Exhibit 4.01


	
  CUSIP NO. 52517P4F5

  	
   

  	
   

  
	
  ISIN NO. US52517P4F57

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  REGISTERED

  	
   

  	
  PRINCIPAL AMOUNT: $1,000,000

  
	
  No. R-1

  	
   

  	
   

  



 


LEHMAN BROTHERS HOLDINGS INC.


MEDIUM-TERM NOTE, SERIES I


Copper and Zinc
Enhanced Participation Notes
 DUE JULY 23, 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 July 23, 2009, or if such day is not a Business Day, on the
next following Business Day.


The “Redemption Amount” is a single U.S. dollar payment on the Maturity
Date per $1,000 note equal to the following:


(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 less than or
equal to 0.000%.


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


The “Component Commodities” are Copper and Zinc.


“Copper” is Copper – Grade A.


“Zinc” is Special High Grade Zinc.


The “Participation Rate” is 125%.


The “Weighted Component Commodity Return” is, for each Component
Commodity, the Component Commodity Weighting for such Component Commodity
multiplied by a quotient, the numerator of which is the difference between the
Final Commodity Price for such Component Commodity and the Commodity Strike for
such Component Commodity and the denominator of which is the Commodity Strike
for such Component Commodity.


The “Component Commodity Weighting” for each Component Commodity is
50%.


The “Commodity Strike” is, for each Component Commodity, the Commodity
Price on the date hereof, as set forth below:


	
  Component

  	
   

  	
   

  	
   

  
	
  Commodity

  	
   

  	
  Commodity Strike

  	
   

  
	
  Copper

  	
   

  	
  $

  	
  7,967.50

  	
   

  
	
  Zinc

  	
   

  	
  $

  	
  3,545.50

  	
   

  



 


The “Trade Date” is July 16, 2007.


The “Issue Date” is July 23, 2007.



 2
 









The “Valuation Date” July
16, 2009; provided that, upon the occurrence of a
Disruption Event with respect to a Component Commodity, the Valuation Date for
the affected Component Commodity may be postponed.


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


The “Commodity Price” is,
for each Component Commodity, 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 (subject to
the occurrence of a Disruption Event).


The “Relevant Exchange” is,
for each Component Commodity, the London Metal Exchange, or its successor, or
if the London Metal Exchange is no longer the principal exchange or trading
market for a 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.


If
the Calculation Agent determines that 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 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 Component Commodity that did suffer a
Disruption Event on the scheduled Valuation Date, the Final Commodity Price on
the immediately succeeding Exchange Business 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 Exchange Business Days
following the scheduled Valuation Date, then (a) that third Exchange Business
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 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.



 3
 









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


(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, or (ii) the disappearance of, or of trading in, the Component
Commodity;


(C)                              the failure of the Relevant Exchange to publish the
official daily settlement price of the Component Commodity for that day (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 the Component Commodity;
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 Component Commodity.


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 a
Component Commodity 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)                                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.


An “Exchange Business Day” is a day, as determined
in good faith 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).


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.



 4
 









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.



 5
 









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


	
  Dated: July 23, 2007

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [SEAL]

  	
   

  	
  LEHMAN BROTHERS HOLDINGS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Andrew Yeung

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Cindy Buckholz

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Assistant Secretary

  
						



 


TRUSTEE’S
CERTIFICATE OF AUTHENTICATION


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


CITIBANK, N.A.


as Trustee


	
  By:

  	
   

  	
   

  
	
   

  	
  Authorized Officer

  	
   

  



 



 6















[REVERSE OF NOTE]


LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTES, SERIES I
 COPPER AND ZINC ENHANCED PARTICIPATION
NOTES
 DUE JULY 23, 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, Copper and Zinc Enhanced Participation 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
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 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
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
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.