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                                                                     EXHIBIT 4.5

                             SHAREHOLDER AGREEMENT

          THIS SHAREHOLDER AGREEMENT is made and entered into this 13th day of
May 1998, by and among NFRONT, INC. a Georgia corporation (the "Company"), BRADY
L. RACKLEY, III, a resident of the State of Georgia ("Rackley"), Brady L.
Rackley, a resident of the State of Georgia ("B. Rackley"), Tom E. Greene
("greene"), James A. Verbrugge ("Verbrugge"), Warren Derek Porter ("Porter"),
Steve Scott Neel ("Neel"), CNL Financial Corporation ("CNL"), and NORO-MOSELEY
PARTNERS IV, L.P., a Georgia limited partnership ("Investor" and, together with
Rackley, B. Rackley, Greene, Verbrugge, Porter, Neel, and CNL the
"Shareholders").

                                  BACKGROUND

          A. Pursuant to a Series A Convertible Preferred Stock Purchase
Agreement of even date herewith (the "Stock Purchase Agreement"), Investor has
purchased Two Hundred Fifty Five Thousand Eight Hundred Eighty Five (255,885)
shares of the Company's Preferred Stock (as hereinafter defined).

          B. Pursuant to a Common Stock Purchase Agreement of even date herewith
(the "Common Stock Agreement"), Investor has purchased Thirty Five Thousand
Eight Hundred Twenty Four (35,824) shares of the Company's Common Stock from B.
Rackley.

          C. The execution ad delivery of this Agreement by the Company and each
of the Shareholders, each of whom owns the number of shares of Common Stock set
forth adjacent to such person's name on the signature page hereto and who,
collectively, own all of the shares of Common Stock (as hereinafter defined)
outstanding on the date hereof, is a condition precedent to the obligation of
Investor to purchase the Preferred Stock pursuant to the Stock Purchase
Agreement.

          D. The parties hereto wish to state herein their mutual agreements and
obligations and to impose certain restrictions on the rights and benefits with
respect to the voting and disposition of the Shares (as hereinafter defined) now
or hereafter owned by the Shareholders, and to set forth certain agreements with
respect to the management of the Company.

                                   AGREEMENT

          For and in consideration of the foregoing, the agreements set forth
below, and other good and valuable consideration, the receipt and sufficiency of
which is acknowledged, the parties agree as follows:

                            SECTION 1. DEFINITIONS

          The following capitalized terms are used in this Agreement with
meanings thereafter ascribed:

          "AFFILIATE" means any person, firm, corporation, partnership,
association, or other entity that, directly or indirectly or through one or more
intermediaries, controls, is controlled by, or is under common control with a
specified person, firm, corporation, partnership, association, or entity.

          "AGREEMENT" means this Agreement, together with any addenda and
amendments made in the manner described in this Agreement.

          "BUSINESS" means the business of selling Internet banking services to
community banks.

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          "BUSINESS DAY" means any Monday, Tuesday, Wednesday, Thursday, or
Friday on which banks are open in Atlanta, Georgia.

          "COMMISSION" means the Securities and Exchange Commission, or any
other federal agency at the time administering the Securities Act.

          "COMMON STOCK" means the common stock, no par value, of the Company of
which Five Million (5,000,000) shares are authorized and One Million Twenty
Three Thousand Eighteen (1,023,018) shares are issued and outstanding as of the
date hereof.

          "COMMON STOCK EQUIVALENTS" means the sum of (x) the number of shares
of Common Stock outstanding, PLUS (y) the number of shares of Common Stock
issuable upon (i) conversion or exchange of all outstanding securities
convertible into or exchangeable for Common Stock, (ii) the exercise of all
vested and outstanding warrants, options, and rights to purchase Common Stock or
securities convertible into or exchangeable for Common Stock, and (iii) the
conversion or exchange of all convertible or exchangeable securities purchased
upon such exercise, all as of the date upon which the number of Common Stock
Equivalents is being determined.

          "COMPANY BENEFIT PLAN" means any stock purchase or stock option plan
which the Company maintains for the benefit of its employees.

          "COMPETITOR" means a person or entity that is substantially engaged in
the Business. For purposes hereof, "substantially engaged" shall mean that the
average annual revenues of such person or entity derived from the conduct of the
Business during the three most recent completed fiscal years of such person or
entity (or if such person or entity has conducted such business for less than
three completed fiscal years, then for such lesser period) is in excess of $30
million and is equal to or greater than thirty percent (30%) of the average
annual gross revenues of such person or entity over such fiscal years (or such
lesser period).

          "CONFIDENTIAL INFORMATION" means information, other than Trade
Secrets, that is of value to its owner and is treated as confidential,
including, but not limited to, information concerning the customers, suppliers,
products, pricing strategies of the Company, personnel assignments and policies
of the Company, matters concerning the financial affairs and management of the
Company or any parent, subsidiary, or affiliate of the Company, future business
plans, licensing strategies, advertising campaigns, and information regarding
executives or employees of the Company.

          "DISPOSITION" means any transfer of all or any part of the rights and
incidents of ownership of the Shares, including the right to vote, and the right
to possession of Shares as collateral for indebtedness, whether such transfer is
outright or conditional, inter vivos or testamentary, voluntary or involuntary,
or for or without consideration, but in any event shall exclude any transfer
pursuant to the Prior Agreements, as amended hereby.

          "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
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.

          "EXISTING SHAREHOLDERS' AGREEMENTS" means those certain Shareholders'
Agreements between the Company and each of Greene, Verbrugge, Porter, and Neel,
respectively, each dated March 31, 1997.

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          "FAIR VALUE" means the value of one share of Common Stock determined
as set forth below, as of the business day which immediately precedes the date
for which Fair Value is determined.

                    (a)  If the Common Stock IS NOT Publicly Traded, the Fair
         Value of one share of Common Stock shall be equal to: (i) the value of
         the Company, DIVIDED BY (II) the number of Common Stock Equivalents
         (assuming in such case the conversion or exercise of only such
         convertible securities or options or warrants that are, as of the date
         of such calculation, then convertible or exercisable). The value of the
         Company will initially be determined in good faith by the Board of
         Directors of the Company, with the approval of the Series A Director
         (his or her approval not to be unreasonably withheld). If Board of
         Directors and the Series A Director shall be unable to agree as to the
         value of the Company, within ten (10) business days from the first
         meeting to determine the value of the Company, then the value of the
         Company will be determined by appraisal as follows: the Company and the
         Series A Director shall each select an appraiser experienced in the
         business of evaluating or appraising the market value of stock of
         privately held companies, and the two appraisers so selected shall,
         within thirty (30) days of selection, appraise the fair market value of
         the Company. Each of the Company and the Series A Director shall pay
         the fees and expenses of their respective appraisers so chosen. If the
         difference between the two appraisals is not greater than ten percent
         (10%) of the higher appraisal, the average of the two appraisals shall
         be deemed the value of the Company; otherwise, the two appraisers shall
         select a third appraiser, who shall be experienced in a manner similar
         to the initial appraisers. If the initial appraisers fail to select
         such third appraiser as provided above, either the Series A Director,
         or the Company, may apply, after written notice to the other, to any
         judge of any court of general jurisdiction for the appointment of such
         third appraiser. The third appraiser so selected shall appraise the
         fair market value of the Company as of the date Fair Value is to be
         determined, and shall forthwith give written notice of his
         determination to the Company and the Series A Director. The value of
         the Company shall then be established by averaging the three
         determinations of value, and then, disregarding the value determination
         which deviates most from such average, and averaging the remaining two
         value determinations. The Company and the Series A Director shall each
         pay one-half (1/2) the expenses and fees of the third appraiser. In
         making the determination of the Fair Value pursuant to this subsection,
         the Board of Directors and/or the appraisers, as the case may be, shall
         assume that fair market value of the Company is equal to the amount
         which would be paid in cash for the Company, as a going concern, by an
         unaffiliated third party buyer, without any discount for factors such
         as the absence of a trading market, the minority status of the shares,
         or any other factors would might otherwise be applicable. In the event
         of a Liquidation which is occasioned by a transaction such as a sale of
         assets, a sale of securities by the holders thereof, or a merger or
         share exchange, Fair Value shall be determined by reference to the
         transaction which gives rise to the Liquidation.

                    (b)  If the Common Stock IS Publicly Traded, "Fair Value"
         means the average Daily Price (as such term is defined below) over a
         twenty (20) trading day period consisting of the day as of which Fair
         Value is being determined and the nineteen (19) consecutive trading
         days prior to such date. For the purposes of computing Fair Value, the
         "Daily Price" for each of the twenty (20) consecutive trading days
         shall be determined as follows:

                         (i)  If the Common Stock is listed on a securities
                 exchange, the "Daily Price" is the closing price of the Common
                 Stock on the securities exchange having the greatest trading
                 volume over the preceding thirty (30) calendar day period, OR,
                 if there have been

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                 no sales on a particular trading day, the average of the last
                 reported bid and asked quotations on such exchange at the close
                 of business for such trading day.

                          (ii)  If the Common Stock is quoted on the NASDAQ
                 National Market System, the "Daily Price" is the average of the
                 representative bid and asked prices of the Common Stock quoted
                 in the NASDAQ National Market System as of 4:00 p.m., Eastern
                 Time.

                          (iii) If the Common Stock is quoted on the
                 over-the-counter market as reported by the National Quotation
                 Bureau, the "Daily Price" is the average of the highest bid and
                 asked prices of the Common Stock on the over-the-counter market
                 as reported by the National Quotation Bureau.

          "MANAGEMENT SHAREHOLDERS" means Rackley and B. Rackley.

          "PERMITTED DISPOSITION" means a Disposition effected:

                  (a)    by a Shareholder to which Investor and other
          Shareholders holding at least a majority of the Shares held by such
          other Shareholders consent in writing;

                  (b)    pursuant to Section 2.2 hereof, or Section 2.4 hereof;

                  (c)    by a Shareholder to a member of such person's immediate
          family, as defined in the regulations promulgated under Section 16 of
          the Exchange Act, or to any trust for his or their benefit;

                  (d)    by a Shareholder effective at the closing of a
          Transaction or a Qualifying Public Offering; and

                  (e)    by Investor to an Affiliate of Investor.

          The foregoing notwithstanding, no Disposition described in (a), (b),
(c) or (e) above shall be a Permitted Disposition unless the transferor shall
have obtained the written agreement of the proposed transferee, that such
transferee will be bound by, and the Shares proposed to be transferred will be
subject to, this Agreement. Such written agreement shall be attached as an
addendum to this Agreement and thereby incorporated as a part of this Agreement,
whereupon the proposed transferee shall have adopted this Agreement, and
thereafter shall be a party hereto, and the term "Shareholders" as used herein
shall thereafter mean and include such transferee.

          "PREFERRED STOCK" means 255,885 shares of Series A Convertible
Preferred Stock issued and outstanding upon closing.

          "PRIME RATE" means the "prime rate" as published in The Wall Street
Journal (Eastern Edition) under its "Money Rates" column or, if no longer
published as such, the rate of interest announced from time to time by
NationsBank, N.A., as its prime rate, base rate, or reference rate. If the Wall
Street Journal publishes more than one "prime rate" under its "Money Rates"
column or a range of rates, then the Prime Rate shall be the average of such
rates.

          "PRIOR AGREEMENTS" means collectively the Existing Shareholders
Agreements and the Voting Trust Agreements.

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          "PROPRIETARY INFORMATION" means Trade Secrets and Confidential
Information.

          "PUBLIC OFFERING" means any offering by the Company of its securities
to the public pursuant to a registration statement filed with the Commission
under the Securities Act.

          "PUBLICLY TRADED" means that the Common Stock of the Company is: (i)
listed on any securities exchange, (ii) quoted in the NASDAQ National Market
System or Bulletin Board, or (iii) quoted on the over-the-counter marker as
reported by the National Quotation Bureau.

          "QUALIFYING PUBLIC OFFERING" means one or a series of firm-commitment
underwritten Public Offerings by the Company whereby the Company and/or one or
more of its Shareholders completes a sale of Common Stock such that the gross
proceeds resulting from such sale exceed Fifteen Million Dollars ($15,000,000)
before deduction of expenses and commissions, and the price per share (before
deduction of expenses and commissions) is not less than three (3) times the then
effective Series A Conversion Price (as defined in the Articles of Amendment
designating the Series A Convertible Preferred Stock).

          "REGISTRATION EXPENSES" has the meaning ascribed in Section 4.5
hereof.

          "REGISTRABLE SECURITIES" means all shares of Common Stock held by
Investor and issued upon conversion of the Preferred Stock purchased under the
Stock Purchase Agreement, excluding in each case securities which have been (a)
registered under the Securities Act pursuant to an effective registration
statement filed thereunder and disposed of in accordance with the registration
statement covering them or (b) publicly sold pursuant to Rule 144 under the
Securities Act.

          "RESTRICTIONS TERMINATION DATE" means the first to occur of (a) the
date on which Investor shall first hold less than (i) twenty-five percent (25%)
of the shares of Series A Convertible Preferred Stock issued on the date hereof
or (ii) twenty-five percent (25%) of the shares of Common Stock issued upon
conversion of the Series A Convertible Preferred Stock or (b) the date of
closing of the first Qualified Public Offering.

          "SECURITIES ACT" means the Securities Act of 1933, as amended, 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.

          "SELLING EXPENSES" has the meaning ascribed in Section 4.5 hereof.

          "SERIES A DIRECTOR" means the member of the Board of Directors elected
by the holders of Preferred Stock pursuant to Section 3 hereof.

          "SHARES" means and includes as to each Shareholder, all shares of the
capital stock of the Company, including without limitation the Common Stock and
the Preferred Stock, now or in the future owned of record or beneficially by
such Shareholder (including without limitation, all Common Stock, Preferred
Stock, or other securities of the Company hereafter acquired pursuant to the
exercise of any option, warrant, or other right granted by the Company to such
Shareholder), and all securities of the Company that may be issued in exchange
for or in respect of such capital stock or securities (including, without
limitation, all securities issued or resulting from any stock dividend, stock
split, recapitalization, or merger effected by the Company).

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          "TRADE SECRET(S)" means information if any form which derives economic
value, actual or potential, from not being generally known and not being readily
ascertainable to other persons who can obtain economic value from its disclosure
or use and which is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy or confidentiality. Trade Secrets may
include either technical or non-technical data, including without limitation:
(a) any useful process, machine, chemical formula, composition of matter, or
other device which: (i) is new or which the Shareholder has a reasonable basis
to believe may be new, (ii) is being used or studied by the Company and is not
described in a patent or in any literature already published and distributed
externally by the Company, and (iii) is not readily ascertainable from
inspection of a product of the Company; (b) any engineering, technical, or
product specifications including those of features used in any current product
of the Company, or to be used, or the use of which is contemplated, in a future
product of the Company; (c) any application, operating system, communication
system, or other computer software (whether in source or object code) and all
flow charts, algorithms, coding sheets, routines, subroutines, compilers,
assemblers, design concepts, test data, documentation, or manuals related
thereto, whether or not copyrighted, patented or patentable, related to or used
in the business of the company; and (d) information concerning the customers,
suppliers, products, pricing strategies of the Company, personnel assignments,
and policies of the Company, or matters concerning the financial affairs and
management of the Company or any parent, subsidiary, or affiliate of the
Company; PROVIDED HOWEVER, that Trade Secrets shall not include any information
that: (A) has been voluntarily disclosed to the public by the Company or has
become generally known to the public (except where such public disclosure has
been made by or through such Shareholder or by a third person or entity with the
knowledge of such Shareholder without authorization by the Company); (B) has
been independently developed and disclosed by parties other than such
Shareholder or the Company, without a breach of any obligation of
confidentiality by any such person running directly or indirectly to the
Company; or (C) otherwise enters the public domain through lawful means.

          "VOTING TRUST AGREEMENTS" means those certain Voting Trust Agreements
between Rackley and each of Greene, Verbrugge, Porter, and Neel, respectively,
each dated March 31, 1997.

                           SECTION 2. SHARE CONTROL

          SECTION 2.1. RESTRICTIONS UPON TRANSFER OF SHARES. At all times prior
to the Restrictions Termination Date, no Shareholder shall make any Disposition
of Shares, except a Permitted Disposition as provided in this Agreement.

          SECTION 2.2. RIGHT OF FIRST REFUSAL.

                  (a)  If any Shareholder (other than Investor as to any
         transfer after May 13, 1999) (the "Offering Shareholder"), desires to
         make a transfer of Shares prior to the Restrictions Termination Date,
         which is not a Permitted Disposition until the provisions of this
         Section 2.2 have been observed, shall receive a bona fide written offer
         from a third party that is not a Competitor (the "Proposed Transferee")
         to purchase all or part of the Shares then owned by the Offering
         Shareholder that the Offering Shareholder desires to accept (an
         "Offer"), the Offering Shareholder shall, as a condition precedent to
         accepting the Offer, offer to the Company, and each of the other
         Shareholders (such other Shareholders are hereinafter collectively
         referred to as the "Other Shareholders" and individually as an "Other
         Shareholder"), in the manner set forth below, the right to purchase,
         individually or in the aggregate, all of the Shares that are the
         subject of the Offer for the same price and the same terms as contained
         in the Offer.

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                  (b)  Within ten (10) Business Days after receipt of the Offer,
         the Offering Shareholder shall notify the Company and each of the Other
         Shareholders in writing of the Offer, stating in such notice (the
         "Transfer Notice") the details of the Offer, including (i) the name and
         address of the Proposed Transferee, (ii) the number of Shares to which
         the Offer pertains (the "Offered Shares"), (iii) the price per share
         offered by the Proposed Transferee for the Offered Shares (the
         "Price"), and (iv) the terms and method of payment. A copy of the Offer
         shall be attached to the Transfer Notice. The Transfer Notice shall
         constitute an offer (the "Right of First Refusal") by the Offering
         Shareholder to sell the Offered Shares to the Company and, if and to
         the extent that the Company shall not accept the Right of First
         Refusal, to the Other Shareholders at the Price and upon the terms and
         conditions set forth in the Transfer Notice, which offer shall be
         irrevocable for thirty (30) Business Days (the "Offer Period") from the
         date the Transfer Notice is delivered to the Company (the "Commencement
         Date"), subject to satisfaction of the conditions specified in Section
         2(g) hereof.

                  (c) The Company shall have the first option to purchase all or
         any portion of the Offered Shares. If the Company desires to purchase
         all or any part of the Offered Shares, the Company shall communicate,
         in writing, its election to purchase to the Offering Shareholder, which
         communication shall state the number of Offered Shares the Company
         desires to purchase and the Price and terms of payment (which shall be
         identical to the terms described in the Transfer Notice), and shall be
         delivered to the Offering Shareholder at the address set forth in the
         Transfer Notice or if no address is set forth in the Transfer Notice,
         at the address reflected in the Company's stock transfer records (with
         a copy being contemporaneously delivered to each of the Other
         Shareholders) within ten (10) Business Days of the Commencement Date
         (such ten (10) Business Day period is hereinafter referred to as the
         "Company Acceptance Period"). Such communication shall, when taken in
         conjunction with the Transfer Notice, be deemed to constitute a valid,
         legally binding, and enforceable agreement for the sale and purchase of
         all or that portion of the Offered Shares which the Company has so
         elected to purchase, subject to satisfaction to the conditions
         specified in Section 2.2(g) hereof.

                  (d) If the Company does not exercise its option to purchase
         all of the Offered Shares from the Offering Shareholder within the
         Company Acceptance Period, each Other Shareholder shall have an option
         to purchase all or any portion of the Offered Shares not purchased by
         the Company (the "Remaining Shares"), exercisable by giving written
         notice of exercise to the Offering Shareholder, each Other Shareholder,
         and the Company. Such written notice shall state the number of
         Remaining Shares such Other Shareholder elects to purchase, and shall
         be delivered to the Offering Shareholder with a copy delivered
         substantially contemporaneously to the Company and to each Other
         Shareholder at the addresses reflected in the Company's stock transfer
         records within the ten (10) Business Day period which commences on the
         first day after the expiration of the Company Acceptance Period (such
         ten (10) Business Day period is hereinafter referred to as the
         "Shareholder Acceptance Period"). Such communication shall, when taken
         in conjunction with the Transfer Notice, be deemed to constitute a
         valid, legally binding, and enforceable agreement for the sale and
         purchase of all or that portion of the Offered Shares which each such
         Other Shareholder has so elected to purchase, subject to the
         satisfaction of the conditions specified in Section 2.2(f) of this
         Agreement, and to the terms set forth in the remainder of this
         paragraph. In the event that more than one Other Shareholder exercises
         the right to purchase the Remaining Shares, each Other Shareholder may
         only purchase up to such Other Shareholder's pro rata share of the
         Remaining Shares (based upon the ratio of the number of Common Stock
         Equivalents owned by such exercising Other Shareholder to the number of
         Common Stock Equivalents owned by all Other Shareholders).

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                  (e)  If one or more Other Shareholders fails to timely
         exercise such Other Shareholder's option to purchase the full pro rata
         share of Offered Shares to which such Other Shareholder is entitled
         within the Shareholder Acceptance Period, the Other Shareholders which
         did exercise their respective options to purchase the full pro rata
         share of Remaining Shares (an "Eligible Other Shareholder") shall have
         an option to purchase that portion of the Remaining Shares which remain
         available for purchase (the "Available Shares"), exercisable by giving
         written notice of exercise to the Offering Shareholder, each Eligible
         Other Shareholder, and the Company. Such written notice shall state the
         number of Available Shares such Eligible Other Shareholder elects to
         purchase, and shall be delivered to the Offering Shareholder with a
         copy delivered substantially contemporaneously to the Company and to
         each Eligible Other Shareholder at the addresses reflected in the
         Company's stock transfer records within the five (5) Business Day
         period which commences on the first day after the expiration of the
         Shareholder Acceptance Period (such five (5) Business Day period is
         hereinafter referred to as the "Overallotment Acceptance Period") Each
         Eligible Other Shareholder may purchase a pro rata share of the
         Available Shares (based upon the ratio of the number of Common Stock
         Equivalents owned by each Eligible Other Shareholder to the number of
         Common Stock Equivalents owned by all Eligible Other Shareholders).
         This method of allocation shall continue to apply to options to
         purchase all of the Available Shares until the first to occur of the
         following: (i) all options have been exercised by one or more Eligible
         Other Shareholders (which exercises shall constitute the valid, legally
         binding, and enforceable agreement as provided above), (ii) the
         Eligible Other Shareholders elect not to exercise their rights to
         purchase any additional Available Shares, or (iii) the Overallotment
         Acceptance Period expires.

                  (f)  The closing of the purchase of any Offered Shares by the
         Company, any Remaining Shares by the Other Shareholders, and any
         Available Shares by the Eligible Other Shareholders (as the case may
         be) shall be held at the principal office of the Company. The Company
         shall designate a closing date and time, which date shall be later than
         thirty (30) Business Days after the date of the Transfer Notice or such
         other date as may be agreed upon by the Company (after consultation
         with any Other Shareholder who has exercised such Other Shareholder's
         option to purchase Remaining Shares or Available Shares) and the
         Offering Shareholder (such date is hereinafter the "Share Transfer
         Date"). At the closing, the Offering Shareholder shall deliver
         certificates duly endorsed or accompanied by duly executed stock powers
         for the Offered Shares being purchased pursuant to this Section 2.2 and
         shall transfer the Offered Shares being purchased pursuant to this
         Section 2.2 to the purchasers thereof, free and clear of all liens,
         claims, charges, or encumbrances, against payment for the Offered
         Shares in accordance with the terms of the Transfer Notice. If the
         Company shall be the purchaser of any of the Offered Shares, the
         Company shall have the right to set off against any payment made to the
         Offering Shareholder by the Company in respect of such Offered Shares
         the amount by which the Offering Shareholder is then indebted to the
         Company.

                  (g)  Notwithstanding the foregoing, if the Right of First
         Refusal is not exercised with respect to all of the Offered Shares (i)
         on or before the expiration of the Overallotment Acceptance Period, or
         (ii) if the Company and the Other Shareholders do not purchase all of
         the Offered Shares on the Share Transfer Date, then the Offering
         Shareholder shall be under no obligation to sell any Offered Shares to
         the Company or the Other Shareholders, and the Offered Shares may be
         sold by the Offering Shareholder to the Proposed Transferee at any time
         during a thirty (30) Business Day period which commences the day after
         (x) the expiration of the Offer Period (if the condition in clause (i)
         of this subparagraph (g) is not satisfied) or (y) the Share Transfer
         Date (if the condition in clause (i) of this subparagraph (g) is
         satisfied but the condition

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         in clause (ii) of this subparagraph (g) is not satisfied (such thirty
         (30) Business Day Period is hereinafter referred to as the "Free
         Transfer Period"). Any such sale shall be only to the Proposed
         Transferee at not less than the Price and upon other terms and
         conditions not more favorable to the Proposed Transferee than those
         specified in the Transfer Notice. No transfer of the Offered Shares or
         any portion thereof shall be made to any Competitor.

                  (h)  As a condition precedent to the sale and transfer of any
         Offered Shares by the Offering Shareholder, the Offering Shareholder
         shall obtain (i) the written agreement of the Proposed Transferee that
         the Proposed Transferee will be bound by, and that the Offered Shares
         transferred to the Proposed Transferee will be subject to, this
         Agreement as provided in Section 2.1 above, except that,
         notwithstanding any other provision of this Agreement, the Proposed
         Transferee shall not be subject to Section 2.4 of this Agreement and
         (ii) (unless waived by the Company) an opinion of counsel, satisfactory
         to the Company, that such transfer of interest does not require
         registration under the Securities Act, and any applicable state
         securities laws. The Company shall not give effect on its books to any
         transfer or purported transfer of Offered Shares held or owned by any
         Offering Shareholder to the Proposed Transferee unless each and all of
         the conditions hereof effecting such transfer shall have been
         satisfied. If the transfer by the Offering Shareholder to the Proposed
         Transferee of that portion of the Offered Shares as to which the Right
         of First Refusal has not been exercised and consummated, is not made
         within the Free Transfer Period, the right to transfer in accordance
         with this Section 2.2 shall expire. In such event, the restrictions of
         this Section 2.2 shall be reinstated as to all Shares which have not
         been so transferred, and any subsequent transfer of such Shares,
         whether or not to the same Proposed Transferee, must be made strictly
         in compliance with the provisions of this Section 2.2.

         SECTION 2.3.  FAILURE TO DELIVER SHARES TO THE COMPANY. If a
Shareholder becomes obligated to sell any Shares to the Company or to the Other
Shareholders under this Agreement (the "Obligated Shareholder") and fails to
deliver such Shares in accordance with the terms of this Agreement, the Company
or such Other Shareholder may, in addition to all other remedies it may have,
tender to the Obligated Shareholder, at the address set forth in the stock
transfer records of the Company, the purchase price for such Offered Shares as
is herein specified, and (i) in the case of shares to be sold to the Company
pursuant to this Agreement, cancel such shares on its books and records
whereupon all of the Obligated Shareholder's right, title, and interest in and
to such Shares shall terminate, (ii) in the case of Shares to be sold to an
Other Shareholder under this Agreement, issue certificates representing such
shares to the Other Shareholder and register the Other Shareholder on its
Company's books and records as the record owner of the shares whereupon all of
the Obligated Shareholder's right, title, and interest in and to such shares
shall terminate.

         SECTION 2.4.  CO-SALE RIGHTS.

                  (a)  If at any time prior to the Restrictions Termination Date
         a Shareholder proposes to effect a Disposition of any or all of the
         Shares owned by such Shareholder to a third party (such transferee for
         purposes of this Section 2.4 is referred to as the "Transferee") other
         than a transaction described in paragraphs(a), (c) and (d) of the
         definition "Permitted Disposition," and such Shareholder shall have
         complied with the provisions of Section 2.2 hereof (for the purposes of
         this Section 2.4, such Shares to be sold are hereinafter referred to as
         the "Transfer Shares"), such Shareholder shall require the Transferee,
         as a condition precedent to the consummation of the sale or disposition
         of the Transfer Shares of such Shareholder to the Transferee, to offer
         to acquire from Investor on the same terms as the proposed sale or
         disposition from Shareholder a number of Common Stock Equivalents equal
         to the product of (i) the number of Common Stock

                                      -9-
<PAGE>

          Equivalents owned of record by Investor MULTIPLIED BY (ii) a fraction,
          the numerator of which is the number of Transfer Shares such
          Shareholder proposes to sell or otherwise dispose of to the
          Transferee, and the denominator of which is the total number of Common
          Stock Equivalents owned beneficially and of record by such Shareholder
          and Investor (for the purposes of this Section 2.4, such number of
          Common Stock Equivalents is hereinafter referred to as the "Allocation
          Shares").

                  (b)  Such Shareholder shall give written notice (for the
          purposes of this Section 2.4, the "Co-Sale Notice") to Investor which
          shall describe fully the terms of the proposed sale or disposition,
          the number of Transfer Shares to be sold or otherwise disposed of, and
          the number of Allocation Shares of Investor eligible for co-sale, the
          name and address of the Transferee or the Company, as applicable, and
          the proposed closing date of the purchase and sale. The Co-Sale Notice
          shall be signed by such Shareholder and by the Transferee or the
          Company, as applicable, and shall be an irrevocable offer, open for
          fifteen (15) days after receipt, to Investor to acquire, as provided
          above, all Allocation Shares. Investor shall have fifteen (15) days
          after receipt of the Co-Sale Notice to accept such offer as to all or
          a portion of the Allocation Shares and notify the Transferee and such
          Shareholder in writing of the number of Allocation Shares, if any,
          Investor wishes to sell to the Transferee. Such Shareholder may not
          consummate the proposed sale or disposition to the Transferee unless
          (x) the sale of Allocation Shares pursuant to the co-sale right of
          Investor (but only if an Investor timely accepts the offer of such
          Shareholder and the Transferee) is consummated; (y) an Investor waives
          the right of co-sale as to all or part of the Allocation Shares; or
          (z) the irrevocable offer expires without acceptance by an Investor
          after the fifteen (15) day period.

                       SECTION 3. GOVERNANCE PROVISIONS

          SECTION 3.1. ELECTION OF DIRECTORS. At all times prior to the
Restrictions Termination Date, each Shareholder agrees to:

                  (a)  Vote all Shares the voting of which is under the
         control of such Shareholder to:

                       (i)   maintain a Board of Directors consisting of
                  five (5) members;

                       (ii)  cause one (1) person designated as the
                  Series A Director and nominated by the Investor to be elected
                  as directors of the Company;

                       (iii) cause two (2) persons designated in writing by the
                  Management Shareholders (the "Management Shareholder
                  Nominees") to be elected as directors of the Company; and

                       (iv)  cause two (2) persons, each of whom either meet the
                  definition of "non-employee director" as defined in Rule 16b-3
                  of the Securities Exchange Act of 1934 and is not an
                  "interested person" of the Investor as defined in Section
                  2(a)(19) of the Investment Company Act of 1940 OR would
                  otherwise be qualified to serve on the Audit Committee of the
                  Company if the Company were listed on the New York Stock
                  Exchange (the "Outside Nominees"), designated in writing by
                  the Management Shareholder Nominees and approved by the Series
                  A Director, such approval not to be unreasonably withheld or
                  delayed.

                                      -10-
<PAGE>

                  (b)  As of the date hereof, the Investor Nominee is Charles D.
         Moseley; the Management Shareholder Nominees are Rackley and B. Rackley
         and the Outside Nominees are Greene and Verbrugge. These designations
         shall remain in effect until a new designation is delivered in writing
         to the Company and each party to this Agreement. A new designation
         shall be effective when delivered. The Company will use reasonable
         efforts to notify all Shareholders at least three (3) days prior to any
         meeting (or written action in lieu of a meeting) of the Shareholders at
         or by which directors are to be elected, if the director nominees will
         change from the nominees designated in this Section 3.1(b).

                  (c)  In the event that any of the Series A Director, and the
         Management Shareholder Nominees, shall cease to serve as a director of
         the Company for any reason, Investor, or the Management Shareholders,
         as applicable, shall have the right to appoint a successor nominee. If
         any Outside Nominee shall cease to serve as a director of the Company
         for any reason, the Management Shareholder Nominees, with the approval
         of the Series A Director, such approval not to be unreasonably withheld
         or delayed, shall appoint a successor nominee who meets the eligibility
         criteria set forth in Section 3.1(a)(iv) hereof. The Shareholders shall
         use their best efforts to ensure that such successor nominee is duly
         appointed and elected to fill such vacancy in the manner provided in
         the Bylaws of the Company.

                  (d)  Each director shall be entitled to one (1) vote on each
         matter on which the Board of Directors takes action.

         SECTION 3.2.  RIGHT TO PURCHASE NEW SECURITIES. The Company hereby
grants to Investor the right to purchase a pro rata share of any New Securities,
as hereinafter defined, which the Company may, at any time prior to the
Restrictions Termination Date, propose to sell and issue (the "Purchase Right").
A pro rata share, for purposes of this Purchase Right, is a fraction, the
numerator of which is the number of Common Stock Equivalents then held by
Investor, and the denominator of which is the total number of Common Stock
Equivalents then outstanding.

                  (a)  Except as set forth below, "New Securities" means any
         shares of capital stock of the Company including Common Stock, whether
         now or hereafter authorized, and any rights, options, or warrants to
         purchase said shares of capital stock, and any securities of any type
         that are, or may become, convertible into said shares of capital stock.
         Notwithstanding the foregoing, "New Securities" does not include: (i)
         securities offered to the public generally pursuant to a registration
         statement filed pursuant to the Securities Act, or pursuant to
         Regulation A under the Securities Act; (ii) securities issued pursuant
         to any merger or share exchange in which the Company is the survivor or
         parent, or pursuant to the purchase of substantially all of the assets
         of another person; (iii) shares of Common Stock or related options
         convertible into such Common Stock issued to employees, officers, and
         directors of the Company pursuant to any plan or arrangement approved
         by the Board of Directors, (including options outstanding on the date
         hereof) as adjusted for stock splits, stock dividends, and similar
         transactions; (iv) securities issued pursuant to any rights or
         agreements including without limitation convertible securities,
         options, and warrants, provided that the Purchase Right under this
         Section 3.2 applies with respect to the initial sale of New Securities
         or the grant by the Company of such rights or agreements; (v)
         securities issued in connection with any stock split, stock dividend,
         or recapitalization by the Company; and (vi) securities issuable to CNL
         pursuant to that certain Stock Purchase and Stock Option Agreement
         dated January 15, 1998 between the Company and CNL (the "CNL
         Agreement").

                                      -11-
<PAGE>

                  (b)  In the event the Company proposes to undertake an
         issuance of New Securities, it shall give Investor written notice of
         its intention, describing the type of New Securities and the price and
         terms upon which the Company proposes to issue the New Securities.
         Investor shall have fifteen (15) days from the date of receipt of any
         such notice to agree to purchase up to its respective pro rata portion
         of shares of such New Securities for the price and upon the terms
         specified in the notice by giving written notice to the Company of
         Investor's intentions, and stating therein the quantity of New
         Securities to be purchased by Investor. Investor shall have fifteen
         (15) days to complete the purchase. If Investor fails to close such
         purchase within the fifteen (15) day period, Investor shall have
         forfeited Investor's right to buy a pro-rata share of that particular
         issuance of New Securities.

                  (c)  In the event Investor fails to exercise the Purchase
         Right as provided herein within said fifteen (15) day period, the
         Company shall have ninety (90) days thereafter to sell or enter into a
         written agreement (pursuant to which the sale of New Securities covered
         thereby shall be completed, if at all, within sixty (60) days from the
         date of said agreement) to sell the New Securities not elected to be
         purchased by Investor at a price and upon such terms which are no more
         favorable to the purchaser of such New Securities than specified in the
         Company's notice to Investor. In the event the Company has not sold the
         New Securities or entered into a written agreement to sell the New
         Securities within said ninety (90) day period (or completed the sale of
         the New Securities within sixty (60) days from the date of said
         agreement, as provided above), the Company shall not thereafter issue
         or sell any New Securities without first offering such securities in
         the manner provided in this Section 3.2.

         SECTION 3.3.  VOTING AGREEMENT. The holders of the then outstanding
shares of Series A Convertible Preferred Stock will not withhold their approval
of any merger ("Business Combination") and shall vote as a class in favor of
such Business Combination, if (A) such Business Combination receives the
approval of the holders of a majority of the outstanding shares of Common Stock,
the holders of Series A Convertible voting with the holders of Common Stock (as
if that all Series A Convertible Preferred Stock were fully converted) and (B)
all Merger Consideration (as such term is defined below) is distributed pro-rata
(other than as may be necessary under Section 2D of the Amended and Restated
Articles of Incorporation of the Company, as amended, to pay to holders of
Series A Convertible Preferred Stock the full amount of the "Senior Liquidation
Payments" to which such holders are entitled) to all Shareholders. As used
herein "Merger Consideration" means all consideration (i) distributed to
Shareholders and (ii) paid to Shareholders of the Corporation in respect of a
Business Combination (including, without limitation, amounts paid in respect of
noncompetition covenants), required by the terms of the Business Combination to
be held in escrow, or is otherwise not immediately available for distribution to
Shareholders (including, without limitation, (x) amounts payable in conjunction
with any "earn-out" or other type of contingent consideration based in whole or
in part upon future performance, and (y) amounts payable pursuant to promissory
notes or other forms of seller financing) and all amounts paid to Shareholders
for consulting services, transition bonuses, stay-on bonuses, excluding,
however, amounts paid to Shareholders that are not in excess of reasonable
compensation for services actually performed for the surviving entity in the
Business Combination by such Shareholder.

                        SECTION 4. REGISTRATION RIGHTS.

         SECTION 4.1.  DEMAND REGISTRATION. At any time following a Public
Offering, Investor may request the Company to register under the Securities Act
not less than forty percent (40%) of all shares of Registrable Securities then
held by Investor for sale in the manner specified in such notice.
Notwithstanding anything to the contrary contained herein, no request may be
made under this

                                      -12-
<PAGE>

Section 4.1 within six months after the effective date of a registration
statement filed by the Company covering a firm commitment underwritten public
offering in which Investor shall have been entitled to join pursuant to Section
4.2 hereof, and in which there shall have been effectively registered all shares
of Registrable Securities as to which registration shall have been requested by
Investor and permitted by the managing underwriter. If the Company receives a
notice from Investor that imposes on the Company the registration obligations of
this Section 4.1, and if, in the reasonable opinion of the Board of Directors of
the Company the general market conditions are not appropriate at the time for an
offering, the Company may, at its option, delay the commencement of the
performance of the Company's obligation pursuant to this Section 4.1 for up to
one hundred twenty (120) days. If Investor specifies in the notice, that the
method of disposition of the Registrable Securities shall be an underwritten
public offering, Investor may designate the managing underwriter of such
offering, subject to the approval of the Company, which approval shall not be
unreasonably withheld or delayed. The Company shall be obligated to prepare and
file a registration statement with respect to Registrable Securities pursuant to
this Section 4.1 on one occasion only PROVIDED HOWEVER, that such obligation
shall be deemed satisfied only when a registration statement covering shares of
Registrable Securities, for sale in accordance with the method of disposition
specified by the requesting Investor, shall have become effective (or is in a
position to be declared effective but for Investor's election not to proceed
with the contemplated offering). The Company shall be entitled to include in any
registration statement referred to in this Section 4.1 for sale in accordance
with the method of disposition specified by Investor, shares of Common Stock to
be sold by the Company for its own account and for the accounts of other holders
of Common Stock, except as and to the extent that in the opinion of the managing
underwriter (if such method of disposition shall be an underwritten public
offering), such inclusion would adversely affect the marketing of the
Registrable Securities to be sold. Except for registration statements on Forms
S-4 or S-8, or any successor thereto, the Company will not file with the
Commission any other registration statement with respect to its Common Stock,
whether for its own account or that of other shareholders, from the date of
receipt of a notice from Investor pursuant to this Section 4.1 until the
completion of the period of distribution of the registration contemplated
thereby (determined as provided in Section 4.3 hereof, but in no event to exceed
ninety (90) days following the effective date of the applicable registration
statement).

         SECTION 4.2.  PIGGYBACK REGISTRATION. At any time following a Public
Offering, if the Company at any time proposes to register any Common Stock under
the Securities Act for sale to the public, whether for its own account or for
the account of other security holders or both (except with respect to
registration statements on Forms S-4 or S-8 or another form not available for
registering the Registrable Securities for sale to the public), each such time
it will give written notice to Investor of its intention so to do. Upon the
written request of an Investor received by the Company within 10 days after the
giving of any such notice by the Company, to register such number of shares of
Registrable Securities held by Investor (or by persons taking from Investor
pursuant to a Permitted Disposition) specified in such written request, the
Company will cause the Registrable Securities as to which registration shall
have been so requested to be included in the securities to be covered by the
registration statement proposed to be filed by the Company, all to the extent
requisite to permit the sale or other disposition by Investor (in accordance
with its written request) of such Registrable Securities so registered. In the
event that any registration pursuant to this Section 4.2 shall be, in whole or
in part, an underwritten public offering of Common Stock, the number of shares
of Registrable Securities to be included in such an underwriting may be reduced
if and to the extent that the managing underwriter shall be of the opinion that
such inclusion would adversely affect the marketing of the securities to be sold
by the Company therein. In the event such a reduction is necessary, the
reduction shall be borne first by holders of Registrable Securities who are not
Investor, and if a further reduction is necessary in the judgment of the
managing underwriter, then, Investor proposing to sell Registrable Securities in
the offering shall bear the reduction on a pro-rata basis, based on the number
of shares of Registrable Securities that Investor

                                      -13-
<PAGE>

proposed to offer for sale in the Offering, or if Investor holds a majority of
the shares of Registrable Securities that Investor may elect to withdraw from
such registration all shares of Registrable Securities held by Investor as to
which registration was requested. Notwithstanding the foregoing provisions, the
Company may for any reason and without the consent of Investor withdraw any
registration statement referred to in this Section 4.2 without thereby incurring
any liability to Investor.

         SECTION 4.3. REGISTRATION PROCEDURES. If and whenever the Company is
required by the provisions of Section 4.1 or 4.2 hereof to use its best efforts
to effect the registration of any shares of Registrable Securities under the
Securities Act, the Company will, as expeditiously as possible:

                  (a) prepare and file with the Commission a registration
         statement (which, in the case of an underwritten public offering
         pursuant to Section 4.1 or 4.2 hereof, shall be on Form S-1, Form S-2,
         Form S-3, any successor forms thereto, or other form of general
         applicability satisfactory to the managing underwriter selected as
         herein provided) with respect to such securities and use its best
         efforts to cause such registration statement to become and remain
         effective for the period of the distribution contemplated thereby
         (determined as hereinafter provided);

                  (b) prepare and file with the Commission such amendments and
         supplements to such registration statement and the prospectus used in
         connection therewith as may be necessary to keep such registration
         statement effective for the period of distribution and comply with the
         provisions of the Securities Act with respect to the disposition of all
         Registrable Securities covered by such registration statement in
         accordance with the intended method of disposition set forth in such
         registration statement for such period;

                  (c) furnish to each Shareholder and to each underwriter such
         number of copies of the registration statement and the prospectus
         included therein (including each preliminary prospectus) as such
         persons reasonably may request in order to facilitate the public sale
         or other disposition of the Registrable Securities covered by such
         registration statement;

                  (d) use its best efforts to register or qualify the
         Registrable Securities covered by such registration statement under the
         securities or "blue sky" laws of such jurisdictions as the
         Shareholders, or, in the case of an underwritten public offering, the
         managing underwriter reasonably shall request, PROVIDED HOWEVER, that
         the Company shall not for any such purpose be required to qualify
         generally to transact business as a foreign corporation in any
         jurisdiction where it is not so qualified or to consent to general
         service of process in any such jurisdiction;

                  (e) use its best efforts to list the Registrable Securities
         covered by such registration statement with any securities exchange or
         NASDAQ on which the Common Stock of the Company is then listed or
         quoted;

                  (f) notify each selling Shareholder at any time when a
         prospectus relating to Registrable Securities is required to be
         delivered under the Securities Act of the happening of any event as a
         result of which the prospectus included in such registration statement
         contains an untrue statement of a material fact or omits any fact
         necessary to make the statements therein not misleading, and, at the
         request of any such Shareholder, the Company will prepare a supplement
         or amendment to such prospectus so that, as thereafter delivered to the
         purchasers of such Registrable Securities, such prospectus will not
         contain an untrue statement of a material fact or omit to state any
         fact necessary to make the statements therein not misleading;

                                      -14-
<PAGE>

                  (g) notify the selling Shareholders immediately, and confirm
         the notice in writing, (1) when the registration statement becomes
         effective, (2) of the issuance by the Commission of any stop order or
         of the initiation, or the threatening, of any proceedings for that
         purpose, (3) of the receipt by the Company of any notification with
         respect to the suspension of qualification of the Restricted Stock for
         sale in any jurisdiction or of the initiation, or the threatening, of
         any proceedings for that purpose, and (4) of the receipt of any
         comments, or requests for additional information, from the Commission
         or any state regulatory authority. If the Commission or any state
         regulatory authority shall enter such a stop order or order suspending
         qualification at any time, the Company will promptly use its best
         reasonable efforts to obtain the lifting of such order; and

                  (h) otherwise use its best efforts to comply with all
         applicable rules and regulations of the Commission, and make available
         to its security holders as soon as reasonably practicable, but not
         later than eighteen (18) months after the effective date of the
         registration statement, an earnings statement covering a period of at
         least twelve (12) months beginning after the effective date of the
         registration statement, which earnings statement shall satisfy the
         provisions of Section 11(a) of the Securities Act.

         For purposes hereof, the period of distribution of Registrable
Securities in a firm commitment underwritten public offering shall be deemed to
extend until each underwriter has completed the distribution of all securities
purchased by it, and the period of distribution of Registrable Securities in any
other registration shall be deemed to extend until the earlier of the sale of
all Registrable Securities covered thereby or 180 days after the effective date
thereof.

         In connection with each registration hereunder, each Shareholder will
furnish to the Company in writing such information with respect to it as a
shareholder as reasonably shall be necessary in order to assure compliance with
federal and applicable state securities laws.

         In connection with each registration pursuant to Section 4.1 or 4.2
hereof covering an underwritten public offering, the Company and each
Shareholder agree to enter into a written agreement with the managing
underwriter selected in the manner herein provided in such form and containing
such provisions as are customary in the securities business for such an
arrangement between such underwriter and companies of the Company's size and
investment stature.

         SECTION 4.4. EXPENSES. All reasonable expenses incurred by the Company
in complying with Section 4.1 or 4.2 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees and expenses
(including counsel fees) incurred in connection with complying with state
securities or "blue sky" laws, fees of the National Association of Securities
Dealers, Inc., transfer taxes, fees of transfer agents and registrars, and in
the case of Section 4.1 the reasonable fees and disbursements of one counsel for
the sellers of Restricted Stock , but excluding any Selling Expenses, are called
"Registration Expenses." All underwriting discounts and selling commissions
applicable to the sale of Restricted Stock are called "Selling Expenses."

                  (a) The Company shall pay all Registration Expenses
         attributable to the shares of Restricted Stock of Shareholders included
         in the Registration in connection with each registration statement
         under Section 4.1 or 4.2 hereof.

                                      -15-
<PAGE>

                  (b) All Selling Expenses in connection with each registration
         statement under Section 4.1 or 4.2 hereof shall be borne by Investor
         and any other selling shareholder in proportion to the number of shares
         sold by Investor or by such other selling shareholders.

         SECTION 4.5. INDEMNIFICATION AND CONTRIBUTION.

                  (a) In the event of a registration of any of the Registrable
         Securities under the Securities Act pursuant to Section 4.1 or 4.2
         hereof, the Company will indemnify and hold harmless Investor, its
         directors and its officers (provided Investor is a seller of
         Registrable Securities thereunder), each underwriter of such
         Registrable Securities thereunder, and each other person, if any, who
         controls Investor, its directors and its officers or underwriter within
         the meaning of the Securities Act, against any losses, claims, damages,
         or liabilities, joint or several, to which Investor, its directors and
         officers, such underwriter or such person may become subject under the
         Securities Act or otherwise, insofar as such losses, claims, damages,
         or liabilities (or actions in respect thereof) arise out of or are
         based upon (i) any untrue statement or alleged untrue statement of any
         material fact contained in any registration statement under which any
         shares of Registrable Securities were registered under the Securities
         Act pursuant to Section 4.1, 4.2, or 4.3 hereof, any preliminary
         prospectus or final prospectus contained therein, or any amendment or
         supplement thereof, or (ii) the omission or alleged omission to state
         therein a material fact required to be stated therein or necessary to
         make the statements therein not misleading, and will reimburse
         Investor, its directors and officers, each such underwriter and each
         such controlling person for any legal or other expenses reasonably
         incurred by any of them in connection with investigating or defending
         any such loss, claim, damage, liability, or action; PROVIDED, HOWEVER,
         that the Company will not be liable in any such case if and to the
         extent that any such loss, claim, damage, or liability arises out of or
         is based upon an untrue statement or alleged untrue statement or
         omission or alleged omission so made in conformity with information
         furnished by an Investor, its directors and its officers, such
         underwriter and such controlling person in writing specifically for use
         in such registration statement or prospectus.

                  (b) In the event of a registration of any of the shares of
         Registrable Securities under the Securities Act pursuant to Section 4.1
         or 4.2 hereof, Investor including Shares of Registrable Securities in
         such registration, severally but not jointly, will indemnify and hold
         harmless the Company, each person, if any, who controls the Company
         within the meaning of the Securities Act, each officer of the Company
         who signs the registration statement, each director of the Company,
         each underwriter, and each person who controls any underwriter within
         the meaning of the Securities Act, against all losses, claims, damages,
         or liabilities, joint or several, to which the person may become
         subject under the Securities Act or otherwise, insofar as such losses,
         claims, damages, or liabilities (or actions in respect thereof) arise
         out of or are based upon any untrue statement or alleged untrue
         statement of any material fact contained in the registration statement
         under which any shares of Registrable Securities were registered under
         the Securities Act pursuant to Section 4.1 or 4.2 hereof, any
         preliminary prospectus, or final prospectus contained therein, or any
         amendment thereof or supplement thereto, or arise out of or are based
         upon the omission or alleged omission to state therein a material fact
         required to be stated therein or necessary to make the statements
         therein not misleading, and will reimburse the Company and each such
         officer, director, underwriter, and controlling person for any legal or
         other expenses reasonably incurred by them in connection with
         investigating or defending any such loss, claim, damage, liability, or
         action, PROVIDED, HOWEVER, that Investor will be liable hereunder in
         any such case if and

                                      -16-
<PAGE>

         only to the extent that any such loss, claim, damage, or liability
         arises out of or is based upon an untrue statement or alleged untrue
         statement or omission or alleged omission made in reliance upon and in
         conformity with information pertaining to Investor, as such,
         respectively, furnished in writing to the Company by Investor
         specifically for use in such registration statement or prospectus, and
         PROVIDED, FURTHER, HOWEVER, that the respective liability of an
         Investor hereunder shall be limited to the proportion of any such loss,
         claim, damage, liability, or expense which is equal to the proportion
         that the public offering price of the shares sold by Investor, under
         such registration statement bears to the total public offering price of
         all securities sold thereunder, but not in any event to exceed the
         proceeds received by an Investor from the sale of shares of Registrable
         Securities or covered by such registration statement. In no event will
         any Shareholder be required to enter into any agreement or undertaking
         in connection with any registration under this Agreement providing for
         any indemnification or contribution obligation on the part of Investor
         greater than Investor's obligation under this Section 4.

                  (c) Promptly after receipt by an indemnified party hereunder
         of notice of the commencement of any action, such indemnified party
         shall, if a claim in respect thereof is to be made against the
         indemnifying party hereunder, notify the indemnifying party in writing
         thereof, but the omission so to notify the indemnifying party shall not
         relieve it from any liability which it may have to such indemnified
         party other than under this Section 5 and shall only relieve it from
         any liability which it may have to such indemnified party under this
         Section 5 if and to the extent the indemnifying party is prejudiced by
         such omission. In case any such action shall be brought against any
         indemnified party and it shall notify the indemnifying party of the
         commencement thereof, the indemnifying party shall be entitled to
         participate in and, to the extent it shall wish, to assume and
         undertake the defense thereof with counsel satisfactory to such
         indemnified party, and, after notice from the indemnifying party to
         such indemnified party of its election so to assume and undertake the
         defense thereof, the indemnifying party shall not be liable to such
         indemnified party under this Section 4.6 for any legal expenses
         subsequently incurred by such indemnified party in connection with the
         defense thereof other than reasonable costs of investigation and of
         liaison with counsel so selected, PROVIDED, HOWEVER, that, if the
         defendants in any such action include both the indemnified party and
         the indemnifying party and the indemnified party shall have reasonably
         concluded that there may be reasonable defenses available to it which
         are different from or additional to those available to the indemnifying
         party or if the interests of the indemnified party reasonably may be
         deemed to conflict with the interests of the indemnifying party, the
         indemnified party shall have the right to select a separate counsel and
         to assume such legal defenses and otherwise to participate in the
         defense of such action, with the expenses and fees of such separate
         counsel and other expenses related to such participation to be
         reimbursed by the indemnifying party as incurred.

                  (d) In order to provide for just and equitable contribution to
         joint liability under the Securities Act in any case in which
         indemnification is unavailable to any indemnified party then, and in
         each such case, the intended indemnifying party shall contribute to the
         amount paid or payable by such indemnified party as a result of such
         losses, claims, damages or liabilities, in such proportion as is
         appropriate to reflect the relative fault of the intended indemnifying
         party on the one hand and of the indemnified parties on the other in
         connection with the statements or omissions which resulted in such
         losses, claims, damages or liabilities, as well as any other relevant
         equitable considerations. The relative fault of the intended
         indemnifying party and of the indemnified parties shall be determined
         by reference to, among other things, whether the untrue

                                      -17-
<PAGE>

         or alleged untrue statement of a material fact or the omission to state
         a material fact relates to information supplied by the intended
         indemnifying party, or by the indemnified party, and the parties'
         relative intent, knowledge, access to information and opportunity to
         correct or present such statement or omission. The Company and Investor
         agree that it would not be just and equitable if contribution pursuant
         to this Section 4.6(d) were determined by pro rata allocation or by any
         other method of allocation which does not take into account the
         equitable considerations referred to in the immediately preceding
         paragraph, PROVIDED HOWEVER, that (i) Investor shall not be required to
         contribute any amounts in excess of the limitations in Section 4.6(b)
         and (ii) no person guilty of fraudulent misrepresentations (within the
         meaning of Section 11(f) of the Securities Act) shall be entitled to
         contribution from any person who was not guilty of such fraudulent
         misrepresentation.

         SECTION 4.6. CHANGES IN COMMON STOCK. If, and as often as, there is any
change in the Common Stock by way of a stock split, stock dividend, combination
or reclassification, or through a merger, consolidation, reorganization or
recapitalization, or by any other means, appropriate adjustment shall be made in
the provisions hereof so that the registration rights granted in this Section 4
shall continue with respect to the Common Stock as so changed.

         SECTION 4.7. RULE 144 REPORTING. With a view to making available the
benefits of certain rules and regulations of the Commission which may at any
time permit the sale of the Registrable Securities to the public without
registration, at all times after ninety (90) days after any registration
statement covering a Public Offering shall have become effective (provided that
the public offering, contemplated thereby is in fact consummated), the Company
agrees to:

                  (a) make and keep public information available, as those terms
         are understood and defined in Rule 144 under the Securities Act;

                  (b) use its best efforts to file with the Commission in a
         timely manner all reports and other documents required of the Company
         under the Securities Act and the Exchange Act; and

                  (c) furnish to Investor holding Registrable Securities
         forthwith upon request a written statement by the Company as to its
         compliance with the reporting requirements of such Rule 144 and of the
         Securities Act and the Exchange Act, a copy of the most recent annual
         or quarterly report of the Company, and such other reports as an
         Investor may reasonably request in availing itself of any rule or
         regulation of the Commission allowing Investor to sell any Registrable
         Securities without registration.

         SECTION 4.8. TRANSFER OF REGISTRATION RIGHTS. The rights to cause the
Corporation to register securities granted the Investor under Section 4 hereof
may be assigned to a transferee or assignee in connection with any transfer or
assignment of Registrable Securities or Preferred Stock provided that: (i) such
transfer may otherwise be effected in accordance with applicable securities
laws, and (ii) such assignee or transferee acquires at least one-half of the
shares of Registrable Securities or Preferred Stock (appropriately adjusted for
stock split or recapitalization) then held by such Investor. Notwithstanding the
foregoing, the rights to cause the Company to register securities may be
assigned to any shareholder, partner, or affiliate of an Investor without
compliance with item (ii) above, provided written notice thereof is promptly
given to the Company.

                                      -18-
<PAGE>

         SECTION 4.9. STANDOFF AGREEMENT.

                  (a) Management Shareholders agree, so long as Management
         Shareholders in the aggregate, hold at least five percent (5%) of the
         outstanding Common Stock, in connection with the Company's initial
         Public Offering, upon request of the Company or the underwriters
         managing any underwritten offering of the Company's securities, not to
         sell, make any short sale of, loan, grant any option for the purchase
         of, or otherwise dispose of any Common Stock (other than those included
         in the registration) without the prior written consent of the Company
         or such underwriters, as the case may be, for such period of time (not
         to exceed ninety (90) days from the effective date of such
         registration) as may be requested by the underwriters.

                  (b) Investor agrees, so long as Investor holds at least five
         percent (5%) of the outstanding Common Stock, in connection with the
         Company's initial public offering, upon request of the Company or the
         underwriters managing any underwritten offering of the Company's
         securities, not to sell, make any short sale of, loan, grant any option
         for the purchase of, or otherwise dispose of any Registrable Securities
         (other than those included in the registration) without the prior
         written consent of the Company or such underwriters, as the case may
         be, for such period of time (not to exceed ninety (90) days from the
         effective date of such registration) as may be requested by the
         underwriters.

                         SECTION 5. GENERAL PROVISIONS

         SECTION 5.1. TERM. This Agreement shall terminate and be of no force
and effect, unless extended as provided herein, upon the first to occur of (a)
the passage of ten (10) years from the date of this Agreement or (b) the
effective date of a written agreement signed by all of the parties hereto
providing for the termination of this Agreement.

         SECTION 5.2. PARTIAL TERMINATION UPON QUALIFIED PUBLIC OFFERING. The
restrictions in Sections 2.1, 2.2, and 2.4, and Section 3 shall terminate upon
the Restriction Termination Date.

         SECTION 5.3. LEGEND. During the term of this Agreement, each
certificate representing the Shares shall bear the following legend, or a
similar legend deemed by the Company to constitute an appropriate notice of the
provisions hereof and the applicable security laws (any such certificate not
having such legend shall be surrendered upon demand by the Company and so
endorsed):

         On the face of the certificate:

         "TRANSFER OF THIS STOCK IS RESTRICTED IN ACCORDANCE WITH CONDITIONS
         PRINTED ON THE REVERSE OF THIS CERTIFICATE."

         On the reverse:

         "THE SHARES OF STOCK EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO AND
         TRANSFERABLE ONLY IN ACCORDANCE WITH THAT CERTAIN SHAREHOLDER AGREEMENT
         BY AND AMONG NFRONT, INC. (ISSUER) (THE "COMPANY") AND CERTAIN
         SHAREHOLDERS THEREOF, DATED MAY 13, 1998 A COPY OF WHICH IS ON FILE AT
         THE PRINCIPAL OFFICE OF THE COMPANY AND MAY BE INSPECTED DURING NORMAL
         BUSINESS HOURS. NO TRANSFER OR PLEDGE OF THE SHARES EVIDENCED HEREBY
         MAY BE MADE EXCEPT IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF
         SAID AGREEMENT. BY ACCEPTANCE OF THIS CERTIFICATE, ANY HOLDER,
         TRANSFEREE OR PLEDGEE HEREOF AGREES TO BE BOUND BY ALL OF THE
         PROVISIONS OF SAID AGREEMENT."

         "SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED BY
         THE HOLDER FOR INVESTMENT PURPOSES ONLY AND NOT FOR RESALE, TRANSFER OR
         DISTRIBUTION, HAVE BEEN

                                      -19-
<PAGE>

         ISSUED PURSUANT TO EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF
         APPLICABLE STATE AND FEDERAL SECURITIES LAWS, AND MAY NOT BE OFFERED
         FOR SALE, SOLD OR TRANSFERRED OTHER THAN PURSUANT TO EFFECTIVE
         REGISTRATION UNDER SUCH LAWS, OR IN TRANSACTIONS OTHERWISE IN
         COMPLIANCE WITH OR EXEMPT FROM SUCH LAWS, AND UPON EVIDENCE
         SATISFACTORY TO THE COMPANY OF COMPLIANCE WITH OR EXEMPTION FROM SUCH
         LAWS, AS TO WHICH THE COMPANY MAY RELY UPON AN OPINION OF COUNSEL
         SATISFACTORY TO THE COMPANY."

         Each Shareholder shall promptly surrender the certificates representing
his/her Shares to the Company so that the Company may affix the foregoing
legends thereto. A copy of this Agreement shall be kept on file in the principal
office of the Company. Upon termination of all applicable restrictions set forth
herein and upon tender to the Company of the appropriate stock certificates, the
Company shall reissue to the holder of such stock certificates new stock
certificates which shall contain only the second paragraph of the restrictive
legend set forth above. The parties to this Agreement intend that the legend
conform to the applicable provisions of the Georgia Business Corporation Code.
This legend may be modified from time to time by the Board of Directors of the
Company to conform to such statutes or to this Agreement.

         SECTION 5.4. WAIVER OF PRE-EMPTIVE RIGHTS; PRIOR AGREEMENTS.

                  (a) All Shareholders other than the Investor hereby
         irrevocably waive any pre-emptive or other rights, including, without
         limitation, any rights of first refusal or similar rights any of them
         have or may have with respect to the issuance of the Preferred Stock

                  (b) Each of the Shareholders who are parties to the Prior
         Agreements hereby acknowledge that the Prior Agreements remain
         unaffected by the execution and delivery of the Stock Purchase
         Agreement and this Agreement, except that, with respect to the Existing
         Shareholders' Agreements, the provisions of Section 2 of each such
         Existing Shareholders' Agreements shall be superseded only to the
         extent that such transfer is a "Permitted Transfer" (as defined in the
         Existing Shareholders' Agreements) by the provisions of Section 2 of
         this Agreement until the earlier of the Restrictions Termination Date
         or the termination of this Agreement, at which time all of the
         provisions of Section 2 of each of the Existing Shareholders'
         Agreements shall again be effective. In the event of any conflict
         between the Prior Agreements and the terms and conditions of this
         Agreement, the terms and conditions of this Agreement shall control.

         SECTION 5.5. PROPRIETARY INFORMATION.

                  (a) Each Shareholder acknowledges and agrees that all
         Proprietary Information, and all physical embodiments thereof, are
         confidential to and shall be and remain the sole and exclusive property
         of the Company and that any Proprietary Information produced by the
         Shareholder during the period of the Shareholder's employment by the
         Company shall be considered "work for hire" as such term is defined in
         17 U.S.C. Section 101, et. seq., the ownership and, if applicable, the
         copyright of which shall be vested solely in the Company. Each
         Shareholder agrees (i) immediately to disclose to the Company all
         Proprietary Information developed in whole or part by such Shareholder
         during the term of such Shareholder's employment by the Company, and
         (ii) at the request and expense of the Company, to do all things and
         sign all documents or instruments reasonably necessary in the opinion
         of the Company to eliminate any ambiguity as to the exclusive rights of
         the Company in such Proprietary Information including, without
         limitation, providing to the Company such Shareholder's full
         cooperation in any litigation or other proceeding to establish,
         protect, or obtain such exclusive rights. Upon request by the Company,
         and in any event upon termination of employment, or

                                      -20-
<PAGE>

         cessation of ownership of Shares, as the case may be, such Shareholder
         shall promptly deliver to the Company, and shall not retain or transmit
         to any other party or parties, all property belonging to the Company
         including, without limitation, all Proprietary Information (and all
         embodiments thereof) then in such Shareholder's custody, control, or
         possession.

                  (b) Each Shareholder agrees that all Proprietary Information
         received or developed by such Shareholder as a result of such
         Shareholder's employment or association with the Company will be held
         in trust and kept in the strictest confidence, that such Shareholder
         will protect such Proprietary Information from disclosure, and that
         such Shareholder will not use, reproduce, distribute, disclose, or
         otherwise disseminate, by electronic or other means, the Proprietary
         Information or any physical embodiments thereof, except in connection
         with such Shareholder's employment hereunder, without the Company's
         prior written consent. The obligations of confidentiality contained in
         this Agreement with respect to all Proprietary Information will apply
         during such Shareholder's employment by the Company, or cessation of
         ownership of Shares, as the case may be, and at any and all times after
         expiration or termination (for whatever reason) of such or ownership.

                  (c) In the event of final adjudication of a breach or
         contemplated breach of the covenants and agreements set forth in
         subsections (a) and (b) above, the Company shall have the right, in
         addition to all other rights or remedies available to it at law or in
         equity, to set off against and deduct from any monies then payable or
         thereafter to become payable to the breaching Shareholder pursuant to
         Section 2 hereof, the amount of any damages suffered or incurred by the
         Company as a result of such breach. In addition, the Company shall be
         entitled to preliminary and permanent injunctive relief against the
         breaching Shareholder to prevent or enjoin an actual or threatened
         breach of such covenants and agreements or the continuation thereof by
         such Shareholder.

         SECTION 5.6. EXTENSION OF TERM. This Agreement may be extended for
additional ten (10) year periods if all Shareholders bound by this Agreement at
the time of the extension so agree in writing.

         SECTION 5.7. CONTINUATION OF EMPLOYMENT. Nothing in this Agreement
shall create an obligation on the Company to continue the employment of a
Shareholder with the Company or any Affiliate of the Company.

         SECTION 5.8. SPECIFIC ENFORCEMENT. The Shareholders expressly agree
that they will be irreparably damaged if this Agreement is not specifically
enforced. Upon a breach or threatened breach of the terms, covenants and/or
conditions of this Agreement by any Shareholder, any other Shareholder shall, in
addition to all other remedies available with respect to such breach, be
entitled to a temporary or permanent injunction, without showing any actual
damage, and/or a decree for specific performance, in accordance with the
provisions hereof.

         SECTION 5.9. NOTICES. All notices, requests, consents, and other
communications required or permitted hereunder shall be in writing and shall be
effective when delivered in person or by "confirmed" facsimile transmission or
one day after deposit with a nationally recognized overnight delivery carrier
properly addressed and deposited prior to the applicable deadline for receipt of
overnight packages, or five days after deposit in the U.S. Mail, certified or
registered mail, return receipt requested, postage prepaid, in each case
addressed as follows (or at such other address for the parties as shall be
specified by like notice):

                                      -21-
<PAGE>

                  (a)  if to the Company:

                                      nFront, Inc.
                                      1551 Jennings Mill Road, Suite 800A
                                      Bogart, Georgia 30622
                                      Attention: Tripp Rackley
                                      Facsimile: (706) 369-8611

                  with a copy (which shall not constitute notice) to:

                                      Rogers & Hardin, LLP
                                      229 Peachtree Street
                                      2700 International Tower, Peachtree Center
                                      Atlanta, Georgia 30303
                                      Attention: Alan C. Leet, Esq.
                                      Facsimile: (404) 525-2224

                  (b)  if to a Shareholder other than NMP, such Shareholder's
         address as reflected in the stock records of the Company or as such
         Shareholder shall designate to the Company in writing.

                  (c)  if to NMP:

                                      Noro-Moseley Partners, IV, L.P.
                                      9 North Parkway Square
                                      4200 Northside Pkwy
                                      Atlanta, GA 30327
                                      Attention: Charles D. Moseley, Jr.
                                      Facsimile: (404) 239-9280

                  with a copy (which shall not constitute notice) to:

                                      Balboni Law Group LLC
                                      990 One Live Oak Center
                                      3475 Lenox Road, N.E.
                                      Atlanta, Georgia 30326
                                      Attention: Gerardo M. Balboni II, Esq.
                                      Facsimile: (404) 812-3101

         SECTION 5.10. ASSIGNMENT. This Agreement shall not be assignable by any
of the parties hereto without the written consent of the other parties.

         SECTION 5.11. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with the internal laws of the State of Georgia,
irrespective of the choice of law provisions thereof. The parties agree that any
appropriate state court located in Fulton County, Georgia, or any Federal Court
located in the Northern District of Georgia-Atlanta Division, shall have
exclusive jurisdiction of any case or controversy arising under or in connection
with this Agreement and shall be a proper forum in which to adjudicate such case
or controversy. The parties consent to the jurisdiction of such courts.

         SECTION 5.12. AMENDMENT. Except as otherwise provided herein, this
Agreement may be amended, supplemented, or interpreted at any time, but only by
a written instrument executed by the

                                      -22-
<PAGE>

Company, the Investor, and Shareholders holding at least sixty-seven percent
(67%) of the Shares held by such Shareholders in the aggregate.

         SECTION 5.13. FACSIMILE SIGNATURE; COUNTERPARTS. This Agreement may be
executed by facsimile signature and in two or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same instrument.

         SECTION 5.14. ENTIRE AGREEMENT. Subject to Section 5.4 hereof with
regard to the Prior Agreements, this Agreement, together with other documents
delivered pursuant hereto or incorporated by reference herein, contain the
entire agreement between the parties hereto concerning the transactions
contemplated herein and supersede all prior agreements or understandings between
the parties hereto relating to the subject matter hereof. No oral
representation, agreement, or understanding made by any party hereto shall be
valid or binding upon such party or any other party hereto.

         SECTION 5.15. EFFECT OF OTHER LAWS AND AGREEMENTS. The rights and
obligations of the parties under this Agreement shall be subject to any
restrictions on the purchase of stock which may be imposed by the Georgia
Business Corporation Code or any agreement now or hereafter entered into between
the Company and any financial institution with respect to loans or other
financial accommodations made to the Company. Nothing contained herein shall be
deemed to limit the obligations and duties imposed upon officers and directors
in accordance with state and federal laws.

         SECTION 5.16. FURTHER ASSURANCE. Each party hereto shall do and
perform, or cause to be done and performed, all such further acts and things and
shall execute and deliver all such other agreements, certificates, instruments
and documents as any other party hereto may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

         SECTION 5.17. CAPTIONS AND SECTION HEADINGS. Except as used in Section
1, captions and section headings used herein are for convenience only and are
not a part of this Agreement and shall not be used in construing it.

         SECTION 5.18. WAIVER. Any waiver by any party hereto of any of his or
its rights hereunder shall be without prejudice of his or its future assertion
of any such rights, and any delay in exercising any rights shall not operate as
a waiver thereof.

         SECTION 5.19. SEVERABILITY OF PROVISIONS. If any one or more of the
provisions of this Agreement shall be determined to be invalid, illegal or
unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provision of this Agreement shall not be impaired in any way.

         SECTION 5.20. SPECIFIC PERFORMANCE. In any action or proceeding to
specifically enforce the provisions of this Agreement, any person (including the
Company) against whom such action or proceeding is brought hereby waives the
claim or defense therein that the plaintiff or claimant has an adequate remedy
at law, and such person shall not urge in any such action or proceeding the
claim or defense that such remedy at law exists. The provisions of this
paragraph shall not prevent any party from seeking a remedy at law in connection
with any breach of this Agreement.

         SECTION 5.21. SHAREHOLDER OBLIGATIONS. The obligations of the
Shareholders hereunder are several and not joint.

                                      -23-
<PAGE>

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

               nFront, Inc.

               By:  /s/ Brady L. Rackley III
                   -----------------------------------------------------
                     Brady L. Rackley, III, President

               Noro-Moseley Partners IV, L.P.

               By:  MKFJ IV., L.L.C., General Partner

               By:  /s/ Charles D. Moseley, Jr.
                   -----------------------------------------------------
                   Charles D. Moseley, Jr., Member 35,824 Shares (Common)
                                                  255,885 Shares (Preferred)

               /s/ Brady L. Rackley III
               ---------------------------------------------------------
               Brady L. Rackley, III 435,000 Shares

               /s/ Brady L. Rackley
               ---------------------------------------------------------
               Brady L. Rackley 435,000 Shares

               /s/ Steve J. Smith, COO/CFO
               ---------------------------------------------------------
               CNL Financial Corporation 23,018 Shares

               /s/ Tom E. Greene
               ---------------------------------------------------------
               Tom E. Greene 15,000 Shares

               /s/ James A. Verbrugge
               ---------------------------------------------------------
               James A. Verbrugge 15,000 Shares
<PAGE>

               /s/ Warren Derek Porter
               ---------------------------------------------------------
               Warren Derek Porter 75,000 Shares

               /s/ Steven Scott Neel
               ---------------------------------------------------------
               Steven Scott Neel 25,000 SharesEXHIBIT 10.2

<PAGE>

                             NITTANY FINANCIAL CORP.

                             1998 STOCK OPTION PLAN

         1.  Purpose  of the  Plan.  The Plan  shall  be  known  as the  NITTANY
FINANCIAL CORP. ("Corporation") 1998 Stock Option Plan (the "Plan"). The purpose
of the Plan is to attract  and  retain  qualified  personnel  for  positions  of
substantial  responsibility  and to provide  additional  incentive  to officers,
directors,   key  employees  and  other  persons   providing   services  to  the
Corporation, or any present or future parent or subsidiary of the Corporation to
promote the success of the  business.  The purpose of the Plan is also to reward
persons who organized the Corporation and its wholly-owned  subsidiary bank. The
Plan is intended to provide for the grant of "Incentive  Stock Options,"  within
the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code") and  Non-Incentive  Stock Options,  options that do not so qualify.  The
provisions of the Plan relating to Incentive  Stock Options shall be interpreted
to conform to the requirements of Section 422 of the Code.

          2. Definitions. The following words and phrases when used in this Plan
with an initial capital letter,  unless the context clearly indicates otherwise,
shall have the meaning as set forth below. Wherever  appropriate,  the masculine
pronoun  shall include the feminine  pronoun and the singular  shall include the
plural.

                  (a) "Award"  means the grant by the  Committee of an Incentive
Stock Option or a Non-Incentive  Stock Option,  or any combination  thereof,  as
provided in the Plan.

                  (b)  "Board"   shall  mean  the  Board  of  Directors  of  the
Corporation, or any successor or parent corporation thereto.

                  (c) "Change in Control"  shall mean: (i) the sale of all, or a
material  portion,  of the  assets  of  the  Corporation;  (ii)  the  merger  or
recapitalization of the Corporation whereby the Corporation is not the surviving
entity;  (iii) a change in control of the Corporation,  as otherwise  defined or
determined by the Office of Thrift Supervision or regulations promulgated by it;
or (iv) the  acquisition,  directly or indirectly,  of the beneficial  ownership
(within  the  meaning  of  that  term  as it is used  in  Section  13(d)  of the
Securities  Exchange  Act of 1934  and the  rules  and  regulations  promulgated
thereunder)  of  twenty-five  percent  (25%) or more of the  outstanding  voting
securities  of the  Corporation  by any  person,  trust,  entity or group.  This
limitation  shall  not  apply to the  purchase  of  shares  by  underwriters  in
connection  with a public  offering of  Corporation  stock,  or the  purchase of
shares  of up to  25%  of any  class  of  securities  of  the  Corporation  by a
tax-qualified  employee  stock  benefit  plan which is exempt from the  approval
requirements,  set forth under 12 C.F.R.  ss.574.3(c)(1)(vi) as now in effect or
as may  hereafter be amended.  The term  "person"  refers to an  individual or a
corporation,  partnership,  trust, association,  joint venture, pool, syndicate,
sole proprietorship, unincorporated organization or any other form of entity not
specifically listed herein. The decision of the Committee as to whether a Change
in Control has occurred shall be conclusive and binding.

<PAGE>

                  (d) "Code"  shall mean the Internal  Revenue Code of 1986,  as
amended, and regulations promulgated thereunder.

                  (e)  "Committee"  shall  mean the  Board or the  Stock  Option
Committee appointed by the Board in accordance with Section 5(a) of the Plan.

                  (f) "Common Stock" shall mean common stock of the Corporation,
or any successor or parent corporation thereto.

                  (g)  "Continuous  Employment"  or  "Continuous  Status  as  an
Employee"  shall  mean  the  absence  of  any  interruption  or  termination  of
employment with the Corporation or any present or future Parent or Subsidiary of
the Corporation.  Employment shall not be considered  interrupted in the case of
sick  leave,  military  leave or any  other  leave of  absence  approved  by the
Corporation  or in the  case of  transfers  between  payroll  locations,  of the
Corporation  or between the  Corporation,  its  Parent,  its  Subsidiaries  or a
successor.

                  (h) "Corporation"  shall mean the NITTANY FINANCIAL CORP., the
parent corporation of the Savings Bank, or any successor or Parent thereof.

                  (i)  "Director"  shall  mean  a  member  of the  Board  of the
Corporation, or any successor or parent corporation thereto.

                  (j)  "Director  Emeritus"  shall  mean a person  serving  as a
director  emeritus,  advisory  director,  consulting  director or other  similar
position as may be  appointed  by the Board of  Directors of the Savings Bank or
the Corporation from time to time.

                  (k)  "Disability"  means (a) with respect to  Incentive  Stock
Options,  the "permanent  and total  disability" of the Employee as such term is
defined at Section  22(e)(3) of the Code; and (b) with respect to  Non-Incentive
Stock Options,  any physical or mental  impairment which renders the Participant
incapable of continuing in the  employment or service of the Savings Bank or the
Parent in his then current capacity as determined by the Committee.

                  (l) "Effective  Date" shall mean the date specified in Section
15 hereof.

                  (m)  "Employee"   shall  mean  any  person   employed  by  the
Corporation or any present or future Parent or Subsidiary of the Corporation.

                  (n) "Fair Market Value" shall mean: (i) if the Common Stock is
traded otherwise than on a national  securities  exchange,  then the Fair Market
Value per Share shall be equal to the mean between the last bid and ask price of
such  Common  Stock on such  date or,  if there is no bid and ask  price on said
date,  then on the  immediately  prior business day on which there was a bid and
ask price. If no such bid and ask price is available, then the Fair Market Value
shall be determined by the Committee in good faith;  or (ii) if the Common Stock
is listed

                                      - 2 -

<PAGE>

on a national securities exchange, then the Fair Market Value per Share shall be
not less than the average of the highest and lowest selling price of such Common
Stock on such  exchange  on such  date,  or if there were no sales on said date,
then the Fair Market  Value shall be not less than the mean between the last bid
and ask price on such date.

                  (o) "Incentive  Stock Option" or "ISO" shall mean an option to
purchase  Shares granted by the Committee  pursuant to Section 8 hereof which is
subject to the limitations and  restrictions of Section 8 hereof and is intended
to qualify as an incentive stock option under Section 422 of the Code.

                  (p)  "Non-Incentive  Stock Option" or "Non-ISO"  shall mean an
option to purchase Shares granted pursuant to Section 9 hereof,  which option is
not intended to qualify under Section 422 of the Code.

                  (q)  "Option"   shall  mean  an  Incentive   Stock  Option  or
Non-Incentive Stock Option granted pursuant to this Plan providing the holder of
such Option with the right to purchase Common Stock.

                  (r)  "Optioned  Stock"  shall mean stock  subject to an Option
granted pursuant to the Plan.

                  (s) "Optionee" shall mean any person who receives an Option or
Award pursuant to the Plan.

                  (t)  "Parent"  shall mean any  present  or future  corporation
which would be a "parent  corporation"  as defined in Sections 424(e) and (g) of
the Code.

                  (u)  "Participant"  means  any  Director,  Director  Emeritus,
officer or key employee of the  Corporation  or any Parent or  Subsidiary of the
Corporation or any other person  providing a service to the  Corporation  who is
selected by the  Committee to receive an Award,  or who by the express  terms of
the Plan is granted an Award.

                  (v) "Plan" shall mean the NITTANY  FINANCIAL  CORP. 1998 Stock
Option Plan.

                  (w) "Savings  Bank" shall mean Nittany  Bank, or any successor
corporation thereto.

                  (x) "Share" shall mean one share of the Common Stock.

                  (y) "Subsidiary"  shall mean any present or future corporation
which  constitutes a "subsidiary  corporation" as defined in Sections 424(f) and
(g) of the Code.

                                      - 3 -

<PAGE>

          3. Shares  Subject to the Plan.  Except as  otherwise  required by the
provisions of Section 13 hereof,  the aggregate number of Shares with respect to
which Awards may be made  pursuant to the Plan shall not exceed  86,615  Shares.
Such Shares may either be from authorized but unissued  shares,  treasury shares
or shares  purchased in the market for Plan purposes.  If an Award shall expire,
become unexercisable,  or be forfeited for any reason prior to its exercise, new
Awards may be granted  under the Plan with respect to the number of Shares as to
which such expiration has occurred.

         4.       Six Month Holding Period.

                  Subject to vesting requirements,  if applicable, except in the
event of death or  disability  of the  Optionee,  a minimum of six  months  must
elapse  between  the date of the grant of an Option  and the date of the sale of
the Common Stock received through the exercise of such Option.

          5.      Administration of the Plan.

                  (a)   Composition  of  the   Committee.   The  Plan  shall  be
administered  by the Board of Directors of the  Corporation or a Committee which
shall consist of not less than two Directors of the Corporation appointed by the
Board and  serving at the  pleasure  of the Board.  All  persons  designated  as
members  of the  Committee  shall  meet  the  requirements  of a "Non-  Employee
Director" within the meaning of Rule 16b-3 under the Securities  Exchange Act of
1934, as amended, as found at 17 CFR ss.240.16b-3.

                  (b) Powers of the Committee.  The Committee is authorized (but
only to the extent not  contrary  to the  express  provisions  of the Plan or to
resolutions adopted by the Board) to interpret the Plan, to prescribe, amend and
rescind  rules and  regulations  relating to the Plan, to determine the form and
content of Awards to be issued  under the Plan and to make other  determinations
necessary or advisable for the  administration  of the Plan,  and shall have and
may  exercise  such other power and  authority  as may be delegated to it by the
Board from time to time. A majority of the entire  Committee shall  constitute a
quorum and the action of a majority  of the  members  present at any  meeting at
which a quorum is present  shall be deemed the  action of the  Committee.  In no
event may the Committee  revoke  outstanding  Awards  without the consent of the
Participant.

                  The President of the  Corporation  and such other  officers as
shall be designated by the  Committee are hereby  authorized to execute  written
agreements  evidencing  Awards on behalf of the Corporation and to cause them to
be delivered to the  Participants.  Such  agreements  shall set forth the Option
exercise price, the number of shares of Common Stock subject to such Option, the
expiration  date  of  such  Options,  and  such  other  terms  and  restrictions
applicable to such Award as are  determined  in accordance  with the Plan or the
actions of the Committee.

                  (c)   Effect   of   Committee's   Decision.   All   decisions,
determinations  and

                                      - 4 -

<PAGE>

interpretations  of the Committee  shall be final and  conclusive on all persons
affected thereby.

          6.      Eligibility for Awards and Limitations.

                   (a) The  Committee  shall  from  time to time  determine  the
officers,  Directors,  Directors  Emeritus,  key employees and other persons who
shall be granted  Awards  under the Plan,  the number of Awards to be granted to
each such persons, and whether Awards granted to each such Participant under the
Plan  shall be  Incentive  and/or  Non-Incentive  Stock  Options.  In  selecting
Participants  and in  determining  the  number of  Shares of Common  Stock to be
granted to each such  Participant,  the Committee may consider the nature of the
prior and anticipated  future services rendered by each such  Participant,  each
such  Participant's  current and potential  contribution  to the Corporation and
such other factors as the Committee may, in its sole discretion,  deem relevant.
Participants  who have been  granted an Award may,  if  otherwise  eligible,  be
granted additional Awards.

                  (b) The aggregate Fair Market Value (determined as of the date
the Option is  granted)  of the Shares  with  respect to which  Incentive  Stock
Options are  exercisable for the first time by each Employee during any calendar
year (under all Incentive  Stock Option plans,  as defined in Section 422 of the
Code,  of the  Corporation  or any present or future Parent or Subsidiary of the
Corporation) shall not exceed $100,000.  Notwithstanding the prior provisions of
this  Section 6, the  Committee  may grant  Options  in excess of the  foregoing
limitations,  provided said Options shall be clearly and specifically designated
as not being Incentive Stock Options.

          7. Term of the Plan.  The Plan shall  continue in effect for a term of
ten (10) years from the Effective  Date,  unless sooner  terminated  pursuant to
Section 18  hereof.  No Option  shall be  granted  under the Plan after ten (10)
years from the Effective Date.

          8. Terms and Conditions of Incentive  Stock Options.  Incentive  Stock
Options may be granted only to  Participants  who are Employees.  Each Incentive
Stock Option granted pursuant to the Plan shall be evidenced by an instrument in
such form as the Committee shall from time to time approve. Each Incentive Stock
Option  granted  pursuant to the Plan shall comply with,  and be subject to, the
following terms and conditions:

                  (a)      Option Price.

                            (i)     The price per Share at which each  Incentive
Stock Option granted by the Committee under the Plan may be exercised shall not,
as to any particular  Incentive Stock Option, be less than the Fair Market Value
of the Common Stock on the date that such Incentive Stock Option is granted.

                           (ii)     In the case of an Employee who  owns  Common
Stock  representing more than ten percent (10%) of the outstanding  Common Stock
at the time the Incentive  Stock

                                      - 5 -

<PAGE>

Option is granted,  the Incentive  Stock Option exercise price shall not be less
than one hundred and ten percent  (110%) of the Fair Market  Value of the Common
Stock on the date that the Incentive Stock Option is granted.

                  (b)  Payment.  Full  payment  for each  Share of Common  Stock
purchased upon the exercise of any Incentive Stock Option granted under the Plan
shall be made at the time of exercise of each such  Incentive  Stock  Option and
shall be paid in cash (in United States Dollars),  Common Stock or a combination
of cash and Common Stock.  Common Stock  utilized in full or partial  payment of
the  exercise  price  shall be  valued at the Fair  Market  Value at the date of
exercise.  The Corporation  shall accept full or partial payment in Common Stock
only to the extent  permitted by applicable law. No Shares of Common Stock shall
be issued  until full  payment  has been  received  by the  Corporation,  and no
Optionee shall have any of the rights of a stockholder of the Corporation  until
Shares of Common Stock are issued to the Optionee.

                  (c) Term of Incentive Stock Option. The term of exercisability
of each Incentive  Stock Option  granted  pursuant to the Plan shall be not more
than ten (10) years from the date each such  Incentive  Stock Option is granted,
provided that in the case of an Employee who owns stock  representing  more than
ten percent  (10%) of the Common  Stock  outstanding  at the time the  Incentive
Stock  Option is granted,  the term of  exercisability  of the  Incentive  Stock
Option shall not exceed five (5) years.

                  (d)  Exercise  Generally.  Except  as  otherwise  provided  in
Section  10 hereof,  no  Incentive  Stock  Option  may be  exercised  unless the
Optionee  shall have been in the employ of the  Corporation  at all times during
the period  beginning with the date of grant of any such Incentive  Stock Option
and  ending on the date three (3) months  prior to the date of  exercise  of any
such Incentive Stock Option. The Committee may impose additional conditions upon
the  right of an  Optionee  to  exercise  any  Incentive  Stock  Option  granted
hereunder  which  are  not  inconsistent  with  the  terms  of the  Plan  or the
requirements for qualification as an Incentive Stock Option.

                  (e) Cashless  Exercise.  Subject to vesting  requirements,  if
applicable,  an Optionee who has held an Incentive Stock Option for at least six
months may engage in the  "cashless  exercise"  of the  Option.  Upon a cashless
exercise,  an Optionee gives the  Corporation  written notice of the exercise of
the Option  together with an order to a registered  broker-dealer  or equivalent
third party,  to sell part or all of the Optioned Stock and to deliver enough of
the  proceeds  to the  Corporation  to pay the  Option  exercise  price  and any
applicable  withholding  taxes. If the Optionee does not sell the Optioned Stock
through a registered  broker-dealer  or equivalent third party, the Optionee can
give the Corporation  written notice of the exercise of the Option and the third
party  purchaser of the Optioned Stock shall pay the Option  exercise price plus
any applicable withholding taxes to the Corporation.

                  (f)   Transferability.   An  Incentive  Stock  Option  granted
pursuant to the Plan shall be exercised  during an  Optionee's  lifetime only by
the Optionee to whom it was granted and shall not be assignable or  transferable
otherwise than by will or by the laws of descent and

                                      - 6 -

<PAGE>

distribution.

          9.  Terms  and  Conditions  of  Non-Incentive   Stock  Options.   Each
Non-Incentive Stock Option granted pursuant to the Plan shall be evidenced by an
instrument in such form as the Committee  shall from time to time approve.  Each
Non-Incentive Stock Option granted pursuant to the Plan shall comply with and be
subject to the following terms and conditions.

                  (a) Options Granted to Directors.  Non-Incentive Stock Options
to purchase shares of Common Stock may be granted to each Director who is not an
Employee on or after the Effective  Date, at an exercise price equal to the Fair
Market  Value of the Common  Stock on such date of grant.  The  Options  will be
first  become  exercisable  as  determined  by the  Committee  or the  Board  of
Directors.  Upon the death or Disability  of the Director or Director  Emeritus,
such Option shall be deemed  immediately  100%  exercisable.  Such Options shall
continue to be exercisable for a period of ten years following the date of grant
without  regard to the  continued  services  of such  Director  as a Director or
Director  Emeritus.  In the event of the Optionee's  death,  such Options may be
exercised by the personal  representative  of his estate or person or persons to
whom his rights  under such  Option  shall have passed by will or by the laws of
descent and  distribution.  Options may be granted to newly appointed or elected
non-employee Directors within the sole discretion of the Committee. The exercise
price per Share of such Options  granted shall be equal to the Fair Market Value
of the Common Stock at the time such Options are granted. All outstanding Awards
shall become immediately  exercisable in the event of a Change in Control of the
Savings Bank or the Company. Unless otherwise inapplicable, or inconsistent with
the  provisions  of this  paragraph,  the  Options to be  granted  to  Directors
hereunder shall be subject to all other provisions of this Plan.

                  (b) Option Price. The exercise price per Share of Common Stock
for each  Non-Incentive  Stock Option  granted  pursuant to the Plan shall be at
such price as the  Committee  may  determine in its sole  discretion,  but in no
event less than the Fair Market  Value of such Common Stock on the date of grant
as determined by the Committee in good faith.

                  (c)  Payment.  Full  payment  for each  Share of Common  Stock
purchased upon the exercise of any Non-Incentive  Stock Option granted under the
Plan  shall be made at the time of  exercise  of each such  Non-Incentive  Stock
Option and shall be paid in cash (in United States  Dollars),  Common Stock or a
combination  of cash and Common Stock.  Common Stock utilized in full or partial
payment of the  exercise  price shall be valued at its Fair Market  Value at the
date of exercise.  The Company  shall  accept full or partial  payment in Common
Stock only to the extent  permitted by applicable law. No Shares of Common Stock
shall be issued  until full  payment  has been  received  by the  Company and no
Optionee  shall have any of the rights of a stockholder of the Company until the
Shares of Common Stock are issued to the Optionee.

                  (d) Term.  The term of  exercisability  of each  Non-Incentive
Stock Option granted  pursuant to the Plan shall be not more than ten (10) years
from the date each such Non-Incentive Stock Option is granted.

                                      - 7 -

<PAGE>

                  (e) Exercise  Generally.  The Committee may impose  additional
conditions upon the right of any Participant to exercise any Non-Incentive Stock
Option granted hereunder which is not inconsistent with the terms of the Plan.

                  (f) Cashless  Exercise.  Subject to vesting  requirements,  if
applicable,  an Optionee who has held a Non-Incentive  Stock Option for at least
six months may engage in the "cashless  exercise" of the Option. Upon a cashless
exercise,  an Optionee  gives the Company  written notice of the exercise of the
Option together with an order to a registered  broker-dealer or equivalent third
party,  to sell part or all of the Optioned  Stock and to deliver  enough of the
proceeds  to the  Company to pay the Option  exercise  price and any  applicable
withholding  taxes.  If the Optionee does not sell the Optioned  Stock through a
registered  broker-dealer  or equivalent  third party, the Optionee can give the
Company  written  notice of the  exercise  of the  Option  and the  third  party
purchaser of the  Optioned  Stock shall pay the Option  exercise  price plus any
applicable withholding taxes to the Company.

                  (g)  Transferability.  Any Non-Incentive  Stock Option granted
pursuant to the Plan shall be exercised  during an  Optionee's  lifetime only by
the Optionee to whom it was granted and shall not be assignable or  transferable
otherwise than by will or by the laws of descent and distribution.

         10.      Effect of Termination of Employment, Disability  or  Death  on
Incentive Stock Options.

                  (a)   Termination  of  Employment.   In  the  event  that  any
Optionee's  employment  with the Company shall  terminate for any reason,  other
than Disability or death,  all of any such  Optionee's  Incentive Stock Options,
and all of any such  Optionee's  rights to purchase or receive  Shares of Common
Stock pursuant thereto, shall automatically  terminate on (A) the earlier of (i)
or  (ii):  (i) the  respective  expiration  dates of any  such  Incentive  Stock
Options, or (ii) the expiration of not more than three (3) months after the date
of such termination of employment; or (B) at such later date as is determined by
the  Committee at the time of the grant of such Award based upon the  Optionee's
continuing  status as a Director or Director Emeritus of the Savings Bank or the
Company,  but only if, and to the extent  that,  the  Optionee  was  entitled to
exercise any such  Incentive  Stock Options at the date of such  termination  of
employment,  and  further  that such  Award  shall  thereafter  be deemed a Non-
Incentive Stock Option. In the event that a Subsidiary ceases to be a Subsidiary
of the Company,  the employment of all of its employees who are not  immediately
thereafter  employees of the Company shall be deemed to terminate  upon the date
such Subsidiary so ceases to be a Subsidiary of the Company.

                  (b)  Disability.  In the event that any Optionee's  employment
with the  Company  shall  terminate  as the  result  of the  Disability  of such
Optionee,  such Optionee may exercise any Incentive Stock Options granted to the
Optionee  pursuant  to the Plan at any  time  prior  to the  earlier  of (i) the
respective expiration dates of any such Incentive Stock Options or (ii) the date
which is one (1) year after the date of such termination of employment, but only
if, and to the

                                      - 8 -

<PAGE>

extent that,  the Optionee  was  entitled to exercise any such  Incentive  Stock
Options at the date of such termination of employment.

                  (c)  Death.  In the  event of the  death of an  Optionee,  any
Incentive  Stock Options granted to such Optionee may be exercised by the person
or persons to whom the Optionee's  rights under any such Incentive Stock Options
pass  by  will  or by the  laws  of  descent  and  distribution  (including  the
Optionee's estate during the period of  administration) at any time prior to the
earlier  of (i) the  respective  expiration  dates of any such  Incentive  Stock
Options or (ii) the date which is two (2) years  after the date of death of such
Optionee  but only if, and to the extent  that,  the  Optionee  was  entitled to
exercise any such Incentive Stock Options at the date of death.  For purposes of
this Section  10(c),  any  Incentive  Stock Option held by an Optionee  shall be
considered  exercisable  at the  date  of his  death  if  the  only  unsatisfied
condition  precedent to the exercisability of such Incentive Stock Option at the
date of death is the passage of a specified period of time. At the discretion of
the Committee,  upon exercise of such Options the Optionee may receive Shares or
cash or a  combination  thereof.  If cash shall be paid in lieu of Shares,  such
cash shall be equal to the  difference  between  the Fair  Market  Value of such
Shares and the exercise price of such Options on the exercise date.

                  (d) Incentive Stock Options Deemed  Exercisable.  For purposes
of Sections 10(a), 10(b) and 10(c) above, any Incentive Stock Option held by any
Optionee  shall  be  considered  exercisable  at  the  date  of  termination  of
employment if any such  Incentive  Stock Option would have been  exercisable  at
such date of termination of employment without regard to the Disability or death
of the Participant.

                  (e) Termination of Incentive  Stock Options.  Except as may be
specified by the Committee at the time of grant of an Option, to the extent that
any  Incentive  Stock  Option  granted  under  the  Plan to any  Optionee  whose
employment with the Company  terminates shall not have been exercised within the
applicable period set forth in this Section 10, any such Incentive Stock Option,
and all rights to purchase or receive Shares of Common Stock  pursuant  thereto,
as the case may be, shall terminate on the last day of the applicable period.

         11.  Effect  of  Termination  of  Employment,  Disability  or  Death on
Non-Incentive  Stock Options.  The terms and conditions of  Non-Incentive  Stock
Options relating to the effect of the termination of an Optionee's employment or
service,  Disability  of an  Optionee  or his  death  shall  be such  terms  and
conditions as the Committee shall, in its sole discretion, determine at the time
of termination of service,  unless specifically provided for by the terms of the
Agreement at the time of grant of the award.

         12.  Withholding  Tax. The Company  shall have the right to deduct from
all amounts paid in cash with  respect to the  cashless  exercise of Options any
taxes required by law to be withheld with respect to such cash payments. Where a
Participant  or other  person is  entitled  to receive  Shares  pursuant  to the
exercise  of an  Option,  the  Company  shall  have  the  right to  require  the
Participant  or such  other  person to pay the  Company  the amount of any taxes
which the

                                      - 9 -

<PAGE>

Company  is  required  to  withhold  with  respect to such  Shares,  or, in lieu
thereof,  to  retain,  or to sell  without  notice,  a  number  of  such  Shares
sufficient to cover the amount required to be withheld.

         13.      Recapitalization, Merger, Consolidation, Change in Control and
Other Transactions.

                  (a)  Adjustment.   Subject  to  any  required  action  by  the
stockholders of the Company,  within the sole  discretion of the Committee,  the
aggregate  number of Shares of Common  Stock for which  Options  may be  granted
hereunder,  the number of Shares of Common  Stock  covered  by each  outstanding
Option,  and the  exercise  price per Share of Common Stock of each such Option,
shall all be proportionately adjusted for any increase or decrease in the number
of issued and outstanding Shares of Common Stock resulting from a subdivision or
consolidation   of  Shares   (whether   by  reason  of  merger,   consolidation,
recapitalization,   reclassification,   split-up,   combination  of  shares,  or
otherwise) or the payment of a stock  dividend (but only on the Common Stock) or
any other  increase or  decrease  in the number of such  Shares of Common  Stock
effected  without the receipt or payment of  consideration by the Company (other
than Shares held by dissenting stockholders).

                  (b) Change in Control.  All  outstanding  Awards  shall become
immediately  exercisable in the event of a Change in Control of the Company,  as
determined  by the  Committee.  In the  event of such a Change in  Control,  the
Committee  and the Board of  Directors  will  take one or more of the  following
actions to be effective as of the date of such Change in Control:

                  (i) provide that such Options shall be assumed,  or equivalent
options  shall  be  substituted,  ("Substitute  Options")  by the  acquiring  or
succeeding  corporation (or an affiliate  thereof),  provided that: (A) any such
Substitute  Options  exchanged  for  Incentive  Stock  Options  shall  meet  the
requirements of Section 424(a) of the Code, and (B) the shares of stock issuable
upon  the  exercise  of such  Substitute  Options  shall  constitute  securities
registered in accordance  with the  Securities  Act of 1933, as amended,  ("1933
Act") or such  securities  shall be exempt from such  registration in accordance
with  Sections  3(a)(2) or 3(a)(5) of the 1933 Act,  (collectively,  "Registered
Securities"),  or in  the  alternative,  if the  securities  issuable  upon  the
exercise of such Substitute Options shall not constitute Registered  Securities,
then the  Optionee  will  receive  upon  consummation  of the  Change in Control
transaction a cash payment for each Option  surrendered  equal to the difference
between (1) the Fair Market Value of the  consideration  to be received for each
share of Common Stock in the Change in Control  transaction  times the number of
shares  of  Common  Stock  subject  to  such  surrendered  Options,  and (2) the
aggregate exercise price of all such surrendered Options, or

                  (ii) in the  event of a  transaction  under the terms of which
the holders of the Common Stock of the Company  will  receive upon  consummation
thereof a cash  payment  (the  "Merger  Price")  for each share of Common  Stock
exchanged in the Change in Control transaction, to make or to provide for a cash
payment to the Optionees  equal to the  difference  between (A) the

                                     - 10 -

<PAGE>

Merger Price times the number of shares of Common Stock  subject to such Options
held by each Optionee (to the extent then exercisable at prices not in excess of
the Merger Price) and (B) the aggregate  exercise price of all such  surrendered
Options in exchange for such surrendered Options.

                  (c)  Extraordinary   Corporate  Action.   Notwithstanding  any
provisions  of the Plan to the contrary,  subject to any required  action by the
stockholders   of  the  Company,   in  the  event  of  any  Change  in  Control,
recapitalization,   merger,   consolidation,   exchange  of  Shares,   spin-off,
reorganization,   tender  offer,   partial  or  complete  liquidation  or  other
extraordinary  corporate action or event, the Committee, in its sole discretion,
shall have the power, prior or subsequent to such action or event to:

                            (i)     appropriately adjust the number of Shares of
Common Stock  subject to each  Option,  the Option  exercise  price per Share of
Common Stock, and the  consideration to be given or received by the Company upon
the exercise of any outstanding Option;

                           (ii)    cancel any or all previously granted Options,
provided that  appropriate  consideration  is paid to the Optionee in connection
therewith; and/or

                         (iii)    make such other adjustments in connection with
the Plan as the Committee, in its sole discretion,  deems necessary,  desirable,
appropriate or advisable;  provided,  however,  that no action shall be taken by
the Committee which would cause Incentive Stock Options granted  pursuant to the
Plan to fail to meet the  requirements  of Section  422 of the Code  without the
consent of the Optionee.

                  (d)  Acceleration.  The Committee  shall at all times have the
power to accelerate  the exercise date of Options  previously  granted under the
Plan.

         Except as expressly  provided in Sections 13(a) and 13(b),  no Optionee
shall have any rights by reason of the occurrence of any of the events described
in this Section 13.

         14. Time of Granting Options.  The date of grant of an Option under the
Plan  shall,  for all  purposes,  be the date on which the  Committee  makes the
determination of granting such Option. Notice of the grant of an Option shall be
given to each  individual  to whom an Option is so granted  within a  reasonable
time after the date of such grant in a form determined by the Committee.

         15.  Effective  Date. The Plan shall become  effective upon the date of
approval of the Plan by the stockholders of the  Corporation.  The Committee may
make a  determination  related to Awards prior to the  Effective  Date with such
Awards to be effective upon the date of stockholder approval of the Plan.

         16.   Approval  by   Stockholders.   The  Plan  shall  be  approved  by
stockholders  of the

                                     - 11 -

<PAGE>

Company  within twelve (12) months before or after the date the Plan is approved
by the Board.

         17.  Modification  of Options.  At any time and from time to time,  the
Board may  authorize  the  Committee to direct the  execution  of an  instrument
providing  for the  modification  of any  outstanding  Option,  provided no such
modification, extension or renewal shall confer on the holder of said Option any
right or benefit  which could not be conferred on the Optionee by the grant of a
new  Option  at such  time,  or shall not  materially  decrease  the  Optionee's
benefits  under the Option  without  the  consent  of the holder of the  Option,
except as otherwise permitted under Section 18 hereof.

         18. Amendment and Termination of the Plan.

                  (a)  Action by the  Board.  The Board may  alter,  suspend  or
discontinue  the Plan,  except that no action of the Board may  increase  (other
than as provided in Section 13 hereof) the maximum number of Shares permitted to
be  optioned  under the Plan,  materially  increase  the  benefits  accruing  to
Participants   under  the  Plan  or  materially   modify  the  requirements  for
eligibility for  participation in the Plan unless such action of the Board shall
be subject to approval or ratification by the stockholders of the Company.

                  (b)  Change  in  Applicable  Law.  Notwithstanding  any  other
provision  contained  in the Plan,  in the event of a change in any  federal  or
state law,  rule or  regulation  which would make the exercise of all or part of
any previously  granted  Option  unlawful or subject the Company to any penalty,
the Committee may restrict any such exercise without the consent of the Optionee
or other holder thereof in order to comply with any such law, rule or regulation
or to avoid any such penalty.

         19. Conditions Upon Issuance of Shares; Limitations on Option Exercise;
Cancellation of Option Rights.

                  (a)  Shares  shall not be issued  with  respect  to any Option
granted  under the Plan unless the  issuance  and  delivery of such Shares shall
comply with all  relevant  provisions  of  applicable  law,  including,  without
limitation,  the Securities Act of 1933, as amended,  the rules and  regulations
promulgated   thereunder,   any  applicable   state   securities  laws  and  the
requirements of any stock exchange upon which the Shares may then be listed.

                  (b) The  inability  of the  Company  to obtain  any  necessary
authorizations,  approvals or letters of non-objection  from any regulatory body
or  authority  deemed by the  Company's  counsel to be  necessary  to the lawful
issuance and sale of any Shares issuable  hereunder shall relieve the Company of
any liability with respect to the non-issuance or sale of such Shares.

                  (c) As a condition to the  exercise of an Option,  the Company
may require the person  exercising the Option to make such  representations  and
warranties as may be necessary to

                                     - 12 -

<PAGE>

assure the  availability of an exemption from the  registration  requirements of
federal or state securities law.

                  (d) Notwithstanding  anything herein to the contrary, upon the
termination  of  employment  or service  of an  Optionee  by the  Company or its
Subsidiaries  for "cause" as defined at 12 C.F.R.  563.39(b)(1) as determined by
the Board of Directors,  all Options held by such Participant  shall cease to be
exercisable as of the date of such termination of employment or service.

                  (e) Upon the  exercise  of an  Option by an  Optionee  (or the
Optionee's  personal  representative),  the Committee,  in its sole and absolute
discretion,  may make a cash payment to the  Optionee,  in whole or in part,  in
lieu of the delivery of shares of Common Stock.  Such cash payment to be paid in
lieu of delivery of Common  Stock shall be equal to the  difference  between the
Fair Market Value of the Common Stock on the date of the Option exercise and the
exercise  price per share of the Option.  Such cash payment shall be in exchange
for the cancellation of such Option.  Such cash payment shall not be made in the
event that such  transaction  would  result in  liability to the Optionee or the
Company under Section 16(b) of the Securities  Exchange Act of 1934, as amended,
and regulations promulgated thereunder.

         20.  Reservation  of Shares.  During the term of the Plan,  the Company
will  reserve and keep  available a number of Shares  sufficient  to satisfy the
requirements of the Plan.

         21. Unsecured Obligation.  No Participant under the Plan shall have any
interest  in any fund or special  asset of the  Company by reason of the Plan or
the grant of any  Option  under the Plan.  No trust  fund  shall be  created  in
connection with the Plan or any grant of any Option hereunder and there shall be
no required funding of amounts which may become payable to any Participant.

         22. No Employment  Rights. No Director,  Employee or other person shall
have a right to be selected as a  Participant  under the Plan.  Neither the Plan
nor any action  taken by the  Committee in  administration  of the Plan shall be
construed  as giving  any person any rights of  employment  or  retention  as an
Employee,  Director or in any other capacity with the Company,  the Savings Bank
or other Subsidiaries.

         23.  Governing  Law.  The Plan shall be  governed by and  construed  in
accordance  with the laws of the  Commonwealth  of  Pennsylvania,  except to the
extent that federal law shall be deemed to apply.

                                     - 13 -

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