Document:

Exhibit
4.01

CUSIP
NO. 52517PV32

ISIN NO. US52517PV327

	
  REGISTERED

  	
  PRINCIPAL AMOUNT: $600,000

  

No. R-1

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTE, SERIES I

CRUDE OIL-LINKED SINGLE BARRIER SYNTHETIC BEARISH REVERSE CONVERTIBLE 

NOTE

DUE SEPTEMBER 10, 2007

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 September 10, 2007, 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 (a) the
principal amount of the Notes, plus (b) the Fixed Return, minus (c) if Crude
OilREF is equal to or greater than the Upper Barrier
on any Exchange Business Day during the Observation Period, the Principal
Adjustment Amount.

The “Fixed Return” is an amount equal to the principal amount of the
Notes multiplied by 6.6%, rounded to the nearest whole cent.

The “Principal Adjustment Amount” is an amount equal to the principal
amount of the Notes multiplied by the greater of (a) the Crude Oil Return, and
(b) 0%, rounded to the nearest whole cent.

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

The “Trade Date” is February 28, 2007.

The “Valuation Date” is 5 Exchange Business Days prior to the Maturity
Date; provided that, if a Disruption Event is in effect on the scheduled
Valuation Date, the Valuation Date may be postponed (as described below).

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

“Crude Oil” is light sweet crude oil.

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

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

The “Upper Barrier” is $86.506, equal to the Crude Oil Strike
multiplied by 140%.

The “Crude Oil Strike” is $61.790, equal to the Crude Oil Price on the
Trade Date.

 2
 

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

The “Crude Oil Return” is a quotient, (x) the numerator of which is the
Final Crude Oil Price minus the Crude Oil Strike and (y) the denominator of
which is the Crude Oil Strike.

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 Crude OilREF is greater than the Upper Barrier on any
Exchange Business Day during the Observation Period and, on the scheduled
Valuation Date, a Disruption Event identified in clauses (A), (B) or (C) below
has occurred or is in effect, the Valuation Date will be postponed to, and the
Calculation Agent will determine the Final Crude Oil Price on, the first
Exchange Business Day succeeding the scheduled Valuation Date on which no
Disruption Event is occurring; provided that if a Disruption Event is occurring
on each of the three scheduled Exchange Business Days succeeding the scheduled
Valuation Date, such third scheduled Exchange Business Day shall be deemed the
Valuation Date and the Calculation Agent will determine the Final Crude Oil
Price on such day in its sole and absolute discretion, taking into account the
latest available quotation for the settlement price of the Crude Oil Contract
and any other information that in good faith it deems relevant.   If Crude OilREF is
greater than the Upper Barrier on any Exchange Business Day during the
Observation Period and, on the scheduled Valuation Date, a Disruption Event
identified in clauses (D) or (E) below is in effect, the Calculation Agent will
determine the Final Crude Oil Price on the scheduled Valuation Date 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 (A), (B) or (C) below has
occurred or is in effect on any Exchange Business Day during the Observation
Period, Crude OilREF 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 five or more consecutive Exchange Business Days (measured from
and including the first Exchange Business Day on which the Disruption Event
occurred or was in effect), the Calculation Agent will determine Crude OilREF 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 has occurred or is in effect on any
Exchange Business Day during the Observation Period, the Calculation Agent will
determine Crude OilREF for such Exchange

 3
 

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

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

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

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

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

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

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

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

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

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

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

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

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

Except as provided below,
the Redemption Amount, if any, 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.

 4
 

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: March 7, 2007

  	
   

  
	
   

  	
   

  
	
  [SEAL]

  	
  LEHMAN BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Andrew Yeung

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Aaron Guth

  
	
   

  	
   

  	
  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

CRUDE OIL-LINKED SINGLE BARRIER SYNTHETIC
BEARISH REVERSE CONVERTIBLE NOTE  
 DUE SEPTEMBER 10, 2007

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, Crude
Oil-Linked Single Barrier Synthetic Bearish Reverse Convertible 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 Redemption 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 and will equal, for each note, (a) the
principal amount plus (b) the Fixed Return deemed to have accrued for the
period from and including the Trade Date to but excluding the date of early
repayment calculated on the basis of a 360-day year consisting of 12 months of
30 days each, and, in the case of an incomplete month, the number of days
elapsed, minus (c) the Principal Adjustment Amount, if any, calculated as
though the date of early repayment were the Maturity Date.  If a bankruptcy proceeding is commenced in
respect of Lehman Brothers Holdings, the claim of the beneficial owner of a
note will be capped at (a) the principal amount plus (b) the Fixed Return
deemed to have accrued for the period from and including the Trade Date to but
excluding the date of the commencement of the proceeding calculated on the
basis of a 360-day year consisting of 12 months of 30 days each, and, in the
case of an incomplete month, the number of days elapsed, minus (c) the
Principal Adjustment Amount, if any, 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.Exhibit 4.02

CUSIP
NO. 52517PU90

ISIN NO. US52517PU907

	
  REGISTERED

  	
  PRINCIPAL
  AMOUNT: $500,000

  

No. R-1

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTE, SERIES I

CRUDE OIL-LINKED SINGLE BARRIER NOTE
 DUE APRIL 15, 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 April 15, 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 each note plus the Supplemental Redemption Amount, if any.

The “Supplemental Redemption Amount” is an amount equal to the
principal amount of the Notes multiplied by:

(A)                              the greater of
(i) the Crude Oil Return multiplied by the Participation Rate; and (ii) 0%, if
Crude OilREF is less than the Upper Barrier on each Exchange Business Day
during the Observation Period; or

(B)                                0%, if Crude
OilREF is equal to or greater than the Upper Barrier 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 “Participation Rate” is 70%.

The “Trade Date” is February 26, 2007.

The “Valuation Date” is 5 Exchange Business Days prior to the Maturity
Date; provided that, if a Disruption Event is in effect on the scheduled
Valuation Date, the Valuation Date may be postponed (as described below).

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

“Crude Oil” is light sweet crude oil.

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

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

The “Upper Barrier” is $85.95, equal to the Crude Oil Strike multiplied
by 140%.

The “Crude Oil Strike” is $61.39, equal to the Crude Oil Price on the
Trade Date.

 2
 

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

The “Crude Oil Return” is a quotient, (x) the numerator of which is the
Final Crude Oil Price minus the Crude Oil Strike and (y) the denominator of
which is the Crude Oil Strike.

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 Crude OilREF is less than the Upper Barrier on each
Exchange Business Day during the Observation Period and, on the scheduled
Valuation Date, a Disruption Event identified in clauses (A), (B) or (C) below
has occurred or is in effect, the Valuation Date will be postponed to, and the
Calculation Agent will determine the Final Crude Oil Price on, the first
Exchange Business Day succeeding the scheduled Valuation Date on which no
Disruption Event is occurring; provided that if a Disruption Event is occurring
on each of the three scheduled Exchange Business Days succeeding the scheduled
Valuation Date, such third scheduled Exchange Business Day shall be deemed the
Valuation Date and the Calculation Agent will determine the Final Crude Oil
Price on such day in its sole and absolute discretion, taking into account the
latest available quotation for the settlement price of the Crude Oil Contract
and any other information that in good faith it deems relevant.   If Crude OilREF is
less than the Upper Barrier on each Exchange Business Day during the
Observation Period and, on the scheduled Valuation Date, a Disruption Event
identified in clauses (D) or (E) below is in effect, the Calculation Agent will
determine the Final Crude Oil Price on the scheduled Valuation Date 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 (A), (B) or (C) below has
occurred or is in effect on any Exchange Business Day during the Observation
Period, Crude OilREF 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 five or more consecutive Exchange Business Days (measured
from and including the first Exchange Business Day on which the Disruption
Event occurred or was in effect), the Calculation Agent will determine Crude
OilREF 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 has occurred or is in effect on any
Exchange Business Day during the Observation Period, the Calculation Agent will
determine Crude OilREF for such Exchange

 3
 

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

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

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

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

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

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

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

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

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

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

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

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

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

Except as provided below,
the Redemption Amount, if any, 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.

 4
 

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: March 9, 2007

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [SEAL]

  	
  LEHMAN BROTHERS HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Andrew Yeung

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Aaron Guth

  
	
   

  	
   

  	
  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

CRUDE OIL-LINKED SINGLE BARRIER NOTE  
 DUE APRIL 15, 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, Crude
Oil-Linked Single Barrier 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 Redemption Amount on this Note at the place, at the respective
times, at the rate, and in the coin or currency herein prescribed.

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

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

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

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

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

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

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

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

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.

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