Document:

Exhibit 4.1

                                SERIES SUPPLEMENT

                       CORPORATE BACKED TRUST CERTIFICATES

              VERIZON NEW YORK DEBENTURE-BACKED SERIES 2004-1 TRUST

                                     between

                             LEHMAN ABS CORPORATION,

                                  as Depositor,

                                       and

                      U.S. BANK TRUST NATIONAL ASSOCIATION,

                                   as Trustee,

                       CORPORATE BACKED TRUST CERTIFICATES

                          Dated as of January 15, 2004

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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.............................8

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

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

Section 6.  Trustee's Fees...................................................16

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

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

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

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

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

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

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

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

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

Section 16.  Additional Depositor Representation.............................27

SCHEDULE I        SERIES 2004-1 UNDERLYING SECURITIES SCHEDULE
EXHIBIT A-1       FORM OF TRUST CERTIFICATE CLASS A-1
EXHIBIT A-2       FORM OF TRUST CERTIFICATE CLASS A-2
EXHIBIT B         FORM OF WARRANT AGENT AGREEMENT
EXHIBIT C         FORM OF INVESTMENT LETTER

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                                SERIES SUPPLEMENT

                       CORPORATE BACKED TRUST CERTIFICATES

              VERIZON NEW YORK DEBENTURE-BACKED SERIES 2004-1 TRUST

          SERIES SUPPLEMENT, Verizon New York Debenture-Backed Series 2004-1,
dated as of January 15, 2004 (the "Series Supplement"), by and between LEHMAN
ABS CORPORATION, as Depositor (the "Depositor"), and U.S. BANK TRUST NATIONAL
ASSOCIATION, as Trustee (the "Trustee").

                             W I T N E S S E T H:

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

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

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

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

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

     Section 1. Incorporation of Standard Terms. Except as otherwise provided
herein, all of the provisions of the Standard Terms are hereby incorporated
herein by reference in their entirety, and this Series Supplement and the
Standard Terms shall form a single agreement between the parties. In the event
of any inconsistency between the provisions of this Series Supplement and the
provisions of the Standard Terms, the provisions of this Series Supplement
will control with respect to the Verizon New York Debenture-Backed Series
2004-1 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.

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

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

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

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

          "Call Date" shall mean any Business Day that any holder of Call
Warrants designates as a Call Date occurring (i) on or after January 15, 2009,
(ii) after the Underlying Securities Issuer announces that it will redeem,
prepay or otherwise make an unscheduled payment on the Underlying Securities,
(iii) after the Trustee notifies the Certificateholders of any proposed sale
of the Underlying Securities pursuant to the provisions of Section 5(e) or
5(i) of this Series Supplement or (iv) on any date on which the Underlying
Securities Issuer or an affiliate thereof consummates a tender offer for some
or all of the Underlying Securities.

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

          "Call Price" shall mean, for each related Call Date, (i) in the case
of the Class A-1 Certificates, the sum of (x) 100% of the outstanding
Certificate Principal Balance of the Class A-1 Certificates being purchased
pursuant to the exercise of the Call Warrants, plus any accrued and unpaid
interest on such amount to, but excluding, the Call Date plus (y) in the event
a holder of a Call Warrant exercises its right to call Class A-1 Certificates
with a settlement date occurring prior to January 15, 2009, an additional
amount, equal to $1.50 per Class A-1 Certificate, and (ii) in the case of the
Class A-2 Certificates, the present value of all amounts that would otherwise
have been payable on the Class A-2 Certificates being purchased pursuant to
the exercise of the Call Warrants for the period from the related Call Date to
the Final Scheduled Distribution Date using a discount rate of 7.35% per
annum, assuming no delinquencies, deferrals, redemptions or prepayments on the
Underlying Securities shall occur after the related Call Date.

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

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

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

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

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          "Class A-1 Allocation" shall mean the sum of the present values
(discounted at the rate of 6.20% per annum) of (i) any unpaid interest due or
to become due on the Class A-1 Certificates and (ii) the outstanding
Certificate Principal Balance of the Class A-1 Certificates (in each case
assuming that the Class A-1 Certificates were paid when due and were not
redeemed or prepaid prior to their stated maturity).

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

          "Class A-2 Allocation" shall mean the present value (discounted at
the rate of 6.20% per annum) of any unpaid amounts due or to become due on the
outstanding notional amount of the Class A-2 Certificates (assuming that the
Class A-2 Certificates were paid when due and were not redeemed or prepaid
prior to their stated maturity).

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

          "Closing Date" shall mean January 15, 2004.

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

          "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.

          "Currency" shall mean United States Dollars.

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

          "Distribution Date" shall mean April 1st and October 1st of each
year (or if such date is not a Business Day, the next succeeding Business
Day), commencing on April 1st, 2004, and ending on the earlier of the Final
Scheduled Distribution Date and any date on which all Underlying Securities
are redeemed, prepaid or liquidated in whole for any reason other than at
their maturity.

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

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          "Event of Default" shall mean (i) a default in the payment of any
interest on the Underlying Securities 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 the Underlying Securities when
the same becomes due and payable and (iii) any other event specified as an
"Event of Default" in the Indenture.

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

          "Final Scheduled Distribution Date" shall mean the Distribution Date
in April of 2032, or if such day is not a Business Day, the next succeeding
Business Day.

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

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

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

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

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

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

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

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

          "Prospectus Supplement" shall mean the Prospectus Supplement, dated
January 5, 2004, relating to the Class A-1 Certificates.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          "Series" shall mean Verizon New York Debenture-Backed Series 2004-1.

          "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.

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

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

          "Underlying Securities" shall mean $150,144,000 aggregate principal
amount of 7 3/8% Debentures, Series B, due 2032, 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 Verizon New York Inc.

          "Underlying Securities Trustee" shall mean JPMorgan Chase Bank.

          "Underwriters" shall mean Lehman Brothers Inc., RBC Dain Rauscher
Inc. and Banc of America Securities LLC.

          "Voting Rights" shall be allocated between the holders of the Class
A-1 Certificates and the holders of the Class A-2 Certificates, pro rata, in
proportion to the ratio of the Class A-1 Allocation to the Class A-2
Allocation as of any applicable record date. The Class A-1 Voting Rights will
be allocated among all of the Class A-1 Certificateholders in proportion to
the respective principal balances of their respective Certificates and the
Class A-2 Voting Rights will be allocated among all of the Class A-2
Certificateholders in proportion to the then outstanding notional amounts of
their respective Certificates.

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

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

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

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

               "Accounting Date"

               "Administrative Fees"

               "Advance"

               "Allowable Expense Amounts"

               "Basic Documents"

               "Call Premium Percentage"

               "Credit Support"

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               "Credit Support Instrument"

               "Credit Support Provider"

               "Cut-off Date"

               "Eligible Expense"

               "Eligible Investments"

               "Exchange Rate Agent"

               "Fixed Pass-Through Rate"

               "Floating Pass-Through Rate"

               "Guaranteed Investment Contract"

               "Letter of Credit"

               "Limited Guarantor"

               "Limited Guaranty"

               "Minimum Wire Denomination"

               "Pass-Through Rate"

               "Place of Distribution"

               "Purchase Price"

               "Required Premium"

               "Required Principal"

               "Requisite Reserve Amount"

               "Retained Interest"

               "Sale Procedures"

               "Sub-Administration Account"

               "Sub-Administration Agreement"

               "Sub-Administration Agent"

               "Surety Bond"

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               "Swap Agreement"

               "Swap Counterparty"

               "Swap Distribution Amount"

               "Swap Guarantee"

               "Swap Guarantor"

               "Swap Receipt Amount"

               "Swap Termination Payment"

     Section 3. Designation of Trust and Certificates. The Trust created
hereby shall be known as the "Corporate Backed Trust Certificates, Verizon New
York Debenture-Backed Series 2004-1 Trust." The Certificates evidencing
certain undivided ownership interests therein shall be known as "Corporate
Backed Trust Certificates, Verizon New York Debenture-Backed Series 2004-1."
The Certificates shall consist of the Class A-1 Certificates and the Class A-2
Certificates (together, the "Certificates"). The Trust is also issuing call
warrants with respect to the Certificates ("Call Warrants").

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

     (b) The Class A-1 Certificates shall consist initially of 6,005,760
Certificates having an initial aggregate certificate principal balance (the
"Certificate Principal Balance") of $150,144,000. The Class A-2 Certificates
are interest-only Certificates and shall have an initial aggregate notional
amount equal to the initial Certificate Principal Balance of the Class A-1
Certificates.

     (c) The holders of the Class A-1 Certificates will be entitled to receive
on each Distribution Date the interest, if any, received on the Underlying
Securities, to the extent necessary to pay interest at a rate of 6.20% per
annum on the outstanding Certificate Principal Balance of the Class A-1
Certificates. The holders of the Class A-2 Certificates will be entitled to
receive on each Distribution Date the interest, if any, received on the
Underlying Securities, to the extent necessary to pay interest at a rate of
1.175% per annum on the outstanding notional

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amount of the Class A-2 Certificates, which notional amount shall be equal to
the Certificate Principal Balance of the Class A-1 Certificates. On the
Distribution Date occurring in April 2004, the Trustee shall cause the Trust
to pay to the Depositor the amount of interest accrued and paid on the
Underlying Securities from October 1, 2003, to but not including the Closing
Date; provided, however, that in the event an Optional Exchange Date shall
occur prior to the Distribution Date in April 2004, a pro rata portion of such
amount shall be paid to the Depositor on the Optional Exchange Date in
accordance with the provisions of Section 7(b)(ix) hereof. If the Depositor is
not paid any such amount on such date, it shall have a claim for such amount.
If Available Funds are insufficient to pay such amount, the Trustee will pay
the Depositor its pro rata share, based on the ratio the amount owed to the
Depositor bears to all amounts owed on the Certificates in respect of accrued
interest, of any proceeds from the recovery on the Underlying Securities.

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

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

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

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

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

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

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

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

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

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

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

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

     Section 5. Distributions.

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

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

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

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

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

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

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

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

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

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

     (b) [Reserved].

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

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

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

         (iii) third, to the holders of the Class A-2 Certificates, an amount
               not to exceed the present value of all amounts that would
               otherwise have been payable on the Class A-2 Certificates for
               the period from the date of such redemption or prepayment to
               the Final Scheduled Distribution Date using a discount rate of
               6.20% per annum, assuming no delinquencies, deferrals,
               redemptions or prepayments on the Underlying Securities;

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

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

                                      12
<PAGE>

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

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

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

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

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

                                      13
<PAGE>

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

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

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

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

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

                                      14
<PAGE>

     allocating the principal amount of the Underlying Securities to the Class
     A-1 Certificateholders and the Class A-2 Certificateholders in accordance
     with the ratio of the Class A-1 Allocation to the Class A-2 Allocation.
     The pro rata share of each of the Class A-1 Certificateholders in the
     Underlying Securities to be distributed shall be determined based on the
     then unpaid Certificate Principal Balances of their Class A-1
     Certificates and the pro rata share of each of the Class A-2
     Certificateholders in the Underlying Securities to be distributed shall
     be determined based on the then outstanding notional amounts of their
     respective Certificates. Notwithstanding the foregoing, in the event of a
     liquidation of the Underlying Securities by the Trustee for any reason
     other than upon the occurrence of an Event of Default or an SEC Reporting
     Failure, each Class A-2 Certificateholder's pro rata share of the
     Underlying Securities shall be equal to the lesser of (1) a pro rata
     share (based on the proportion of the aggregate notional amount of such
     holder's Class A-2 Certificates to the outstanding aggregate notional
     amount of the Class A-2 Certificates) of the principal amount of
     Underlying Securities remaining after the Trustee has allocated Available
     Funds in accordance with Sections 5(c)(i) and 5(c)(ii) hereof and (2) the
     present value of all amounts that would otherwise have been payable on
     such Class A-2 Certificate for the period from the date of such
     redemption or prepayment to the Final Scheduled Distribution Date using a
     discount rate of 6.20% per annum, assuming no delinquencies, deferrals,
     redemptions or prepayments on the Underlying Securities.

          (iii) The amount requested to be distributed pursuant to Section
     5(k)(i) or 5(k)(ii) must be in an even multiple of the minimum
     denomination of the Underlying Securities and may not exceed such
     requesting Certificateholder's pro rata share (as determined by the
     Calculation Agent in accordance with this Section 5(k)) of the Underlying
     Securities. Upon receipt of any such direction from a Class A-1
     Certificateholder or Class A-2 Certificateholder and after at least ten
     (10) Business Days' following delivery to the Warrant Agent of notice of
     an SEC Reporting Failure or, as applicable, thirty (30) days' following
     delivery to the Warrant Agent of notice of an Event of Default, the
     Trustee shall not liquidate the requested portion of Underlying
     Securities and instead shall cause such Underlying Securities to be
     distributed to the requesting Class A-1 Certificateholder or Class A-2
     Certificateholder; provided, that the Trustee shall not cause the
     distribution of any Underlying Securities to any Class A-1
     Certificateholder or Class A-2 Certificateholder unless, but for the
     requesting Class A-1 Certificateholder or Class A-2 Certificateholder's
     giving direction in accordance with this Section 5(k), such Underlying
     Securities would be liquidated as otherwise provided in this Agreement
     and provided further that, if any Warrant Holder designates any day on or
     prior to the proposed distribution date as a Call Date and Optional
     Exchange Date pursuant to Section 7, the portion of the Underlying
     Securities related to such Optional Exchange shall not be distributed to
     the Class A-1 Certificateholders and the Class A-2 Certificateholders,
     but shall be distributed to the exercising Warrant Holder pursuant to
     Section 7 and the Warrant Agent Agreement. Any portion of any Class A-1
     Certificateholder's or Class A-2 Certificateholder's pro rata share of
     the Underlying Securities that is not distributed, based on the failure
     to meet the minimum denomination requirements or otherwise, shall be sold
     in accordance with the provisions of Section 5(e) or 5(i) hereof, as
     applicable and the proceeds thereof distributed to such Class A-1
     Certificateholder or Class A-2 Certificateholder.

                                      15
<PAGE>

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

     Section 6. Trustee's Fees.

     (a) As compensation for its services hereunder, the Trustee shall be
entitled to the Trustee Fee and any amounts payable under clauses 5(a)(iii)
and 5(b)(iv) above. The Trustee Fee shall be paid by the Depositor and not
from Trust Property. The Trustee shall bear all Ordinary Expenses. Failure by
the Depositor to pay such amount shall not entitle the Trustee to any payment
or reimbursement from the Trust, nor shall such failure release the Trustee
from the duties it is required to perform under the Trust Agreement.

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

     Section 7. Optional Call; Optional Exchange.

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

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

          (i) A notice specifying the number of Certificates being surrendered
     and the Optional Exchange Date shall be delivered to the Trustee no less
     than 5 days (or such shorter period acceptable to the Trustee) but not
     more than 30 days before the Optional

                                      16
<PAGE>

     Exchange Date; provided that for an Optional Exchange to occur on a Call
     Date, unless otherwise specified therein, the Call Notice shall be deemed
     to be the notice required hereunder.

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

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

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

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

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

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

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

          (ix) In the event such Optional Exchange shall occur prior to the
     Distribution Date in April 2004, the Certificateholders shall have paid
     to the Trustee, for distribution to the Depositor, on the Optional
     Exchange Date an amount equal to the sum obtained by multiplying the
     amount of accrued interest on the Underlying Securities from October 1,
     2003 through, but excluding, the Closing Date by a fraction, the
     numerator of which shall

                                      17
<PAGE>

     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.

     (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) [Reserved.]

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

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

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

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

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

                                      18
<PAGE>

          (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 satisfaction of the conditions set forth
in Section 7(b) shall entitle the Certificateholders or the Warrant Holders,
as applicable, to a distribution of the Underlying Securities.

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

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

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

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

          (iv) If fewer than all tendered Underlying Securities are accepted
     for payment and paid for, (A) the amount of Call Warrants exercised shall
     be reduced to an amount that corresponds to a number of Certificates that
     could be exchanged in an Optional Exchange for the Underlying Securities
     accepted for payment and paid for (without regard to any restrictions on
     the amount to be exchanged, so long as such restrictions

                                      19
<PAGE>

     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 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 an affiliate thereof without consummation thereof or if all
     tenders by the Trust of Underlying Securities are otherwise rejected,
     then (1) the Call Notices will be of no further force and effect, and (2)
     any Call Warrants relating to such Call Notices will not be exercised and
     will remain outstanding.

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

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

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

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

                                      20
<PAGE>

     in clause (B) shall remain outstanding; and (E) the excess of the
     redemption proceeds over the Call Price shall be allocated in proportion
     to the amount of Call Warrants deemed exercised as set forth in clause
     (A) above.

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

     Section 8. Notices of Events of Default.

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

     Section 9. Miscellaneous.

     (a) The provisions of Section 4.04, Advances, of the Standard Terms shall
not apply to the Verizon New York Debenture-Backed Series 2004-1 Certificates.

     (b) The provisions of Section 4.07, Optional Exchange, of the Standard
Terms shall not apply to the Verizon New York Debenture-Backed Series 2004-1
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 Verizon New York Debenture-Backed Series 2004-1 Certificates.

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

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

                                      21
<PAGE>

     (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 Class A-1 Certificates and Class A-2 Certificates representing the
Required Percentage--Removal.

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

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

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

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

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

                                      22
<PAGE>

3(3); or (y) a "disqualified person" within the meaning of Internal Revenue
Code Section 4975(e)(2) with respect to a "Plan" as defined in Code Section
4975(e)(1) except in each case with respect to plans sponsored by the Call
Warrant holder or its affiliates which cover employees of the Call Warrant
holder and/or such affiliates; (ii) a certificate that each of the Call
Warrant holders is not such a "party in interest" or "disqualified person"
with respect to any employee benefit plan or Plan identified to the Trustee by
such Plan fiduciary at the time such request is made; or (iii) a written
consent to the limited disclosure of the respective Call Warrant holder's
identity to a specific Plan fiduciary solely for purposes of allowing the
Trustee to satisfy its obligations to a Plan fiduciary.

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

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

          If to the Depositor, to:

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

           If to the Trustee or the Warrant Agent, to:

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

           If to the Rating Agencies, to:

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

                                      23
<PAGE>

           and to:

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

           If to the New York Stock Exchange, to:

                New York Stock Exchange, Inc.
                20 Broad Street
                New York, New York  10005
                Attention:  Susan G. Waiter, Managing Director,
                            Investment Banking Services/Structured Products
                Telephone:  (212) 656-2818
                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(p).

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

     (r) The provisions of Section 2.01(d)(iii) of the Standard Terms shall
not apply to the Verizon New York Debenture-Backed Series 2004-1 Certificates
and the following shall be deemed to be inserted in its place:

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

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

                                      24
<PAGE>

year that specifies the calculations made in reviewing the distribution
reports prepared by the Trustee for the previous calendar year and such
accountants' associated findings.

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

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

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

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

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

                                      25
<PAGE>

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

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

                                      26
<PAGE>

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

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

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

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

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

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

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

                                      27
<PAGE>

     (vi) Other than the security interest granted to the Trust pursuant to
          this Agreement, the Depositor has not assigned, pledged, sold,
          granted a security interest in or otherwise conveyed any interest in
          the Underlying Securities (or, if any such interest has been
          assigned, pledged or otherwise encumbered, it has been released).
          The Depositor has not authorized the filing of and is not aware of
          any financing statements against the Depositor that include a
          description of the Underlying Securities other than any financing
          statement relating to the security interest granted to the Trust
          hereunder. The Depositor is not aware of any judgment or tax lien
          filings against the Depositor.

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

                                      28
<PAGE>

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

                                     LEHMAN ABS CORPORATION,
                                         as Depositor

                                     By: _______________________________________
                                          Name:  Paul Mitrokostas
                                          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 Verizon New
                                        York Debenture-Backed
                                        Series 2004-1 Trust

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

                                      29
<PAGE>

                                                                    SCHEDULE I

                 VERIZON NEW YORK DEBENTURE-BACKED SERIES 2004-1

                         UNDERLYING SECURITIES SCHEDULE

Underlying Securities:              7 3/8% Debentures, Series B, due April 2032.

Issuer:                             Verizon New York Inc.

CUSIP Number:                       92344XAB5.

Principal Amount Deposited:         $150,144,000.

Original Issue Date:                March 28, 2003.

Principal Amount of
Underlying Securities
Originally Issued:                  $500,000,000.

Maturity Date:                      April 1, 2032.

Interest Rate:                      7 3/8% per annum.

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

                                     I-1

<PAGE>

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

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

NUMBER 1                                         6,005,760 $25 PAR CERTIFICATES
                                                          CUSIP NO. 21988K 80 0

                       SEE REVERSE FOR CERTAIN DEFINITIONS

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

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

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

                                    A-1-1
<PAGE>

                             LEHMAN ABS CORPORATION

                                6,005,760 $25 PAR

                      CORPORATE BACKED TRUST CERTIFICATES,

                 VERIZON NEW YORK DEBENTURE-BACKED SERIES 2004-1

6.20% INTEREST RATE

          evidencing a proportionate undivided beneficial ownership interest
in the Trust, as defined below, the property of which consists principally of
$150,144,000 aggregate principal amount of 7 3/8% Debentures, Series B, due
2032, issued by Verizon New York Inc. (the "Underlying Securities Issuer") and
all payments received thereon (the "Trust Property"), deposited in trust by
Lehman ABS Corporation (the "Depositor").

          THIS CERTIFIES THAT CEDE & CO. is the registered owner of an
aggregate of $150,144,000 principal amount nonassessable, fully-paid,
proportionate undivided beneficial ownership interest in the Corporate Backed
Trust Certificates, Verizon New York Debenture-Backed Series 2004-1 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 in respect of the Verizon
New York Debenture-Backed Series 2004-1, dated as of January 15, 2004 (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, Verizon New York
Debenture-Backed Series 2004-1, Class A-1" (herein called the "Certificates").
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound. The Trust Property consists of: (i) Underlying Securities
described in the Trust Agreement, and (ii) all payments on or collections in
respect of the Underlying Securities accrued on or after January 15, 2004,
together with any and all income, proceeds and payments with respect thereto;
provided, however, that any income from the investment of Trust funds in
certain permitted investments ("Eligible Investments") does not constitute
Trust Property.

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

                                    A-1-2
<PAGE>

Date, to the Person in whose name this Certificate is registered on the
applicable Record Date, in an amount equal to such Certificateholder's
proportionate undivided beneficial ownership interest in the amount required
to be distributed to the Holders of the Certificates on such Distribution
Date. The Record Date applicable to any Distribution Date is the close of
business on the day immediately preceding such Distribution Date (whether or
not a Business Day). If a payment with respect to the Underlying Securities is
made to the Trustee after the date on which such payment was due, then the
Trustee will distribute any such amounts received on the next occurring
Business Day.

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

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

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

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

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

                                    A-1-3
<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,
                                      VERIZON NEW YORK DEBENTURE-BACKED
                                      SERIES 2004-1 TRUST

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

                                      By:______________________________________
                                         Authorized Signatory

Dated: January 15, 2004

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

          This is one of the Corporate Backed Trust Certificates, Verizon New
York Debenture-Backed Series 2004-1, described in the Trust Agreement referred
to herein.

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

By:_________________________________
     Authorized Signatory

                                    A-1-4
<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 Class A-1 Certificates in the
manner set forth in the Series Supplement and the Standard Terms. Any such
consent by the Holder of this Certificate (or any predecessor Certificate)
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not a notation of such consent is
made upon this Certificate. The Trust Agreement also permits the amendment
thereof, in certain limited circumstances, without the consent of the Holders
of any of the Certificates.

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

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

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

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

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

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

                                    A-1-5
<PAGE>

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

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

                                    A-1-6
<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-1-7
<PAGE>

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

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

NUMBER 1                                                  CUSIP NO. 21988K AH 0

                       SEE REVERSE FOR CERTAIN DEFINITIONS

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

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

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

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

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

                                    A-2-1
<PAGE>

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

                                    A-2-2
<PAGE>

                             LEHMAN ABS CORPORATION

                      CORPORATE BACKED TRUST CERTIFICATES,

                 VERIZON NEW YORK DEBENTURE-BACKED SERIES 2004-1

                          $150,144,000 NOTIONAL AMOUNT

1.175% INTEREST RATE

FINAL SCHEDULED DISTRIBUTION DATE:  April 1, 2032

     evidencing a proportionate undivided beneficial ownership interest in the
Trust, as defined below, the property of which consists principally of
$150,144,000 aggregate principal amount of 7 3/8% Debentures, Series B, due
2032, issued by Verizon New York Inc., and all payments received thereon (the
"Trust Property"), deposited in trust by Lehman ABS Corporation (the
"Depositor").

          THIS CERTIFIES THAT CEDE & CO. is the registered owner of an
aggregate amount of $150,144,000 notional amount nonassessable, fully-paid,
proportionate undivided beneficial ownership interest in the Corporate Backed
Trust Certificates, Verizon New York Debenture-Backed Series 2004-1 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, Verizon New York
Debenture-Backed Series 2004-1, dated as of January 15, 2004 (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, Verizon New York
Debenture-Backed Series 2004-1, Class A-2" (herein called the "Certificates").
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound. The Trust Property consists of: (i) Underlying Securities
described in the Trust Agreement, and (ii) all payments on or collections in
respect of the Underlying Securities accrued on or after January 15, 2004,
together with any and all income, proceeds and payments

                                    A-2-3
<PAGE>

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

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

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

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

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

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

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

                                    A-2-4
<PAGE>

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

                                    A-2-5
<PAGE>

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

                                      CORPORATE BACKED TRUST CERTIFICATES,
                                      VERIZON NEW YORK DEBENTURE-BACKED
                                      SERIES 2004-1 TRUST

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

                                      By:______________________________________
                                          Authorized Signatory

Dated: January 15, 2004

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

          This is one of the Corporate Backed Trust Certificates, Verizon New
York Debenture-Backed Series 2004-1, described in the Trust Agreement referred
to herein.

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

By:_________________________________
    Authorized Signatory

                                    A-2-6
<PAGE>

                            (REVERSE OF CERTIFICATE)

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

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

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

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

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

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

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

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

                                    A-2-7
<PAGE>

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

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

                                    A-2-8
<PAGE>

                                   ASSIGNMENT

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

PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE

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

Dated:

                                                           *
                                                 Signature Guaranteed:

                                                           *

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

                                    A-2-9
<PAGE>

                                    EXHIBIT B

                         FORM OF WARRANT AGENT AGREEMENT

                             WARRANT AGENT AGREEMENT

                       CORPORATE BACKED TRUST CERTIFICATES

              VERIZON NEW YORK DEBENTURE-BACKED SERIES 2004-1 TRUST

          WARRANT AGENT AGREEMENT, dated as of January 15, 2004 (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,
Verizon New York Debenture-Backed Series 2004-1 Trust (the "Trust"), a trust
created under the laws of the State of New York pursuant to a Standard Terms for
Trust Agreements, dated as of January 16, 2001 (the "Agreement"), between Lehman
ABS Corporation (the "Depositor") and U.S. Bank Trust National Association, a
national banking association, not in its individual capacity but solely as
Trustee (the "Trustee"), as supplemented by the Series Supplement 2004-1, dated
as of January 15, 2004 (the "Series Supplement" and, together with the
Agreement, the "Trust Agreement"), between the Depositor and the Trustee; and

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

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

                                   ARTICLE I

                           EXERCISE OF CALL WARRANTS

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

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

<PAGE>

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

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

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

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

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

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

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

                                       2
<PAGE>

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

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

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

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

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

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

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

                                       3
<PAGE>

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

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

                                  ARTICLE II

                               THE CALL WARRANTS

     Section 2.1  The Call Warrants.

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

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

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

                                       4
<PAGE>

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

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

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

                                  ARTICLE III

                           RESTRICTIONS ON TRANSFER

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

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

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

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

                                       5
<PAGE>

                                   ARTICLE IV

                REGISTRATION AND TRANSFER OF CALL WARRANTS, ETC.

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

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

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

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

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

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

                                       6
<PAGE>

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

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

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

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

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

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

                                       7
<PAGE>

                                   ARTICLE V

                                  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 January 15, 2009, (ii)
after the Underlying Securities Issuer announces that it will redeem, prepay
or otherwise make an unscheduled payment on the Underlying Securities, (iii)
after the Trustee notifies the Certificateholders of any proposed sale of the
Underlying Securities pursuant to the provisions of the Series Supplement or
(iv) on which the Underlying Securities Issuer or an affiliate thereof
consummates a tender offer for some or all of the Underlying Securities.

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

          "Call Price": For each related Call Date, (i) in the case of the
Class A-1 Certificates, the sum of (x) 100% of the outstanding Certificate
Principal Balance of the Class A-1 Certificates being purchased pursuant to
the exercise of the Call Warrants, plus any accrued and unpaid interest on
such amount to, but excluding, the Call Date and (y) in the event a holder of
a Call Warrant exercises its right to call Class A-1 Certificates with a
settlement date occurring prior to January 15, 2009, an additional amount,
equal to $1.50 per Class A-1 Certificate, and (ii) in the case of the Class
A-2 Certificates, the present value of all amounts that would otherwise have
been payable on the Class A-2 Certificates being purchased pursuant to the
exercise of the Call Warrants for the period from the related Call Date to the
Final Scheduled Distribution Date using a discount rate of 7.35% per annum,
assuming no delinquencies, deferrals, redemptions or prepayments on the
Underlying Securities shall occur after the related Call Date.

          "Call Warrant": As defined in the recitals.

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

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

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

          "Closing Date": January 15, 2004.

          "Depositor": As defined in the recitals.

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

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

                                      8
<PAGE>

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

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

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

          "QIB": As defined in Section 4.2 hereof.

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

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

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

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

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

          "Trust": As defined in the recitals.

          "Trust Agreement": As defined in the recitals.

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

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

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

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

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

                                      9
<PAGE>

                                  ARTICLE VI

                                 WARRANT AGENT

          Section 6.1  Limitation on Liability. The Warrant Agent shall be
protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its administration of the Call
Warrants in reliance upon any instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document in good faith believed by it
to be genuine and to be signed, executed and, where necessary, verified and
acknowledged, by the proper Person or Persons.

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

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

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

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

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

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

          (f) The Warrant Agent is hereby authorized and directed to accept
     instructions with respect to the performance of its duties hereunder from
     the Chairman of

                                      10
<PAGE>

     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 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.

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

          Section 6.3  Change of Warrant Agent. The Warrant Agent may resign
and be discharged from its duties hereunder upon thirty (30) days notice in
writing mailed to the Depositor and the Trustee by registered or certified
mail, and to the Warrant Holders by first-

                                      11
<PAGE>

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

                                  ARTICLE VII

                                 MISCELLANEOUS

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

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

          Section 7.3  Notices. All notices and other communications under this
Warrant Agent Agreement shall be in writing and shall be delivered, or mailed
by registered or certified mail, return receipt requested, by a nationally
recognized overnight courier, postage prepaid, addressed (a) if to any Warrant
Holder, at the registered address of such Warrant Holder as set forth in the
register kept by the Warrant Agent or (b) if to the Warrant Agent, to 100 Wall
Street, Suite 1600, New York, New York 10005, Attention: Corporate Trust or to
such other address notice of which the Warrant Agent shall have given to the
Warrant Holder and the Trustee or (c) if to the Trust or the Trustee, to the
Corporate Trust Office (as set forth in the Trust Agreement);

                                      12
<PAGE>

provided that the exercise of any Call Warrants shall be effective in the
manner provided in Article I. The Warrant Agent shall forward to the Warrant
Holder any notices received by it hereunder or pursuant to the Trust Agreement
or this Agreement by facsimile within one Business Day of receipt thereof.

          Section 7.4  Amendment. (a) This Warrant Agent Agreement may be
amended from time to time by the Depositor, the Trustee and the Warrant Agent
without the consent of any Warrant Holder, upon receipt of an opinion of
counsel satisfactory to the Warrant Agent that the provisions hereof have been
satisfied and that such amendment would not cause the Trust to be taxed as an
association or publicly traded partnership taxable as a Corporation under the
Code, for any of the following purposes: (i) to cure any ambiguity or to
correct or supplement any provision herein which may be defective or
inconsistent with any other provision herein or to provide for any other terms
or modify any other provisions with respect to matters or questions arising
under the Call Warrant which shall not adversely affect in any material
respect the interests of the Warrant Holder or any holder of a Certificate;
provided, however, that no amendment altering the timing or amount of any
payment of the Call Price shall be effected without the consent of each
Warrant Holder; or (ii) to evidence and provide for the acceptance of
appointment hereunder of a Warrant Agent other than U.S. Bank Trust National
Association.

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

          (c) Promptly after the execution of any such amendment or
     modification, the Warrant Agent shall furnish a copy of such amendment or
     modification to each Warrant Holder, to the Trustee and to the Rating
     Agencies. It shall not be necessary for the consent of Warrant Holders or
     holders of Certificates under this Section to approve the particular form
     of any proposed amendment, but it shall be sufficient if such consent
     shall

                                      13
<PAGE>

     approve the substance thereof. The manner of obtaining such consents and
     of evidencing the authorization of the execution thereof shall be subject
     to such reasonable regulations as the Warrant Agent may prescribe.

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

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

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

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

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

                                      14
<PAGE>

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

                             LEHMAN ABS CORPORATION,
                             as Depositor

                             By:
                                ---------------------------------------------
                             Name:
                             Title:

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

                             By:
                                ---------------------------------------------
                             Name:
                             Title:

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

                             By:
                                ---------------------------------------------
                             Name:
                             Title:

                                      15
<PAGE>

                                    EXHIBIT A

                            FORM OF INVESTMENT LETTER

                          QUALIFIED INSTITUTIONAL BUYER

                                                  Dated: ___________ __, _____

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

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

         Re:  Corporate Backed Trust Certificates, Verizon New York
              -----------------------------------------------------
              Debenture-Backed Series 2004-1
              ------------------------------

Ladies and Gentlemen:

          In connection with its proposed purchase of Call Warrants (the "Call
Warrants") which represent the right to call $______________ aggregate
certificate principal balance of Corporate Backed Trust Certificates, Verizon
New York Debenture-Backed Series 2004-1 Class A-1 Certificates and
$_______________ aggregate notional amount of Corporate Backed Trust
Certificates, Verizon New York Debenture-Backed Series 2004-1 Class A-2
Certificates, the undersigned purchaser (the "Purchaser") confirms that:

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

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

                                     A-1
<PAGE>

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

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

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

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

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

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

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

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

                                     A-2
<PAGE>

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

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

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

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

                                     A-3
<PAGE>

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

                                 Very truly yours,

                                     [Name of Purchaser]

                                     By: ____________________________________
                                     Name:  _________________________________
                                     Title: _________________________________

                                     A-4

<PAGE>

                                    EXHIBIT C

                            FORM OF INVESTMENT LETTER
              QUALIFIED INSTITUTIONAL BUYER AND ACCREDITED INVESTOR

                                           Dated:

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

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

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

Ladies and Gentlemen:

     In connection with our proposed purchase of $___________ aggregate
notional amount of Class A-2 Certificates (the "Class A-2 Certificates")
representing an interest in the Corporate Backed Trust Certificates, Verizon
New York Debenture-Backed Series 2004-1 Trust (the "Trust"), the undersigned,
by executing this letter (the "Purchaser") confirms that:

     1. Reference is made to the private placement memorandum, dated
[_______], 2004, including the schedules, exhibits and annexes, if any,
thereto, as supplemented or amended to the date hereof (the "Memorandum"),
relating to the Class A-2 Certificates. Capitalized terms used herein that are
not otherwise defined shall have the meanings ascribed thereto in the
Memorandum. The Purchaser has received a copy of the Memorandum and such other
information as the Purchaser deems necessary in order to make its investment
decision and the Purchaser has been provided the opportunity to ask questions
of, and receive answers from, the Depositor and the Initial Purchaser,
concerning the terms and conditions of the offering described in the
Memorandum. The Purchaser has received and understands the information
discussed above and understands that substantial risks are involved in an
investment in the Class A-2 Certificates. The Purchaser represents that, in
making its investment decision to acquire the Class A-2 Certificates, the
Purchaser has not relied on representations, warranties, opinions,
projections, financial or other information or analysis, if any, supplied to
it by any person or entity, including the Initial Purchaser, the Depositor or
the Trustee or any of their affiliates, except as expressly contained in the
Memorandum and in the other written information, if any, discussed above. The
Purchaser acknowledges that it has read and agreed to the matters stated on
pages 2 through 4 of such Memorandum and the information under the heading
"Transfer Restrictions." The Purchaser is purchasing the Class A-2
Certificates for investment purposes

                                     C-1
<PAGE>

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

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

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

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

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

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

                                     C-2
<PAGE>

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

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

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

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

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

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

                                C-3
<PAGE>

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

                                     Very truly yours,

                                     By:  _____________________________________
                                          Name:
                                          Title:

                                     C-4EXHIBIT 10.2

                          LOAN AND SECURITY AGREEMENT

     WCMA LOAN AND SECURITY  AGREEMENT NO. 885-07D32 ("Loan Agreement") dated as
of November 25, 2003, between ATLAS TECHNOLOGIES,  INC., a corporation organized
and existing under the laws of the State of Michigan having its principal office
at 201 S. Alloy Dr. Fenton,  MI 48430  ("Customer"),  and MERRILL LYNCH BUSINESS
FINANCIAL SERVICES INC., a corporation  organized and existing under the laws of
the State of Delaware  having its principal  office at 222 North LaSalle Street,
Chicago, IL 60601 ("MLBFS").

     Pursuant to that certain WORKING CAPITAL  MANAGEMENT(r)  ACCOUNT  AGREEMENT
NO. 885-07D32 and the accompanying  Program  Description (as the same may be, or
have been,  amended,  modified or supplemented,  the "WCMA  Agreement")  between
Customer  and  MLBFS'  affiliate,   MERRILL  LYNCH,   PIERCE,   FENNER  &  SMITH
INCORPORATED ("MLPF&S"),  Customer opened, or shall prior to the Activation Date
open, a Working Capital  Management  Account  pursuant to the "WCMA Service" and
the  "WCMA   Program"   described  in  the  WCMA  Agreement  and  any  documents
incorporated therein. The WCMA Agreement is by this reference  incorporated as a
part hereof. In conjunction therewith and as part of the WCMA Program,  Customer
has requested that MLBFS provide, and subject to the terms and conditions herein
set forth MLBFS has agreed to provide, a commercial line of credit for Customer.

     Accordingly,  and in  consideration  of  the  premises  and  of the  mutual
covenants of the parties hereto, Customer and MLBFS hereby agree as follows:

                             ARTICLE I. DEFINITIONS

     1.1 Specific  Terms.  In addition to terms  defined  elsewhere in this Loan
Agreement,  when used  herein  the  following  terms  shall  have the  following
meanings:

     "Activation Date" shall mean the date upon which MLBFS shall cause the WCMA
Line of Credit to be fully  activated  under MLPF&S'  computer system as part of
the WCMA  Program.  "Bankruptcy  Event" shall mean any of the  following:  (i) a
proceeding  under  any  bankruptcy,  reorganization,   arrangement,  insolvency,
readjustment of debt,  liquidation,  winding up or  receivership  law or statute
shall be commenced,  filed or consented to by any Credit Party; or (ii) any such
proceeding shall be filed against any Credit Party and shall not be dismissed or
withdrawn  within sixty (60) days after filing;  or (iii) any Credit Party shall
make a general assignment for the benefit of creditors; or (iv) any Credit Party
shall  generally  fail to pay or admit in writing its inability to pay its debts
as they become due; or (v) any Credit Party shall be  adjudicated  a bankrupt or
insolvent;  or (vi) any Credit  Party shall take  advantage  of any other law or
procedure  for the relief of debtors or shall take any action for the purpose of
or with a view  towards  effecting  any of the  foregoing;  or (vii) a receiver,
trustee, custodian, fiscal agent or similar official for any Credit Party or for
any  substantial  part of any of their  respective  property or assets  shall be
sought by such Credit Party or appointed.

     "Business  Day" shall mean any day other than a Saturday,  Sunday,  federal
holiday or other day on which the New York Stock  Exchange is regularly  closed.
"Business Guarantor" shall mean every Guarantor that is not a natural person.

     "Certificate of Compliance"  shall mean, as applicable,  that duly executed
certificate,  substantially  the same form as Exhibit B  attached  hereto to the
extent such certificate shall be applicable,  of the president,  chief financial
officer or chief executive officer of Customer, certifying as to the matters set
forth in such certificate.

     "Collateral"  shall mean the WCMA  Account,  all Accounts,  Chattel  Paper,
Contract Rights, Inventory,  Equipment,  Fixtures, General Intangibles,  Deposit
Accounts,  Documents,  Instruments,  Investment Property,  Financial Assets, and
Letter-of-Credit  Rights of Customer,  howsoever  arising,  whether now owned or
existing or hereafter acquired or arising,  and wherever located;  together with
all parts  thereof  (including  spare parts),  all  accessories  and  accessions
thereto,  all books and records  (including  computer  records) directly related
thereto,  all proceeds thereof (including,  without limitation,  proceeds in the
form of Accounts,  insurance  proceeds and all rights to payment and performance
under that certain Letter of Credit Number  LC322190300791  issued by HSBC), and
the additional collateral described in Section 3.6 (b) hereof.

     "Commitment Expiration Date" shall mean December 15, 2003.

     "Credit   Party"  and  "Credit   Parties"  shall  mean,   individually   or
collectively,  the Customer,  all Guarantors and all Pledgors.  "Default"  shall
mean either an "Event of Default" as defined in Section 3.5 hereof,  or an event
which with the giving of notice, passage of time, or both, would constitute such
an Event of Default.

     "Default  Rate" shall mean an annual  interest rate equal to the lesser of:
(i) two percentage  points over the Interest Rate; or (ii) the highest  interest
rate  allowed by  applicable  law.  "Event of Loss"  shall  mean the  occurrence
whereby  any  tangible  Collateral  is  damaged  beyond  repair,  lost,  totally
destroyed or confiscated.

     "Excess Interest" shall mean any amount or rate of interest  (including the
Default Rate and, to the extent that they may be deemed to constitute  interest,
any prepayment fees, late charges and other fees and charges)  payable,  charged
or received  in  connection  with any of the Loan  Documents  which  exceeds the
maximum amount or rate of interest  permitted under applicable law. "GAAP" shall
mean the generally accepted accounting principles in effect in the United States
of America from time to time.  "General Funding  Conditions"  shall mean each of
the following conditions to any WCMA Loan by MLBFS hereunder: (i) Customer shall
have  validly  subscribed  to and  continued  to maintain  the WCMA Account with
MLPF&S,  and the WCMA Account shall then be reflected as an active  "commercial"
WCMA  Account  (i.e.,  one with line of credit  capabilities)  on  MLPF&S'  WCMA
computer system;  (ii) no Default or Event of Default shall have occurred and be
continuing or would result from the making of any WCMA Loan  hereunder by MLBFS;
(iii) there shall not have  occurred  and be  continuing  any  material  adverse
change in the business or  financial  condition  of any Credit  Party;  (iv) all
representations  and warranties of all of the Credit Parties herein or in any of
the Loan Documents shall then be true and correct in all material respects;  (v)
MLBFS  shall  have  received  this  Loan  Agreement  and all of the  other  Loan
Documents  duly executed and filed or recorded  where  applicable,  all of which
shall be in form and  substance  satisfactory  to MLBFS;  (vi) MLBFS  shall have
received  evidence  satisfactory to it as to the ownership of the Collateral and
the perfection and priority of MLBFS' liens and security interests  thereon,  as
well as the  ownership  of and the  perfection  and priority of MLBFS' liens and
security  interests  on any  other  collateral  for  the  Obligations  furnished
pursuant to any of the Loan Documents;  (vii) MLBFS shall have received evidence
satisfactory  to it of the  insurance  required  hereby  or by  any of the  Loan
Documents;  and (viii) any additional  conditions specified in the "WCMA Line of
Credit  Approval"  letter  executed  by MLBFS with  respect to the  transactions
contemplated   hereby  shall  have  been  met  to  the  satisfaction  of  MLBFS.
"Guarantor"  shall mean each Person  obligated under a guaranty,  endorsement or
other undertaking by which such Person  guarantees or assumes  responsibility in
any capacity for the payment or performance of any of the Obligations.  "Initial
Maturity Date" shall mean the first date upon which the WCMA Line of Credit will
expire  (subject  to  renewal  in  accordance  with the terms  hereof);  to wit:
December 31, 2004.

     "Individual  Guarantor"  shall mean each Guarantor who is a natural person.
"Interest  Due Date" shall mean the first  Business Day of each  calendar  month
during the term hereof.

     "Interest  Rate" shall mean a variable per annum rate of interest  equal to
the sum of 2.85% plus the One-Month LIBOR.  "One-Month  LIBOR" shall mean, as of
the date of any determination, the interest rate then most recently published in
the "Money Rates"  section of The Wall Street  Journal as the  one-month  London
Interbank  Offered  Rate.  The  Interest  Rate  will  change  as of the  date of
publication  in The Wall Street  Journal of a One-Month  LIBOR that is different
from that  published  on the  preceding  Business  Day, if more than one rate is
published,  then the  highest of such  rates.  In the event that The Wall Street
Journal  shall,  for any reason,  fail or cease to publish the One-Month  LIBOR,
MLBFS will choose a  reasonably  comparable  index or source to use as the basis
for the Interest Rate.

     "Line Fee" shall mean a fee of $40,000.00 payable  periodically by Customer
to  MLBFS in  accordance  with the  provisions  of  Section  2.2  hereof.  "Loan
Documents" shall mean this Loan Agreement, any indenture, any guaranty of any of
the  Obligations  and all other  security  and other  instruments,  assignments,
certificates,  certifications  and agreements of any kind relating to any of the
Obligations,  whether obtained,  authorized,  authenticated,  executed,  sent or
received  concurrently  with or  subsequent  to this  Loan  Agreement,  or which
evidence the creation,  guaranty or  collateralization of any of the Obligations
or the granting or perfection of liens or security interests upon any Collateral
or any  other  collateral  for the  Obligations,  including  any  modifications,
amendments or restatements of the foregoing.

     "Location  of Tangible  Collateral"  shall mean the address of Customer set
forth at the beginning of this Loan  Agreement,  together with any other address
or  addresses  set forth on an exhibit  hereto as being a Location  of  Tangible
Collateral.  "Maturity  Date" shall mean the date of expiration of the WCMA Line
of Credit.

     "Maximum WCMA Line of Credit"  shall mean, as of any date of  determination
thereof,  an amount  equal to the lesser of:  (A)  $4,000,000.00,  or (B) 80% of
Customer's Accounts and Chattel Paper, as shown on its regular books and records
(excluding  Accounts over 90 days old,  Accounts directly or indirectly due from
any person or entity not domiciled in the United States or from any shareholder,
officer or employee of Customer or any  affiliated  entity),  50% of  Customer's
Inventory   as  shown  on  its  regular   books  and  records   (excluding   all
work-in-process  inventory),  and a percentage,  to be determined by MLBFS at it
sole discretion, of Customer's Eligible Foreign Account, as shown on its regular
books and record.  For the purposes hereof,  the term "Eligible Foreign Account"
shall mean that certain Account due to Customer from Yuejin Motor Group Imp. and
Exp.  Co., Ltd,  provided that (i) such Account is credit  enhanced by letter of
credit  #LC322190300791 having a face amount of $667,500 and issued by HSBC Bank
USA (the "LOC");  (ii) MLBFS has a first priority lien and security  interest on
the proceeds of the Letter-of-Credit Rights of such LOC; and (iii) HBSC Bank USA
has  consented in writing to pay to MLBFS all proceeds of such  Letter-of-Credit
Rights of the LOC.  "Obligations"  shall mean all liabilities,  indebtedness and
other obligations of Customer to MLBFS, howsoever created, arising or evidenced,
whether now existing or hereafter arising, whether direct or indirect,  absolute
or contingent,  due or to become due,  primary or secondary or joint or several,
and, without limiting the generality of the foregoing,  shall include principal,
accrued  interest  (including  without  limitation  interest  accruing after the
filing of any  petition in  bankruptcy),  all  advances  made by or on behalf of
MLBFS under the Loan Documents, collection and other costs and expenses incurred
by or on behalf of MLBFS,  whether  incurred  before or after  judgment  and all
present and future  liabilities,  indebtedness and obligations of Customer under
this Loan Agreement,  under that certain Term Loan and Security  Agreement dated
as of November 25, 2003 and that certain Term Loan and Security  Agreement Dated
as of November 25, 2003.

     "Permitted Liens" shall mean with respect to the Collateral:  (i) liens for
current taxes not yet due and payable, other non-consensual liens arising in the
ordinary  course of  business  for sums not due,  and,  if MLBFS'  rights to and
interest in the Collateral are not  materially and adversely  affected  thereby,
any such liens for taxes or other  non-consensual  liens arising in the ordinary
course of business  being  contested in good faith by  appropriate  proceedings;
(ii) liens in favor of MLBFS;  (iii)  liens  which will be  discharged  with the
proceeds of the initial WCMA Loan; and (iv) any other liens expressly  permitted
in writing by MLBFS. "Person" shall mean any natural person and any corporation,
partnership (general,  limited or otherwise),  limited liability company, trust,
association,  joint venture,  governmental body or agency or other entity having
legal  status of any kind.  "Pledgor"  shall  mean each  Person  who at any time
provides  collateral,  or otherwise now or  hereinafter  agrees to grant MLBFS a
security interest in any assets as security for Customer's Obligations.

     "Renewal  Year"  shall mean and refer to the  12-month  period  immediately
following the Initial Maturity Date and each 12-month period  thereafter.  "WCMA
Account"  shall  mean and refer to the  Working  Capital  Management  Account of
Customer  with MLPF&S  identified  as Account No.  885-07D32  and any  successor
Working Capital Management Account of Customer with MLPF&S.

     "WCMA Line of Credit"  shall mean a line of credit  funded by MLBFS through
the WCMA Account.  "WCMA Loan" shall mean each advance made by MLBFS pursuant to
this Loan  Agreement.  "WCMA Loan  Balance"  shall  mean an amount  equal to the
aggregate  unpaid  principal  amount of all WCMA  Loans.  "UCC"  shall  mean the
Uniform Commercial Code of Illinois as in effect in Illinois from time to time.

     1.2 Other Terms.  Except as otherwise defined herein: (i) all terms used in
this Loan  Agreement  which are defined in the UCC shall have the  meanings  set
forth in the UCC,  and (ii)  capitalized  terms used herein which are defined in
the WCMA Agreement (including,  without limitation,  "Money Accounts",  "Minimum
Money Accounts  Balance",  and "WCMA Directed  Reserve  Program") shall have the
meanings set forth in the WCMA Agreement, and (iii) accounting terms not defined
herein shall have the meaning ascribed to them in GAAP.

     1.3 UCC  Filing.  Customer  hereby  authorizes  MLBFS to file a  record  or
records (as defined or otherwise  specified under the UCC),  including,  without
limitation,  financing  statements,  in all  jurisdictions  and with all  filing
offices  as MLBFS  may  determine,  in its sole  discretion,  are  necessary  or
advisable  to  perfect  the  security  interest  granted to MLBFS  herein.  Such
financing statements may describe the Collateral in the same manner as described
herein or may contain an indication or description of collateral  that describes
such  property  in any  other  manner  as  MLBFS  may  determine,  in  its  sole
discretion,  is necessary,  advisable or prudent to ensure the perfection of the
security interest in the Collateral granted to the MLBFS herein.

                      ARTICLE II. THE WCMA LINE OF CREDIT

     2.1 WCMA PROMISSORY  NOTE. FOR VALUE RECEIVED,  Customer hereby promises to
pay to the order of MLBFS, at the times and in the manner set forth in this Loan
Agreement,  or in such other  manner  and at such  place as MLBFS may  hereafter
designate in writing, the following: (a) on the Maturity Date, or if earlier, on
the date of termination of the WCMA Line of Credit,  the WCMA Loan Balance;  (b)
interest at the Interest  Rate (or, if  applicable,  at the Default Rate) on the
outstanding WCMA Loan Balance,  from and including the date on which the initial
WCMA Loan is made until the date of  payment of all WCMA Loans in full;  and (c)
on demand,  all other sums payable  pursuant to this Loan Agreement,  including,
but not limited to, the periodic  Line Fee.  Except as otherwise  expressly  set
forth herein,  Customer hereby waives presentment,  demand for payment,  protest
and notice of protest,  notice of dishonor,  notice of  acceleration,  notice of
intent to accelerate and all other notices and  formalities  in connection  with
this WCMA Promissory Note and this Loan Agreement.

     2.2 WCMA LOANS

     (a) Activation  Date.  Provided that:  (i) the Commitment  Expiration  Date
shall not then have  occurred,  and (ii) Customer  shall have  subscribed to the
WCMA Program and its  subscription  to the WCMA Program shall then be in effect,
the  Activation  Date shall occur on or promptly  after the date,  following the
acceptance of this Loan  Agreement by MLBFS at its office in Chicago,  Illinois,
upon which each of the General Funding  Conditions and the Real Property Funding
Condition  shall have been met or satisfied to the  reasonable  satisfaction  of
MLBFS.  No activation  by MLBFS of the WCMA Line of Credit for a nominal  amount
shall be deemed evidence of the satisfaction of any of the conditions herein set
forth,  or a waiver of any of the terms or conditions  hereof.  Customer  hereby
authorizes  MLBFS to pay out of and  charge to  Customer's  WCMA  Account on the
Activation Date any and all amounts necessary to fully pay off any bank or other
financial  institution  having a lien upon any of the  Collateral  other  than a
Permitted Lien.

     (b) WCMA  Loans.  Subject to the terms and  conditions  hereof,  during the
period from and after the Activation  Date to the first to occur of the Maturity
Date or the date of termination of the WCMA Line of Credit pursuant to the terms
hereof,  and in  addition  to  WCMA  Loans  automatically  made  to pay  accrued
interest,  as hereafter provided:  (i) MLBFS will make WCMA Loans to Customer in
such amounts as Customer may from time to time  request in  accordance  with the
terms hereof,  up to an aggregate  outstanding  amount not to exceed the Maximum
WCMA Line of Credit,  and (ii)  Customer may repay any WCMA Loans in whole or in
part at any time,  and request a  re-borrowing  of amounts repaid on a revolving
basis.  Customer may request such WCMA Loans by use of WCMA Checks, FTS, Visa(r)
charges,  wire  transfers,  or such  other  means of  access to the WCMA Line of
Credit as may be permitted by MLBFS from time to time; it being  understood that
so long as the WCMA Line of Credit  shall be in  effect,  any charge or debit to
the WCMA Account  which but for the WCMA Line of Credit would under the terms of
the WCMA Agreement result in an overdraft, shall be deemed a request by Customer
for a WCMA Loan.

     (c) Conditions of WCMA Loans.  Notwithstanding  the foregoing,  MLBFS shall
not be obligated to make any WCMA Loan,  and may without  notice refuse to honor
any such request by Customer,  if at the time of receipt by MLBFS of  Customer's
request:  (i) the making of such WCMA Loan would cause the Maximum  WCMA Line of
Credit to be exceeded;  or (ii) the Maturity  Date shall have  occurred,  or the
WCMA Line of Credit shall have otherwise been  terminated in accordance with the
terms hereof;  or (iii)  Customer's  subscription to the WCMA Program shall have
been  terminated;  or (iv) an event shall have occurred and be continuing  which
shall have caused any of the General  Funding  Conditions  to not then be met or
satisfied to the reasonable  satisfaction  of MLBFS.  The making by MLBFS of any
WCMA Loan at a time when any one or more of said conditions  shall not have been
met  shall  not in any  event be  construed  as a waiver  of said  condition  or
conditions or of any Default, and shall not prevent MLBFS at any time thereafter
while any  condition  shall not have been met from refusing to honor any request
by Customer for a WCMA Loan.

     (d) Limitation of Liability. MLBFS shall not be responsible, and shall have
no liability  to Customer or any other party,  for any delay or failure of MLBFS
to honor any request of Customer for a WCMA Loan or any other act or omission of
MLBFS,  MLPF&S or any of their  affiliates  due to or resulting  from any system
failure, error or delay in posting or other clerical error, loss of power, fire,
Act of God or other cause beyond the reasonable control of MLBFS,  MLPF&S or any
of their  affiliates  unless directly arising out of the willful wrongful act or
active gross  negligence of MLBFS. In no event shall MLBFS be liable to Customer
or any other party for any incidental or consequential  damages arising from any
act or omission by MLBFS,  MLPF&S or any of their  affiliates in connection with
the WCMA Line of Credit or this Loan Agreement.

     (e) Interest.

          (i) An amount equal to accrued interest on the daily WCMA Loan Balance
     shall be payable by Customer monthly on each Interest Due Date,  commencing
     with the  first  Interest  Due  Date  after  the  Activation  Date.  Unless
     otherwise  hereafter  directed in writing by MLBFS on or after the first to
     occur of the Maturity Date or the date of  termination  of the WCMA Line of
     Credit  pursuant to the terms hereof,  such interest will be  automatically
     charged to the WCMA Account on the  applicable  Interest Due Date,  and, to
     the extent not paid with free credit  balances or the  proceeds of sales of
     any Money Accounts then in the WCMA Account, as hereafter provided, paid by
     a WCMA Loan and  added to the WCMA  Loan  Balance.  All  interest  shall be
     computed  for the  actual  number  of days  elapsed  on the basis of a year
     consisting of 360 days.

          (ii) Upon the  occurrence  and during the  continuance of any Default,
     but without limiting the rights and remedies  otherwise  available to MLBFS
     hereunder  or waiving  such  Default,  the  interest  payable  by  Customer
     hereunder shall at the option of MLBFS accrue and be payable at the Default
     Rate. The Default Rate,  once  implemented,  shall continue to apply to the
     Obligations  under this Loan Agreement and be payable by Customer until the
     date MLBFS gives  written  notice  that such  Default has been cured to the
     satisfaction of MLBFS.

          (iii) Notwithstanding any provision to the contrary in any of the Loan
     Documents,  no provision  of any of the Loan  Documents  shall  require the
     payment or permit the collection of Excess Interest. If any Excess Interest
     is provided  for, or is  adjudicated  as being  provided for, in any of the
     Loan Documents, then: (A) Customer shall not be obligated to pay any Excess
     Interest;  and (B)  any  Excess  Interest  that  MLBFS  may  have  received
     hereunder or under any of the Loan Documents shall, at the option of MLBFS,
     be either  applied as a credit against the then unpaid WCMA Loan Balance or
     refunded to the payor thereof.

     (f)  Payments.  All payments  required or permitted to be made  pursuant to
this Loan Agreement  shall be made in lawful money of the United States.  Unless
otherwise directed by MLBFS, payments on account of the WCMA Loan Balance may be
made by the delivery of checks (other than WCMA  Checks),  or by means of FTS or
wire transfer of funds (other than funds from the WCMA Line of Credit) to MLPF&S
for credit to  Customer's  WCMA  Account.  Notwithstanding  anything in the WCMA
Agreement to the contrary,  Customer hereby  irrevocably  authorizes and directs
MLPF&S to apply  available  free  credit  balances  in the WCMA  Account  to the
repayment of the WCMA Loan Balance prior to  application  for any other purpose.
Payments to MLBFS from funds in the WCMA  Account  shall be deemed to be made by
Customer  upon the same  basis  and  schedule  as funds are made  available  for
investment  in the  Money  Accounts  in  accordance  with the  terms of the WCMA
Agreement.  All funds  received by MLBFS from MLPF&S  pursuant to the  aforesaid
authorization  shall be applied by MLBFS to repayment of the WCMA Loan  Balance.
The acceptance by or on behalf of MLBFS of a check or other payment for a lesser
amount  than  shall be due  from  Customer,  regardless  of any  endorsement  or
statement  thereon or transmitted  therewith,  shall not be deemed an accord and
satisfaction  or anything  other than a payment on account,  and MLBFS or anyone
acting on  behalf  of MLBFS  may  accept  such  check or other  payment  without
prejudice  to the  rights of MLBFS to recover  the  balance  actually  due or to
pursue any other remedy under this Loan  Agreement  or  applicable  law for such
balance.  All checks  accepted by or on behalf of MLBFS in  connection  with the
WCMA Line of Credit are subject to final collection.

     (g) Irrevocable  Instructions to MLPF&S. In order to minimize the WCMA Loan
Balance, Customer hereby irrevocably authorizes and directs MLPF&S, effective on
the  Activation  Date and  continuing  thereafter so long as this Loan Agreement
shall be in effect:  (i) to immediately  and prior to application  for any other
purpose  pay to MLBFS to the extent of any WCMA Loan  Balance  or other  amounts
payable by Customer  hereunder all available  free credit  balances from time to
time in the WCMA Account;  and (ii) if such available  free credit  balances are
insufficient to pay the WCMA Loan Balance and such other amounts,  and there are
in the WCMA Account at any time any  investments in Money  Accounts  (other than
any investments  constituting  any Minimum Money Accounts Balance under the WCMA
Directed Reserve Program),  to immediately liquidate such investments and pay to
MLBFS to the  extent  of any  WCMA  Loan  Balance  and such  other  amounts  the
available proceeds from the liquidation of any such Money Accounts.

     (h) Late  Charge.  Any  payment or deposit  required to be made by Customer
pursuant  to the Loan  Documents  not paid or made  within  ten (10) days of the
applicable  due date shall be subject to a late charge in an amount equal to the
lesser of: (a) 5% of the overdue amount,  or (b) the maximum amount permitted by
applicable law. Such late charge shall be payable on demand, or, without demand,
may in the sole  discretion of MLBFS be paid by a Subsequent WCMA Loan and added
to the WCMA Loan  Balance in the same  manner as  provided  herein  for  accrued
interest with respect to the WCMA Line of Credit.

     (i)  Statements.  MLPF&S will include in each  monthly  statement it issues
under the WCMA Program  information with respect to WCMA Loans and the WCMA Loan
Balance.  Any questions that Customer may have with respect to such  information
should be directed to MLBFS;  and any questions with respect to any other matter
in such  statements or about or affecting the WCMA Program should be directed to
MLPF&S.

     (j) Use of WCMA Loan Proceeds.  The proceeds of each WCMA Loan initiated by
Customer  shall be used by Customer  solely for working  capital in the ordinary
course of its business,  or, with the prior written consent of MLBFS,  for other
lawful business purposes of Customer not prohibited hereby. Customer agrees that
under no  circumstances  will the  proceeds  of any WCMA  Loan be used:  (i) for
personal,  family or  household  purposes of any person  whatsoever,  or (ii) to
purchase,  carry or trade in  securities,  or repay debt  incurred to  purchase,
carry or trade in securities, whether in or in connection with the WCMA Account,
another  account of Customer  with MLPF&S or an account of Customer at any other
broker  or dealer in  securities,  or (iii)  unless  otherwise  consented  to in
writing by MLBFS, to pay any amount to Merrill Lynch and Co., Inc. or any of its
subsidiaries,  other than Merrill Lynch Bank USA, Merrill Lynch Bank & Trust Co.
or any  subsidiary of either of them  (including  MLBFS and Merrill Lynch Credit
Corporation).

     (k) Renewal at Option of MLBFS;  Right of Customer to Terminate.  MLBFS may
at any time, in its sole discretion and at its sole option,  renew the WCMA Line
of Credit for one or more Renewal  Years or extend the Maturity  Date;  it being
understood, however, that no such renewal or extension shall be effective unless
set forth in a writing executed by a duly authorized representative of MLBFS and
delivered to Customer.  Unless any such renewal or extension is accompanied by a
proposed  change  in the  terms  of the  WCMA  Line of  Credit  (other  than the
extension  of the  Maturity  Date),  no  Customer  approval  shall be  required.
Customer shall,  however, have the right to terminate the WCMA Line of Credit at
any time upon written notice to MLBFS.  Concurrently  with any such termination,
Customer  shall  pay to  MLBFS  the  entire  WCMA  Loan  Balance  and all  other
Obligations.

          (l) Line Fees.

               (i) In  consideration of the extension of the WCMA Line of Credit
          by MLBFS to Customer during the period from the Activation Date to the
          Initial Maturity Date,  Customer has paid or shall pay the Line Fee to
          MLBFS.  If the  Line Fee has not  heretofore  been  paid by  Customer,
          Customer hereby  authorizes  MLBFS, at its option, to either cause the
          Line  Fee to be paid  on the  Activation  Date  with a WCMA  Loan,  or
          invoice  Customer for such Line Fee (in which event Customer shall pay
          said fee within 5 Business  Days after  receipt of such  invoice).  No
          delay in the Activation Date, howsoever caused, shall entitle Customer
          to any rebate or reduction in the Line Fee or to any  extension of the
          Initial Maturity Date.

               (ii) Customer shall pay to MLBFS an additional  Line Fee for each
          Renewal  Year,  or an extension  fee for any extension of the Maturity
          Date (each  extension fee shall be equal to the pro rata amount of the
          Line Fee  corresponding  to the length of the  extension  period).  In
          connection therewith, Customer hereby authorizes MLBFS, at its option,
          to either cause each such fee to be paid with a WCMA Loan on or at any
          time after the first  Business  Day of such  Renewal Year or extension
          period, as applicable,  or invoiced to Customer at such time (in which
          event  Customer  shall pay such Line Fee within 5 Business  Days after
          receipt of such  invoice).  Each Line Fee and  extension  fee shall be
          deemed fully  earned by MLBFS on the date payable by Customer,  and no
          termination  of the  WCMA  Line of  Credit,  howsoever  caused,  shall
          entitle  Customer  to any rebate or refund of any portion of such fee;
          provided,  however,  that if Customer shall terminate the WCMA Line of
          Credit not later than 5 Business Days after the receipt by Customer of
          notice  from MLBFS of a renewal  of the WCMA Line of Credit,  Customer
          shall be entitled to a refund of any Line Fee charged by MLBFS for the
          ensuing Renewal Year.

                         ARTICLE III. GENERAL PROVISIONS

     3.1 REPRESENTATIONS AND WARRANTIES

     Customer represents and warrants to MLBFS that:

     (a) Organization and Existence.  Customer is a corporation,  duly organized
and validly  existing in good  standing  under the laws of the State of Michigan
and is qualified  to do business and in good  standing in each other state where
the nature of its business or the property  owned by it make such  qualification
necessary;  and, where  applicable,  each Business  Guarantor is duly organized,
validly  existing  and in good  standing  under  the  laws of the  state  of its
formation  and is qualified  to do business  and in good  standing in each other
state  where the nature of its  business or the  property  owned by it make such
qualification  necessary. (b) Execution,  Delivery and Performance.  Each Credit
Party has the  requisite  power and authority to enter into and perform the Loan
Documents. The Customer holds all necessary permits,  licenses,  certificates of
occupancy and other governmental  authorizations and approvals required in order
to own  and  operate  the  Customer's  business.  The  execution,  delivery  and
performance  by Customer of this Loan  Agreement and by each of the other Credit
Parties of such of the other  Loan  Documents  to which it is a party:  (i) have
been duly authorized by all requisite  action,  (ii) do not and will not violate
or conflict with any law, order or other governmental requirement, or any of the
agreements,  instruments  or documents  which formed or govern any of the Credit
Parties,  and (iii) do not and will not breach or violate any of the  provisions
of, and will not result in a default by any of the  Credit  Parties  under,  any
other  agreement,  instrument  or document to which it is a party or is subject.
(c) Notices and Approvals.  Except as may have been given or obtained, no notice
to or consent or approval of any  governmental  body or authority or other third
party whatsoever (including, without limitation, any other creditor) is required
in connection with the execution, delivery or performance by any Credit Party of
such of this Loan Agreement and the Loan  Documents to which it is a party.  (d)
Enforceability.  The Loan Documents to which any Credit Party is a party are the
respective  legal,   valid  and  binding   obligations  of  such  Credit  Party,
enforceable  against it or them,  as the case may be, in  accordance  with their
respective  terms,  except as  enforceability  may be limited by bankruptcy  and
other  similar laws  affecting  the rights of creditors  generally or by general
principles of equity.  (e)  Collateral.  Except for  priorities  afforded to any
Permitted  Liens:  (i) Customer has good and marketable title to the Collateral,
(ii) none of the  Collateral  is subject to any lien,  encumbrance  or  security
interest,  and (iii) upon the filing of all Uniform  Commercial  Code  financing
statements authenticated or otherwise authorized by Customer with respect to the
Collateral in the appropriate jurisdiction(s) and/or the completion of any other
action  required by applicable law to perfect its liens and security  interests,
MLBFS will have valid and perfected first liens and security  interests upon all
of the Collateral.  (f) Financial  Statements.  Except as expressly set forth in
Customer's  or any Business  Guarantor's  financial  statements,  all  financial
statements of Customer and each Business Guarantor  furnished to MLBFS have been
prepared  in  conformity   with  generally   accepted   accounting   principles,
consistently applied, are true and correct in all material respects,  and fairly
present the  financial  condition  of it as at such dates and the results of its
operations for the periods then ended (subject, in the case of interim unaudited
financial statements, to normal year-end adjustments); and since the most recent
date covered by such financial  statements,  there has been no material  adverse
change in any such financial  condition or operation.  All financial  statements
furnished to MLBFS of any Guarantor other than a Business Guarantor are true and
correct in all material respects and fairly represent such Guarantor's financial
condition as of the date of such financial statements, and since the most recent
date of such financial statements,  there has been no material adverse change in
such  financial  condition.  (g)  Litigation;   Compliance  With  All  Laws.  No
litigation, arbitration,  administrative or governmental proceedings are pending
or, to the knowledge of Customer,  threatened  against any Credit  Party,  which
would, if adversely determined,  materially and adversely affect (i) such Credit
Party's interest in the Collateral or the liens and security  interests of MLBFS
hereunder or under any of the Loan Documents, or (ii) the financial condition of
any Credit Party or its continued operations. Each Credit Party is in compliance
in all material respects with all laws, regulations,  requirements and approvals
applicable to such Credit Party. (h) Tax Returns.  All federal,  state and local
tax  returns,  reports and  statements  required to be filed by any Credit Party
have been filed with the appropriate governmental agencies and all taxes due and
payable by any Credit Party have been timely paid (except to the extent that any
such failure to file or pay will not materially and adversely  affect (i) either
the liens and  security  interests  of MLBFS  hereunder or under any of the Loan
Documents,  (ii) the  financial  condition  of any  Credit  Party,  or (iii) its
continued  operations).  (i) Collateral Location. All of the tangible Collateral
is located at a Location of Tangible Collateral. (j) No Default. No "Default" or
"Event of Default"  (each as defined in this Loan  Agreement or any of the other
Loan Documents) has occurred and is continuing.  (k) No Outside  Broker.  Except
for employees of MLBFS,  MLPF&S or one of their affiliates,  Customer has not in
connection  with the  transactions  contemplated  hereby  directly or indirectly
engaged or dealt  with,  and was not  introduced  or  referred  to MLBFS by, any
broker  or  other  loan  arranger.  Each of the  foregoing  representations  and
warranties:  (i) has been and will be relied upon as an  inducement  to MLBFS to
provide  the WCMA Line of  Credit,  and (ii) is  continuing  and shall be deemed
remade by Customer concurrently with each request for a WCMA Loan.

     3.2 FINANCIAL AND OTHER INFORMATION

     (a)  Customer  shall  furnish or cause to be  furnished to MLBFS during the
term  of  this  Loan  Agreement  all  of the  following:  (i)  Annual  Financial
Statements.  Within 120 days after the close of each fiscal year of Customer,  a
copy of the annual  audited  financial  statements  of  Customer,  including  in
reasonable  detail, a balance sheet and statement of retained earnings as at the
close of such  fiscal year and  statements  of profit and loss and cash flow for
such fiscal year; (ii) Certificate of Compliance. Within 45 days after the close
of each fiscal quarter of Customer,  a Certificate of Compliance,  duly executed
by an authorized officer of Customer,  in the form of Exhibit B attached hereto,
or such  other form as  reasonably  required  by MLBFS from time to time;  (iii)
Annual Collateral Audit.  Within 120 days after the close of each fiscal year of
Customer,  receipt and  satisfactory  review of a collateral  audit of controls,
accounts receivable and inventory,  prepared by a third party firm acceptable to
MLBFS.  The costs associated with the audit will be the sole  responsibility  of
Customer.  (iv) Interim Financial Statements.  Within 45 days after the close of
each fiscal quarter of Customer,  a copy of the interim financial  statements of
Customer for such fiscal quarter  (including in reasonable detail both a balance
sheet as of the close of such fiscal  period,  and  statement of profit and loss
for the  applicable  fiscal  period);  (v) A/R Agings.  Within 15 days after the
close of each fiscal month of Customer,  a copy of the Accounts Receivable Aging
of Customer as of the end of such fiscal month; (vi) Inventory  Reports.  Within
15 days  after  the  close  of each  fiscal  month  of  Customer,  a copy of the
Inventory  Report (as and to the extent  applicable,  breaking out  Inventory by
location,  and  separately  reporting any work in process) of Customer as of the
end of such fiscal month; (vii) Borrowing Base Certificate. Within 15 days after
the close of each fiscal month of Customer,  a Borrowing Base Certificate,  duly
executed  by an  authorized  officer of  Customer,  in the form of  Exhibit  B-1
attached hereto, or such other form as reasonably required by MLBFS from time to
time;  (viii) SEC Reports.  Customer  shall  furnish or cause to be furnished to
MLBFS not later than 10 days after the date of filing  with the  Securities  and
Exchange Commission ("SEC"), a copy of each 10-K, 10-Q and other report required
to be filed with the SEC during the term hereof by each Business Guarantor; (ix)
Paid Tax Bills.  A copy of each real estate tax bill on or issued in  connection
with the Real Property,  together with evidence of payment of such tax bill; and
(x) Other  Information.  Such other  information  as MLBFS may from time to time
reasonably request relating to Customer, any Credit Party or the Collateral.

     (b) General  Agreements  With  Respect to Financial  Information.  Customer
agrees that  except as  otherwise  specified  herein or  otherwise  agreed to in
writing by MLBFS: (i) all annual financial  statements  required to be furnished
by  Customer  to  MLBFS  hereunder  will  be  prepared  by  either  the  current
independent accountants for Customer or other independent accountants reasonably
acceptable to MLBFS,  and (ii) all other  financial  information  required to be
furnished  by Customer to MLBFS  hereunder  will be  certified as correct in all
material  respects by the party who has prepared such  information,  and, in the
case of internally prepared information with respect to Customer or any Business
Guarantor, certified as correct by their respective chief financial officer.

     3.3 OTHER COVENANTS

     Customer  further  covenants  and  agrees  during  the  term of  this  Loan
Agreement that:

     (a)  Financial  Records;  Inspection.  Each  Credit  Party  (other than any
Individual  Guarantor)  will:  (i) maintain at its  principal  place of business
complete and  accurate  books and  records,  and  maintain all of its  financial
records  in  a  manner  consistent  with  the  financial  statements  heretofore
furnished  to MLBFS,  or  prepared  on such other  basis as may be  approved  in
writing by MLBFS; and (ii) permit MLBFS or its duly authorized  representatives,
upon reasonable  notice and at reasonable times, to inspect its properties (both
real and personal), operations, books and records.

     (b) Taxes. Each Credit Party will pay when due all of its respective taxes,
assessments and other governmental charges,  howsoever designated, and all other
liabilities and obligations,  except to the extent that any such failure to file
or pay will not  materially  and adversely  affect either the liens and security
interests of MLBFS hereunder or under any of the Loan  Documents,  the financial
condition of any Credit Party or its continued operations.

     (c) Compliance With Laws and  Agreements.  No Credit Party will violate (i)
any law, regulation or other governmental requirement,  any judgment or order of
any court or governmental agency or authority; (ii) any agreement, instrument or
document  which is material to its  operations or to the operation or use of any
Collateral,  in each case as contemplated  by the Loan  Documents;  or (iii) any
agreement,  instrument  or  document  to  which  it is a party or by which it is
bound,  if any such  violation will  materially and adversely  affect either the
liens  and  security  interests  of MLBFS  hereunder  or  under  any of the Loan
Documents,  the  financial  condition  of any  Credit  Party,  or its  continued
operations.

     (d) No Use of  Merrill  Lynch  Name.  No  Credit  Party  will  directly  or
indirectly publish,  disclose or otherwise use in any advertising or promotional
material,  or press  release or  interview,  the name,  logo or any trademark of
MLBFS, MLPF&S, Merrill Lynch and Co., Incorporated or any of their affiliates.

     (e)  Notification  By Customer.  Customer  shall  provide MLBFS with prompt
written  notification  of: (i) any Default;  (ii) any material adverse change in
the business,  financial  condition or operations of any Credit Party; (iii) any
information  which  indicates that any financial  statements of any Credit Party
fail in any  material  respect to present  fairly the  financial  condition  and
results of  operations  purported to be presented in such  statements;  (iv) any
threatened or pending  litigation  involving any Credit Party;  (v) any casualty
loss,  attachment,  lien,  judicial  process,  encumbrance or claim affecting or
involving  $25,000 or more of any Collateral;  and (vi) any change in Customer's
outside accountants. Each notification by Customer pursuant hereto shall specify
the  event  or  information  causing  such  notification,  and,  to  the  extent
applicable,  shall specify the steps being taken to rectify or remedy such event
or information.

     (f) Entity  Organization.  Each  Credit  Party  which is an entity will (i)
remain  (A)  validly  existing  and  in  good  standing  in  the  state  of  its
organization and (B) qualified to do business and in good standing in each other
state  where the nature of its  business or the  property  owned by it make such
qualification  necessary,  and (ii) maintain all governmental permits,  licenses
and  authorizations.  Customer  shall  give  MLBFS not less  than 30 days  prior
written notice of any change in name  (including  any fictitious  name) or chief
executive office, place of business,  or as applicable,  the principal residence
of any Credit Party.

(g)  Merger,  Change in  Business.  Except upon the prior
written consent of MLBFS Customer shall not cause or permit any Credit Party to:
(i) be a party to any merger or  consolidation  with,  or purchase or  otherwise
acquire  all or  substantially  all of the  assets  of, or any  material  stock,
partnership,  joint  venture or other equity  interest in, any Person,  or sell,
transfer or lease all or any substantial part of its assets;  (ii) engage in any
material business substantially  different from its business in effect as of the
date of  application by Customer for credit from MLBFS,  or cease  operating any
such material  business;  or (iii) cause or permit any other Person to assume or
succeed to any material  business or operations of such Credit Party.

     (h) Fixed Charge Coverage.  Customer's  "Fixed Charge Coverage  Ratio",  as
defined and calculated as set forth in Exhibit B attached  hereto,  shall at all
times exceed 1.50 to 1.

     (i) Minimum  Tangible Net Worth.  As of December  31, 2003,  the sum of (x)
Customer's  aggregate  subordinated debt and (y) Customer's "Tangible Net Worth"
("Minimum  Tangible Net Worth")  shall exceed  $2,400,000.  As of June 30, 2004,
Customer's  Minimum  Tangible  Net Worth  shall not be less than  $2,650,000.00.
After June 30, 2004,  and as and as of the close of each fiscal year of Customer
thereafter,  Customer's  Minimum  Tangible  Net  Worth  shall  not be less  than
$250,000  higher  than the  Minimum  Tangible  Net  Worth of  Customer  required
hereunder as of the close of the immediately  preceding  fiscal year of Customer
(so that as of December 31, 2004,  such Minimum  Tangible Net Worth shall be not
less than  $2,900,000.00,  as of December  31, 2005,  such Minimum  Tangible Net
Worth shall be not less than  $3,150,000.00,  etc.).  For the  purposes  hereof,
subordinated  debt shall mean any debt of Obligors for  borrowed  money which is
subordinated  in right of payment and is payable on terms and conditions  junior
to MLBFS.  The term  "Tangible Net Worth" shall mean Obligors net worth as shown
on Obligors' regular combined financial  statements  prepared in accordance with
GAAP, but excluding an amount equal to: (i) any Intangible  Assets, and (ii) any
amounts now or hereafter  directly or indirectly  owing to Obligors by officers,
shareholders or affiliates of Obligors. "Intangible Assets" shall mean the total
amount of goodwill,  patents,  trade names, trade or service marks,  copyrights,
experimental  expense,  organization  expense,  unamortized  debt  discount  and
expense,  the  excess of cost of shares  acquired  over  book  value of  related
assets, and such other assets as are properly  classified as "intangible assets"
of the Obligors determined in accordance with GAAP.

     (j)  Total  Liabilities  To  Tangible  Net  Worth  and  Subordinated  Debt.
Customer's  "Leverage  Ratio" shall not at any time exceed 5.75 to 1. As of June
30, 2004,  Customer's  Leverage Ratio shall not exceed 4.00 to 1. As of December
31, 2004 and anytime thereafter, Customer's Leverage Ratio shall not exceed 3.50
to 1.  For  purposes  hereof,  "Leverage  Ratio"  shall  mean  the  ratio of (i)
Customer's total liabilities less any subordinated debt of Customer, to (ii) the
sum of Customer's Tangible Net Worth plus any subordinated debt of Customer. The
term "Tangible Net Worth" shall mean Customer's net worth as shown on Customer's
regular financial  statements prepared in accordance with GAAP, but excluding an
amount  equal  to:  (i) any  Intangible  Assets,  and  (ii) any  amounts  now or
hereafter directly or indirectly owing to Customer by officers,  shareholders or
affiliates  of  Customer.  "Intangible  Assets"  shall mean the total  amount of
goodwill, patents, trade names, trade or service marks, copyrights, experimental
expense, organization expense, unamortized debt discount and expense, the excess
of cost of shares  acquired  over book value of related  assets,  and such other
assets  as are  properly  classified  as  "intangible  assets"  of the  Customer
determined in  accordance  with GAAP.  Subordinated  debt shall mean any debt of
Customer for  borrowed  money which is  subordinated  in right of payment and is
payable  on terms  and  conditions  junior to  MLBFS,  and in a form and  manner
acceptable to MLBFS.

     (k) No  Loans/Guarantees  To  Affiliates.  Except  upon the  prior  written
consent of MLBFS,  no Credit Party shall directly or indirectly  lend any moneys
to, or  guaranty  the debt of, any  affiliated  person or entity  other than the
existing loans and guarantees  existing as of the date hereof that are consented
to by MLBFS and reflected on Exhibit A attached hereto.

     (l) No Loans/Transfers Of Assets.  Except upon the prior written consent of
MLBFS,  Customer shall not directly or indirectly  lend any moneys,  or transfer
any assets or  property,  to any  unaffiliated  person or entity other than arms
length transfers for fair consideration in the ordinary course of business.

     (m)  Productivity  Technologies  Corporation  Management Fee  Forebearance.
Until further notice and only upon the prior written consent of MLBFS,  Customer
shall suspend monthly accrual and payment of any management fees to Productivity
Technologies Corporation.

     (n) No  Change  In  Management.  Customer  will  maintain  experienced  and
competent professional senior management,  including Samuel N. Seidman and Jesse
A. Levine.

     (o)  Borrowed  Debt.  Except upon the prior  written  consent of MLBFS,  no
Credit Party shall  directly or indirectly  incur or permit to exist any debt of
any  Credit  Party  for  borrowed  money or the lease  under a capital  lease or
deferred  purchase  price of real or personal  property  other than: (i) debt to
MLBFS and (ii) debt  existing  as of the date hereof  that are  consented  to by
MLBFS and reflected on Exhibit A attached hereto.

(p)  Distributions  to  Shareholders.
Except upon the prior written consent of MLBFS, Customer shall not in any fiscal
year directly or indirectly pay any dividends or make any other distributions on
account  of  its  stock  to its  shareholders.

     3.4 COLLATERAL

     (a)  Pledge  of  Collateral.  To  secure  payment  and  performance  of the
Obligations, Customer hereby pledges, assigns, transfers and sets over to MLBFS,
and grants to MLBFS first liens and  security  interests  in and upon all of the
Collateral, subject only to priorities afforded to Permitted Liens.

     (b) Liens.  Except upon the prior written consent of MLBFS,  Customer shall
not create or permit to exist any lien, encumbrance or security interest upon or
with  respect  to any  Collateral  now owned or  hereafter  acquired  other than
Permitted Liens.

     (c)  Performance  of  Obligations.   Customer  shall  perform  all  of  its
obligations  owing on account of or with  respect  to the  Collateral;  it being
understood that nothing herein,  and no action or inaction by MLBFS,  under this
Loan  Agreement or  otherwise,  shall be deemed an assumption by MLBFS of any of
Customer's said obligations.

     (d) Sales and Collections.  Customer shall not sell,  transfer or otherwise
dispose of any Collateral, except that so long as no Event of Default shall have
occurred and be continuing, Customer may in the ordinary course of its business:
(i) sell any Inventory  normally held by Customer for sale,  (ii) use or consume
any materials and supplies normally held by Customer for use or consumption, and
(iii) collect all of its Accounts.

     (e) Account  Schedules.  Upon the request of MLBFS,  which may be made from
time to time,  Customer  shall  deliver  to  MLBFS,  in  addition  to the  other
information required hereunder, a schedule identifying, for each Account and all
Chattel  Paper  subject to MLBFS'  security  interests  hereunder,  each account
debtor by name and address and  amount,  invoice or contract  number and date of
each  invoice or  contract.  Customer  shall  furnish  to MLBFS such  additional
information with respect to the Collateral,  and amounts received by Customer as
proceeds  of any of the  Collateral,  as MLBFS may from time to time  reasonably
request.

     (f) Alterations and  Maintenance.  Except upon the prior written consent of
MLBFS,  Customer  shall  not make or  permit  any  material  alterations  to any
tangible  Collateral which might materially reduce or impair its market value or
utility.  Customer  shall at all times (i) keep the tangible  Collateral in good
condition  and  repair,  reasonable  wear and tear  excepted,  (ii)  protect the
Collateral against loss, damage or destruction and (iii) pay or cause to be paid
all obligations  arising from the repair and maintenance of such Collateral,  as
well as all  obligations  with  respect to any  Location of Tangible  Collateral
(e.g., all obligations under any lease, mortgage or bailment agreement),  except
for  any  such  obligations  being  contested  by  Customer  in  good  faith  by
appropriate proceedings.

     (g)  Location.  Except for  movements  required in the  ordinary  course of
Customer's business,  Customer shall give MLBFS 30 days' prior written notice of
the placing at or movement of any tangible Collateral to any location other than
a Location of Tangible  Collateral.  In no event shall  Customer cause or permit
any material  tangible  Collateral to be removed from the United States  without
the express  prior  written  consent of MLBFS.  Customer will keep its books and
records at its principal office address specified in the first paragraph of this
Loan Agreement. Customer will not change the address where books and records are
kept, or change its name or taxpayer  identification number. Customer will place
a legend  acceptable  to MLBFS on all Chattel  Paper that is  Collateral  in the
possession or control of Customer from time to time  indicating that MLBFS has a
security interest therein.

     (h) Insurance. Customer shall insure all of the tangible Collateral under a
policy or policies of physical damage insurance for the full  replacement  value
thereof against such perils as MLBFS shall reasonably require and also providing
that losses will be payable to MLBFS as its interests  may appear  pursuant to a
lender's or mortgagee's  long form loss payable  endorsement and containing such
other provisions as may be reasonably required by MLBFS.  Customer shall further
provide  and  maintain a policy or  policies  of  commercial  general  liability
insurance  naming  MLBFS  as an  additional  party  insured.  Customer  and each
Business Guarantor shall maintain such other insurance as may be required by law
or is  customarily  maintained  by companies in a similar  business or otherwise
reasonably  required by MLBFS.  All such  insurance  policies shall provide that
MLBFS  will  receive  not  less  than  10  days  prior  written  notice  of  any
cancellation,  and shall  otherwise be in form and amount and with an insurer or
insurers  reasonably  acceptable to MLBFS.  Customer  shall furnish MLBFS with a
copy or certificate of each such policy or policies and, prior to any expiration
or cancellation, each renewal or replacement thereof.

     (i)  Event of Loss.  Customer  shall at its  expense  promptly  repair  all
repairable  damage to any  tangible  Collateral.  In the event  that there is an
Event of Loss and the  affected  Collateral  had a value  prior to such Event of
Loss of $25,000.00 or more, then, on or before the first to occur of (i) 90 days
after the  occurrence  of such Event of Loss, or (ii) 10 Business Days after the
date on which either  Customer or MLBFS shall  receive any proceeds of insurance
on  account of such  Event of Loss,  or any  underwriter  of  insurance  on such
Collateral shall advise either Customer or MLBFS that it disclaims  liability in
respect of such Event of Loss,  Customer  shall,  at Customer's  option,  either
replace the Collateral subject to such Event of Loss with comparable  Collateral
free of all liens other than  Permitted  Liens (in which event Customer shall be
entitled to utilize the  proceeds of  insurance on account of such Event of Loss
for such  purpose,  and may retain any excess  proceeds of such  insurance),  or
permanently  prepay the  Obligations by an amount equal to the actual cash value
of such Collateral as determined by either the insurance company's payment (plus
any  applicable  deductible)  or, in absence of insurance  company  payment,  as
reasonably  determined  by  MLBFS;  it being  further  understood  that any such
permanent prepayment shall cause an immediate permanent reduction in the Maximum
WCMA Line of Credit in the  amount of such  prepayment  and shall not reduce the
amount of any future  reductions  in the Maximum WCMA Line of Credit that may be
required hereunder.  Notwithstanding the foregoing, if at the time of occurrence
of such  Event  of Loss or any time  thereafter  prior  to  replacement  or line
reduction,  as  aforesaid,  an Event  of  Default  shall  have  occurred  and be
continuing hereunder, then MLBFS may at its sole option, exercisable at any time
while such Event of Default  shall be  continuing,  require  Customer  to either
replace such  Collateral or prepay the  Obligations  and reduce the Maximum WCMA
Line of Credit, as aforesaid.

     (j) Notice of Certain Events. Customer shall give MLBFS immediate notice of
any  attachment,  lien,  judicial  process,  encumbrance  or claim  affecting or
involving $25,000.00 or more of the Collateral.

     (k)  Indemnification.  Customer  shall  indemnify,  defend  and save  MLBFS
harmless  from and against any and all claims,  liabilities,  losses,  costs and
expenses  (including,   without  limitation,   reasonable  attorneys'  fees  and
expenses) of any nature  whatsoever which may be asserted against or incurred by
MLBFS  arising  out  of or in  any  manner  occasioned  by  (i)  the  ownership,
collection,  possession, use or operation of any Collateral, or (ii) any failure
by Customer to perform any of its  obligations  hereunder;  excluding,  however,
from said indemnity any such claims,  liabilities,  etc. arising directly out of
the willful  wrongful act or active gross  negligence of MLBFS.  This  indemnity
shall survive the  expiration or  termination  of this Loan  Agreement as to all
matters arising or accruing prior to such expiration or termination.

     3.5 EVENTS OF DEFAULT The  occurrence of any of the following  events shall
constitute an "Event of Default" under this Loan Agreement:

     (a)  Exceeding  the Maximum  WCMA Line of Credit.  If the WCMA Loan Balance
shall at any time exceed the Maximum WCMA Line of Credit and Customer shall fail
to  deposit  sufficient  funds  into the WCMA  Account  to reduce  the WCMA Loan
Balance  below the Maximum  WCMA Line of Credit  within five (5)  Business  Days
after written notice thereof shall have been given by MLBFS to Customer.

     (b) Other  Failure to Pay.  Customer  shall fail to pay to MLBFS or deposit
into the WCMA  Account when due any other amount owing or required to be paid or
deposited by Customer under this Loan Agreement or any of the Loan Documents, or
shall fail to pay when due any other  Obligations,  and any such  failure  shall
continue for more than five (5) Business Days after written notice thereof shall
have been given by MLBFS to Customer.

     (c) Failure to Perform.  Any Credit Party shall default in the  performance
or  observance  of any  covenant or  agreement  on its part to be  performed  or
observed under any of the Loan Documents (not  constituting  an Event of Default
under any  other  clause  of this  Section),  and such  default  shall  continue
unremedied  for ten (10) Business Days (i) after  written  notice  thereof shall
have been given by MLBFS to  Customer,  or (ii) from  Customer's  receipt of any
notice or knowledge of such default from any other source.

     (d) Breach of Warranty.  Any  representation or warranty made by any Credit
Party contained in this Loan Agreement or any of the Loan Documents shall at any
time prove to have been incorrect in any material respect when made.

     (e) Default Under Other ML Agreement.  A default or event of default by any
Credit Party shall occur under the terms of any other  agreement,  instrument or
document  with or  intended  for the  benefit  of MLBFS,  MLPF&S or any of their
affiliates,  and any required notice shall have been given and required  passage
of time shall have elapsed,  or the WCMA  Agreement  shall be terminated for any
reason.

     (f) Bankruptcy Event. Any Bankruptcy Event shall occur.

     (g) Material Impairment. Any event shall occur which shall reasonably cause
MLBFS to in good faith believe that the prospect of full payment or  performance
by the Credit  Parties of any of their  respective  liabilities  or  obligations
under any of the Loan Documents has been materially  impaired.  The existence of
such a material  impairment shall be determined in a manner  consistent with the
intent of Section 1-208 of the UCC.

     (h) Default Under Other Agreements.  Any event shall occur which results in
any  default  of any  material  agreement  involving  any  Credit  Party  or any
agreement  evidencing  any  indebtedness  of any Credit Party of  $100,000.00 or
more.

     (i)  Collateral   Impairment.   The  loss,  theft  or  destruction  of  any
Collateral,  the occurrence of any material  deterioration  or impairment of any
Collateral or any material  decline or depreciation in the value or market price
thereof (whether actual or reasonably anticipated), which causes any Collateral,
in the sole opinion of MLBFS, to become unsatisfactory as to value or character;
or any levy, attachment,  seizure or confiscation of the Collateral which is not
released within ten (10) Business Days.

     (j)  Contested  Obligation.  (i) Any of the Loan  Documents  shall  for any
reason cease to be, or are asserted by any Credit Party not to be a legal, valid
and binding  obligations  of any Credit Party,  enforceable  in accordance  with
their terms;  or (ii) the validity,  perfection or priority of MLBFS' first lien
and security  interest on any of the  Collateral is contested by any Person;  or
(iii) any Credit Party shall or shall attempt to repudiate,  revoke,  contest or
dispute,  in whole or in part,  such Credit Party's  obligations  under any Loan
Document.

     (k)  Judgments.  A judgment  shall be entered  against any Credit  Party in
excess of $25,000 and the judgment is not paid in full and discharged, or stayed
and bonded to the satisfaction of MLBFS.

     (l) Change in  Control/Change  in  Management.  (i) Any direct or  indirect
sale,  conveyance,  assignment  or other  transfer  of or  grant  of a  security
interest in any ownership interest of any Credit Party which results,  or if any
rights  related  thereto  were  exercised  would  result,  in any  change in the
identity of the  individuals or entities in control of any Credit Party; or (ii)
the owner(s) of the controlling  equity interest of any Credit Party on the date
hereof shall cease to own and control such Credit Party; or (iii) any Person (or
a replacement  who is  satisfactory  to MLBFS in its sole  discretion)  named in
Section 3.3 (n) hereof,  on the date hereof shall for any reason cease to be the
chief executive officer or senior manager of Productivity Technologies Corp.

     (m) Withdrawal, Death, etc. The incapacity, death, withdrawal, dissolution,
or the filing for  dissolution of: (i) any Credit Party; or (ii) any controlling
shareholder, partner, or member of any Credit Party.

     3.6 REMEDIES

     (a) Remedies Upon Default.  Upon the occurrence and during the  continuance
of any Event of Default,  MLBFS may at its sole option do any one or more or all
of the  following,  at such  time and in such  order  as  MLBFS  may in its sole
discretion choose:

          (i)  Termination.  MLBFS may without notice terminate the WCMA Line of
     Credit and all  obligations  to extend any credit to or for the  benefit of
     Customer (it being  understood,  however,  that upon the  occurrence of any
     Bankruptcy Event all such obligations shall automatically terminate without
     any action on the part of MLBFS).

          (ii) Acceleration.  MLBFS may declare the principal of and interest on
     the WCMA Loan Balance,  and all other  Obligations  to be forthwith due and
     payable,  whereupon all such amounts shall be immediately  due and payable,
     without  presentment,  demand for  payment,  protest and notice of protest,
     notice of dishonor, notice of acceleration,  notice of intent to accelerate
     or other notice or formality of any kind, all of which are hereby expressly
     waived; provided, however, that upon the occurrence of any Bankruptcy Event
     all such  principal,  interest and other  Obligations  shall  automatically
     become due and payable without any action on the part of MLBFS.

          (iii)  Exercise  Other  Rights.  MLBFS may  exercise any or all of the
     remedies of a secured party under applicable law and in equity,  including,
     but not  limited  to,  the  UCC,  and any or all of its  other  rights  and
     remedies under the Loan Documents.

          (iv) Possession. MLBFS may require Customer to make the Collateral and
     the records  pertaining  to the  Collateral  available  to MLBFS at a place
     designated by MLBFS which is reasonably convenient to Customer, or may take
     possession of the Collateral  and the records  pertaining to the Collateral
     without the use of any  judicial  process  and without any prior  notice to
     Customer.

          (v)  Sale.  MLBFS may sell any or all of the  Collateral  at public or
     private sale upon such terms and  conditions as MLBFS may  reasonably  deem
     proper,  whether for cash, on credit, or for future delivery, in bulk or in
     lots. MLBFS may purchase any Collateral at any such sale free of Customer's
     right of redemption,  if any, which Customer expressly waives to the extent
     not  prohibited by  applicable  law. The net proceeds of any such public or
     private sale and all other amounts actually  collected or received by MLBFS
     pursuant  hereto,  after  deducting all costs and expenses  incurred at any
     time in the collection of the Obligations and in the protection, collection
     and  sale  of  the  Collateral,  will  be  applied  to the  payment  of the
     Obligations,  with any remaining  proceeds paid to Customer or whoever else
     may be entitled  thereto,  and with Customer and each  Guarantor  remaining
     jointly and  severally  liable for any amount  remaining  unpaid after such
     application.

          (vi)  Delivery of Cash,  Checks,  Etc.  MLBFS may require  Customer to
     forthwith upon receipt, transmit and deliver to MLBFS in the form received,
     all cash,  checks,  drafts and other  instruments  for the payment of money
     (properly endorsed,  where required, so that such items may be collected by
     MLBFS)  which may be  received  by  Customer at any time in full or partial
     payment of any Collateral, and require that Customer not commingle any such
     items which may be so  received by Customer  with any other of its funds or
     property  but instead  hold them  separate and apart and in trust for MLBFS
     until delivery is made to MLBFS.

          (vii)  Notification of Account  Debtors.  MLBFS may notify any account
     debtor  that its  Account or Chattel  Paper has been  assigned to MLBFS and
     direct such account debtor to make payment directly to MLBFS of all amounts
     due or becoming  due with  respect to such  Account or Chattel  Paper;  and
     MLBFS may enforce payment and collect,  by legal  proceedings or otherwise,
     such Account or Chattel Paper.

          (viii) Control of Collateral.  MLBFS may otherwise take control in any
     lawful  manner of any cash or  non-cash  items of  payment or  proceeds  of
     Collateral and of any rejected, returned, stopped in transit or repossessed
     goods included in the Collateral and endorse Customer's name on any item of
     payment on or proceeds of the Collateral.

     (b) Set-Off.  MLBFS shall have the further  right upon the  occurrence  and
during the continuance of an Event of Default to set-off,  appropriate and apply
toward payment of any of the Obligations,  in such order of application as MLBFS
may  from  time to time and at any  time  elect,  any  cash,  credit,  deposits,
accounts,  financial  assets,  investment  property,  securities  and any  other
property of  Customer  which is in transit to or in the  possession,  custody or
control of MLBFS, MLPF&S or any agent,  bailee, or affiliate of MLBFS or MLPF&S.
Customer hereby  collaterally  assigns and grants to MLBFS a continuing security
interest in all such property as Collateral  and as additional  security for the
Obligations.  Upon the  occurrence  and  during the  continuance  of an Event of
Default,  MLBFS shall have all rights in such  property  available to collateral
assignees and secured  parties under all  applicable  laws,  including,  without
limitation, the UCC.

     (c)  Power of  Attorney.  Effective  upon the  occurrence  and  during  the
continuance of an Event of Default,  Customer hereby irrevocably  appoints MLBFS
as its attorney-in-fact, with full power of substitution, in its place and stead
and in its name or in the name of MLBFS,  to from  time to time in  MLBFS'  sole
discretion  take any action and to execute any  instrument  which MLBFS may deem
necessary or advisable to accomplish the purposes of this Loan Agreement and the
other Loan  Documents,  including,  but not limited to, to receive,  endorse and
collect all checks,  drafts and other  instruments for the payment of money made
payable to Customer  included in the Collateral.  The powers of attorney granted
to MLBFS in this Loan Agreement are coupled with an interest and are irrevocable
until the Obligations  have been  indefeasibly  paid in full and fully satisfied
and all obligations of MLBFS under this Loan Agreement have been terminated

     (d) Remedies are Severable and Cumulative. All rights and remedies of MLBFS
herein are  severable  and  cumulative  and in addition to all other  rights and
remedies  available in the Loan Documents,  at law or in equity,  and any one or
more  of  such  rights  and  remedies  may  be   exercised   simultaneously   or
successively.

     (e) No  Marshalling.  MLBFS  shall be under  no duty or  obligation  to (i)
preserve,  protect or  marshall  the  Collateral;  (ii)  preserve or protect the
rights of any Credit  Party or any other  Person  claiming  an  interest  in the
Collateral; (iii) realize upon the Collateral in any particular order or manner,
(iv) seek repayment of any Obligations from any particular  source;  (v) proceed
or not proceed  against any Credit  Party  pursuant to any  guaranty or security
agreement or against any Credit Party under the Loan Documents,  with or without
also realizing on the  Collateral;  (vi) permit any  substitution or exchange of
all or any part of the  Collateral;  or (vii) release any part of the Collateral
from the Loan Agreement or any of the other Loan Documents,  whether or not such
substitution or release would leave MLBFS adequately secured.

     (f) Notices.  To the fullest extent  permitted by applicable law,  Customer
hereby irrevocably waives and releases MLBFS of and from any and all liabilities
and  penalties  for  failure  of MLBFS to  comply  with any  statutory  or other
requirement  imposed upon MLBFS relating to notices of sale,  holding of sale or
reporting  of any  sale,  and  Customer  waives  all  rights  of  redemption  or
reinstatement  from any such sale.  Any notices  required  under  applicable law
shall  be  reasonably  and  properly  given to  Customer  if given by any of the
methods  provided herein at least 5 Business Days prior to taking action.  MLBFS
shall have the right to  postpone or adjourn  any sale or other  disposition  of
Collateral at any time without  giving notice of any such postponed or adjourned
date.  In  the  event  MLBFS  seeks  to  take  possession  of  any or all of the
Collateral by court process,  Customer further irrevocably waives to the fullest
extent  permitted by law any bonds and any surety or security  relating  thereto
required  by any  statute,  court  rule  or  otherwise  as an  incident  to such
possession,  and any demand for possession prior to the commencement of any suit
or action.

     3.7 MISCELLANEOUS

     (a) Non-Waiver.  No failure or delay on the part of MLBFS in exercising any
right,  power or remedy pursuant to this Loan Agreement or any of the other Loan
Documents shall operate as a waiver thereof,  and no single or partial  exercise
of any such right,  power or remedy shall preclude any other or further exercise
thereof, or the exercise of any other right, power or remedy. Neither any waiver
of any provision of any of the Loan Documents,  nor any consent to any departure
by Customer  therefrom,  shall be effective  unless the same shall be in writing
and signed by MLBFS.  Any waiver of any provision of this Loan  Agreement or any
of the other Loan  Documents  and any consent to any  departure by Customer from
the terms of this Loan  Agreement  or any of the other Loan  Documents  shall be
effective only in the specific  instance and for the specific  purpose for which
given.  Except as otherwise expressly provided herein, no notice to or demand on
Customer  shall in any case entitle  Customer to any other or further  notice or
demand in similar or other circumstances.

     (b) Disclosure.  Customer hereby  irrevocably  authorizes MLBFS and each of
its affiliates,  including without limitation MLPF&S, to at any time (whether or
not an Event of Default  shall have  occurred)  obtain from and disclose to each
other, and to any third party in connection with Section 3.7 (g) herein, any and
all financial and other  information  about  Customer.  In connection  with said
authorization,  the  parties  recognize  that in order to provide a WCMA Line of
Credit certain  information about Customer is required to be made available on a
computer network  accessible by certain  affiliates of MLBFS,  including MLPF&S.
Customer further irrevocably authorizes MLBFS to contact,  investigate,  inquire
and obtain consumer  reports,  references and other information on Customer from
consumer  reporting  agencies and other  credit  reporting  services,  former or
current creditors, and other persons and sources (including, without limitation,
any  Affiliate of MLBFS) and to provide to any  references,  consumer  reporting
agencies,  credit  reporting  services,  creditors and other persons and sources
(including,  without limitation,  affiliates of MLBFS) all financial, credit and
other information obtained by MLBFS relating to the Customer.

     (c) Communications.  Delivery of an agreement, instrument or other document
may,  at the  discretion  of MLBFS,  be by  electronic  transmission.  Except as
required by law or  otherwise  provided  herein or in a writing  executed by the
party  to be  bound,  all  notices  demands,  requests,  accountings,  listings,
statements, advices or other communications to be given under the Loan Documents
shall be in writing and shall be served  either  personally,  by deposit  with a
reputable  overnight  courier with charges prepaid,  or by deposit in the United
States mail by certified mail, return receipt required. Notices may be addressed
to Customer as set forth at its address shown in the preamble hereto,  or to any
office to which billing or account  statements are sent; to MLBFS at its address
shown in the preamble hereto, or at such other address  designated in writing by
MLBFS.  Any such  communication  shall be deemed to have been given upon, in the
case of personal  delivery the date of delivery,  one Business Day after deposit
with an overnight  courier,  two (2) Business  Days after  deposit in the United
States by certified  mail (return  receipt  required),  or receipt of electronic
transmission  (which  shall be  presumed  to be three  hours  after  the time of
transmission unless an error message is received by the sender), except that any
notice of change of address shall not be effective until actually received.

     (d) Fees,  Expenses and Taxes.  Customer shall pay or reimburse  MLBFS for:
(i) all UCC,  real  property  or other  filing,  recording,  and search fees and
expenses  incurred by MLBFS in connection with the  verification,  perfection or
preservation  of  MLBFS'  rights  hereunder  or in any  Collateral  or any other
collateral  for the  Obligations;  (ii) any and all stamp,  transfer,  mortgage,
intangible,  document,  filing,  recording  and other taxes and fees  payable or
determined  to be payable in  connection  with the  borrowings  hereunder or the
execution, delivery, filing and/or recording of the Loan Documents and any other
instruments  or  documents  provided  for herein or delivered or to be delivered
hereunder  or in  connection  herewith;  and  (iii)  all fees and  out-of-pocket
expenses  (including,  attorneys' fees and legal expenses)  incurred by MLBFS in
connection  with  the  preparation,   execution,   administration,   collection,
enforcement,  protection,  waiver or amendment of this Loan Agreement, the other
Loan  Documents  and such other  instruments  or  documents,  and the rights and
remedies of MLBFS  thereunder  and all other  matters in  connection  therewith.
Customer hereby  authorizes  MLBFS,  at its option,  to either cause any and all
such fees,  expenses and taxes to be paid with a WCMA Loan, or invoice  Customer
therefore (in which event Customer  shall pay all such fees,  expenses and taxes
within 5  Business  Days after  receipt of such  invoice).  The  obligations  of
Customer  under this  paragraph  shall survive the  expiration or termination of
this Loan Agreement and the discharge of the other Obligations.

     (e) Right to Perform  Obligations.  If Customer shall fail to do any act or
thing  which it has  covenanted  to do under  any of the Loan  Documents  or any
representation  or  warranty  on the  part of  Customer  contained  in the  Loan
Documents shall be breached, MLBFS may, in its sole discretion, after 5 Business
Days  written  notice is sent to Customer (or such lesser  notice,  including no
notice, as is reasonable under the circumstances), do the same or cause it to be
done or remedy any such breach,  and may expend its funds for such purpose.  Any
and all  reasonable  amounts so expended by MLBFS shall be repayable to MLBFS by
Customer upon demand,  with interest at the Interest Rate during the period from
and  including the date funds are so expended by MLBFS to the date of repayment,
and all such amounts shall be additional Obligations. The payment or performance
by MLBFS of any of Customer's  obligations  hereunder shall not relieve Customer
of said  obligations or of the  consequences  of having failed to pay or perform
the same, and shall not waive or be deemed a cure of any Default.

     (f) Further Assurances.  Customer agrees to do such further acts and things
and to execute and deliver to MLBFS such additional agreements,  instruments and
documents as MLBFS may  reasonably  require or deem  advisable to effectuate the
purposes  of the Loan  Documents,  to  confirm  the  WCMA  Loan  Balance,  or to
establish,  perfect and maintain  MLBFS'  security  interests and liens upon the
Collateral, including, but not limited to: (i) executing financing statements or
amendments thereto when and as reasonably requested by MLBFS; and (ii) if in the
reasonable  judgment of MLBFS it is  required  by local law,  causing the owners
and/or mortgagees of the real property on which any Collateral may be located to
execute and deliver to MLBFS waivers or subordinations  reasonably  satisfactory
to MLBFS with respect to any rights in such Collateral.

     (g) Binding  Effect.  This Loan Agreement and the Loan  Documents  shall be
binding  upon,  and shall  inure to the  benefit  of MLBFS,  Customer  and their
respective  successors and assigns.  MLBFS reserves the right, at any time while
the Obligations  remain  outstanding,  to sell,  assign,  syndicate or otherwise
transfer or dispose of any or all of MLBFS' rights and interests  under the Loan
Documents.  MLBFS also reserves the right at any time to pool the WCMA Loan with
one or more  other  loans  originated  by  MLBFS  or any  other  Person,  and to
securitize  or offer  interests  in such pool on whatever  terms and  conditions
MLBFS shall determine.  Customer consents to MLBFS releasing financial and other
information  regarding  Credit  Parties,  the  Collateral  and the WCMA  Loan in
connection  with any  such  sale,  pooling,  securitization  or other  offering.
Customer  shall not assign any of its rights or delegate any of its  obligations
under this Loan Agreement or any of the Loan Documents without the prior written
consent of MLBFS.  Unless  otherwise  expressly agreed to in a writing signed by
MLBFS,  no such  consent  shall  in any  event  relieve  Customer  of any of its
obligations under this Loan Agreement or the Loan Documents.

     (h)  Interpretation;  Construction.  (i) Captions and section and paragraph
headings in this Loan  Agreement are inserted  only as a matter of  convenience,
and shall not affect the interpretation  hereof;  (ii) no provision of this Loan
Agreement shall be construed  against a particular Person or in favor of another
Person  merely  because  of which  Person  (or its  representative)  drafted  or
supplied the wording for such provision;  and (iii) where the context  requires:
(a) use of the singular or plural  incorporates  the other, and (b) pronouns and
modifiers in the  masculine,  feminine or neuter gender shall be deemed to refer
to or include the other genders.

     (i) Governing Law. This Loan  Agreement,  and, unless  otherwise  expressly
provided therein, each of the Loan Documents,  shall be governed in all respects
by the  laws of the  State  of  Illinois,  not  including  its  conflict  of law
provisions.

     (j) Severability of Provisions.  Whenever possible,  each provision of this
Loan Agreement and the other Loan Documents  shall be interpreted in such manner
as to be effective  and valid under  applicable  law. Any provision of this Loan
Agreement or any of the Loan Documents which is prohibited or  unenforceable  in
any  jurisdiction  shall, as to such  jurisdiction,  be ineffective  only to the
extent  of  such  prohibition  or  unenforceability   without  invalidating  the
remaining  provisions of this Loan Agreement and the Loan Documents or affecting
the validity or enforceability of such provision in any other jurisdiction.

     (k) Term. This Loan Agreement  shall become  effective on the date accepted
by MLBFS at its office in Chicago,  Illinois,  and, subject to the terms hereof,
shall continue in effect so long  thereafter as the WCMA Line of Credit shall be
in effect or there shall be any Obligations outstanding.  Customer hereby waives
notice of acceptance of this Loan Agreement by MLBFS.

     (l) Exhibits.  The exhibits to this Loan Agreement are hereby  incorporated
and made a part hereof and are an integral part of this Loan Agreement

     (m)  Counterparts.  This  Loan  Agreement  may be  executed  in one or more
counterparts which, when taken together, constitute one and the same agreement.

     (n) Jurisdiction; Waiver. Customer acknowledges that this Loan Agreement is
being accepted by MLBFS in partial  consideration of MLBFS' right and option, in
its  sole  discretion,  to  enforce  this  Loan  Agreement  and all of the  Loan
Documents  in either the State of  Illinois or in any other  jurisdiction  where
Customer or any Collateral may be located.  Customer  irrevocably submits itself
to jurisdiction in the State of Illinois and venue in any state or federal court
in the County of Cook for such purposes,  and Customer waives any and all rights
to contest said  jurisdiction  and venue and the  convenience of any such forum,
and any and all  rights to remove  such  action  from  state to  federal  court.
Customer  further  waives any rights to commence any action against MLBFS in any
jurisdiction except in the County of Cook and State of Illinois. Customer agrees
that all such service of process shall be made by mail or messenger  directed to
it in the same manner as provided for notices to Customer in this Loan Agreement
and that  service so made shall be deemed to be  completed  upon the  earlier of
actual  receipt  or three (3) days  after  the same  shall  have been  posted to
Customer or Customer's agent. Nothing contained herein shall affect the right of
MLBFS to serve legal process in any other manner  permitted by law or affect the
right of MLBFS to  bring  any  action  or  proceeding  against  Customer  or its
property in the courts of any other jurisdiction. Customer waives, to the extent
permitted by law, any bond or surety or security upon such bond which might, but
for this  waiver,  be required of MLBFS.  Customer  further  waives the right to
bring any non-compulsory counterclaims.

     (o) Jury Waiver. MLBFS and Customer hereby each expressly waive any and all
rights to a trial by jury in any action,  proceeding or counterclaim  brought by
either of the  parties  against  the other  party  with  respect  to any  matter
relating  to,  arising  out of or in any way  connected  with the  WCMA  Line of
Credit, the Obligations,  this Loan Agreement,  any of the Loan Documents and/or
any of the transactions which are the subject matter of this Loan Agreement.

     (p)  Integration.  This  Loan  Agreement,  together  with  the  other  Loan
Documents,  constitutes  the entire  understanding  and  represents the full and
final  agreement  between the parties with respect to the subject matter hereof,
and may not be  contradicted  by evidence of prior written  agreements or prior,
contemporaneous  or  subsequent  oral  agreements  of the parties.  There are no
unwritten  oral  agreements  of the parties.  Without  limiting  the  foregoing,
Customer  acknowledges that: (i) no promise or commitment has been made to it by
MLBFS, MLPF&S or any of their respective employees, agents or representatives to
extend the  availability  of the WCMA Line of Credit or the Maturity Date, or to
increase the Maximum WCMA Line of Credit,  or to make any WCMA Loan on any terms
other than as expressly set forth herein or to otherwise extend any other credit
to Customer or any other  party;  (ii) no  purported  extension  of the Maturity
Date,  increase  in the  Maximum  WCMA  Line of  Credit  or other  extension  or
agreement to extend credit shall be valid or binding unless  expressly set forth
in a  written  instrument  signed  by  MLBFS;  and  (iii)  this  Loan  Agreement
supersedes  and replaces any and all  proposals,  letters of intent and approval
and commitment letters from MLBFS to Customer, none of which shall be considered
a Loan Document.  No amendment or  modification  of any of the Loan Documents to
which Customer is a party shall be effective  unless in a writing signed by both
MLBFS and Customer.

     (q) Survival.  All  representations,  warranties,  agreements and covenants
contained in the Loan  Documents  shall  survive the signing and delivery of the
Loan  Documents,  and all of the waivers  made and  indemnification  obligations
undertaken by Customer shall survive the termination,  discharge or cancellation
of the Loan Documents.

     (r)  Customer's   Acknowledgments.   The  Customer  acknowledges  that  the
Customer:  (i) has had ample  opportunity to consult with counsel and such other
parties as deemed  advisable prior to signing and delivering this Loan Agreement
and the other Loan  Documents;  (ii)  understands  the  provisions  of this Loan
Agreement and the other Loan Documents, including all waivers contained therein;
and (iii) signs and delivers this Loan  Agreement  and the other Loan  Documents
freely and voluntarily, without duress or coercion.

(SIGNATURE PAGE TO FOLLOW)
<PAGE>

     This Loan  Agreement and the other Loan  Documents are executed  under seal
and are intended to take effect as sealed instruments.

     IN WITNESS WHEREOF, this Loan Agreement has been executed as of the day and
year first above written.

ATLAS TECHNOLOGIES, INC.

By:
   --------------------------------     ------------------------------
   Signature (1)                        Signature (2)

   --------------------------------     ------------------------------
   Printed Name                         Printed Name

   --------------------------------     ------------------------------
   Title                                Title

Accepted at Chicago, Illinois:
MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.

By:
   ---------------------------------------

<PAGE>

                                   EXHIBIT A

     ATTACHED TO AND HEREBY MADE A PART OF WCMA LOAN AND SECURITY  AGREEMENT NO.
885-07D32  BETWEEN  MERRILL  LYNCH  BUSINESS  FINANCIAL  SERVICES INC. AND ATLAS
TECHNOLOGIES, INC.

Additional Locations of Tangible Collateral:

         201 S. Alloy Dr. Fenton, MI 48430

         3100 Copper Avenue
         Fenton, MI 48430

Existing loans and Guarantees (Section 3.3 (k)):

Existing Debt (Section 3.3 (o)):

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00060-of-00352.parquet"}]]