of the Settlement Rate for such Reference Currency minus the Initial Reference Currency Rate for such Reference Currency and the denominator of which is the Initial Reference Currency Rate for such Reference Currency.

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

Reference Currency	Weighting		Initial Reference Currency Rate
EUR	57.6	%	1.4883
JPY	13.6	%	107.66
GBP	11.9	%	1.9723
CAD	9.1	%	0.9871
SEK	4.2	%	6.2534
CHF	3.6	%	1.0848

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

The “Reference Exchange Rates” are, for EUR and GBP, the spot exchange rates for each of EUR and GBP quoted against the U.S. dollar, expressed as the number of USD per unit of the Reference Currency. The Reference Exchange Rates for JPY, CAD, SEK and CHF are the spot exchange rate for each of JPY, CAD, SEK and CHF, respectively, quoted against the U.S. dollar, expressed as the number of units of the Reference Currency per one USD.

The “Valuation Date” is February 24, 2010; provided that, upon the occurrence of a Disruption Event with respect to a Reference Currency, the Valuation Date for the affected Reference Currency may be postponed (as described in “Disruption Events” below).

The “Issue Date” is February 29, 2008.

· for each Reference Currency that did not suffer a Disruption Event on the scheduled Valuation Date, the Settlement Rate on the scheduled Valuation Date, and

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 (x) the conversion of the Reference Currency into USD through customary legal channels; or (y) for any Reference Currency other than EUR, the delivery of USD from accounts

inside the Reference Currency Jurisdiction with respect to such Reference Currency to accounts outside that Reference Currency Jurisdiction;

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

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

Reference Currency	Screen Reference*	Valuation Business Day
EUR	Reuters page EURUSDFIXM=WM (as substitute for 1FED)	London
JPY	Reuters page USDJPYFIXM=WM (as substitute for 1FED)	London
GBP	Reuters page GBPUSDFIXM=WM (as substitute for 1FED)	London
CAD	Reuters page USDCADFIXM=WM (as substitute for 1FED)	London
SEK	Reuters page USDSEKFIXM=WM (as substitute for 1FED)	London
CHF	Reuters page USDCHFFIXM=WM (as substitute for 1FED)	London

* In each case, as observed at approximately 4:00 p.m. London time.

The “Settlement Rate Option” for the EUR is the U.S. Dollar/Euro official fixing rate, expressed as the amount of U.S. Dollars per one Euro, for settlement in two Business Days reported by the Federal Reserve Bank of New York which appears on Reuters Screen 1FED to the right of the caption “EUR” at approximately 10.00 a.m., New York time, on the relevant Valuation Date. The Settlement Rate Option for the JPY is the Yen/U.S. Dollar official fixing rate, expressed as the amount of Japanese Yen per one U.S. Dollar, for settlement in two Business Days reported by the Federal Reserve Bank of New York which appears on Reuters Screen 1FED to the right of the caption “JPY” at approximately 10.00 a.m., New York time, on the relevant Valuation Date. The Settlement Rate Option for the GBP is the U.S. Dollar/Sterling official fixing rate, expressed as the amount of U.S. Dollars per one Sterling, for settlement in

two Business Days reported by the Federal Reserve Bank of New York which appears on Reuters Screen 1FED to the right of the caption “GBP” at approximately 10.00 a.m., New York time, on the relevant Valuation Date. The Settlement Rate Option for the CAD is the Canadian Dollar/U.S. Dollar official fixing rate, expressed as the amount of Canadian Dollars per one U.S. Dollar, for settlement in one Business Day reported by the Federal Reserve Bank of New York which appears on Reuters Screen 1FED to the right of the caption “CAD” at approximately 10.00 a.m. New York time, on the relevant Valuation Date. The Settlement Rate Option for the SEK is the Swedish Krona/U.S. Dollar official fixing rate, expressed as the amount of Swedish Krona per one U.S. Dollar, for settlement in two Business Days reported by the Federal Reserve Bank of New York which appears on Reuters Screen 1FED to the right of the caption “SEK” at approximately 10.00 a.m., New York time, on the relevant Valuation Date. The Settlement Rate Option for the CHF is the Swiss Franc/U.S. Dollar official fixing rate, expressed as the amount of Swiss Francs per one U.S. Dollar, for settlement in two Business Days reported by the Federal Reserve Bank of New York which appears on Reuters Screen 1FED to the right of the caption “CHF” at approximately 10.00 a.m., New York time, on the relevant Valuation Date. The term “business day” solely as used in any Settlement Rate Option described above shall mean any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which commercial banks are authorized or required by law, regulation or executive order to close (including for dealings in foreign exchange in accordance with the practice of the foreign exchange market) in the Principal Financial Center for both (a) the Basket Currency and (b) the currency against which the Basket Currency is quoted (the “base currency”) in accordance with the Reference Exchange Rate specified in the applicable pricing supplement, in each case as specified for the applicable Basket Currency or base currency in the table above.

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).

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: February 29, 2008

[SEAL]	LEHMAN BROTHERS HOLDINGS INC.


	By:
		Name: Andrew Yeung
		Title: Vice President


	Attest:
		Name: Cindy Buckholz
		Title: Assistant Secretary

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

CITIBANK, N.A.
as Trustee


By:
Authorized Officer

[REVERSE OF NOTE]

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTES, SERIES I

FX BASKET-LINKED NOTE
DUE MARCH 1, 2010

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 $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.

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.

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-4.05 6 a08-7099_11ex4d05.htm EX-4.05

Exhibit 4.05

CUSIP NO. 5252M0DA2

ISIN NO. US5252M0DA23

REGISTERED	PRINCIPAL AMOUNT: $2,223,000
No. R-1

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTE, SERIES I

FX BASKET-LINKED NOTE

DUE FEBRUARY 28, 2011

The “Maturity Date” is February 28, 2011, 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 product of the Upside Leverage times the Basket Return, if the Basket Return is greater than zero, and the Downside Return Rate times the product of -1 times the Basket Return, if the Basket Return is less than or equal to zero; provided that the minimum Additional Amount payable on the notes shall be zero.

The “Upsize Leverage” is 100%.

The “Downside Return Rate” is 60%.

The “Reference Currencies” are the Brazilian Real (BRL), Russian Ruble (RUB), Indian Rupee (INR), Chinese Renminbi (CNY) and South Korean Won (KRW).

The “Basket Return” equals the sum of the Weighted Currency Returns for each Reference Currency.

The “Weighted Currency Return” is, for each Reference Currency, the product of the Weighting for such Reference Currency times a quotient, the numerator of which is the difference of the Initial Reference Currency Rate for such Reference Currency minus the Settlement Rate for such Reference Currency and the denominator of which is the Initial Reference Currency Rate for such Reference Currency.

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

Reference Currency	Weighting		Initial Reference Currency Rate
BRL	20	%	1.6882
RUB	20	%	24.4305
INR	20	%	39.91
CNY	20	%	7.1505
KRW	20	%	947.40

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

The “Valuation Date” is February 23, 2011; provided that, upon the occurrence of a Disruption Event with respect to a Reference Currency, the Valuation Date for the affected Reference Currency may be postponed (as described in “Disruption Events” below).

The “Issue Date” is February 29, 2008.

· for each Reference Currency that did not suffer a Disruption Event on the scheduled Valuation Date, the Settlement Rate on the scheduled Valuation Date, and

provided, however, that if a Disruption Event has occurred or is continuing with respect to a Reference 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 Reference Currency; and (b) the Calculation Agent will determine the Settlement Rate for the affected Reference Currency 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 Reference Currency Jurisdiction for that Reference Currency to accounts outside that Reference Currency Jurisdiction;

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

(C) the Settlement Rate being unavailable for the Reference Currency, or the occurrence of an event (i) in the Reference Currency Jurisdiction for that Reference Currency that materially disrupts the market for the Reference

Currency or (ii) that generally makes it impossible to obtain the Settlement Rate for the Reference Currency, on the Valuation Date.

Reference Currency	Screen Reference	Valuation Business Day
BRL	BRFR	Brazilia, Rio de Janiero or São Paulo
RUB	EMTA	Moscow
INR	RBIB	Mumbai
CNY	SAEC	Beijing
KRW	KFTC18	Seoul

The “Settlement Rate Option” 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 Settlement Rate Option 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 Settlement Rate Option 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 on the Valuation Date or such other relevant date. The Settlement Rate Option 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 other such relevant date. The Settlement Rate Option for the KRW is the South Korean Won/U.S. Dollar market average Seoul rate, expressed as the amount of South Korean Won per one U.S. Dollar, for settlement in two Business Days reported by the Korea Financial Telecommunications and Clearing Corporation which appears on the Reuters Screen KFTC18 Page to the right of the caption “USD Today” that is available at approximately 5:30 p.m., Seoul time, on the Valuation Date or as soon thereafter as practicable, but in no event later than 9:00 a.m., Seoul time, on the first Business Day following the relevant Valuation Date.

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).

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: February 29, 2008

[SEAL]	LEHMAN BROTHERS HOLDINGS INC.


	By:
		Name: Andrew Yeung
		Title: Vice President


	Attest:
		Name: Cindy Buckholz
		Title: Assistant Secretary

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

CITIBANK, N.A.
as Trustee


By:
	Authorized Officer

[REVERSE OF NOTE]

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTES, SERIES I

FX BASKET-LINKED NOTE
DUE FEBRUARY 28, 2011

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 $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 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-4.06 7 a08-7099_11ex4d06.htm EX-4.06

Exhibit 4.06

CUSIP NO. 52522L632

ISIN NO. US52522L6323

REGISTERED	PRINCIPAL AMOUNT: $3,380,240
No. R-1

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTE, SERIES I

NOTES LINKED TO AN ASIAN CURRENCY BASKET

DUE FEBRUARY 26, 2010

The “Maturity Date” is February 26, 2010, or if such day is not a Business Day, on the next following Business Day.

The “Valuation Date” is February 23, 2010; provided that, upon the occurrence of a Disruption Event with respect to a Basket Currency, the Valuation Date for the affected Basket Currency may be postponed (as described in “Disruption Events” below).

The “Redemption Amount” is:

(A) If the Basket Return is greater than zero, an amount per Note equal to $10 plus the product of $10 times the Participation Rate times the Basket Return.

(B) If the Basket Return is equal to or less than zero, an amount per Note equal to $10 plus the product of $10 times the Basket Return; provided that if the Basket Return is equal to or less than zero, the principal amount of Notes will decrease 1% for every 1% that the Basket Return is below zero.

The “Participation Rate” is 400%.

The “Basket Currencies” are the Malaysian Ringgit (MYR), Indonesian Rupiah (IDR), Indian Rupee (INR) and Philippine Peso (PHP).

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

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

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

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

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

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

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

Basket Currency	Weighting		Initial Spot Rate
MYR	25	%	3.2025
IDR	25	%	9035
INR	25	%	39.81
PHP	25	%	40.26

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

The “Issue Date” is February 29, 2008.

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

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

(A) the occurrence and/or existence of an event on any day that has the effect of preventing or making impossible the delivery of USD from accounts inside 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 being unavailable for the Basket Currency, or the occurrence of an event (i) in the Basket Currency Jurisdiction for that Basket Currency that materially disrupts the market for the Basket Currency or (ii) that generally makes it impossible to obtain the Final Spot Rate for the Basket Currency, on the Valuation Date.

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

Basket Currency	Screen Reference	Valuation Business Day
MYR	ABSIRFIX01	Singapore
IDR	ABSIRFIX01	Singapore
INR	RBIB	Mumbai
PHP	PDSPESO (as successor to PHPESO)	Manila

The Spot Rate Source for the MYR is the Malaysian Ringgit/U.S. Dollar spot rate at 11:00 a.m., Singapore time, 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 relevant Valuation Date. The “Spot Rate Source” for the IDR is the Indonesian Rupiah/U.S. Dollar spot rate at 11:00 a.m., Singapore time, expressed as the amount of Indonesian Rupiah 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 “IDR” at approximately 11:30 a.m., Singapore time, on the relevant Valuation 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 on the Valuation Date or such other relevant date. The Spot Rate Source for the PHP is the Philippine Peso/U.S. Dollar morning weighted average rate, expressed as the amount of Philippine Pesos per one U.S. Dollar, for settlement in one Business Day reported by the Philippine Dealing system which appears on the Reuters Screen PHPESO Page to the right of the caption “AM WT AVE” at approximately 12:30 p.m., Manila time, on the relevant Valuation Date.

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

applicable pricing supplement. If the Noon Buying Rate is not announced on that date, the Reference Exchange Rate, Final Spot Rate or other rate for such Basket Currency will be calculated on the basis of the arithmetic mean of the applicable spot quotations received by the Calculation Agent at approximately 10:00 a.m., New York City time, on the Valuation Business Day next succeeding the Valuation Date or such other date specified in the applicable pricing supplement, for the purchase or sale for deposits in the basket currency by the New York offices of three leading banks engaged in the interbank market (selected in the sole discretion of the Calculation Agent) (the “Reference Banks”). If fewer than three Reference Banks provide spot quotations, then the Reference Exchange Rate, Final Spot Rate or other rate, as applicable, will be calculated on the basis of the arithmetic mean of the applicable spot quotations received by the Calculation Agent at approximately 10:00 a.m., New York City time, on the relevant date from two Reference Banks (selected in the sole discretion of the Calculation Agent), for the purchase or sale for deposits in the Basket Currency. If these spot quotations are available from only one Reference Bank, then the Calculation Agent, in its sole discretion, will determine whether that quotation is reasonable to be used. If no spot quotation is available, then the Reference Exchange Rate, Final Spot Rate or other rate, as applicable, for such Basket Currency 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: February 29, 2008

[SEAL]	LEHMAN BROTHERS HOLDINGS INC.


	By:
		Name: Andrew Yeung
		Title: Vice President


	Attest:
		Name: Cindy Buckholz
		Title: Assistant Secretary

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

CITIBANK, N.A.
as Trustee


By:
	Authorized Officer

[REVERSE OF NOTE]

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTES, SERIES I

NOTES LINKED TO AN ASIAN CURRENCY BASKET
DUE FEBRUARY 26, 2010

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

Section 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 $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.

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

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-4.07 8 a08-7099_11ex4d07.htm EX-4.07

Exhibit 4.07

CUSIP NO. 52523J412

ISIN NO. US52523J4123

REGISTERED	PRINCIPAL AMOUNT: $13,692,000
No. R-1

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTE, SERIES I

NOTES LINKED TO AN ASIAN CURRENCY BASKET

DUE FEBRUARY 26, 2010

The “Maturity Date” is February 26, 2010, 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 $10, plus the Additional Amount, if any.

The “Additional Amount” is an amount per Note equal to the greater of (a) zero and (b) $10 multiplied by the product of the Basket Return times the Participation Rate.

The “Participation Rate” is 190%.

The “Basket Currencies” are the Indonesian Rupiah (IDR), Indian Rupee (INR), Malaysian Ringgit (MYR) and Philippine Peso (PHP).

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

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

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

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

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

Basket Currency	Weighting		Initial Spot Rate
IDR	25	%	9035
INR	25	%	39.81
MYR	25	%	3.2025
PHP	25	%	40.26

The “Issue Date” is February 29, 2008.

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

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

(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

Currency or (ii) that generally makes it impossible to obtain the Final Spot Rate for the Basket Currency, on the Valuation Date.

Basket Currency	Screen Reference	Valuation Business Day
IDR	ABSIRFIX01	Singapore
INR	RBIB	Mumbai
MYR	ABSIRFIX01	Singapore
PHP	PDSPESO (as successor to PHPESO)	Manila

The “Spot Rate Source” for the IDR is the Indonesian Rupiah/U.S. Dollar spot rate at 11:00 a.m., Singapore time, expressed as the amount of Indonesian Rupiah 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 “IDR” at approximately 11:30 a.m., Singapore time, on the relevant Valuation 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 on the Valuation Date or such other relevant date. The Spot Rate Source for the MYR is the Malaysian Ringgit/U.S. Dollar spot rate at 11:00 a.m., Singapore time, 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 relevant Valuation Date. The Spot Rate Source for the PHP is the Philippine Peso/U.S. Dollar morning weighted average rate, expressed as the amount of Philippine Pesos per one U.S. Dollar, for settlement in one Business Day reported by the Philippine Dealing system which appears on the Reuters Screen PHPESO Page to the right of the caption “AM WT AVE” at approximately 12:30 p.m., Manila time, on the relevant Valuation Date.

Calculation Agent at approximately 10:00 a.m., New York City time, on the Valuation Business Day next succeeding the Valuation Date or such other date specified in the applicable pricing supplement, for the purchase or sale for deposits in the basket currency by the New York offices of three leading banks engaged in the interbank market (selected in the sole discretion of the Calculation Agent) (the “Reference Banks”). If fewer than three Reference Banks provide spot quotations, then the Reference Exchange Rate, Final Spot Rate or other rate, as applicable, will be calculated on the basis of the arithmetic mean of the applicable spot quotations received by the Calculation Agent at approximately 10:00 a.m., New York City time, on the relevant date from two Reference Banks (selected in the sole discretion of the Calculation Agent), for the purchase or sale for deposits in the Basket Currency. If these spot quotations are available from only one Reference Bank, then the Calculation Agent, in its sole discretion, will determine whether that quotation is reasonable to be used. If no spot quotation is available, then the Reference Exchange Rate, Final Spot Rate or other rate, as applicable, for such Basket Currency 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: February 29, 2008

[SEAL]	LEHMAN BROTHERS HOLDINGS INC.


	By:
		Name: Andrew Yeung
		Title: Vice President


	Attest:
		Name: Cindy Buckholz
		Title: Assistant Secretary

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

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

CITIBANK, N.A.
as Trustee


By:
	Authorized Officer