Document:

EXHIBIT 10.3

                      SHARE TRANSFER RESTRICTION AGREEMENT

                                  BY AND AMONG

                              W.W. GRAINGER, INC.,

                THE SHAREHOLDERS OF MOUNTAIN CAPITAL CORPORATION
                      LISTED AS "ORIGINAL MCC SHAREHOLDERS"
                          ON THE SIGNATURE PAGES HERETO

                                       AND

                   THE PERSONS LISTED AS "OTHER SHAREHOLDERS"
                          ON THE SIGNATURE PAGES HERETO

                           Dated of February 28, 2002

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                      SHARE TRANSFER RESTRICTION AGREEMENT

     This SHARE TRANSFER RESTRICTION AGREEMENT (this "Agreement") is made and
entered into as of the 28th day of February, 2002, among (i) W.W. Grainger,
Inc., an Illinois corporation ("GWW"), (ii) the shareholders of Mountain Capital
Corporation, a Nevada corporation ("MCC"), which shareholders are listed as
"Original MCC Shareholders" on the signature pages hereto (collectively, the
"Original MCC Shareholders"), and (iii) the Persons listed as the "Other
Shareholders" on the signature pages hereto (together with the Original MCC
Shareholders, the "Restricted Signatories").

                              W I T N E S S E T H:

     A. GWW, MCC and the Original MCC Shareholders are parties to that certain
Purchase Agreement dated as of the date hereof (the "Purchase Agreement") which
contemplates, among other things, the following transactions: (i) the sale by
MCC to GWW of certain assets of MCC, consisting of 4,801,600 shares of GWW
Common Stock (as hereinafter defined) and cash (collectively, the "Purchased
Assets"), and in exchange for the Purchased Assets, the transfer by GWW to MCC
of shares of GWW Common Stock (the "Original New GWW Shares") in a number to be
determined pursuant to the terms of the Purchase Agreement (the "Acquisition"),
(ii) the execution and delivery by GWW, MCC, the Original MCC Shareholders and
the Escrow Agent (as hereinafter defined) of that certain Escrow Agreement,
dated as of the date hereof (the "Escrow Agreement"), which provides for the
pledge by MCC of ten percent (10%) of the Original New GWW Shares received by
MCC in the Acquisition (the "Escrow Shares"), and the pledge by the Original MCC
Shareholders of the Escrow Shares, to GWW pursuant to the terms of the Escrow
Agreement to serve as security for the obligations and liabilities of MCC and
the Original MCC Shareholders under Article VII of the Purchase Agreement and
(iii) immediately following the Acquisition, the distribution by MCC of all of
its assets, consisting of the Original New GWW Shares and certain Excluded
Assets (as defined in the Purchase Agreement), to the Original MCC Shareholders
pursuant to a complete liquidation of MCC (the "Liquidation").

     B. In connection with the Liquidation, each Original MCC Shareholder is
receiving the number of Original New GWW Shares set forth in the schedule that
such Original MCC Shareholder has previously provided to GWW as contemplated by
Section 6.4.

     C. The Purchase Agreement requires the Restricted Signatories and GWW to
execute and deliver this Agreement at, and as a condition to, the Closing (as
hereinafter defined).

     D. GWW would not be willing to enter into the Purchase Agreement and
consummate the Acquisition unless each Restricted Signatory agreed to restrict
the Transfer (as hereinafter defined) of shares of GWW Common Stock and certain
other securities now or hereafter owned or controlled by such Restricted
Signatory in accordance with the terms and conditions of this Agreement.

     E. Each Restricted Signatory is benefiting, directly or indirectly, from
the Acquisition and has determined that the execution, delivery and performance
of this Agreement is advisable and in the best interests of such Restricted
Signatory and, if applicable, such Restricted Signatory's shareholders,
custodians or beneficiaries.

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     NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

     1.1  Definitions. The following terms shall have the following meanings
for the purposes of this Agreement:

     "Acquisition" shall have the meaning set forth in the recitals hereto.

     "Affiliate" shall mean, with respect to any specified Person, (i) any other
Person which, directly or indirectly, owns or controls, is under common
ownership or control with, or is owned or controlled by, such specified Person,
(ii) any other Person which is a director, officer or partner, or is, directly
or indirectly, the beneficial owner of ten percent (10%) or more of any class of
equity securities, of the specified Person or a Person described in clause (i)
of this paragraph, (iii) another Person of which the specified Person is a
director, officer or partner or is, directly or indirectly, the beneficial owner
of ten percent (10%) or more of any class of equity securities, (iv) another
Person in which the specified Person has a substantial beneficial interest or as
to which the specified Person serves as trustee or in a similar capacity or (v)
any relative or spouse of the specified Person or any of the foregoing Persons,
any relative of such spouse or any spouse of any such relative. For purposes of
this Agreement, GWW shall not be deemed an Affiliate of any Restricted Signatory
or Permitted Transferee.

     "Agreement" shall have the meaning set forth in the preamble hereto.

     "Anniversary" shall mean an annual anniversary of the Closing Date.

     "Bank" shall mean (i) a bank (as defined in section (3)(a)(2) of the
Securities Act), (ii) a savings and loan association described in section
3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary
capacity, (iii) a broker or dealer registered pursuant to section 15 of the
Exchange Act or (iv) an insurance company (as defined in section 2(13) of the
Securities Act).

     "Blackout Period" shall mean any of the following periods during a fiscal
year of GWW: (i) the period from and including the last Friday prior to the end
of the first fiscal quarter through and including the sixteenth day of the
second fiscal quarter, (ii) the period from and including the last Friday prior
to the end of the second fiscal quarter through and including the sixteenth day
of the third fiscal quarter, (iii) the period from and including the last Friday
prior to the end of the third fiscal quarter through and including the sixteenth
day of the fourth fiscal quarter and (iv) the period from and including the
first Friday of the first fiscal quarter through and including the twenty-first
day after the first Friday of the first fiscal quarter.

     "Bona Fide Pledgee" shall have the meaning set forth in Section 5.1(g).

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     "Business Day" shall mean any day of the year other than (i) any Saturday
or Sunday or (ii) any other day on which banks located in Chicago, Illinois are
authorized or required to be closed for business.

     "Charitable Organization" shall mean an organization that qualifies as a
tax exempt organization pursuant to 501(c)(3) of the United States Internal
Revenue Code of 1986, as it may be amended from time to time.

     "Closing" shall mean the consummation of the Acquisition in accordance
with Article VI of the Purchase Agreement.

     "Closing Date" shall mean the date on which the Closing occurs.

     "Contract" shall mean any contract, arrangement, commitment, understanding,
lease, sales order, purchase order, agreement, warranty, indenture, mortgage,
note, bond, right, warrant or instrument, whether written or verbal.

     "Election Notice" shall have the meaning set forth in Section 4.1(b).

     "Election Period" shall mean, with respect to any proposed Transfer of
Offered Shares (other than a Transfer described in Section 5.1), the period
beginning on the day GWW receives a Transfer Notice from a Slavik Shareholder
notifying GWW of such proposed Transfer and ending on (i) the fourteenth day
following GWW's receipt of such Transfer Notice, if more than 100,000 Offered
Shares are proposed to be Transferred, or (ii) subject to the last sentence of
this paragraph, the seventh day following GWW's receipt of such Transfer Notice,
if 100,000 or fewer Offered Shares are proposed to be Transferred; provided that
if the Election Period determined in accordance with clause (i) or (ii) above
would otherwise end on a day that is within a Blackout Period, the Election
Period shall end on the third Business Day following the end of such Blackout
Period. Notwithstanding anything to the contrary set forth in the preceding
sentence, if the Slavik Shareholder providing such Transfer Notice to GWW has,
within the prior thirty (30) days, provided a Transfer Notice to GWW for which a
seven (7) day Election Period was applicable pursuant to clause (ii) above, then
a seven (7) day Election Period shall not apply to such proposed Transfer (if
and to the extent such proposed Transfer, when aggregated with the proposed
Transfer(s) described in such earlier Transfer Notice for which a seven (7) day
Election Period was applicable, exceeds 100,000 Offered Shares) and the Election
Period shall end on the fourteenth day following GWW's receipt of the Transfer
Notice with respect to such proposed Transfer (unless such day is within a
Blackout Period, in which case the Election Period shall end on the third
Business Day following the end of such Blackout Period), regardless of the
number of Offered Shares proposed to be Transferred.

     "Escrow Agent" shall mean American National Bank and Trust Company of
Chicago, a national banking association.

     "Escrow Agreement" shall have the meaning set forth in the recitals hereto.

     "Escrow Fund" shall have the meaning assigned to such term in the Escrow
Agreement.

     "Escrow Shares" shall have the meaning set forth in the recitals hereto.

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     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
or any similar successor federal statute, and the rules and regulations
thereunder, all as the same shall be in effect at the time.

     "Family Transferee" shall mean James D. Slavik, John H. Slavik, Paul A.
Slavik and Susan Slavik Williams, and any descendants or spouses of the
foregoing and the spouses of any such descendants.

     "Glenview State Bank" shall mean Glenview State Bank, an Illinois banking
corporation.

     "Governmental Authority" shall mean the government of the United States or
any foreign country or any state or political subdivision of the United States
or any foreign country and any other entity, body, agency or authority
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including any quasi-governmental
entity established to perform such functions.

     "GWW" shall have the meaning set forth in the preamble hereto.

     "GWW Common Stock" shall mean the Common Stock, par value $.50 per share,
of GWW.

     "GWW Indemnified Parties" shall mean GWW, each of its Subsidiaries and
Affiliates and each of their respective officers, directors, shareholders,
employees, agents and representatives; provided, that in no event shall any
Restricted Signatory or Slavik Shareholder be deemed a GWW Indemnified Party.

     "Indemnified Person" shall mean the Person or Persons entitled to, or
claiming a right to, indemnification under Article VIII.

     "Indemnifying Person" shall mean the Person or Persons claimed by the
Indemnified Person to be obligated to provide indemnification under Article
VIII.

     "Law" shall mean any law (including the common law), statute, regulation,
ordinance, rule, order, decree, judgment, consent decree, settlement agreement
or governmental requirement enacted, promulgated, entered into, agreed or
imposed by any Governmental Authority.

     "Liability" shall mean any past, present or future liability or obligation
(whether known or unknown, whether asserted or unasserted, whether absolute,
fixed, contingent or otherwise, whether accrued or unaccrued, whether liquidated
or unliquidated, and whether due or to become due), including any liability or
obligation for Taxes.

     "Lien" shall mean any lien, mortgage, charge, restriction, pledge, security
interest, option, lease, sublease or right of any third party.

     "Liquidation" shall have the meaning set forth in the recitals hereto.

     "Loss" or "Losses" shall mean any and all losses, Liabilities, costs,
claims, damages, penalties and expenses (including reasonable attorneys' fees
and expenses and reasonable costs of investigation and litigation). In the event
any of the foregoing are indemnifiable hereunder, the terms "Loss" and "Losses"
shall include any and all reasonable attorneys' fees and expenses and reasonable
costs of investigation and litigation incurred by the Indemnified Person in
enforcing such indemnity.

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     "Market Price" shall have the meaning set forth in Section 3.2.

     "Market Value" shall mean the closing per share sale price for shares of
GWW Common Stock on the trading day immediately prior to the relevant date as
reported in the composite transactions for the New York Stock Exchange.

     "MCC" shall mean Mountain Capital Corporation, a Nevada corporation.

     "MCC Shareholder" shall mean (i) any Original MCC Shareholder or (ii) any
MCC Shareholder Transferee.

     "MCC Shareholder Transferee" shall mean a Permitted Transferee who shall
own New GWW Shares received from a MCC Shareholder pursuant to and in accordance
with Section 5.1(a).

     "New GWW Shares" shall mean (i) the Original New GWW Shares (including the
Escrow Shares) and (ii) all shares of capital stock or other securities, whether
issued by GWW or otherwise, issued or paid as dividends or other distributions
on or in respect of Original New GWW Shares or other shares of capital stock or
securities otherwise constituting New GWW Shares.

     "Offer Price" shall have the meaning set forth in Section 3.2.

     "Offered Shares" shall have the meaning set forth in Section 3.2.

     "Original MCC Shareholder" shall have the meaning set forth in the preamble
hereto.

     "Original New GWW Shares" shall have the meaning set forth in the recitals
hereto.

     "Original Owner" of any Restricted Shares shall mean the Restricted
Signatory that owned such Restricted Shares on the date hereof (or if such
Restricted Shares did not exist on the date hereof, the Restricted Signatory
that owned the Restricted Shares that did exist on the date hereof with respect
to which the Restricted Shares in question were distributed).

     "Other Slavik Shares" shall mean (i) all shares of GWW Common Stock (other
than New GWW Shares) now or hereafter beneficially owned by a Restricted
Signatory, (ii) all shares of GWW Common Stock (other than New GWW Shares) which
are hereafter beneficially owned by a Slavik Transferee and which were received
from a Slavik Shareholder and (iii) all shares of capital stock or other
securities, whether issued by GWW or otherwise, issued or paid as dividends or
other distributions on or in respect of shares of GWW Common Stock or other
shares of capital stock or securities otherwise constituting Other Slavik
Shares.

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     "Permitted Transferee" shall mean (i) a Family Transferee, (ii) the
custodian under any Uniform Transfers to Minors Act or similar law for a minor
who is a Family Transferee, (iii) a trust (including a voting trust), other than
a Charitable Organization, of which one or more Family Transferees and/or
Charitable Organizations are the sole beneficiaries, (iv) a corporation of which
one or more Family Transferees or such Family Transferees' Permitted Transferees
(as determined under this definition of "Permitted Transferee") collectively
beneficially own a majority of the combined voting power of the outstanding
capital stock entitled to vote for the election of directors, a partnership of
which one or more Family Transferees or such Family Transferees' Permitted
Transferees (as determined under this definition of "Permitted Transferee")
collectively beneficially own a majority of the partnership interests entitled
to participate in the management of the partnership, a member managed limited
liability company of which one or more Family Transferees or such Family
Transferees' Permitted Transferees (as determined under this definition of
"Permitted Transferee") collectively beneficially own a majority of the
outstanding member interests entitled to participate in the management of the
limited liability company, or a manager managed limited liability company of
which a majority of the managers entitled to participate in decisions with
respect to the voting or disposition by the limited liability company of the
Restricted Shares are either Family Transferees or such Family Transferees'
Permitted Transferees (as determined under this definition of "Permitted
Transferee"), (v) the estate of a Family Transferee, or the executor,
administrator or personal representative of the estate of a Family Transferee or
(vi) the guardian, conservator, or custodian of any Family Transferee adjudged
disabled by a court of competent jurisdiction. For purposes of this definition
of "Permitted Transferee":

                  (A) The relationship of any person that is derived by or
       through legal adoption shall be considered a natural one.

                  (B) Each joint owner of Restricted Shares shall be considered
       a holder of such shares who must qualify as a Permitted Transferee.

                  (C) Each reference to a corporation or limited liability
       company shall include any successor corporation or limited liability
       company resulting from merger, consolidation, reorganization or
       recapitalization; each reference to a partnership shall include any
       successor partnership resulting from the death or withdrawal of a
       partner; each reference to a trustee, executor or any other personal
       representative shall include any successor trustee, successor executor or
       successor personal representative.

In this Agreement, a "Permitted Transferee" of a Person shall mean a Permitted
Transferee who shall own Restricted Shares received, directly or indirectly,
from such Person pursuant to one or more Transfers made pursuant to and in
accordance with Section 5.1(a).

     "Person" shall mean any individual, corporation, proprietorship, firm,
partnership, limited partnership, limited liability company, trust, association
or other entity.

     "Purchase Agreement" shall have the meaning set forth in the recitals
hereto.

     "Purchased Assets" shall have the meaning set forth in the recitals hereto.

     "Restricted Shares" shall mean the New GWW Shares and the Other Slavik
Shares.

     "Restricted Signatories" shall have the meaning set forth in the preamble
hereto.

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     "Rule 144" shall mean Rule 144 as promulgated by the SEC under the
Securities Act, as such rule may be amended from time to time, or any similar
successor rule that may be promulgated by the SEC.

     "SEC" shall mean the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.

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

     "Securities Act Legend" shall have the meaning assigned to such term in the
Purchase Agreement.

     "Share Transfer Restriction Agreement Legend" shall have the meaning set
forth in Section 9.1.

     "Slavik Shareholder" shall mean (i) any Restricted Signatory or (ii) any
Slavik Transferee.

     "Slavik Transferee" shall mean a Permitted Transferee who shall own New GWW
Shares or Other Slavik Shares received from a Slavik Shareholder pursuant to and
in accordance with Section 5.1(a).

     "Subsidiary" shall mean, with respect to any Person, any corporation or
other entity, whether incorporated or unincorporated, of which (i) such Person
or any other Subsidiary of such Person is a general partner or (ii) at least a
majority of the securities or other interests having by their terms ordinary
voting power to elect a majority of the board of directors or others performing
similar functions with respect to such corporation or other entity is, directly
or indirectly, owned or controlled by such Person or by any one or more of its
Subsidiaries, or by such Person and any one or more of its Subsidiaries.

     "Taxes" shall mean all taxes, charges, fees, duties (including customs
duties), levies or other assessments, including income, gross receipts, net
proceeds, ad valorem, turnover, real and personal property (tangible and
intangible), sales, use, franchise, excise, goods and services, value added,
stamp, leasing, lease, user, transfer, fuel, excess profits, occupational,
interest equalization, windfall profits, severance, license, payroll,
environmental, capital stock, disability, employee's income withholding, other
withholding, unemployment and Social Security taxes, which are imposed by any
Governmental Authority, and such term shall include any interest, penalties or
additions to tax attributable thereto.

     "Transfer" shall mean (i) when used as a noun, any sale, transfer,
conveyance, grant (including a grant of a security interest), encumbrance,
pledge, hypothecation, gift, donation, bequest, devise or other disposition,
whether direct or indirect, whether or not for value, and shall include any
disposition of the economic or other risks of ownership of Restricted Shares,
including (A) a liquidation, dissolution or winding up of the Slavik Shareholder
or (B) the sale, transfer, conveyance, grant, encumbrance, pledge,
hypothecation, gift, donation, bequest, devise or other disposition, whether
direct or indirect, whether or not for value, of options, warrants or rights to
acquire, or other securities convertible into, Restricted Shares, in which case
the number of shares of Restricted Shares which such options, warrants or rights
give a right to acquire, or into which such other securities are convertible,
shall be deemed to have been Transferred and (ii) when used as a verb, making or
effecting any of the foregoing.

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     "Transfer Notice" shall have the meaning set forth in Section 3.1(a).

     "Transferring Shareholder" shall have the meaning set forth in Section 3.2.

     1.2 Interpretation. The headings preceding the text of Articles and
Sections included in this Agreement and the headings to Schedules attached to
this Agreement are for convenience only and shall not be deemed part of this
Agreement or be given any effect in interpreting this Agreement. The use of the
masculine, feminine or neuter gender or the singular or plural form of words
herein shall not limit any provision of this Agreement. The use of the terms
"including" or "include" shall in all cases herein mean "including, without
limitation" or "include, without limitation," respectively. Reference to any
Person includes such Person's successors and assigns to the extent such
successors and assigns are permitted by the terms of any applicable agreement,
and reference to a Person in a particular capacity excludes such Person in any
other capacity or individually. Reference to any agreement (including this
Agreement), document or instrument means such agreement, document or instrument
as amended or modified and in effect from time to time in accordance with the
terms thereof and, if applicable, the terms hereof. Reference to any Law means
such Law as amended, modified, codified, replaced or re-enacted, in whole or in
part, including rules, regulations, enforcement procedures and any
interpretations promulgated thereunder. Underscored references to Articles,
Sections, Subsections or Schedules shall refer to those portions of this
Agreement. The use of the terms "hereunder," "hereof," "hereto" and words of
similar import shall refer to this Agreement as a whole and not to any
particular Article, Section or clause of or Exhibit or Schedule to this
Agreement. No specific representation, warranty or covenant contained herein
shall limit the generality or applicability of a more general representation,
warranty or covenant contained herein. A breach of or inaccuracy in any
representation, warranty or covenant shall not be affected by the fact that any
more general or less general representation, warranty or covenant was not also
breached or inaccurate. The word "class" when used by reference to securities or
Restricted Shares shall have the meaning as set forth in Section 12 of the
Exchange Act.

                                   ARTICLE II

                          RESTRICTIONS ON TRANSFERS OF
                                 NEW GWW SHARES

     2.1 Restrictions On Transfers of New GWW Shares. In addition to complying
with Rule 144 and all other Transfer restrictions and other requirements under
any other Law, in each case if and to the extent applicable, each MCC
Shareholder shall comply with the following restrictions on Transfers of New GWW
Shares following the Closing:

     (a) During the period from and after the date hereof and through and
including the first Anniversary, no MCC Shareholder shall Transfer, and no MCC
Shareholder shall permit any Permitted Transferee of such MCC Shareholder to
Transfer, any New GWW Shares;

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     (b) During the period from and after the first Anniversary through and
including the second Anniversary, no MCC Shareholder shall Transfer, and no MCC
Shareholder shall permit any Permitted Transferee of such MCC Shareholder to
Transfer, New GWW Shares in an aggregate number, for all such Transfers by such
MCC Shareholder and its Permitted Transferees, greater than twenty-five percent
(25%) of the New GWW Shares received by such MCC Shareholder pursuant to the
Liquidation (including the Escrow Shares of such MCC Shareholder held by the
Escrow Agent);

     (c) During the period from and after the second Anniversary through and
including the third Anniversary, no MCC Shareholder shall Transfer, and no MCC
Shareholder shall permit any Permitted Transferee of such MCC Shareholder to
Transfer, New GWW Shares in an aggregate number, for all such Transfers by such
MCC Shareholder and its Permitted Transferees, greater than the remainder of (i)
fifty percent (50%) of the New GWW Shares received by such MCC Shareholder
pursuant to the Liquidation (including the Escrow Shares of such MCC Shareholder
held by the Escrow Agent) less (ii) the total New GWW Shares Transferred by such
MCC Shareholder and its Permitted Transferees during the period and within the
limitations set forth in Section 2.1(b);

     (d) During the period from and after the third Anniversary through and
including the fourth Anniversary, no MCC Shareholder shall Transfer, and no MCC
Shareholder shall permit any Permitted Transferee of such MCC Shareholder to
Transfer, New GWW Shares in an aggregate number, for all such Transfers by such
MCC Shareholder and its Permitted Transferees, greater than the remainder of (i)
seventy-five percent (75%) of the New GWW Shares received by such MCC
Shareholder pursuant to the Liquidation (including the Escrow Shares of such MCC
Shareholder held by the Escrow Agent) less (ii) the total New GWW Shares
Transferred by such MCC Shareholder and its Permitted Transferees during the
period and within the limitations set forth in Section 2.1(b) and (c);

     (e) After the fourth Anniversary, each MCC Shareholder and each Permitted
Transferee of such MCC Shareholder may Transfer any or all of the New GWW Shares
(other than the Escrow Shares);

provided that (i) each such Transfer of New GWW Shares shall be subject to all
of the provisions of this Agreement, including Articles III, IV and V, (ii) no
MCC Shareholder may Transfer any New GWW Shares constituting Escrow Shares
unless and until such shares have been released from the Escrow Fund and
distributed to such MCC Shareholder by the Escrow Agent pursuant to the terms of
the Escrow Agreement, (iii) any Transfer of New GWW Shares described in Section
5.1(a), (c), (d), (e) or (f) shall not be included in determining compliance by
any MCC Shareholder with the provisions of this Article II and (iv) any Transfer
of New GWW Shares described in Section 5.1(g) shall not be included in
determining compliance by any MCC Shareholder with the provisions of this
Article II, provided that (A) any subsequent foreclosure or similar action
resulting in such a Transfer of any or all of the New GWW Shares to, by, on
behalf of, or for the benefit of the Bona Fide Pledgee, are made in accordance
with Rule 144 (and, in any event, no such foreclosure or similar action shall be
made prior to the first Anniversary) and (B) on the date the MCC Shareholder
makes, grants or enters into the bona fide pledge constituting such a Transfer,
the amount of the bona fide indebtedness secured by such pledge does not exceed
eighty-five percent (85%) of the aggregate Market Value of the New GWW Shares
pledged as collateral security for such indebtedness.

                                    10
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                                  ARTICLE III

                               NOTICES OF TRANSFER

     3.1 Requirement to Provide Transfer Notice.

     (a) Subject to Section 3.1(b), during the period from the Closing Date to
the tenth Anniversary:

         (i) No Slavik Shareholder shall Transfer any New GWW Shares without
first providing a written notice (a "Transfer Notice") to GWW complying with
this Article III.

         (ii) No Slavik Shareholder shall Transfer any Other Slavik
Shares in a negotiated private transaction effected by or on behalf of such
Slavik Shareholder or in any other manner other than pursuant to a "brokers
transaction" (within the meaning of section 4(4) of the Securities Act) or a
transaction directly with a "market maker" (as that term is defined in section
3(a)(38) of the Securities Act) as contemplated by Rule 144 without first
providing a Transfer Notice to GWW complying with this Article III.

     (b) Notwithstanding anything to the contrary set forth in Section 3.1(a),
(i) no Transfer Notice shall be required to be provided by a Slavik Shareholder
to GWW in connection with any Transfer of New GWW Shares or Other Slavik Shares
described in Section 5.1(d), (e) or (f), (ii) no Transfer Notice shall be
required to be provided by a Slavik Shareholder to GWW in connection with any
Transfer of Other Slavik Shares described in Section 5.1(c), provided that the
Other Slavik Shares so Transferred by such Slavik Shareholder do not exceed
1,000 shares in the aggregate during any twelve-month period prior to the tenth
Anniversary and (iii) any Transfer Notice required to be provided by a Slavik
Shareholder to GWW in connection with any Transfer described in Section 5.1(a),
(b), (c) or (g) shall be provided by such Slavik Shareholder to GWW not less
than three (3) Business Days following such Transfer.

     3.2 Contents of Transfer Notice. Subject to the last sentence of this
Section 3.2, each Transfer Notice to be provided by a Slavik Shareholder (each,
a "Transferring Shareholder") to GWW shall be substantially in the form set
forth in Exhibit A and shall indicate the Transferring Shareholder's good faith
intention to make a Transfer of Restricted Shares and shall set forth (i) the
method of making the proposed Transfer; (ii) the number of Restricted Shares
proposed to be Transferred by such Transferring Shareholder (the "Offered
Shares"), (iii) the name and mailing address of the proposed purchaser or
proposed transferee, as the case may be, (iv) if the proposed Transfer is a
proposed sale, the proposed purchase price per share of the Offered Shares (the
"Offer Price") and (v) the other terms and conditions of the proposed Transfer;
provided that (i) if the proposed Transfer of Offered Shares is to be made
pursuant to a "brokers transaction" (within the meaning of section 4(4) of the
Securities Act) or a transaction directly with a "market maker" (as that term is
defined in section 3(a)(38) of the Securities Act) as contemplated by Rule 144,
the Transfer Notice may state that the proposed purchaser(s) are open market
purchasers (in which case no address need be provided) and (ii) instead of
specifying an Offer Price, the Transfer Notice may state that the proposed
purchase price per share of the Offered Shares shall be (A) the market price for
shares of GWW Common Stock on the New York Stock Exchange at the time of the
Transfer, (B) the market price for shares of GWW Common Stock on the New York

                                    11
<PAGE>

Stock Exchange at the time of the Transfer but not less than a specified amount,
(C) a price calculated based on a specified premium (or discount) over (or
under) the market price for shares of GWW Common Stock on the New York Stock
Exchange at the time of the Transfer, (D) a price calculated based on an average
of the market price for shares of GWW Common Stock on the New York Stock
Exchange over a specified time period prior to the Transfer, (E) a price
calculated using a specified and determinable formula similar to any of the
foregoing based on the market price for shares of GWW Common Stock on the New
York Stock Exchange at or prior to the Transfer or (F) a price calculated using
any of the foregoing formulas but not less than a specified amount (each
referred to herein as a "Market Price"); provided that if the Transfer Notice
merely states that the proposed purchase price per share of the Offered Shares
shall be "at market" or "at the market price," without specifying the method of
calculating the Market Price, then the Market Price shall be deemed to be the
market price for shares of GWW Common Stock on the New York Stock Exchange at
the time of the Transfer. In the case of a Transfer Notice to be provided by a
Slavik Shareholder to GWW in connection with a Transfer described in Section
5.1(a), (b), (c) or (g) that has been consummated, the Transfer Notice shall
identify the date that such Transfer occurred and shall set forth the same
information with respect to such Transfer as is described in the first sentence
of this Section 3.2 (other than the information described in clause (iv)
thereof)).

                                   ARTICLE IV

                             RIGHT OF FIRST REFUSAL

     4.1 Right of GWW to Purchase.

     (a) No Transfer of Offered Shares (other than a Transfer described in
Section 5.1) shall be made except in accordance with this Article IV.

     (b) Subject to Section 4.1(c), during the Election Period with respect to a
proposed Transfer, GWW may, by delivering a written notice (an "Election
Notice") to the Transferring Shareholder, elect to purchase all (but not only a
portion) of the Offered Shares at the Offer Price specified in the Transfer
Notice related to such proposed Transfer (or, if such Transfer Notice specified
a Market Price, at the higher of (i) the minimum price, if any, specified in
such Transfer Notice or (ii) the Market Price, which shall be calculated as if
the proposed Transfer had occurred at the close of the market on the trading day
immediately prior to the day that GWW delivers such Election Notice to the
Transferring Shareholder) and upon the other terms and conditions set forth in
such Transfer Notice.

     (c) Notwithstanding anything to the contrary set forth in Section 4.1(b), a
Transferring Shareholder may elect not to consummate any proposed Transfer of
Offered Shares for which a Transfer Notice has been provided to GWW and may
withdraw the Transfer Notice with respect to such Offered Shares by delivering a
written notice of such withdrawal to GWW at any time prior to delivery by GWW of
an Election Notice with respect to such Offered Shares to the Transferring
Shareholder.

     4.2 Right of Transferring Shareholder to Sell. If GWW does not deliver an
Election Notice with respect to the Offered Shares to the Transferring
Shareholder within the Election Period, then the Transferring Shareholder shall
be permitted to Transfer all of the Offered Shares to the proposed purchaser(s)
specified in the Transfer Notice at the Offer Price (or, if the Transfer Notice
specified a Market Price, at the Market Price) and upon the other terms and
conditions set forth in such Transfer Notice, within sixty (60) days following
the expiration of the Election Period. If such Transfer is not completed within
such sixty (60) day period, the Transferring Shareholder may not Transfer the
Offered Shares without again complying with all of the provisions of this
Agreement, including this Article IV.

                                    12
<PAGE>

     4.3 Closing of Purchases by GWW. If GWW delivers an Election Notice with
respect to the Offered Shares to the Transferring Shareholder within the
Election Period, then (i) the Transferring Shareholder shall not Transfer the
Offered Shares as contemplated in the Transfer Notice and (ii) the Transferring
Shareholder shall Transfer the Offered Shares to GWW as contemplated in the
Election Notice. The closing of the purchase and sale of any Offered Shares to
be acquired by GWW hereunder shall be held at the offices of GWW on such dates
and times as the parties may agree but in any event within ten (10) days
following the day that GWW delivered the Election Notice with respect to such
Offered Shares to the Transferring Shareholder.

                                   ARTICLE V

                     EXCEPTIONS AND OTHER SPECIAL PROVISIONS
                  CONCERNING NOTICES AND RIGHT OF FIRST REFUSAL

     5.1 Exceptions to Right of First Refusal. Notwithstanding anything to the
contrary set forth herein, the provisions of Article IV shall not apply to any
of the following Transfers of Restricted Shares by a Slavik Shareholder:

     (a) a Transfer of Restricted Shares to a Permitted Transferee of such
Slavik Shareholder or to any other Slavik Shareholder, provided that such
Restricted Shares shall continue to be subject to all of the provisions of this
Agreement to the same extent as when such Restricted Shares were held by the
transferor and, with respect to a Transfer to a Permitted Transferee who is not
a Slavik Shareholder, the Permitted Transferee shall, prior to such Transfer,
execute and deliver to GWW and to any other issuer of Restricted Shares, a
written agreement substantially in the form set forth in Exhibit B attached
hereto or otherwise in a form reasonably satisfactory to GWW and any such other
issuer, in which the Permitted Transferee shall agree that, as to the Restricted
Shares so Transferred, such Permitted Transferee shall be bound by all of the
provisions of this Agreement to the same extent as the transferor hereunder
(other than the indemnification obligations of the transferor set forth in
Article VIII), and provided further that no Transfer of Restricted Shares by a
Slavik Shareholder pursuant to this Section 5.1(a) shall limit or otherwise
affect such Slavik Shareholder's obligations (including the indemnification
obligations of such Slavik Shareholder set forth in Article VIII) under this
Agreement;

     (b) a Transfer of New GWW Shares by a Slavik Shareholder pursuant to a
"brokers transaction" (within the meaning of section 4(4) of the Securities Act)
or a transaction directly with a "market maker" (as that term is defined in
section 3(a)(38) of the Securities Act) as contemplated by Rule 144, but only to
the extent the New GWW Shares so Transferred by such Slavik Shareholder
(together with all other New GWW Shares so Transferred by the Permitted
Transferees of such Slavik Shareholder and, if such Slavik Shareholder is a
Slavik Transferee, together with all other New GWW Shares so Transferred by the
Original Owner of such New GWW Shares and all Permitted Transferees of such
Original Owner), do not exceed in the aggregate, during any twelve-month period
prior to the tenth Anniversary, the greater of (i) 5,000 shares or (ii) two
percent (2%) of the aggregate number of shares of GWW Common Stock owned by such
Slavik Shareholder at the time of the Closing, as represented and warranted by
such Slavik Shareholder in the schedule that such Slavik Shareholder has
previously provided to GWW as contemplated by Section 6.4, or if not so
represented and warranted by such Slavik Shareholder, two percent (2%) of the
New GWW Shares that were acquired by such Slavik Shareholder (or, if such Slavik
Shareholder is a Slavik Transferee, by the Original Owner of such New GWW
Shares) in the Liquidation;

                                    13
<PAGE>

     (c) a Transfer of Restricted Shares as a donation to a Charitable
Organization;

     (d) a Transfer of Restricted Shares pursuant to the terms of any tender
offer made pursuant to Regulation 14D promulgated under the Exchange Act or
exchange offer pursuant to a registration statement filed under the Securities
Act to purchase or acquire any portion of the outstanding securities
constituting the same class of securities as the Restricted Shares being
transferred pursuant to this Section 5.1(d) which is extended equally to all
holders of securities of such class and which is approved by the board of
directors of the issuer of such class of securities, provided that if, following
completion of any such offer, the holders of securities of such class
immediately prior to such offer, in their capacity as such holders, received
capital stock of the entity making such offer having at least a majority of the
combined voting power of the capital stock of such entity, then the capital
stock of such entity received by the Slavik Shareholders pursuant to such offer
shall be subject to all of the provisions of this Agreement;

     (e) a Transfer of Restricted Shares pursuant to any merger or consolidation
involving the issuer of Restricted Shares which is approved by the board of
directors of such issuer, provided that if, following such merger or
consolidation, the holders of securities of such class immediately prior to such
merger or consolidation, in their capacity as such holders, received capital
stock of an entity involved in such merger or consolidation having at least a
majority of the combined voting power of the capital stock of such entity, then
the capital stock of such entity received by the Slavik Shareholder pursuant to
such merger or consolidation shall be subject to all of the provisions of this
Agreement;

     (f) a Transfer of Restricted Shares in connection with any
recapitalization, reorganization, reclassification, change of domicile merger or
other similar transaction (A) which is approved by the board of directors of the
issuer of such Restricted Shares and (B) in which there is no change in the
relative percentages of ownership among the holders of the capital stock of the
resulting or surviving entity, except for changes resulting from cash payments
in lieu of fractional shares, from the percentages of ownership of the class of
securities of which such Restricted Shares are a part which existed immediately
prior to such transaction, provided that the capital stock of such surviving or
resulting entity shall be subject to all of the provisions of this Agreement;
and
     (g) a bona fide pledge by a Slavik Shareholder to Glenview State Bank or a
Bank which has total assets of at least $1 billion (each, a "Bona Fide Pledgee")
of Restricted Shares as collateral security for bona fide indebtedness for
borrowed money due from such Slavik Shareholder to such Bona Fide Pledgee,
provided that (A) upon any release or termination of such pledge, such
Restricted Shares shall continue to be subject to all of the provisions of this
Agreement to the same extent as if such shares had not been pledged by the
Slavik Shareholder, (B) in the event of a bona fide foreclosure or other similar
action resulting in a Transfer of any or all of the pledged Restricted Shares
to, by, on behalf of or for the benefit of such Bona Fide Pledgee made in
accordance with Rule 144, except as provided in clause (C) of this Section
5.1(g), any such pledged shares shall no longer be subject to any of the
provisions of this Agreement and (C) with respect to any bona fide pledge of
Restricted Shares made or granted pursuant to an agreement entered into after
the date of this Agreement, such Bona Fide Pledgee agrees to provide a written
notice to GWW in accordance with Section 10.4 of any foreclosure or similar
action resulting in a Transfer of any or all of the pledged Restricted Shares
to, by, on behalf of or for the benefit of such Bona Fide Pledgee at least three
(3) Business Days prior to such foreclosure or action, provided that an
extension of the term of a pledge agreement in existence prior to the date of
this Agreement shall not be deemed to be an agreement entered into after the
date of this Agreement.

                                    14
<PAGE>

     5.2 Stock Splits And Dividends. If there is any increase or decrease in the
number of issued and outstanding Restricted Shares following the Closing Date
resulting from a subdivision or consolidation of shares or the payment of a
stock dividend or any other increase or decrease in the number of issued and
outstanding Restricted Shares effected without receipt of consideration by GWW
or the issuer thereof, as applicable, the shares resulting from such subdivision
or consolidation or issued as such dividend or otherwise shall be subject to all
of the provisions of this Agreement to the same extent as were the shares as to
which such subdivision or consolidation occurred or the shares with respect to
which such dividend was distributed or such other increase or decrease occurred.

     5.3 Changes In Ownership Of Certain Entities. If, by reason of any proposed
change in the ownership of the stock, partnership interests or member interests,
or the identity or ownership interests of the managers of a Permitted Transferee
who acquired Restricted Shares pursuant to Section 5.1(a), such corporation,
partnership or limited liability company would no longer qualify as a Permitted
Transferee under clause (iv) of the "Permitted Transferee" definition, then the
event by which such proposed change of ownership shall occur shall be deemed to
be a Transfer of all of the Restricted Shares then held by such corporation,
partnership or limited liability company which were acquired by such
corporation, partnership or limited liability company pursuant to Section
5.1(a), which Transfer must comply with all of the provisions of this Agreement.

                                   ARTICLE VI

            REPRESENTATIONS AND WARRANTIES OF RESTRICTED SIGNATORIES

     Each Restricted Signatory severally represents and warrants to GWW, as of
the date of this Agreement, as set forth below. The information disclosed on any
Schedule attached hereto shall be deemed to relate solely to the section of this
Article VI to which such Schedule relates and shall not be deemed to relate to
any other sections to which such disclosures may apply unless such disclosure is
cross-referenced in the Schedule(s) relating to such other section(s), and only
to the extent that the applicable information or risk is described.

     6.1 Due Organization. If such Restricted Signatory is not a natural person,
such Restricted Signatory is an entity duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization.

     6.2 Due Authorization. If such Restricted Signatory is not a natural
person, such Restricted Signatory has full power and authority to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby. If such Restricted Signatory is a natural person, such
Restricted Signatory has the legal capacity, power and authority to execute,
deliver and perform this Agreement and to consummate the transactions
contemplated hereby. If such Restricted Signatory is a trust or a custodianship,
the trustee of such trust or the custodian of such custodianship, as the case
may be, has the legal capacity, power and authority, on behalf of such trust or
custodianship, as the case may be, to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby. Such
Restricted Signatory has taken all action required by Law, such Restricted
Signatory's organizational or governing documents (if applicable), or otherwise
to authorize the execution, delivery and performance of this Agreement and the
consummation by such Restricted Signatory of the transactions contemplated
hereby. Such Restricted Signatory has duly and validly executed and delivered
this Agreement. This Agreement constitutes legal, valid and binding obligations
of such Restricted Signatory, enforceable in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
moratorium, reorganization or similar laws in effect that affect the enforcement
of creditors' rights generally and by equitable limitations on the availability
of specific remedies.

                                    15
<PAGE>

     6.3 Consents and Approvals; Authority.

     (a) Except as described in Schedule 6.3(a), no consent, authorization or
approval of, filing or registration with, waiver of any right of first refusal
or first offer from, or cooperation from, any Governmental Authority or any
other Person is necessary in connection with the execution, delivery and
performance by such Restricted Signatory of this Agreement or the consummation
by such Restricted Signatory of the transactions contemplated hereby.

     (b) The execution, delivery and performance by such Restricted Signatory of
this Agreement and the consummation by such Restricted Signatory of the
transactions contemplated hereby, do not and will not (i) violate any Law
applicable to or binding on such Restricted Signatory, or any of such Restricted
Subsidiary's assets or properties; (ii) violate or conflict with, result in a
breach or termination of, constitute a default or give any third party any
additional right (including a termination right) under, permit cancellation of,
result in the creation of any Lien upon any of the assets or properties of such
Restricted Signatory under, or result in or constitute a circumstance which,
with or without notice or lapse of time or both, would constitute any of the
foregoing under, any Contract to which such Restricted Signatory is a party or
by which such Restricted Signatory or any of such Restricted Subsidiary's assets
or properties are bound; (iii) permit the acceleration of the maturity of any
indebtedness of such Restricted Signatory or indebtedness secured by any of such
Restricted Subsidiary's assets or properties; or (iv) violate or conflict with
any provision of the certificate of incorporation, by-laws or similar
organizational instruments of such Restricted Signatory.

     6.4 Ownership of GWW Common Stock. Such Restricted Signatory has previously
provided to GWW a schedule that sets forth (i) the name, address and taxpayer
identification number of such Restricted Signatory, (ii) the number of New GWW
Shares (including the number of Escrow Shares) being received by such Restricted
Signatory in connection with the Liquidation and (iii) except with respect to
John H. Slavik, David A. Slavik, Sean T. Slavik and the Sean Thomas Slavik
Trust, (A) the total number of other shares of GWW Common Stock legally or
beneficially owned by such Restricted Signatory, (B) the names and accounts in
which each of such New GWW Shares and other shares of GWW Common Stock are held
and (C) the number of such New GWW Shares and other shares of GWW Common Stock
that are subject to a pledge or similar encumbrance and the identity of the
pledgee and the date such shares became subject to such pledge or similar
encumbrance.

                                    16
<PAGE>

                                  ARTICLE VII

                      REPRESENTATIONS AND WARRANTIES OF GWW

     GWW represents and warrants to the Restricted Signatories, as of the
date of this Agreement, as follows:

     7.1 Due Incorporation. GWW is a corporation duly organized, validly
existing and in good standing under the laws of the State of Illinois, with all
requisite power and authority to own, lease and operate its properties and to
carry on its business as now being conducted.

     7.2 Due Authorization. GWW has full power and authority to execute, deliver
and perform this Agreement and to consummate the transactions contemplated
hereby. The execution, delivery and performance by GWW of this Agreement, and
the consummation by GWW of the transactions contemplated hereby, have been duly
and validly approved by the board of directors of GWW, and no other actions or
proceedings on the part of GWW are necessary to authorize this Agreement or the
transactions contemplated hereby. GWW has duly and validly executed and
delivered this Agreement. This Agreement constitutes legal, valid and binding
obligations of GWW, enforceable in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or similar laws in effect that affect the enforcement of
creditors' rights generally and by equitable limitations on the availability of
specific remedies.

     7.3 Consents and Approvals; Authority.

     (a) Except as described in Schedule 7.3(a), no consent, authorization or
approval of, filing or registration with, or cooperation from, any Governmental
Authority or any other Person not a party to this Agreement is necessary in
connection with the execution, delivery and performance by GWW of this Agreement
or the consummation by GWW of the transactions contemplated hereby.

     (b) The execution, delivery and performance by GWW of this Agreement, and
the consummation by GWW of the transactions contemplated hereby, do not and will
not (i) violate any Law applicable to or binding on GWW or any of its assets or
properties; (ii) violate or conflict with, result in a breach or termination of,
constitute a default or give any third party any additional right (including a
termination right) under, permit cancellation of, result in the creation of any
Lien upon any of the assets or properties of GWW under, or result in or
constitute a circumstance which, with or without notice or lapse of time or
both, would constitute any of the foregoing under, any Contract to which GWW is
a party or by which GWW or any of its assets or properties are bound; (iii)
permit the acceleration of the maturity of any indebtedness of GWW or
indebtedness secured by its assets or properties; or (iv) violate or conflict
with any provision of GWW's articles of incorporation or by-laws.

                                    17
<PAGE>

                                  ARTICLE VIII

                                 INDEMNIFICATION

     8.1 Survival. All of the representations and warranties of the parties
hereto contained herein shall survive until the tenth Anniversary.

     8.2 Indemnification by Restricted Signatories. Each Restricted Signatory
(and each Permitted Transferee of such Restricted Signatory) severally agrees to
indemnify each of the GWW Indemnified Parties against, and agrees to hold each
of the GWW Indemnified Parties harmless from, any and all Losses incurred or
suffered by any or all of the GWW Indemnified Parties arising out of or in
connection with any of the following:

     (a) any breach of or any inaccuracy in (or any third party claim involving
an alleged breach of or inaccuracy in) any representation or warranty made by
such Restricted Signatory (or by any Permitted Transferee of such Restricted
Signatory) in this Agreement; or

     (b) any breach (or any third party claim involving an alleged
breach) by such Restricted Signatory (or by any Permitted Transferee of such
Restricted Signatory) of or failure (or any third party claim involving an
alleged failure) by such Restricted Signatory (or by any Permitted Transferee of
such Restricted Signatory) to perform any covenant, agreement or obligation of
such Restricted Signatory (or of any Permitted Transferee of such Restricted
Signatory) in this Agreement.

     8.3 Indemnification by GWW. GWW agrees to indemnify each Restricted
Signatory against, and agrees to hold each of them harmless from, any and all
Losses incurred or suffered by such Restricted Signatory arising out of or in
connection with any of the following:

     (a) any breach of or any inaccuracy in (or any third party claim involving
an alleged breach of or inaccuracy in) any representation or warranty made by
GWW in this Agreement; or

     (b) any breach (or any third party claim involving an alleged breach) of or
failure (or any third party claim involving an alleged failure) by GWW to
perform any covenant, agreement or obligation of GWW in this Agreement.

     8.4 Claims. As soon as is reasonably practicable after becoming aware of a
claim for indemnification under this Agreement not involving a claim, or the
commencement of any suit, action or proceeding, of the type described in Section
8.5, the Indemnified Person shall give notice to the Indemnifying Person of such
claim; provided, that the failure of the Indemnified Person to give notice shall
not relieve the Indemnifying Person of its obligations under this Article VIII,
except to the extent the Indemnifying Person shall have been materially
prejudiced thereby.

     8.5 Notice of Third Party Claims; Assumption of Defense. The Indemnified
Person shall give notice as promptly as is reasonably practicable to the
Indemnifying Person of the assertion of any claim, or the commencement of any
suit, action or proceeding, by any Person not a party hereto in respect of which
indemnity may be sought under this Agreement; provided, that the failure of the
Indemnified Person to give notice shall not relieve the Indemnifying Person of
its obligations under this Article VIII, except to the extent the Indemnifying
Person shall have been materially prejudiced thereby. The Indemnifying Person
may, at its own expense, (a) participate in the defense of any such claim, suit,
action or proceeding and (b) upon notice to the Indemnified Person and the

                                    18
<PAGE>

Indemnifying Person's delivering to the Indemnified Person a written agreement
that the Indemnified Person is entitled to indemnification pursuant to Section
8.2 or Section 8.3 for all Losses arising out of such claim, suit, action or
proceeding and that the Indemnifying Person shall be liable for the entire
amount of any Loss resulting therefrom, at any time during the course of any
such claim, suit, action or proceeding, assume the defense thereof; provided,
that (i) the Indemnifying Person's counsel is reasonably satisfactory to the
Indemnified Person and (ii) the Indemnifying Person shall thereafter consult
with the Indemnified Person upon the Indemnified Person's reasonable request for
such consultation from time to time with respect to such claim, suit, action or
proceeding. If the Indemnifying Person assumes such defense, the Indemnified
Person shall have the right (but not the duty) to participate in the defense
thereof and to employ counsel, at its own expense, separate from the counsel
employed by the Indemnifying Person. If, however, the Indemnified Person
reasonably determines in its judgment that representation by the Indemnifying
Person's counsel of both the Indemnifying Person and the Indemnified Person
would present such counsel with a conflict of interest, then such Indemnified
Person may employ separate counsel to represent or defend it in any such claim,
action, suit or proceeding and the Indemnifying Person shall pay the reasonable
fees and disbursements of such separate counsel. Whether or not the Indemnifying
Person chooses to defend or prosecute any such claim, suit, action or
proceeding, all of the parties hereto shall cooperate in the defense or
prosecution thereof.

     8.6 Settlement or Compromise. Any settlement or compromise made or caused
to be made by the Indemnified Person or the Indemnifying Person, as the case may
be, of any such claim, suit, action or proceeding of the kind referred to in
Section 8.5 shall also be binding upon the Indemnifying Person or the
Indemnified Person, as the case may be, in the same manner as if a final
judgment or decree had been entered by a court of competent jurisdiction in the
amount of such settlement or compromise; provided, that no obligation,
restriction or Loss shall be imposed on the Indemnified Person or the
Indemnifying Person (other than obligations arising under this Agreement) as a
result of such settlement without its prior written consent, which consent shall
not be unreasonably withheld. The Indemnified Person will give the Indemnifying
Person at least fifteen (15) days' notice of any proposed settlement or
compromise of any claim, suit, action or proceeding referred to in Section 8.5
that it is defending, during which time the Indemnifying Person may, on
reasonable grounds, reject such proposed settlement or compromise; provided,
that from and after such rejection, the Indemnifying Person shall be obligated
to assume the defense of and full and complete liability and responsibility for
such claim, suit, action or proceeding and any and all Losses in connection
therewith. Likewise, the Indemnifying Person will give the Indemnified Person at
least fifteen (15) days' notice of any proposed settlement or compromise of any
claim, suit, action or proceeding referred to in Section 8.5 that it is
defending, during which time the Indemnified Person may, on reasonable grounds,
reject such proposed settlement or compromise; provided, that from and after
such rejection, the Indemnified Person shall defend the claim at its expense and
the Indemnifying Person's liability shall be limited to the amount of the
proposed settlement or compromise.

                                    19
<PAGE>

     8.7 Failure of Indemnifying Person to Act. In the event that the
Indemnifying Person does not elect to assume the defense of any claim, suit,
action or proceeding, then any failure of the Indemnified Person to defend or to
participate in the defense of any such claim, suit, action or proceeding or to
cause the same to be done, shall not relieve the Indemnifying Person of its
obligations hereunder.

     8.8 Acknowledgment; No Obligation to Set-Off Against Escrow Fund. Each
Restricted Signatory agrees and acknowledges that (i) the right of
indemnification of the GWW Indemnified Parties hereunder is absolute, (ii) the
indemnification obligations of such Restricted Signatory shall not in any manner
be limited to the Escrow Shares or any other assets that may be contained in the
Escrow Fund at any time, and (iii) the GWW Indemnified Parties are not obligated
to seek satisfaction of a claim for indemnification pursuant to this Agreement
from the Escrow Fund established pursuant to the Escrow Agreement prior to
seeking satisfaction of such a claim from such Restricted Signatory.

                                   ARTICLE IX

                                     LEGENDS

     9.1 Legends. For so long as the restrictions hereunder are applicable to
such shares as determined by GWW in GWW's reasonable discretion, in addition to
the Securities Act Legend and any other legends required by the Purchase
Agreement, all certificates representing New GWW Shares shall be stamped or
otherwise imprinted with a legend (the "Share Transfer Restriction Agreement
Legend") in substantially the following form: "The sale, transfer or other
disposition of the shares represented by this certificate prior to February 28,
2012 is subject to, and may not be made except in compliance with, the
conditions specified in a Share Transfer Restriction Agreement with W.W.
Grainger, Inc. (the "Company"). A copy of the Share Transfer Restriction
Agreement is on file and may be inspected at the principal office of the Company
and will be furnished by the Company to the holder hereof upon request and
without charge."

     9.2 Removal of Legends.

     (a) Upon receipt by GWW of a written notice from a Slavik Shareholder
stating that such Slavik Shareholder has made or is making a Transfer described
in Section 5.1(b), (c), (d), (e) or (f) of any New GWW Shares (other than a
Transfer in which New GWW Shares will remain subject to the provisions of this
Agreement) or a Transfer in accordance with Section 4.2 of any New GWW Shares
for which GWW did not deliver an Election Notice, along with the certificate or
certificates representing the New GWW Shares Transferred or to be Transferred,
GWW shall promptly instruct its transfer agent to register the number of shares
Transferred or to be Transferred in the name of the transferee or to the selling
broker in "street name" and to deliver one or more new certificates representing
such Transferred shares to the Slavik Shareholder or to the Slavik Shareholder's
designee(s), which new certificate or certificates shall not contain the Share
Transfer Restriction Agreement Legend, provided that GWW shall have no
obligation to provide such instructions to its transfer agent unless and until
GWW has received satisfactory written evidence that such Transfer was made or is
being made in accordance with the requirements of Rule 144 and 145 and otherwise
in compliance with the Securities Act and all applicable state securities laws
as contemplated by Section 9.2(b).

                                    20
<PAGE>

     (b) Upon receipt by GWW of satisfactory written evidence (which evidence
shall include, at GWW's reasonable request, an opinion of counsel reasonably
acceptable to GWW, in form and substance reasonably acceptable to GWW) that a
Slavik Shareholder has Transferred or is Transferring New GWW Shares in
accordance with the requirements of Rule 144 and 145 and otherwise in compliance
with the Securities Act and all applicable state securities laws, along with the
certificate or certificates representing the New GWW Shares Transferred or to be
Transferred, GWW shall promptly instruct its transfer agent to register the
number of shares Transferred or to be Transferred in the name of the transferee
or to the selling broker in "street name" and to deliver one or more new
certificates representing such Transferred shares to the Slavik Shareholder or
to the Slavik Shareholder's designee(s), which new certificate or certificates
shall not contain the Securities Act Legend, provided that GWW shall have no
obligation to provide such instructions to its transfer agent unless such
Transfer was made or is being made in compliance with all of the provisions of
this Agreement.

     (c) At any time following the tenth Anniversary, upon receipt by GWW from
any Slavik Shareholder of one or more certificates representing Restricted
Shares, GWW shall promptly instruct its transfer agent to (i) cancel such
returned certificate or certificates and (ii) deliver one or more new
certificates representing such Restricted Shares to such Slavik Shareholder or
to such Slavik Shareholder's designee, which new certificate or certificates
shall not contain the Share Transfer Restriction Agreement Legend.

     9.3 Later Delivery of Certificates. In the event that any additional shares
of GWW Common Stock or other shares of capital stock or securities shall become
New GWW Shares at any time following the Closing, upon the request of GWW, the
holder of such New GWW Shares shall promptly deliver the certificates for such
New GWW Shares to GWW for the sole purpose of permitting GWW to stamp or
otherwise imprint the Share Transfer Restriction Agreement Legend thereon. GWW
shall promptly return such certificates to such holder after GWW has so stamped
or imprinted such certificates.

     9.4 Uncertificated Shares. To the extent any New GWW Shares are not
evidenced by certificates, the books and records of GWW or the applicable issuer
(including those maintained by the registrar or transfer agent of such class of
New GWW Shares) shall contain appropriate notation indicating that such shares
are subject to, and the Transfer thereof is subject to, and may not be made
except in compliance with, all of the provisions of this Agreement.

     9.5 No Limitation of Indemnification Obligations. Nothing in this Article
IX shall limit or otherwise affect the indemnification obligations of the
Restricted Signatories (or their respective Permitted Transferees) set forth in
Article VIII or the obligation of any Restricted Signatory or Slavik Shareholder
to comply with all of the provisions of this Agreement.

                                   ARTICLE X

                                  MISCELLANEOUS

     10.1 Termination In Certain Events. The provisions of this Agreement shall
terminate and be of no further force and effect (i) with respect to any
particular class of Restricted Shares, upon the liquidation or dissolution of
the issuer of such class of Restricted Shares, (ii) with respect to any
particular class of Restricted Shares, upon the occurrence of any
reorganization, merger, consolidation or other transaction in which the holders
of securities of the same class as the applicable Restricted Shares immediately
prior to such event, in their capacity as such holders, own less than 50% of the
combined voting power of the surviving or resulting entity or (iii) upon the
tenth Anniversary.

                                    21
<PAGE>

     10.2 Implementing Agreement. Subject to the terms and conditions hereof,
each party hereto shall take all action required of it to fulfill its
obligations under the terms of this Agreement and shall otherwise use all
commercially reasonable efforts to facilitate the consummation of the
transactions contemplated hereby. Each party hereto agrees that he, she or it
will take no action that would have the effect of preventing or impairing the
performance by any party hereto of its respective obligations under this
Agreement.

     10.3 Amendment. This Agreement may be amended, modified or supplemented but
only with the written consent of GWW and each Slavik Shareholder affected by
such amendment. Without limiting the generality of the foregoing, any Slavik
Shareholder may at any time request that GWW execute and deliver to such Slavik
Shareholder a written agreement in which GWW agrees to waive or to otherwise
amend, modify or supplement the provisions of this Agreement with respect to any
or all of the Restricted Shares owned by such Slavik Shareholder or with respect
to any particular transaction regarding any or all of the Restricted Shares
owned by such Slavik Shareholder, provided that GWW shall have the right to
accept or reject all or any part of such Slavik Shareholder's request in GWW's
sole and absolute judgment.

     10.4 Notices. Any notice, request, instruction or other document to be
given hereunder by a party hereto shall be in writing and shall be deemed to
have been received, (a) when delivered if given in person or by courier or a
courier service such as Federal Express, DHL or other similar services, (b) on
the date of transmission if sent by facsimile or other wire transmission
(receipt confirmed by return facsimile) or (c) five (5) Business Days after
being deposited in the U.S. mail, certified or registered mail, postage prepaid:

     (a) If to any Restricted Signatory, addressed to the address listed for
such Restricted Signatory on the schedule for such Restricted Signatory referred
to in Section 6.4, with a copy to:

                  McDermott, Will & Emery
                  227 West Monroe Street
                  Chicago, Illinois 60606-5096
                  Attention: Daniel N. Zucker, Esq.
                  Facsimile No.: (312) 984-2097

                  and

                  Mark IV Capital, Inc.
                  100 Bayview Circle, Suite 4500
                  Newport Beach, California 92650
                  Attention: President
                  Facsimile No.: (949) 509-1104

                                    22
<PAGE>

     (b) If to a Slavik Transferee, to the address listed for such Slavik
Transferee pursuant to the written agreement executed and delivered by such
Slavik Transferee as contemplated by Section 5.1(a), with a copy to:

                  McDermott, Will & Emery
                  227 West Monroe Street
                  Chicago, Illinois 60606-5096
                  Attention: Daniel N. Zucker, Esq.
                  Facsimile No.: (312) 984-2097

                  and

                  Mark IV Capital, Inc.
                  100 Bayview Circle, Suite 4500
                  Newport Beach, California 92650
                  Attention: President
                  Facsimile No.: (949) 509-1104

(c)      If to GWW, addressed as follows:

                  W.W. Grainger, Inc.
                  100 Grainger Parkway
                  Lake Forest, Illinois 60045
                  Attention: Corporate Secretary
                  Facsimile No.: (847) 535-1045

                  with a copy to:

                  W.W. Grainger, Inc.
                  100 Grainger Parkway
                  Lake Forest, Illinois 60045
                  Attention: General Counsel
                  Facsimile No.: (847) 535-4585

                  and

                  Mayer, Brown, Rowe & Maw
                  190 South LaSalle Street
                  Chicago, Illinois  60603
                  Attention: Frederick B. Thomas, Esq.
                  Facsimile No.:  (312) 701-7711

or to such other individual or address as a party hereto may designate for
itself by notice given as herein provided.

     10.5 Effect of Investigation. Any due diligence review, audit or other
investigation or inquiry undertaken or performed by or on behalf of GWW shall
not limit, qualify, modify or amend the representations, warranties, covenants
or obligations of (including indemnities by) any Restricted Signatory made or
undertaken pursuant to this Agreement, irrespective of the knowledge and
information received (or which should have been received) therefrom by GWW.

                                    23
<PAGE>

     10.6 Payments in Dollars. Except as otherwise provided herein, all payments
pursuant hereto shall be made by electronic wire transfer in United States
Dollars in same day or immediately available funds.

     10.7 Waivers. The failure of a party hereto at any time or times to require
performance of any provision hereof shall in no manner affect its right at a
later time to enforce the same. No waiver by a party of any condition or of any
breach of any term, covenant, representation or warranty contained in this
Agreement shall be effective unless in writing, and no waiver in any one or more
instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or warranty.

     10.8 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. This Agreement may be executed by facsimile
signature and a facsimile signature shall constitute an original signature for
all purposes.

     10.9 Successors And Assigns. Except as otherwise provided herein, the terms
and conditions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors, assigns, heirs and legal
representatives. Additionally the parties hereto agree that, to the extent GWW
is not the issuer of a particular class of securities or Restricted Shares
subject to this Agreement, GWW shall have the right to assign to the issuer of
such class of securities or Restricted Shares GWW's rights and obligations under
this Agreement with respect to such class of securities or Restricted Shares and
any such assignment will not operate as a termination or limitation of GWW's
rights and obligations under this Agreement with respect to any other class of
securities or Restricted Shares. GWW shall remain liable for any of its
obligations under this Agreement that are assigned in accordance with this
Section 10.9.

     10.10 Severability. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall be
deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.

     10.11 Remedies. The remedies provided in this Agreement shall be cumulative
and shall not preclude the assertion or exercise of any other rights or remedies
available by Law, in equity or otherwise. Each of the parties hereto hereby
acknowledges and agrees that the other parties would be damaged irreparably in
the event that any of the provisions of this Agreement are not performed in
accordance with their specific terms or are otherwise breached. Each of the
parties hereto hereby agrees that the other parties shall be entitled to an
injunction or injunctions to prevent breaches (or threatened breaches) of the
provisions of this Agreement and to enforce specific performance of the
provisions of this Agreement in addition to any other remedies provided in this
Agreement and any other rights or remedies available by Law, in equity or
otherwise.

                                    24
<PAGE>

     10.12 Entire Understanding. This Agreement, the Purchase Agreement and the
Escrow Agreement sets forth the entire agreement and understanding of the
parties hereto with respect to the transactions contemplated hereby and
supersede any and all prior agreements, arrangements and understandings among
the parties (including the Mutual Letter of Intent dated as of January 24, 2002
by and between GWW and MCC) relating to the subject matter hereof.

     10.13 Applicable Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Illinois without
giving effect to the principles of conflicts of law thereof.

     10.14 Jurisdiction of Disputes; Waiver of Jury Trial. The state courts of
the County of Cook, Illinois and the United States District Court for the
Northern District of Illinois shall have the exclusive jurisdiction over any and
all litigation, proceeding or other legal action relating to or arising out of
this Agreement, the subject matter hereof or the transactions contemplated
hereby. Each of the parties hereto hereby irrevocably (a) submits to the
personal jurisdiction of such courts over such party in connection with any
litigation, proceeding or other legal action relating to or arising out of this
Agreement or the subject matter hereof or the transactions contemplated hereby,
(b) waives to the fullest extent permitted by Law any objection to the venue of
any such litigation, proceeding or other legal action which is brought in any
such court and (c) agrees to the mailing of service of process to the address
specified above for such party as an alternative method of service of process in
any such litigation, proceeding or other legal proceeding brought in any such
court. EACH PARTY HERETO WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY LITIGATION,
PROCEEDING OR OTHER LEGAL ACTION RELATING TO OR ARISING OUT OF THIS AGREEMENT OR
ANY MATTERS DESCRIBED OR CONTEMPLATED HEREIN, AND AGREES TO TAKE ANY AND ALL
ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER.

     10.15 Acknowledgement of each Restricted Signatory. Each Restricted
Signatory represents to GWW that he, she or it is knowledgeable and
sophisticated as to business matters, including the subject matter of this
Agreement, that such Restricted Signatory has read this Agreement and that he,
she or it understands its terms. Each Restricted Signatory acknowledges that,
prior to assenting to the terms of this Agreement, he, she or it has been given
a reasonable time to review it, to consult with counsel of his, her or its
choice and to negotiate at arm's-length with GWW as to its contents. Each
Restricted Signatory and GWW agree that the language used in this Agreement is
the language chosen by the parties to express their mutual intent, and that no
rule or strict construction is to be applied against any Restricted Signatory or
GWW.

                                    * * * * *

                                    25
<PAGE>

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

                                 W.W. GRAINGER, INC.

                                 By:     /s/ Richard L. Keyser
                                         ---------------------------------------
                                 Name:   Richard  L. Keyser
                                 Title:  Chairman of the Board and
                                         Chief Executive Officer

                                 The Original MCC Shareholders:

                                 BRENNAN SLAVIK TRUST

                                 By:     /s/ Paul A. Slavik
                                         ---------------------------------------
                                 Name:   Paul A. Slavik
                                 Title:  Trustee

                                 EVAN MICHAEL SLAVIK TRUST

                                 By:     /s/ Paul A. Slavik
                                         ---------------------------------------
                                 Name:   Paul A. Slavik
                                         Title:  Trustee

                                 SUSAN SLAVIK INTER-VIVOS TRUST

                                 By:     /s/ Susan Slavik Williams
                                         ---------------------------------------
                                 Name:   Susan Slavik Williams
                                 Title:  Trustee

                                    26
<PAGE>

                                 JAMES AND GLENYS SLAVIK 2000 EXEMPT
                                 TRUST FBO BRENNAN JAMES SLAVIK

                                 By:     /s/ Glenys Slavik
                                        ----------------------------------------
                                 Name:   Glenys Slavik
                                 Title:  Trustee

                                 By:     /s/ Paul A. Slavik
                                         ---------------------------------------
                                 Name:   Paul A. Slavik
                                 Title:  Trustee

                                 JAMES AND GLENYS SLAVIK 2000 EXEMPT TRUST
                                 FBO EVAN MICHAEL SLAVIK

                                 By:     /s/ Glenys Slavik
                                         ---------------------------------------
                                 Name:   Glenys Slavik
                                 Title:  Trustee

                                 By:     /s/ Paul A. Slavik
                                         ---------------------------------------
                                 Name:   Paul A. Slavik
                                 Title:  Trustee

                                 PAUL AND CATHIE SLAVIK 2000 EXEMPT
                                 TRUST FBO LAUREN D. SLAVIK

                                 By:     /s/ Cathie Slavik
                                         ---------------------------------------
                                 Name:   Cathie Slavik
                                 Title:  Trustee

                                 By:     /s/ James D. Slavik
                                         ---------------------------------------
                                 Name:   James D. Slavik
                                 Title:  Trustee

                                    27
<PAGE>

                                 PAUL AND CATHIE SLAVIK 2000 EXEMPT
                                 TRUST FBO LINDSAY C. SLAVIK

                                 By:     /s/ Cathie Slavik
                                         ---------------------------------------
                                 Name:   Cathie Slavik
                                 Title:  Trustee

                                 By:     /s/ James D. Slavik
                                         ---------------------------------------
                                 Name:   James D. Slavik
                                 Title:  Trustee

                                 SUSAN SLAVIK WILLIAMS & FELIX WILLIAMS
                                 2000 TRUST

                                 By:     /s/ Felix N. Williams, III
                                         ---------------------------------------
                                 Name:   Felix N. Williams, III
                                 Title:  Trustee

                                 By:     /s/ James Garrity
                                         ---------------------------------------
                                 Name:   James Garrity
                                 Title:  Trustee

                                 SEAN THOMAS SLAVIK TRUST

                                 By:     /s/ John H. Slavik
                                         ---------------------------------------
                                 Name:   John H. Slavik
                                 Title:  Trustee

                                 By:     /s/ Gary R. King
                                         ---------------------------------------
                                 Name:   Gary R. King
                                 Title:  Trustee

                                 LAUREN DANIELLE SLAVIK TRUST
                                 ESTABLISHED DECEMBER 28, 1987

                                 By:     /s/ James D. Slavik
                                         ---------------------------------------
                                 Name:   James D. Slavik
                                 Title:  Trustee

                                    28
<PAGE>

                                 LINDSAY SLAVIK TRUST ESTABLISHED
                                 OCTOBER 1, 1989

                                 By:     /s/ James D. Slavik
                                         ---------------------------------------
                                 Name:   James D. Slavik
                                 Title:  Trustee

                                 THE JAMES D. SLAVIK SEPARATE PROPERTY TRUST
                                 ESTABLISHED FEBRUARY 27, 1974, AS AMENDED

                                 By:     /s/ James D. Slavik
                                         ---------------------------------------
                                 Name:   James D. Slavik
                                 Title:  Trustee

                                 THE PAUL A. SLAVIK TRUST ESTABLISHED
                                 JANUARY 26, 1993

                                 By:     /s/ Paul A. Slavik
                                         ---------------------------------------
                                 Name:   Paul A. Slavik
                                 Title:  Trustee

                                 /s/ John H. Slavik
                                 -----------------------------------------------
                                 John H. Slavik, individually

                                        Acknowledged, Consented to and Agreed:

                                        /s/ Kathleen A. Slavik
                                        ----------------------------------------
                                        Kathleen A. Slavik

                                 /s/ Sean T. Slavik
                                 -----------------------------------------------
                                 Sean T. Slavik, individually

                                    29
<PAGE>

                                 /s/ David A. Slavik
                                 -----------------------------------------------
                                 David A. Slavik, individually

                                         Acknowledged, Consented to and Agreed:

                                         /s/ Jocelyne Slavik
                                         ---------------------------------------
                                         Jocelyne Slavik

                                 The Other Shareholders:

                                 MARK IV CAPITAL, INC.

                                 By:     /s/ James D. Slavik
                                         ---------------------------------------
                                 Name:   James D. Slavik
                                 Title:  President

                                 THE JAMES AND GLENYS SLAVIK FAMILY
                                 TRUST ESTABLISHED JUNE 6, 1990

                                 By:     /s/ James D. Slavik
                                         ---------------------------------------
                                 Name:   James D. Slavik
                                 Title:  Trustee

                                 By:     /s/ Paul A. Slavik
                                         ---------------------------------------
                                 Name:   Paul A. Slavik
                                 Title:  Trustee

                                 TRUST UNDER THE WILLS OF
                                 ELMER O. SLAVIK AND ANTOINETTE
                                 SLAVIK FBO JAMES D. SLAVIK

                                 By:     /s/ James D. Slavik
                                         ---------------------------------------
                                 Name:   James D. Slavik
                                 Title:  Trustee

                                 By:     /s/ Paul A. Slavik
                                         ---------------------------------------
                                 Name:   Paul A. Slavik
                                 Title:  Trustee

                                    30
<PAGE>

                                 TRUST UNDER THE WILLS OF ELMER O. SLAVIK
                                 AND ANTOINETTE SLAVIK FBO PAUL A. SLAVIK

                                 By:     /s/ Paul A. Slavik
                                         ---------------------------------------
                                 Name:   Paul A. Slavik
                                 Title:  Trustee

                                 By:     /s/ James D. Slavik
                                         ---------------------------------------
                                 Name:   James D. Slavik
                                 Title:  Trustee

                                 TRUST  UNDER  THE  WILLS  OF
                                 ELMER O.  SLAVIK  AND  ANTOINETTE
                                 SLAVIK FBO SUSAN A. SLAVIK

                                 By:     /s/ James D. Slavik
                                         ---------------------------------------
                                 Name:   James D. Slavik
                                 Title:  Trustee

                                 By:     /s/ Paul A. Slavik
                                         ---------------------------------------
                                 Name:   Paul A. Slavik
                                 Title:  Trustee

                                 SLAVIK FAMILY INCOME TRUST

                                 By:     /s/ Susan Ann Slavik
                                         ---------------------------------------
                                 Name:   Susan Ann Slavik
                                 Title:  Trustee

                                 /s/ Paul A. Slavik
                                 -----------------------------------------------
                                 Paul A. Slavik, as custodian for
                                 Brennan J. Slavik

                                 /s/ Paul A. Slavik
                                 -----------------------------------------------
                                 Paul A. Slavik, as custodian for
                                 Evan M. Slavik

                                 /s/ Glenys N. Slavik
                                 -----------------------------------------------
                                 Glenys N. Slavik, individually

                                 /s/ Brennan J. Slavik
                                 -----------------------------------------------
                                 Brennan J. Slavik, individually

                                 /s/ Evan M. Slavik
                                 -----------------------------------------------
                                 Evan M. Slavik, individually

                                    31
<PAGE>

                                Table of Contents

                                                                           Page

ARTICLE I        DEFINITIONS..................................................3

    1.1     Definitions.......................................................3

    1.2     Interpretation....................................................9

ARTICLE II       RESTRICTIONS ON TRANSFERS OF NEW GWW SHARES..................9

    2.1     Restrictions On Transfers of New GWW Shares.......................9

ARTICLE III      NOTICES OF TRANSFER.........................................11

    3.1     Requirement to Provide Transfer Notice...........................11

    3.2     Contents of Transfer Notice......................................11

ARTICLE IV       RIGHT OF FIRST REFUSAL......................................12

    4.1     Right of GWW to Purchase.........................................12

    4.2     Right of Transferring Shareholder to Sell........................12

    4.3     Closing of Purchases by GWW......................................13

ARTICLE V        EXCEPTIONS AND OTHER SPECIAL PROVISIONS CONCERNING
                 NOTICEs OF FIRST REFUSAL ...................................13

    5.1     Exceptions to Right of First Refusal.............................13

    5.2     Stock Splits And Dividends.......................................15

    5.3     Changes In Ownership Of Certain Entities.........................15

ARTICLE VI       REPRESENTATIONS AND WARRANTIES OF RESTRICTED
                 SIGNATORIES  ...............................................15

    6.1     Due Organization.................................................15

    6.2     Due Authorization................................................15

    6.3     Consents and Approvals; Authority................................16

    6.4     Ownership of GWW Common Stock....................................16

ARTICLE VII      REPRESENTATIONS AND WARRANTIES OF GWW.......................17

    7.1     Due Incorporation................................................17

    7.2     Due Authorization................................................17

    7.3     Consents and Approvals; Authority................................17

                                    -i-
<PAGE>

ARTICLE VIII     INDEMNIFICATION.............................................18

    8.1     Survival.........................................................18

    8.2     Indemnification by Restricted Signatories........................18

    8.3     Indemnification by GWW...........................................18

    8.4     Claims...........................................................18

    8.5     Notice of Third Party Claims; Assumption of Defense..............18

    8.6     Settlement or Compromise.........................................19

    8.7     Failure of Indemnifying Person to Act............................20

    8.8     Acknowledgment; No Obligation to Set-Off Against Escrow Fund.....20

ARTICLE IX       LEGENDS.....................................................20

    9.1     Legends..........................................................20

    9.2     Removal of Legends. .............................................20

    9.3     Later Delivery of Certificates...................................21

    9.4     Uncertificated Shares............................................21

    9.5     No Limitation of Indemnification Obligations.....................21

ARTICLE X        MISCELLANEOUS...............................................21

    10.1    Termination In Certain Events....................................21

    10.2    Implementing Agreement...........................................21

    10.3    Amendment........................................................22

    10.4    Notices..........................................................22

    10.5    Effect of Investigation..........................................23

    10.6    Payments in Dollars..............................................24

    10.7    Waivers..........................................................24

    10.8    Counterparts.....................................................24

    10.9    Successors And Assigns...........................................24

    10.10   Severability.....................................................24

    10.11   Remedies.........................................................24

    10.12   Entire Understanding.............................................25

    10.13   Applicable Law...................................................25

    10.14   Jurisdiction of Disputes; Waiver of Jury Trial...................25

    10.15   Acknowledgement of each Restricted Signatory.....................25

EXHIBITS

Exhibit A         Form of Transfer Notice
Exhibit B         Form of Joinder Agreement

                                       -ii-SERIES SUPPLEMENT

                       CORPORATE BACKED TRUST CERTIFICATES

              ROYAL & SUN ALLIANCE BOND-BACKED SERIES 2002-2 TRUST

                                     between

                             LEHMAN ABS CORPORATION,

                                  as Depositor

                                       and

                      U.S. BANK TRUST NATIONAL ASSOCIATION,

                                   as Trustee

                       CORPORATE BACKED TRUST CERTIFICATES

                          Dated as of February 21, 2002

<PAGE>

                                Table of Contents

                                                                            Page
                                                                            ----

Section 1.   Incorporation of Standard Terms...................................1

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

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

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

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

Section 6.   Trustee's Fees...................................................11

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

Section 8.   Notices of Events of Default.....................................13

Section 9.   Miscellaneous....................................................13

Section 10.  Governing Law....................................................15

Section 11.  Counterparts.....................................................16

Section 12.  Termination of the Trust.........................................16

Section 13.  Sale of Underlying Securities; Optional Exchange.................16

Section 14.  Amendments.......................................................16

Section 15.  Voting of Underlying Securities, Modification of Indenture.......17

Section 16.  Additional Depositor Representation..............................18

SCHEDULE I      SERIES 2002-2 UNDERLYING SECURITIES SCHEDULE
SCHEDULE II     CLASS A-2 CERTIFICATE CALL SCHEDULE
EXHIBIT A-1     FORM OF TRUST CERTIFICATE CLASS A-1
EXHIBIT A-2     FORM OF TRUST CERTIFICATE CLASS A-2
EXHIBIT B       FORM OF WARRANT AGENT AGREEMENT
EXHIBIT C       FORM OF INVESTMENT LETTER

                                        i

<PAGE>

                                SERIES SUPPLEMENT

                       CORPORATE BACKED TRUST CERTIFICATES

              ROYAL & SUN ALLIANCE BOND-BACKED SERIES 2002-2 TRUST

          SERIES SUPPLEMENT, Royal & Sun Alliance Bond-Backed Series 2002-2,
dated as of February 21, 2002 (the "Series Supplement"), by and between LEHMAN
ABS CORPORATION, as Depositor (the "Depositor"), and U.S. BANK TRUST NATIONAL
ASSOCIATION, as Trustee (the "Trustee").

                              W I T N E S S E T H:

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

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

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

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

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

     Section 1. Incorporation of Standard Terms. Except as otherwise provided
herein, all of the provisions of the Standard Terms are hereby incorporated
herein by reference in their entirety, and this Series Supplement and the
Standard Terms shall form a single agreement between the parties. In the event
of any inconsistency between the provisions of this Series Supplement and the
provisions of the Standard Terms, the provisions of this Series Supplement will
control with respect to the Royal & Sun Alliance Bond-Backed Series 2002-2
Certificates and the transactions described herein.

     Section 2. Definitions.

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

                                       1
<PAGE>

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

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

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

          "Call Date" shall mean any Business Day on or after February 21, 2007
or after the announcement of any redemption or other unscheduled payment or sale
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 par value of the Class A-1 Certificates being
purchased pursuant to the exercise of the Call Warrants, plus any accrued and
unpaid interest on such amount to but excluding the Call Date and (ii) in the
case of the Class A-2 Certificates, any accrued and unpaid interest on the
notional amount of the Class A-2 Certificates being purchased pursuant to the
exercise of the Call Warrants to but excluding the Call Date, plus the
additional amount (or portion thereof, in the case of a partial call) set forth
under the heading "Value" in Schedule II hereof for such Call Date or, if such
Call Date is not a Distribution Date, the immediately following Distribution
Date.

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

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

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

          "Class A-1 Allocation" shall mean the sum of the present values
(discounted at the rate of 6.50% per annum) of (i) any unpaid interest due or to
become due on the Class A-1 Certificates and (ii) the outstanding principal
amount of the Class A-1 Certificates (in each case assuming that the Class A-1
Certificates were paid when due and were not redeemed 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.

                                       2
<PAGE>

          "Class A-2 Allocation" shall mean the present value (discounted at the
rate of 9.50% per annum) of any unpaid amounts due or to become due on the Class
A-2 Certificates (assuming that the Class A-2 Certificates were paid when due
and were not redeemed 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 February 21, 2002.

          "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 15th and October 15th of each
year (or if such date is not a Business Day, the next succeeding Business Day),
commencing on April 15, 2002, and ending on the earlier of the Final Scheduled
Distribution Date and any date on which all Underlying Securities are redeemed
pursuant to the Indenture or prepaid or liquidated in whole for any reason other
than at their maturity.

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

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

          "Final Scheduled Distribution Date" shall mean October 15, 2029, or,
if such day is not a Business Day, the next succeeding Business Day.

          "Indenture" shall mean the indenture, dated as of September 30, 1999,
between the Underlying Securities Issuer, Royal & Sun Alliance Insurance plc and
the Underlying Securities Trustee, pursuant to which the Underlying Securities
were issued.

                                       3
<PAGE>

          "Interest Accrual Period" shall mean for any Distribution Date, the
period from and including the preceding Distribution Date (or in the case of the
first Interest Accrual Period, from and including February 21, 2002) to but
excluding the current Distribution Date.

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

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

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

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

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

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

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

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

          "Prospectus Supplement" shall mean the Prospectus Supplement, dated
February 11, 2002, relating to the Certificates.

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

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

          "Required Percentage-Amendment" shall be 66-2/3% of the aggregate
Voting Rights, 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 Certificate Principal Amount 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.

                                       4
<PAGE>

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

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

          "Series" shall mean Royal & Sun Alliance Bond-Backed Series 2002-2.

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

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

          "Trust Property" shall mean the Underlying Securities described on
Schedule I hereto and the Certificate Account.

          "Underlying Securities" shall mean $49,500,000 aggregate principal
amount of 8.95% Subordinated Guaranteed Bonds due October 15, 2029, 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 Royal & Sun Alliance
Insurance Group plc.

          "Underlying Securities Trustee" shall mean Citibank, N.A.

          "Underwriters" shall mean Lehman Brothers Inc., Prudential Securities
Incorporated, RBC Dain Rauscher Inc., U.S. Bancorp Piper Jaffray Inc. and HSBC
Securities (USA) Inc.

          "Voting Rights" shall, in the entirety, be allocated among all Class
A-1 Certificateholders in proportion to the then unpaid principal amounts of
their respective Certificates. The Class A-2 Certificateholders will have no
Voting Rights.

          "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"

                                       5
<PAGE>

               "Allowable Expense Amounts"

               "Basic Documents"

               "Calculation Agent"

               "Call Premium Percentage"

               "Credit Support"

               "Credit Support Instrument"

               "Credit Support Provider"

               "Cut-off Date"

               "Eligible Expense"

               "Eligible Investment"

               "Exchange Rate Agent"

               "Fixed Pass-Through Rate"

               "Floating Pass-Through Rate"

               "Guaranteed Investment Contract"

               "Letter of Credit"

               "Limited Guarantor"

               "Limited Guaranty"

               "Minimum Wire Denomination"

               "Pass-Through Rate"

               "Place of Distribution"

               "Purchase Price"

               "Required Premium"

               "Required Principal"

               "Requisite Reserve Amount"

               "Retained Interest"

                                       6
<PAGE>

               "Sale Procedures"

               "Sub-Administration Account"

               "Sub-Administration Agreement"

               "Sub-Administration Agent"

               "Surety Bond"

               "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, Royal & Sun Alliance
Bond-Backed Series 2002-2 Trust." The Certificates evidencing certain undivided
ownership interests therein shall be known as "Corporate Backed Trust
Certificates, Royal & Sun Alliance Bond-Backed Series 2002-2." 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 Certificates shall be held through the Depository in book-entry
form and shall be substantially in the forms attached hereto as Exhibits A-1 and
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 have an initial aggregate certificate
principal amount (the "Certificate Principal Amount") of $49,500,000. The Class
A-2 Certificates are interest-only Certificates, and have a notional amount
equal to the Certificate Principal Amount of the Class A-1 Certificates.

                                       7
<PAGE>

     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 7.50% per annum
on the outstanding Certificate Principal Amount 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 1.45% per annum on the
outstanding notional amount of the Class A-2 Certificates. On April 15, 2002,
the Trustee will pay to the Depositor the amount of interest accrued and paid on
the Underlying Securities from October 15, 2001, to but not including the
Closing Date. 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.

     (c) The Depositor may sell to the Trustee additional Underlying Securities
on any date hereafter upon at least 3 Business Days' notice to 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 Amount, and Class A-2 Certificates in a notional
amount, equal to the principal amount of such additional Underlying Securities,
and the 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.

     (d) As a condition precedent for transferring the Call Warrants, the
prospective transferee shall be required to deliver to the Trustee and the
Depositor an executed copy of the Investment Letter (set forth in Exhibit C
hereto).

     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.

                                       8
<PAGE>

     (a) Except as otherwise provided in Section 3(c), 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
     (subject to Section 5(c) and Section 5(d) below):

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

               (2) second, to the holders of the Class A-1 Certificates and to
          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

               (2) second, to the holders of the Class A-1 Certificates, the
          Certificate Principal Amount.

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 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 Underlying Securities Event of Default, the
cessation of the Underlying Securities Issuer to file periodic reports as
required by the Exchange Act or at their maturity, 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 outstanding Certificate Principal Amount plus
               accrued and unpaid interest thereon;

          (iii) third, to the holders of the Class A-2 Certificates, the present
               value of all amounts that would otherwise have been payable on
               the Class A-2

                                       9
<PAGE>

               Certificates for the period from the date of such redemption or
               prepayment to the Final Scheduled Distribution Date using a
               discount rate of 9.50% per annum, assuming no delinquencies,
               deferrals, redemptions or prepayments on the Underlying
               Securities; and

          (iv) fourth, 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.

     (d) Notwithstanding the foregoing, if the Underlying Securities are
redeemed, prepaid or liquidated in whole or in part due to the occurrence of an
Underlying Securities Event of Default, the Trustee shall apply 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 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 Amount of Certificates on a
dollar-for-dollar basis.

     (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.

                                       10
<PAGE>

     (h) If a payment with respect to the Underlying Securities is made to the
Trustee 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 or at their maturity, the Trustee will
distribute any such amounts received in accordance with Section 5(c) on the next
occurring Business Day (a "Special Distribution Date") as if the funds had
constituted Available Funds on the Distribution Date immediately preceding such
Special Distribution Date; provided, however, that the Record Date for such
Special Distribution Date shall be one Business Day prior to the day on which
the related payment was received from the Underlying Securities.

     (i) Notwithstanding Section 3.12 of the Standard Terms, if the Underlying
Securities Issuer ceases to file periodic reports as required under the Exchange
Act, the Depositor shall within a reasonable time instruct the Trustee to (i)
notify the Warrant Agent that the Underlying Securities are proposed to be sold
and that any Call Warrants and related Optional Exchange rights must be
exercised no later than the date specified in the notice (which shall be not
less than ten Business Days after the date of such notice) and (ii) to the
extent that the Warrant Holders fail to exercise their Call Warrants and related
Optional Exchange rights on or prior to such date, to sell the Underlying
Securities and 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; provided, however, the
Depositor shall not instruct the Trustee to sell the Underlying Securities (or
provide a notice of such instruction to the Warrant Agent) pursuant to this
clause unless the Underlying Securities Issuer has either (x) stated in writing
that it intends permanently to cease filing reports required under the Exchange
Act or (y) failed to file any required reports for one full calendar year.

     Section 6. Trustee's Fees.

     (a) As compensation for its services hereunder, the Trustee shall be
entitled to the Trustee Fee. 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.

                                       11
<PAGE>

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

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

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

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

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

                                       12
<PAGE>

          (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(a)
     shall entitle the Certificateholder or Warrant Holder, as applicable, to a
     distribution thereof.

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

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

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

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

          (v) Subject to receipt of the Call Price, the Trustee shall pay the
     Call Price to the Certificateholders on the Call Date. The Call Price for
     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

                                       13
<PAGE>

     and authentication and delivery by the Trustee of additional certificates
     and call warrants pursuant to Section 3(d) shall be deemed to adversely
     affect the Warrant Holders.

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

     (e) This Section 7 shall not provide the Warrant Holder with a lien
against, an interest in or a right to specific performance with respect to the
Underlying Securities.

     (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.

     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 Royal & Sun Alliance Bond-Backed Series 2002-2 Certificates.

     (b) The provisions of Section 4.07, Optional Exchange, of the Standard
Terms shall not apply to the Royal & Sun Alliance Bond-Backed Series 2002-2
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 Royal & Sun Alliance Bond-Backed Series 2002-2 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

                                       14
<PAGE>

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 of the Certificates shall not be
reduced by the amount of any Realized Losses (as defined in the Standard Terms).

     (h) The Trust may not engage in any business or activities other than in
connection with, or relating to, the holding, protecting and preserving of the
Trust Property and the issuance of the Certificates and the Call Warrants, and
other than those required or authorized by the Trust Agreement or incidental and
necessary to accomplish such activities. The Trust may not issue or sell any
certificates or other obligations other than the Certificates and the Call
Warrants or otherwise incur, assume or guarantee any indebtedness for money
borrowed. Notwithstanding Section 3.05 of the Standard Terms, funds on deposit
in the Certificate Account shall not be invested.

     (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) [Reserved].

     (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) Notices. 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).

                                       15
<PAGE>

          If to the Depositor, to:

              Lehman ABS Corporation
              745 Seventh Avenue
              New York, New York  10019
              Attention:  Structured Credit Trading
              Telephone:  (212) 524-6575
              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:  (212) 361-2500
              Facsimile:  (212) 809-5459

          If to the Rating Agencies, to:

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

     and to:

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

          If to the New York Stock Exchange, to:

              New York Stock Exchange, Inc.
              20 Broad Street
              New York, New York  10005
              Attention:  Vincent Patten
              Telephone:  (212) 656-5276
              Facsimile:  (212) 656-5780

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

                                       16
<PAGE>

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

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

     Section 12. Termination of the Trust. The Trust shall terminate upon the
earliest to occur of (i) the payment in full at maturity or sale by the Trust
after a payment default 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
Scheduled Distribution Date and (iv) the expiration of 21 years from the death
of the last survivor of the descendants of Joseph P. Kennedy, the late
Ambassador of the United States to the Court of St. James, living on the date
hereof.

     Section 13. Sale of Underlying Securities; Optional Exchange. In the event
of a sale of the Underlying Securities pursuant to Section 5(e) hereof or
pursuant to the instructions of the Warrant Agent under Section 1.2 of the
Warrant Agent Agreement, the Trustee shall solicit bids for the sale of the
Underlying Securities with settlement thereof on or before the third (3rd)
Business Day after such sale from three leading dealers in the relevant market.
Any of the following dealers (or their successors) shall be deemed to qualify as
leading dealers: (1) Credit Suisse First Boston Corporation, (2) Goldman, Sachs
& Co., (3) Merrill Lynch, Pierce, Fenner & Smith Incorporated, (4) UBS Warburg
LLC, (5) Salomon Smith Barney Inc., and (6) except in the case of a sale related
to the exercise of Call Warrants by the Depositor or any Affiliate thereof,
Lehman Brothers Inc. The Trustee shall not be responsible for the failure to
obtain a bid so long as it has made reasonable efforts to obtain bids. If a bid
for the sale of the Underlying Securities has been accepted by the Trustee but
the sale has failed to settle on the proposed settlement date, the Trustee shall
request new bids from such leading dealers to the Class A-1 and Class A-2
Certificateholders. 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. Further, no amendment shall be
permitted which would adversely affect in any material respect the interests of
any class of Certificateholders without confirmation by each

                                       17
<PAGE>

Rating Agency that such amendment will not result in a downgrading or withdrawal
of its rating of such Class of Certificates.

     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 (based on the relative outstanding Certificate
Principal Amounts of the Class A-1 Certificates) as the Certificates of the
Trust were actually voted or not voted by the Certificateholders thereof as of a
date determined by the Trustee prior to the date on which such consent or vote
is required; provided, however, that, notwithstanding anything in the Trust
Agreement to the contrary, the Trustee shall at no time vote on or consent to
any matter (i) unless such vote or consent would not (based on an opinion of
counsel) cause the Trust to be taxed as an association or publicly traded
partnership taxable as a corporation under the Code, (ii) which would alter the
timing or amount of any payment on the Underlying Securities, including, without
limitation, any demand to accelerate the Underlying Securities, except in the
event of a default under the Underlying Securities or an event which with the
passage of time would become an event of default under the Underlying Securities
and with the unanimous consent of holders of all outstanding Class A-1
Certificates, Class A-2 Certificates and all Warrant Holders, or (iii) which
would result in the exchange or substitution of any of the outstanding
Underlying Securities pursuant to a plan for the refunding or refinancing of
such Underlying Securities except in the event of a default under the Indenture
and only with the consent of Certificateholders representing 100% of the Class
A-1 Certificates, 100% of the Class A-2 Certificates and 100% of the Warrant
Holders. The Trustee shall have no liability for any failure to act resulting
from Certificateholders' late return of, or failure to return, directions
requested by the Trustee from the Certificateholders.

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

     (c) If an event of default under the Indenture occurs and is continuing,
and if directed by a majority of the outstanding Class A-1 Certificateholders
and Class A-2 Certificateholders,

                                       18
<PAGE>

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 by the Depositor to the Trustee to secure a debt or other obligation
of the Depositor, pursuant to Section 10.07 of the Standard Terms. In connection
with any such grant of a security interest in the Underlying Securities
(including any such grant in connection with any sale of additional Underlying
Securities pursuant to Section 3(d)), the Depositor hereby represents and
warrants to Trustee as follows:

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

     (ii) The Underlying Securities have been credited to a trust account (the
          "Securities Account") of the Trustee, or its authorized agent, in
          accordance with Section 2.01 of the Standard Terms. The Trustee, as
          securities intermediary for the Securities Account, has agreed to
          treat the Underlying Securities as "financial assets" within the
          meaning of the Uniform Commercial Code.

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

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

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

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

                                       19
<PAGE>

          financing statements against Depositor that includes a description of
          the Underlying Securities. Depositor is not aware of anyjudgment or
          tax lien filings against Depositor.

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

                                       20
<PAGE>

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

                                LEHMAN ABS CORPORATION,
                                    as Depositor

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

                                U.S. BANK TRUST NATIONAL ASSOCIATION,
                                   not in its individual capacity
                                   but solely as Trustee on behalf
                                   of the Corporate Backed Trust Certificates
                                   Royal & Sun Alliance Bond-Backed
                                   Series 2002-2 Trust

                                By:_________________________________________
                                   Name:  David J. Kolibachuk
                                   Title: Vice President and Assistant Secretary

                                       21
<PAGE>

                                                                      SCHEDULE I

                 ROYAL & SUN ALLIANCE BOND-BACKED SERIES 2002-2

                         UNDERLYING SECURITIES SCHEDULE

Underlying Securities:                8.95% Subordinated Guaranteed Bonds due
                                      October 15, 2029.

Issuer:                               Royal & Sun Alliance Insurance Group plc.

Guarantor:                            Royal & Sun Alliance Insurance plc.

CUSIP Number:                         78004V AB 9.

Principal Amount Deposited:           $49,500,000

Original Issue Date:                  September 27, 1999.

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

Maturity Date:                        October 15, 2029.

Interest Rate:                        8.95% per annum.

Interest Payment Dates:               April 15th and October 15th.

Record Dates:                         April 14th and October 14th.

                                       I-1

<PAGE>

                                                                     SCHEDULE II

                      CLASS A-2 CERTIFICATE CALL SCHEDULE

              Distribution Date                          Value
                      4/15/2002                        $7,266,508
                     10/15/2002                        $7,234,626
                      4/15/2003                        $7,201,309
                     10/15/2003                        $7,166,493
                      4/15/2004                        $7,130,111
                     10/15/2004                        $7,092,091
                      4/15/2005                        $7,052,360
                     10/15/2005                        $7,010,841
                      4/15/2006                        $6,967,454
                     10/15/2006                        $6,922,114
                      4/15/2007                        $6,874,734
                     10/15/2007                        $6,825,222
                      4/15/2008                        $6,773,482
                     10/15/2008                        $6,719,414
                      4/15/2009                        $6,662,913
                     10/15/2009                        $6,603,869
                      4/15/2010                        $6,542,168
                     10/15/2010                        $6,477,690
                      4/15/2011                        $6,410,311
                     10/15/2011                        $6,339,900
                      4/15/2012                        $6,266,321
                     10/15/2012                        $6,189,430
                      4/15/2013                        $6,109,080
                     10/15/2013                        $6,025,113
                      4/15/2014                        $5,937,368
                     10/15/2014                        $5,845,675
                      4/15/2015                        $5,749,855
                     10/15/2015                        $5,649,724
                      4/15/2016                        $5,545,086
                     10/15/2016                        $5,435,740
                      4/15/2017                        $5,321,473
                     10/15/2017                        $5,202,065
                      4/15/2018                        $5,077,283
                     10/15/2018                        $4,946,885
                      4/15/2019                        $4,810,620
                     10/15/2019                        $4,668,223
                      4/15/2020                        $4,519,418
                     10/15/2020                        $4,363,917
                      4/15/2021                        $4,201,418
                     10/15/2021                        $4,031,607
                      4/15/2022                        $3,854,154
                     10/15/2022                        $3,668,716
                      4/15/2023                        $3,474,934
                     10/15/2023                        $3,272,431
                      4/15/2024                        $3,060,815
                     10/15/2024                        $2,839,677

                                      II-1

<PAGE>

              Distribution Date                          Value
                      4/15/2025                        $2,608,587
                     10/15/2025                        $2,367,099
                      4/15/2026                        $2,114,743
                     10/15/2026                        $1,851,031
                      4/15/2027                        $1,575,453
                     10/15/2027                        $1,287,473
                      4/15/2028                         $986,535
                     10/15/2028                         $672,054
                      4/15/2029                         $343,421
                     10/15/2029                            $0

                                      II-2

<PAGE>

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

                                     A-1-1

<PAGE>

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

                                     A-2-1

<PAGE>

                                    EXHIBIT B
                         FORM OF WARRANT AGENT AGREEMENT

                                     B-1

<PAGE>
                                    EXHIBIT C

                            FORM OF INVESTMENT LETTER

                          QUALIFIED INSTITUTIONAL BUYER

                                                        Dated: [_______________]

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

Lehman Brothers Inc.
745 Seventh Avenue
New York, New York  10019

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

          Ladies and Gentlemen:

     In connection with our proposed purchase of ___________ Call Warrants (the
"Call Warrants") representing an interest in the Corporate Backed Trust
Certificates, Royal & Sun Alliance Bond-Backed Series 2002-2 Trust (the
"Trust"), the investor on whose behalf the undersigned is executing this letter
(the "Purchaser") confirms that:

     (1) Reference is made to the Prospectus Supplement, dated February 11, 2002
(the "Prospectus Supplement"), with respect to the Certificates to which the
Call Warrants relate. Capitalized terms used herein that are not otherwise
defined shall have the meanings ascribed thereto in the Prospectus Supplement.
The Purchaser has received a copy of the Prospectus Supplement 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 Underwriters, concerning the
terms and conditions of the Call Warrants. The Purchaser has received and
understands the above, and 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,
the Depositor or the Trustee or any of your or their affiliates, except as
expressly contained in the Prospectus Supplement and in the other written
information, if any, discussed above. 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 is (A) a "Qualified Institutional Buyer" (as defined in
Rule 144A under the Securities Act of 1933, as amended (the "1933 Act")) and (B)
acquiring the Call Warrants for

                                      C-1

<PAGE>

its own account or for the account of an investor of the type described in
clause (A) above as to each of which the Purchaser exercises sole investment
discretion. The Purchaser is purchasing the Call Warrants for investment
purposes and not with a view to, or for, the offer or sale in connection with, a
public distribution or in any other manner that would violate the 1933 Act or
the securities or blue sky laws of any state.

     (3) The Purchaser understands that the Call Warrants have not been and will
not be registered under the 1933 Act or under the securities or blue sky laws of
any state, and that (i) if it decides to resell, pledge or otherwise transfer
any Call Warrant, such Call Warrant may be resold, pledged or transferred
without registration only to an entity that has delivered to the Depositor and
the Trustee a certification that it is a Qualified Institutional Buyer that
purchases (1) for its own account or (2) for the account of such a Qualified
Institutional Buyer, that is, in either case, aware that the resale, pledge or
transfer is being made in reliance on said Rule 144A and (ii) it will, and each
subsequent holder will be required to, notify any purchaser of any Call Warrant
from it of the resale restrictions referred to in clause (i) above.

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

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

     (5) The Purchaser understands that no subsequent transfer of the Call
Warrants is permitted unless it causes its proposed transferee to provide to the
Depositor and the initial Warrant Holder a letter substantially in the form of
Exhibit C to the Series Supplement, as applicable, or such other written
statement as the Depositor shall prescribe.

     (6) 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
Section 3.2 of the Warrant Agent Agreement. 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 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 Warrant Holder.

                                      C-2

<PAGE>

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

                                          Very truly yours,

                                          By:_________________________________
                                          Name:
                                          Title:

                                          [Medallion Stamp to be affixed here]

                                     C-3

<PAGE>

                              CLASS A-2 CERTIFICATE

NUMBER 1                                                   CUSIP NO. 21988G BN 5

                       SEE REVERSE FOR CERTAIN DEFINITIONS

     THIS CLASS A-2 CERTIFICATE 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.

     THE NOTIONAL PRINCIPAL AMOUNT OF THIS CLASS A-2 CERTIFICATE IS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING NOTIONAL PRINCIPAL 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.

<PAGE>
                             LEHMAN ABS CORPORATION

                      CORPORATE BACKED TRUST CERTIFICATES,

                 ROYAL & SUN ALLIANCE BOND-BACKED SERIES 2002-2

                      $49,500,000 NOTIONAL PRINCIPAL AMOUNT

1.45% INTEREST RATE

     evidencing a proportionate undivided beneficial ownership interest in the
Trust, as defined below, the property of which consists principally of
$49,500,000 aggregate notional principal amount of 8.95% Subordinated Guaranteed
Bonds due October 15, 2029, issued by Royal & Sun Alliance Insurance Group plc
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
principal amount of $49,500,000 notional principal amount nonassessable,
fully-paid, proportionate undivided beneficial ownership interest in the
Corporate Backed Trust Certificates, Royal & Sun Alliance Bond-Backed Series
2002-2 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, Royal & Sun Alliance Bond-Backed Series 2002-2, dated
as of February 21, 2002 (the "Series Supplement" and, together with the Standard
Terms, the "Trust Agreement"), between the Depositor and the Trustee. This
Certificate does not purport to summarize the Trust Agreement and reference is
hereby made to the Trust Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and obligations of the Trustee with respect hereto. A
copy of the Trust Agreement may be obtained from the Trustee by written request
sent to the Corporate Trust Office. Capitalized terms used but not defined
herein have the meanings assigned to them in the Trust Agreement.

     This Certificate is one of the duly authorized Certificates designated as
the "Corporate Backed Trust Certificates, Royal & Sun Alliance Bond-Backed
Series 2002-2, 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 February 21, 2002 together with any proceeds
thereof; and (iv) all funds from time to time deposited with the Trustee
relating to the Certificates, 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.

<PAGE>

     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.

     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.

<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,
                                    ROYAL & SUN ALLIANCE BOND-BACKED
                                    SERIES 2002-2 TRUST

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

                                    By:________________________________
                                       Authorized Signatory

Dated: February 21, 2002

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

     This is one of the Corporate Backed Trust Certificates, Royal & Sun
Alliance Bond-Backed Series 2002-2, 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

<PAGE>

                            (REVERSE OF CERTIFICATE)

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

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

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

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

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

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

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

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

<PAGE>

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 and Class A-2
Certificateholders; (ii) the Final Scheduled Distribution Date and (iii) 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.

<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.

<PAGE>

                              CLASS A-1 CERTIFICATE

NUMBER 1                                          1,980,000 $25 PAR CERTIFICATES
                                                           CUSIP NO. 21988G 51 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 OR THE TRUST ASSETS ARE INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.

<PAGE>

                             LEHMAN ABS CORPORATION

                                1,980,000 $25 PAR

                      CORPORATE BACKED TRUST CERTIFICATES,

                 ROYAL & SUN ALLIANCE BOND-BACKED SERIES 2002-2

7.50% INTEREST RATE

     evidencing a proportionate undivided beneficial ownership interest in the
Trust, as defined below, the property of which consists principally of
$49,500,000 aggregate principal amount of 8.95% Subordinated Guaranteed Bonds
due October 15, 2029, issued by Royal & Sun Alliance Insurance Group plc (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 $49,500,000
DOLLARS nonassessable, fully-paid, proportionate undivided beneficial ownership
interest in the Corporate Backed Trust Certificates, Royal & Sun Alliance
Bond-Backed Series 2002-2 Trust, formed by the Depositor.

<PAGE>

     The Trust was created pursuant to a Standard Terms for Trust Agreements,
dated as of January 16, 2001 (the "Standard Terms"), between the Depositor and
U.S. Bank Trust National Association, a national banking association, not in its
individual capacity but solely as Trustee (the "Trustee"), as supplemented by
the Series Supplement, Royal & Sun Alliance Bond-Backed Series 2002-2, dated as
of February 21, 2002 (the "Series Supplement" and, together with the Standard
Terms, the "Trust Agreement"), between the Depositor and the Trustee. This
Certificate does not purport to summarize the Trust Agreement and reference is
hereby made to the Trust Agreement for information with respect to the
interests, rights, benefits, obligations, proceeds and duties evidenced hereby
and the rights, duties and obligations of the Trustee with respect hereto. A
copy of the Trust Agreement may be obtained from the Trustee by written request
sent to the Corporate Trust Office. Capitalized terms used but not defined
herein have the meanings assigned to them in the Trust Agreement.

     This Certificate is one of the duly authorized Certificates designated as
the "Corporate Backed Trust Certificates, Royal & Sun Alliance Bond-Backed
Series 2002-2, 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 February 21, 2002 together with any proceeds
thereof; and (iv) all funds from time to time deposited with the Trustee
relating to the Certificates, together with any and all income, proceeds and
payments with respect thereto; provided, however, that any income from the
investment of Trust funds in certain permitted investments ("Eligible
Investments") does not constitute Trust Property.

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

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

     Distributions made on this Certificate will be made as provided in the
Trust Agreement by the Trustee by wire transfer in immediately available funds,
or check mailed to the Certificateholder of record in the Certificate Register
without the presentation or surrender of

<PAGE>

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.

<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, ROYAL & SUN ALLIANCE
                                    BOND-BACKED SERIES 2002-2 TRUST

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

                                    By:_______________________________
                                       Authorized Signatory

Dated: February 21, 2002

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Corporate Backed Trust Certificates, Royal & Sun Alliance
Bond-Backed Series 2002-2, 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

<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 notation of such consent in made upon this Certificate.
The Trust Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.

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

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

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

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

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

     The Trust and the obligations of the Depositor and the Trustee created by
the Trust Agreement with respect to the Certificates shall terminate upon the
earliest to occur of (i) the payment in full at maturity or sale by the Trust
after a payment default or an acceleration or other

<PAGE>

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 Final Scheduled Distribution Date and (iii) 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.

<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.

<PAGE>

                             WARRANT AGENT AGREEMENT

                       CORPORATE BACKED TRUST CERTIFICATES

              ROYAL & SUN ALLIANCE BOND-BACKED SERIES 2002-2 TRUST

     WARRANT AGENT AGREEMENT, dated as of February 21, 2002 (the "Warrant Agent
Agreement"), by and between LEHMAN ABS CORPORATION, as Depositor (the
"Depositor"), U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee (the "Trustee")
and U.S. BANK TRUST NATIONAL ASSOCIATION, as Warrant Agent (the "Warrant
Agent").

                              W I T N E S S E T H:

     WHEREAS, the Depositor created Corporate Backed Trust Certificates, Royal &
Sun Alliance Bond-Backed Series 2002-2 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 2002-2, dated
as of February 21, 2002 (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.

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

<PAGE>

                    (iii) The Warrant Holder shall have made payment to the
          Warrant Agent, by wire transfer or other immediately available funds
          acceptable to the Warrant Agent, in the amount of the Call Price, no
          later than 10:00 a.m. (New York City time) on the Call Date.

                    (iv) The Warrant Holder shall exercise Call Warrants
          relating to Class A-1 Certificates and Call Warrants relating to Class
          A-2 Certificates which represent a like percentage of all Class A-1
          Certificates and Class A-2 Certificates.

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

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

          (b) Upon exercise of Call Warrants, any Warrant Holder other than the
Depositor or any Affiliate of the Depositor shall be entitled to delivery by the
Trustee of the Called Certificates. The "Called Certificates" shall be, in the
case of the Class A-1 Certificates, Class A-1 Certificates having a Certificate
Principal Amount equal to $25 per Call Warrant, and in the case of the Class A-2
Certificates, Class A-2 Certificates having a notional balance equal to $100,000
per Call Warrant. Unless otherwise specified therein, such Call Notice shall be
deemed to be notice of an Optional Exchange pursuant to Section 7(a) of the
Series Supplement. Any Warrant Holder which is the Depositor or any Affiliate of
the Depositor shall receive the proceeds of the sale of the Called Underlying
Securities and shall not be entitled to receive the related Called Certificates
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 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
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,
then the Call Notice shall automatically expire and none of the Warrant Holder,
the Warrant Agent or the Trustee shall have any obligation with

                                       2
<PAGE>

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.

     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, or

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

          If such exercise is in part only, the Warrant Agent shall instruct the
Trustee to authenticate new Call Warrants of like tenor, representing the
outstanding Call Warrants of the Warrant Holder and the Warrant Agent shall
deliver such Call Warrants to the Warrant Holder.

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

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

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

                     ARTICLE II - RESTRICTIONS ON TRANSFER

     Section 2.1   Restrictive Legends. Except as otherwise permitted by this
Article II, each Call Warrant (including each Call Warrant issued upon the
transfer of any Call Warrant) shall be issued with a legend in substantially the
following form:

     "This Call Warrant has not been registered under the Securities Act of
1933, as amended, and may not be transferred, sold or otherwise disposed of
except while a registration under such Act is in effect or pursuant to an
exemption therefrom under such Act. The Call Warrant represented hereby may be
transferred only in compliance with the conditions specified in the Call
Warrants."

                                       3
<PAGE>

     Section 2.2  Notice of Proposed Transfer; Opinions of Counsel. Prior to any
transfer of any Call Warrant or portion thereof, the Warrant Holder will give 5
Business Days (or such lesser period acceptable to the Warrant Agent) prior
written notice to the Warrant Agent of such Warrant Holder's intention to effect
such transfer.

         ARTICLE III - REGISTRATION AND TRANSFER OF CALL WARRANTS, ETC.

     Section 3.1 Warrant Register; Ownership of Call Warrants. The Warrant Agent
will keep a register in which the Warrant Agent will provide for the
registration of Call Warrants and the registration of transfers of Call Warrants
representing numbers of Call Warrants. The Trustee and the Warrant Agent may
treat the Person in whose name any Call Warrant is registered on such register
as the owner thereof for all purposes, and the Trustee and the Warrant Agent
shall not be affected by any notice to the contrary.

     Section 3.2 Transfer and Exchange of Call Warrants. Upon surrender of any
Call Warrant for registration of transfer or for exchange to the Warrant Agent,
the Warrant Agent shall (subject to compliance with Article II) execute and
deliver, and cause the Trustee, on behalf of the Trust, to execute and deliver,
in exchange therefor, a new Call Warrant of like tenor and evidencing a like
number of Call Warrants, in the name of such Warrant Holder or as such Warrant
Holder (upon payment by such Warrant Holder of any applicable transfer taxes or
government charges) may direct; provided that as a condition precedent for
transferring the Call Warrants, the prospective transferee shall be required to
deliver to the Trustee and the Depositor an executed copy of the Investment
Letter (set forth as Exhibit C to the Series Supplement).

     Section 3.3 Replacement of Call Warrants. Upon receipt of evidence
reasonably satisfactory to the Warrant Agent of the loss, theft, destruction or
mutilation of any Call Warrant and, in the case of any such loss, theft or
destruction of any Call Warrant, upon delivery of an indemnity bond in such
reasonable amount as the Warrant Agent may determine, or, in the case of any
such mutilation, upon the surrender of such Call Warrant for cancellation to the
Warrant Agent, the Warrant Agent shall execute and deliver, and cause the
Trustee, on behalf of the Trust, to execute and deliver, in lieu thereof, a new
Call Warrant of like tenor bearing a number not contemporaneously outstanding.

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

                            ARTICLE IV - DEFINITIONS

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

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

     "Call Date": Any Business Day on or after February 21, 2007, or after the
announcement of any redemption or other unscheduled payment or sale of the
Underlying Securities.

                                       4
<PAGE>

     "Call Price" shall mean, for each related Call Date, (i) in the case of the
Class A-1 Certificates, the par value of the Class A-1 Certificates being
purchased pursuant to the exercise of the Call Warrants, plus any accrued and
unpaid interest on such amount to but excluding the Call Date and (ii) in the
case of the Class A-2 Certificates, any accrued and unpaid interest on the
notional amount of the Class A-2 Certificates being purchased pursuant to the
exercise of the Call Warrants to but excluding the Call Date, plus the
additional amount (or portion thereof, in the case of a partial call) set forth
under the heading "Value" in Schedule II to the Series Supplement (as amended)
for such Call Date or, if such Call Date is not a Distribution Date, the
immediately following Distribution Date.

     "Call Warrant": As defined in the recitals.

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

     "Called Underlying Securities" shall mean Underlying Securities which
represent the same percentage of the Underlying Securities as the Called
Certificates represent of the Class A-1 Certificates and Class A-2 Certificates.

     "Closing Date": February 21, 2002.

     "Depositor": As defined in the recitals.

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

     "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.

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

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

     "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 introduction to this Warrant, or any successor
thereto under the Trust Agreement.

     "Warrant Agent": U.S. Bank Trust National Association, a national banking
association, in its capacity as warrant agent hereunder, or any successor
thereto.

                                       5
<PAGE>

                           ARTICLE V - WARRANT AGENT

     Section 5.1 Limitation on Liability. The Warrant Agent shall be protected
and shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of the Call Warrants in
reliance upon any instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document in good faith believed by it to be genuine
and to be signed, executed and, where necessary, verified and acknowledged, by
the proper Person or Persons.

     Section 5.2 Duties of Warrant Agent. The Warrant Agent undertakes only the
specific duties and obligations imposed hereunder upon the following terms and
conditions, by all of which the Depositor, the Trust, the Trustee and each
Warrant Holder shall be bound:

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

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

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

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

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

          (f) The Warrant Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the Chief Executive Officer, Chief Financial Officer,
Chief Operating Officer, President, a Vice President, a Senior Vice President, a
Managing Director, its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary of the Depositor, and any Responsible Officer of the
Trustee, and to apply to such officers for advice or instructions in connection
with its duties, and it shall

                                       6
<PAGE>

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.

     Section 5.3 Change of Warrant Agent. The Warrant Agent may resign and be
discharged from its duties hereunder upon thirty (30) days notice in writing
mailed to the Depositor and the Trustee by registered or certified mail, and to
the Warrant Holders by first-class mail at the expense of the Depositor;
provided that no such resignation or discharge shall become effective until a
successor Warrant Agent shall have been appointed hereunder. The Depositor may
remove the Warrant Agent or any successor Warrant Agent upon thirty (30) days
notice in writing, mailed to the Warrant Agent or successor Warrant Agent, as
the case may be, and to the Warrant Holders by first-class mail; provided
further that no such removal shall become effective until a successor Warrant
Agent shall have been appointed hereunder. If the Warrant Agent shall resign or
be removed or shall otherwise become incapable of acting, the Depositor shall
promptly appoint a successor to the Warrant Agent, which may be designated as

                                       7
<PAGE>

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.

                           ARTICLE VI - MISCELLANEOUS

     Section 6.1  Remedies. The remedies at law of the Warrant Holder in the
event of any default or threatened default by the Warrant Agent in the
performance of or compliance with any of the terms of the Call Warrants are not
and will not be adequate and, to the full extent permitted by law, such terms
may be specifically enforced by a decree for the specific performance of any
agreement contained herein or by an injunction against a violation of any of the
terms thereof or otherwise.

     Section 6.2  Limitation on Liabilities of Warrant Holder. Nothing contained
in this Warrant Agent Agreement shall be construed as imposing any obligation on
the Warrant Holder to purchase any of the Certificates except in accordance with
the terms thereof.

     Section 6.3  Notices. All notices and other communications under this
Warrant Agent Agreement shall be in writing and shall be delivered, or mailed by
registered or certified mail, return receipt requested, by a nationally
recognized overnight courier, postage prepaid, addressed (a) if to any Warrant
Holder, at the registered address of such Warrant Holder as set forth in the
register kept by the Warrant Agent or (b) if to the Warrant Agent, to 100 Wall
Street, Suite 1600, New York, New York 10005, Attention: Corporate Trust or to
such other address notice of which the Warrant Agent shall have given to the
Warrant Holder and the Trustee or (c) if to the Trust or the Trustee, to the
Corporate Trust Office (as set forth in the Trust Agreement); provided that the
exercise of any Call Warrants shall be effective in the manner provided in
Article I. The Warrant Agent shall forward to the Warrant Holder any notices
received by it hereunder or pursuant to the Trust Agreement or this Agreement by
facsimile within one Business Day of receipt thereof.

     Section 6.4 Amendment. (a) This Warrant Agent Agreement may be amended from
time to time by the Depositor, the Trustee and the Warrant Agent without the
consent of any Warrant Holder, upon receipt of an opinion of counsel
satisfactory to the Warrant Agent that the provisions hereof have been satisfied
and that such amendment would not alter the status of the Trust as a grantor
trust 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

                                       8
<PAGE>

Certificate or (ii) to evidence and provide for the acceptance of appointment
hereunder of a Warrant Agent other than U.S. Bank Trust National Association.

          (a) 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 seen 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, this Section 6.4(b) shall not be amended
without the consent of 100% of the affected Warrant Holders.

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

     Section 6.5  Expiration. The right to exercise the Call Warrants shall
expire on the earliest to occur of (a) the cancellation thereof, (b) the
termination of the Trust Agreement or (c) the liquidation, disposition, or
maturity of all of the Underlying Securities.

     Section 6.6  Descriptive Headings. The headings in this Warrant Agent
Agreement are for purposes of reference only and shall not limit or otherwise
affect the meaning hereof.

     Section 6.7  GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW
OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

     Section 6.8  Judicial Proceedings; Waiver of Jury. Any judicial proceeding
brought against the Trust, the Trustee or the Warrant Agent with respect to this
Warrant Agent

                                       9
<PAGE>

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

                                       10
<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:

                                       11
<PAGE>

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