Document:

Exhibit 4.1

                               SERIES SUPPLEMENT

                      CORPORATE BACKED TRUST CERTIFICATES

                MOTOROLA DEBENTURE-BACKED SERIES 2002-12 TRUST

                                    between

                            LEHMAN ABS CORPORATION,

                                 as Depositor

                                      and

                     U.S. BANK TRUST NATIONAL ASSOCIATION,

                                  as Trustee

                      CORPORATE BACKED TRUST CERTIFICATES

                           Dated as of June 18, 2002

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                               Table of Contents

                                                                           Page
                                                                           ----
Section 1.  Incorporation of Standard Terms..................................1

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

Section 3.  Designation of Trust and Certificates............................7

Section 4.  Trust Certificates...............................................8

Section 5.  Distributions....................................................8

Section 6.  Trustee's Fees..................................................10

Section 7.  Optional Exchange; Optional Call................................11

Section 8.  Notices of Events of Default....................................15

Section 9.  Miscellaneous...................................................15

Section 10.  Governing Law..................................................18

Section 11.  Counterparts...................................................19

Section 12.  Termination of the Trust.......................................19

Section 13.  Sale of Underlying Securities; Optional Exchange...............19

Section 14.  Amendments.....................................................19

Section 15.  Voting of Underlying Securities, Modification of Indenture.....19

Section 16.  Additional Depositor Representation............................20

SCHEDULE I        SERIES 2002-12 UNDERLYING SECURITIES SCHEDULE
EXHIBIT A         FORM OF TRUST CERTIFICATE
EXHIBIT B         FORM OF WARRANT AGENT AGREEMENT

                                      1
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                              SERIES SUPPLEMENT

                      CORPORATE BACKED TRUST CERTIFICATES

                MOTOROLA DEBENTURE-BACKED SERIES 2002-12 TRUST

                  SERIES SUPPLEMENT, Motorola Debenture-Backed Series 2002-12
Trust, dated as of June 18, 2002 (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 set forth on Schedule I attached hereto (the "Underlying
Securities Schedule") 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 Motorola Debenture-Backed
Series 2002-12 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

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

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

                  "Business Day" shall mean any day other than (i) Saturday
and Sunday or (ii) a day on which banking institutions in New York City, New
York are authorized or obligated by law or executive order to be closed for
business or (iii) a day that is not a business day for the purposes of the
Indenture.

                  "Call Date" shall mean any Business Day (i) on or after June
18, 2007, (ii) after the Underlying Securities Issuer announces that it will
redeem (including as a result of an optional redemption), 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 this Series Supplement or (iv) 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, 100% of
the outstanding Certificate Principal Balance of the 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.

                  "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.

                  "Certificates" shall mean the certificates in the form
attached hereto as Exhibit A, 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.

                  "Closing Date" shall mean June 18, 2002.

                  "Code" The Internal Revenue Code of 1986, as amended, and
Treasury Regulations promulgated thereunder.

                  "Collection Period" shall mean, (i) with respect to each
October Distribution Date, the period beginning on the day after the April
Distribution Date of such year and ending on such October Distribution Date,
inclusive and, (ii) with respect to each April Distribution Date, the period
beginning on the day after the October Distribution Date of the prior year and
ending on such April 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.

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                  "Currency" shall mean United States Dollars.

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

                  "Distribution Date" shall mean April 1 and October 1 of each
year (or if such date is not a Business Day, the next succeeding Business
Day), commencing on October 1, 2002, and ending on the earlier of the Final
Scheduled Distribution Date and any date on which all Underlying Securities
are prepaid or liquidated in whole for any reason other than at their
maturity.

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

                  "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 October 1,
2097, or, if such day is not a Business Day, the next succeeding Business Day.

                  "Indenture" shall mean the indenture dated as of May 1,
1995, as supplemented, between the Underlying Securities Issuer and the
Underlying Securities Trustee, pursuant to which the Underlying Securities
were issued.

                  "Interest Accrual Period" shall mean for any Distribution
Date, the period from and including the preceding Distribution Date (or in the
case of the first Interest Accrual Period, from and including Closing Date) to
but excluding the current Distribution Date.

                  "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, Inc.

                  "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.

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                  "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.

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

                  "Prospectus Supplement" shall mean the Prospectus
Supplement, dated June 6, 2002, relating to the Certificates.

                  "Rating Agency" 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.

                  "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.

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

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

                  "Series" shall mean Motorola Debenture-Backed Series
2002-12.

                  "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.

                  "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.

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                  "Underlying Securities" shall mean $49,776,000 aggregate
principal amount of 5.22% Debentures due October 1, 2097 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 Motorola, Inc.,
and any successors in respect of the Underlying Securities.

                  "Underlying Securities Trustee" shall mean Harris Trust and
Savings Bank.

                  "Underwriters" shall mean Lehman Brothers Inc., RBC Dain
Rauscher Inc. and Prudential Securities Incorporated.

                  "Voting Rights" shall, in the entirety, be allocated among
all the Certificateholders in proportion to the then outstanding Certificate
Principal Balances 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"

                           "Calculation Agent"

                           "Call Premium Percentage"

                           "Credit Support"

                           "Credit Support Instrument"

                           "Credit Support Provider"

                           "Cut-off Date"

                           "Eligible Expense"

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                           "Eligible Investment"

                           "Exchange Rate Agent"

                           "Fixed Pass-Through Rate"

                           "Floating Pass-Through Rate"

                           "Guaranteed Investment Contract"

                           "Letter of Credit"

                           "Limited Guarantor"

                           "Limited Guaranty"

                           "Minimum Wire Denomination"

                           "Notional Amount"

                           "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"

                           "Swap Agreement"

                           "Swap Counterparty"

                           "Swap Distribution Amount"

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                           "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, Motorola
Debenture-Backed Series 2002-12 Trust." The Certificates evidencing certain
undivided ownership interests therein shall be known as "Corporate Backed
Trust Certificates, Motorola Debenture-Backed Series 2002-12." The
Certificates shall consist of a single class of Certificates (the
"Certificates"). The Trust is also issuing call warrants with respect to the
Certificates ("Call Warrants").

         (a) The Certificates shall be held through the Depository in
book-entry form and shall be substantially in the form attached hereto as
Exhibit A. The Certificates shall be issued in denominations of $25. 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 Certificates consist of 1,267,466 Certificates having an
initial aggregate certificate principal amount (the "Certificate Principal
Balance") of $31,686,650.

         (c) The holders of the 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 8.20% per
annum on the outstanding Certificate Principal Balance of the Certificates. On
the Distribution Date in October 2002, the Trustee will pay to the Depositor
the amount of interest accrued and paid on the Underlying Securities from
April 1, 2002, to but not including the Closing Date; provided, however, that
in the event an Optional Exchange shall occur prior to the Distribution Date
in October 2002, 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)(vii) hereof. 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

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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, Certificates, with an aggregate Certificate
Principal Balance in the same proportion to the Underlying Securities as
exists on the Closing Date (i.e. the additional Certificates shall have an
aggregate Certificate Principal Balance not to exceed the product of (x) the
aggregate principal amount of the additional Underlying Securities and (y)
0.63658), and the Call Warrants related thereto as described herein. Any such
additional Certificates authenticated and delivered shall have the same terms
and rank pari passu with any Certificates previously issued in accordance with
this Series Supplement.

         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(b) and 5(g), 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
              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 Certificates, as
              interest, at the rate of 8.20% per annum on the outstanding
              Certificate Principal Balance of the Certificates.

              (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

                    (2) second, to the holders of the Certificates, pro
               rata, the remaining available principal portion of
               Available Funds (in an aggregate amount not to exceed the
               outstanding Certificate Principal Balance of the
               Certificates).

              (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.

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<PAGE>

               (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 Certificates pro rata
         in proportion to their original Certificate Principal Balances.

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 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) Notwithstanding any other provision hereof (other than Section
3(c)) if the Underlying Securities are redeemed (including as a result of an
optional redemption) prepaid or liquidated in whole or in part for any reason
other than if the Underlying Securities Issuer discontinues filing the
periodic reports required under the Exchange Act or at their maturity, the
Trustee shall apply Available Funds in the manner described in Section 5(f) 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 Certificates, an amount
         equal to the product obtained by multiplying (x) the original
         principal amount of the Underlying Securities so redeemed, prepaid or
         liquidated by (y) .63658 plus any accrued and unpaid interest
         thereon; and

           (iii) third, to the holders of the Certificates, any amount
         remaining after the distributions in clauses 5(b)(i) through 5(b)(ii)
         above, pro rata in proportion to their original Certificate Principal
         Balances.

           It is the express understanding of the parties hereto that the amount
paid to the Certificateholders pursuant to clause (ii) above (other than the
accrued and unpaid interest) shall cause a reduction in the Certificate
Principal Balance of the Certificates and that the payment made pursuant to
clause (iii) above shall not cause any such reduction.

         (c) 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(b) 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.

         (d) 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

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<PAGE>

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 Certificates then outstanding and unpaid, pro rata by
outstanding Certificate Principal Balance (after deducting the costs incurred
in connection therewith) in accordance with Section 5(b) 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 Certificates on a dollar-for-dollar
basis.

         (e) Subject to Section 9(f) hereof, to the extent Available Funds are
insufficient to make scheduled interest or principal payments on the
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(f) hereof) on which sufficient funds are available to pay such
shortfall.

         (f) 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) after the Underlying Securities are prepaid or
liquidated in whole or in part for any reason other than if the Underlying
Securities Issuer discontinues filing periodic reports required by the
Exchange Act or at their maturity, then the Trustee will distribute any such
amounts received in accordance with Section 5(a) or 5(b), as applicable, on
the next occurring Business Day (a "Special Distribution Date") as if the
funds had constituted Available Funds on the Distribution Date immediately
preceding such Special Distribution Date; provided, however, that the Record
Date for such Special Distribution Date shall be the Business Day prior to the
day on which the related payment was received from the Underlying Securities
Trustee.

         (g) Notwithstanding Section 3.12 of the Standard Terms, if the
Underlying Securities Issuer stops filing periodic reports required under the
Exchange Act, the Depositor shall within a reasonable time period instruct the
Trustee 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 allocate the proceeds of such sale in the
following order of priority: first, to the Trustee, reimbursement for any
remaining Extraordinary Trust Expenses incurred by the Trustee pursuant to the
instructions of all the Certificateholders and, thereafter, to the
Certificateholders pro rata in proportion to their outstanding Certificate
Principal Balances; provided, however, that the Depositor shall not instruct
the Trustee to sell the Underlying Securities (or provide a notice of such
instruction to the Warrant Agent) pursuant to this clause unless the
Underlying Securities Issuer has either (x) stated in writing that it intends
permanently to cease filing reports required under the Exchange Act or (y)
failed to file any required reports for one full calendar year.

         Section 6. Trustee's Fees.

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         (a) As compensation for its services hereunder, the Trustee shall be
entitled to the Trustee Fee and any amounts payable under clause 5(a)(iii) and
(5)(b)(iii) 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 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 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 Exchange; Optional Call.

         (a)   On (A) any Distribution Date or (B) any date on which a tender
offer for some or all of the Underlying Securities is consummated, any holder
of 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, however, 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. In the
event of an Optional Exchange in connection with a partial redemption of
Underlying Securities, the Underlying Securities selected by the Trustee for
exchange shall, to the extent possible and consistent with the foregoing
requirements, be Underlying Securities selected for redemption.

         (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, however, 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

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<PAGE>

         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.

               (iii) 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.

                (iv) 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 Underwriters but never
         distributed to investors) of the then outstanding Certificates.

                 (v) 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.

                (vi) 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.

               (vii) The aggregate principal amount 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.

              (viii) In the event such Optional Exchange shall occur prior
         to the Distribution Date in October 2002, the Certificateholder shall
         pay to the Trustee on the Optional Exchange Date an amount equal to
         the sum obtained by multiplying the amount of accrued interest on the
         Underlying Securities from April 1, 2002 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.

                                      12
<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 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 shall be deducted from the proceeds of a tender offer
         by the Trust pursuant to Section 7(g)(iii).

              (v) Subject to receipt of the Call Price, the Trustee shall
         pay the Call Price to the Certificateholders on the Call Date. The
         Call Price for the Certificates in respect of partial calls shall be
         allocated pro rata to the Certificateholders.

             (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.

         (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

                                      13
<PAGE>

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 connection 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 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

                                      14
<PAGE>

         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.

         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 Motorola Debenture-Backed Series 2002-12 Certificates.

         (b) The provisions of Section 4.07, Optional Exchange, of the
Standard Terms shall not apply to the Motorola Debenture-Backed Series 2002-12
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 Motorola Debenture-Backed Series 2002-12 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 Certificateholders pro rata in
proportion to their respective entitlements to such delayed payments.

                                      15
<PAGE>

         (g) The outstanding Certificate Principal Balance 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 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 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) The Trustee shall promptly notify each Rating Agency upon its
obtaining actual knowledge of the occurrence of a Defeasance (as defined in
the Indenture) with respect to the Underlying Securities.

         (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

                                      16
<PAGE>

                   New York, New York  10019
                   Attention:  Structured Credit Trading
                   Telephone:  (212) 526-6575
                   Facsimile:   (201) 524-2080

             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:  (212) 361-2500
                   Facsimile:  (212) 809-5459

             If to the Rating Agencies, to:

                   Moody's Investors Service, Inc.
                   99 Church Street 21W
                   New York, New York  10007
                   Attention:  CBO/CLO Monitoring Department
                   Telephone:  (212) 553-1494
                   Facsimile:  (212) 553-0355

         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:  Vincent Patten
                   Telephone:  (212) 656-5276
                   Facsimile:  (212) 656-5780

         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.

                                      17
<PAGE>

         (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 Motorola Debenture-Backed Series 2002-12 Certificates
and the following shall be deemed to be inserted in its place:

             "at the time of delivery of the Underlying Securities,
             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) A Plan (as defined below) 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 Code
Section 4975(e)(2) with respect to a "Plan" as defined in Code Section
4975(e)(1) except in each case 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.

         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.

                                      18
<PAGE>

         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 or an acceleration or other early payment of the
Underlying Securities and the distribution in full of all amounts due to the
Certificateholders; (ii) the exercise of all outstanding Call Warrants by the
Warrant Holder; (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.

         Section 13. Sale of Underlying Securities; Optional Exchange. In the
event of a sale of the Underlying Securities pursuant to Section 5(c) hereof
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 (3rd)
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 Corporation, (2)
Goldman, Sachs & Co., (3) Merrill Lynch, Pierce, Fenner & Smith Incorporated,
(4) UBS Warburg LLC, (5) Salomon Smith Barney 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 the 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. The
Trustee shall provide written notice to each Rating Agency before entering
into any amendment or modification of the Trust Agreement pursuant to this
Section 14.

         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

                                      19
<PAGE>

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 (based on the relative outstanding Certificate Principal
Balances of the Certificates) as the Certificates 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 holders of all outstanding
Certificates, and all 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 Certificates 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 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 the
Trustee is directed by the affirmative vote of the holders of 100% of the
Certificates and Call Warrants 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
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 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

                                      20
<PAGE>

such conveyance be deemed a pledge of such Underlying Securities 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 (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 applicable Uniform
                           Commercial Code) in the Underlying Securities in
                           favor of the Trustee 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") of the
                           Trustee, or its authorized agent, in accordance
                           with Section 2.01 of the Standard Terms. The
                           Trustee, as securities intermediary for the
                           Securities Account, has agreed to treat the
                           Underlying Securities as "financial assets" within
                           the meaning of the Uniform Commercial Code.

                  (iii)    Immediately prior to the transfer of the Underlying
                           Securities to the Trust, 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)     Depositor has received all consents and approvals
                           required by the terms of the Underlying Securities
                           to the transfer to the Trustee of its interest and
                           rights in the Underlying Securities as contemplated
                           by the Trust Agreement.

                  (v)      Depositor has taken all steps necessary to cause
                           the Trustee, as securities intermediary for the
                           Securities Account, to identify on its records that
                           the Trustee, as the trustee of the Trust, is the
                           Person having a security entitlement against the
                           securities intermediary in the Securities Account.

                  (vi)     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).
                           Depositor has not authorized the filing of and is
                           not aware of any financing statements against
                           Depositor that includes a description of the
                           Underlying Securities. Depositor is not aware of
                           any judgment or tax lien filings against Depositor.

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

                                      21
<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:  /s/ Rene Canezin
                                    ------------------------
                                    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
                                   Motorola Debenture-Backed
                                   Series 2002-12 Trust

                                 By: /s/ David Kolibachuk
                                    ------------------------------
                                    Name:  David Kolibachuk
                                    Title:  Vice President

                                      22
<PAGE>
                                  SCHEDULE I

                   MOTOROLA DEBENTURE-BACKED SERIES 2002-12

                        UNDERLYING SECURITIES SCHEDULE

Underlying Securities:                   5.22% Debentures due October 1, 2097.

Underlying Securities Issuer:            Motorola, Inc.

CUSIP Number:                            620076AM1.

Principal Amount Deposited:              $49,776,000.

Original Issue Date:                     October 1, 1997.

Principal Amount of

Underlying Securities

Originally Issued:                       $300,000,000.

Maturity Date:                           October 1, 2097.

Principal Payment Date:                  October 1, 2097.

Interest Rate:                           8.20% per annum.

Interest Payment Dates:                  April 1st and October 1st.

Underlying Securities Record Dates:      March 15th  and September 15th.

                                     S-1
<PAGE>

                                   EXHIBIT A
                           FORM OF TRUST CERTIFICATE

                                  CERTIFICATE
                                  ------------

NUMBER 1                                        1,267,466 $25 PAR CERTIFICATES
                                                CUSIP NO. 21988G 39 5

                      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 OR THE TRUST ASSETS ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.

                                     A-1
<PAGE>

                            LEHMAN ABS CORPORATION

                                   1,267,466

                     CORPORATE BACKED TRUST CERTIFICATES,

                   MOTOROLA DEBENTURE-BACKED SERIES 2002-12

8.20% INTEREST RATE

evidencing a proportionate undivided beneficial ownership interest in the
Trust, as defined below, the property of which consists principally of
$49,776,000 aggregate principal amount of 5.22% Debentures due October 1,
2097, issued by Motorola, 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 1,267,466 Corporate
Backed Trust Certificates, Motorola Debenture-Backed Series 2002-12 Trust,
having an aggregate Certificate Principal Balance of $31,686,650 DOLLARS,
representing a nonassessable, fully-paid, proportionate undivided beneficial
ownership interest in the Motorola Debenture-Backed Series 2002-12 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, Motorola Debenture-Backed Series 2002-12, dated as of
June 18, 2002 (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, Motorola Debenture-Backed Series
2002-12" (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 June 18, 2002; 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

                                     A-2
<PAGE>

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 (a "Special Distribution Date").

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.

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-3
<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, MOTOROLA DEBENTURE-
                                  BACKED SERIES 2002-12 TRUST

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

                                  By:______________________________________
                                     Authorized Signatory

Dated: June 18, 2002

                    TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is on one of the Corporate Backed Trust Certificates, Motorola
Debenture-Backed Series 2002-12, 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-4
<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 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 in 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) the payment in full at maturity or sale by the Trust
after a payment default or an acceleration or other early payment of the
Underlying Securities and the distribution in full of all amounts due to the
Certificateholders; (ii) the exercise of all outstanding Call Warrants by the
Warrant Holder; (iii)

                                      24
<PAGE>

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-6
<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-7
<PAGE>

                                   EXHIBIT B
                        FORM OF WARRANT AGENT AGREEMENT

                            WARRANT AGENT AGREEMENT

                      CORPORATE BACKED TRUST CERTIFICATES

                MOTOROLA DEBENTURE-BACKED SERIES 2002-12 TRUST

         WARRANT AGENT AGREEMENT, dated as of June 18, 2002 (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,
Motorola Debenture-Backed Series 2002-12 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 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 Motorola Debenture-Backed Series 2002-12
Series Supplement, dated as of June 18, 2002 (the "Series Supplement" and,
together with the Agreement, the "Trust Agreement"), between the Depositor and
the Trustee;

         WHEREAS, in connection with the creation of the Trust and the deposit
therein of $49,776,000 aggregate principal amount of Underlying Securities, it
is desired to provide for the issuance of (i) 1,267,466 trust certificates
(the "Certificates") having an aggregate Certificate Principal Balance of
$31,686,650, evidencing undivided interests in the Trust and (ii) 1,267,466
call warrants with respect to the Certificates (the "Call Warrants"); and

         WHEREAS, in connection with any sale of additional Underlying
Securities to the Trust pursuant to Section 3(d) of the Series Supplement, the
Trust shall issue additional Certificates and 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:

                                     B-1
<PAGE>

                                  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.

                    (ii) The Warrant Holder shall surrender the Call Warrants
               to the Warrant Agent at its office specified in Section 6.3
               hereof no later than 10:00 a.m. (New York City time) on such
               Call Date.

                   (iii) 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
               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 the opinion (in a form
               reasonably satisfactory to the Trustee) and the solvency
               certificate required pursuant to Section 7(d)(ii) of the Series
               Supplement.

                    (v) The Warrant Holder shall have satisfied all conditions
               to the exercise of Call Warrants set forth in Section 7(b) 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 Certificates having a Certificate Principal Amount equal to $25 per
Call Warrant. Unless otherwise specified therein, such Call Notice shall be
deemed to be notice of an Optional Exchange pursuant to Section 7(a) 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. "Called Underlying Securities" are Underlying Securities which
represent the same percentage of the Underlying Securities as the Called
Certificates represent of the 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

                                     B-2
<PAGE>

(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 Call Notice relating to a
tender offer for 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 shall be deducted from the proceeds of a tender
offer by the Trust pursuant to Section 7(g)(iii) 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 a Call Notice and Optional Exchange is in
connection with a tender offer, the Warrant Agent shall instruct the Trustee
to distribute to the exercising Warrant Holder the excess of the tender offer
proceeds over the Call Price pursuant to Section 7(g)(iii) 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 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 III, 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.

         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

                                     B-3
<PAGE>

amount on or in respect of the Certificates or to enforce any of the covenants
of the Trust Agreement.

                                  ARTICLE II

                           RESTRICTIONS ON TRANSFER

         Section 2.1  Restrictive Legends. Except as otherwise permitted by
this Article II, 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 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."

         Section 2.2  Notice of Proposed Transfer; Opinions of Counsel. Prior
to any transfer of any Call Warrant or portion thereof, the Warrant Holder
will give 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.

                                 ARTICLE III

               REGISTRATION AND TRANSFER OF CALL WARRANTS, ETC.

         Section 3.1  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. The Trustee and the Warrant
Agent may treat the Person in whose name any Call Warrant is registered on
such register as the owner thereof for all purposes, and the Trustee and the
Warrant Agent shall not be affected by any notice to the contrary.

         Section 3.2  Transfer and Exchange of Call Warrants. (a) No Call
Warrant 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 Call
Warrants 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 Call Warrant (or any predecessor thereto) or (y) or 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, 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 Call Warrant in

                                     B-4
<PAGE>

the manner described in clause (iii) above, 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 Call Warrants to be
transferred substantially in the form of Exhibit A hereto. Prior to any offer,
resale, assignment or transfer of any Call Warrants 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). In addition to the foregoing, each prospective transferee of any
Call Warrants 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 Call Warrant 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 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 (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, 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 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 II) 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 3.3  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

                                     B-5
<PAGE>

Trust, to execute and deliver, in lieu thereof, a new Call Warrant of like
tenor bearing a number not contemporaneously outstanding.

         Section 3.4 Execution and Delivery of Call Warrants by Trustee. The
Trustee, on behalf of the Trust, hereby agrees (subject to compliance with
Article II) to execute and deliver such new Call Warrants issued in accordance
with Section 1.2 or this Article III as the Warrant Agent shall request in
accordance herewith.

         Section 3.5 Additional Call Warrants. The Trustee shall execute and
deliver 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 IV

                                  DEFINITIONS

         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 June 18, 2007, (ii)
after the Underlying Securities Issuer announces that it will redeem
(including as a result of an optional redemption), 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 this 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, 100% of the outstanding
Certificate Principal Balance of the 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.

         "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.

         "Closing Date": June 18, 2002.

         "Depositor": As defined in the recitals.

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

                                     B-6
<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 3.2 hereof.

         "Rating Agencies": Standard & Poor's Ratings Services and Moody's
Investors Service, Inc. and any successor thereto.

         "Resale Restriction Termination Date": As defined in Section 3.2
hereof.

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

         "Rule 144A":  As defined in Section 3.2.

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

                                  ARTICLE V

                                 WARRANT AGENT

         Section 5.1  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, 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 5.2  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

                                     B-7
<PAGE>

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 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

                                     B-8
<PAGE>

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.

         Section 5.3 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 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 5.4 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 Call Warrant Holder.

                                     B-9
<PAGE>

                                  ARTICLE VI

                                 MISCELLANEOUS

         Section 6.1  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 6.2  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 6.3 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 6.4 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 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 which adversely affects the Warrant Holder shall be
effected without the consent of the 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 the Call Warrants related to the Certificates, upon receipt of an
opinion of counsel satisfactory to the Warrant Agent that the provisions
hereof

                                     B-10
<PAGE>

(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 Call Warrant, this Section 6.4(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 6.5  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.

         Section 6.6  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 6.7  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 6.8  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.

                                     B-11
<PAGE>

         Section 6.9  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-12
<PAGE>

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

                                        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 and Authenticating Agent

                                        By:  ______________________________
                                             Name:  David Kolibachuk
                                             Title:  Vice President

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

                                        By:  ______________________________
                                             Name:  David Kolibachuk
                                             Title:  Vice President

                                     B-13
<PAGE>

                                   EXHIBIT A

                           FORM OF INVESTMENT LETTER

                         QUALIFIED INSTITUTIONAL BUYER

                                                  Dated:  ____________, 2002

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

Ladies and Gentlemen:

   In connection with its proposed purchase of Call Warrants (the "Call
Warrants") more particularly described in Schedule A hereto, 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 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 Call Warrant, such Call

<PAGE>

     Warrant may be resold, pledged or transferred without registration only to
     an entity that has delivered to the Depositor and the Trustee a
     certification that it is a Qualified Institutional Buyer that purchases
     (1) for its own account or (2) for the account of such a Qualified
     Institutional Buyer, that is, in either case, aware that the resale,
     pledge or transfer is being made in reliance on said Rule 144A and (ii) it
     will, and each subsequent holder will be required to, notify any purchaser
     of any Call Warrant 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 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."

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 3.2 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

     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

<PAGE>

     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.

     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.

7.   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.

<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,

                                            _______________________________

                                            By:  _____________________________
                                            Name:  ___________________________
                                            Title:  __________________________

<PAGE>
                                                     Schedule A to Exhibit A
                                                     -----------------------

<TABLE>
<CAPTION>

                                 Call Warrants
                                 -------------

---------------- ------------------------- ----------------- ---------------- ---------------------

                                           Principal            Date of
LABS Series      Name of Underlying        Amount of            Warrant Agent          [o] Purchase
Number           Securities Issuer         Certificates         Agreement*
---------------- ------------------------- ----------------- ---------------- ---------------------
<S>              <C>                       <C>               <C>              <C>

 [o]                 [o]                    $[o]                  [o], 2002             [o]
---------------- ------------------------- ----------------- ---------------- ---------------------
</TABLE>

* Initial Closing DateQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.1    
  

 
 

EMPLOYMENT AND RETENTION AGREEMENT    
  

        Date: May 19, 2002  

        This Employment and Retention Agreement (the "Agreement") is made and entered into as of the date shown above by and between 

	

 	
 	
Thomas Waechter	
 	

("Employee")
	

 	
 	

350 West Java Drive
 [STREET ADDRESS]	
 	

 
	

 	
 	

Sunnyvale CA 94089
 [CITY, STATE ZIP]

	
 	

 

and 

	 	 	REMEC, Inc.	 	("Company")
	

 	
 	

3790 Via de la Valle

Del Mar, CA 92014-4247

	
 	

 

RECITALS:

        A.    Employee
has been employed as an officer of SPECTRIAN Corporation ("SPECTRIAN"). 

        B.    In
connection with his employment by SPECTRIAN, Employee and SPECTRIAN have entered into a Change of Control and Severance Agreement and an Indemnification Agreement.
Copies of these agreements are appended to this Agreement as Exhibits B-1 and B-2, respectively. 

        C.
SPECTRIAN and the Company have entered into an Agreement and Plan of Merger and Reorganization (the "Merger Agreement") describing a transaction in which, following the satisfaction
of certain conditions, SPECTRIAN will merge with a wholly owned subsidiary of the Company (the "Merger"). 

        D.
Effective at the date and time of the Merger (the "Effective Date" and "Effective Time," respectively), the Company wishes to employ Employee, and Employee is willing to be employed
by the Company, pursuant to the terms and conditions of this Agreement. 

        E.
The parties intend that the terms of this Agreement shall govern the employment of Employee by Company, and that Employee's prior agreements with SPECTRIAN shall be superseded, void
and of no further effect immediately prior to the Effective Time. 

The parties agree as follows:  

        1.    Employment.    The Company agrees to employ the Employee during the Term specified in paragraph 2, and
the Employee agrees to accept employment upon the terms and conditions in this Agreement. 

        2.    Term.    

        2.1    Initial Term.    Subject to the early termination provisions contained in paragraph 6, Employee's
employment by the Company shall be for a term commencing at the Effective Time and expiring at the close of business on the third anniversary of the Effective Date (the "Initial Term"). Employee's
employment shall continue for an indefinite period after the Initial Term unless and until either party shall give to the other a written notice of expiration of the term (a 

 

"Notice of Termination") as provided in paragraph 10.3. The Initial Term and the period of employment, if any, following the Initial Term is referred to as the "Term."  
        2.2    Termination Date.    The date on which Employee ceases to be employed by the Company, for whatever reason,
is
referred to as the "Termination Date." 

        3.    Duties and Responsibilities.    

        3.1    Title.    Employee shall be employed in the capacity of President, Chief Operating Officer. 

        3.2    Reporting.    Employee shall report directly to the Company's Chief Executive Officer. 

        3.3    Best efforts.    Employee will use his best efforts to (a) seek to ensure that the Company is successful
in achieving its strategic and operational objectives; (b) comply on a timely basis with all financial, budgetary and reporting requirements set by the board of directors and senior management;
(c) duly and faithfully observe the general employment policies and practices of the Company, including, without limitation, any and all rules, regulations, policies and/or procedures which the
Company may now or hereafter establish governing the conduct of its employees generally; and (d) not incur obligations on behalf of the Company or enter into any transaction not in the ordinary
course of business, except as authorized by the scope of his duties or a senior executive. 

        3.4    Full-time employment.    Employee shall devote his entire working time, attention, and efforts to
Company's business and affairs and shall faithfully and diligently serve Company's interests. Employee agrees that he shall not, without the prior written consent of the Chief Executive Officer of the
Company, engage either directly or indirectly (whether as an employee, director, consultant, advisor, investor or in any other capacity), in any business or employment activity that is not on
Company's behalf. 

        3.5    Charitable and civic activities; passive investments.    Notwithstanding the obligation of
full-time employment described in paragraph 3.4, Employee shall be permitted to engage in charitable and civic activities and manage his personal passive investments, provided such
activities (individually or collectively) do not materially interfere with the performance of his duties or responsibilities under this Agreement; and, provided further that no investments made or
controlled, directly or indirectly, by Employee may be in an enterprise that transacts business with the Company or engages in a competitive business, unless (a) that enterprise is publicly
traded and (b) Employee's participation is limited to owning less than 1% of the cumulative voting power of the enterprise, or (c) Employee has received the prior written consent of the
Company's Chief Executive Officer. 

        4.    Non-Competition and Confidentiality.    

        4.1    Covenant not to Compete.    Employee specifically promises that during his employment with the Company he shall
not engage in any competing activity, including, but not limited to, the business of designing, developing or manufacturing radio frequency (RF) and microwave subsystems used in the transmission of
voice, video and data traffic over wireless communications networks or in defense electronics applications. 

        4.2    Confidentiality.    Employee shall enter into the Company's customary Proprietary Information and Invention
Assignment Agreement, attached to this Agreement as Exhibit 4.2. 

        4.3    Covenant not to compete after Termination Date.    If Employee becomes eligible to receive the Severance
Benefits described in paragraph 6.4, then the payment of such Severance Benefits is expressly conditioned upon Employee's continued compliance with paragraph 4.1 for the Severance
Period. Employee shall give written notice to the Company of any proposed activity that might be 

Page 2 of 11 pages

 

prohibited by this paragraph and shall describe the proposed activity in reasonable detail in such notice. 

        5.    Compensation.    

        5.1    Settlement/Salary.    In exchange for Employee waiving his rights under all SPECTRIAN agreements in effect
immediately prior to the Merger, Employee shall receive from the Company $1,000,000 in cash, less applicable withholding for taxes. Such payment shall be made at closing of the Merger. Company shall
pay Employee in accordance with its normal payroll practices a base salary in the annualized gross amount of $375,000 less authorized and required deductions. 

        5.2    Incentive Bonus.    Employee shall have the opportunity to participate in the Company's incentive bonus
programs, targeted at 30% of annual base salary for 100% target achievement, in the same manner, and at a level commensurate with, other employees of the Company holding comparable senior management
positions. 

        5.3    Benefits.    Employee shall be eligible to participate in such medical, dental, life insurance, 401(k) and
other benefit plans as are now generally available or later made generally available to the senior executive officers of the Company. Employee shall also be reimbursed for the reasonable cost of a
country club membership and he shall be reimbursed for monthly dues. Employee shall also receive a $9,000 annual car allowance. Employee shall be entitled to six (6) weeks vacation per year.
Company shall pay the cost of a level term portable $1 million life insurance policy on the life of the Employee. 

        5.4    New Stock Option.    Employee shall be granted an option to purchase one hundred thousand (100,000) shares of
the Company's common stock (the "Option") vesting 25% per year of employment with the Company. 

        5.5    Assumption of SPECTRIAN Stock Options/Waiver of Acceleration in Connection with Merger.    Pursuant to the
Merger Agreement, as of the Effective Time the Company shall assume the outstanding stock options granted to Employee by SPECTRIAN. In general, the terms of the SPECTRIAN options will continue in
effect during Employee's employment with the Company. Thus, for example, while Employee is employed by the Company his SPECTRIAN options will continue to vest in accordance with the vesting schedule
in his SPECTRIAN option agreement. The preceding notwithstanding, Employee acknowledges and agrees that except as set forth in this Agreement, any acceleration of vesting applicable to SPECTRIAN
Options, whether such acceleration is provided for in the option agreements or pursuant to other agreements or provisions are hereby waived and after the Merger are null and void. Employee
acknowledges and agrees that no acceleration of vesting shall apply to SPECTRIAN options because of the Merger and that there shall be no acceleration of vesting applicable to the SPECTRIAN options
and any other option to purchase shares of the Company's common stock except as set forth in this Agreement. Employee consents to the revision of all SPECTRIAN options to conform to the provisions of
this Agreement. 

        5.6    Indemnification and Insurance.    In the performance of his duties for the Company, Employee shall be entitled
to indemnification and, if applicable, coverage under a policy of officers' and directors' liability insurance, to the same extent and in the same manner as other employees performing comparable
duties. 

        5.7    Relocation.    Employee shall be reimbursed for actual relocation expenses, including house hunting, family and
personal travel, closing costs on the sale of the residence in the San Jose, CA area, closing costs on the purchase of a residence in the San Diego, CA area, and reasonable living expenses until a
residence is purchased in the San Diego, CA area. Employee shall receive a tax gross-up payment to cover federal, state and local income and employment taxes on the relocation expenses and
gross-up payment. 

Page 3 of 11 pages

 

        6.    Change of Control, Termination and Severance Benefits.    

        6.1    Termination Without Cause.    Notwithstanding any other provision of this paragraph, the Company shall have the
right to terminate Employee's employment without Cause at any time by giving at least thirty (30) days written notice to Employee. 

        6.2    Termination Following a Change of Control Defined.    For purposes of this Agreement, "Termination Following a
Change of Control" shall mean Employee's termination of employment with the Company that occurs within two (2) years following a Change of Control but only if the termination is due to either
(a) the Company's involuntary Termination without Cause of Employee's employment or (b) Employee's resignation for Good Reason. "Termination Following a Change of Control" does not
include a termination by the Company for Cause, or as a result of the death or disability of the Employee. "Change of Control" shall mean the occurrence of any of the following events: 

        (i)    Merger or Consolidation.    The approval by shareholders of the Company of a merger or consolidation of the
Company with any other corporation or entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than fifty percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding immediately after such merger or consolidation; 

        (ii)    Liquidation.    Any approval by the shareholders of the Company of a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or substantially all of the assets of the Company; 

        (iii)    Acquisition of 50% Voting Power.    Any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) becoming the "beneficial owner" (as defined in Rule 13d-3 under said Act), directly or indirectly, of securities of the Company
representing 50% or more of the total voting power represented by the Company's then outstanding voting securities; or 

        (iv)    Change in Composition of The Board.    A change in the composition of the Board, as a result of which less
than a majority of the directors are Incumbent Directors. "Incumbent Directors" shall mean directors who either: (a) are directors of the Company as of Effective Date, or (b) are
elected, or nominated for election, to the Board with the affirmative votes of at least a majority of those directors whose election or nomination was not in connection with any transaction described
in subsections (i) or (iii), above, or in connection with an actual or threatened proxy contest relating to the election of directors of the Company. 

        6.3    Resignation With and Without Good Reason.    Employee may terminate his employment with the Company by
resignation. A resignation is with "Good Reason" if it is on account of: (i) without Employee's express written consent, a significant reduction of Employee's duties, position or
responsibilities relative to Employee's duties, position or responsibilities in effect immediately prior to such reduction, or the removal of Employee from such position, duties and responsibilities,
unless the Employee is provided with comparable duties, position and responsibilities; (ii) without Employee's express written consent, a substantial reduction, without good business reasons,
of the facilities and perquisites (including office space and location) available to Employee immediately prior to such reduction; (iii) a reduction by the Company of the Employee's base salary
or target bonus as in effect immediately prior to such reduction; (iv) a material reduction by the Company in the kind or level of employee benefits to which Employee is entitled immediately
prior to such reduction with the result that Employee's overall benefits package is significantly reduced; (v) without Employee's express written consent, the relocation of 

Page 4 of 11 pages

 

Employee to a facility or location that is more than thirty-five (35) miles from the Company's principal offices (by way of clarification, Good Reason shall not exist because of
Employee's relocation from the San Jose, CA area to the San Diego, CA area); (vi) any purported termination of Employee by the Company which is not effected for Cause or for which the grounds
relied upon are not valid; or (vii) the failure of the Company to obtain the assumption of this Agreement by any successors of the Company. Employee must give the Company 30 days notice
of a termination for Good Reason. The written notice must specify the circumstances constituting Good Reason in the opinion of the Employee. Good Reason shall not exist if the Company reasonably cures
the defect within the 30 day notice period. 

        6.4    Severance and Change of Control Benefits.    

        (a)    Involuntary Termination and Resignation with Good Reason.    In the event of, during the Initial Term of this
Agreement, Employee's involuntary termination by the Company without Cause or resignation by the Employee for Good Reason, Employee shall be eligible to receive the following Severance Benefits: 

        (i)    Employee
will be paid (1) his base salary for three (3) years after the Termination Date (the "Severance Period") plus (3) three times Employee's
annual target bonus, as in effect immediately prior to the Termination Date, calculated at the 100% achievement level. Such amount shall be paid either in
periodic installments during the Severance Period in accordance with the Company's normal payroll and bonus disbursement practices or, at Company's election, in a lump sum. 

        (ii)  During
the Severance Period, the Company shall continue to make available to the Employee and Employee's spouse and dependents all group medical, dental or other health
plans, any disability or life insurance plans and other similar insurance plans in which Employee or Employee's spouse or dependents participate on the date of the Employee's termination on the same
basis as before such termination, including any Company subsidy for the cost of the benefit. If the terms of a benefit plan do not permit Employee or his dependents to continue coverage after the
Termination Date, the Company will reimburse Employee for the reasonable cost of similar coverage. The Employee's 18-month COBRA health care continuation period will begin at the end of
the Severance Period. 

        (iii)  The
vesting of a SPECTRIAN option assumed by Company in the Merger shall accelerate, but only to the extent the unvested portion of the option would have vested during
the three (3) years following the Termination Date assuming Employee had remained in employment through that date. The vesting of all options to purchase Company stock, i.e., those granted to
Employee at any time after the Merger, shall accelerate, but only to the extent the unvested portion of the options would have vested during the one (1) year period following the Termination
Date assuming Employee had remained in employment through that date. In the event benefits are paid pursuant to this Paragraph 6.4, Employee will have ninety (90) days following the
Termination Date to exercise all his options to purchase Company stock. 

        (b)    Change of Control.    If Employee is still employed by the Company on the date of a Change in Control, Employee
shall be entitled to the benefits in paragraph 6.4(a)(iii) as of the date of a Change of Control, except that the one year and three year acceleration shall occur from the date of the
Change of Control and the remaining unvested portion shall continue to vest according to the option's vesting schedule starting on the date of the Change of Control. This paragraph 6.4(b) shall
apply in the event of a Change of Control regardless of whether the Change of Control occurs in the Initial Term. 

Page 5 of 11 pages

 

        (c)    Termination Following a Change of Control.    If there is a Termination Following a Change of Control, Employee
shall be entitled to all the benefits of paragraph 6.4(a)(i) and (ii) and in addition, Employee shall become fully and immediately vested in all his options to purchase shares of
Company stock, including the SPECTRIAN options assumed by Company and Company options granted after the Merger. This paragraph 6.4(c) shall apply in the event of a Termination Following a
Change of Control regardless of whether the Change of Control or the termination occurs in the Initial Term. 

        6.5    General Release.    As a further condition of his eligibility to receive the Severance Benefits described in
the preceding paragraph, Employee shall deliver to the Company within thirty (30) days after the Termination Date a duly executed General Release of Claims in a form to be mutually agreed by
the parties within ten (10) days of the date of this Agreement. The Company shall not be obligated to
deliver any of the Severance Benefits described in paragraph 6.4 until ten (10) days after receipt of the General Release. 

        6.6    Other Terminations.    

        (i)    By Company for Cause.    The Company may terminate Employee's employment for Cause, without advance written
notice of termination, by giving written notice of such termination. For purposes of this Agreement, "Cause" shall mean (a) any act of personal dishonesty taken by the Employee in connection
with his responsibilities as an employee which is intended to result in substantial personal enrichment of the Employee, (b) Employee's conviction of a felony which the Board reasonably
believes has had or will have a material detrimental effect on the Company's reputation or business, (c) a willful act by the Employee which constitutes misconduct and is injurious to the
Company, and (d) continued willful violations by the Employee of the Employee's obligations to the Company after there has been delivered to the Employee a written demand for performance from
the Company which describes the basis for the Company's belief that the Employee has not substantially performed his duties. Company must give Employee 30 days notice of a termination for
Cause. The written notice must specify the circumstances constituting Cause in the opinion of the Company. Cause shall not exist if Employee reasonably cures the defect within the 30 day notice
period. 

        6.7    Accrued Wages and Vacation; Expenses.    Without regard to the reason for, or the timing of, Employee's
termination of employment: (i) the Company shall pay the Employee any unpaid base salary due for periods prior to the date of termination; (ii) the Company shall pay the Employee all of
the Employee's accrued and unused vacation through the date of termination; and (iii) following submission of proper expense reports by the Employee, the Company shall reimburse the Employee
for all expenses reasonably and necessarily incurred by the Employee in connection with the business of the Company prior to the date of termination. These payments shall be made promptly upon
termination and within the period of time mandated by law. 

        6.8    No Other Benefits.    No other benefits shall be payable upon termination of employment except as specified in
this Agreement. Without limitation, the Severance Benefits specified in paragraph 6.4 shall not be payable if Employee's employment is terminated by his resignation without Good Reason by the
Company for Cause or by reason of death or disability (as defined in the California Government Code). 

        6.9    Excise Tax Adjustment.    In the event Employee becomes entitled to Severance Benefits under Section 6.4
herein, and the Company determines that the Severance Benefits will be subject to the tax (the "Excise Tax") imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code"), or any similar tax that may hereafter be imposed, the Company shall compute the "Net After-Tax Amount," and the "Reduced Amount," and shall adjust the Severance Benefits as
described below. The Net After-Tax Amount shall mean the present value of all 

Page 6 of 11 pages

 

amounts payable to Employee hereunder, net of all federal income, excise and employment taxes imposed on Employee by reason of such payments. The Reduced Amount shall mean the largest aggregate
amount of the Severance Benefits that if paid to Employee would result in Employee receiving a Net After-Tax Amount that is equal to or greater than the Net After-Tax Amount
that Employee would have received if all Severance Benefits had been paid or made. If the Company determines that there is a Reduced Amount, the Severance will be reduced to the Reduced Amount. Such
reduction shall be made by the Company with respect to benefits in the order and in the amounts suggested by Employee, except to the extent that the Company determines that a different reduction or
set of reductions would significantly reduce the costs or administrative burdens of the Company. 

        7.    At-Will Employment.    Subject to the other provisions of this Agreement regarding notice and
severance benefits, Employee shall be employed at-will. "At will" employment means that either the Employee or the Company may terminate the employment at any time, for any reason, and
except as set forth herein, Employee will receive no compensation, severance or benefits other than salary, bonus and benefits accrued and payable in connection with services performed through the
Termination Date. 

        8.    Termination of Agreement.    This Agreement shall terminate upon the date that all obligations of the parties
hereto under this Agreement have been performed. 

        9.    Successors.    

        9.1    Company's Successors.    Any successor to the Company (whether direct or indirect and whether by purchase,
lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company's business and/or assets shall assume the Company's obligations under this Agreement and agree
expressly to perform the Company's obligations under this Agreement in the same manner and to the same extent as the Company would be required to perform such obligations in the absence of a
succession. For all purposes under this Agreement, the term "Company" shall include any successor to the Company's business and/or assets which executes and delivers the assumption agreement described
in this subparagraph 9.1 or which becomes bound by the terms of this Agreement by operation of law. 

        9.2    Employee's Successors.    Without the written consent of the Company, Employee shall not assign or transfer
this Agreement or any right or obligation under this Agreement to any other person or entity. Notwithstanding the foregoing, the terms of this Agreement and all rights of Employee hereunder shall
inure to the benefit of, and be enforceable by, Employee's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. 

        10.    Notices.    

        10.1    Delivery.    All notices and other communications under this Agreement shall be in writing and shall be given
by personal delivery; 1st class mail, certified or registered with return receipt requested;
facsimile transmission; telegram; or e-mail. Notice shall be deemed to have been duly given upon receipt if personally delivered; three (3) days after mailing, if mailed; the next
business day after transmission, if delivered by telegram, facsimile or e-mail. 

        10.2    Addresses of parties.    Notices shall be delivered to the Company, Attention: Chief Executive Officer, at the
address shown on the first page of this Agreement, or at such subsequent address to which the Company shall locate its principal executive offices. Notices to Employee shall be delivered to the
address shown on the first page of this Agreement, or to such subsequent address as the Employee shall provide to the Company in accordance with this paragraph. 

        10.3    Notice of Termination.    Any Notice of Termination shall specify the intended date on which employment will
terminate. If a Notice is given by the Company, it also shall identify the specific termination provision in this Agreement relied upon, and the facts and circumstances 

Page 7 of 11 pages

 

claimed to provide a basis for termination under the cited provision. Except in the case of a termination for Cause, as defined in paragraph 6.6, a Notice of Termination from either party
shall provide at least 30 days advance notice of the Termination Date. The Company shall have the right, at any time during the 30 day notice period, to relieve the Employee of his
offices, duties and responsibilities and to place him on a paid leave-of-absence status. 

        11.    Nonsolicitation: non-raiding of Company personnel.    Employee recognizes that the Company's
workforce is a vital part of its business, and the composition, competencies and duties of that workforce are trade secrets of the Company. Therefore, Employee agrees that for twelve
(12) months after the Termination Date, regardless of the reason employment has terminated, Employee will not solicit, directly or indirectly, any employee to leave his or her employment with
Company. For purposes of this Agreement, the phrase "shall not solicit, directly or indirectly," includes, without limitation, that Employee: (a) shall not identify any Company employees to any
third party as potential candidates for employment, such as by disclosing the names, backgrounds and qualifications of any Company employees; (b) shall not personally or through any other
person approach, recruit or otherwise solicit employees of Company to work for any other employer; and (c) shall not participate in any pre-employment interviews with any person who
was employed by Company while Employee was employed or retained by Company. 

        12.    Dispute Resolution.    

        12.1    Arbitration of employment-related claims.    Any dispute, controversy or claim arising out of or in respect to
the subject matter of this Agreement (or its validity, interpretation or enforcement), and/or all aspects of the employment relationship, with the exception of any claim by the Company related to the
use, disclosure or ownership of intellectual property, shall be submitted to and settled by arbitration conducted before a single, neutral arbitrator within 35 miles of Employee's principal workplace
for the Company on the Termination Date, in accordance with the American Arbitration Association's National Rules for the Resolution of Employment Disputes. The costs of arbitration shall be borne by
the
Company. Attorney fees shall be awarded to the prevailing party in the case of a breach of contract claim. 

        12.2    Claims subject to arbitration.    THE CLAIMS COVERED BY THIS ARBITRATION CLAUSE INCLUDE, BUT ARE NOT LIMITED
TO, ANY AND ALL CLAIMS OF WRONGFUL DISCHARGE OF EMPLOYMENT; BREACH OF CONTRACT, BOTH EXPRESS AND IMPLIED; BREACH OF THE COVENANT OF GOOD FAITH AND FAIR DEALING, BOTH EXPRESS AND IMPLIED; NEGLIGENT OR
INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS; NEGLIGENT OR INTENTIONAL MISREPRESENTATION; NEGLIGENT OR INTENTIONAL INTERFERENCE WITH CONTRACT OR PROSPECTIVE ECONOMIC ADVANTAGE; AND DEFAMATION, ANY AND
ALL CLAIMS FOR VIOLATION OF ANY FEDERAL STATE OR MUNICIPAL STATUTE, INCLUDING, BUT NOT LIMITED TO, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE CIVIL RIGHTS ACT OF 1991, THE AGE DISCRIMINATION IN
EMPLOYMENT ACT OF 1967, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE FAIR LABOR STANDARDS ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, AND LABOR CODE SECTION 201,  ET SEQ.; AND ANY AND
ALL CLAIMS ARISING OUT OF ANY OTHER LAWS AND REGULATIONS RELATING TO EMPLOYMENT OR EMPLOYMENT DISCRIMINATION. 

        12.3    Intellectual property claims excluded.    The Company shall have the right, in its sole discretion, to pursue
judicial resolution of any claims involving the use, disclosure or ownership of intellectual property related to the business of the Company, including without limitation patents, trademarks, trade
secrets and copyrighted material. 

Page 8 of 11 pages

 

        12.4    Binding effect of arbitration.    The arbitration of covered issues, including the determination of any amount
of damages suffered, shall be final and binding upon the parties to the maximum extent permitted by law. Judgment upon the award rendered by the arbitrator may be entered by a court of competent
jurisdiction. The parties expressly consent to the exclusive jurisdiction and venue of the California Superior Court, San Diego County, or the United States District Court for the Southern District of
California for this purpose. The arbitrator shall have the authority to award costs and attorneys' fees to either party in the same manner and under the same circumstances as a court of competent
jurisdiction, in accordance with applicable state and federal law. 

        12.5    Injunctive Relief.    Notwithstanding the agreement to arbitrate, either party to this Agreement may seek
injunctive relief from a court of competent jurisdiction. The parties expressly consent to the exclusive jurisdiction and venue of the California Superior Court, San Diego County, or the United States
District Court for the Southern District of California for this purpose. Any party seeking injunctive relief may also seek any other relief or remedy otherwise available, as permitted by this
Agreement. 

        12.6    Waiver of Right to Jury Trial.    By
signing this Agreement, Employee expressly acknowledges that he has read and understood this Agreement, and specifically Paragraph 12 regarding arbitration. Employee understands that this
arbitration clause constitutes a waiver of the Employee's right to a jury trial and relates to the resolution of all claims Employee may assert regarding all aspects of the employer/employee
relationship.

        13.    Amendment and modification.    No provision of this Agreement may be amended, modified, waived or discharged
unless the modification, waiver or discharge is agreed to in writing and signed with the same formality as this Agreement by the Employee and by an authorized executive officer of the Company (other
than the Employee). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other
condition or provision or of the same condition or provision at another time. 

        14.    Legal requirements.    This Agreement is contingent upon Employee's ability to present documentation evidencing
his eligibility for employment in the United States in compliance with the provisions of the Immigration Reform and Control Act of 1986. 

        15.    Waiver of rights under SPECTRIAN agreements.    Employee agrees that the terms of this Agreement entirely
supersede and replace the terms of all agreements regarding his prior employment by SPECTRIAN, including without limitation the Change of Control Severance Agreement annexed to this Agreement as
Exhibit B-1 and any related payments including any tax gross-up. The Merger shall not be deemed to constitute a "Change of Control" that would entitle Employee to any
severance or change of control benefits under any agreement. Employee acknowledges that by signing this Agreement, he is waiving all rights to severance benefits and stock acceleration in connection
with the Merger, except as specifically provided in this Agreement for transactions that may occur after the Effective Date. 

        16.    Integration and Merger.    This Agreement, including the documents appended as exhibits and hereby incorporated
by reference, represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements, whether written or oral.
Prior agreements superseded by this Agreement include, but are not limited to, Employee's agreements with SPECTRIAN. 

        17.    Choice of Law.    The validity, interpretation, construction and performance of this Agreement shall be
governed by the internal substantive laws, but not the conflicts of law rules, of the State of California. 

Page 9 of 11 pages

 

        18.    Severability.    The invalidity or unenforceability of any provision or provisions of this Agreement shall not
affect the validity or enforceability of any other provision hereof, which shall remain in full force and effect. 

        19.    Employment Taxes.    All payments made pursuant to this Agreement shall be subject to withholding of applicable
income and employment taxes. 

        20.    Counterparts.    This Agreement may be executed in counterparts, each of which shall be deemed an original, but
all of which together will constitute one and the same instrument. 

        21.    Access to Legal and Financial Counsel.    Employee is fully aware that this Agreement deals with important
legal and financial rights and obligations. Employee acknowledges that before signing this Agreement, Employee has had ample opportunity to consult with legal and financial counsel of his own
choosing. 

[Signature Page Follows] 

Page 10 of 11 pages

 

        22.    Signatures.    The parties have executed this Agreement, in the case of the Company by its duly authorized
officer, as of the date shown on the first page, intending to be legally bound. 

	 
	 	 
	 	 
	 	 

	REMEC, Inc.

a California corporation	 	THOMAS WAECHTER
	 	 	 	 	 	 	 
	By:	 	/s/  DAVID L. MORASH      
	 	/s/  THOMAS WAECHTER      
 Signature
	 	 	 	 	 	 	 
	Printed name:	 	David L. Morash
	 	 	 	 
	 	 	 	 	 	 	 
	Title:	 	EVP and Chief Financial Officer
	 	 	 	 
	 	 	 	 	 	 	 
	Date signed:	 	May 19, 2002
	 	Date signed:	 	May 19, 2002

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

	 
	 
	 	 

	Attachments:	 	 	 
	 	Exhibit B-1	 	Change of control and Severance Agreement
	 	Exhibit B-2	 	Indemnification Agreement
	 	Exhibit 4.2	 	Proprietary Information and Invention Assignment Agreement
	 	Exhibit 5.4(a)	 	2001 Equity Incentive Plan
	 	Exhibit 5.4(b)	 	Stock Option Agreement

Page 11 of 11 pages

QuickLinks

Exhibit 10.1

EMPLOYMENT AND RETENTION AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00040-of-00352.parquet"}]]