Document:

Exhibit 10.1

RIGHTS AGREEMENT

BY AND BETWEEN

ARI NETWORK SERVICES, INC.

AND

AMERICAN STOCK TRANSFER & TRUST COMPANY

RIGHTS AGENT

DATED AS OF AUGUST 7, 2003

TABLE OF CONTENTS

	 	PAGE

	SECTION 1.  CERTAIN DEFINITIONS

	1

	SECTION 2.  APPOINTMENT OF RIGHTS AGENT

	5

	SECTION 3.  ISSUE OF RIGHT CERTIFICATES

	5

	SECTION 4.  FORM OF RIGHT CERTIFICATES

	6

	SECTION 5.  COUNTERSIGNATURE AND REGISTRATION

	7

	SECTION 6.  TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT

     CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES

	

7

	SECTION 7.  EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS

	8

	SECTION 8.  CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES

	10

	SECTION 9.  AVAILABILITY OF PREFERRED SHARES

	10

	SECTION 10.  PREFERRED SHARES RECORD DATE

	10

	SECTION 11.  ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF

     RIGHTS

	

11

	SECTION 12.  CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES

	18

	SECTION 13.  CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING

     POWER

	

19

	SECTION 14.  FRACTIONAL RIGHTS AND FRACTIONAL SHARES

	20

	SECTION 15.  RIGHTS OF ACTION

	22

	SECTION 16.  AGREEMENT OF RIGHT HOLDERS

	22

	SECTION 17.  RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER

	23

	SECTION 18. CONCERNING THE RIGHTS AGENT

	23

	SECTION 19.  MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT

	24

	SECTION 20.  DUTIES OF RIGHTS AGENT

	24

	SECTION 21.  CHANGE OF RIGHTS AGENT

	26

	SECTION 22.  ISSUANCE OF NEW RIGHT CERTIFICATES

	27

	SECTION 23.  REDEMPTION

	27

	SECTION 24.  EXCHANGE

	28

	SECTION 25.  NOTICE OF CERTAIN EVENTS

	29

	SECTION 26.  NOTICES

	30

	SECTION 27.  SUPPLEMENTS AND AMENDMENTS

	31

	SECTION 28.  SUCCESSORS

	31

	SECTION 29.  BENEFITS OF THIS AGREEMENT

	31

	SECTION 30.  SEVERABILITY

	32

	SECTION 31.  DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS

	32

	SECTION 32.  GOVERNING LAW

	32

	SECTION 33.  COUNTERPARTS

	32

	SECTION 34.  DESCRIPTIVE HEADINGS

	32

	Signatures

	34

	Exhibit A

Form of Attachment to the Articles of Amendment of Incorporation of ARI Network 

     Services, Inc

	A-1

	Exhibit B

Form of Right Certificate

	B-1

	Exhibit C

Summary of Rights to Purchase Preferred Shares

	C-1

	 	 

RIGHTS AGREEMENT

THIS RIGHTS AGREEMENT (“Agreement”), dated as of August 7, 2003, is made between ARI NETWORK SERVICES, INC., a Wisconsin corporation (the “Company”), and AMERICAN STOCK TRANSFER & TRUST COMPANY, a New York corporation (the “Rights Agent”).

WHEREAS, the Board of Directors of the Company (the “Board”) has authorized and declared a dividend of one preferred share purchase right (a “Right”) for each Common Share (as hereinafter defined) of the Company outstanding on the Record Date (as hereinafter defined), each Right representing the right to purchase one one-thousandth of a Preferred Share (as hereinafter defined), upon the terms and subject to the conditions herein set forth, and has further authorized and directed the issuance of one Right with respect to each Common Share that shall become outstanding between the Record Date and the earliest of the Distribution Date, the Redemption Date and the Final Expiration Date (as such terms are hereinafter defined);

Accordingly, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:

SECTION 1.  CERTAIN DEFINITIONS.

For purposes of this Agreement, the following terms have the meanings indicated:

(a)

“Acquiring Person” shall mean any Person who or which, together with all Affiliates and Associates (as such terms are hereinafter defined) of such Person, shall be the Beneficial Owner (as such term is hereinafter defined) of 10% or more of the Common Shares of the Company then outstanding, but shall not include an Excepted Person so long as such Person continues to meet the definition of Excepted Person, the Company, any Subsidiary (as such term is hereinafter defined) of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company or any entity holding Common Shares for or pursuant to the terms of any such plan.  Notwithstanding the foregoing, no Person shall become an “Acquiring Person” as the result of an acquisition of Common Shares by the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares beneficially owned by such Person to 10% or more of the Common Shares of the Company then outstanding; provided, however, that if a Person shall become the Beneficial Owner of 10% or more of the Common Shares of the Company then outstanding by reason of share purchases by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of an additional 1% or more of the Common Shares of the Company then outstanding, then such Person shall be deemed to be an “Acquiring Person.”  Notwithstanding the foregoing, if the Board determines in good faith that a Person who would otherwise be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this Section 1(a), has become such inadvertently, and without any plan or intention to seek or affect control of the Company, and such Person divests as promptly as practicable (without exercising or retaining any power, including voting, with respect to such shares) a sufficient number of Common Shares so that such Person would no longer be an “Acquiring Person,” as defined pursuant to the foregoing provisions of this Section 1(a), then such Person shall not be deemed to be an “Acquiring Person” for any purposes of this Agreement.

(b)

“Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act.

(c)

A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “beneficially own” any securities:

(i)

which such Person or any of such Person’s Affiliates or Associates beneficially owns, directly or indirectly, within the meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange Act as in effect on the date hereof;

(ii)

which such Person or any of such Person’s Affiliates or Associates has:

(A)

the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities), or upon the exercise of conversion rights, exchange rights, rights (other than these Rights), warrants or options, or otherwise; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Person’s Affiliates or Associates until such tendered securities are accepted for purchase or exchange; or

(B)

the right to vote pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security if the agreement, arrangement or understanding to vote such security (1) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations promulgated under the Exchange Act and (2) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report); or

(iii)

which are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to Section 1(c)(ii)(B)) or disposing of any securities of the Company.

Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the phrase “then outstanding,” when used with reference to a Person’s Beneficial Ownership of securities of the Company, shall mean the number of such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding which such Person would be deemed to own beneficially hereunder.

(d)

“Business Day” shall mean any day other than a Saturday, Sunday, or a day on which banking institutions in the State of Wisconsin are authorized or obligated by law or executive order to close.

(e)

“Close of business” on any given date shall mean 5:00 P.M., Milwaukee, Wisconsin time, on such date; provided, however, that if such date is not a Business Day it shall mean 5:00 P.M., Milwaukee, Wisconsin time, on the next succeeding Business Day.

(f)

“Common Shares” when used with reference to the Company shall mean the shares of common stock, $.001 par value per share, of the Company.  “Common Shares” when used with reference to any Person other than the Company, shall mean the capital stock (or equity interest) with the greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person.

(g)

“Distribution Date” shall mean the earlier of (i) the tenth day after the Shares Acquisition Date (as such term is hereinafter defined), or (ii) the tenth business day (or such later date as may be determined by action of the Board prior to such time as any Person becomes an Acquiring Person) after the date of the commencement by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company or any entity holding Common Shares for or pursuant to the terms of any such plan) of, or the first public announcement of the intention of any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company or any entity holding Common Shares for or pursuant to the terms of any such plan) to commence, a tender or exchange offer the consummation of which would result in any Person becoming the Beneficial Owner of Common Shares aggregating 10% or more of the then outstanding Common Shares (including any such date which is after the date of this Agreement and prior to the issuance of the Rights).

(h)

“Excepted Percentage” applicable to any Excepted Person shall, at any particular time, be a percentage of the Common Shares then outstanding, which percentage shall be equal to the sum of (A) the lesser of (i) the percentage of the outstanding Common Shares beneficially owned by such Person on the date of this Agreement or (ii) the lowest percentage of the outstanding Common Shares beneficially owned by such Person at any time thereafter, and (B) 1.0%.

(i)

“Excepted Person” shall mean any Person that, on the date of this Agreement, is the Beneficial Owner of 10% or more of the Common Shares then outstanding, but only so long as such Person has not become the Beneficial Owner of a percentage of the Common Shares then outstanding in excess of the then applicable Excepted Percentage.

(j)

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, as in effect on the date of this Agreement.

(k)

“Final Expiration Date” shall mean August 18, 2013.

(l)

“NASDAQ” shall mean the National Association of Securities Dealers, Inc. Automated Quotations System.

(m)

“Parity Common Shares” shall mean 50% of the number of Common Shares of the Company for which a Right is then exercisable pursuant to Section 11(a)(ii).

(n)

“Person” shall mean any individual, firm, corporation, limited liability company or other entity, and shall include any successor (by merger or otherwise) of such entity.

(o)

“Preferred Shares” shall mean shares of Series B Junior Preferred Stock, $.001 par value per share, of the Company having the rights and preferences set forth in the Form of Attachment to the Articles of Incorporation of ARI Network Services, Inc. attached to this Agreement as Exhibit A.

(p)

The “Purchase Price” for each one one-thousandth of a Preferred Share purchasable pursuant to the exercise of a Right shall mean $10.00, subject to adjustment from time to time as provided in Sections 11 and 13 hereof.

(q)

“Record Date” shall mean August 18, 2003.

(r)

“Redemption Date” shall mean that date, if any, on which the Board shall redeem the Rights as provided in Section 23 hereof.

(s)

“Redemption Price” shall mean $0.01 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof.

(t)

“Right Certificate” shall mean certificates evidencing ownership of Rights in substantially the form set out in Exhibit B hereto.

(u)

“Share Exchange” shall mean an exchange pursuant to Section 180.1102 of the Wisconsin Business Corporation Law.

(v)

“Shares Acquisition Date” shall mean the first date of public announcement by the Company or an Acquiring Person that an Acquiring Person has become such.

(w)

“Subsidiary” of any Person shall mean any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by such Person.

(x)

“Trading Day” shall mean a day on which the principal national securities exchange on which a security is listed or admitted to trading is open for the transaction of business or, if the security is not listed or admitted to trading on any national securities exchange, a Business Day.

SECTION 2.  APPOINTMENT OF RIGHTS AGENT.

The Company hereby appoints the Rights Agent to act as agent for the Company in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment.  The Company may from time to time appoint such Co-Rights Agents as it may deem necessary or desirable.  The Rights Agent shall have no duty to supervise, and in no event shall be liable for, the acts or omissions of any such Co-Rights Agent.

SECTION 3.  ISSUE OF RIGHT CERTIFICATES.

(a)

Until the Distribution Date, (i) the Rights will be evidenced (subject to the provisions of paragraph (b) of this Section 3) by the certificates for the Common Shares registered in the names of the holders of the Common Shares and not by separate certificates, and (ii) Rights will be transferable only in connection with the transfer of the underlying Common Shares (including a transfer to the Company).

(b)

As promptly as practicable following the Record Date, the Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in substantially the form attached hereto as Exhibit C (“Summary of Rights”), by first class mail, postage prepaid, to each record holder of the Common Shares as of the close of business on the Record Date, at the address of such holder shown on the records of the Company. With respect to certificates of the Common Shares outstanding as of the Record Date, until the Distribution Date or the earlier surrender for transfer thereof or the Redemption Date or Final Expiration Date, the Rights associated with the Common Shares represented by such certificates shall be evidenced by such certificates for the Common Shares together with a copy of the Summary of Rights, and the registered holders of the Common Shares shall also be the registered holders of the associated Rights. Until the earlier of the Distribution Date, the Redemption Date or the Final Expiration Date, the transfer of any of the certificates for the Common Shares outstanding on the Record Date, with or without a copy of the Summary of Rights attached thereto, shall also constitute the transfer of the Rights associated with the Common Shares represented by such certificates.

(c)

Rights shall be issued in respect of all Common Shares which become outstanding (including, without limitation, reacquired Common Shares referred to in the last sentence of this paragraph (c)) after the Record Date, but prior to the earliest of the Distribution Date, the Redemption Date or the Final Expiration Date.  Certificates representing such Common Shares shall also be deemed to represent the related Rights.  After the Record Date, but prior to the earliest of the Distribution Date, the Redemption Date or the Final Expiration Date, certificates representing Common Shares shall have impressed on, printed on, written on, or otherwise affixed to them the following legend:

“This certificate also evidences and entitles the holder hereof to certain rights as set forth in a Rights Agreement between ARI Network Services, Inc. and American Stock Transfer & Trust Company dated August 7, 2003 which may be amended from time to time (the “Rights Agreement”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of ARI Network Services, Inc.  Under certain circumstances, as set forth in the Rights Agreement, such Rights shall be evidenced by separate certificates and shall no longer be evidenced by this certificate.  ARI Network Services, Inc. shall mail to the holder of this certificate a copy of the Rights Agreement without charge after receipt of a written request therefor.  Under certain circumstances, as set forth in the Rights Agreement, Rights issued to any Person who becomes an Acquiring Person or any Associate or Affiliate of an Acquiring Person (as such terms are defined in the Rights Agreement) (or nominee of any of them) may become null and void.”

With respect to such certificates containing the foregoing legend, until the Distribution Date, the Rights associated with the Common Shares represented by such certificates shall be evidenced by such certificates alone, and the surrender for transfer of any such certificate shall also constitute the transfer of the Rights associated with the Common Shares represented thereby.  In the event that the Company purchases or acquires any Common Shares after the Record Date, but prior to the Distribution Date, any Rights associated with such Common Shares shall be deemed canceled and retired so that the Company shall not be entitled to exercise any Rights associated with the Common Shares which are no longer outstanding.

(d)

As soon as practicable after the Distribution Date, the Company shall promptly notify the Rights Agent thereof and provide the Rights Agent with a list of shareholders of Common Shares, and the Company shall prepare and execute, the Rights Agent shall countersign, and the Company shall send or cause to be sent (and the Rights Agent shall, if requested, send) by first-class, insured, postage-prepaid mail, to each record holder of Common Shares as of the close of business on the Distribution Date, at the address of such holder shown on the records of the Company, a Right Certificate evidencing one Right for each Common Share so held.  As of the Distribution Date, the Rights shall be evidenced solely by such Right Certificates.

SECTION 4.  FORM OF RIGHT CERTIFICATES.

The Right Certificates (and the forms of election to purchase Preferred Shares and of assignment to be printed on the reverse thereof) shall be substantially the same as Exhibit B hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, and which do not affect the rights, duties or responsibilities of the Rights Agent, or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage.  Subject to the provisions of Section 22 hereof, the Right Certificates shall entitle the holders thereof to purchase such number of one one-thousandths of a Preferred Share as shall be set forth therein at the Purchase Price set forth therein, but the number of such one one-thousandths of a Preferred Share and the Purchase Price shall be subject to adjustment as provided herein.

SECTION 5.  COUNTERSIGNATURE AND REGISTRATION.

The Right Certificates shall be executed on behalf of the Company by any of its Chairman of the Board, its Chief Executive Officer, or its Chief Financial Officer, and attested by its Secretary or any Assistant Secretary or any Vice President, either manually or by facsimile signature.  The Right Certificates shall not be valid for any purpose unless countersigned by the Rights Agent.  In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent, and issued and delivered by the Company with the same force and effect as though the person who signed such Right Certificates had not ceased to be such officer of the Company; and any Right Certificate may be signed on behalf of the Company by any person who holds any such office at the actual date of the execution of such Right Certificate, although at the date of the execution of this Rights Agreement such person was not such an officer.

Following the Distribution Date and receipt by the Rights Agent of all relevant information, the Rights Agent shall keep or cause to be kept, at its offices designated for such purpose, books for registration and transfer of the Right Certificates issued hereunder.  Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates, and the date of each of the Right Certificates.

SECTION 6.  TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE 

OF RIGHT CERTIFICATES; MUTILATED, DESTROYED,

LOST OR STOLEN RIGHT CERTIFICATES.

Subject to the provisions of Section 14 hereof, at any time after the close of business on the Distribution Date and at or prior to the close of business on the earlier of the Redemption Date or the Final Expiration Date, any Right Certificate or Right Certificates (other than Right Certificates representing Rights that have become void pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined or exchanged for another Right Certificate or other Right Certificates, entitling the registered holder to purchase a like number of one one-thousandths of a Preferred Share as the Right Certificate or Right Certificates surrendered then entitled such holder to purchase.  Any registered holder desiring to transfer, split up, combine or exchange any Right Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged at the office of the Rights Agent designated for such purpose.  Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Right Certificate until the registered holder shall have completed and signed the certificate contained in the form of assignment on the reverse side of such Right Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request.  Thereupon the Rights Agent shall countersign and deliver to the person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested.  The Company may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates.  

Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or security satisfactory to them, and, at the Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company shall make and deliver a new Right Certificate of like tenor to the Rights Agent for delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.  

SECTION 7.  EXERCISE OF RIGHTS; PURCHASE PRICE; 

EXPIRATION DATE OF RIGHTS

(a)

The registered holder of any Right Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein) in whole or in part at any time after the Distribution Date upon surrender of the Right Certificate (with the form of election to purchase on the reverse side thereof duly executed) to the Rights Agent at the office of the Rights Agent designated for such purpose, together with payment of the Purchase Price for each one one-thousandth of a Preferred Share as to which the Rights are exercised, at or prior to the earliest of:

(i)

the close of business on the Final Expiration Date,

(ii)

the close of business on the Redemption Date, or

(iii)

the time at which such Rights are exchanged as provided in Section 24 hereof.

(b)

The Purchase Price shall be payable in lawful money of the United States of America in accordance with Section 7(c).

(c)

Upon receipt of a Right Certificate representing exercisable Rights (with the form of election to purchase duly executed), accompanied by payment (by certified check, cashier’s check, or money order payable to the order of the Company) of the Purchase Price for the shares to be purchased and an amount equal to any applicable tax or governmental charge required to be paid by the holder of such Right Certificate in accordance with Section 9 hereof, the Rights Agent shall thereupon promptly

(i)

(A)

requisition from any transfer agent of the Preferred Shares certificates for the number of Preferred Shares to be purchased, and the Company hereby irrevocably authorizes its transfer agent to comply with all such requests, or

(B)

requisition from the depositary agent depositary receipts representing such number of one one-thousandths of a Preferred Share as are to be purchased (in which case certificates for the Preferred Shares represented by such receipts shall be deposited by the transfer agent with the depositary agent) and the Company hereby directs the depositary agent to comply with such request; and

(ii)

when necessary to comply with this Agreement, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares in accordance with Section 14 hereof; and

(iii)

promptly after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder; and

(iv)

when necessary to comply with this Agreement, after receipt, promptly deliver such cash to or upon the order of the registered holder of such Right Certificate.

(d)

In case the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to the registered holder of such Right Certificate or to his duly authorized assigns, subject to the provisions of Section 6 and Section 14 hereof.

(e)

Notwithstanding anything in the Agreement to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder upon the occurrence of any purported exercise as set forth in this Section 7 unless such registered holder shall have (i) completed and signed the certificate contained in the form ef election to purchase set forth on the reverse side of the Right Certificate surrendered for such exercise, and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the Company shall reasonably request.

SECTION 8.  CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.

All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Rights Agreement.  The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof.  The Rights Agent shall deliver all canceled Right Certificates to the Company, or shall, at the written request of the Company, destroy such canceled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the Company.

SECTION 9.  AVAILABILITY OF PREFERRED SHARES.

The Company covenants and agrees that it shall cause to be reserved and kept available out of its authorized and unissued Preferred Shares, the number of Preferred Shares that shall be sufficient to permit the exercise in full of all outstanding Rights in accordance with Section 7 hereof.

The Company covenants and agrees that it shall take all such actions as may be necessary to ensure that all Preferred Shares delivered upon exercise of the Rights shall, at the time of delivery of the certificates for such Preferred Shares (subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable shares, except as otherwise provided by Section 180.0622(2)(b) of the Wisconsin Business Corporation Law, or any successor provision, and judicial interpretations thereof.

The Company covenants and agrees that it shall pay when due and payable any and all taxes and governmental charges which may be payable in respect of the issuance or delivery of the Right Certificates or of any Preferred Shares upon the exercise of Rights. The Company shall not, however, be required to pay any tax or governmental charge which may be payable in respect of any transfer or delivery of Right Certificates to a person other than, or the issuance or delivery of certificates or depositary receipts for the Preferred Shares in a name other than that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise, or to issue or to deliver any certificates or depositary receipts for Preferred Shares upon the exercise of any Rights until any such tax or governmental charge shall have been paid (any such tax or governmental charge being payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the Company’s reasonable satisfaction that no such tax or governmental charge is due.

SECTION 10.  PREFERRED SHARES RECORD DATE.

Each Person in whose name any certificate for Preferred Shares is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Preferred Shares represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable taxes and governmental charges) was made; provided, however, that if the date of such surrender and payment is a date upon which the Preferred Shares transfer books of the Company are closed, such person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the Preferred Shares transfer books of the Company are open.

Prior to the issuance of Preferred Shares upon the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of a holder of Preferred Shares for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions, or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein.

SECTION 11.  ADJUSTMENT OF PURCHASE PRICE, NUMBER

 OF SHARES OR  NUMBER OF RIGHTS.

The Purchase Price, the number of Preferred Shares covered by each Right, and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. 

(a)

(i)

In the event the Company shall at any time after the date of this Agreement

(A)

declare a dividend on the Preferred Shares payable in Preferred Shares,

(B)

subdivide the outstanding Preferred Shares, 

(C)

combine the outstanding Preferred Shares into a smaller number of Preferred Shares, or

(D)

issue any shares of its capital stock in a reclassification of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), 

except as otherwise provided in this Section 11(a), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were open, the holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii). 

(ii)

Subject to Section 24 of this Agreement, in the event any Person becomes an Acquiring Person, each holder of a Right shall thereafter have a right to receive, upon exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-thousandths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preferred Shares, such number of Common Shares of the Company as shall equal the result obtained by multiplying:

(A)

the then current Purchase Price by the number of one one-thousandths of a Preferred Share for which a Right is then exercisable and dividing that product, by

(B)

50% of the then current per share market price of the Company’s Common  Shares (determined pursuant to Section 11(d) hereof) on the date of the occurrence of such event.

In the event that any Person shall become an Acquiring Person and the Rights shall then be outstanding, the Company shall not take any action which would eliminate or diminish the benefits intended to be afforded by the Rights.

From and after the occurrence of such event, any Rights that are or were acquired or beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof, or nominee of any of them) shall be null and void and any holder of such Rights shall thereafter have no right to exercise such Rights under any provision of this Agreement.  No Right Certificate shall be issued pursuant to Section 3 hereof or otherwise that represents Rights beneficially owned by an Acquiring Person whose Rights would be null and void pursuant to the preceding sentence (or any Associate or Affiliate thereof, or nominee of any of them); no Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be null and void pursuant to the preceding sentence (or any Associate or Affiliate thereof or any nominee of any of them); and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be null and void pursuant to the preceding sentence (or any Associate or Affiliate thereof, or nominee of any of them) shall be canceled. In addition, any Right Certificate issued pursuant to Section 3 hereof that represents Rights beneficially owned by an Acquiring Person (or any Associate or Affiliate thereof, or nominee of any of them) and any Right Certificate issued at any time upon the transfer of any Rights to an Acquiring Person (or any Associate or Affiliate thereof, or nominee of any of them) and any Right Certificate issued pursuant to Sections 6, 7(d), 11, or 22 hereof upon transfer, exchange, replacement or adjustment of any other Right Certificate referred to in this sentence, shall contain the following legend:

“The Rights represented by this Right Certificate were issued to a Person who was an Acquiring Person or an Affiliate or an Associate of an Acquiring Person (as such terms are described in the Rights Agreement) or a nominee of one of them. This Right Certificate and the Rights represented hereby may become void in the circumstances specified in the Rights Agreement.”

(iii)

In the event that there shall not be sufficient Common Shares issued but not outstanding or authorized but unissued to permit the exercise in full of the Rights in accordance with the foregoing Section 11(a)(ii), the Company shall take all such actions as may be necessary to authorize additional Common Shares for issuance upon exercise of the Rights. In the event the Company, after good faith effort, shall be unable to take all such actions as may be necessary to authorize such additional Common Shares, the Company shall substitute, for each Common Share that would otherwise be issuable upon exercise of a Right, a number of Preferred Shares or fraction thereof such that the current per share market price of one Preferred Share multiplied by such number or fraction is equal to the current per share market price of one Common Share as of the date of issuance of such Preferred Shares or fraction thereof.

(b)

In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Shares (or shares having the same rights, privileges and preferences as the Preferred Shares (“Equivalent Preferred Shares”)) or securities convertible into Preferred Shares or Equivalent Preferred Shares at a price per share (or having a conversion price per share, if a security convertible into Preferred Shares or Equivalent Preferred Shares) less than the then current per share market price of the Preferred Shares on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of Preferred Shares outstanding on such record date plus the number of Preferred Shares which the aggregate offering price of the total number of Preferred Shares and/or Equivalent Preferred Shares so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price and the denominator of which shall be the number of Preferred Shares outstanding on such record date plus the number of additional Preferred Shares and/or Equivalent Preferred Shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise of one Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and holders of the Rights. Preferred Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation.

Such adjustment shall be made successively whenever such a record date is fixed; and in the event that such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.

(c)

In case the Company shall fix a record date for the making of a distribution to all holders of the Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in Preferred Shares) or subscription rights, options or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the then current per share market price of the Preferred Shares on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and holders of the Rights) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights, options or warrants applicable to one Preferred Share and the denominator of which shall be such current per share market price of the Preferred Shares; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon the exercise of one Right.

Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.

(d)

(i)

For the purpose of any computation hereunder, the “current per share market price” of any security (a “Security” for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days immediately prior to such date; provided, however, that in the event that the current per share market price of the Security is determined during a period following the announcement by the issuer of such Security of a dividend or distribution on such Security payable in shares of such Security or securities convertible into such shares, or any subdivision, combination or reclassification of such Security, and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. The closing price for each day shall be:

(A)

the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange, or

(B)

if the Security is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Security is listed or admitted to trading, or

(C)

if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the NASDAQ or such other system then in use, including prices quoted on The Nasdaq Stock Market or the OTC Bulletin Board, or

(D)

if the Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board.

(ii)

For the purpose of any computation hereunder, the “current per share market price” of the Preferred Shares shall be determined in accordance with the method set forth in Section 11(d)(i).  If the Preferred Shares are not publicly traded, the “current per share market price” of the Preferred Shares shall be conclusively deemed to be the current per share market price of the Common Shares as determined pursuant to Section 11(d)(i) (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the Record Date), multiplied by one thousand.  If neither the Common Shares nor the Preferred Shares are publicly held or so listed or traded, “current per share market price” shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent. 

(e)

No adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment.  All calculations under this Section 11 shall be made to the nearest cent or to the nearest one ten-millionth of a Preferred Share or one ten-thousandth of any other share or security as the case may be.  Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three years from the date of the transaction which requires such adjustment or (ii) the date of the expiration of the right to exercise any Rights. 

(f)

If, as a result of an adjustment made pursuant to Section 11(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than Preferred Shares, thereafter the number of such other shares so receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Shares contained in Sections 11(a) through (c), inclusive, and the provisions  of Sections 7, 9, 10 and 13 hereof with respect to the Preferred Shares shall apply on like terms to any such other shares.

(g)

All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one one-thousandths of a Preferred Share purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.

(h)

Unless the Company shall have exercised its election as provided in Section 11(i), upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c), each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one one-thousandths of a Preferred Share (calculated to the nearest one ten-millionth of a Preferred Share) obtained by:

(i)

multiplying the number of one one-thousandths of a share covered by a Right immediately prior to this adjustment by the Purchase Price in effect immediately prior to such adjustment of the Purchase Price, and

(ii)

dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price.

(i)

The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights, in substitution for any adjustment in the number of one one-thousandths of a Preferred Share purchasable upon the exercise of a Right.  Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one one-thousandths of a Preferred Share for which a Right was exercisable immediately prior to such adjustment.  Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price.  The Company shall promptly notify the Rights Agent and make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made.  This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least 10 days later than the date of the public announcement.

If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such holders shall be entitled after such adjustment.  Right Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement.

(j)

Irrespective of any adjustment or change in the Purchase Price or the number of one one-thousandths of a Preferred Share issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of one one-thousandths of a Preferred Share which were expressed in the initial Right Certificates issued hereunder.

(k)

Before taking any action that would cause an adjustment reducing the Purchase Price below one one-thousandth of the then par value, if any, of the Preferred Shares issuable upon exercise of the Rights, the Company shall take any corporate actions which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable (except as provided by Section 180.0622(2)(b) of the Wisconsin Business Corporation Law, or any successor provision, and judicial interpretations thereof) Preferred Shares at such adjusted Purchase Price.

(l)

In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer (and shall promptly notify the Rights Agent of any such election) until the occurrence of such event the issuing to the holder of any Right exercised after such record date of the Preferred Shares and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the Preferred Shares and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holder’s right to receive such additional shares upon the occurrence of the event requiring such adjustment.

(m)

Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it in its sole discretion shall determine to be advisable in order that any consolidation or subdivision of the Preferred Shares, issuance wholly for cash of any Preferred Shares at less than the current market price, issuance wholly for cash of Preferred Shares or securities which by their terms are convertible into or exchangeable for Preferred Shares, dividends on Preferred Shares payable in Preferred Shares, or issuance of rights, options or warrants referred to herein above in Section 11(b), hereafter made by the Company to holders of its Preferred Shares shall not be taxable to such shareholders.

(n)

In the event that at any time after the Record Date and prior to the Distribution Date, the Company shall:

(i)

declare or pay any dividend on the Common Shares payable in Common Shares, or

(ii)

effect a subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares) into a greater or lesser number of Common Shares,

then in any such case,

(A)

the number of one one-thousandths of a Preferred Share purchasable after such event upon proper exercise of each Right shall be determined by multiplying the number of one one-thousandths of a Preferred Share so purchasable immediately prior to such event by a fraction, the numerator of which is the number of Common Shares outstanding immediately before such event and the denominator of which is the number of Common Shares outstanding immediately after such event, and

(B)

each Common Share outstanding immediately after such event shall have issued with respect to it that number of Rights which each Common Share outstanding immediately prior to such event had issued with respect to it.

The adjustments provided for in this Section 11(n) shall be made successively whenever such a dividend is declared or paid or such a subdivision, combination or consolidation is effected.  If an event occurs which would require an adjustment under Section 11(a)(ii) and this Section 11(n), the adjustments provided for in this Section 11(n) shall be in addition and prior to any adjustment required pursuant to Section 11(a)(ii).

SECTION 12.  CERTIFICATE OF ADJUSTED PURCHASE

PRICE OR NUMBER OF SHARES.

Whenever an adjustment is made as provided in Section 11 or 13 hereof, the Company shall promptly:

(a)

prepare a certificate setting forth such adjustment, and a brief, reasonably detailed statement of the facts and computations accounting for such adjustment,

(b)

file with the Rights Agent and with each transfer agent for the Common Shares or the Preferred Shares a copy of such certificate, and

(c)

mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof.

The Rights Agent shall be fully protected in relying on the terms of any such certificate and on any adjustment contained therein, and shall have no duty with respect to, and shall not be deemed to have knowledge of, any such adjustment unless and until it shall have received such a certificate.

SECTION 13.  CONSOLIDATION, MERGER OR SALE OR

 TRANSFER OF ASSETS OR EARNING POWER.

In the event, directly or indirectly, at any time after a Person has become an Acquiring Person,

(a)

the Company shall consolidate with, or merge with and into, any other Person,

(b)

any Person shall consolidate with the Company, or merge with and into the Company and the Company shall be the continuing or surviving corporation of such merger and, in connection with such merger, all or part of the Common Shares shall be changed into or exchanged for stock or other securities of any other Person (or the Company) or cash or any other property,

(c)

the Company shall be a party to a Share Exchange immediately following which the Company is a Subsidiary of any other Person, or

(d)

the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person other than the Company or one or more of its wholly owned Subsidiaries, then, and in each such case, proper provision shall be made so that

(i)

each holder of a Right (except as otherwise provided herein) shall thereafter have the right to receive, upon the exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-thousandths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preferred Shares, such number of validly authorized and issued, fully paid, nonassessible (except as provided by Section 180.0622(2)(b) of the Wisconsin Business Corporation Law, or any successor provision, and judicial interpretations thereof) and freely tradeable Common Shares of such other Person (including the Company as successor thereto or as the surviving corporation) as shall equal the result obtained by multiplying the then current Purchase Price by the number of one one-thousandths of a Preferred Share for which a Right is then exercisable and dividing that product by 50% of the then current per share market price of the Common Shares of such other Person (determined pursuant to Section 11(d) hereof) on the date of consummation of such consolidation, merger, Share Exchange, sale or transfer;

(ii)

the issuer of such Common Shares shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, Share Exchange, sale or transfer, all the obligations and duties of the Company pursuant to this Agreement;

(iii)

the term “Company” shall thereafter be deemed to refer to such issuer; and

(iv)

such issuer shall take such steps (including, but not limited to, the reservation of a sufficient number of its Common Shares in accordance with Section 9 hereof) in connection with such consummation as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the Common Shares thereafter deliverable upon the exercise of the Rights.

The Company shall not consummate any such consolidation, merger, Share Exchange, sale or transfer unless prior thereto the Company and such issuer shall have executed and delivered to the Rights Agent a supplemental agreement so providing.  

The Company shall not enter into any transaction of the kind referred to in this Section 13 if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements or arrangements which, as a result of the consummation of such transaction, would eliminate or substantially diminish the benefits intended to be afforded by the Rights.

The provisions of this Section 13 shall similarly apply to successive consolidations, mergers, Share Exchanges, sales, or other transfers.

SECTION 14.  FRACTIONAL RIGHTS AND FRACTIONAL SHARES.

(a)

The Company shall not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights.  In lieu of such fractional Rights, there shall be paid to the registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use, including prices quoted on The Nasdaq Stock Market or the OTC Bulletin Board, or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Board. If on any such date no such market maker is making a market in the Rights, the fair value of the Rights on such date as determined in good faith by the Board shall be used.

(b)

The Company shall not be required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one one-thousandth of a Preferred Share) upon exercise of the Rights or to distribute certificates which evidence fractional Preferred Shares (other than fractions which are integral multiples of one one-thousandth of a Preferred Share). Fractions of Preferred Shares in integral multiples of one one-thousandth of a Preferred Share may, at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it; provided, that such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Preferred Shares represented by such depositary receipts. In lieu of fractional Preferred Shares that are not integral multiples of one one-thousandth of a Preferred Share, the Company shall pay to the registered holders of Right Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one Preferred Share. For the purposes of this Section 14(b), the current market value of a Preferred Share shall be the closing price of a Preferred Share (as determined pursuant to the second sentence of Section 11(d)(i) and Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of such exercise.

(c)

The Company shall not be required to issue fractions of Common Shares or other securities issuable upon exercise or exchange of the Rights or to distribute certificates which evidence any such fractional securities.  In lieu of issuing any such fractional securities, the Company may at its election either round to the nearest whole number of securities or pay to any Person to whom or which such fractional securities would otherwise be issuable an amount in cash equal to the same fraction of the current market value of one such security.  For purposes of this Section 14(c), the current market value of a Common Share or other security issuable upon the exercise or exchange of Rights shall be the closing price thereof (as determined pursuant to Section 11(d) hereof) for the Trading Day immediately prior to the date of such exercise or exchange.

(d)

The holder of a Right, by the acceptance thereof, expressly waives his right to receive any fractional Rights or any fractional shares upon exercise of a Right (except as provided above).

SECTION 15.  RIGHTS OF ACTION.

All rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent under Section 18 hereof, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Shares).  Any registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of the Common Shares), may, on his own behalf and for his own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, his right to exercise the Rights evidenced by such Right Certificate in the manner provided in such Right Certificate and in this Agreement.  Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement and shall be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of the obligations of any Person subject to this Agreement.

SECTION 16.  AGREEMENT OF RIGHT HOLDERS.

Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that:

(a)

prior to the Distribution Date, the Rights shall be transferable only in connection with the transfer of the Common Shares;

(b)

after the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the office of the Rights Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer;

(c)

the Company and the Rights Agent may deem and treat the person in whose name the Right Certificate (or, prior to the Distribution Date, the Common Shares certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificate or the Common Shares certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary; and

(d)

notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other Person as a result of its inability to perform any of its obligations under this Agreement by reason of any preliminary or permanent injunction or other order, decree or ruling (whether interlocutory or final) issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by any governmental authority, prohibiting or otherwise restraining performance of such obligation; provided, however, the Company must use its best efforts to have any such order, decree or ruling lifted or otherwise overturned as soon as possible.

SECTION 17.  RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER.

No holder, as such, of any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the Preferred Shares or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders (except as provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof.

SECTION 18.  CONCERNING THE RIGHTS AGENT.

The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the preparation, delivery, administration, execution and amendment of this Agreement and the exercise and performance of its duties hereunder.

The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or expense, incurred without negligence, bad faith or willful misconduct on the part of the Rights Agent, for any action taken, suffered or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement or the exercise or performance of its duties hereunder, including, without limitation, the costs and expenses of defending against any claim of such liability.  The indemnity provided herein shall survive the termination of this Agreement and the termination and the expiration of the Rights.

The Rights Agent shall be authorized to rely on, shall be protected and shall incur no liability for, or in respect of any action taken, suffered or omitted by it in connection with, its acceptance and administration of this Agreement or the exercise or performance of its duties hereunder in reliance upon any Right Certificate or certificate for the Preferred Shares or Common Shares or other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons.

SECTION 19.  MERGER OR CONSOLIDATION OR CHANGE

OF NAME OF RIGHTS AGENT.

Any Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the stock transfer or shareholder services business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided that such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case, at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and in case at that time any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement.

In case, at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and in case, at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name; and in all such cases, such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement. 

SECTION 20.  DUTIES OF RIGHTS AGENT.

The Rights Agent undertakes the duties and obligations, and only the duties and obligations, imposed by this Agreement (and no implied duties or obligations) upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound:

(a)

The Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the advice or opinion of such counsel shall be full and complete authorization and protection to the Rights Agent, and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted by it in good faith and in accordance with such advice or opinion.

(b)

Whenever, in the performance of its duties under this Agreement, the Rights Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking, suffering or omitting any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by any one of the Chairman of the Board, the Chief Executive Officer, Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization and protection to the Rights Agent, and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted in good faith by it under the provisions of this Agreement in reliance upon such certificate. 

(c)

The Rights Agent shall be liable hereunder to the Company and any other Person only for its own negligence, bad faith or willful misconduct.

(d)

The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only.

(e)

The Rights Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights (including the manner, method or amount thereof) provided for in Sections 3, 11, 13, 23, or 24 hereof, or the ascertaining of the existence of facts that would require any such change or adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after actual notice that such change or adjustment is required); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Preferred Shares to be issued pursuant to this Agreement or any Right Certificate or as to whether any Preferred Shares shall, when issued, be validly authorized and issued, fully paid and nonassessable.

(f)

The Company agrees that it shall perform, execute, acknowledge and deliver (or cause to be performed, executed, acknowledged and delivered) all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement. 

(g)

The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any one of the Chairman of the Board, the Chief Executive Officer, Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary of the Company, and to apply to such officers for advice or instructions in connection with its duties, and such advice or instructions shall be full authorization and protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted by it in good faith in accordance with the advice or instructions of any such officer or for any delay in acting while waiting for such advice or instructions. 

(h)

The Rights Agent and any shareholder, director, officer, member, Affiliate or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company, or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company, or otherwise act fully and freely as though it were not Rights Agent under this Agreement.  Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other Person.

(i)

The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof.

SECTION 21.  CHANGE OF RIGHTS AGENT.

The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon 30 days’ notice in writing mailed to the Company and to each transfer agent of the Common Shares or Preferred Shares by registered or certified mail, and to the holders of the Right Certificates by first-class mail.

The Company may remove the Rights Agent or any successor Rights Agent upon 30 days’ notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Shares or Preferred Shares by registered or certified mail, and to the holders of the Right Certificates by first-class mail.

If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent.  If the Company shall fail to make such appointment within a period of 30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (who shall, with such notice, submit his Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be (i) a Person organized and doing business under the laws of the United States or of the State of Wisconsin (or of any other state of the United States so long as such corporation is authorized to do business as a banking institution in the State of Wisconsin), in good standing, having an office in the State of Wisconsin, which is authorized under such laws to exercise corporate trust or stock transfer powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million or (ii) an Affiliate of such Person.

After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent, without further act or deed. The predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares or Preferred Shares, and mail a notice thereof in writing to the registered holders of the Right Certificates. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. 

SECTION 22.  ISSUANCE OF NEW RIGHT CERTIFICATES.

Notwithstanding any of the provisions of this Agreement or of the Rights Certificates to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by the Board to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Agreement. 

In addition, in connection with the issuance or sale of Common Shares following the Distribution Date and prior to the earlier of the Redemption Date and the Final Expiration Date, the Company (i) shall with respect to Common Shares so issued or sold pursuant to the exercise of stock options or under any employee plan or arrangement, or upon the exercise, conversion, or exchange of securities, notes or debentures issued by the Company and (ii) may, in any other case, if deemed necessary or appropriate by the Board, issue Right Certificates representing the appropriate number of Rights in connection with such sale; provided, however, that (i) the Company shall not be obligated to issue any such Right Certificates if, and to the extent that, the Company shall be advised by counsel that such issuance would create a significant risk of material adverse tax consequences to the Company or the Person to whom such Right Certificate would be issued and (ii) no Right Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in lieu of the issuance thereof.

SECTION 23.  REDEMPTION.

(a)

The Board may, at its option, at any time prior to such time as any Person becomes an Acquiring Person, redeem all but not less than all of the then outstanding Rights at the Redemption Price.  The redemption of the Rights by the Board may be made effective at such time on such basis and with such conditions as the Board in its sole discretion may establish.

(b)

Immediately upon the action of the Board ordering the redemption of the Rights pursuant to Section 23(a), and without any further action and without any notice, the right to exercise the Rights shall terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price.  The Company shall promptly give public notice of any such redemption; provided, however, that the failure to give, or any defect in, any such notice shall not affect the validity of such redemption.  Within 10 days after such action of the Board ordering the redemption of the Rights, the Company shall mail a notice of redemption to all the holders of the then outstanding Rights at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Shares.  Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice.  Each such notice of redemption shall state the method by which the payment of the Redemption Price shall be made.  Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time in any manner other than that specifically set forth in this Section 23 or in Section 24 hereof, and other than in connection with the purchase of Common Shares prior to the Distribution Date. 

SECTION 24.  EXCHANGE.

(a)

The Board may, at its option, at any time after any Person becomes an Acquiring Person, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become null and void pursuant to the provisions of Section 11(a)(ii) hereof) for Common Shares at an exchange ratio of Parity Common Shares per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such exchange ratio being hereinafter referred to as the “Exchange Ratio”). Notwithstanding the foregoing, the Board shall not be empowered to effect such exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Shares for or pursuant to the terms of any such plan), together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or more of the Common Shares then outstanding. 

(b)

Immediately upon the action of the Board ordering the exchange of any Rights pursuant to Section 24(a), and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of holders of such Rights shall be to receive that number of Common Shares equal to the number of such Rights held by such holder multiplied by the Exchange Ratio.  The Company shall promptly notify the Rights Agent and give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange.  The Company promptly shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent.  Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice.  Each such notice of exchange shall state the method by which the exchange of the Common Shares for Rights shall be effected and, in the event of any partial exchange, the number of Rights which shall be exchanged.  Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights.

(c)

In the event that there shall not be sufficient Common Shares issued but not outstanding or authorized but unissued to permit any exchange of Rights as contemplated in accordance with this Section 24, the Company shall take all such actions as may be necessary to authorize additional Common Shares for issuance upon exchange of the Rights.  In the event the Company shall, after good faith effort, be unable to take all such actions as may be necessary to authorize such additional Common Shares, the Company shall substitute, for each Common Share that would otherwise be issuable upon exchange of a Right, a number of Preferred Shares or fraction thereof such that the current per share market price of one Preferred Share multiplied by such number or fraction is equal to the current per share market price of one Common Share as of the date of issuance of such Preferred Shares or fraction thereof.

(d)

The Company shall not be required to issue fractions of Common Shares or to distribute certificates which evidence fractional Common Shares.  In lieu of such fractional Common Shares, the Company may at its election either round to the nearest whole number of Common Shares or pay to the registered holders of the Right Certificates with regard to which such fractional Common Shares would otherwise be issuable an amount in cash equal to the same fraction of the current market value of a whole Common Share.  For the purposes of this Section 24(d), the current market value of a whole Common Share shall be the closing price of a Common Share (as determined pursuant to the second sentence of Section 11(d)(i) and Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24.

SECTION 25.  NOTICE OF CERTAIN EVENTS.

(a)

In case the Company shall propose

(i)

to pay any dividend payable in stock of any class to the holders of its Preferred Shares or to make any other distribution to the holders of its Preferred Shares (other than a regular quarterly cash dividend),

(ii)

to offer to the holders of its Preferred Shares rights or warrants to subscribe for or to purchase any additional Preferred Shares or shares of stock of any class or any other securities, rights or options,

(iii)

to effect any reclassification of its Preferred Shares (other than a reclassification involving only the subdivision of outstanding Preferred Shares),

(iv)

to effect any consolidation or merger into or with, to effect any Share Exchange with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person,

(v)

to effect the liquidation, dissolution or winding up of the Company, or

(vi)

to declare or pay any dividend on the Common Shares payable in Common Shares or to effect a subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares), 

then, in each such case, the Company shall give to the Rights Agent and each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, or distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, Share Exchange, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of the Common Shares and/or Preferred Shares, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by Section 25(a)(i) or (ii) above at least 10 days prior to the record date for determining holders of the Preferred Shares for purposes of such action, and in the case of any such other action, at least 10 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Common Shares and/or Preferred Shares, whichever shall be the earlier.

(b)

In case an event set forth in Section 11(a)(ii) hereof shall occur, then the Company shall as soon as practicable thereafter give to the Rights Agent and each holder of a Right Certificate (or if occurring prior to the Distribution Date, the holders of the Company Common Shares) in accordance with Section 26 hereof, a notice of the occurrence of such event, which notice shall describe such event and the consequences of such event to holders of Rights under Section 11(a)(ii) hereof.

SECTION 26.  NOTICES.

Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows:

ARI Network Services, Inc.

11425 W. Lake Park Drive, Suite 900

Milwaukee, Wisconsin  53224 

Attention:  Corporate Secretary

Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Right Certificate to or on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows:

American Stock Transfer & Trust Company

59 Maiden Lane

New York, New York  10038

Attention:  Corporate Trust Department

Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company.

SECTION 27.  SUPPLEMENTS AND AMENDMENTS.

For so long as the Rights are redeemable, the Company may in its sole and absolute discretion, and the Rights Agent shall, if the Company so directs, supplement or amend any provision of this Agreement in any respect without the approval of any holders of Rights or Common Shares.  From and after the time that the Rights are no longer redeemable, the Company may, and the Rights Agent shall, if the Company so directs, from time to time supplement or amend this Agreement without the approval of any holders of Rights (i) to cure any ambiguity or to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, or (ii) to make any other changes or provisions in regard to matters or questions arising hereunder which the Company may deem necessary or desirable, including but not limited to extending the Final Expiration Date; provided, however, that no such supplement or amendment shall adversely affect the interests of the holders of Rights as such (other than an Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no such supplement or amendment may cause the Rights again to become redeemable or cause this Agreement again to become amendable other than in accordance with this sentence; provided further, that the right of the Board to extend the Distribution Date shall not require any amendment or supplement hereunder.  Upon the delivery of a certificate from an appropriate officer of the Company which states that the proposed supplement or amendment is in compliance with the terms of this Section 27 and, provided such supplement or amendment does not change or increase the Rights Agent’s duties, liabilities or obligations hereunder, the Rights Agent shall execute such supplement or amendment.

SECTION 28.  SUCCESSORS.

All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

SECTION 29.  BENEFITS OF THIS AGREEMENT.

Nothing in this Agreement shall be construed to give to any person or corporation other than the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares).

SECTION 30.  SEVERABILITY.

If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

SECTION 31.  DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS.

The Board of Directors shall have the exclusive power and authority to administer this Agreement and to exercise the rights and powers specifically granted to the Board of Directors or to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation, the right and power to (i) interpret the provisions of this Agreement and (ii) make all determinations deemed necessary or advisable for the administration of this Agreement (including, without limitation, a determination to redeem or not redeem the Rights or amend this  Agreement).  All such actions, calculations, interpretations and determinations (including, for purposes of clause (y) below, all omissions with respect to the foregoing) that are done or made by the Board of Directors in good faith shall (x) be final, conclusive and binding on the Company, the Rights Agent, the holders of the Rights, as such, and all other parties, and (y) not subject the Board of Directors to any liability to the holders of the Rights Certificates. 

SECTION 32.  GOVERNING LAW.

This Agreement, each Right and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Wisconsin and for all purposes shall be governed by and construed in accordance with the laws thereof applicable to contracts to be made and performed entirely within Wisconsin.

SECTION 33.  COUNTERPARTS.

This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

SECTION 34.  DESCRIPTIVE HEADINGS.

Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

AMERICAN STOCK TRANSFER &

ARI NETWORK SERVICES, INC.

TRUST COMPANY

By: /s/ Brian E. Dearing;

By: /s/ Herbert J. Lemmer

Name: Brian E. Dearing

Name: Herbert J. Lemmer

Title: Chairman & CEO

Title: Vice President

Exhibit A

FORM OF

ATTACHMENT TO THE 

ARTICLES OF INCORPORATION OF

ARI NETWORK SERVICES, INC.

PREFERENCES, LIMITATIONS AND

RELATIVE RIGHTS OF THE SERIES B

JUNIOR  PREFERRED STOCK

1.  Dividends and Distributions.

(a)  Subject to the rights of the holders of any shares of any series of Preferred Stock (or any similar stock) ranking prior and superior to the Series B Junior Preferred Stock (the “Series B Junior Preferred Stock”) with respect to dividends, the holders of shares of Series B Junior Preferred Stock, in preference to the holders of Common Stock, par value $0.001 per share (the “Common Stock”), of the Company and of any other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of February, May, August and November in each year (each such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series B Junior Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (i) $10.00 or (ii) subject to the provision for adjustment hereinafter set forth, 1,000 times the aggregate per share amount of all cash dividends, and 1,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series B Junior Preferred Stock. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series B Junior Preferred Stock were entitled immediately prior to such event under clause (ii) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

(b)  The Company shall declare and pay a dividend or distribution on the Series B Junior Preferred Stock as provided in paragraph (a) of this Section at the same times that it declares or pays a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock).

(c)  Dividends shall begin to accrue and be cumulative on outstanding shares of Series B Junior Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series B Junior Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date.  Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series B Junior Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series B Junior Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof.

2.  Voting Rights.  The holders of shares of Series B Junior Preferred Stock shall have the following voting rights:

(a)  Subject to the provision for adjustment hereinafter set forth, each share of Series B Junior Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the shareholders of the Company. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series B Junior Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

(b)  Except as otherwise provided herein, in any Articles of Amendment or such other similar document creating a series of Preferred Stock or any similar stock, or by law, the holders of shares of Series B Junior Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Company having general voting rights shall vote together as one class on all matters submitted to a vote of shareholders of the Company.

(c)  Except as set forth herein, or as otherwise provided by law, holders of Series B Junior Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

3. Certain Restrictions.

(a)  Whenever quarterly dividends or other dividends or distributions payable on the Series B Junior Preferred Stock as provided in Section 1, above, are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series B Junior Preferred Stock outstanding shall have been paid in full, the Company shall not:

(i)  declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Junior Preferred Stock;

(ii)  declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B Junior Preferred Stock, except dividends paid ratably on the Series B Junior Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

(iii)  redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up), to the Series B Junior Preferred Stock, provided that the Company may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Company ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series B Junior Preferred Stock; or

(iv)  redeem or purchase or otherwise acquire for consideration any shares of Series B Junior Preferred Stock, or any shares of stock ranking on a parity with the Series B Junior Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

(b)  The Company shall not permit any subsidiary of the Company to purchase or otherwise acquire for consideration any shares of stock of the Company unless the Company could, under paragraph (a) of this Section 3, purchase or otherwise acquire such shares at such time and in such manner.

4.  Reacquired Shares.  Any shares of Series B Junior Preferred Stock purchased or otherwise acquired by the Company in any manner whatsoever shall be retired and canceled promptly after the acquisition thereof.  All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Amended and Restated Articles of Incorporation, or in any Articles of Amendment or such other similar document creating a series of Preferred Stock or any similar stock or as otherwise required by law.

5.  Liquidation, Dissolution or Winding Up.  Upon any liquidation, dissolution or winding up of the Company, no distribution shall be made (a) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Junior Preferred Stock unless, prior thereto, the holders of shares of Series B Junior Preferred Stock shall have received $10,000 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, provided that the holders of shares of Series B Junior Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1,000 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (b) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B Junior Preferred Stock, except distributions made ratably on the Series B Junior Preferred Stock and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series B Junior Preferred Stock were entitled immediately prior to such event under the proviso in clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

6.  Consolidation, Merger, etc.  In case the Company shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series B Junior Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 1,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series B Junior Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

7.  No Redemption.  The shares of Series B Junior Preferred Stock shall not be redeemable.

8.  Rank.  The Series B Junior Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets, junior to all series of any other class of the Company’s Preferred Stock.

Exhibit B

Form of Right Certificate - Front Side

Certificate No. R-_______________

_______________ Rights

NOT EXERCISABLE AFTER AUGUST 18, 2013, OR EARLIER REDEMPTION OR EXCHANGE.  THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.  UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS, ASSOCIATES OR AFFILIATES OF ACQUIRING PERSONS (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) (OR NOMINEE OF ANY OF THEM) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.  [THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE WERE ISSUED TO A PERSON WHO WAS AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (OR A NOMINEE OF ONE OF THEM).  THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT.]1

The portion of the legend in brackets shall be inserted only if applicable.
Right Certificate

ARI NETWORK SERVICES, INC.

This certifies that _______________________, or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of August 7, 2003 (the “Rights Agreement”), between ARI Network Services, Inc., a Wisconsin corporation (the “Company”), and American Stock Transfer & Trust Company (the “Rights Agent”), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to 5:00 P.M., Milwaukee, Wisconsin time, on August 18, 2013, at the office of the Rights Agent designated for such purpose, or at the office of its successor as Rights Agent, one one-thousandth of a fully paid non-assessable (except as provided by Section 180.0622(2)(b) of the Wisconsin Business Corporation Law, or any successor provision, and judicial interpretations thereof) share of Series B Junior Preferred Stock, $.001 par value (the “Preferred Shares”), of the Company, at a purchase price of $10.00 per one one-thousandth of a Preferred Share (the “Purchase Price”), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase duly executed.

The number of Rights evidenced by this Right Certificate (and the number of one one-thousandths of a Preferred Share which may be purchased upon exercise hereof) and the Purchase Price set forth above are the number and Purchase Price as of August 7, 2003, based on the Preferred Shares as constituted at such date.  As provided in the Rights Agreement, the Purchase Price and the number of one one-thousandths of a Preferred Share which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events.

This Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and reference is hereby made to the Rights Agreement for a full description of the rights, limitations of rights, obligations, duties and immunities of the Rights Agent, the Company, and the holders of the Right Certificates.  Copies of the Rights Agreement are on file at the principal executive offices of the Company and the above-mentioned offices of the Rights Agent.

This Right Certificate, upon surrender at the office of the Rights Agent designated for such purpose, may be exchanged for another Right Certificate of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of Preferred Shares as the Rights evidenced by the Right Certificate.  If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised.

Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate (i) may be redeemed by the Company at a redemption price of $0.01 per Right or (ii) may be exchanged in whole or in part for shares of the Company’s Common Stock, par value $.001 per share, or Preferred Shares.

No fractional Preferred Shares shall be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one one-thousandth of a Preferred Share, which may, at the election of the Company, be evidenced by depositary receipts), but in lieu thereof a cash payment shall be made or the number of shares to be issued may be rounded, as provided in the Rights Agreement.

No holder of this Right Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred Shares or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised as provided in the Rights Agreement.

This Right Certificate shall not be valid or obligatory for any purpose until it has been countersigned by the Rights Agent.

WITNESS the facsimile signature of the proper officers of the Company, dated as of __________________________, ______.

ATTEST:

ARI NETWORK SERVICES, INC.

By:

By:

Secretary

Countersigned (for purposes of authentication):

AMERICAN STOCK TRANSFER & TRUST COMPANY

By:

Authorized Signature

Form of Right Certificate - Reverse Side

NOTICE

The signature in the Form of Assignment or Form of Election to Purchase, as the case may be, must conform to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.

In the event the certification set forth below in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not completed, the Company and the Rights Agent will deem the beneficial owner of the Rights evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement) and such Assignment or Election to Purchase will not be honored.

FORM OF ASSIGNMENT

(To be executed by the registered holder to transfer the Right Certificate.)

FOR VALUE RECEIVED, __________________, hereby sells, assigns and transfers unto 

(Please print name and address of transferee)

this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint                                          Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution.

Signature:

Dated:

Signature Guaranteed:

Signatures must be guaranteed by an eligible guarantor institution (a bank, stockbroker, savings and loan association or credit union with membership in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934.

The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement).

Signature: 

FORM OF ELECTION TO PURCHASE

(To be executed by registered holder to exercise Rights

represented by the Right Certificate.)

To:  ARI NETWORK SERVICES, INC.

The undersigned hereby irrevocably elects to exercise ________ Rights represented by this Right Certificate to purchase the Preferred Shares issuable upon the exercise of such Rights and requests that certificates for such Preferred Shares be issued in the name of:

(Please print name and address)

Social security or taxpayer identification number: 

If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name of and delivered to:

(Please print name and address)

Social security or taxpayer identification number: 

Signature:

Dated:

Signature Guaranteed:

Signatures must be guaranteed by an eligible guarantor institution (a bank, stockbroker, savings and loan association or credit union with membership in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934.

The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement).

Signature: 

Exhibit C

Summary of Rights to Purchase Preferred Shares

Introduction.  On August 7, 2003 the Board of Directors of ARI Network Services, Inc. (the “Company”) declared a dividend of one preferred share purchase right (a “Right”) for each outstanding share of common stock, par value $.001 per share, of the Company.  The dividend was paid to the stockholders of record as of the close of business on August 18, 2003.  A Right represents the ability of the holder to purchase one one-thousandth of a share of Series B Junior Preferred Stock, $.001 par value (“Preferred Stock”), of the Company at a price of $10.00 (as the same may be adjusted, the “Purchase Price”).  The description and terms of the Rights are set forth in a Rights Agreement (as the same may be amended from time to time, the “Rights Agreement”) dated as of August 7, 2003, between the Company and American Stock Transfer & Trust Company, as Rights Agent (the “Rights Agent”).

Our Board has adopted the Rights Agreement providing for these rights in order to protect stockholders from coercive or otherwise unfair takeover tactics.  In general terms, it works by imposing a significant penalty upon any person or group which acquires 10% or more of our outstanding common stock without the approval of our Board.  The Rights Agreement should not interfere with any merger or other business combination approved by our Board.  The Rights Agreement does not apply to shareholders who currently hold over 10% of our outstanding common stock unless they increase their holdings by 1% or more without the approval of our Board.

For those interested in the specific terms of the Rights Agreement we provide the following summary description.  Please note, however, that this description is only a summary, and is not complete, and should be read together with the entire Rights Agreement, which has been filed with the Securities and Exchange Commission as an exhibit to a Registration Statement on Form 8-A dated August 18, 2003.  A copy of the agreement is available free of charge from our Company.

The Rights.  The Rights trade with, and are inseparable from, the common stock.  The Rights are evidenced only by certificates that represent shares of common stock.  New Rights will accompany any new shares of common stock we issue until the Distribution Date described below.

Exercise Price.  Each Right will allow its holder to purchase from our Company one one-thousandth of a share of Preferred Stock for $10.00, once the Rights become exercisable. This portion of the share of Preferred Stock will give the shareholder approximately the same dividend, voting, and liquidation rights as would one share of common stock.  Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.

Exercisability. The Rights will not be exercisable until

•

ten days after the public announcement that a person or group has become an “Acquiring Person” by obtaining beneficial ownership of 10% or more of our outstanding common stock, or, if earlier,

•

10 business days (or a later date determined by our Board before any person or group becomes an Acquiring Person) after a person or group begins a tender or exchange offer which, if completed, would result in that person or group becoming an Acquiring Person.

We refer to the date when the Rights become exercisable as the “Distribution Date.”  Until that date, the common stock certificates will also evidence the Rights, and any transfer of shares of common stock will constitute a transfer of Rights.  After that date, the Rights will separate from the common stock and be evidenced by book-entry credits or by Rights certificates that we will mail to all eligible holders of common stock.  Any Rights held by an Acquiring Person are void and may not be exercised. 

Consequences of A Person or Group Becoming an Acquiring Person.  If a person or group becomes an Acquiring Person, all holders of Rights except the Acquiring Person may, for $10.00, purchase shares of our common stock with a market value of $20.00, based on the market price of the common stock prior to such acquisition.

If our Company is later acquired in a merger or similar transaction after the Rights Distribution Date, all holders of Rights except the Acquiring Person may, for $10.00, purchase shares of the acquiring corporation with a market value of $20.00 based on the market price of the acquiring corporation’s stock, prior to such merger.

Preferred Share Provisions.  Each one one-thousandth of a share of Preferred Stock, if issued:

•

will not be redeemable;

•

will entitle holders to quarterly dividend payments of $.01 per fractional share, or an amount equal to the dividend paid on one share of common stock, whichever is greater;

•

will entitle holders upon liquidation either to receive $10.00 per fractional share or an amount equal to the payment made on one share of common stock, whichever is greater.

•

will be entitled to one vote on all matters submitted to a vote of shareholders.

•

if shares of our common stock are exchanged via merger, consolidation, or a similar transaction, will entitle holders to a per share payment equal to the payment made on one share of common stock.

Expiration.  The Rights will expire on August 18, 2013.

Redemption.  Our Board may redeem the Rights for $0.01 per Right at any time before any person or group becomes an Acquiring Person.  If our Board redeems any Rights, it must redeem all of the Rights.  Once the Rights are redeemed, the only right of the holders of Rights will be to receive the redemption price of $0.01 per Right.  The redemption price will be adjusted if we have a stock split or stock dividends of our common stock.

Exchange.  After a person or group becomes an Acquiring Person our Board may extinguish the Rights by exchanging common shares or equivalent securities with a market value of $10.00 for each Right, other than Rights held by the Acquiring Person.

Anti Dilution Provisions.  Our Board may adjust the purchase price of the Preferred Stock, the number of shares of Preferred Stock issuable and the number of outstanding Rights to prevent dilution that may occur from a stock dividend, a stock split, a reclassification of the Preferred Stock or common stock.  

Amendments.  The terms of the Rights Agreement may be amended by our Board without the consent of the holders of the Rights.  After a person or group becomes an Acquiring Person, our Board may not amend the agreement in a way that adversely affects holders of the Rights.EXHIBIT 4.1

                               SERIES SUPPLEMENT

                      CORPORATE BACKED TRUST CERTIFICATES

             GOLDMAN SACHS GROUP NOTE-BACKED SERIES 2003-12 TRUST

                                    between

                            LEHMAN ABS CORPORATION,

                                 as Depositor,

                                      and

                     U.S. BANK TRUST NATIONAL ASSOCIATION,

                                  as Trustee,

                      CORPORATE BACKED TRUST CERTIFICATES

                          Dated as of August 7, 2003

<PAGE>

<TABLE>
<CAPTION>
                                                 Table of Contents

                                                                                                               Page
                                                                                                               ----

<S>         <C>   <C>                                                                                            <C>
Section 1.  Incorporation of Standard Terms.......................................................................1

Section 2.  Definitions...........................................................................................1

Section 3.  Designation of Trust and Certificates.................................................................8

Section 4.  Trust Certificates...................................................................................11

Section 5.  Distributions........................................................................................11

Section 6.  Trustee's Fees.......................................................................................15

Section 7.  Optional Call; Optional Exchange.....................................................................16

Section 8.  Notices of Events of Default.........................................................................21

Section 9.  Miscellaneous........................................................................................21

Section 10.  Governing Law.......................................................................................25

Section 11.  Counterparts........................................................................................25

Section 12.  Termination of the Trust............................................................................25

Section 13.  Sale of Underlying Securities; Optional Exchange....................................................25

Section 14.  Amendments..........................................................................................25

Section 15.  Voting of Underlying Securities, Modification of Indenture..........................................26

Section 16.  Additional Depositor Representation.................................................................27
</TABLE>

SCHEDULE I        SERIES 2003-12 UNDERLYING SECURITIES SCHEDULE
EXHIBIT A-1       FORM OF TRUST CERTIFICATE CLASS A-1
EXHIBIT A-2       FORM OF TRUST CERTIFICATE CLASS A-2
EXHIBIT B         FORM OF WARRANT AGENT AGREEMENT
EXHIBIT C         FORM OF INVESTMENT LETTER

                                                         i

<PAGE>

                               SERIES SUPPLEMENT

                      CORPORATE BACKED TRUST CERTIFICATES

             GOLDMAN SACHS GROUP NOTE-BACKED SERIES 2003-12 TRUST

          SERIES SUPPLEMENT, Goldman Sachs Group Note-Backed Series 2003-12,
dated as of August 7, 2003 (the "Series Supplement"), by and between LEHMAN
ABS CORPORATION, as Depositor (the "Depositor"), and U.S. BANK TRUST NATIONAL
ASSOCIATION, as Trustee (the "Trustee").

                             W I T N E S S E T H:

          WHEREAS, the Depositor desires to create the Trust designated herein
(the "Trust") by executing and delivering this Series Supplement, which shall
incorporate the terms of the Standard Terms for Trust Agreements, dated as of
January 16, 2001 (the "Standard Terms" and, together with this Series
Supplement, the "Trust Agreement"), by and between the Depositor and the
Trustee, as modified by this Series Supplement;

          WHEREAS, the Depositor desires to deposit into the Trust the
Underlying Securities described on Schedule I attached hereto, the general
terms of which are described in the Prospectus Supplement under the heading
"Description of the Deposited Assets--Underlying Securities;"

          WHEREAS, in connection with the creation of the Trust and the
deposit therein of the Underlying Securities, it is desired to provide for the
issuance of trust certificates evidencing undivided interests in the Trust and
call warrants related thereto; and

          WHEREAS, the Trustee has joined in the execution of the Standard
Terms and this Series Supplement to evidence the acceptance by the Trustee of
the Trust.

          NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants expressed herein, it is hereby agreed by and between the
Depositor and the Trustee as follows:

     Section 1. Incorporation of Standard Terms. Except as otherwise provided
herein, all of the provisions of the Standard Terms are hereby incorporated
herein by reference in their entirety, and this Series Supplement and the
Standard Terms shall form a single agreement between the parties. In the event
of any inconsistency between the provisions of this Series Supplement and the
provisions of the Standard Terms, the provisions of this Series Supplement
will control with respect to the Goldman Sachs Group Note-Backed Series
2003-12 Certificates and the transactions described herein.

     Section 2. Definitions.

     (a) Except as otherwise specified herein or as the context may otherwise
require, the following terms shall have the respective meanings set forth
below for all purposes under this Series Supplement. (Section 2(b) below sets
forth terms listed in the Standard Terms which are

                            1
<PAGE>

not applicable to this Series.) Capitalized terms used but not defined herein
shall have the meanings assigned to them in the Standard Terms.

          "Accredited Investor" shall mean a Person that qualifies as an
"accredited investor" within the meaning of Rule 501(a) under the Securities
Act.

          "Available Funds" shall have the meaning specified in the Standard
Terms.

          "Business Day" shall mean any day other than a Saturday or Sunday,
that is not a legal holiday, or a day on which banks in the City of New York
are not required or authorized by law to be closed.

          "Calculation Agent" shall mean Lehman ABS Corporation or such
affiliate thereof as shall be designated by Lehman ABS Corporation.

          "Call Date" shall mean any Business Day that any holder of Call
Warrants designates as a Call Date occurring (i) on or after August 7, 2008,
(ii) after the Underlying Securities Issuer announces that it will redeem,
prepay or otherwise make an unscheduled payment on the Underlying Securities,
(iii) after the Trustee notifies the Certificateholders of any proposed sale
of the Underlying Securities pursuant to the provisions of Section 5(e) or
5(i) of this Series Supplement or (iv) on the date on which a tender offer for
some or all of the Underlying Securities is consummated.

          "Call Notice" shall have the meaning specified in Section 1.1 of the
Warrant Agent Agreement.

          "Call Price" shall mean, for each related Call Date, (i) in the case
of the Class A-1 Certificates, 100% of the outstanding Certificate Principal
Balance of the Class A-1 Certificates being purchased pursuant to the exercise
of the Call Warrants, plus any accrued and unpaid interest on such amount to
but excluding the Call Date and, (ii) in the case of the Class A-2
Certificates, the present value of all amounts that would otherwise have been
payable on the Class A-2 Certificates being purchased pursuant to the exercise
of the Call Warrants for the period from the related Call Date to the Final
Scheduled Distribution Date using a discount rate of 7.00% per annum, assuming
no delinquencies, deferrals, redemptions or prepayments on the Underlying
Securities shall occur after the related Call Date.

          "Call Warrants" shall have the meaning specified in Section 3
hereof.

          "Called Certificates" shall have the meaning specified in Section
1.1(b) of the Warrant Agent Agreement.

          "Certificate Principal Balance" shall have the meaning specified in
Section 3 hereof.

          "Certificates" shall have the meaning specified in Section 3 hereof.

          "Class A-1 Allocation" shall mean the sum of the present values
(discounted at the rate of 5.80% per annum) of (i) any unpaid interest due or
to become due on the Class A-1

                                      2
<PAGE>

Certificates and (ii) the outstanding Certificate Principal Balance of the
Class A-1 Certificates (in each case assuming that the Class A-1 Certificates
were paid when due and were not redeemed or prepaid prior to their stated
maturity).

          "Class A-1 Certificates" shall mean the Certificates, in the form
attached hereto as Exhibit A-1, to be issued by the Trust representing a
proportionate undivided beneficial ownership interest in certain distributions
to be made by the Trust and having the characteristics described herein and in
the Certificates.

          "Class A-2 Allocation" shall mean the present value (discounted at
the rate of 5.80% per annum) of any unpaid amounts due or to become due on the
outstanding notional amount of the Class A-2 Certificates (assuming that the
Class A-2 Certificates were paid when due and were not redeemed or prepaid
prior to their stated maturity).

          "Class A-2 Certificates" shall mean the Certificates, in the form
attached hereto as Exhibit A-2, to be issued by the Trust representing a
proportionate undivided beneficial ownership interest in certain distributions
to be made by the Trust and having the characteristics described herein and in
the Certificates.

          "Closing Date" shall mean August 7, 2003.

          "Code" means the Internal Revenue Code of 1986, as amended.

          "Collection Period" shall mean, (i) with respect to each August
Distribution Date, the period beginning on the day after the February
Distribution Date of such year and ending on such August Distribution Date,
inclusive and (ii) with respect to each February Distribution Date, the period
beginning on the day after the August Distribution Date of the prior year and
ending on such February Distribution Date, inclusive; provided, however, that
clauses (i) and (ii) shall be subject to Section 9(f) hereof.

          "Corporate Trust Office" shall mean the office of U.S. Bank Trust
National Association located at 100 Wall Street, New York, New York 10005.

          "Currency" shall mean United States Dollars.

          "Depository" shall mean The Depository Trust Company, its nominees
and their respective successors.

          "Distribution Date" shall mean February 15th and August 15th of each
year (or if such date is not a Business Day, the next succeeding Business
Day), commencing on August 15, 2003, and ending on the earlier of the Final
Scheduled Distribution Date and any date on which all Underlying Securities
are redeemed, prepaid or liquidated in whole for any reason other than at
their maturity.

          "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.

                                      3
<PAGE>

          "Event of Default" shall mean (i) a default in the payment of any
interest on any Underlying Security after the same becomes due and payable
(subject to any applicable grace period), (ii) a default in the payment of the
principal of or any installment of principal of any Underlying Security when
the same becomes due and payable and (iii) any other event specified as an
"Event of Default" in the Indenture.

          "Exchange Act" shall mean the Securities and Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.

          "Final Scheduled Distribution Date" shall mean the Distribution Date
in February 15, 2033, or if such day is not a Business Day, the next
succeeding Business Day.

          "Indenture" shall mean the indenture among the Underlying Securities
Issuer and the Underlying Securities Trustee, as supplemented, pursuant to
which the Underlying Securities were issued.

          "Liquidation Price" shall mean the price at which the Trustee sells
the Underlying Securities.

          "Maturity Date" shall have the meaning specified in Schedule I
hereto.

          "Moody's" shall mean Moody's Investors Service.

          "Optional Call" shall mean the call of the Certificates by the
Warrant Holder, in whole or in part, resulting from the exercise of Call
Warrants by the Warrant Holder, pursuant to Section 7(d) hereof.

          "Optional Exchange" shall mean the exchange of the Certificates by
the Trust for the Underlying Securities pursuant to Section 7(a) hereof.

          "Optional Exchange Date" shall mean any date on which Underlying
Securities subject to Optional Exchange are distributed to a
Certificateholder.

          "Ordinary Expenses" shall mean the Trustee's ordinary expenses and
overhead in connection with its services as Trustee, including the items
referred to in the definition of Ordinary Expenses in the Standard Terms.

          "Plan" means (a) an employee benefit plan (as defined in Section
3(3) of ERISA), (b) a plan described in Section 4975(e)(1) of the Code or (c)
any entity whose underlying assets are treated as assets of any such plan by
reason of such plan's investment in the entity.

          "Prepaid Ordinary Expenses" shall be zero for this Series.

          "Prospectus Supplement" shall mean the Prospectus Supplement, dated
July 29, 2003, relating to the Class A-1 Certificates.

          "QIB" shall have the meaning set forth in Section 3(e) hereof.

                                      4
<PAGE>

          "Rating Agencies" shall mean Moody's and S&P.

          "Record Date" shall mean, with respect to each Distribution Date,
the day immediately preceding the related Distribution Date.

          "Required Percentage--Amendment" shall be 66-2/3% of the aggregate
Voting Rights, unless the subject amendment requires the vote of holders of
only one class of Certificates pursuant to the Standard Terms, in which case
66-2/3% of the Voting Rights of such Class.

          "Required Percentage--Direction of Trustee" shall be 66-2/3% of the
aggregate Voting Rights.

          "Required Percentage--Remedies" shall be 66-2/3% of the aggregate
Voting Rights.

          "Required Percentage--Removal" shall be 66-2/3% of the aggregate
Voting Rights.

          "Required Rating" shall mean, in the case of Moody's, the rating
assigned to the Underlying Securities by Moody's as of the Closing Date, and,
in the case of S&P, the rating assigned to the Underlying Securities by S&P as
of the Closing Date.

          "Resale Restriction Termination Date" shall have the meaning set
forth in Section 3(e) hereof.

          "Rule 144A" shall have the meaning set forth in Section 3(e) hereof.

          "S&P" shall mean Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc.

          "SEC Reporting Failure" shall mean the date determined by the
Depositor within a reasonable time following the Underlying Securities
Issuer's either (x) having stated in writing that it intends permanently to
cease filing periodic reports required under the Exchange Act or (y) having
failed to file all required periodic reports for one full year.

          "Securities Act" shall mean the United States Securities Act of
1933, as amended.

          "Securities Intermediary" shall mean initially, U.S. Bank Trust
National Association.

          "Series" shall mean Goldman Sachs Group Note-Backed Series 2003-12.

          "Special Distribution Date" shall have the meaning specified in
Section 5 hereof.

          "Trustee Fee" shall mean the amount paid to the Trustee by the
Depositor on the Closing Date.

                                      5
<PAGE>

          "Trust Property" shall mean the Underlying Securities described on
Schedule I hereto, the Certificate Account and any additional Underlying
Securities sold to the Trust pursuant to Section 3(d) hereof.

          "UCC" shall mean the Uniform Commercial Code as in effect in the
applicable jurisdiction.

          "Underlying Securities" shall mean $25,000,000 aggregate principal
amount of 6.125% Notes due 2033, issued by the Underlying Securities Issuer,
as set forth in Schedule I attached hereto (subject to Section 3(d) hereof).

          "Underlying Securities Issuer" shall mean The Goldman Sachs Group,
Inc.

          "Underlying Securities Trustee" shall mean The Bank of New York.

          "Underwriter" shall mean Lehman Brothers Inc.

          "Voting Rights" shall be allocated between the holders of the Class
A-1 Certificates and the holders of the Class A-2 Certificates, pro rata, in
proportion to the ratio of the Class A-1 Allocation to the Class A-2
Allocation. The Class A-1 Voting Rights will be allocated among Class A-1
Certificateholders in proportion to the then unpaid Certificate Principal
Balances of their respective Certificates. The Class A-2 Voting Rights will be
allocated among the Class A-2 Certificateholders in proportion to the then
outstanding notional amounts of their respective Certificates.

          "Warrant Agent" shall mean initially, U.S. Bank Trust National
Association.

          "Warrant Agent Agreement" shall mean that certain Warrant Agent
Agreement, dated as of the date hereof, between the Depositor and U.S. Bank
Trust National Association, as Warrant Agent and as Trustee, as the same may
be amended from time to time.

          "Warrant Holder" shall mean the holder of a Call Warrant.

     (b) The terms listed below are not applicable to this Series.

               "Accounting Date"

               "Administrative Fees"

               "Advance"

               "Allowable Expense Amounts"

               "Basic Documents"

               "Call Premium Percentage"

               "Credit Support"

                                      6
<PAGE>

               "Credit Support Instrument"

               "Credit Support Provider"

               "Cut-off Date"

               "Eligible Expense"

               "Eligible Investments"

               "Exchange Rate Agent"

               "Fixed Pass-Through Rate"

               "Floating Pass-Through Rate"

               "Guaranteed Investment Contract"

               "Letter of Credit"

               "Limited Guarantor"

               "Limited Guaranty"

               "Minimum Wire Denomination"

               "Pass-Through Rate"

               "Place of Distribution"

               "Purchase Price"

               "Required Premium"

               "Required Principal"

               "Requisite Reserve Amount"

               "Retained Interest"

               "Sale Procedures"

               "Sub-Administration Account"

               "Sub-Administration Agreement"

               "Sub-Administration Agent"

               "Surety Bond"

                                      7
<PAGE>

               "Swap Agreement"

               "Swap Counterparty"

               "Swap Distribution Amount"

               "Swap Guarantee"

               "Swap Guarantor"

               "Swap Receipt Amount"

               "Swap Termination Payment"

     Section 3. Designation of Trust and Certificates. The Trust created
hereby shall be known as the "Corporate Backed Trust Certificates, Goldman
Sachs Group Note-Backed Series 2003-12 Trust." The Certificates evidencing
certain undivided ownership interests therein shall be known as "Corporate
Backed Trust Certificates, Goldman Sachs Group Note-Backed Series 2003-12."
The Certificates shall consist of the Class A-1 Certificates and the Class A-2
Certificates (together, the "Certificates"). The Trust is also issuing call
warrants with respect to the Certificates ("Call Warrants").

     (a) The Class A-1 Certificates shall be held through the Depository in
book-entry form and shall be substantially in the form attached hereto as
Exhibit A-1. The Class A-2 Certificates shall initially be held through the
Depository in book-entry form and, as set forth in Section 3(e) below, shall
be held subsequent to the Closing Date in physical form or through the
Depository in book-entry form and shall be substantially in the form attached
hereto as Exhibit A-2. The Class A-1 Certificates shall be issued in
denominations of $25. The Class A-2 Certificates shall be issued in minimum
notional denominations of $100,000 and integral multiples of $1 in excess
thereof; provided, however, that on any Call Date on which a Warrant Holder
shall concurrently exchange Called Certificates for a distribution of
Underlying Securities in accordance with the provisions of Section 7 hereof,
Called Certificates may be issued in other denominations. Except as provided
in the Standard Terms and in paragraph (d) in this Section, the Trust shall
not issue additional Certificates or additional Call Warrants or incur any
indebtedness.

     (b) The Class A-1 Certificates shall consist initially of 1,000,000
Certificates having an initial aggregate certificate principal balance (the
"Certificate Principal Balance") of $25,000,000. The Class A-2 Certificates
are interest-only Certificates and shall have an initial aggregate notional
amount equal to the initial Certificate Principal Balance of the Class A-1
Certificates.

     (c) The holders of the Class A-1 Certificates will be entitled to receive
on each Distribution Date the interest, if any, received on the Underlying
Securities, to the extent necessary to pay interest at a rate of 5.80% per
annum on the outstanding Certificate Principal Balance of the Class A-1
Certificates. The holders of the Class A-2 Certificates will be entitled to
receive on each Distribution Date the interest, if any, received on the
Underlying Securities, to the extent necessary to pay interest at a rate of
0.325% per annum on the outstanding notional

                                      8
<PAGE>

amount of the Class A-2 Certificates, which notional amount shall be equal to
the Certificate Principal Balance of the Class A-1 Certificates. On the
Distribution Date occurring in August 2003, the Trustee shall cause the Trust
to pay to the Depositor the amount of interest accrued and paid on the
Underlying Securities from February 15, 2003, to but not including the Closing
Date; provided, however, that in the event an Optional Exchange Date shall
occur prior to the Distribution Date in August 2003, a pro rata portion of
such amount shall be paid to the Depositor on the Optional Exchange Date in
accordance with the provisions of Section 7(b)(ix) hereof. If the Depositor is
not paid any such amount on such date, it shall have a claim for such amount.
If Available Funds are insufficient to pay such amount, the Trustee will pay
the Depositor its pro rata share, based on the ratio the amount owed to the
Depositor bears to all amounts owed on the Certificates in respect of accrued
interest, of any proceeds from the recovery on the Underlying Securities.

     (d) The Depositor may sell to the Trustee additional Underlying
Securities on any date hereafter upon at least 3 Business Days' notice to the
Trustee (or such shorter period as shall be mutually satisfactory to the
Depositor and the Trustee) and upon (i) satisfaction of the Rating Agency
Condition and (ii) delivery of an Opinion of Counsel to the effect that the
sale of such additional Underlying Securities will not cause the Trust to be
taxed as an association or publicly traded partnership taxable as a
corporation for federal income tax purposes. Each condition to be satisfied
with respect to a sale of Underlying Securities on or prior to the Closing
Date shall be satisfied with respect to a sale of additional Underlying
Securities no later than the date of sale thereof, each representation and
warranty set forth in the Standard Terms to be made on the Closing Date shall
be made on such date of sale, and from and after such date of sale, all
Underlying Securities held by the Trustee shall be held on the same terms and
conditions. Upon such sale to the Trustee, the Trustee shall deposit such
additional Underlying Securities in the Certificate Account, and shall
authenticate and deliver to the Depositor, on its order, Class A-1
Certificates in a Certificate Principal Balance, and Class A-2 Certificates in
a notional amount, equal to the principal amount of such additional Underlying
Securities, and Call Warrants related thereto. Any such additional Class A-1
Certificates and Class A-2 Certificates authenticated and delivered shall have
the same terms and rank pari passu with the corresponding classes of
Certificates previously issued in accordance with this Series Supplement.

     (e) No Class A-2 Certificate may be offered, resold, assigned or
otherwise transferred (including by pledge or hypothecation) at any time prior
to (x) the date which is two years, or such shorter period of time as
permitted by Rule 144(k) under the Securities Act, after the later of the
original issue date of such Class A-2 Certificates and the last date on which
the Depositor or any "affiliate" (as defined in Rule 144 under the Securities
Act) of the Depositor was the owner of such Class A-2 Certificates (or any
predecessor thereto) or (y) such later date, if any, as may be required by a
change in applicable securities laws (the "Resale Restriction Termination
Date") unless such offer, resale, assignment or transfer is (i) to the Trust,
(ii) pursuant to an effective registration statement under the Securities Act,
(iii) to a qualified institutional buyer (a "QIB"), as such term is defined in
Rule 144A promulgated under the Securities Act ("Rule 144A"), in accordance
with Rule 144A or (iv) pursuant to another available exemption from
registration provided under the Securities Act (including transfers to
Accredited Investors), and, in each of cases (i) through (iv), in accordance
with any applicable securities laws of any state of the United States and
other jurisdictions. Prior to any offer, resale, assignment or transfer of any
Class A-2 Certificates in the manner described in clause (iii) above, the
prospective transferee

                                      9
<PAGE>

and the prospective transferor shall be required to deliver to the Trustee an
executed copy of an Investment Letter with respect to the Class A-2
Certificates to be transferred substantially in the form of Exhibit C hereto
and in the event the resale, assignment or transfer shall involve Class A-2
Certificates then being held in physical form, such A-2 Certificates shall be
delivered to the Trustee for cancellation and the Trustee shall instruct the
Depository to increase the aggregate notional amount of the Class A-2
Certificates held in book-entry form by an amount equal to the aggregate
notional amount of Class A-2 Certificates so resold, assigned or transferred
and to issue a beneficial interest in such global Class A-2 Certificates to
such transferee. Prior to any offer, resale, assignment or transfer of any
Class A-2 Certificates in the manner described in clause (iv) above, the
prospective transferee and the prospective transferor shall be required to
deliver to the Trustee documentation certifying that the offer, resale,
assignment or transfer complies with the provisions of said clause (iv) and,
in the event any such Class A-2 Certificate shall then be held in book-entry
form and such resale, assignment or transfer shall be to an Accredited
Investor that is not a QIB, the Trustee shall instruct the Depository to
decrease the aggregate notional amount of the Class A-2 Certificates held in
book-entry form and the Trustee shall authenticate and deliver one or more
Class A-2 Certificates in physical form in an aggregate notional amount equal
to the amount of Class A-2 Certificates resold, assigned or transferred. In
addition to the foregoing, each prospective transferee of any Class A-2
Certificates in the manner contemplated by clause (iii) above shall
acknowledge, represent and agree as follows:

     (1)  The transferee (x) is a QIB, (y) is aware that the sale to it is
          being made in reliance on Rule 144A and (z) is acquiring such Class
          A-2 Certificates for its own account or for the account of a QIB.

     (2)  The transferee understands that the Class A-2 Certificates are being
          offered in a transaction not involving any public offering in the
          United States within the meaning of the Securities Act, and that the
          Class A-2 Certificates have not been and will not be registered
          under the Securities Act.

     (3)  The transferee agrees that (A) if in the future it decides to offer,
          resell, pledge or otherwise transfer the Class A-2 Certificates
          prior to the Resale Restriction Termination Date, such Class A-2
          Certificates shall only be offered, resold, assigned or otherwise
          transferred (i) to the Trust, (ii) pursuant to an effective
          registration statement under the Securities Act, (iii) to a QIB, in
          accordance with Rule 144A or (iv) pursuant to another available
          exemption from registration provided under the Securities Act
          (including any transfer to an Accredited Investor), and, in each of
          cases (i) through (iv), in accordance with any applicable securities
          laws of any state of the United States and other jurisdictions and
          (B) the transferee will, and each subsequent holder is required to,
          notify any subsequent purchaser of such Class A-2 Certificates from
          it of the resale restrictions referred to in clause (A) above.

     (f) The Class A-2 Certificates will, unless otherwise agreed by the
Depositor and the Trustee, bear a legend substantially to the following
effect:

                                      10
<PAGE>

          "THIS CLASS A-2 CERTIFICATE (OR ITS PREDECESSOR) HAS NOT BEEN
          REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
          MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT
          WHILE A REGISTRATION UNDER SUCH ACT IS IN EFFECT OR PURSUANT TO
          AN EXEMPTION THEREFROM UNDER SUCH ACT. THE CLASS A-2
          CERTIFICATE REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN
          ACCORDANCE WITH THE TERMS OF THE SERIES SUPPLEMENT.

          EACH PURCHASER OF THIS CLASS A-2 CERTIFICATE IS HEREBY NOTIFIED
          THAT THE SELLER OF THIS CLASS A-2 CERTIFICATE MAY BE RELYING ON
          THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
          SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER."

     Section 4. Trust Certificates. The Trustee hereby acknowledges receipt,
on or prior to the Closing Date, of:

     (a) the Underlying Securities set forth on Schedule I hereto; and

     (b) all documents required to be delivered to the Trustee pursuant to
Section 2.01 of the Standard Terms.

     Section 5. Distributions.

     (a) Except as otherwise provided in Sections 3(c), 5(c), 5(d) and 5(i),
on each applicable Distribution Date (or such later date as specified in
Section 9(f)), the Trustee shall apply Available Funds in the Certificate
Account as follows:

          (i) The Trustee will pay the interest portion of Available Funds:

               (1) first, to the Trustee, as reimbursement for any remaining
          Extraordinary Trust Expenses incurred by the Trustee in accordance
          with Section 6(b) below and approved by 100% of the
          Certificateholders; and

               (2) second, to the holders of the Class A-1 Certificates and
          the holders of the Class A-2 Certificates, interest accrued and
          unpaid on each such Class, pro rata in proportion to their
          entitlements thereto.

          (ii) the Trustee will pay the principal portion of Available Funds:

               (1) first, to the Trustee, as reimbursement for any remaining
          Extraordinary Trust Expenses incurred by the Trustee in accordance
          with Section 6(b) below and approved by 100% of the
          Certificateholders; and

                                      11
<PAGE>

               (2) second, to the holders of the Class A-1 Certificates, the
          Certificate Principal Balance of the Class A-1 Certificates (the
          Class A-2 Certificates are not entitled to distributions of
          principal).

          (iii) any Available Funds remaining in the Certificate Account after
     the payments set forth in clauses 5(a)(i) and 5(a)(ii) above shall be
     paid to the Trustee as reasonable compensation for services rendered to
     the Depositor, up to $1,000.

          (iv) the Trustee will pay any Available Funds remaining in the
     Certificate Account after the distributions in clauses 5(a)(i) through
     5(a)(iii) above to the holders of the Class A-1 Certificates and Class
     A-2 Certificates pro rata in proportion to the interest rate on each such
     class of Certificates.

Any portion of the Available Funds (i) that does not constitute principal of,
or interest on, the Underlying Securities, (ii) that is not received in
connection with a tender offer, redemption, prepayment or liquidation of the
Underlying Securities and (iii) for which allocation by the Trustee is not
otherwise contemplated by this Series Supplement, shall be remitted by the
Trustee to the Depositor.

     (b) [Reserved].

     (c) Notwithstanding the foregoing, if the Underlying Securities are
redeemed, prepaid or liquidated in whole or in part for any reason other than
due to the occurrence of an Event of Default, an SEC Reporting Failure, or the
Final Scheduled Distribution Date, the Trustee shall apply Available Funds in
the manner described in Section 5(h) in the following order of priority:

          (i)    first, to the Trustee, as reimbursement for any Extraordinary
                 Trust Expenses incurred by the Trustee in accordance with
                 Section 6(b) below and approved by 100% of the
                 Certificateholders;

          (ii)   second, to the holders of the Class A-1 Certificates, an
                 amount equal to the principal amount of Underlying Securities
                 so redeemed, prepaid or liquidated plus accrued and unpaid
                 interest on the amount of Class A-1 Certificates redeemed in
                 connection with such principal payment;

          (iii)  third, to the holders of the Class A-2 Certificates, an
                 amount not to exceed the present value of all amounts that
                 would otherwise have been payable on the Class A-2
                 Certificates for the period from the date of such redemption
                 or prepayment to the Final Scheduled Distribution Date using
                 a discount rate of 5.80% per annum, assuming no
                 delinquencies, deferrals, redemptions or prepayments on the
                 Underlying Securities;

          (iv)   fourth, to the Trustee, as reasonable compensation for
                 services rendered to the Depositor, any remainder up to
                 $1,000; and

          (v)    fifth, any remainder to the holders of the Class A-1
                 Certificates and the Class A-2 Certificates pro rata in
                 proportion to the ratio of the Class A-1 Allocation to the
                 Class A-2 Allocation.

                                      12
<PAGE>

     (d) Notwithstanding the foregoing, if the Underlying Securities are
redeemed, prepaid or liquidated in whole or in part due to the occurrence of
an Event of Default, the Trustee shall distribute Available Funds to the
holders of the Class A-1 Certificates and the holders of the Class A-2
Certificates in accordance with the ratio of the Class A-1 Allocation to the
Class A-2 Allocation.

     (e) Unless otherwise instructed by holders of Certificates representing a
majority of the Voting Rights, thirty (30) days after giving notice pursuant
to Section 8 hereof, the Trustee shall sell the Underlying Securities pursuant
to Section 13 hereof and deposit the Liquidation Proceeds, if any, into the
Certificate Account for distribution not later than two (2) Business Days
after the receipt of immediately available funds in accordance with Section
5(d) hereof, provided, however, that if any Warrant Holder designates any day
on or prior to the proposed sale date as a Call Date and Optional Exchange
Date pursuant to Section 7, the portion of Underlying Securities related to
such Optional Exchange shall not be sold but shall be distributed to the
Warrant Holder pursuant to Section 7 and the Warrant Agent Agreement.

     (f) If the Trustee receives non-cash property in respect of the
Underlying Securities as a result of a payment default on the Underlying
Securities (including from the sale thereof), the Trustee will promptly give
notice to the Depository, or for any Certificates which are not then held by
DTC or any other depository, directly to the registered holders of the
Certificates then outstanding and unpaid and to the Warrant Agent. Such notice
shall state that the Trustee shall, and the Trustee shall, not later than 30
days after the receipt of such property, allocate and distribute such property
to the holders of Class A-1 Certificates and Class A-2 Certificates then
outstanding and unpaid (after deducting the costs incurred in connection
therewith) in accordance with Section 5(d) hereof. Property other than cash
will be liquidated by the Trustee, and the proceeds thereof distributed in
cash, only to the extent necessary to avoid distribution of fractional
securities to Certificateholders. In-kind distribution of such property to
Certificateholders, based on the market value of such property as of the date
of distribution to Certificateholders, will be deemed to reduce the
Certificate Principal Balance of the Class A-1 Certificates on a
dollar-for-dollar basis. The outstanding notional amounts of the Class A-2
Certificates shall be reduced, pro rata among all Class A-2
Certificateholders, by an amount equal to the amount by which the Certificate
Principal Balance of the Class A-1 Certificates is reduced.

     (g) Subject to Section 9(f) hereof, to the extent Available Funds are
insufficient to make any scheduled interest or principal payments on any class
of Certificates on any Distribution Date, any shortfall will be carried over
and will be distributed on the next Distribution Date (or date referred to in
Section 5(h) hereof) on which sufficient funds are available to pay such
shortfall.

     (h) If a payment with respect to the Underlying Securities is made to the
Trustee (i) after the payment date of the Underlying Securities on which such
payment was due or (ii) in connection with redemption, prepayment or
liquidation, in whole or in part, of the Underlying Securities for any reason
other than due to the occurrence of an Event of Default, an SEC Reporting
Failure or at their maturity, the Trustee will distribute any such amounts
received in accordance with the provisions of this Section 5 on the next
occurring Business Day (a "Special Distribution Date") as if the funds had
constituted Available Funds on the Distribution Date

                                      13
<PAGE>

immediately preceding such Special Distribution Date; provided, however, that
the Record Date for such Special Distribution Date shall be one Business Day
prior to the day on which the related payment was received with respect to the
Underlying Securities.

     (i) Notwithstanding Section 3.12 of the Standard Terms, upon the
occurrence of an SEC Reporting Failure, the Depositor shall instruct the
Trustee within a reasonable time to (i) notify the Warrant Agent that the
Underlying Securities are proposed to be sold and that any Call Warrants and
related Optional Exchange rights must be exercised no later than the date
specified in the notice (which shall be not less than ten Business Days after
the date of such notice) and (ii) to the extent that the Warrant Holders fail
to exercise their Call Warrants and related Optional Exchange rights on or
prior to such date, to sell the Underlying Securities and distribute the
proceeds of such sale to the Certificateholders in accordance with the
following order of priority: first, to the Trustee, as reimbursement for any
Extraordinary Trust Expenses incurred by the Trustee in accordance with
Section 6(b) below and approved by 100% of the Certificateholders; and second,
any remainder to the holders of the Class A-1 Certificates and the Class A-2
Certificates pro rata in proportion to the ratio of the Class A-1 Allocation
to the Class A-2 Allocation, as determined by the Calculation Agent.

     (j) On any date on which Underlying Securities are redeemed, prepaid or
liquidated for any reason, the aggregate outstanding notional amount of the
Class A-2 Certificates shall be reduced by an amount equal to the principal
amount of the Underlying Securities so redeemed, prepaid or liquidated, the
reduction for the Class A-2 Certificates to be allocated pro rata among all
Class A-2 Certificates.

     (k) (i) Within five Business Days (or such longer period as shall be
acceptable to the Trustee) of receipt of notice of an SEC Reporting Failure,
any Class A-1 Certificateholder or Class A-2 Certificateholder may direct the
Trustee to distribute all or a portion of such Certificateholder's pro rata
share of the Underlying Securities to it, in lieu of any proceeds received
upon liquidation of the Underlying Securities. The respective pro rata shares
of the Class A-1 and Class A-2 Certificateholders in the Underlying Securities
shall be determined by allocating the portion of the principal amount
remaining after reimbursement of the Trustee for any Extraordinary Trust
Expenses approved by 100% of the Certificateholders to the Class A-1
Certificateholders and the Class A-2 Certificateholders in accordance with the
ratio of the Class A-1 Allocation to the Class A-2 Allocation. The pro rata
share of each of the Class A-1 Certificateholders in the Underlying Securities
to be distributed shall be determined based on the then unpaid Certificate
Principal Balances of their Class A-1 Certificates and the pro rata share of
each of the Class A-2 Certificateholders in the Underlying Securities to be
distributed shall be determined based on the then outstanding notional amounts
of their respective Certificates.

          (ii) Within five Business Days (or such longer period as shall be
     acceptable to the Trustee) of receipt of notice of an Event of Default or
     any other liquidation of the Underlying Securities by the Trustee, any
     Class A-2 Certificateholder may direct the Trustee to distribute all or a
     portion of such Class A-2 Certificateholder's pro rata share (as
     determined by the Calculation Agent in accordance with this Section 5(k))
     of the Underlying Securities to it, in lieu of any proceeds received upon
     liquidation of the Underlying Securities. Upon the occurrence of an Event
     of Default, each Class A-2 Certificateholder's pro rata share of the
     Underlying Securities shall be determined by

                                      14
<PAGE>

     allocating the principal amount of the Underlying Securities to the Class
     A-1 Certificateholders and the Class A-2 Certificateholders in accordance
     with the ratio of the Class A-1 Allocation to the Class A-2 Allocation.
     The pro rata share of each of the Class A-2 Certificateholders in the
     Underlying Securities to be distributed shall be determined based on the
     then outstanding notional amounts of their respective Certificates. In
     the event of a liquidation of the Underlying Securities by the Trustee
     for any reason other than upon the occurrence of an Event of Default or
     an SEC Reporting Failure, each Class A-2 Certificateholder's pro rata
     share of the Underlying Securities shall be equal to the lesser of (1) a
     pro rata share (based on the proportion of the aggregate notional amount
     of such holder's Class A-2 Certificates to the outstanding aggregate
     notional amount of the Class A-2 Certificates) of the principal amount of
     Underlying Securities remaining after the Trustee has allocated Available
     Funds in accordance with Sections 5(c)(i) and 5(c)(ii) hereof and (2) the
     present value of all amounts that would otherwise have been payable on
     such Class A-2 Certificate for the period from the date of such
     redemption or prepayment to the Final Scheduled Distribution Date using a
     discount rate of 5.80% per annum, assuming no delinquencies, deferrals,
     redemptions or prepayments on the Underlying Securities.

          (iii) The amount requested to be distributed pursuant to Section
     5(k)(i) or 5(k)(ii) must be in an even multiple of the minimum
     denomination of the Underlying Securities and may not exceed such
     requesting Certificateholder's pro rata share (as determined by the
     Calculation Agent in accordance with this Section 5(k)) of the Underlying
     Securities. Upon receipt of any such direction from a Class A-1
     Certificateholder or Class A-2 Certificateholder, the Trustee shall not
     liquidate the requested portion of Underlying Securities and instead
     shall cause such Underlying Securities to be distributed to the
     requesting Class A-1 Certificateholder or Class A-2 Certificateholder;
     provided, that the Trustee shall not cause the distribution of any
     Underlying Securities to any Class A-1 Certificateholder or Class A-2
     Certificateholder unless, but for the requesting Class A-1
     Certificateholder or Class A-2 Certificateholder's giving direction in
     accordance with this Section 5(k), such Underlying Securities would be
     liquidated as otherwise provided in this Agreement. Any portion of any
     Class A-1 Certificateholder's or Class A-2 Certificateholder's pro rata
     share of the Underlying Securities that is not distributed, based on the
     failure to meet the minimum denomination requirements or otherwise, shall
     be sold in accordance with the provisions of Section 5(e) or 5(i) hereof,
     as applicable and the proceeds thereof distributed to such Class A-1
     Certificateholder or Class A-2 Certificateholder.

          (iv) All decisions and determinations of the Calculation Agent
     pursuant to this Section 5(k) shall be in its sole discretion and shall,
     in the absence of manifest error, be conclusive for all purposes and
     irrevocably binding upon the Certificateholders.

     Section 6. Trustee's Fees.

     (a) As compensation for its services hereunder, the Trustee shall be
entitled to the Trustee Fee and any amounts payable under clauses 5(a)(iii)
and 5(b)(iv) above. The Trustee Fee shall be paid by the Depositor and not
from Trust Property. The Trustee shall bear all Ordinary Expenses. Failure by
the Depositor to pay such amount shall not entitle the Trustee to

                                      15
<PAGE>

any payment or reimbursement from the Trust, nor shall such failure release
the Trustee from the duties it is required to perform under the Trust
Agreement.

     (b) Extraordinary Expenses shall not be paid out of the Trust Property
unless all the holders of the Class A-1 Certificates and Class A-2
Certificates then outstanding have directed the Trustee to incur such
Extraordinary Expenses. The Trustee may incur other Extraordinary Expenses if
any lesser percentage of the Certificateholders requesting such action
pursuant hereto reimburse the Trustee for the cost thereof from their own
funds in advance. If Extraordinary Expenses are not approved unanimously as
set forth in the first sentence of this Section 6(b), such Extraordinary
Expenses shall not be an obligation of the Trust, and the Trustee shall not
file any claim against the Trust therefor notwithstanding failure of
Certificateholders to reimburse the Trustee.

     Section 7. Optional Call; Optional Exchange.

     (a) On (A) any Distribution Date, (B) any date on which a tender offer
for some or all of the Underlying Securities is consummated or (C) any date on
which the Underlying Securities are to be redeemed by the Underlying
Securities Issuer, any holder of Class A-1 Certificates, Class A-2
Certificates and the related Call Warrants, if Call Warrants related to such
Certificates are outstanding, may exchange such Certificates and, if
applicable, Call Warrants, for a distribution of Underlying Securities
representing the same percentage of the Underlying Securities as such
Certificates represent of all outstanding Certificates. On any Call Date, any
Warrant Holder may exchange Called Certificates for a distribution of
Underlying Securities representing the same percentage of Underlying
Securities as such Called Certificates represent of all outstanding
Certificates; provided that any such exchange shall either (x) result from an
exercise of all Call Warrants owned by such Warrant Holder or (y) occur on a
Call Date on which such Warrant Holder, alone or together with one or more
other Warrant Holders, shall exchange Called Certificates relating to
Underlying Securities having an aggregate principal amount equal to or in
excess of the product of (i) 0.1 and (ii) the aggregate principal amount of
the Underlying Securities deposited into the Trust on the Closing Date.

     (b) The following conditions shall apply to any Optional Exchange.

          (i) A notice specifying the number of Certificates being surrendered
     and the Optional Exchange Date shall be delivered to the Trustee no less
     than 5 days (or such shorter period acceptable to the Trustee) but not
     more than 30 days before the Optional Exchange Date; provided that for an
     Optional Exchange to occur on a Call Date, unless otherwise specified
     therein, the Call Notice shall be deemed to be the notice required
     hereunder.

          (ii) Certificates and, if applicable, the Call Warrants, shall be
     surrendered to the Trustee no later than 10:00 a.m. (New York City time)
     on the Optional Exchange Date; provided that for an Optional Exchange to
     occur on a Call Date, payment of the Call Price to the Warrant Agent
     pursuant to Section 1.1(a)(iii) of the Warrant Agent Agreement shall
     satisfy the requirement to surrender Certificates.

                                      16
<PAGE>

          (iii) Class A-1 Certificates and Class A-2 Certificates representing
     a like percentage of all outstanding Class A-1 Certificates and Class A-2
     Certificates shall be surrendered.

          (iv) The Trustee shall have received an opinion of counsel stating
     that the Optional Exchange would not cause the Trust to be treated as an
     association or publicly traded partnership taxable as a corporation for
     federal income tax purposes.

          (v) If the Certificateholder is the Depositor or any Affiliate of
     the Depositor, (1) the Trustee shall have received a certification from
     the Certificateholder that any Certificates being surrendered have been
     held for at least six months, and (2) the Certificates being surrendered
     may represent no more than 5% (or 25% in the case of Certificates
     acquired by the Underwriter but never distributed to investors) of the
     then outstanding Certificates.

          (vi) The Trustee shall not be obligated to determine whether an
     Optional Exchange complies with the applicable provisions for exemption
     under Rule 3a-7 of the Investment Company Act of 1940, as amended, or the
     rules or regulations promulgated thereunder.

          (vii) The provisions of Section 4.07 of the Standard Terms shall not
     apply to an Optional Exchange pursuant to this Section 7(b). This Section
     7(b) shall not provide any Person with a lien against, an interest in or
     a right to specific performance with respect to the Underlying
     Securities; provided that satisfaction of the conditions set forth in
     this Section 7(b) shall entitle the Certificateholder or Warrant Holder,
     as applicable, to a distribution thereof.

          (viii) The aggregate principal balance, or notional amount, as the
     case may be, of Certificates exchanged in connection with any Optional
     Exchange pursuant to this Section shall be in an amount that will entitle
     the Certificateholders thereof to Underlying Securities in an even
     multiple of the minimum denomination of such Underlying Securities.

          (ix) In the event such Optional Exchange shall occur prior to the
     Distribution Date in August 2003, the Certificateholders shall have paid
     to the Trustee, for distribution to the Depositor, on the Optional
     Exchange Date an amount equal to the sum obtained by multiplying the
     amount of accrued interest on the Underlying Securities from February 15,
     2003 through, but excluding, the Closing Date by a fraction, the
     numerator of which shall be the number of Certificates being exchanged on
     such Optional Exchange Date and the denominator of which shall be the
     total number of Certificates.

     (c) Concurrently with the execution of this Series Supplement, the
Trustee, on behalf of the Trust, shall execute the Warrant Agent Agreement and
the Call Warrants, dated as of the date hereof and substantially in the form
of Exhibit B hereto, initially evidencing all of the Call Warrants. The
Trustee shall perform the Trust's obligations under the Warrant Agent
Agreement and the Call Warrants in accordance with their respective terms.

                                      17
<PAGE>

     (d) Call Warrants may be exercised by the Warrant Holder in whole or in
part on any Call Date. In addition to the conditions set forth in Section 1.1
of the Warrant Agent Agreement, the following conditions shall apply to any
Optional Call.

          (i) An opinion of counsel to the Warrant Holder shall have been
     delivered to the Rating Agencies, in form satisfactory to the Rating
     Agencies, indicating that payment of the Call Price shall not be
     recoverable as a preferential transfer or fraudulent conveyance under the
     United States Bankruptcy Code. Such opinion may contain customary
     assumptions and qualifications.

          (ii) The Warrant Holder shall have provided a certificate of
     solvency to the Trustee.

          (iii) Upon receipt of a Call Notice, the Trustee shall provide a
     conditional call notice to the Depository not less than 3 Business Days
     prior to the Call Date.

          (iv) Delivery of a Call Notice does not give rise to an obligation
     on the part of the Warrant Holder to pay the Call Price. If, by 10:00
     a.m. (New York City time) on the Call Date, the Warrant Holder has not
     paid the Call Price, except in connection with a Call Notice relating to
     a tender offer for or redemption of the Underlying Securities, then the
     Call Notice shall automatically expire and none of the Warrant Holder,
     the Warrant Agent or the Trustee shall have any obligation with respect
     to the Call Notice. The expiration of a Call Notice shall in no way
     affect the Warrant Holder's right to deliver a Call Notice at a later
     date. The Call Price for a call in connection with a tender offer or
     redemption shall be deducted from the proceeds of a tender offer or
     redemption by the Trust pursuant to Section 7(g)(iii) or Section
     7(h)(iii), as applicable.

          (v) Subject to receipt of the Call Price, the Trustee shall pay the
     applicable portion of the Call Price to the Class A-1 and Class A-2
     Certificateholders on the Call Date. The Call Price for each Class of
     Certificates in respect of partial calls shall be allocated pro rata to
     the Certificateholders of such Class.

          (vi) The Trustee shall not consent to any amendment or modification
     of this Agreement (including the Standard Terms) which would adversely
     affect the Warrant Holders (including, without limitation, any alteration
     of the timing or amount of any payment of the Call Price or any other
     provision of this Agreement in a manner adverse to the Warrant Holders)
     without the prior written consent of 100% of the Warrant Holders. For
     purposes of this clause, no amendment, modification or supplement
     required to provide for any purchase by the Trustee of additional
     Underlying Securities and authentication and delivery by the Trustee of
     additional Certificates and Call Warrants pursuant to Section 3(d) shall
     be deemed to adversely affect the Warrant Holders.

          (vii) The Trustee shall not be obligated to determine whether an
     Optional Call complies with the applicable provisions for exemption under
     Rule 3a-7 of the Investment Company Act of 1940, as amended, or the rules
     or regulations promulgated thereunder.

                                      18
<PAGE>

     (e) This Section 7 shall not provide the Warrant Holder with a lien
against, an interest in or a right to specific performance with respect to the
Underlying Securities; provided that satisfaction of the conditions set forth
in Section 7(b) shall entitle the Certificateholders or the Warrant Holders,
as applicable, to a distribution of the Underlying Securities.

     (f) The rights of the Certificateholders under the Trust Agreement and
the Certificates are limited by the terms, provisions and conditions of the
Trust Agreement, the Warrant Agent Agreement and the Call Warrants with
respect to the exercise of the Call Warrants by the Warrant Holder. The
Certificateholders, by their acceptance of Certificates, covenant and agree to
tender any and all Called Certificates to the Trustee upon the Warrant
Holder's exercise of Call Warrants and payment of the Call Price for such
Certificates in accordance with the provisions hereof and of the Warrant Agent
Agreement.

     (g) (i) If the Trustee receives notice of a tender offer for some or all
of the Underlying Securities, the Trustee shall within one Business Day notify
the Warrant Agent and forward to the Warrant Agent copies of all materials
received by the Trustee in connection therewith. If the Trustee receives a
Call Notice from any Warrant Holder no later than five Business Days prior to
the expiration of the tender offer acceptance period that such Warrant Holder
desires to exercise all or a portion of its Call Warrants in connection with
the consummation of any such tender offer, then the Trustee shall tender, in
compliance with the tender offer requirements, an amount of Underlying
Securities equal to the amount of Underlying Securities that would be
distributable to the Warrant Holder with respect to an Optional Exchange of
the Called Certificates called by such Warrant Holder; provided that any
Optional Call or Optional Exchange undertaken in connection with any such
tender offer shall be subject to the provisions of Section 7 hereof.

          (ii) The Call Date and Optional Exchange Date for any exercise of
     Call Warrants in connection with a tender offer shall be deemed to be the
     Business Day on which such Underlying Securities are accepted for payment
     and paid for.

          (iii) The Call Price shall be deducted from the tender offer
     proceeds and paid to Certificateholders in accordance with Section
     7(d)(v), and the excess of the tender offer proceeds over the Call Price
     shall be paid to the exercising Warrant Holders pro rata in respect to
     their proportionate exercises of Call Warrants or, if the Call Price
     exceeds the tender offer proceeds, the amount of such excess shall be
     paid by the exercising Warrant Holders pro rata in respect to their
     proportionate exercises of Call Warrants.

          (iv) If fewer than all tendered Underlying Securities are accepted
     for payment and paid for, (A) the amount of Call Warrants exercised shall
     be reduced to an amount that corresponds to a number of Certificates that
     could be exchanged in an Optional Exchange for the Underlying Securities
     accepted for payment and paid for (without regard to any restrictions on
     the amount to be exchanged, so long as such restrictions would have been
     satisfied had all tendered Underlying Securities been accepted for
     payment and paid for); (B) each Warrant Holder's exercise shall be
     reduced by its share (proportionate to the amount specified in its
     exercise notice) of the amount of Underlying Securities not accepted for
     payment and paid for; (C) the Call Price shall be determined

                                      19
<PAGE>

     after giving effect to the reduction specified in clause (B); (D) the
     Call Warrants that relate to the reduction specified in clause (B) shall
     remain outstanding; and (E) the excess of the tender offer proceeds over
     the Call Price shall be allocated in proportion to the amount of Call
     Warrants deemed exercised as set forth in clause (A) above or, if the
     Call Price exceeds the tender offer proceeds the amount of such excess
     shall be paid by the exercising Warrant Holders pro rata in respect to
     their proportionate exercises of Call Warrants.

          (v) If the tender offer is terminated by the Underlying Securities
     Issuer or any other tender offeror without consummation thereof or if all
     tenders by the Trust of Underlying Securities are otherwise rejected,
     then (1) the Call Notices will be of no further force and effect, and (2)
     any Call Warrants relating to such Call Notices will not be exercised and
     will remain outstanding.

     (h) (i) If the Trustee receives notice of a redemption by the Underlying
Securities Issuer for some or all of the Underlying Securities, the Trustee
shall, within three Business Days, notify the Warrant Agent and forward to the
Warrant Agent copies of all materials received by the Trustee in connection
therewith. Any Warrant Holder that desires to call Underlying Securities in
connection with a redemption by the Underlying Securities Issuer shall send a
Call Notice to the Trustee no later than seven Business Days prior to the date
such Underlying Securities are to be redeemed.

          (ii) The Call Date and Optional Exchange Date for any exercise of
Call Warrants in connection with a redemption by the Underlying Securities
Issuer shall be deemed to be the Business Day on which such Underlying
Securities are redeemed by the Underlying Securities Issuer.

          (iii) The Call Price shall be deducted from the redemption proceeds
and paid to Certificateholders in accordance with Section 7(d)(v), and the
excess of the redemption proceeds over the Call Price shall be paid to the
exercising Warrant Holders pro rata in respect to their proportionate
exercises of Call Warrants.

          (iv) If fewer than all Underlying Securities are redeemed by the
Underlying Securities Issuer and the amount of Call Warrants exercised
corresponds to a number of Class A-1 and Class A-2 Certificates that could be
exchanged in an Optional Exchange for a principal amount of Underlying
Securities that exceeds the principal amount of Underlying Securities actually
redeemed, then, unless otherwise directed by any exercising Warrant Holder,
(A) the amount of Call Warrants exercised shall be reduced to an amount that
corresponds to a number of Class A-1 and Class A-2 Certificates that could be
exchanged in an Optional Exchange for the principal amount of Underlying
Securities redeemed by the Underlying Securities Issuer (without regard to any
restrictions on the amount to be exchanged); (B) each Warrant Holder's
exercise shall be reduced by its share (proportionate to the amount specified
in its exercise notice) of the amount of such excess; (C) the Call Price shall
be determined after giving effect to the reduction specified in clause (B);
(D) the Call Warrants that relate to the reduction specified in clause (B)
shall remain outstanding; and (E) the excess of the redemption proceeds over
the Call Price shall be allocated in proportion to the amount of Call Warrants
deemed exercised as set forth in clause (A) above.

                                      20
<PAGE>

          (v) If the Underlying Securities are not redeemed by the Underlying
Securities Issuer for any reason, then (1) the Call Notices will be of no
further force and effect, and (2) any Call Warrants relating to such Call
Notices will not be exercised and will remain outstanding.

     Section 8. Notices of Events of Default.

          As promptly as practicable after, and in any event within 30 days
after, the occurrence of any Event of Default actually known to the Trustee,
the Trustee shall give notice of such Event of Default to the Depository, or,
if any Certificates are not then held by DTC or any other depository, directly
to the registered holders of such Certificates, and to the Warrant Agent.
However, except in the case of an Event of Default relating to the payment of
principal of or interest on any of the Underlying Securities, the Trustee will
be protected in withholding such notice if in good faith it determines that
the withholding of such notice is in the interest of the Certificateholders.

     Section 9. Miscellaneous.

     (a) The provisions of Section 4.04, Advances, of the Standard Terms shall
not apply to the Goldman Sachs Group Note-Backed Series 2003-12 Certificates.

     (b) The provisions of Section 4.07, Optional Exchange, of the Standard
Terms shall not apply to the Goldman Sachs Group Note-Backed Series 2003-12
Certificates.

     (c) The Trustee shall simultaneously forward reports to
Certificateholders pursuant to Section 4.03 of the Standard Terms and to the
New York Stock Exchange.

     (d) Except as expressly provided herein, the Certificateholders shall not
be entitled to terminate the Trust or cause the sale or other disposition of
the Underlying Securities.

     (e) The provisions of Section 3.07(d) of the Standard Terms shall not
apply to the Goldman Sachs Group Note-Backed Series 2003-12 Certificates.

     (f) If the Trustee has not received payment with respect to a Collection
Period on the Underlying Securities on or prior to the related Distribution
Date, such distribution will be made promptly upon receipt of such payment. No
additional amounts shall accrue on the Certificates or be owed to
Certificateholders as a result of such delay; provided, however, that any
additional interest owed and paid by the Underlying Securities Issuer as a
result of such delay shall be paid to the Class A-1 Certificateholders and
Class A-2 Certificateholders pro rata in proportion to their respective
entitlements to such delayed payments.

     (g) The outstanding principal balance, or notional amount, as the case
may be, of the Certificates shall not be reduced by the amount of any Realized
Losses (as defined in the Standard Terms).

     (h) The Trust may not engage in any business or activities other than in
connection with, or relating to, the holding, protecting and preserving of the
Trust Property and the issuance

                                      21
<PAGE>

of the Certificates and the Call Warrants, and other than those required or
authorized by the Trust Agreement or incidental and necessary to accomplish
such activities. The Trust may not issue or sell any certificates or other
obligations other than the Certificates and the Call Warrants or otherwise
incur, assume or guarantee any indebtedness for money borrowed.
Notwithstanding Section 3.05 of the Standard Terms, funds on deposit in the
Certificate Account shall not be invested. Section 2.01(f) of the Standard
Terms shall be superseded by this provision.

     (i) Notwithstanding anything in the Trust Agreement to the contrary, the
Trustee may be removed upon 60 days prior written notice delivered by the
holders of Class A-1 Certificates and Class A-2 Certificates representing the
Required Percentage--Removal.

     (j) In the event that the Internal Revenue Service challenges the
characterization of the Trust as a grantor trust, the Trustee shall then file
such forms as the Depositor may specify to establish the Trust's election
pursuant to Section 761 of the Code to exclude the Trust from the application
of Subchapter K of the Code and is hereby empowered to execute such forms on
behalf of the Certificateholders.

     (k) Notwithstanding anything in the Standard Terms to the contrary, the
Trustee, upon written direction by the Depositor, will execute the
Certificates.

     (l) In relation to Section 7.01(f) of the Standard Terms, any periodic
reports filed by the Trustee pursuant to the Exchange Act in accordance with
the customary practices of the Depositor, need not contain any independent
reports.

     (m) Notwithstanding anything in the Trust Agreement to the contrary, the
Trustee will have no recourse to the Underlying Securities.

     (n) A Plan fiduciary, whether or not a Certificateholder at such time,
may request in writing that the Trustee provide such Plan fiduciary with such
information as shall be necessary for it to determine whether any of the Call
Warrant holders is (i) a "party in interest" (within the meaning of ERISA,
Section 3(14)); or (ii) a "disqualified person" within the meaning of Internal
Revenue Code ("Code") Section 4975(e)(2) with respect to any employee benefit
plan or Plan identified to the Trustee by such Plan fiduciary at the time such
request is made in order for the Plan fiduciary to determine whether an
investment in the Certificates by such Plan is or would be permissible under
ERISA or the Code. Any such written request of a Plan fiduciary shall be
accompanied by a certification of the Plan fiduciary, opinion of counsel
experienced in such issues, and such other documentation as the Trustee may
require, in order to establish that such disclosure is necessary for the Plan
fiduciary to determine compliance with ERISA and the Code, as well as a
confidentiality agreement, whereby the Plan fiduciary agrees not to disclose
the identity of any Call Warrant holders except to any legal or other experts
as necessary to make such determination. The holder of a Call Warrant shall
upon reasonable request of the Trustee, in order for the Trustee to satisfy
its obligations to a Plan fiduciary, provide the Trustee with any one or more
of the following, in the sole discretion of the Call Warrant holder: (i) a
certificate that each of the Call Warrant holders is not (x) a "party in
interest" (within the meaning of ERISA, Section 3(14)) with respect to any
"employee benefit plan" as defined in ERISA, Section 3(3); or (y) a
"disqualified person" within the meaning of Internal Revenue Code Section
4975(e)(2) with respect to a "Plan" as defined in Code Section 4975(e)(1)
except in each case

                                      22
<PAGE>

with respect to plans sponsored by the Call Warrant holder or its affiliates
which cover employees of the Call Warrant holder and/or such affiliates; (ii)
a certificate that each of the Call Warrant holders is not such a "party in
interest" or "disqualified person" with respect to any employee benefit plan
or Plan identified to the Trustee by such Plan fiduciary at the time such
request is made; or (iii) a written consent to the limited disclosure of the
respective Call Warrant holder's identity to a specific Plan fiduciary solely
for purposes of allowing the Trustee to satisfy its obligations to a Plan
fiduciary.

     (o) The Trust will not merge or consolidate with any other entity without
confirmation from each Rating Agency that such merger or consolidation will
not result in the qualification, reduction or withdrawal of its then-current
rating on the Certificates.

     (p) All directions, demands and notices hereunder or under the Standard
Terms shall be in writing and shall be delivered as set forth below (unless
written notice is otherwise provided to the Trustee).

          If to the Depositor, to:

               Lehman ABS Corporation
               745 Seventh Avenue
               New York, New York  10019
               Attention:  Structured Credit Trading
               Telephone:  (212) 526-6575
               Facsimile:   (201) 508-4621

          If to the Trustee or the Warrant Agent, to:

               U.S. Bank Trust National Association 100 Wall
               Street New York, New York 10005 Attention:
               Corporate Trust Telephone: (646) 835-5500
               Facsimile: (212) 809-5459

               If to the Rating Agencies, to:

               Moody's Investors Service, Inc.
               99 Church Street
               New York, New York  10007
               Attention:  CBO/CLO Monitoring Department
               Telephone:  (212) 553-1494
               Facsimile:  (212) 553-0355

                                      23
<PAGE>

     and to:

               Standard & Poor's Ratings Services
               55 Water Street
               New York, New York  10041
               Attention:  Structured Finance Surveillance Group
               Telephone:  (212) 438-2482
               Facsimile:  (212) 438-2664

          If to the New York Stock Exchange, to:

               New York Stock Exchange, Inc.
               20 Broad Street
               New York, New York  10005
               Attention:  Jonathan M. Kiesel, Senior Listing Representative
               Telephone:  212-656-5090
               Facsimile:  (212) 656-5465

          Copies of all directions, demands and notices required to be given to
the Certificateholders hereunder or under the Standard Terms will also be
given to the Warrant Holders in writing as set forth in this Section 9, and
copies of all directions, demands and notices required to be given to the
Trustee hereunder or under the Standard Terms will also be given to the
Warrant Agent in writing as set forth in this Section 9(p).

     (q) Each of the representations, covenants and agreements made herein by
each of the Depositor and the Trustee are for the benefit of the
Certificateholders and the Warrant Holders.

     (r) The provisions of Section 2.01(d)(iii) of the Standard Terms shall
not apply to the Goldman Sachs Group Note-Backed Series 2003-12 Certificates
and the following shall be deemed to be inserted in its place:

          "at the time of delivery of the Underlying Securities, the Depositor
owns such Underlying Securities, has the right to transfer its interest in
such Underlying Securities and such Underlying Securities are free and clear
of any lien, pledge, encumbrance, right, charge, claim or other security
interest; and"

     (s) The Trustee shall appoint a firm of independent certified public
accountants to review each of the distribution reports prepared by the Trustee
pursuant to Section 4.03 of the Standard Terms and to verify (x) that such
reports and the calculations made therein were made accurately and in
accordance with the terms of the Trust Agreement and (y) that the Depositor
and the Trustee have each fulfilled their obligations under this Trust
Agreement. The Trustee shall instruct the accountants (i) to promptly report
to the Trustee any errors in such distribution reports discovered in verifying
such calculations and (ii) to render to the Trustee an annual examination
report, prepared in compliance with established or stated criteria as set
forth in the professional standards of the American Institute of Certified
Public Accountants, within 45 days (or such longer period as may be acceptable
to the Trustee) following the end of each calendar year that specifies the
calculations made in reviewing the distribution reports prepared by the
Trustee for the previous calendar year and such accountants' associated
findings.

                                      24
<PAGE>

     Section 10. Governing Law. THIS SERIES SUPPLEMENT AND THE TRANSACTIONS
DESCRIBED HEREIN SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED
WITHIN THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CHOICE OF LAWS
PROVISIONS THEREOF.

     Section 11. Counterparts. This Series Supplement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and
all such counterparts shall constitute but one and the same instrument.

     Section 12. Termination of the Trust. The Trust shall terminate upon the
earliest to occur of (i) the payment in full at maturity or sale by the Trust
after a payment default, call or an acceleration or other early payment of the
Underlying Securities and the distribution in full of all amounts due to the
Class A-1 Certificateholders and Class A-2 Certificateholders; (ii) the
exercise of all outstanding Call Warrants by the Warrant Holder; (iii) the
final Distribution Date and (iv) the expiration of 21 years from the death of
the last survivor of the descendants of Joseph P. Kennedy, the late Ambassador
of the United States to the Court of St. James, living on the date hereof.

     Section 13. Sale of Underlying Securities; Optional Exchange. In the
event of a sale of the Underlying Securities pursuant to this Agreement or
pursuant to the instructions of the Warrant Agent under Section 1.2 of the
Warrant Agent Agreement, the Trustee shall solicit bids for the sale of the
Underlying Securities with settlement thereof on or before the third Business
Day after such sale from three leading dealers in the relevant market. Any of
the following dealers (or their successors) shall be deemed to qualify as
leading dealers: (1) Credit Suisse First Boston LLC, (2) Goldman, Sachs & Co.,
(3) Merrill Lynch, Pierce, Fenner & Smith Incorporated, (4) UBS Securities
LLC, (5) Citigroup Global Markets Inc., and (6) except in the case of a sale
related to the exercise of Call Warrants by the Depositor or any Affiliate
thereof, Lehman Brothers Inc. The Trustee shall not be responsible for the
failure to obtain a bid so long as it has made reasonable efforts to obtain
bids. If a bid for the sale of the Underlying Securities has been accepted by
the Trustee but the sale has failed to settle on the proposed settlement date,
the Trustee shall request new bids from such leading dealers. In the event of
an Optional Exchange, the Trustee shall only deliver the Underlying Securities
to the purchaser of such Underlying Securities or sell the Underlying
Securities pursuant to this Section 13, as the case may be, against payment in
same day funds deposited into the Certificate Account.

     Section 14. Amendments. Notwithstanding anything in the Trust Agreement
to the contrary, in addition to the other restrictions on modification and
amendment contained therein, the Trustee shall not enter into any amendment or
modification of the Trust Agreement which would adversely affect in any
material respect the interests of the holders of any class of Certificates
without the consent of the holders of 100% of such class of Certificates;
provided, however, that no such amendment or modification will be permitted
which would cause the Trust to be taxed as an association or publicly traded
partnership taxable as a corporation for federal income tax purposes. Unless
otherwise agreed, the Trustee shall provide five Business Days written notice
to each Rating Agency before entering into any amendment or modification of
the Trust Agreement pursuant to this Section 14.

                                      25
<PAGE>

     Section 15. Voting of Underlying Securities, Modification of Indenture.

     (a) The Trustee, as holder of the Underlying Securities, has the right to
vote and give consents and waivers in respect of the Underlying Securities as
permitted by the Depository and except as otherwise limited by the Trust
Agreement. In the event that the Trustee receives a request from the
Depository, the Underlying Securities Trustee or the Underlying Securities
Issuer for its consent to any amendment, modification or waiver of the
Underlying Securities, the Indenture or any other document thereunder or
relating thereto, or receives any other solicitation for any action with
respect to the Underlying Securities, the Trustee shall mail a notice of such
proposed amendment, modification, waiver or solicitation to each
Certificateholder of record as of such date. The Trustee shall request
instructions from the Certificateholders as to whether or not to consent to or
vote to accept such amendment, modification, waiver or solicitation. The
Trustee shall consent or vote, or refrain from consenting or voting, in the
same proportion as the Voting Rights of the Trust were actually voted or not
voted by the Certificateholders thereof as of a date determined by the Trustee
prior to the date on which such consent or vote is required; provided,
however, that, notwithstanding anything in the Trust Agreement to the
contrary, the Trustee shall at no time vote on or consent to any matter (i)
unless such vote or consent would not (based on an opinion of counsel) cause
the Trust to be taxed as an association or publicly traded partnership taxable
as a corporation under the Code, (ii) which would alter the timing or amount
of any payment on the Underlying Securities, including, without limitation,
any demand to accelerate the Underlying Securities, except in the event of a
default under the Underlying Securities or an event which with the passage of
time would become an event of default under the Underlying Securities and with
the unanimous consent of Certificateholders representing 100% of the aggregate
Voting Rights and 100% of the Warrant Holders, or (iii) which would result in
the exchange or substitution of any of the outstanding Underlying Securities
pursuant to a plan for the refunding or refinancing of such Underlying
Securities except in the event of a default under the Indenture and only with
the consent of Certificateholders representing 100% of the aggregate Voting
Rights and 100% of the Warrant Holders. The Trustee shall have no liability
for any failure to act resulting from Certificateholders' late return of, or
failure to return, directions requested by the Trustee from the
Certificateholders.

     (b) In the event that an offer is made by the Underlying Securities
Issuer to issue new obligations in exchange and substitution for any of the
Underlying Securities, pursuant to a plan for the refunding or refinancing of
the outstanding Underlying Securities or any other offer is made for the
Underlying Securities, the Trustee shall notify the Class A-1
Certificateholders, Class A-2 Certificateholders and the Warrant Holders of
such offer promptly. Subject to the rights of the Warrant Holders to exercise
Call Warrants in connection with a tender offer for the Underlying Securities,
the Trustee must reject any such offer unless an Underlying Securities event
of default has occurred and the Trustee is directed by the affirmative vote of
Certificateholders representing 100% of the aggregate Voting Rights to accept
such offer and the Trustee has received the tax opinion described above. If
pursuant to the preceding sentence, the Trustee accepts any such offer the
Trustee shall promptly notify the Rating Agencies.

     (c) If an event of default under the Indenture occurs and is continuing,
and if directed by a majority of the outstanding Class A-1 Certificateholders
and Class A-2 Certificateholders, the Trustee shall vote the Underlying
Securities in favor of directing, or take such other action as may be
appropriate to direct, the Underlying Securities Trustee to declare the unpaid
principal

                                      26
<PAGE>

amount of the Underlying Securities and any accrued and unpaid interest
thereon to be due and payable.

     Section 16. Additional Depositor Representation. It is the express intent
of the parties hereto that the conveyance of the Underlying Securities by the
Depositor to the Trustee be, and be construed as, a sale of the Underlying
Securities by the Depositor and not a pledge of any Underlying Securities by
the Depositor to secure a debt or other obligation of the Depositor. In the
event that, notwithstanding the aforementioned intent of the parties, any
Underlying Securities are held to be property of the Depositor, then, it is
the express intent of the parties that such conveyance be deemed a pledge of
such Underlying Securities and all proceeds thereof by the Depositor to the
Trustee to secure a debt or other obligation of the Depositor, pursuant to
Section 10.07 of the Standard Terms. In connection with any such grant of a
security interest in the Underlying Securities and all proceeds thereof
(including any such grant in connection with any sale of additional Underlying
Securities pursuant to Section 3(d)), the Depositor hereby represents and
warrants to Trustee as follows:

     (i)    In the event the Underlying Securities are held to be property of
            the Depositor, then the Trust Agreement creates a valid and
            continuing security interest (as defined in the UCC) in the
            Underlying Securities in favor of the Securities Intermediary
            which security interest is prior to all other liens, and is
            enforceable as such as against creditors of, and purchasers from,
            the Depositor.

     (ii)   The Underlying Securities have been credited to a trust account
            (the "Securities Account") established in the name of the Trustee
            in accordance with Section 2.01 of the Standard Terms. U.S. Bank
            Trust National Association, as securities intermediary (the
            "Securities Intermediary") has established the Securities Account
            and has agreed to treat the Underlying Securities as "financial
            assets" within the meaning of the UCC.

     (iii)  Immediately prior to the transfer of the Underlying Securities to
            the Trust, the Depositor owned and had good and marketable title
            to the Underlying Securities free and clear of any lien, claim or
            encumbrance of any Person.

     (iv)   The Depositor has received all consents and approvals required by
            the terms of the Underlying Securities for the transfer to the
            Trustee all of the Depositor's interest and rights in the
            Underlying Securities as contemplated by the Trust Agreement.

     (v)    The Depositor has taken all steps necessary to cause the
            Securities Intermediary to identify on its records that the
            Trustee is the Person owning the security entitlements credited to
            the Securities Account.

     (vi)   Other than the security interest granted to the Trust pursuant to
            this Agreement, the Depositor has not assigned, pledged, sold,
            granted a security interest in or otherwise conveyed any interest
            in the Underlying Securities (or, if any such interest has been
            assigned, pledged or otherwise encumbered, it has been released).
            The Depositor has not authorized the filing of and is not aware of
            any

                                      27
<PAGE>

            financing statements against the Depositor that include a
            description of the Underlying Securities other than any financing
            statement relating to the security interest granted to the Trust
            hereunder. The Depositor is not aware of any judgment or tax lien
            filings against the Depositor.

     (vii)  The Securities Account is not in the name of any Person other than
            the Trustee. The Depositor has not consented to the compliance by
            the Securities Intermediary, with entitlement orders of any Person
            other than the Trustee.

                                      28
<PAGE>

          IN WITNESS WHEREOF, the parties hereto have caused this Series
Supplement to be duly executed by their respective authorized officers as of
the date first written above.

                                 LEHMAN ABS CORPORATION,
                                   as Depositor

                                 By: ________________________________________
                                     Name:   Rene Canezin
                                     Title:  Senior Vice President

                                 U.S. BANK TRUST NATIONAL ASSOCIATION,
                                   not in its individual capacity but solely
                                   as Trustee on behalf of the Corporate
                                   Backed Trust Certificates Goldman Sachs
                                   Group Note-Backed Series 2003-12 Trust

                                By: ________________________________________
                                    Name:  David J. Kolibachuk
                                    Title:  Vice President

                                      29
<PAGE>

                                                                   SCHEDULE I

                GOLDMAN SACHS GROUP NOTE-BACKED SERIES 2003-12

                        UNDERLYING SECURITIES SCHEDULE

Underlying Securities:                          6.125% Notes due 2033.

Issuer:                                         The Goldman Sachs Group, Inc.

CUSIP Number:                                   38141GCU6.

Principal Amount Deposited:                     $25,000,000.

Original Issue Date:                            February 13, 2003.

Principal Amount of
Underlying Securities
Originally Issued:                              $2,000,000,000.

Maturity Date:                                  February 15, 2033.

Interest Rate:                                  6.125% per annum.

Interest Payment Dates:                         February 15th and August 15th.

                                      I-1
<PAGE>

                                  EXHIBIT A-1
                      FORM OF TRUST CERTIFICATE CLASS A-1

                             CLASS A-1 CERTIFICATE
                             ---------------------

NUMBER 1                                        1,000,000 $25 PAR CERTIFICATES
                                                         CUSIP NO. 21988G 23 9

                      SEE REVERSE FOR CERTAIN DEFINITIONS

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          THIS CERTIFICATE REPRESENTS A PROPORTIONATE UNDIVIDED BENEFICIAL
OWNERSHIP INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF
THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE TRUST ASSETS ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.

          THE CERTIFICATEHOLDERS, BY THEIR ACCEPTANCE OF CERTIFICATES,
COVENANT AND AGREE TO TENDER ANY AND ALL CALLED CERTIFICATES TO THE TRUSTEE
UPON THE WARRANT HOLDER'S EXERCISE OF CALL WARRANTS AND PAYMENT OF THE CALL
PRICE FOR SUCH CERTIFICATES IN ACCORDANCE WITH THE PROVISIONS HEREOF AND OF
THE WARRANT AGENT AGREEMENT.

                                    A-1-1
<PAGE>

                            LEHMAN ABS CORPORATION

                               1,000,000 $25 PAR

                     CORPORATE BACKED TRUST CERTIFICATES,

                GOLDMAN SACHS GROUP NOTE-BACKED SERIES 2003-12

5.80% INTEREST RATE

          evidencing a proportionate undivided beneficial ownership interest
in the Trust, as defined below, the property of which consists principally of
$25,000,000 aggregate principal amount of 6.125% Notes due 2033, issued by The
Goldman Sachs Group, Inc. (the "Underlying Securities Issuer") and all
payments received thereon (the "Trust Property"), deposited in trust by Lehman
ABS Corporation (the "Depositor").

          THIS CERTIFIES THAT CEDE & CO. is the registered owner of an
aggregate of $25,000,000 principal amount nonassessable, fully-paid,
proportionate undivided beneficial ownership interest in the Corporate Backed
Trust Certificates, Goldman Sachs Group Note-Backed Series 2003-12 Trust,
formed by the Depositor.

                                    A-1-2
<PAGE>

          The Trust was created pursuant to a Standard Terms for Trust
Agreements, dated as of January 16, 2001 (the "Standard Terms"), between the
Depositor and U.S. Bank Trust National Association, a national banking
association, not in its individual capacity but solely as Trustee (the
"Trustee"), as supplemented by the Series Supplement in respect of the Goldman
Sachs Group Note-Backed Series 2003-12, dated as of August 7, 2003 (the
"Series Supplement" and, together with the Standard Terms, the "Trust
Agreement"), between the Depositor and the Trustee. This Certificate does not
purport to summarize the Trust Agreement and reference is hereby made to the
Trust Agreement for information with respect to the interests, rights,
benefits, obligations, proceeds and duties evidenced hereby and the rights,
duties and obligations of the Trustee with respect hereto. A copy of the Trust
Agreement may be obtained from the Trustee by written request sent to the
Corporate Trust Office. Capitalized terms used but not defined herein have the
meanings assigned to them in the Trust Agreement.

          This Certificate is one of the duly authorized Certificates
designated as the "Corporate Backed Trust Certificates, Goldman Sachs Group
Note-Backed Series 2003-12, Class A-1" (herein called the "Certificates").
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound. The Trust Property consists of: (i) Underlying Securities
described in the Trust Agreement, and (ii) all payments on or collections in
respect of the Underlying Securities accrued on or after August 7, 2003,
together with any and all income, proceeds and payments with respect thereto;
provided, however, that any income from the investment of Trust funds in
certain permitted investments ("Eligible Investments") does not constitute
Trust Property.

          Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the
obligation created by the Trust Agreement shall have terminated in accordance
therewith, distributions will be made on each Distribution Date, to the Person
in whose name this Certificate is registered on the applicable Record Date, in
an amount equal to such Certificateholder's proportionate undivided beneficial
ownership interest in the amount required to be distributed to the Holders of
the Certificates on such Distribution Date. The Record Date applicable to any
Distribution Date is the close of business on the day immediately preceding
such Distribution Date (whether or not a Business Day). If a payment with
respect to the Underlying Securities is made to the Trustee after the date on
which such payment was due, then the Trustee will distribute any such amounts
received on the next occurring Business Day.

          Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any time
institute against the Trust, or join in any institution against the Trust of,
any bankruptcy proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Certificates
or the Trust Agreement.

          Distributions made on this Certificate will be made as provided in
the Trust Agreement by the Trustee by wire transfer in immediately available
funds, or check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the
making of any notation hereon, except that with respect to Certificates
registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such

                                    A-1-3
<PAGE>

nominee shall be Cede & Co.), payments will be made by wire transfer in
immediately available funds to the account designated by such nominee. Except
as otherwise provided in the Trust Agreement and notwithstanding the above,
the final distribution on this Certificate will be made after due notice by
the Trustee of the pendency of such distribution and only upon presentation
and surrender of this Certificate at the Corporate Trust Office or such other
location as may be specified in such notice.

          Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.

          Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not
entitle the Holder hereof to any benefit under the Trust Agreement or be valid
for any purpose.

          THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.

                                    A-1-4
<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed as of the date set forth below.

                                  CORPORATE BACKED TRUST
                                  CERTIFICATES, GOLDMAN SACHS GROUP
                                  NOTE-BACKED SERIES 2003-12 TRUST

                                  By: U.S. BANK TRUST NATIONAL
                                  ASSOCIATION
                                  not in its individual capacity but solely as
                                  Trustee,

                                  By:__________________________________________
                                     Authorized Signatory

Dated: August 7, 2003

                    TRUSTEE'S CERTIFICATE OF AUTHENTICATION

          This is one of the Corporate Backed Trust Certificates, Goldman
Sachs Group Note-Backed Series 2003-12, described in the Trust Agreement
referred to herein.

U.S. BANK TRUST NATIONAL ASSOCIATION
not in its individual capacity but solely as
Trustee,

By:_____________________________________
     Authorized Signatory

                                    A-1-5
<PAGE>

                           (REVERSE OF CERTIFICATE)

          The Certificates are limited in right of distribution to certain
payments and collections respecting the Underlying Securities, all as more
specifically set forth herein and in the Trust Agreement. The registered
Holder hereof, by its acceptance hereof, agrees that it will look solely to
the Trust Property (to the extent of its rights therein) for distributions
hereunder.

          The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of the
Certificateholders under the Trust Agreement at any time by the Depositor and
the Trustee with the consent of the Holders of Class A-1 Certificates in the
manner set forth in the Series Supplement and the Standard Terms. Any such
consent by the Holder of this Certificate (or any predecessor Certificate)
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not a notation of such consent is
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders
of any of the Certificates.

          The Certificates are issuable in fully registered form only in
denominations of $25.

          As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is
registerable in the Certificate Register upon surrender of this Certificate
for registration of transfer at the offices or agencies of the Certificate
Registrar maintained by the Trustee in the Borough of Manhattan, the City of
New York, duly endorsed by or accompanied by an assignment in the form below
and by such other documents as required by the Trust Agreement, and thereupon
one or more new Certificates of the same class in authorized denominations
evidencing the same principal amount will be issued to the designated
transferee or transferees. The initial Certificate Registrar appointed under
the Trust Agreement is U.S. Bank Trust National Association.

          No service charge will be made for any registration of transfer or
exchange, but the Trustee may require exchange of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with
any transfer or exchange of Certificates.

          The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Depositor, the Trustee, nor
any such agent shall be affected by any notice to the contrary.

          It is the intention of the parties to the Trust Agreement that the
Trust created thereunder shall constitute a fixed investment trust for federal
income tax purposes under Treasury Regulation Section 301.7701-4, and the
Certificateholder agrees to treat the Trust, any distributions therefrom and
its beneficial interest in the Certificates consistently with such
characterization.

          The Trust and the obligations of the Depositor and the Trustee
created by the Trust Agreement with respect to the Certificates shall
terminate upon the earliest to occur of (i)

                                    A-1-6
<PAGE>

the payment in full at maturity or sale by the Trust after a payment default
on or an acceleration or other early payment of the Underlying Securities and
the distribution in full of all amounts due to the Class A-1
Certificateholders and Class A-2 Certificateholders; (ii) the exercise of all
outstanding Call Warrants by the Warrant Holders; (iii) the Final Scheduled
Distribution Date and (iv) the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late Ambassador of
the United States to the Court of St. James, living on the date hereof.

          An employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), a plan described in Section
4975(e) of the Code, an entity whose underlying assets include plan assets by
reason of any such plan's investment in the entity, including an individual
retirement account or Keogh plan (any such, a "Plan") may purchase and hold
Certificates if the Plan can represent and warrant that its purchase and
holding of the Certificates would not be prohibited under ERISA or the Code.

                                    A-1-7
<PAGE>

                                  ASSIGNMENT

          FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto

PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE

(Please print or type name and address, including postal zip code, of
assignee) the within Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing ______________________ Attorney to
transfer said Certificate on the books of the Certificate Register, with full
power of substitution in the premises.

Dated:

                                                                     *

                                                        Signature Guaranteed:

                                                                     *

*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Signatures must be guaranteed
by an "eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.

                                    A-1-8
<PAGE>

                                  EXHIBIT A-2
                      FORM OF TRUST CERTIFICATE CLASS A-2

                             CLASS A-2 CERTIFICATE
                             ---------------------

NUMBER 1                                                CUSIP NO. 21988G CS 3

                      SEE REVERSE FOR CERTAIN DEFINITIONS

          THIS CLASS A-2 CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION UNDER
SUCH ACT IS IN EFFECT OR PURSUANT TO AN EXEMPTION THEREFROM UNDER SUCH ACT.
THE CLASS A-2 CERTIFICATE REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN
ACCORDANCE WITH THE TERMS OF THE SERIES SUPPLEMENT.

          EACH PURCHASER OF THIS CLASS A-2 CERTIFICATE IS HEREBY NOTIFIED THAT
THE SELLER OF THIS CLASS A-2 CERTIFICATE MAY BE RELYING ON THE EXEMPTION FROM
THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.

          THE NOTIONAL AMOUNT OF THIS CLASS A-2 CERTIFICATE IS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING NOTIONAL AMOUNT OF THIS CLASS A-2
CERTIFICATE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

          THIS CERTIFICATE REPRESENTS A PROPORTIONATE UNDIVIDED BENEFICIAL
OWNERSHIP INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF
THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE OR THE TRUST ASSETS ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.

                                    A-2-1
<PAGE>

          THE CERTIFICATEHOLDERS, BY THEIR ACCEPTANCE OF CERTIFICATES,
COVENANT AND AGREE TO TENDER ANY AND ALL CALLED CERTIFICATES TO THE TRUSTEE
UPON THE WARRANT HOLDER'S EXERCISE OF CALL WARRANTS AND PAYMENT OF THE CALL
PRICE FOR SUCH CERTIFICATES IN ACCORDANCE WITH THE PROVISIONS HEREOF AND OF
THE WARRANT AGENT AGREEMENT.

                                    A-2-2
<PAGE>

                            LEHMAN ABS CORPORATION

                     CORPORATE BACKED TRUST CERTIFICATES,

                GOLDMAN SACHS GROUP NOTE-BACKED SERIES 2003-12

                          $25,000,000 NOTIONAL AMOUNT

0.325% INTEREST RATE

FINAL SCHEDULED DISTRIBUTION DATE:  February 15, 2033

   evidencing a proportionate undivided beneficial ownership interest in
the Trust, as defined below, the property of which consists principally of
$25,000,000 aggregate principal amount of 6.125% Notes due 2033, issued by The
Goldman Sachs Group, Inc., and all payments received thereon (the "Trust
Property"), deposited in trust by Lehman ABS Corporation (the "Depositor").

          THIS CERTIFIES THAT CEDE & CO. is the registered owner of an
aggregate amount of $25,000,000 notional amount nonassessable, fully-paid,
proportionate undivided beneficial ownership interest in the Corporate Backed
Trust Certificates, Goldman Sachs Group Note-Backed Series 2003-12 Trust,
formed by the Depositor.

          The Trust was created pursuant to a Standard Terms for Trust
Agreements, dated as of January 16, 2001 (the "Standard Terms"), between the
Depositor and U.S. Bank Trust National Association , a national banking
association, not in its individual capacity but solely as Trustee (the
"Trustee"), as supplemented by the Series Supplement, Goldman Sachs Group
Note-Backed Series 2003-12, dated as of August 7, 2003 (the "Series
Supplement" and, together with the Standard Terms, the "Trust Agreement"),
between the Depositor and the Trustee. This Certificate does not purport to
summarize the Trust Agreement and reference is hereby made to the Trust
Agreement for information with respect to the interests, rights, benefits,
obligations, proceeds and duties evidenced hereby and the rights, duties and
obligations of the Trustee with respect hereto. A copy of the Trust Agreement
may be obtained from the Trustee by written request sent to the Corporate
Trust Office. Capitalized terms used but not defined herein have the meanings
assigned to them in the Trust Agreement.

          This Certificate is one of the duly authorized Certificates
designated as the "Corporate Backed Trust Certificates, Goldman Sachs Group
Note-Backed Series 2003-12, Class A-2" (herein called the "Certificates").
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound. The Trust Property consists of: (i) Underlying Securities
described in the Trust Agreement, and (ii) all payments on or collections in
respect of the Underlying Securities accrued on or after August 7, 2003,
together with any and all income, proceeds and payments with respect thereto;

                                    A-2-3
<PAGE>

provided, however, that any income from the investment of Trust funds in
certain permitted investments ("Eligible Investments") does not constitute
Trust Property.

          Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the
obligation created by the Trust Agreement shall have terminated in accordance
therewith, distributions of interest will be made on this Certificate on each
Distribution Date.

          Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the
obligation created by the Trust Agreement shall have terminated in accordance
therewith, distributions will be made on each Distribution Date, to the Person
in whose name this Certificate is registered on the applicable Record Date, in
an amount equal to such Certificateholder's proportionate undivided beneficial
ownership interest in the amount required to be distributed to the Holders of
the Certificates on such Distribution Date. The Record Date applicable to any
Distribution Date is the close of business on the day immediately preceding
such Distribution Date (whether or not a Business Day). If a payment with
respect to the Underlying Securities is made to the Trustee after the date on
which such payment was due, then the Trustee will distribute any such amounts
received on the next occurring Business Day.

          Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any time
institute against the Trust, or join in any institution against the Trust of,
any bankruptcy proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Certificates
or the Trust Agreement.

          Distributions made on this Certificate will be made as provided in
the Trust Agreement by the Trustee by wire transfer in immediately available
funds, or check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of this Certificate or the
making of any notation hereon, except that with respect to Certificates
registered on the Record Date in the name of the nominee of the Clearing
Agency (initially, such nominee shall be Cede & Co.), payments will be made by
wire transfer in immediately available funds to the account designated by such
nominee. Except as otherwise provided in the Trust Agreement and
notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the Corporate
Trust Office or such other location as may be specified in such notice.

          Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.

          Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not
entitle the Holder hereof to any benefit under the Trust Agreement or be valid
for any purpose.

                                    A-2-4
<PAGE>

          THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.

                                    A-2-5
<PAGE>

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed as of the date set forth below.

                                  CORPORATE BACKED TRUST
                                  CERTIFICATES, GOLDMAN SACHS GROUP
                                  NOTE-BACKED SERIES 2003-12 TRUST

                                  By: U.S. BANK TRUST NATIONAL ASSOCIATION
                                  not in its individual capacity but solely as
                                  Trustee,

                                  By:_________________________________________
                                              Authorized Signatory

Dated: August 7, 2003

                    TRUSTEE'S CERTIFICATE OF AUTHENTICATION

               This is one of the Corporate Backed Trust Certificates, Goldman
Sachs Group Note-Backed Series 2003-12, described in the Trust Agreement
referred to herein.

U.S. BANK TRUST NATIONAL ASSOCIATION not in its individual capacity but solely
as Trustee,

By:_____________________________
    Authorized Signatory

                                    A-2-6
<PAGE>

                           (REVERSE OF CERTIFICATE)

          The Certificates are limited in right of distribution to certain
payments and collections respecting the Underlying Securities, all as more
specifically set forth herein and in the Trust Agreement. The registered
Holder hereof, by its acceptance hereof, agrees that it will look solely to
the Trust Property (to the extent of its rights therein) for distributions
hereunder.

          The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of the
Certificateholders under the Trust Agreement at any time by the Depositor and
the Trustee with the consent of the holders of Class A-2 Certificates in the
manner set forth in the Series Supplement and the Standard Terms. Any such
consent by the Holder of this Certificate (or any predecessor Certificate)
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders
of any of the Certificates.

          The Certificates are issuable in fully registered form only in
denominations of $100,000 and in integral multiples of $1 in excess thereof.

          As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is
registerable in the Certificate Register upon surrender of this Certificate
for registration of transfer at the offices or agencies of the Certificate
Registrar maintained by the Trustee in the Borough of Manhattan, the City of
New York, duly endorsed by or accompanied by an assignment in the form below
and by such other documents as required by the Trust Agreement, and thereupon
one or more new Certificates of the same class in authorized denominations
evidencing the same notional amount will be issued to the designated
transferee or transferees. The initial Certificate Registrar appointed under
the Trust Agreement is U.S. Bank Trust National Association.

          No service charge will be made for any registration of transfer or
exchange, but the Trustee may require exchange of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with
any transfer or exchange of Certificates.

          The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Depositor, the Trustee, nor
any such agent shall be affected by any notice to the contrary.

          It is the intention of the parties to the Trust Agreement that the
Trust created thereunder shall constitute a fixed investment trust for federal
income tax purposes under Treasury Regulation Section 301.7701-4, and the
Certificateholder agrees to treat the Trust, any distributions therefrom and
its beneficial interest in the Certificates consistently with such
characterization.

          The Trust and the obligations of the Depositor and the Trustee
created by the Trust Agreement with respect to the Certificates shall
terminate upon the earliest to occur of (i)

                                    A-2-7
<PAGE>

the payment in full at maturity or sale by the Trust after a payment default
on or an acceleration or other early payment of the Underlying Securities and
the distribution in full of all amounts due to the Class A-1
Certificateholders and Class A-2 Certificateholders; (ii) the exercise of all
outstanding Call Warrants by the Warrant Holders; (iii) the Final Scheduled
Distribution Date and (iv) the expiration of 21 years from the death of the
last survivor of the descendants of Joseph P. Kennedy, the late Ambassador of
the United States to the Court of St. James, living on the date hereof.

          An employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), a plan described in Section
4975(e) of the Code, an entity whose underlying assets include plan assets by
reason of any such plan's investment in the entity, including an individual
retirement account or Keogh plan (any such, a "Plan") may purchase and hold
Certificates if the Plan can represent and warrant that its purchase and
holding of the Certificates would not be prohibited under ERISA or the Code.

                                    A-2-8
<PAGE>

                                  ASSIGNMENT

          FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto

PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE

(Please print or type name and address, including postal zip code, of
assignee) the within Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing ________________________________
Attorney to transfer said Certificate on the books of the Certificate
Register, with full power of substitution in the premises.

Dated:

                                                            *
                                                        Signature Guaranteed:

                                                            *

*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Signatures must be guaranteed
by an "eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.

                                    A-2-9

<PAGE>

                                   EXHIBIT B

                        FORM OF WARRANT AGENT AGREEMENT

                      CORPORATE BACKED TRUST CERTIFICATES

             GOLDMAN SACHS GROUP NOTE-BACKED SERIES 2003-12 TRUST

          WARRANT AGENT AGREEMENT, dated as of August 7, 2003 (the "Warrant
Agent Agreement"), by and between LEHMAN ABS CORPORATION, as Depositor (the
"Depositor"), U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee (the "Trustee")
and U.S. BANK TRUST NATIONAL ASSOCIATION, as Warrant Agent (the "Warrant
Agent").

                             W I T N E S S E T H:

          WHEREAS, the Depositor created Corporate Backed Trust Certificates,
Goldman Sachs Group Note-Backed Series 2003-12 Trust (the "Trust"), a trust
created under the laws of the State of New York pursuant to a Standard Terms
for Trust Agreements, dated as of January 16, 2001 (the "Agreement"), between
Lehman ABS Corporation (the "Depositor") and U.S. Bank Trust National
Association, a national banking association, not in its individual capacity
but solely as Trustee (the "Trustee"), as supplemented by the Series
Supplement 2003-12, dated as of August 7, 2003 (the "Series Supplement" and,
together with the Agreement, the "Trust Agreement"), between the Depositor and
the Trustee; and

          WHEREAS, in connection with the creation of the Trust and the deposit
therein of the Underlying Securities, it is desired to provide for the
issuance of trust certificates (the "Certificates") evidencing undivided
interests in the Trust and call warrants with respect to the Certificates
("Call Warrants").

          NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants expressed herein, it is hereby agreed by and between the
Depositor, the Warrant Agent and the Trustee that except as otherwise
specified herein or as the context may otherwise require, capitalized terms
used herein but not defined herein shall have the respective meanings set
forth below in the Series Supplement, and as follows:

                                  ARTICLE I

                           EXERCISE OF CALL WARRANTS

     Section 1.1 Manner of Exercise. (a) Call Warrants may be exercised by any
holder thereof (each, a "Warrant Holder") in whole or in part on any Call
Date. The following conditions shall apply to any exercise of Call Warrants:

               (i) A notice (each, a "Call Notice") specifying the number of
          Call Warrants being exercised and the Call Date shall be delivered
          to the Warrant Agent and the Trustee at least 5 Business Days before
          such Call Date.

                                     B-1

<PAGE>

               (ii) The Warrant Holder shall surrender the Call Warrants to
          the Warrant Agent at its office specified in Section 7.3 hereof no
          later than 10:00 a.m. (New York City time) on such Call Date.

               (iii) Except as otherwise provided herein in connection with a
          Call Notice relating to a tender offer for or redemption of
          Underlying Securities, the Warrant Holder shall have made payment to
          the Warrant Agent, by wire transfer or other immediately available
          funds acceptable to the Warrant Agent, in the amount of the Call
          Price, no later than 10:00 a.m. (New York City time) on the Call
          Date.

               (iv) The Warrant Holder may not exercise the Call Warrants at
          any time when such Warrant Holder is insolvent, and such Warrant
          Holder shall be required to certify that it is solvent at the time
          of exercise, by completing the form of subscription ("Form of
          Subscription") attached to the Call Warrants and delivering such
          completed Form of Subscription to the Trustee on or prior to the
          Call Date and by delivering to the Trustee a form reasonably
          satisfactory to the Trustee of the solvency certificate required
          pursuant to Section 7(d)(ii) of the Series Supplement.

               (v) The Warrant Holder shall have satisfied any other
          conditions to the exercise of Call Warrants set forth in Section
          7(d) of the Series Supplement.

          (b) Upon exercise of Call Warrants, any Warrant Holder other than
     the Depositor or any Affiliate of the Depositor shall be entitled to
     delivery by the Trustee of the Called Certificates. The "Called
     Certificates" shall be, in the case of the Class A-1 Certificates, Class
     A-1 Certificates having a Certificate Principal Balance equal to $25 per
     Call Warrant, and in the case of the Class A-2 Certificates, Class A-2
     Certificates having a notional balance equal to $100,000 per Call
     Warrant. Unless otherwise specified therein, each Call Notice shall be
     deemed to be notice of an Optional Exchange pursuant to Section 7(b) of
     the Series Supplement. Any Warrant Holder which is the Depositor or any
     Affiliate of the Depositor shall receive the proceeds of the sale of the
     Called Underlying Securities and shall not be entitled to receive the
     related Called Certificates or Called Underlying Securities. "Called
     Underlying Securities" are Underlying Securities which represent the same
     percentage of the Underlying Securities as the Called Certificates
     represent of the Class A-1 Certificates and the Class A-2 Certificates.

          (c) The Warrant Agent shall notify the Trustee immediately upon its
     receipt of a Call Notice and upon receipt of payment of the Call Price.
     The Warrant Agent shall transfer the amount of any paid Call Price to the
     Trustee in immediately available funds, for deposit in the Certificate
     Account and application pursuant to the Trust Agreement on the applicable
     Call Date (and, pending such transfer, shall hold such amount for the
     benefit of the Warrant Holder in a segregated trust account).

          (d) Delivery of a Call Notice does not give rise to an obligation on
     the part of the Warrant Holder to pay the Call Price. If, by 10:00 a.m.
     (New York City time) on the Call Date, the Warrant Holder has not paid
     the Call Price, except in connection with a

                                     B-2

<PAGE>

     Call Notice relating to a tender offer for or redemption of Underlying
     Securities, then the Call Notice shall automatically expire and none of
     the Warrant Holder, the Warrant Agent or the Trustee shall have any
     obligation with respect to the Call Notice. The expiration of a Call
     Notice shall in no way affect the Warrant Holder's right to deliver a
     Call Notice at a later date. The Call Price for a call in connection with
     a tender offer or redemption shall be deducted from the proceeds of a
     tender offer or a redemption by the Trust pursuant to Section 7(g)(iii)
     or Section 7(h)(iii), as applicable, of the Series Supplement.

     Section 1.2 Transfer of Certificates. As soon as practicable after each
surrender of Call Warrants in whole or in part on the Call Date and upon
satisfaction of all other requirements described in the Call Warrants and in
Section 1.1 hereof, the Warrant Agent shall instruct the Trustee as follows:

          (a) if Call Warrants are being exercised by any Warrant Holder other
     than the Depositor or any Affiliate of the Depositor, to cause the Called
     Certificates to reflect the Warrant Holder's beneficial ownership of such
     Certificates and if such Call Notice is also deemed to be a notice of
     Optional Exchange, to cause a distribution of Underlying Securities to
     the Warrant Holder in accordance with Section 7(a) of the Series
     Supplement, provided, however, that if such Call Notice and Optional
     Exchange is in connection with a tender offer or a redemption, the
     Warrant Agent shall instruct the Trustee to distribute to the exercising
     Warrant Holder the excess of the tender offer or redemption proceeds over
     the Call Price pursuant to Section 7(g)(iii) or Section 7(h)(iii), as
     applicable, of the Series Supplement, or

          (b) if the Call Warrants are being exercised by the Depositor or any
     Affiliate of the Depositor, to cause the Called Underlying Securities to
     be sold pursuant to Section 13 of the Series Supplement and to distribute
     the proceeds of such sale to the Warrant Holder.

     If such exercise is in part only, the Warrant Agent shall (i) in the case
of a Global Call Warrant, cause the Registered Warrant Amount to be decreased
to reflect the outstanding Call Warrants of the Warrant Holder and (ii) in the
case of a Certificated Call Warrant, instruct the Trustee to authenticate new
Call Warrants of like tenor, representing the outstanding Call Warrants of the
Warrant Holder, and the Warrant Agent shall deliver such Call Warrants to the
Warrant Holder.

          In each case, the Trustee shall act in accordance with such
instructions.

     Section 1.3 Cancellation and Destruction of Call Warrants. All Call
Warrants surrendered to the Warrant Agent for the purpose of exercise (in
whole or in part) pursuant to Section 1.1 and actually exercised, or for the
purpose of transfer or exchange pursuant to Article IV, shall be cancelled by
the Warrant Agent, and no Call Warrant (other than that reflecting any such
transfer or exchange) shall be issued in lieu thereof. The Warrant Agent shall
destroy all cancelled Call Warrants.

                                     B-3

<PAGE>

     Section 1.4 No Rights as Holder of Certificates Conferred by Call
Warrants. Prior to the exercise thereof, Call Warrants shall not entitle the
Warrant Holder to any of the rights of a holder of the Certificates,
including, without limitation, the right to receive the payment of any amount
on or in respect of the Certificates or to enforce any of the covenants of the
Trust Agreement.

     Section 1.5 Pro Rata Reduction of Call Warrants if Partial Redemption of
Underlying Securities. If Underlying Securities are redeemed in part by the
Underlying Securities Issuer and the Warrant Holders do not exercise their
Call Rights in connection with such partial redemption, the Warrant Amount or
Registered Warrant Amount, as the case may be, held by each Warrant Holder
shall be reduced proportionately so that the aggregate amount of Class A-1
Certificates callable by Call Warrants shall equal the amount of outstanding
Class A-1 Certificates after giving effect to such partial redemption and the
aggregate notional amount of Class A-2 Certificates callable by Call Warrants
shall equal the outstanding notional amount of Class A-2 Certificates after
giving effect to such partial redemption. The Warrant Agent shall make such
adjustments to its records as shall be necessary to reflect such reductions
and shall notify the Depository or each Warrant Holder, as the case may be, of
such adjustments.

                                  ARTICLE II

                               THE CALL WARRANTS

     Section 2.1 The Call Warrants.

          (a) The Call Warrants shall initially be issued as one or more
     Global Call Warrants in definitive, fully registered form without
     coupons, and DTC shall be the Depository. Upon issuance, the Global Call
     Warrants shall initially be deposited with the Trustee in its capacity as
     custodian on behalf of DTC. Such Global Call Warrants shall initially be
     registered in the name of Cede & Co. or another nominee designated by
     DTC. Global Call Warrants shall clear and settle in book-entry only form
     through the facilities of the Depository. Unless and until it is
     exchanged in whole or in part for Certificated Call Warrants, a Global
     Call Warrant may not be transferred except as a whole by the Depository
     for such Global Call Warrant to a nominee of such Depository, or by a
     nominee of such Depository to such Depository or another nominee of such
     Depository, or by such Depository or any such nominee to a successor of
     such Depository or a nominee of such successor. The Registered Warrant
     Amount of Call Warrants may from time to time be increased or decreased
     by adjustments made on the records of the Trustee, as custodian for DTC
     for such Global Call Warrant, as provided in this Section.

          (b) The Warrant Agent shall register the transfer or exchange of any
     Global Call Warrant without requiring any additional certification.

          (c) Interests of beneficial owners in a Global Call Warrant may be
     transferred in accordance with the rules and procedures of DTC and any
     other applicable Depositories. In connection with any exchange of
     beneficial ownership interests in a Global Call Warrant for Certificated
     Call Warrants pursuant to Section 2.3, the Warrant Agent shall reflect on
     its books and records the date of such exchange and a decrease in

                                     B-4

<PAGE>

     the Registered Warrant Amount of such Global Call Warrant in an amount
     equal to the Warrant Amount of the beneficial ownership interests in such
     Global Call Warrant being exchanged for Certificated Call Warrants.

     Section 2.2 Cancellation. All Call Warrants presented and surrendered for
payment, transfer or exchange shall be delivered to the Warrant Agent and
shall be promptly canceled by it. No Call Warrants shall be authenticated in
lieu of or in exchange for any Call Warrants canceled as provided in this
Section 2.2.

     Section 2.3 Certificated Call Warrants. Any Global Call Warrant
representing Call Warrants shall be exchangeable for Certificated Call
Warrants only if (i) the Depository advises the Depositor in writing that it
is no longer willing or able to properly discharge its responsibilities with
respect to the Call Warrants and the Depositor is unable to locate a qualified
successor within 60 calendar days or (ii) the Depositor, at its option,
advises the Trustee in writing that it elects to terminate the book-entry
system through the Depository. Any Global Call Warrant that is exchangeable
pursuant to the preceding sentence will be exchangeable for Certificated Call
Warrants of like tenor and Warrant Amount, as applicable, in any authorized
denomination or denominations and registered in the names of such Person or
Persons as the Depository shall direct. Upon such exchange, the Warrant Agent
shall execute and authenticate such Certificated Call Warrants and register
the same in the name of, and deliver the same to, such Person or Persons
consistent with the provisions hereof.

                                 ARTICLE III

                           RESTRICTIONS ON TRANSFER

     Section 3.1 Restrictive Legends. Except as otherwise permitted by this
Article III, each Call Warrant (including each Call Warrant issued upon the
transfer of any Call Warrant) shall be issued with a legend in substantially
the following form:

   "THIS CALL WARRANT (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
   SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE TRANSFERRED, SOLD OR
   OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION UNDER SUCH ACT IS IN
   EFFECT OR PURSUANT TO AN EXEMPTION THEREFROM UNDER SUCH ACT. THE CALL
   WARRANT REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH THE
   CONDITIONS SPECIFIED IN THE CALL WARRANTS.

   EACH PURCHASER OF THIS CALL WARRANT IS HEREBY NOTIFIED THAT THE SELLER OF
   THIS CALL WARRANT MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
   SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER."

     Section 3.2 Notice of Proposed Transfer. Prior to any transfer of any
Call Warrant or portion thereof, the Warrant Holder will give five (5)
Business Days (or such lesser period acceptable to the Warrant Agent) prior
written notice to the Warrant Agent of such Warrant Holder's intention to
effect such transfer.

                                     B-5

<PAGE>

                                  ARTICLE IV

               REGISTRATION AND TRANSFER OF CALL WARRANTS, ETC.

     Section 4.1 Warrant Register; Ownership of Call Warrants. The Warrant
Agent will keep a register in which the Warrant Agent will provide for the
registration of Call Warrants and the registration of transfers of Call
Warrants representing numbers of Call Warrants. Prior to due presentment of a
Call Warrant for registration of transfer, the Depositor, the Trustee, the
Warrant Agent and any agent of the Depositor, the Trustee or the Warrant Agent
may treat the Person in whose name any Call Warrant is registered as the owner
of such Call Warrant for any purposes whatsoever, and none of the Depositor,
the Trustee, the Warrant Agent or any agent of the Depositor, the Trustee or
the Warrant Agent shall be affected by notice to the contrary.

          None of the Depositor, the Trustee, the Warrant Agent or any agent
of the Depositor, the Trustee or the Warrant Agent shall have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests of a Global Call
Warrant or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.

          Notwithstanding the foregoing, with respect to any Global Call
Warrant, nothing herein shall prevent the Depositor, the Trustee, the Warrant
Agent or any agent of the Depositor, the Trustee or the Warrant Agent from
giving effect to any written certification, proxy or other authorization
furnished by any Depository, as a Warrant Holder, with respect to such Global
Call Warrant or impair, as between such Depository and owners of beneficial
interests in such Global Call Warrant, the operation of customary practices
governing the exercise of the rights of such Depository (or its nominee) as
Warrant Holder of such Global Call Warrant.

     Section 4.2 Transfer and Exchange of Call Warrants. (a) No Call Warrant
or any beneficial interest therein may be offered, resold, assigned or
otherwise transferred (including by pledge or hypothecation) unless such
offer, resale, assignment or transfer is to a qualified institutional buyer (a
"QIB"), as such term is defined in Rule 144A promulgated under the Securities
Act ("Rule 144A"), in accordance with Rule 144A, and in accordance with any
applicable securities laws of any state of the United States and other
jurisdictions. Prior to any offer, resale, assignment or transfer of any
Certificated Call Warrant, the prospective transferee and the prospective
transferor shall be required to deliver to the Trustee an executed copy of an
Investment Letter with respect to the Certificated Call Warrants to be
transferred substantially in the form of Exhibit A hereto. In addition to the
foregoing, each prospective transferee of any Certificated Call Warrants shall
acknowledge, represent and agree (and each prospective transferee of any
beneficial interest in a Global Call Warrant shall be deemed to acknowledge,
represent and agree) as follows:

     (1)  The transferee (x) is a QIB, (y) is aware that the sale to it is
          being made in reliance on Rule 144A and (z) is acquiring such Call
          Warrants for its own account or for the account of a QIB.

     (2)  The transferee understands that the Call Warrants are being offered
          in a transaction not involving any public offering in the United
          States within the

                                     B-6

<PAGE>

          meaning of the Securities Act, and that the Call Warrants have not
          been and will not be registered under the Securities Act.

     (3)  The transferee agrees that (A) if in the future it decides to offer,
          resell, pledge or otherwise transfer the Call Warrants prior to the
          Resale Restriction Termination Date, such Call Warrants shall only
          be offered, resold, assigned or otherwise transferred to a QIB, in
          accordance with Rule 144A, and in accordance with any applicable
          securities laws of any state of the United States and other
          jurisdictions and (B) the transferee will, and each subsequent
          holder is required to, notify any subsequent purchaser of such Call
          Warrants from it of the resale restrictions referred to in clause
          (A) above.

          (b) Upon surrender of any Call Warrant for registration of transfer
     or for exchange to the Warrant Agent, the Warrant Agent shall (subject to
     compliance with Article III) promptly execute and deliver, and cause the
     Trustee, on behalf of the Trust, to execute and deliver, in exchange
     therefor, a new Call Warrant of like tenor and evidencing a like number
     of Call Warrants, in the name of such Warrant Holder or as such Warrant
     Holder (upon payment by such Warrant Holder of any applicable transfer
     taxes or government charges) may direct; provided that as a condition
     precedent for transferring the Call Warrants, the prospective transferee
     shall deliver to the Trustee and the Depositor an executed copy of the
     Investment Letter (set forth as Exhibit A hereto) if the same is required
     pursuant to the provisions of clause (a) above.

     Section 4.3 Replacement of Call Warrants. Upon receipt of evidence
reasonably satisfactory to the Warrant Agent of the loss, theft, destruction
or mutilation of any Call Warrant and, in the case of any such loss, theft or
destruction of any Call Warrant, upon delivery of an indemnity bond in such
reasonable amount as the Warrant Agent may determine, or, in the case of any
such mutilation, upon the surrender of such Call Warrant for cancellation to
the Warrant Agent, the Warrant Agent shall execute and deliver, and cause the
Trustee, on behalf of the Trust, to execute and deliver, in lieu thereof, a
new Call Warrant of like tenor bearing a number not contemporaneously
outstanding.

     Section 4.4 Execution and Delivery of Call Warrants by Trustee. The
Trustee, on behalf of the Trust, hereby agrees (subject to compliance with
Article III) to execute and deliver such new Call Warrants issued in
accordance with Section 1.2 or this Article IV as the Warrant Agent shall
request in accordance herewith.

     Section 4.5 Additional Call Warrants. The Trustee shall execute and
deliver, in a manner consistent with Article II hereof, additional Call
Warrants on behalf of the Trust with respect to any additional Certificates
issued by the Trust following the sale of additional Underlying Securities to
the Trust, in accordance with the provisions of Section 3(d) of the Series
Supplement.

                                  ARTICLE V

                                  DEFINITIONS

                                     B-7

<PAGE>

          As used herein, unless the context otherwise requires, the following
terms have the following respective meanings:

          "Business Day": As defined in the Trust Agreement.

          "Call Date": Any Business Day (i) on or after August 7, 2008, (ii)
after the Underlying Securities Issuer announces that it will redeem, prepay
or otherwise make an unscheduled payment on the Underlying Securities, (iii)
after the Trustee notifies the Certificateholders of any proposed sale of the
Underlying Securities pursuant to the provisions of the Series Supplement or
(iv) on which a tender offer for some or all of the Underlying Securities is
consummated.

          "Call Notice": As defined in Section 1.1(a)(i) hereof.

          "Call Price": For each related Call Date, (i) in the case of the
Class A-1 Certificates, 100% of the outstanding Certificate Principal Balance
of the Class A-1 Certificates being purchased pursuant to the exercise of the
Call Warrants, plus any accrued and unpaid interest on such amount to but
excluding the Call Date and, (ii) in the case of the Class A-2 Certificates,
the present value of all amounts that would otherwise have been payable on the
Class A-2 Certificates being purchased pursuant to the exercise of the Call
Warrants for the period from the related Call Date to the Final Scheduled
Distribution Date using a discount rate of 7.00% per annum, assuming no
delinquencies, deferrals, redemptions or prepayments on the Underlying
Securities shall occur after the related Call Date.

          "Call Warrant": As defined in the recitals.

          "Called Certificates": As defined in Section 1.1(b) hereof.

          "Called Underlying Securities": As defined in Section 1.1(b) hereof.

          "Certificated Call Warrant": Any Call Warrant in definitive,
physical form registered in the name of a Person other than the Depository or
its nominee.

          "Closing Date": August 7, 2003.

          "Depositor": As defined in the recitals.

          "Depositor Order": As defined in the Trust Agreement.

          "Depository": DTC initially, or such other depository appointed by
the Depositor.

          "DTC": The Depository Trust Company, a limited purpose trust company
organized under the laws of the State of New York, and any of its successors
or assigns.

          "Global Call Warrant": A registered Call Warrant in the name of the
Depository or its nominee.

                                     B-8

<PAGE>

          "Person": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political
subdivision thereof.

          "QIB": As defined in Section 4.2 hereof.

          "Rating Agencies": Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc. and Moody's Investors Service and any of their
respective successors.

          "Registered Warrant Amount": The Warrant Amount represented by the
Global Call Warrants.

          "Responsible Officer": As defined in the Trust Agreement.

          "Rule 144A": As defined in Section 4.2.

          "Securities Act": The Securities Act of 1933, or any similar federal
statute, and the rules and regulations of the Commission thereunder, all as
the same shall be in effect at the time.

          "Trust": As defined in the recitals.

          "Trust Agreement": As defined in the recitals.

          "Trustee": As defined in the recitals, or any successor thereto
under the Trust Agreement.

          "Warrant Agent": As defined in the recitals, or any successor
thereto under this Warrant Agent Agreement.

          "Warrant Agent Agreement": As defined in the recitals.

          "Warrant Amount": With respect to any Warrant Holder, the number of
Call Warrants relating to Class A-1 Certificates and Call Warrants relating to
the Class A-2 Certificates, held by such Warrant Holder.

          "Warrant Holder": As defined in Section 1.1(a) hereof.

                                  ARTICLE VI

                                 WARRANT AGENT

     Section 6.1 Limitation on Liability. The Warrant Agent shall be protected
and shall incur no liability for or in respect of any action taken, suffered
or omitted by it in connection with its administration of the Call Warrants in
reliance upon any instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,

                                     B-9

<PAGE>

statement or other paper or document in good faith believed by it to be
genuine and to be signed, executed and, where necessary, verified and
acknowledged, by the proper Person or Persons.

     Section 6.2 Duties of Warrant Agent. The Warrant Agent undertakes only
the specific duties and obligations imposed hereunder upon the following terms
and conditions, by all of which the Depositor, the Trust, the Trustee and each
Warrant Holder shall be bound:

          (a) The Warrant Agent may consult with legal counsel (who may be
     legal counsel for the Depositor), and the opinion of such counsel shall
     be full and complete authorization and protection to the Warrant Agent as
     to any action taken or omitted by it in good faith and in accordance with
     such opinion, provided the Warrant Agent shall have exercised reasonable
     care in the selection by it of such counsel.

          (b) Whenever in the performance of its duties hereunder, the Warrant
     Agent shall deem it necessary or desirable that any fact or matter be
     proved or established by the Depositor or the Trustee prior to taking or
     suffering any action hereunder, such fact or matter may be deemed to be
     conclusively proved and established by a Depositor Order or a certificate
     signed by a Responsible Officer of the Trustee and delivered to the
     Warrant Agent; and such certificate shall be full authorization to the
     Warrant Agent for any action taken or suffered in good faith by it
     hereunder in reliance upon such certificate.

          (c) The Warrant Agent shall be liable hereunder only for its own
     negligence, willful misconduct or bad faith.

          (d) The Warrant Agent shall not be liable for or by reason of any of
     the statements of fact or recitals contained herein or be required to
     verify the same, but all such statements and recitals are and shall be
     deemed to have been made by the Trust and the Depositor only.

          (e) The Warrant Agent shall not have any responsibility in respect
     of and makes no representation as to the validity of the Call Warrants or
     the execution and delivery thereof (except the due execution hereof by
     the Warrant Agent); nor shall it be responsible for any breach by the
     Trust of any covenant or condition contained in the Call Warrants; nor
     shall it by any act thereunder be deemed to make any representation or
     warranty as to the Certificates to be purchased thereunder.

          (f) The Warrant Agent is hereby authorized and directed to accept
     instructions with respect to the performance of its duties hereunder from
     the Chairman of the Board, the Chief Executive Officer, Chief Financial
     Officer, Chief Operating Officer, President, a Vice President, a Senior
     Vice President, a Managing Director, its Treasurer, an Assistant
     Treasurer, its Secretary or an Assistant Secretary of the Depositor, and
     any Responsible Officer of the Trustee, and to apply to such officers for
     advice or instructions in connection with its duties, and it shall not be
     liable for any action taken or suffered to be taken by it in good faith
     in accordance with instructions of any such officer.

          (g) The Warrant Agent and any shareholder, director, officer or
     employee of the Warrant Agent may buy, sell or deal in any of the Call
     Warrants or other securities of the Trust or otherwise act as fully and
     freely as though it were not Warrant Agent

                                     B-10

<PAGE>

     hereunder, so long as such persons do so in full compliance with all
     applicable laws. Nothing herein shall preclude the Warrant Agent from
     acting in any other capacity for the Trust, the Depositor or for any
     other legal entity.

          (h) The Warrant Agent may execute and exercise any of the rights or
     powers hereby vested in it or perform any duty hereunder either itself or
     by or through its attorneys or agents.

          (i) The Warrant Agent shall act solely as the agent of the Trust
     hereunder. The Warrant Agent shall not be liable except for the failure
     to perform such duties as are specifically set forth herein, and no
     implied covenants or obligations shall be read into the Call Warrants
     against the Warrant Agent, whose duties shall be determined solely by the
     express provisions thereof. The Warrant Agent shall not be deemed to be a
     fiduciary.

          (j) The Warrant Agent shall not be responsible for any failure on
     the part of the Trustee to comply with any of its covenants and
     obligations contained herein.

          (k) The Warrant Agent shall not be under any obligation or duty to
     institute, appear in or defend any action, suit or legal proceeding in
     respect hereof, unless first indemnified to its satisfaction, but this
     provision shall not affect the power of the Warrant Agent to take such
     action as the Warrant Agent may consider proper, whether with or without
     such indemnity. The Warrant Agent shall promptly notify the Depositor and
     the Trustee in writing of any claim made or action, suit or proceeding
     instituted against it arising out of or in connection with the Call
     Warrants.

          (l) The Trustee will perform, execute, acknowledge and deliver or
     cause to be performed, executed, acknowledged and delivered all such
     further acts, instruments and assurances as may be required by the
     Warrant Agent in order to enable it to carry out or perform its duties
     hereunder.

          (m) Upon request of a Warrant Holder, the Warrant Agent shall
     furnish to such Warrant Holder and/or a prospective purchaser designated
     by such Warrant Holder the information required to be delivered under
     Rule 144A(d)(4) under the Securities Act, to the extent that such
     information is in the possession of the Warrant Agent.

     Section 6.3 Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties hereunder upon thirty (30) days notice in writing
mailed to the Depositor and the Trustee by registered or certified mail, and
to the Warrant Holders by first-class mail at the expense of the Depositor;
provided that no such resignation or discharge shall become effective until a
successor Warrant Agent shall have been appointed hereunder. The Depositor may
remove the Warrant Agent or any successor Warrant Agent upon thirty (30) days
notice in writing, mailed to the Warrant Agent or successor Warrant Agent, as
the case may be, and to the Warrant Holders by first-class mail; provided
further that no such removal shall become effective until a successor Warrant
Agent shall have been appointed hereunder. If the Warrant Agent shall resign
or be removed or shall otherwise become incapable of acting, the Depositor
shall promptly appoint a successor to the Warrant Agent, which may be
designated as an interim Warrant Agent. If an interim Warrant Agent is
designated, the Depositor shall then

                                     B-11

<PAGE>

appoint a permanent successor to the Warrant Agent, which may be the interim
Warrant Agent. If the Depositor shall fail to make such appointment of a
permanent successor within a period of thirty (30) days after such removal or
within sixty (60) days after notification in writing of such resignation or
incapacity by the resigning or incapacitated Warrant Agent or by the Warrant
Holder, then the Warrant Agent or registered Warrant Holder may apply to any
court of competent jurisdiction for the appointment of such a successor. Any
successor to the Warrant Agent appointed hereunder must be rated in one of the
four highest rating categories by the Rating Agencies. Any entity which may be
merged or consolidated with or which shall otherwise succeed to substantially
all of the trust or agency business of the Warrant Agent shall be deemed to be
the successor Warrant Agent without any further action.

     Section 6.4 Warrant Agent Transfer Fee. The Warrant Agent will assess a
fee of $50.00 upon the issue of any new Call Warrant, such fee to be assessed
upon the new Warrant Holder.

                                 ARTICLE VII

                                 MISCELLANEOUS

     Section 7.1 Remedies. The remedies at law of the Warrant Holder in the
event of any default or threatened default by the Warrant Agent in the
performance of or compliance with any of the terms of the Call Warrants are
not and will not be adequate and, to the full extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein or by an injunction against a violation of any
of the terms thereof or otherwise.

     Section 7.2 Limitation on Liabilities of Warrant Holder. Nothing
contained in this Warrant Agent Agreement shall be construed as imposing any
obligation on the Warrant Holder to purchase any of the Certificates except in
accordance with the terms thereof.

     Section 7.3 Notices. All notices and other communications under this
Warrant Agent Agreement shall be in writing and shall be delivered, or mailed
by registered or certified mail, return receipt requested, by a nationally
recognized overnight courier, postage prepaid, addressed (a) if to any Warrant
Holder, at the registered address of such Warrant Holder as set forth in the
register kept by the Warrant Agent or (b) if to the Warrant Agent, to 100 Wall
Street, Suite 1600, New York, New York 10005, Attention: Corporate Trust or to
such other address notice of which the Warrant Agent shall have given to the
Warrant Holder and the Trustee or (c) if to the Trust or the Trustee, to the
Corporate Trust Office (as set forth in the Trust Agreement); provided that
the exercise of any Call Warrants shall be effective in the manner provided in
Article I. The Warrant Agent shall forward to the Warrant Holder any notices
received by it hereunder or pursuant to the Trust Agreement or this Agreement
by facsimile within one Business Day of receipt thereof.

     Section 7.4 Amendment. (a) This Warrant Agent Agreement may be amended
from time to time by the Depositor, the Trustee and the Warrant Agent without
the consent of any Warrant Holder, upon receipt of an opinion of counsel
satisfactory to the Warrant Agent that the provisions hereof have been
satisfied and that such amendment would not cause the Trust to be

                                     B-12

<PAGE>

taxed as an association or publicly traded partnership taxable as a
Corporation under the Code, for any of the following purposes: (i) to cure any
ambiguity or to correct or supplement any provision herein which may be
defective or inconsistent with any other provision herein or to provide for
any other terms or modify any other provisions with respect to matters or
questions arising under the Call Warrant which shall not adversely affect in
any material respect the interests of the Warrant Holder or any holder of a
Certificate; provided, however, that no amendment altering the timing or
amount of any payment of the Call Price shall be effected without the consent
of each Warrant Holder; or (ii) to evidence and provide for the acceptance of
appointment hereunder of a Warrant Agent other than U.S. Bank Trust National
Association.

          (b) Without limiting the generality of the foregoing, the Call
     Warrants may also be modified or amended from time to time by the
     Depositor, the Trustee and the Warrant Agent with the consent of Warrant
     Holders of 66-2/3% of each of the Call Warrants related to the Class A-1
     Certificates and the Call Warrants related to the Class A-2 Certificates,
     upon receipt of an opinion of counsel satisfactory to the Warrant Agent
     that the provisions hereof (including, without limitation, the following
     proviso) have been satisfied, for the purpose of adding any provisions to
     or changing in any manner or eliminating any of the provisions of the
     Call Warrants or of modifying in any manner the rights of the Warrant
     Holders; provided, however, that no such amendment shall (i) adversely
     affect in any material respect the interests of holders of Certificates
     without the consent of the holders of Certificates evidencing not less
     than the Required Percentage--Amendment of the aggregate Voting Rights of
     such affected Certificates (as such terms are defined in the Trust
     Agreement) and without written confirmation from the Rating Agencies that
     such amendment will not result in a downgrading or withdrawal of its
     rating of the Certificates; (ii) alter the terms on which Call Warrants
     are exercisable or the amounts payable upon exercise of a Warrant without
     the consent of the holders of Certificates evidencing not less than 100%
     of the aggregate Voting Rights of such affected Certificates and 100% of
     the affected Warrant Holders or (iii) reduce the percentage of aggregate
     Voting Rights required by (i) or (ii) without the consent of the holders
     of all such affected Certificates. Notwithstanding any other provision of
     this Warrant Agent Agreement, this Section 7.4(b) shall not be amended
     without the consent of 100% of the affected Warrant Holders.

          (c) Promptly after the execution of any such amendment or
     modification, the Warrant Agent shall furnish a copy of such amendment or
     modification to each Warrant Holder, to the Trustee and to the Rating
     Agencies. It shall not be necessary for the consent of Warrant Holders or
     holders of Certificates under this Section to approve the particular form
     of any proposed amendment, but it shall be sufficient if such consent
     shall approve the substance thereof. The manner of obtaining such
     consents and of evidencing the authorization of the execution thereof
     shall be subject to such reasonable regulations as the Warrant Agent may
     prescribe.

     Section 7.5 Expiration. The right to exercise the Call Warrants shall
expire on the earliest to occur of (a) the cancellation thereof, (b) the
termination of the Trust Agreement, or (c) the liquidation, disposition, or
maturity of all of the Underlying Securities.

                                     B-13

<PAGE>

     Section 7.6 Descriptive Headings. The headings in this Warrant Agent
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof.

     Section 7.7 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE
LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS.

     Section 7.8 Judicial Proceedings; Waiver of Jury. Any judicial proceeding
brought against the Trust, the Trustee or the Warrant Agent with respect to
this Warrant Agent Agreement may be brought in any court of competent
jurisdiction in the County of New York, State of New York or of the United
States of America for the Southern District of New York and, by execution and
delivery of the Call Warrants, the Trustee on behalf of the Trust and the
Warrant Agent (a) accept, generally and unconditionally, the nonexclusive
jurisdiction of such courts and any related appellate court, and irrevocably
agree that the Trust, the Trustee and the Warrant Agent shall be bound by any
judgment rendered thereby in connection with this Warrant Agent Agreement or
the Call Warrants, subject to any rights of appeal, and (b) irrevocably waive
any objection that the Trust, the Trustee or the Warrant Agent may now or
hereafter have as to the venue of any such suit, action or proceeding brought
in such a court or that such court is an inconvenient forum.

     Section 7.9 Nonpetition Covenant; No Recourse. Each of (i) the Warrant
Holder by its acceptance thereof, and (ii) the Warrant Agent agrees, that it
shall not (and, in the case of the Warrant Holder, that it shall not direct
the Warrant Agent to), until the date which is one year and one day after the
payment in full of the Certificates and all other securities issued by the
Trust, the Depositor or entities formed, established or settled by the
Depositor, acquiesce, petition or otherwise invoke or cause the Trust, the
Depositor, or any such other entity to invoke the process of the United States
of America, any State or other political subdivision thereof or any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government for the purpose of commencing or
sustaining a case by or against the Trust, the Depositor or any such other
entity under a federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
or other similar official of the Trust, the Depositor or any such other entity
or all or any part of the property or assets of Trust, the Depositor or any
such other entity or ordering the winding up or liquidation of the affairs of
the Trust, the Depositor or any such other entity.

                                     B-14

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused their names to be
signed hereto by their respective duly authorized officers as of the date
first above written.

                                 LEHMAN ABS CORPORATION,
                                 as Depositor

                                 By:_________________________________________
                                    Name:
                                    Title:

                                 U.S. BANK TRUST NATIONAL ASSOCIATION,
                                 not in its individual capacity but solely
                                 as Trustee and Authenticating Agent

                                 By:_________________________________________
                                    Name:
                                    Title:

                                 U.S. BANK TRUST NATIONAL ASSOCIATION,
                                 as Warrant Agent

                                 By:_________________________________________
                                    Name:
                                    Title:

                                     B-15

<PAGE>

                                   EXHIBIT A

                           FORM OF INVESTMENT LETTER

                         QUALIFIED INSTITUTIONAL BUYER

                                                 Dated: ___________ __, _____

U.S. Bank Trust National Association,
as Trustee
100 Wall Street
New York, New York 10005

Lehman ABS Corporation,
as Depositor
745 Seventh Avenue
New York, New York  10019

     Re:  Corporate Backed Trust Certificates, Goldman Sachs Group Note-Backed
          Series 2003-12

Ladies and Gentlemen:

     In connection with its proposed purchase of Call Warrants (the "Call
Warrants") which represent the right to call $______________ aggregate
certificate principal balance of Corporate Backed Trust Certificates, Goldman
Sachs Group Note-Backed Series 2003-12 Class A-1 Certificates and
$_______________ aggregate notional amount of Corporate Backed Trust
Certificates, Goldman Sachs Group Note-Backed Series 2003-12 Class A-2
Certificates, the undersigned purchaser (the "Purchaser") confirms that:

     1. The Purchaser understands that substantial risks are involved in an
investment in the Call Warrants. The Purchaser represents that in making its
investment decision to acquire the Call Warrants, the Purchaser has not relied
on representations, warranties, opinions, projections, financial or other
information or analysis, if any, supplied to it by any person, including you,
Lehman ABS Corporation, as depositor (the "Depositor"), or U.S. Bank Trust
National Association, as trustee (the "Trustee"), or any of your or their
affiliates, except as expressly contained in written information, if any. The
Purchaser has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of an investment in the
Call Warrants, and the Purchaser is able to bear the substantial economic
risks of such an investment. The Purchaser has relied upon its own tax, legal
and financial advisors in connection with its decision to purchase the Call
Warrants.

     2. The Purchaser (A) is a "Qualified Institutional Buyer" (as defined in
Rule 144A under the Securities Act of 1933, as amended (the "1933 Act")) and
(B) is acquiring the Call Warrants for its own account or for the account of
an investor of the type described in clause (A) above as to each of which the
Purchaser exercises sole investment discretion. The Purchaser is purchasing
the Call Warrants for investment purposes and not with a view to, or for, the
offer or

                                     A-1
<PAGE>

sale in connection with, a public distribution or in any other manner that
would violate the 1933 Act or the securities or blue sky laws of any state.

     3. The Purchaser understands that the Call Warrants have not been and
will not be registered under the 1933 Act or under the securities or blue sky
laws of any state, and that (i) if it decides to resell, pledge or otherwise
transfer any Security, such resale, pledge or other transfer must comply with
the provisions of the Warrant Agent Agreement relating to the Call Warrants
(including, without limitation, the provisions of Section 4.2 thereof) and
(ii) it will, and each subsequent holder will be required to, notify any
purchaser of any Security from it of the resale restrictions referred to in
clause (i) above.

     4. The Purchaser understands that each of the Call Warrants will bear a
legend substantially to the following effect, unless otherwise agreed by the
Depositor and the Trustee:

           "THIS CALL WARRANT (OR ITS PREDECESSOR) HAS NOT BEEN
           REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
           MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT
           WHILE A REGISTRATION UNDER SUCH ACT IS IN EFFECT OR PURSUANT
           TO AN EXEMPTION THEREFROM UNDER SUCH ACT. THE CALL WARRANT
           REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN COMPLIANCE
           WITH THE CONDITIONS SPECIFIED HEREIN OR IN THE SERIES
           SUPPLEMENT.

           EACH PURCHASER OF THIS CALL WARRANT IS HEREBY NOTIFIED THAT
           THE SELLER OF THIS CALL WARRANT MAY BE RELYING ON THE
           EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
           ACT PROVIDED BY RULE 144A THEREUNDER."

     5. The Purchaser understands that no subsequent transfer of the Call
Warrants is permitted unless (A) such transfer is of a Call Warrant with the
applicable minimum denomination and (B) the Purchaser causes the proposed
transferee to provide to the Depositor and the Trustee such documentation as
may be required pursuant to Section 4.2 of the Warrant Agent Agreement,
including, if required, a letter substantially in the form hereof, or such
other written statement as the Depositor shall reasonably prescribe.

     6. The Purchaser is a person or entity (a "Person") who is either

          A. (1) a citizen or resident of the United States, (2) a
     corporation, partnership or other entity organized in or under the laws
     of the United States or any political subdivision thereof, or (3) an
     estate the income of which is includible in gross income for federal
     income tax purposes regardless of source, or (4) a trust if a court
     within the United States is able to exercise primary supervision of the
     administration of the trust and one or more United States persons have
     the authority to control all substantial decisions of the trust, or

                                     A-2
<PAGE>

          B. a Person not described in (A), whose ownership of such Call
     Warrant is effectively connected with such Person's conduct of a trade or
     business within the United States within the meaning of the Internal
     Revenue Code of 1986, as amended (the "Code"), and its ownership of any
     interest in such Call Warrant will not result in any withholding
     obligation with respect to any payments with respect to the Call Warrants
     by any Person (other than withholding, if any, under Section 1446 of the
     Code), or

          C. a Person not described in (A) or (B) above, who is not a Person:
     (1) that owns, directly or indirectly, 10% or more of the total combined
     voting power of all classes of stock in the Underlying Securities Issuer
     (as defined in the Prospectus Supplement) entitled to vote, (2) that is a
     controlled foreign corporation related to the Underlying Securities
     Issuer within the meaning of Section 864(d)(4) of the Code, or (3) that
     is a bank extending credit pursuant to a loan agreement entered into in
     the ordinary course of its trade or business.

     7. The Purchaser agrees that (I) if it is a Person described in clause
(A) above, it will furnish to the Depositor and the Trustee a properly
executed IRS Form W-9, and (II) if it is a Person described in clause (B)
above, it will furnish to the Depositor and the Trustee a properly executed
IRS Form W-8ECI, and (III) if it is a Person described in clause (C) above, it
will furnish to the Depositor and the Trustee a properly executed IRS Form
W-8BEN (or, if the Purchaser is treated as a partnership for federal income
tax purposes, a properly executed IRS Form W-8IMY with appropriate
certification for all partners or members attached). The Purchaser also agrees
that it will provide a new IRS form upon the expiration or obsolescence of any
previously delivered form, and that it will provide such other certifications,
representations or Opinions of Counsel as may be requested by the Depositor
and the Trustee.

     8. The Purchaser agrees that if at some time in the future it wishes to
transfer or exchange any of the Call Warrants, it will not transfer or
exchange any of the Call Warrants unless such transfer or exchange is in
accordance with the terms of the Warrant Agent Agreement, Series Supplement
and other documents applicable to the Call Warrant. The Purchaser understands
that any purported transfer of the Call Warrants (or any interest therein) in
contravention of any of the restrictions and conditions in the agreements, as
applicable, shall be void, and the purported transferee in such transfer shall
not be recognized by any Person as a holder of such Call Warrants, for any
purpose.

                                     A-3
<PAGE>

          You and the Trustee are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.

                                    Very truly yours,

                                        [Name of Purchaser]

                                        By:  _________________________________
                                        Name:  _______________________________
                                        Title:  ______________________________

                                     A-4
<PAGE>

                                   EXHIBIT C

                           FORM OF INVESTMENT LETTER
             QUALIFIED INSTITUTIONAL BUYER AND ACCREDITED INVESTOR

                                                 Dated:

U.S. Bank Trust National Association, as Trustee
100 Wall Street
New York, New York 10005

Lehman Brothers Inc.,
  as Initial Purchaser
745 Seventh Avenue
New York, New York 10019

Lehman ABS Corporation,
  as Depositor
745 Seventh Avenue
New York, New York 10019

Ladies and Gentlemen:

     In connection with our proposed purchase of $___________ aggregate
notional amount of Class A-2 Certificates (the "Class A-2 Certificates")
representing an interest in the Corporate Backed Trust Certificates, Goldman
Sachs Group Note-Backed Series 2003-12 Trust (the "Trust"), the undersigned,
by executing this letter (the "Purchaser") confirms that:

     1. Reference is made to the private placement memorandum, dated July 29,
2003, including the schedules, exhibits and annexes, if any, thereto, as
supplemented or amended to the date hereof (the "Memorandum"), relating to the
Class A-2 Certificates. Capitalized terms used herein that are not otherwise
defined shall have the meanings ascribed thereto in the Memorandum. The
Purchaser has received a copy of the Memorandum and such other information as
the Purchaser deems necessary in order to make its investment decision and the
Purchaser has been provided the opportunity to ask questions of, and receive
answers from, the Depositor and the Initial Purchaser, concerning the terms
and conditions of the offering described in the Memorandum. The Purchaser has
received and understands the information discussed above and understands that
substantial risks are involved in an investment in the Class A-2 Certificates.
The Purchaser represents that, in making its investment decision to acquire
the Class A-2 Certificates, the Purchaser has not relied on representations,
warranties, opinions, projections, financial or other information or analysis,
if any, supplied to it by any person or entity, including the Initial
Purchaser, the Depositor or the Trustee or any of their affiliates, except as
expressly contained in the Memorandum and in the other written information, if
any, discussed above. The Purchaser acknowledges that it has read and agreed
to the matters stated on pages 2 through 4 of such Memorandum and the
information under the heading "Transfer Restrictions." The Purchaser is
purchasing the Class A-2 Certificates for investment purposes

                                     C-1
<PAGE>

and not with a view to, or for, the offer or sale in connection with a public
distribution or in any other manner that would violate the Securities Act or
the securities or blue sky laws of any state of the United States. The
Purchaser has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of purchasing any of the
Class A-2 Certificates. The Purchaser is aware that it may be required to bear
the substantial economic risk of an investment in the Class A-2 Certificates
for an indefinite period of time and such Purchaser is able to bear such risk
for an indefinite period. The Purchaser has relied upon its own tax, legal and
financial advisors in connection with its decision to purchase the Class A-2
Certificates.

     2. The Purchaser is not an "affiliate" (as defined in Rule 144 under the
Securities Act) of the Depositor and is either:

          (i) (A) a "Qualified Institutional Buyer" (a "QIB") (as defined in
Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"
and "Rule 144A")) and has delivered to you the certification contained herein
as to the fact that it is a QIB and (B) acquiring the Class A-2 Certificates
for its own account, for the account of an Accredited Investor (as defined in
Rule 501(a) under the Securities Act), or for the account of a QIB as to each
of which the Purchaser exercises sole investment discretion. The Purchaser is
aware that the Class A-2 Certificates are being sold to it in reliance on the
exemption from the provisions of Section 5 of the Securities Act provided by
Rule 144A; or

          (ii) an Accredited Investor and, if the Class A-2 Certificates are
to be purchased for one or more accounts ("investor accounts") for which it is
acting as fiduciary or agent, each such investor account is an Accredited
Investor on a like basis or a QIB; in the normal course of its business, such
Purchaser invests in or purchases securities similar to the Class A-2
Certificates.

     3. The Purchaser acknowledges that neither the Depositor nor the Initial
Purchaser, or any person representing the Depositor or the Initial Purchaser,
has made any representation to such purchaser with respect to the Trust, the
Underlying Securities or the offering or sale of any Class A-2 Certificates,
other than the information contained in the Memorandum, which has been
delivered to the Purchaser and upon which the Purchaser is relying in making
an investment decision with respect to the Class A-2 Certificates.
Accordingly, the Purchaser acknowledges that no representation or warranty is
made by the Depositor or the Initial Purchaser as to the accuracy or
completeness of such materials.

     4. The Purchaser understands that the Class A-2 Certificates are being
offered in a transaction not involving any public offering in the United
States within the meaning of the Securities Act, that the Class A-2
Certificates have not been and will not be registered under the Securities Act
or under the securities or blue sky laws of any state, and that (i) if in the
future it decides to offer, resell, pledge or otherwise transfer the Class A-2
Certificates, such Class A-2 Certificates shall only be offered, resold,
assigned or otherwise transferred (A) to the Trust, (B) pursuant to an
effective registration statement under the Securities Act, (C) to a QIB, in
accordance with Rule 144A or (D) to any person or entity (including an
Accredited Investor within the meaning of Rule 501(a) under the Securities
Act) pursuant to another available exemption from registration provided under
the Securities Act, and, in each of cases (A) through

                                     C-2
<PAGE>

(D), in accordance with any applicable securities laws of any state of the
United States and other jurisdictions and (ii) the purchaser will, and each
subsequent holder is required to, notify any subsequent purchaser of such
Class A-2 Certificates from it of the resale restrictions referred to in
clause (i) above. Upon the transfer of Class A-2 Certificates held in the form
of global certificates to an Accredited Investor, the transferor's interest in
such global certificates shall be exchanged for a Class A-2 Certificate in
definitive form. Thereafter, upon transfer of a definitive Class A-2
Certificate to a QIB, such Class A-2 Certificate may be exchanged for a
beneficial interest in a global certificate.

     5. The Purchaser understands that each Class A-2 Certificate will, unless
otherwise agreed to by the Depositor and the Trustee, bear a legend
substantially to the following effect:

        "THIS CLASS A-2 CERTIFICATE (OR ITS PREDECESSOR) HAS NOT
        BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
        AMENDED, AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
        DISPOSED OF EXCEPT WHILE A REGISTRATION UNDER SUCH ACT IS IN
        EFFECT OR PURSUANT TO AN EXEMPTION THEREFROM UNDER SUCH ACT.
        THE CLASS A-2 CERTIFICATE REPRESENTED HEREBY MAY BE
        TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF THE SERIES
        SUPPLEMENT.

        EACH PURCHASER OF THIS CLASS A-2 CERTIFICATE IS HEREBY
        NOTIFIED THAT THE SELLER OF THIS CLASS A-2 CERTIFICATE MAY
        BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
        OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER."

     6. The Purchaser understands that no subsequent transfer of the Class A-2
Certificates is permitted unless (A) such transfer is of a Class A-2
Certificate with a denomination of at least $100,000 and (B) it causes its
proposed transferee to provide to the Trustee and the Initial Purchaser a
letter substantially in the form of Exhibit C to the Series Supplement and
otherwise satisfactory to the Trustee and Initial Purchaser, as applicable, or
such other written statement as the Depositor shall prescribe.

     7. The Purchaser agrees that, if at some time in the future it wishes to
transfer or exchange any of the Class A-2 Certificates, it will not transfer
or exchange any of the Class A-2 Certificates unless such transfer or exchange
is in accordance with Section 5.04 of the Trust Agreement. The Purchaser
understands that any purported transfer of the Class A-2 Certificates (or any
interest therein) in contravention of any of the restrictions and conditions
in the Trust Agreement, as applicable, shall be void, and the purported
transferee in such transfer shall not be recognized by the Trust or any other
Person as a Certificateholder, as the case may be, for any purpose.

                                     C-3
<PAGE>

     8. The purchaser (i) acknowledges that the Depositor, the Initial
Purchaser, the Trustee and others will rely upon the truth and accuracy of the
foregoing acknowledgments, representations and agreements and agrees that the
Depositor, the Initial Purchaser, the Trustee are irrevocably authorized to
produce this letter or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the
matters covered hereby, and (ii) agrees that, if any of the acknowledgments,
representations, warranties and agreements made or deemed to have been made by
such purchaser's purchase of the Class A-2 Certificates are no longer
accurate, such purchaser shall promptly notify the Depositor and the Initial
Purchaser. If the purchaser is acquiring any Class A-2 Certificates as a
fiduciary or agent for one or more investor accounts, it represents that it
has sole investment discretion with respect to each such account and it has
full power to make the foregoing acknowledgments, representations and
agreements on behalf of each such account and that each such investor account
is eligible to purchase the Class A-2 Certificates.

                                          Very truly yours,

                                          By:_________________________________
                                             Name:
                                             Title:

                                     C-4

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