Exhibit
4.01


CUSIP NO. 52517P4G3
 ISIN NO. US52517P4G31


	
  REGISTERED

  	
   

  	
  PRINCIPAL AMOUNT: $3,000,000

  
	
  No. R-1

  	
   

  	
   

  



 


LEHMAN BROTHERS HOLDINGS INC.


MEDIUM-TERM NOTE, SERIES I


WEDDING CAKE CRUDE OIL-LINKED NOTE
 DUE JULY 28, 2008


This
Note is a Global Security within the meaning of the Indenture hereinafter
referred to and is registered in the name of the Depository or a nominee of the
Depository.  Unless this certificate is
presented by an authorized representative of The Depository Trust Company (55
Water Street, New York, New York) to the Company (as defined below) or its
agent for registration of transfer, exchange or payment and any certificate
issued is registered in the name of Cede & Co. or such other name as
requested by an authorized representative of The Depository Trust Company and
any payment is made to Cede & Co., any transfer, pledge or other use hereof
for value or otherwise by or to any person is wrongful since the registered
owner hereof, Cede & Co., has an interest herein.


Unless
and until it is exchanged in whole or in part for Notes in certificated form (a
“Certificated Note”), this Global Security may not be transferred except as a
whole by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor depository or a nominee of such
successor depository.













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


The
“Maturity Date” is July 28, 2008, or if such day is not a Business Day, on the
next following Business Day.


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


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


(A) 11.00%, if Crude OilREF is strictly within the First Barrier Range on
each Exchange Business Day during the Observation Period;


(B) 7.00%, if Crude OilREF is outside the First Barrier Range on any
Exchange Business Day during the Observation Period, but strictly within the
Second Barrier Range on each Exchange Business Day during the Observation
Period;


(C) 4.0%, if Crude OilREF is outside the First Barrier Range and the
Second Barrier Range on any Exchange Business Day during the Observation
Period, but strictly within the Third Barrier Range on each Exchange Business
Day during the Observation Period; or


(D) 1.50%, if Crude OilREF is outside the First Barrier Range, the Second
Barrier and the Third Barrier Range on any Exchange Business Day during the
Observation Period.


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


The “Trade Date” is July
19, 2007.


The “Issue Date” is July
26, 2007.


The “Valuation Date” is
July 21, 2008.


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


“Crude
Oil” is light sweet crude oil.


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



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


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


	
  Barrier Range

  	
   

  	
  Lower Barrier

  	
   

  	
  Upper Barrier

  
	
  First

  	
   

  	
  $63.0136 (equal
  to Crude Oil Strike * 83.0%)

  	
   

  	
  $88.8264 (equal to Crude Oil Strike * 117.0%)

  
	
  Second

  	
   

  	
  $60.7360 (equal
  to Crude Oil Strike * 80.0%)

  	
   

  	
  $91.1040 (equal to Crude Oil Strike * 120.0%)

  
	
  Third

  	
   

  	
  $56.9400 (equal
  to Crude Oil Strike * 75.0%)

  	
   

  	
  $94.9000 (equal to Crude Oil Strike * 125.0%)

  



 


The “Crude Oil Strike” is $75.92, equal to the Crude Oil
Price on the Trade Date.


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


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


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


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



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


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


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


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


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


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


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


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


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


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


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


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


The “Calculation
Agent” means Lehman Brothers Commodity Services Inc.



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


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


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


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


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


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



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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: July 26, 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

  	
   

  	
   

  
					



 



 6















[REVERSE OF NOTE]


LEHMAN BROTHERS
HOLDINGS INC.


MEDIUM-TERM NOTES,
SERIES I


WEDDING CAKE CRUDE OIL-LINKED NOTE
 DUE JULY 28, 2008


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


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


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













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


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


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


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


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


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













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


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


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


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