Exhibit 4.02


CUSIP
NO. 52517P7D7


ISIN NO. US52517P7D72


 




	
  REGISTERED

  	
   

  	
  PRINCIPAL
  AMOUNT: $750,000

  






No. R-1


 


 


LEHMAN BROTHERS HOLDINGS INC.


MEDIUM-TERM NOTE, SERIES I


NOTES LINKED TO A BASKET OF GOLD, ALUMINUM
AND COPPER
 DUE NOVEMBER 1, 2010


 


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


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


 

















 


 


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


                     The “Maturity Date” is November 1, 2010, or if
such day is not a Business Day, on the next following Business Day.


                     The “Valuation Date” is October 25, 2010, or
if such day is not a Valuation Business Day, the immediately preceding
Valuation Business Day; provided that
if a Disruption Event is in effect on the scheduled Valuation Date, the
Valuation Date may be postponed (as described below).


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


                      (A)     the sum of $1,000 plus the product of
$1,000 times the Basket Return times the Participation Rate, if the Basket
Return is greater than 0.000%; or


                      (B)     $1,000, if the Basket Return is equal to or
less than 0.000%.


 


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




	
  

  Component Commodities

  	
   

  	
  Component
  

  Weighting

  
	
  Gold (“Gold”)

  	
   

  	
  1/3

  
	
  High Grade
  Primary Aluminum (“Aluminum”)

  	
   

  	
  1/3

  
	
  Copper — Grade A
  (“Copper”)

  	
   

  	
  1/3

  






                     The “Participation Rate” is
100%.


                     The
“Basket Return” is the sum of the Weighted Component Commodity Returns,
expressed as a percentage rounded to three decimal places.


                     The
“Trade Date” is October 24, 2007.


                     The
“Issue Date” is October 31, 2007.


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


                     The
“Commodity Strike” for each Component Commodity are as follows:


 


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  Component

  Commodity

  	
  Commodity Strike

  
	
  Gold

  	
  US$757.50

  
	
  Aluminum

  	
  US$2,475.0

  
	
  Copper

  	
  US$7,736.0

  






                     The “Final Commodity Price”
is, for each Component Commodity, the Commodity Price on the Valuation Date.


                     The
“Commodity Price” for each Component Commodity is as follows:




	
  Component

  Commodity

  	
  

     Commodity Price   

  
	
  Gold

  	
  For Gold, the official afternoon fixing price of
  Gold, stated in U.S. dollars 

  per fine troy ounce, as calculated and quoted by the London Bullion Market
  Association (the “LBMA”) (subject to the occurrence of a Disruption Event).

  
	
  Aluminum

  Copper

  	
  For each of Aluminum and Copper, the official
  settlement price of that Component Commodity for cash delivery, expressed as
  the U.S. dollar price per metric ton of the Component Commodity, as made
  public by the Relevant Exchange for that Component Commodity (subject to the
  occurrence of a Disruption Event).

  






 


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


                     The “Relevant Market” is,
for Gold, the market in London on which members of the LBMA, or any successor
thereto, quote prices for the buying and selling of Gold, or if such 




 


3

















 


market
is no longer the principal trading market for Gold or options or futures
contracts for Gold, such other exchange or principal trading market for Gold as
determined in good faith by the Calculation Agent which serves as the source of
prices for Gold, and any principal exchanges where options or futures contracts
on Gold are traded.


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


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


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


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


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


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


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


(A)              the
suspension of or material limitation on trading in the Component Commodity or
futures contracts or options related to the Component Commodity, on the
Relevant Exchange for Copper and/or Aluminum or on the Relevant Market for
Gold;


 


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


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


                     solely
with respect to Component Commodities other than Gold,


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


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


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


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


(3)               a
suspension of or material limitation on trading on a Relevant Exchange for Copper
and/or Aluminum or on the Relevant Market for Gold will not include any time
when the Relevant Exchange for Copper and/or Aluminum or when the Relevant
Market for Gold is closed for trading under ordinary circumstances.


                     For
purposes of calculating the Basket Return in the event of a Disruption Event
relating to one or more Component Commodities in accordance with the above, “trading
day” means a day, as determined in good faith by the Calculation Agent, on
which trading is generally conducted on the Relevant Exchange for Copper and/or
Aluminum or on the Relevant Market for Gold.


 


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


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


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


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


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


                     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.


 


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


Dated:  October 31, 2007


 




	
  [SEAL]

  	
  LEHMAN BROTHERS
  HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Andrew M.W. Yeung

  
	
   

  	
   

  	
  Title: 

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
  Name: 

  	
  Cindy Buckholz

  
	
   

  	
   

  	
  Title:

  	
  Assistant Secretary

  
					






 


 


 


 


 


 


 


TRUSTEE’S CERTIFICATE OF
AUTHENTICATION


 


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


 


	
  CITIBANK, N.A.

  	
   

  
	
  as Trustee

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Officer

  	
   

  



 


 


 


 


7
















 


[REVERSE
OF NOTE]


 


 


LEHMAN BROTHERS
HOLDINGS INC.


MEDIUM-TERM NOTES,
SERIES I


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


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


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



















 


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


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


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


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


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


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



















 


such
notice or becomes aware of such ineligibility, the Company will issue, and the
Trustee will authenticate and deliver, Notes of this series in definitive form
in an aggregate principal amount equal to the principal amount of this Note.


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


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


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


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


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


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