Document:

SECOND AMENDED AND RESTATED
                    FORBEARANCE, LOCK-UP AND VOTING AGREEMENT

         This  SECOND  AMENDED  AND  RESTATED  FORBEARANCE,  LOCK-UP  AND VOTING
AGREEMENT (this  "Agreement") is made and entered into as of May 18, 2000 by and
between Innovative Clinical Solutions,  Ltd., a Delaware  corporation ("ICSL" or
the  "Company"),  and the holders  listed on the Schedule of Consenting  Holders
attached hereto, (each, a "Consenting Holder," and collectively, the "Consenting
Holders").  The Company and the Consenting Holders are collectively  referred to
herein as the "Parties" and individually as a "Party."

                                    RECITALS

         WHEREAS,  ICSL and the Consenting  Holders have previously entered into
that certain  Forbearance,  Lock-Up and Voting Agreement dated as of January 17,
2000 (as amended and restated by that certain Amended and Restated  Forbearance,
Lock-Up  and  Voting  Agreement  dated  as  of  April  7,  2000,  the  "Original
Agreement") with regard to  restructuring  the  indebtedness  outstanding  under
ICSL's 6 3/4% Convertible Subordinated Debentures due 2003 (the "Old Convertible
Subordinated Debentures");

         WHEREAS,  ICSL and the  Consenting  Holders  now  desire  to amend  and
restate the Original  Agreement  and  implement a financial  restructuring  (the
"Financial  Restructuring")  of  ICSL  pursuant  to a  pre-packaged  Chapter  11
bankruptcy  filing  by  ICSL  and  all of  its  wholly-owned  subsidiaries  (the
"Subsidiaries")  on the  terms set forth in this  Agreement  and the Term  Sheet
attached as Exhibit A hereto (the "Term Sheet");

         WHEREAS,  in order to implement the Financial  Restructuring,  ICSL and
the Subsidiaries intend,  subject to the terms and conditions of this Agreement,
to, (i)  prepare  and,  if  necessary,  file with the  Securities  and  Exchange
Commission a Prepetition Disclosure and Solicitation Document (the "Solicitation
Document") containing "adequate  information" as such term is defined in section
1125(a) of title 11 of the United  States  Code (the  "Bankruptcy  Code");  (ii)
prepare a plan of reorganization  (the "Prepackaged  Plan") consistent with this
Agreement  and the  Term  Sheet;  (iii)  solicit  requisite  acceptances  of the
Prepackaged  Plan from holders of impaired  claims prior to the  commencement of
proceedings   under  chapter  11  of  the  Bankruptcy   Code  (the  "Chapter  11
Proceedings");  and (iv) if requisite  acceptances  are  obtained,  commence the
Chapter 11 Proceedings to implement the terms of the Financial Restructuring;

         WHEREAS,  in order to facilitate  the  implementation  of the Financial
Restructuring,  the Consenting  Holders are prepared to commit,  as set forth in
more detail herein,  during the period  commencing on the date hereof and ending
on the date a Termination Event (as defined herein) first occurs, and no longer,
(i) to forbear  from  exercising  remedies  in  respect  of the Old  Convertible
Subordinated Debentures, and (ii) not to sell, transfer or assign any of the Old
Convertible Subordinated Debentures except as permitted herein;

         WHEREAS,  the Consenting  Holders are prepared to commit,  on the terms
and subject to the  conditions  of this  Agreement,  to consent to a Prepackaged
Plan that satisfies the Conditions (as defined herein).

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants  and  agreements  set forth  herein,  and for other good and  valuable
consideration,  the receipt and  sufficiency  of which are hereby  acknowledged,
ICSL and the Consenting Holders hereby agree as follows:

         1.  Forbearance.  During the period  commencing  on the date hereof and
ending on the date that a Termination Event first occurs, and no longer, each of
the  Consenting  Holders  hereby  agrees to forebear (and agrees not to give any
instructions  to the trustee under the Old  Convertible  Subordinated  Debenture
Indenture inconsistent with such forbearance) from the exercise of any rights or
remedies it may have under or with respect to the Old  Convertible  Subordinated
Debentures  or  the  Old  Convertible   Subordinated  Debenture  Indenture  (the
"Existing Agreements"), applicable law or otherwise, with respect to any default
in existence or arising under the Existing Agreements; provided, however, during
such period,  ICSL shall have continued to comply with its obligations under the
terms and conditions of this  Agreement.  In the event that this Agreement shall
terminate, the Consenting Holders shall have, and shall be entitled to exercise,
each of their rights or remedies  under the Existing  Agreements  and applicable
law, as if this  Agreement  was never  executed (and shall not be deemed to have
waived any such rights or remedies by virtue of executing this Agreement).

         2.  Voting,  Consent  and/or  Tender.  Each of the  Consenting  Holders
represents  that, as of the date hereof,  it is the beneficial  owner and/or the
investment  adviser or manager for the beneficial  owner (with the power to vote
and  dispose  of Old  Convertible  Subordinated  Debentures  on  behalf  of such
beneficial  owner) of Old Convertible  Subordinated  Debentures set forth on the
schedule  attached to its  signature  page (for each such Party,  the  "Relevant
Claims").  Each of the Consenting  Holders agrees that, subject to the condition
that the terms of the  Prepackaged  Plan and all  documents  attendant  thereto,
including,  without limitation,  the terms, financial instruments,  and security
documents  (if  any)  to be  provided  to the  holders  of the  Old  Convertible
Subordinated Debentures (collectively, the "Attendant Documents"),  contained in
the  Solicitation   Document  relating  to  the  Old  Convertible   Subordinated
Debentures  include and/or are  consistent  with the terms set forth in the Term
Sheet,  and are in form and substance  satisfactory  in all other  respects,  it
shall timely vote (including  instructing  custodial agents to vote, as the case
may be) the entirety of its Relevant Claims to accept the Prepackaged Plan. Each
of the Consenting  Holders also agrees that,  subject to the conditions that (i)
all classes of impaired  claims  shall have  accepted  the  Prepackaged  Plan as
provided in section  1126(c) of the  Bankruptcy  Code, and (ii) the court in the
Chapter 11 Proceedings  the  "Bankruptcy  Court") shall have determined that the
solicitation  of  holders of  impaired  claims was in  compliance  with  section
1126(b) of the Bankruptcy  Code, it shall not withdraw or revoke its vote except
as permitted  herein.  Each of the  conditions set forth in this Section 2 shall
hereinafter be referred to collectively as the "Conditions".

         3.  Restriction  on Transfer.  Each of the  Consenting  Holders  hereby
agrees that,  during the period  commencing on the date hereof and ending on the
date that a Termination  Event first occurs,  and no longer,  it shall not sell,
transfer or assign any of the Relevant Claims or any option thereon or any right
or interest (voting or otherwise) therein,  unless the transferee thereof agrees

                                       2

in  writing  to be  bound by all the  terms of this  Agreement  by  executing  a
counterpart  signature page of this  Agreement and the transferor  provides ICSL
with a copy  thereof,  in which event ICSL shall be deemed to have  acknowledged
that its  obligations to the  Consenting  Holders  hereunder  shall be deemed to
constitute obligations in favor of such transferee,  and ICSL shall confirm that
acknowledgment in writing.

         4. ICSL  Agreements.  ICSL  hereby  agrees to use its  reasonable  best
efforts to have the  prepetition  solicitation  of holders  of  impaired  claims
approved by the Bankruptcy  Court pursuant to section  1126(b) of the Bankruptcy
Code, and shall  thereafter take all reasonable steps necessary and desirable to
obtain an order of the  Bankruptcy  Court  confirming  the  Prepackaged  Plan as
expeditiously  as possible under the  provisions,  rules and  regulations of the
Bankruptcy Code and the Bankruptcy Rules.

         5. Support of the Plan.  ICSL will use its  reasonable  best efforts to
obtain the  required  consent of 66-2/3% of the  holders of the Old  Convertible
Subordinated  Debentures  to  the  Prepackaged  Plan  and  confirmation  of  the
Prepackaged  Plan in accordance  with the Bankruptcy  Code as  expeditiously  as
possible. The Consenting Holders will take all necessary and appropriate actions
to support the Prepackaged  Plan and the  confirmation  thereof.  The Consenting
Holders shall not (a) object to the  Solicitation  Document or confirmation of a
Prepackaged  Plan that  satisfies  the  Conditions  or  otherwise  commence  any
proceeding to oppose or alter a Prepackaged  Plan that  satisfies the Conditions
or  any  other  reorganization  documents  containing  terms  that  satisfy  the
Conditions,  (b) vote for, consent to, support or participate in the formulation
of any other plan of  reorganization  or liquidation  proposed or filed or to be
proposed  or filed in any chapter 11 or chapter 7 case  commenced  in respect of
ICSL  provided that ICSL is  supporting a  Prepackaged  Plan that  satisfies the
Conditions,  (c) directly or indirectly seek, solicit,  support or encourage any
other  plan,  proposal  or  offer  of  dissolution,   winding  up,  liquidation,
reorganization,  merger or restructuring of ICSL or any of its subsidiaries that
could  reasonably  be  expected  to  prevent,  delay or  impede  the  successful
restructuring of ICSL as contemplated by the Prepackaged Plan, provided that the
Prepackaged  Plan  satisfies  the  Conditions,  (d)  object to the  Solicitation
Document or the solicitation of consents to the Prepackaged Plan,  provided that
the Prepackaged Plan satisfies the Conditions, or (e) take any other action that
is inconsistent  with, or that would delay confirmation of the Prepackaged Plan,
provided that the Prepackaged Plan satisfies the Conditions.

         6. Acknowledgment. This Agreement is not and shall not be deemed to be
a  solicitation  for consents to the  Prepackaged  Plan.  The  acceptance of the
Consenting  Holders  will not be  solicited  until the  Consenting  Holders have
received the Solicitation Document and related documents.

         7. Termination of this Agreement and Consenting Holders's  Obligations.
The Consenting Holders may terminate their obligations hereunder and rescind any
consent to the Prepackaged Plan by such Consenting  Holders (which consent shall
be null and void and have no further force and effect) and this Agreement  shall
terminate if any of the following events (any such event, a "Termination Event")
occur:   (i)  ICSL  files,   propounds  or   otherwise   supports  any  plan  of
reorganization or liquidation that does not satisfy the Conditions; and (ii) the
Prepackaged Plan is modified or replaced such that it (or any such  replacement)

                                       3

at any time does not satisfy the Conditions;  (iii) the Solicitation Document is
not  distributed to holders of impaired  claims on or before June 5, 2000;  (iv)
the Chapter 11 Proceedings are not commenced on or before July 15, 2000; (v) the
Prepackaged  Plan is not consummated on or before October 20, 2000; or (vi) ICSL
shall have  disclaimed in writing its intention to pursue the  restructuring  or
has otherwise  materially  breached this  Agreement and shall not have cured any
breach within thirty (30) days of receiving written notices thereof.

          8.  Representations  and  Warranties.  Each of ICSL and the Consenting
Holders represents and warrants to each other the following statements are true,
correct and complete as of the date hereof:

                  (a)  Power  and  Authority.  It has all  requisite  power  and
authority  to  enter  into  this  Agreement  and to carry  out the  transactions
contemplated by, and perform its respective obligations under, this Agreement.

                  (b)   Authorization.   The  execution  and  delivery  of  this
Agreement  and the  performance  of its  obligations  hereunder  have  been duly
authorized by all necessary corporate,  trust,  partnership or LLC action on its
part.

                  (c) No Conflicts.  The execution,  delivery and performance by
it of this Agreement do not and shall not (i) violate any provision of law, rule
or regulation  applicable to it or any of its subsidiaries or its Certificate of
Incorporation or bylaws or other organizational documents or those of any of its
subsidiaries  or (ii) conflict with,  result in a breach of or constitute  (with
due notice or lapse of time or both) a default  under any  material  contractual
obligation to which it or any of its subsidiaries is a party.

                  (d)  Governmental  Consents.   The  execution,   delivery  and
performance  by  it  of  this  Agreement  do  not  and  shall  not  require  any
registration  or filing  with,  consent or  approval  of, or notice to, or other
action to, with or by, any  federal,  state or other  governmental  authority or
regulatory  body,  except such filings as may be necessary  and/or  required for
disclosure by the Securities and Exchange  Commission and in connection with the
commencement of the Chapter 11 Proceedings, the approval of the Solicitation and
confirmation of the Prepackaged Plan.

                  (e) Binding  Obligation.  This  Agreement is the legally valid
and binding  obligation of it,  enforceable  against it in  accordance  with its
terms,  except  as  enforcement  may  be  limited  by  bankruptcy,   insolvency,
reorganization,  moratorium  or  other  similar  laws  relating  to or  limiting
creditors'   rights   generally   or  by   equitable   principles   relating  to
enforceability.

          9. Further  Acquisition of Securities.  This Agreement shall in no way
be construed  to preclude  the  Consenting  Holders  from  acquiring  additional
Claims.  However,  any such additional Claims so acquired shall automatically be
deemed to be Relevant Claims and to be subject to the terms of this Agreement.

                                       4

         10.  Amendments.  This  Agreement  may  not be  modified,  amended  or
supplemented except in writing signed by ICSL and the Consenting Holders.

         11. Disclosure.  Unless required by applicable law or regulation,  ICSL
shall not disclose any of the Consenting  Holders'  holdings of Relevant  Claims
without the prior written consent of the applicable  Consenting  Holder,  and if
such announcement or disclosure is so required by law or regulation,  ICSL shall
afford such  Consenting  Holders a reasonable  opportunity to review and comment
upon  any  such  announcement  or  disclosure  prior  to  such  announcement  or
disclosure.  The foregoing  shall not prohibit ICSL from disclosing the names of
the Consenting  Holders or the existence and terms of this Agreement;  provided,
however,   that  any  press  release  of  ICSL  naming  the  Consenting  Holders
(individually  or as an ad hoc committee)  shall be acceptable to the Consenting
Holders, such approval not to be unreasonably withheld, delayed or denied.

         12.  Impact of  Appointment  to  Creditors  Committee.  If an  official
committee of unsecured  creditors or of holders of Old Convertible  Subordinated
Debentures is appointed by the United States Trustee in a Chapter 11 Proceeding,
to the extent  that the  Consenting  Holders  wish,  in their sole and  absolute
discretion,  to be appointed to any official committee of unsecured creditors or
holders of Old Convertible  Subordinated  Debentures,  ICSL shall cooperate with
the Consenting  Holders in seeking to cause the United States Trustee to appoint
the  Consenting  Holders to be a member of an  official  committee  pursuant  to
Section 1102 of the  Bankruptcy  Code.  Notwithstanding  anything  herein to the
contrary,  in the event that any of the Consenting  Holders are appointed to and
serve on a committee  of creditors  or holders of Old  Convertible  Subordinated
Debentures in a Chapter 11 Proceeding,  the terms of this Agreement shall not be
construed so as to limit such  Consenting  Holder's  exercise (in their sole and
absolute  discretion)  of its  fiduciary  duties to any person  arising from its
service  on such  committee,  and any such  exercise  (in the sole and  absolute
discretion of such  Consenting  Holders) of such  fiduciary  duties shall not be
deemed to  constitute a breach of the terms of this  Agreement  (but the fact of
such  service  on such  committee  shall not  otherwise  affect  the  continuing
validity or enforceability of this Agreement).

         13.  Notices.  All  notices,   requests,   claims,  demands  and  other
communications  hereunder  shall be in  writing  (including  by  facsimile  with
written  confirmation  thereof) and unless otherwise  expressly provided herein,
shall be delivered  during normal  business  hours by hand, by Federal  Express,
United  Parcel  Service  or other  nationally  recognized  overnight  commercial
delivery  service,  or by facsimile  notice,  confirmation of receipt  received,
addressed as follows,  or to such other address as may be hereafter  notified by
the respective parties hereto:

                                       5

                  (1)      If to the Consenting Holders:

                           767 Third Avenue
                           New York, New York   10017
                           Attention:       Martin J. Whitman
                           Facsimile Number:         (212) 888-6704

                  With a copy, which will not constitute notice, to:

                           White & Case
                           1155 Avenue of the Americas
                           New York, New York 10036-2787
                           Attention:       Andrew DeNatale
                           Facsimile Number:         212-354-8113

                  (2)      If to the Company:

                           Innovative Clinical Solutions, Ltd.
                           10 Dorrance Street
                           Suite 400
                           Providence, Rhode Island  02903
                           Attention: Michael Heffernan
                           Facsimile Number: 401-831-6758

                  With a copy, which will not constitute notice, to:

                           Katten Muchin Zavis
                           525 West Monroe
                           Suite 1300
                           Chicago, Illinois   60661
                           Attention: Jeff J. Marwil, Esq.
                           Facsimile Number: 312-902-1061

         14.  Governing Law;  Jurisdiction.  This Agreement shall be governed by
and  construed in  accordance  with the internal  laws of the State of Delaware,
without  regard to any  conflicts  of law  provision  which  would  require  the
application of the law of any other jurisdiction.  By its execution and delivery
of  this  Agreement,   each  of  the  Parties  hereto  hereby   irrevocably  and
unconditionally  agrees for itself  that any legal  action,  suit or  proceeding
against it with respect to any matter  under or arising out of or in  connection
with this Agreement or for  recognition or enforcement of any judgment  rendered
in any such action, suit or proceeding,  may be brought in the District Court of
Delaware.  By  execution  and  delivery of this  Agreement,  each of the parties
hereto  hereby  irrevocably  accepts  and  submits  itself  to the  nonexclusive
jurisdiction of each such court, generally and unconditionally,  with respect to
any such action,  suit or proceeding.  Notwithstanding  the foregoing consent to
Delaware jurisdiction, upon the commencement of any Chapter 11 Proceedings, each

                                       6

of the  Parties  hereto  hereby  agrees  that the  Bankruptcy  Court  shall have
exclusive  jurisdiction of all matters arising out of or in connection with this
Agreement.

         15.  Specific  Performance.  It is understood and agreed by each of the
Parties  hereto  that money  damages  would not be a  sufficient  remedy for any
breach of this  Agreement  by any Party and each  non-breaching  Party  shall be
entitled to specific  performance and injunctive or other equitable  relief as a
remedy of any such breach.

         16. Headings. The headings of the sections, paragraphs and subsections
of this  Agreement  are inserted for  convenience  only and shall not affect the
interpretation hereof.

         17.  Successors  and Assigns.  This  Agreement is intended to bind and
inure to the benefit of the Parties and their  respective  successors,  assigns,
heirs, executors, administrators and representatives.

         18. Prior  Negotiations.  This Agreement and the Term Sheet  supersede
the Original  Agreement and all prior  negotiations  with respect to the subject
matter hereof.

         19.  Counterparts.  This  Agreement  may be  executed  in one or  more
counterparts,  each of which shall be deemed an original  and all of which shall
constitute one and the same Agreement.

         20. No Third-Party Beneficiaries. Unless expressly stated herein, this
Agreement  shall be solely for the  benefit of the  Parties  hereto and no other
person or entity shall be a third-party beneficiary hereof.

         21.  Consideration.  It is hereby  acknowledged  by the Parties  hereto
that, except as otherwise set forth in the Term Sheet, no consideration shall be
due or paid to the  Consenting  Holders  for their  agreement  to consent to the
Prepackaged  Plan in accordance  with the terms and conditions of this Agreement
other  than  ICSL's  agreement  to use its  reasonable  best  efforts  to obtain
approval of  Prepackaged  Plan and to take all steps  necessary and desirable to
confirm the Prepackaged Plan in accordance with the terms and conditions of this
Agreement.

                                       7

         IN  WITNESS  WHEREOF,  each  of the  parties  hereto  has  caused  this
Agreement to be executed and delivered by its duly authorized  officer as of the
date first above written.

                                       INNOVATIVE CLINICAL SOLUTIONS, LTD.

                                        By:  /s/Martin J. Whitman
                                            -------------------------------
                                             Name: Martin J. Whitman
                                             Title:  Chairman

                                       THIRD AVENUE TRUST ON BEHALF OF THE
                                       THIRD AVENUE VALUE FUND SERIES

                                        By:  /s/David Barse
                                            -------------------------------
                                             Name:  David Barse
                                             Title:  President

                                       M.J. WHITMAN PILOT FISH OPPORTUNITY
                                       FUND LP

                                       By:   M.J. Whitman Pilot Fish Opportunity
                                             Fund Inc., general partner

                                       By:   /s/David Barse
                                           -------------------------------
                                           Name:  David Barse
                                           Title:  President

                                       8

                         SCHEDULE OF CONSENTING HOLDERS

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

             Holder                    Principal Amount of Debentures
------------------------------------ -------------------------------------------
------------------------------------ -------------------------------------------

     Third Avenue Value Fund                     $49,155,000
------------------------------------ -------------------------------------------
------------------------------------ -------------------------------------------
M.J. Whitman Pilot Fish Opportunity               $1,750,000
Fund LP
------------------------------------ -------------------------------------------
------------------------------------ -------------------------------------------

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

                                       9EXHIBIT 4.2

                          HERITAGE BANK 1989 EMPLOYEES'
                                STOCK OPTION PLAN

<PAGE>

                                Table of Contents

                                                                       Page
                                                                       ----

SECTION 1.
           Plan Purpose..................................................1

SECTION 2.
           Definitions...................................................1

SECTION 3.
           Plan Administration...........................................2

SECTION 4.
           Stock Subject to Plan.........................................2

SECTION 5.
           Eligible Employees............................................2

SECTION 6.
           Option Price..................................................3

SECTION 7.
           Exercise of Options...........................................3

SECTION 8.
           Withholding Taxes.............................................4

SECTION 9.
           Surrender of Options..........................................4

SECTION 10.
           Capital Adjustments and Corporate Reorganizations.............5

SECTION 11.
           Regulatory Approvals and Listing..............................5

SECTION 12.
           Non-Transferability...........................................5

SECTION 13.
           Stock Option Agreement........................................5

SECTIONS 14-19.
           General Provisions..........................................6-7

                                       -i-
<PAGE>

                                  HERITAGE BANK
                        1989 EMPLOYEES' STOCK OPTION PLAN

1. PURPOSE. The purpose of the Plan is to advance the interests of the Bank and
its shareholders by attracting and retaining in the employ of the Bank key
professional and management employees, by providing such employees with the
incentive for outstanding performance inherent in stock options and by
increasing their proprietary interest in the Bank through Stock ownership.

2.         DEFINITIONS.

          (a)  "Bank" means Heritage Bank.

          (b)  "Code" means the Internal Revenue Code of 1986, as amended, and
               the rules and regulations promulgated thereunder.

          (c)  "Committee" means the committee appointed by the Board of
               Directors of the Bank to administer the Plan, which committee
               shall consist of not less than three members, none of whom shall
               be eligible to receive Options hereunder.

          (d)  "Disability" means permanent and total disability within the
               meaning of Section 22(e)(3) of the Code, as determined by the
               Committee.

          (e)  "Fair Market Value" means the price at which a willing buyer and
               a willing seller will trade the Stock on a particular date. The
               determination of the Fair Market Value of the Stock as of a
               particular date shall be made by the Committee and shall be based
               on all of the facts and circumstances surrounding the Bank and
               the Stock at such time. Such a determination shall be consistent
               with the rules set forth in Code Section 422A and the Treasury
               Regulations promulgated thereunder.

          (f)  "Incentive Option" means an Option to purchase Stock qualifying
               as an incentive stock option within the heading of Code Section
               422A.

          (g)  "Non-Qualified Option" means an Option to purchase Stock which is
               not an incentive Option.

          (h)  "Option" means a Stock option granted under the Plan.

          (i)  "Option Price" means the purchase price to be paid for each share
               of Stock purchased under an Option.

          (j)  "Optionee" means an employee of the Bank who has been granted one
               or more Options.

          (k)  "Plan" means the Heritage Bank 1989 Employees' Stock Option Plan.

          (l)  "Stock" means the common stock, $2.00 par value of the Bank.

                                      -ii-
<PAGE>

3. PLAN ADMINISTRATION. The Committee shall have full authority to administer
the Plan in accordance with its provision. The Committee shall determine the
dates on which Option are to be granted (provided that the date of grant shall
not precede the date on which the Committee takes action to approve the granting
of such (Options) and shall select the employees to whom Options are to be
granted. At the time an Option is granted, the Committee shall:

          (a)  determine the number of shares of Stock subject to each Option;

          (b)  determine whether the Option is an Incentive Option or a
               Non-Qualified Option;

          (c)  determine the Option Price, subject to the limitations of
               Sections 6 and 19;

          (d)  provide for the exercise of Option, subject to the limitations of
               Section 7, 11, and 19;

          (e)  determine whether and the extent to which the Optionee is
               authorized to surrender the right to exercise the Option as
               provided in Section 9.

The Committee may grant Options conditioned upon an employee's consent to the
cancellation of outstanding and unexercised Option regardless of the price of
such canceled Options and may specify a minimum number of shares of Stock (as
adjusted pursuant to Section 10) which must be purchased at any one time upon
exercise of a portion of an Option. The Committee is authorized to interpret the
provisions of the Plan; to establish, amend and rescind rules and procedures and
adopt forms for use under the Plan; and to make all other determinations
necessary or advisable in connection with the administration of the Plan. Any
action by the Committee shall be final and binding on all Optionees and their
personal representatives. No member of the Committee shall be liable to any
Optionee for any action taken or determination made in good faith.

4. STOCK SUBJECT TO PLAN. The aggregate number of shares of Stock for which
Options may be granted and which may be issued pursuant to the exercise of
Options under the Plan shall not exceed 150,000 (adjusted pursuant to Section
10), which shares may be authorized and unissued or treasury shares. If an
Option expires, is canceled with the consent of the Optionee, or is terminated,
in whole or in part, for any reason, other than the exercise or surrender
thereof, the shares subject to such Option or portion thereof so expired,
canceled or terminated may again be subject to an Option. The shares of Stock
subject to an Option, or portion thereof, as to which he right to exercise shall
have been surrendered pursuant to section 9 may not again be subject to an
Option under the Plan.

5. ELIGIBLE EMPLOYEES. Options may be granted to such officers and other
full-time key professional and management employees of the Bank as the Committee
may select. A director of the Bank who is not also a salaried employee is not
eligible to receive an Option.

6. OPTION PRICE. The Option Price shall be determined by the Committee, but in
no event shall the Option Price be less than the greater of the par value of the
Stock or the Fair Market Value thereof on the date the Option is granted.

7. EXERCISE OF OPTIONS. An Option shall be exercisable in full at any time or
from time to time or in such installments at such times as the Committee may
prescribe, provided that in no event may an Option be exercisable

                                      -iii-
<PAGE>

          (a)  until the Optionee shall have completed at least one year of
               continued employment at the Bank after the date such Option is
               granted; or

          (b)  for more than ten years from the date such Option is granted, in
               the case of an Incentive Option, and ten years and two days, in
               the case of a Non-Qualified Option; or

          (c)  in the case of an Incentive Option, for the first time by the
               Optionee during a calendar year, to the extent that the aggregate
               Fair Market Value of the Stock (determined as of the respective
               dates the options were granted) with respect to which the Option
               and all other Incentive Options granted to the Optionee under the
               Plan and other stock option plans of the Bank become exercisable
               for the first time during such calendar year would exceed
               $100,000.

Whether an authorized leave of absence for military or government service shall
constitute termination of employment shall be determined by the Committee. In
the event of the death or Disability of an Optionee during employment, all his
unexercised Options shall immediately become exercisable and may be exercised
(by his personal representative in the event of death) for a period of one year
following the date of such death or Disability, but in no event after the
respective expiration dates of such Options or prior to one year from the
respective dates of grant thereof and, in the case of Incentive Options, subject
to the limitations of clause (c) of the first sentence of this section. In the
event of the termination of an Optionee's employment of cause, any Options held
by him under the Plan not theretofore exercised shall terminate immediately upon
such termination of employment and may not be exercised thereafter. The
Committee in its sole discretion may determine that an Optionee's employment was
terminated for cause, if it finds that the Optionee willfully violated any of
the Bank's policies on ethical business conduct or engaged in any activity or
conduct during his employment which was inimical to the best interest of the
Bank. If an Optionee's employment is terminated for any reason other than by his
death or Disability or by the Bank for cause, his Options, to the extent then
exercisable, may be exercised within the 90 days immediately following the dated
of termination, but in no event after the respective expiration dates of such
Option. An Option may be exercised according to its terms by delivering written
notice to the Secretary or the Chairman of the Board of Directors of the Bank at
its principal executive offices identifying the Option being exercised and
specifying the number of shares of Stock to be purchased, accompanied by the
payment in full of the total Option Price of such shares either in cash or, at
the discretion of the Committee, by delivery of shares of Sock having a Fair
Market Value on the date of exercise equal to the total Option Prices of the
shares, together with any applicable taxes required to be withheld by the Bank
as provided in Section 8. The Committee may for any reason decline to accept
payment of the Option Price of the shares in shares of Stock or may impose such
limitations or restrictions as it, in its sole discretion, deems advisable. An
Optionee shall not have any of the rights of a shareholder with respect to any
of the shares of Stock subject to an Option, unless and until he shall become
the holder of record of such shares, as reflected on the stock transfer records
of the Bank.

8. WITHHOLDING TAXES. Upon exercise of an Option which requires the Bank at the
time of exercise to withhold any Federal, state or local income or other taxes
by reason of the exercise of such Option, the Optionee shall tender to the Bank
along with payment of the total Option Price of the shares an amount in cash
equal to such request to the Committee that the Bank withhold from the shares to
be received upon exercise of the Option shares of Stock having an aggregate Fair
Market Value on the date of exercise at least equal to the applicable
withholding taxes. The acceptance by the Committee. If the exercise of an Option
will give rise to an obligation to withhold

                                      -iv-
<PAGE>

Federal income taxes subsequent to the date of exercise, the Committee may, in
its sole discretion, require the Optionee to place the shares of Stock purchased
under the Option in escrow for the benefit of the Bank until such a time as any
amount is required to be included in the gross income of the Optionee as a
result of the exercise of the Optionee pay the applicable withholding taxes to
the Bank in cash, in which case the shares of Stock shall be released from
escrow to the Optionee. Alternatively, the Committee, in its sole discretion,
may permit the Bank to accept the shares of stock held in escrow to satisfy the
Bank's withholding obligation based on the Fair Market Value of the shares on
the date of the termination of the escrow arrangement. Upon application of such
shares to the Bank's withholding obligation, any shares of Stock held in escrow
which are not, in the sole judgment of the Committee, necessary to satisfy such
obligation shall be released from escrow to the Optionee.

9. SURRENDER OF OPTIONS. At the time an Option is granted, the Committee, in its
sole discretion, may authorize the Optionee during his employment to surrender
the right to exercise the Option or any portion thereof to the extent then
exercisable in exchange for the payment to the Optionee of an amount equal to
the excess of the Fair Market Value of the shares of Stock on the date of
surrender of such right over the total Option Price of the shares, less any
applicable withholding taxes required to be withheld by the Bank. Such payment
shall be made in shares of Stock valued at their Fair Market Value on such date
(with cash in Lieu of fractional shares), cash or a combination thereof, in such
proportion and upon such terms and conditions and subject to such restrictions
as shall be determined by the Committee. The surrender of the right to exercise
an Option shall be mad only if the Bank (i) has filed all reports and statements
required to be filed pursuant to Section 13 of the Securities Exchange Act of
1934, as amended, and only during a period beginning on the third business day
following the date on which quarterly or annual summary statements of Bank's
sales and earnings have been made publicly available and ending on the twelfth
business day following such day or (ii) has other wise complied with the
requirements of Rule 16b-3 under the Securities Exchange Act of 1934, as
amended.

10. CAPITAL ADJUSTMENTS AND CORPORATE REORGANIZATIONS. In the event of any
change in the outstanding shares of Stock by reason of a Stock dividend, split
or combination, recapitalization or reclassification, or a reorganization,
merger or consolidation in which the Bank is the surviving corporation or other
similar change affecting the Stock, the number and class of shares then subject
to Options and for which Options may thereafter be granted and the amounts per
share of Stock payable upon exercise or surrender of such Options shall be
appropriately adjusted by the Committee to reflect such change. No fractional
shares shall be issued as a result of such adjustment. In the event of a
dissolution of the Bank or a reorganization, merger or consolidation in which
the Bank is not the surviving corporation, the Bank by action of its Board of
Directors shall either (i) terminate outstanding and unexercised Options as of
the effective date to be specified by the Committee, of all outstanding and
unexercised Options or portions thereof, provided that no Option shall become
exercisable hereunder either after the expiration date thereof or prior to one
year form the date of grant thereof, and provided, further, that no Incentive
Options may be exercisable for the first time by an Optionee during a calendar
year to the extent that the aggregate Fair Market Value of the Stock (determined
as of the respective dates the options granted) with respect to which the Option
and all other Incentive Options granted to the Optionee under the Plan and other
stock option plans of the Bank become exercisable for the first time during such
calendar year would exceed $100,000 or (ii) in the case of such reorganization,
merger or consolidation, arrange for an appropriate substitution of shares or
other securities of the corporation

                                       -v-
<PAGE>

with which the Bank is reorganized, merged or consolidated in lieu of the shares
of stock which are subject to such outstanding and unexercised Options.

11. REGULATORY APPROVALS AND LISTING. For so long as Options are outstanding
under the Plan, the Bank shall endeavor to (i) obtain from any governmental
regulatory authority having jurisdiction any approval, consent or authorization
necessary to issue the shares of stock upon exercise of such outstanding
Options, (ii) register or qualify such shares under applicable state and Federal
securities laws and (iii) obtain from any stock exchange on which the Stock is
listed the admission by such exchange of such shares to listing. If, in the
opinion of counsel for the Bank, the issuance of any shares of Stock hereunder
would not be lawful for any reason or would violate the rules of policies of any
stock exchange on which the Stock is listed, the obligated to issue any shares
upon exercise of an Option, unless a registration statement in compliance with
the provisions of the Securities Act of 1933, as amended, is in effect at the
time with respect to such shares or the bank receives an opinion of counsel or
other evidence satisfactory to the Committee that the issuance of such shares in
the absence of an effective registration statement would not constitute a
violation of such Act.

12. NON-TRANSFERABILITY. Options granted under the Plan may not be assigned,
pledged or otherwise transferred except by will or the laws of descent and
distribution, and during the lifetime of the Optionee are exercisable only by
the Optionee.

13. STOCK OPTION AGREEMENT. Each Option granted under the Plan shall be
evidenced by a stock option agreement executed by the Optionee and by a member
of the Committee on behalf of the Bank setting forth the terms and conditions of
the Option either expressly or by reference to the Plan. Options which are
intended to be incentive Options shall be designated as such. A stock option
agreement may contain such other provisions not inconsistent with or prohibited
by the Plan as the Committee in its discretion may determine.

14. EFFECTIVE DATE AND TERM OF THE PLAN. The effective dated of the Plan shall
be the date the Board of Directors of the Bank adopts the Plan after the Plan is
approved by the shareholders of the Blank at the meeting scheduled for May 25,
1989. No Option may be granted under the plan after May 24, 1999.

15. AMENDMENT OF THE PLAN. The Plan may be amended, either retroactively or
prospectively, or may be terminated at any time by the Board of Directors of the
Bank, provided that, without the approval of the Bank's shareholders, no
amendment shall (i) extend the term of the Plan; (iii) increase the number of
shares of Stock which may be issued under the Plan; (iv) change the minimum
purchase price; or (v) materially increase the benefits accruing to Optionees
under the Plan. No amendment of the Plan may materially impair the rights or
increase the obligations of an Optionee under any Option previously granted
under the plan without the consent of the Optionee, unless required by law.

16. DISQUALIFYING DISPOSITIONS. If an Optionee disposes of shares of Stock
acquired upon exercise of an Incentive Option within two years from the date the
Option is granted or within one year after the issuance of such shared to him,
the Optionee shall notify the Bank of such disposition and provide information
as to the date of disposition, sale price, number of shares disposed of and any
other information relating thereto which the Bank may reasonably request.

                                      -vi-
<PAGE>

17. GOVERNING LAW. The validity and construction of the Plan and any agreements
there under shall be governed by the laws of the State of Tennessee.

18. MISCELLANEOUS PROVISIONS. Options granted under the Plan shall not be
affected by any change of employment among the Bank and any subsidiaries, so
long as the Optionee continues to be an employee of the Bank or of any
subsidiary. Nothing in the Plan shall be deemed to give any employee of the Bank
or of a subsidiary the right to be retained in employment by the Bank or a
subsidiary for any period of time, and no provision of the Plan or granting of
Options under the plan shall be deemed to interfere with the right of the Bank
or of a subsidiary to terminate the employment of any Optionee at any time
without regard to the effect that such discharge will have on his rights, if
any, under the Plan or under any Option granted under the Plan.

19. SPECIAL RULE FOR OPTIONS GRANTED TO TEN PERCENT SHAREHOLDERS.
Notwithstanding any other provisions of this Plan, in the event that one or more
Options are granted to any employee of the Bank who, immediately after the
granting of an Option, owns more that ten percent (10%) of the issued and
outstanding Stock, the following special rules will apply to such Option or
Options:

          (a)  Option Price: The price on any Option to which this Section 19
               applies must be at least 110% of the Fair Market Value of the
               Stock on the date of the grant of the Option.

          (b)  Term of Option: The term for exercising any Option to which this
               Section 19 applies must not exceed five years from the date of
               the grant of the option.

For purposes of this Section 19, an employee will be considered as owning all
Stock owned by the employee's brothers, sisters, spouse, ancestors and lineal
descendants, and his pro rata share of all Stock owned by corporations,
partnerships, estates and trusts in which he has an interest.

                                      -vii-

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