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                                                                   EXHIBIT 4.3.2

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                          FIRST SUPPLEMENTAL INDENTURE

                                     between

                                 XTO ENERGY INC.

                                       and

                              THE BANK OF NEW YORK,

                                   as Trustee

                                 ______________

                                 April __, 2002

                            __% Senior Notes due 2012

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                                TABLE OF CONTENTS

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<S>                                                                              <C>
ARTICLE 1 THE 2012 NOTES .......................................................  2
 SECTION 1.1. Designation of 2012 Notes; Establishment of Form..................  2
 SECTION 1.2. Amount............................................................  2
 SECTION 1.3. Redemption and Repurchase. .......................................  2
 SECTION 1.4. Conversion........................................................  3
 SECTION 1.5. Maturity. ........................................................  3
 SECTION 1.6. Other Terms of 2012 Notes.........................................  3

ARTICLE 2 AMENDMENTS TO THE INDENTURE ..........................................  3
 SECTION 2.1. Definitions.......................................................  3
 SECTION 2.2. Consolidation, Merger and Sale.................................... 18
 SECTION 2.3. Events of Default................................................. 18
 SECTION 2.4. Supplemental Indentures without Consent of Holders................ 21
 SECTION 2.5. Supplemental Indenture with Consent of Holders.................... 22
 SECTION 2.6. Covenants......................................................... 22
 SECTION 2.7. Redemption........................................................ 34
 SECTION 2.8. Defeasance and Covenant Defeasance ............................... 35
 SECTION 2.9. Guarantees........................................................ 38

ARTICLE 3 MISCELLANEOUS PROVISIONS ............................................. 42
 SECTION 3.1. Integral Part. ................................................... 42
 SECTION 3.2. General Definitions............................................... 42
 SECTION 3.3. Adoption, Ratification and Confirmation........................... 42
 SECTION 3.4. Counterparts...................................................... 42
 SECTION 3.5. Benefits of Indenture............................................. 42
 SECTION 3.6. Governing Law..................................................... 42
 SECTION 3.7. Supplemental Indenture Controls................................... 42

EXHIBIT A FORM OF 2012 NOTE ....................................................A-1
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                          FIRST SUPPLEMENTAL INDENTURE

     THIS FIRST SUPPLEMENTAL INDENTURE, dated as of April __, 2002 (this "First
Supplemental Indenture"), between XTO Energy Inc., a Delaware corporation (the
"Company"), and The Bank of New York, a New York banking corporation (the
"Trustee"),

                              W I T N E S S E T H:

     WHEREAS, the Company has heretofore executed and delivered to the Trustee
an Indenture, dated as of April __, 2002 (the "Original Indenture" and, as
amended and supplemented by this First Supplemental Indenture, the "Indenture"),
providing for the issuance from time to time of one or more series of the
Company's Securities;

     WHEREAS, Section 8.1(k) of the Indenture provides that the Company and the
Trustee may from time to time enter into one or more indentures supplemental
thereto to establish the form or terms of Securities of a new series;

     WHEREAS, Sections 8.1(b) and 8.1(c) of the Indenture permit the execution
of supplemental indentures without the consent of any Holders to add to the
covenants of the Company for the benefit of, and to add any additional Events of
Default with respect to, all or any series of Securities;

     WHEREAS, Section 8.1(h) of the Indenture permits the execution of
supplemental indentures without the consent of any Holders to add to, change or
eliminate any of the provisions of the Indenture with respect to all or any
series of Securities, provided that, among other things, such addition, change
or elimination does not apply to any outstanding Security of any series created
prior to the execution of such supplemental indenture;

     WHEREAS, Sections 2.1 and 2.2 of the Indenture provide that the Company may
enter into supplemental indentures to establish the form, terms and provisions
of a series of Securities issued pursuant to the Indenture;

     WHEREAS, the Company desires to issue __% Senior Notes due 2012 (the "2012
Notes"), a new series of Securities, the issuance of which was authorized by or
pursuant to resolution of the Board of Directors of the Company;

     WHEREAS, the Company, pursuant to the foregoing authority, proposes in and
by this First Supplemental Indenture to supplement and amend the Indenture
insofar as it will apply only to the 2012 Notes in certain respects; and

     WHEREAS, all things necessary have been done to make the 2012 Notes, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, and to make this
First Supplemental Indenture a valid agreement of the Company, in accordance
with their and its terms;

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     NOW, THEREFORE:

     In consideration of the premises provided for herein, the Company and the
Trustee mutually covenant and agree for the equal and proportionate benefit of
all Holders of the 2012 Notes as follows:

                                    ARTICLE 1

                                 THE 2012 Notes

     SECTION 1.1. Designation of 2012 Notes; Establishment of Form.

     There shall be a series of Securities designated "__% Senior Notes due
2012" of the Company (the "2012 Notes"), and the form thereof shall be
substantially as set forth in Exhibit A hereto, which is incorporated into and
shall be deemed a part of this First Supplemental Indenture, in each case with
such appropriate insertions, omissions, substitutions and other variations as
are required or permitted by the Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any securities exchange or as
may, consistently with the Indenture, be determined by the officers of the
Company executing such 2012 Notes, as evidenced by their execution of the 2012
Notes.

     The 2012 Notes will initially be issued in permanent global form,
substantially in the form set forth in Exhibit A hereto, as a Global Security.

     The Company initially appoints the Trustee to act as Paying Agent and
Security Registrar with respect to the 2012 Notes.

     SECTION 1.2. Amount.

     The Trustee shall authenticate and deliver 2012 Notes for original issue in
an aggregate principal amount of up to $300,000,000 upon Company Order for the
authentication and delivery of 2012 Notes, without any further action by the
Company. The authorized aggregate principal amount of 2012 Notes may be
increased at any time hereafter and the series may be reopened for issuances of
additional Securities as provided in the last paragraph of Section 2.2 of the
Original Indenture, subject to compliance with Section 9.14 of the Indenture.
The 2012 Notes issued on the date hereof and any such additional 2012 Notes that
may be issued hereafter shall be part of the same series of Securities.

     SECTION 1.3. Redemption and Repurchase.

     (a) There shall be no sinking fund for the retirement of the 2012 Notes or
other mandatory redemption obligation.

     (b) The Company, at its option, may redeem the 2012 Notes in accordance
with the provisions of the 2012 Notes and the Indenture, including, without
limitation, Section 10.9.

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     (c) The Company, at the option of the Holders thereof, shall repurchase the
2012 Notes in accordance with the provisions of and at the Change of Control
Purchase Price or the Offered Price, as the case may be, set forth in the 2012
Notes and in accordance with the provisions of the Indenture, including, without
limitation, Sections 9.15 and 9.16.

     SECTION 1.4. Conversion.

     The 2012 Notes shall not be convertible into any other securities.

     SECTION 1.5. Maturity.

     The Stated Maturity of the 2012 Notes shall be ______________ 1, 2012.

     SECTION 1.6. Other Terms of 2012 Notes.

     Without limiting the foregoing provisions of this Article 1, the terms of
the 2012 Notes shall be as provided in the form of 2012 Notes set forth in
Exhibit A hereto and as provided in the Indenture.

                                   ARTICLE 2

                           AMENDMENTS TO THE INDENTURE

     The amendments and supplements contained herein shall apply to 2012 Notes
only and not to any other series of Securities issued under the Indenture and
any covenants provided herein are expressly being included solely for the
benefit of the 2012 Notes. These amendments and supplements shall be effective
for so long as there remains any 2012 Notes outstanding.

     SECTION 2.1. Definitions.

     Section 1.1 of the Original Indenture is amended and supplemented by
inserting or restating, as the case may be, in their appropriate alphabetical
position, the following definitions:

     "Adjusted Net Assets" of a Subsidiary Guarantor at any date shall mean the
amount by which the fair value of the Properties of such Subsidiary Guarantor
exceeds the total amount of liabilities, including, without limitation,
contingent liabilities (after giving effect to all other fixed and contingent
liabilities incurred or assumed on such date), but excluding liabilities under
the Subsidiary Guarantee of such Subsidiary Guarantor at such date.

     "Asset Acquisition" means (a) an Investment by the Company or any
Restricted Subsidiary in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or any Restricted Subsidiary shall be merged with
or into the Company or any Restricted Subsidiary or (b) the acquisition by the
Company or any Restricted Subsidiary of the assets of any Person which
constitute all or substantially all of the assets of such Person or any division
or line of business of such Person.

     "Asset Sale" means any sale, issuance, conveyance, transfer, lease or other
disposition to any Person other than the Company or any of its Restricted
Subsidiaries (including, without

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limitation, by way of a Production Payment or by way of merger or consolidation)
(collectively, for purposes of this definition, a "transfer"), directly or
indirectly, in one or a series of related transactions, of (a) any Capital Stock
of any Restricted Subsidiary held by the Company or any Restricted Subsidiary;
(b) all or substantially all of the properties and assets of any division or
line of business of the Company or any of its Restricted Subsidiaries; or (c)
any other properties or assets of the Company or any of its Restricted
Subsidiaries other than any abandonment, farm-in, farm-out, lease or sublease of
Oil and Gas Properties in the ordinary course of business or any disposition of
hydrocarbons or other mineral products in the ordinary course of business. For
the purposes of this definition, the term "Asset Sale" shall not include (i) any
transfer of properties or assets that is governed by, and made in accordance
with, the provisions of Article VII hereof; (ii) any transfer of properties or
assets to an Unrestricted Subsidiary, if such transfer is made in compliance
with Section 9.13 hereof; (iii) any trade or exchange of Oil and Gas Properties
or Capital Stock in any corporation or royalty trust in the Oil and Gas Business
owned by the Company or any Restricted Subsidiary for Oil and Gas Properties
owned or held by another Person provided that (x) the Fair Market Value of the
Properties or Capital Stock traded or exchanged by the Company or such
Restricted Subsidiary (including any cash or Cash Equivalents, not to exceed 15%
of such Fair Market Value, to be delivered by the Company or such Restricted
Subsidiary) is reasonably equivalent to the Fair Market Value of the Properties
(together with any cash or Cash Equivalents, not to exceed 15% of such Fair
Market Value) to be received by the Company or such Restricted Subsidiary as
determined in good faith by (A) any Officer of the Company if such Fair Market
Value is less than $5,000,000 and (B) the Board of Directors of the Company as
evidenced by a Board Resolution if such Fair Market Value is equal to or in
excess of $5,000,000, provided that if such resolution indicates that such Fair
Market Value is equal to or in excess of $10,000,000 such resolution shall be
accompanied by a written appraisal by a nationally recognized investment banking
firm or appraisal firm, in each case specializing or having a specialty in Oil
and Gas Properties, and (y) such exchange is approved by a majority of the
Disinterested Directors of the Company; (iv) Sale/Leaseback Transactions in
compliance with Section 9.19; or (v) any transfer of Properties having a Fair
Market Value of less than $2,000,000.

     "Change of Control" means the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d)(3) or
14(d)(2) of the Exchange Act) is or becomes the "beneficial owner" (as defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 50%
of the total voting power of the outstanding Voting Stock of the Company; (b)
the Company, either individually or in conjunction with one or more Restricted
Subsidiaries, sells, conveys, transfers or leases, or the Restricted
Subsidiaries sell, convey, transfer or lease, all or substantially all of the
assets of the Company and the Restricted Subsidiaries, taken as a whole (either
in one transaction or a series of related transactions), including Capital Stock
of the Restricted Subsidiaries, to any Person (other than the Company or a
Wholly Owned Restricted Subsidiary); (c) during any consecutive two-year period,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election by such
Board of Directors or whose nomination for election by the stockholders of the
Company was approved by a vote of 662/3% of the directors then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority

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of the Board of Directors of the Company then in office; or (d) the liquidation
or dissolution of the Company.

     "Change of Control Notice" has the meaning specified in Section 9.15(c).

     "Change of Control Offer" has the meaning specified in Section 9.15(a).

     "Change of Control Purchase Date" has the meaning specified in Section
9.15(c).

     "Change of Control Purchase Price" has the meaning specified in Section
9.15(a).

     "Consolidated Fixed Charge Coverage Ratio" means, for any period, the ratio
of (a) the sum of Consolidated Net Income, Consolidated Interest Expense,
Consolidated Income Tax Expense and Consolidated Non-cash Charges deducted in
computing Consolidated Net Income, in each case, for such period, of the Company
and its Restricted Subsidiaries on a consolidated basis, all determined in
accordance with GAAP, decreased (to the extent included in determining
Consolidated Net Income) by the sum of (x) the amount of deferred revenues that
are amortized during such period and are attributable to reserves that are
subject to Volumetric Production Payments and (y) amounts recorded in accordance
with GAAP as repayments of principal and interest pursuant to Dollar-Denominated
Production Payments, to (b) the sum of such Consolidated Interest Expense for
such period; provided that (i) in making such computation, the Consolidated
Interest Expense attributable to interest on any Indebtedness required to be
computed on a pro forma basis in accordance with clause (x) of Section 9.14
hereof and bearing a floating interest rate shall be computed as if the rate in
effect on the date of computation had been the applicable rate for the entire
period, (ii) in making such computation, the Consolidated Interest Expense
attributable to interest on any Indebtedness under a revolving credit facility
required to be computed on a pro forma basis in accordance with clause (x) of
Section 9.14 hereof shall be computed based upon the average daily balance of
such Indebtedness during the applicable period, provided that such average daily
balance shall be reduced by the amount of any repayment of Indebtedness under a
revolving credit facility during the applicable period, which repayment
permanently reduced the commitments or amounts available to be reborrowed under
such facility, (iii) notwithstanding clauses (i) and (ii) of this proviso,
interest on Indebtedness determined on a fluctuating basis, to the extent such
interest is covered by agreements relating to Interest Rate Protection
Obligations, shall be deemed to have accrued at the rate per annum resulting
after giving effect to the operation of such agreements and (iv) in making such
calculation, Consolidated Interest Expense shall exclude interest attributable
to Dollar-Denominated Production Payments.

     "Consolidated Income Tax Expense" means, for any period, the provision for
federal, state, local and foreign income taxes (including franchise taxes based
on income) of the Company and its Restricted Subsidiaries for such period as
determined on a consolidated basis in accordance with GAAP.

     "Consolidated Interest Expense" means, for any period, without duplication,
the sum of (a) the interest expense of the Company and its Restricted
Subsidiaries for such period as determined on a consolidated basis in accordance
with GAAP, including, without limitation, (i)

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any amortization of debt discount, (ii) the net cost under Interest Rate
Protection Obligations (including any amortization of discounts), (iii) the
interest portion of any deferred payment obligation, (iv) all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and (v) all accrued interest, in each case to the
extent attributable to such period, (b) to the extent any Indebtedness of any
Person (other than the Company or a Restricted Subsidiary) that is guaranteed by
the Company or any Restricted Subsidiary is in default, the aggregate amount of
interest paid or accrued by such other Person during such period attributable to
any such Indebtedness, in each case to the extent attributable to that period,
(c) the aggregate amount of the interest component of Capitalized Lease
Obligations paid, accrued and/or scheduled to be paid or accrued by the Company
and its Restricted Subsidiaries during such period as determined on a
consolidated basis in accordance with GAAP and (d) the aggregate amount of
dividends paid or accrued on Redeemable Capital Stock of the Company and its
Restricted Subsidiaries, to the extent such Redeemable Capital Stock is owned by
Persons other than Restricted Subsidiaries.

     "Consolidated Net Income" means, for any period, the consolidated net
income (or loss) of the Company and its Restricted Subsidiaries for such period
as determined in accordance with GAAP, adjusted by excluding (a) net after-tax
extraordinary gains or losses (less all fees and expenses relating thereto), (b)
net after-tax effect of changes on or after January 1, 2001, in accounting
principles, (c) net after-tax gains or losses (less all fees and expenses
relating thereto) attributable to Asset Sales, (d) the net income (or net loss)
of any Person (other than the Company or any of its Restricted Subsidiaries or
any oil and gas royalty trust), in which the Company or any of its Restricted
Subsidiaries has an ownership interest, except to the extent of the amount of
dividends or other distributions actually paid to the Company or its Restricted
Subsidiaries in cash by such other Person during such period (regardless of
whether such cash dividends, distributions or interest on indebtedness is
attributable to net income (or net loss) of such Person during such period or
during any prior period), (e) the net income of any Restricted Subsidiary to the
extent that the declaration or payment of dividends or similar distributions by
that Restricted Subsidiary is not at the date of determination permitted,
directly or indirectly, by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Restricted Subsidiary or its stockholders, (f)
income resulting from transfers of assets received by the Company or any
Restricted Subsidiary from an Unrestricted Subsidiary, (g) any write-downs of
non-current assets; provided, however, that any ceiling limitation write-downs
under SEC guidelines shall be treated as capitalized costs, as if such
write-downs had not occurred and (h) any unrealized non-cash gains or losses in
respect of hedge or non-hedge derivatives (including those resulting from the
application of Financial Accounting Standards Board Statement No. 133).

     "Consolidated Non-cash Charges" means, for any period, the aggregate
depreciation, depletion, amortization (including, without limitation,
amortization of capitalized debt issuance costs), impairment and other non-cash
expenses (including any exploration expense) of the Company and its Restricted
Subsidiaries reducing Consolidated Net Income for such period, determined on a
consolidated basis in accordance with GAAP (excluding any such non-cash charge
which requires an accrual of or reserve for cash charges for any future period).

     "Covenant Termination Date" has the meaning specified in Section 9.21.

     "Excess Proceeds" has the meaning specified in Section 9.16(b).

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     "Existing Subordinated Notes" means all or any of (i) the Company's 9 1/4%
Senior Subordinated Notes due 20007 issued in the original aggregate principal
amount of $125,000,000 and outstanding at the Issue Date and (ii) the Company's
8 3/4% Senior Subordinated Notes due 2009 issued in the original aggregate
principal amount of $175,000,000 and outstanding at the Issue Date.

     "Funding Guarantor" has the meaning specified in Section 14.5.

     "Guarantee" means, as applied to any obligation, (i) a guarantee (other
than by endorsement of negotiable instruments for collection in the ordinary
course of business), direct or indirect, in any manner, of any part or all of
such obligation and (ii) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of nonperformance) of all or any
part of such obligation, including, without limiting the foregoing, the payment
of amounts drawn down by letters of credit. When used as a verb, "guarantee"
shall have a corresponding meaning.

     "Indebtedness" means, with respect to any Person, without duplication, (a)
all liabilities of such Person for borrowed money or for the deferred purchase
price of property or services, excluding any trade accounts payable and other
accrued current liabilities incurred in the ordinary course of business, but
including, without limitation, all obligations, contingent or otherwise, of such
Person in connection with any letters of credit, bankers' acceptance or other
similar credit transaction and in connection with any agreement to purchase,
redeem, exchange, convert or otherwise acquire for value any Capital Stock of
such Person, or any warrants, rights or options to acquire such Capital Stock,
now or hereafter outstanding, if, and to the extent, any of the foregoing would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP, (b) all obligations of such Person evidenced by bonds, notes,
debentures or other similar instruments, if, and to the extent, any of the
foregoing would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP, (c) all Indebtedness of such Person created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even if the rights and remedies of
the seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), but excluding trade accounts payable
arising in the ordinary course of business, (d) all Capitalized Lease
Obligations of such Person, (e) the Attributable Indebtedness (in excess of any
related Capitalized Lease Obligations) related to any Sale/Leaseback Transaction
of such Person (unless such Sale/Leaseback Transaction has been entered into in
reliance upon, and complies with, clause (ii) of Section 9.19), (f) all
Indebtedness referred to in the preceding clauses of other Persons and all
dividends of other Persons, the payment of which is secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon property (including, without limitation, accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness (the amount of
such obligation being deemed to be the lesser of the value of such property or
asset or the amount of the obligation so secured), (g) all guarantees by such
Person of Indebtedness referred to in this definition (including, with respect
to any Production Payment, any warranties or guaranties of production or payment
by such Person with respect to such Production Payment but excluding other
contractual obligations of such Person with respect to such Production Payment),
(h) all Redeemable Capital Stock of such Person valued at the greater of its
voluntary or involuntary maximum fixed repurchase price plus accrued dividends,
(i) all

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net obligations of such Person under or in respect of currency exchange
contracts, Interest Rate Protection Obligations and Oil and Gas Hedging
Contracts and (j) any amendment, supplement, modification, deferral, renewal,
extension or refunding of any liability of such Person of the types referred to
in clauses (a) through (i) above. For purposes hereof, the "maximum fixed
repurchase price" of any Redeemable Capital Stock which does not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Redeemable Capital Stock as if such Redeemable Capital Stock were purchased on
any date on which Indebtedness shall be required to be determined pursuant to
this Indenture, and if such price is based upon, or measured by, the Fair Market
Value of such Redeemable Capital Stock, such Fair Market Value shall be
determined in good faith by the board of directors of the issuer of such
Redeemable Capital Stock, provided, however, that if such Redeemable Capital
Stock is not at the date of determination permitted or required to be
repurchased, the "maximum fixed repurchase price" shall be the book value of
such Redeemable Capital Stock. Subject to clause (g) of the first sentence of
this definition, neither Dollar-Denominated Production Payments nor Volumetric
Production Payments shall be deemed to be Indebtedness.

     "Interested Person" has the meaning set forth in Section 9.17.

     "Investment" means, with respect to any Person, any direct or indirect
advance, loan, guarantee of Indebtedness or other extension of credit or capital
contribution to (by means of any transfer of cash or other property or assets to
others or any payment for property, assets or services for the account or use of
others), or any purchase or acquisition by such Person of any Capital Stock,
bonds, notes, debentures or other securities (including derivatives) or
evidences of Indebtedness issued by, any other Person. In addition, the Fair
Market Value of the net assets of any Restricted Subsidiary at the time that
such Restricted Subsidiary becomes an Unrestricted Subsidiary shall be deemed to
be an "Investment" made by the Company in such Unrestricted Subsidiary at such
time. "Investments" shall exclude (a) extensions of trade credit on commercially
reasonable terms in accordance with normal trade practices and (b) Interest Rate
Protection Obligations entered into in the ordinary course of business or as
required by any Permitted Indebtedness or any Indebtedness incurred in
compliance with Section 9.14 hereof, but only to the extent that the notional
principal amount of such Interest Rate Protection Obligations does not exceed
105% of the principal amount of such Indebtedness to which such Interest Rate
Protection Obligations relate and (c) bonds, notes, debentures or other
securities or evidences of Indebtedness received as a result of Asset Sales
permitted under Section 9.16 hereof.

     "Investment Grade Rating" means a rating equal to or higher than Baa3 (or
the equivalent) by Moody's and equal to or higher than BBB- (or the equivalent)
by S&P.

     "Issue Date" means the date of original issuance of the 2012 Notes.

     "Liquid Securities" means securities of an issuer that is not an Affiliate
of the Company, that are publicly traded on a national securities exchange or
the Nasdaq Stock Market and upon which the Company does not have any selling
restrictions. The Company or any Restricted Subsidiary shall not be deemed to
have selling restrictions with respect to any securities under the Securities
Act if it has registration rights with respect to such securities.

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     "Make-Whole Amount" with respect to a 2012 Note means an amount equal to
the excess, if any, of (i) the present value of the remaining interest, premium
and principal payments due on such 2012 Note (excluding any portion of such
payments of interest accrued as of the Redemption Date), computed using a
discount rate equal to the Treasury Rate plus 50 basis points, over (ii) the
outstanding principal amount of such 2012 Note. As used herein, "Treasury Rate"
is defined as the yield to maturity (calculated on a semi-annual bond equivalent
basis) at the time of the computation of United States Treasury securities with
a constant maturity (as compiled by and published in the most recent Federal
Reserve Statistical Release H.15 (510), which has become publicly available at
least two Business Days prior to the date of the redemption notice or, if such
Statistical Release is no longer published, any publicly available source of
similar market data) most nearly equal to the then remaining maturity of the
2012 Notes; provided, however, that if the Make-Whole Average Life of such 2012
Note is not equal to the constant maturity of the United States Treasury
security for which a weekly average yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for
which such yields are given, except that if the Make-Whole Average Life of such
2012 Note is less than one year, the weekly average yield on actually traded
United States Treasury securities adjusted to a constant maturity of one year
shall be used. As used herein, "Make-Whole Average Life" means the number of
years (calculated to the nearest one-twelfth) between the Redemption Date and
the Stated Maturity of the 2012 Notes.

     "Make-Whole Price" means the sum of the outstanding principal amount of the
2012 Notes to be redeemed plus the Make-Whole Amount of such 2012 Notes.

     "Net Cash Proceeds" means, with respect to any Asset Sale, the proceeds
thereof in the form of cash or Cash Equivalents including payments in respect of
deferred payment obligations when received in the form of cash or Cash
Equivalents (except to the extent that such obligations are financed or sold
with recourse to the Company or any Restricted Subsidiary), net of (a) brokerage
commissions and other fees and expenses (including fees and expenses of legal
counsel and investment banks) related to such Asset Sale, (b) provisions for all
taxes payable as a result of such Asset Sale, (c) amounts required to be paid to
any Person (other than the Company or any Restricted Subsidiary) owning a
beneficial interest in the assets subject to the Asset Sale and (d) appropriate
amounts to be provided by the Company or any Restricted Subsidiary, as the case
may be, as a reserve required in accordance with GAAP consistently applied
against any liabilities associated with such Asset Sale and retained by the
Company or any Restricted Subsidiary, as the case may be, after such Asset Sale,
including, without limitation, pension and other post-employment benefit
liabilities, liabilities related to environmental matters and liabilities under
any indemnification obligations associated with such Asset Sale, all as
reflected in an Officers' Certificate delivered to the Trustee; provided,
however, that any amounts remaining after adjustments, revaluations or
liquidations of such reserves shall constitute Net Cash Proceeds.

     "Net Proceeds Deficiency" has the meaning specified in Section 9.16(c).

     "Net Proceeds Offer" has the meaning specified in Section 9.16(c).

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     "Note Obligations" means any principal of, premium, if any, and interest
on, and any other amounts (including, without limitation, any payment
obligations with respect to the 2012 Notes as a result of any Asset Sale, Change
of Control or redemption) owing in respect of, the 2012 Notes payable pursuant
to the terms of the 2012 Notes or this Indenture or upon acceleration of the
2012 Notes.

     "Offered Price" has the meaning specified in Section 9.16(c).

     "Pari Passu Indebtedness Amount" has the meaning specified in Section
9.16(c).

     "Pari Passu Offer" has the meaning specified in Section 9.16(c).

     "Payment Amount" has the meaning specified in Section 9.16(c).

     "Permitted Indebtedness" means any of the following:

     (a)  Indebtedness of the Company under one or more bank credit or revolving
credit facilities in an aggregate principal amount at any one time outstanding
under this clause (a) not to exceed the greater of (i) $850 million and (ii) an
amount equal to the sum of (A) $400 million and (B) 25% of Adjusted Consolidated
Net Tangible Assets determined as of the date of the incurrence of such
Indebtedness (plus interest and fees under such facilities), less any amounts
derived from Asset Sales and applied to the required permanent reduction of Pari
Passu Indebtedness (and a permanent reduction of the related commitment to lend
or amount available to be reborrowed in the case of a revolving credit facility)
under such credit facilities as contemplated by Section 9.16(b)(i) (the "Maximum
Credit Amount") (with the Maximum Credit Amount to be an aggregate maximum
amount for the Company and all Restricted Subsidiaries, pursuant to clause (a)
of the definition of "Permitted Subsidiary Indebtedness"), and any renewals,
amendments, extensions, supplements, modifications, deferrals, refinancings or
replacements (each, for purposes of this clause, a "refinancing") thereof by the
Company, including any successive refinancings thereof by the Company, so long
as the aggregate principal amount of any such new Indebtedness, together with
the aggregate principal amount of all other Indebtedness outstanding pursuant to
this clause (a) (and clause (a) of the definition of "Permitted Subsidiary
Indebtedness"), shall not at any one time exceed the Maximum Credit Amount;

     (b)  Indebtedness of the Company under the 2012 Notes issued on the Issue
Date;

     (c)  Indebtedness of the Company outstanding on the date of this Indenture
(and not repaid or defeased with the proceeds of the 2012 Notes);

     (d)  obligations of the Company pursuant to Interest Rate Protection
Obligations, but only to the extent such obligations do not exceed 105% of the
aggregate principal amount of the Indebtedness covered by such Interest Rate
Protection Obligations; and obligations under currency exchange contracts and
Oil and Gas Hedging Contracts entered into in the ordinary course of business;

     (e)  Indebtedness of the Company to any Restricted Subsidiaries;

                                       10

<PAGE>

     (f)  in-kind obligations relating to net gas balancing positions arising in
the ordinary course of business and consistent with past practice;

     (g)  Indebtedness in respect of bid, performance or surety bonds issued for
the account of the Company or any Restricted Subsidiary in the ordinary course
of business, including guarantees and letters of credit supporting such bid,
performance, surety or other reimbursement obligations (in each case other than
an obligation for money borrowed);

     (h)  any renewals, extensions, substitutions, refinancings or replacements
(each, for purposes of this clause, a "refinancing") by the Company of any
Indebtedness of the Company incurred in compliance with clauses (i) and (ii) of
the proviso to the first sentence of Section 9.14 or pursuant to clause (b),
(c), (h) or (j) of this definition, including any successive refinancings by the
Company, so long as (i) any such new Indebtedness shall be in a principal amount
that does not exceed the principal amount (or, if such Indebtedness being
refinanced provides for an amount less than the principal amount thereof to be
due and payable upon a declaration of acceleration thereof, such lesser amount
as of the date of determination) so refinanced plus the amount of any premium
required to be paid in connection with such refinancing pursuant to the terms of
the Indebtedness refinanced or the amount of any premium reasonably determined
by the Company as necessary to accomplish such refinancing, plus the amount of
expenses of the Company incurred in connection with such refinancing, and (ii)
in the case of any refinancing of Subordinated Indebtedness, such new
Indebtedness is made subordinate to the 2012 Notes at least to the same extent
as the Indebtedness being refinanced and (iii) such new Indebtedness has an
Average Life equal to or longer than the Average Life of the Indebtedness being
refinanced and a final Stated Maturity equal to or later than the final Stated
Maturity of the Indebtedness being refinanced;

     (i)  Non-Recourse Indebtedness;

     (j)  Purchase Money Indebtedness of the Company in an aggregate principal
amount (when added to (1) all refinancings thereof pursuant to clause (h) of
this definition plus (2) Purchase Money Indebtedness incurred by all Restricted
Subsidiaries pursuant to clause (k) of the definition of Permitted Subsidiary
Indebtedness and all refinancings thereof pursuant to clause (l) of such
definition) not in excess of $50,000,000 at any one time outstanding; and

     (k)  other Indebtedness of the Company in an aggregate principal amount not
in excess of $50,000,000 at any one time outstanding.

     "Permitted Investments" means any of the following: (a) Investments in Cash
Equivalents; (b) Investments in the Company or any of its Restricted
Subsidiaries; (c) Investments in an amount not to exceed 10% of Adjusted
Consolidated Net Tangible Assets determined as of the date of the making or
incurrence of such Permitted Investment at any one time outstanding; (d)
Investments by the Company or any of its Restricted Subsidiaries in another
Person, if as a result of such Investment (i) such other Person becomes a
Restricted Subsidiary of the Company or (ii) such other Person is merged or
consolidated with or into, or transfers or conveys all or substantially all of
its assets to, the Company or a Restricted Subsidiary; (e) entry into operating
agreements, joint ventures, partnership agreements, limited liability company
agreements, working interests, royalty interests, mineral leases, processing

                                       11

<PAGE>

agreements, farm-out agreements, contracts for the sale, transportation or
exchange of oil and natural gas, unitization agreements, pooling arrangements,
area of mutual interest agreements or other similar or customary agreements,
transactions or arrangements, and Investments, contributions of Property and
expenditures in connection therewith or pursuant thereto, in each case made or
entered into in the ordinary course of the Oil and Gas Business; (f) entry into
any Oil and Gas Hedging Contracts in the ordinary course of business; (g)
Investments in Capital Stock of any oil and gas royalty trust; (h) entry into a
joint venture or partnership agreement in connection with ownership and
operation of office and building real estate and related assets owned by the
Company or any Restricted Subsidiary and contribution of such assets to such
entity; or (i) loans and advances to employees of the Company or any Restricted
Subsidiary in an amount not to exceed $2,000,000 at any one time outstanding.

     "Permitted Liens" means the following types of Liens:

     (a) Liens existing as of the Issue Date;

     (b) Liens securing the 2012 Notes;

     (c) Liens in favor of the Company or a Subsidiary Guarantor;

     (d) Liens securing refinancings, as defined in clause (h) of the definition
of Permitted Indebtedness of secured Indebtedness; provided that such Liens
extend only to cover the Property currently securing the Indebtedness being
refinanced;

     (e) Liens for taxes, assessments and governmental charges or claims either
(i) not delinquent or (ii) contested in good faith by appropriate proceedings
and as to which the Company or its Restricted Subsidiaries shall have set aside
on their books such reserves as may be required pursuant to GAAP;

     (f) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen and other Liens imposed by law
incurred in the ordinary course of business for sums not delinquent or being
contested in good faith, if such reserve or other appropriate provision, if any,
as shall be required by GAAP shall have been made in respect thereof;

     (g) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, or to secure the payment or performance of tenders, statutory
or regulatory obligations, surety and appeal bonds, bids, leases, government
contracts and leases, performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money but
including lessee or operator obligations under statutes, governmental
regulations or instruments related to the ownership, exploration and production
of oil, gas and minerals on state, federal or foreign lands or waters);

     (h) judgment Liens not giving rise to an Event of Default so long as any
appropriate legal proceedings which may have been duly initiated for the review
of such judgment shall not

                                       12

<PAGE>

have been finally terminated or the period within which such proceeding may be
initiated shall not have expired;

     (i) easements, rights-of-way, restrictions and other similar charges or
encumbrances not interfering in any material respect with the ordinary conduct
of the business of the Company or any of its Restricted Subsidiaries;

     (j) any interest or title of a lessor under any Capitalized Lease
Obligation or operating lease;

     (k) Liens resulting from the deposit of funds or evidences of Indebtedness
in trust for the purpose of defeasing Indebtedness of the Company or any of its
Restricted Subsidiaries;

     (l) Liens securing obligations under Oil and Gas Hedging Contracts;

     (m) Liens upon specific items of inventory or other goods and proceeds of
any Person securing such Person's obligations in respect of bankers' acceptances
issued or created for the account of such Person to facilitate the purchase,
shipment or storage of such inventory or other goods;

     (n) Liens securing reimbursement obligations with respect to commercial
letters of credit which encumber documents and other property relating to such
letters of credit and products and proceeds thereof;

     (o) Liens encumbering property or assets under construction arising from
progress or partial payments by a customer of the Company or its Restricted
Subsidiaries relating to such property or assets;

     (p) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual or warranty requirements of the Company or
any of its Restricted Subsidiaries, including rights of offset and set-off;

     (q) Liens securing Interest Rate Protection Obligations which Interest Rate
Protection Obligations relate to Indebtedness that is secured by Liens otherwise
permitted under this Indenture;

     (r) Liens on, or related to, properties or assets to secure all or part of
the costs incurred in the ordinary course of business for the exploration,
drilling, development or operation thereof;

     (s) Liens on pipeline or pipeline facilities which arise out of operation
of law;

     (t) Liens arising under operating agreements, joint venture agreements,
partnership agreements, oil and gas leases, farm-out agreements, division
orders, contracts for the sale, transportation or exchange of oil and natural
gas, unitization and pooling declarations and

                                       13

<PAGE>

agreements, area of mutual interest agreements and other agreements which are
customary in the Oil and Gas Business;

     (u)  Liens reserved in oil, gas and mineral leases for bonus or rental
payments, and for compliance with the terms of such leases;

     (v)  Liens constituting survey exceptions, encumbrances, easements, or
reservations of, or rights to others for, rights-of-way, zoning or other
restrictions as to the use of real properties, and minor defects of title which,
in the case of any of the foregoing, were not incurred or created to secure the
payment of borrowed money or the deferred purchase price of Property or
services, and in the aggregate do not materially adversely affect the value of
Property of the Company and the Restricted Subsidiaries, taken as a whole, or
materially impair the use of such Properties for the purposes for which such
Properties are held by the Company or any Restricted Subsidiaries;

     (w)  Liens securing Non-Recourse Indebtedness; provided, however, that the
related Non-Recourse Indebtedness shall not be secured by any property or assets
of the Company or any Restricted Subsidiary other than the property and assets
acquired by it with the proceeds of such Non-Recourse Indebtedness;

     (x)  Liens securing Indebtedness incurred under one or more bank credit or
revolving credit facilities in compliance with Section 9.14, including
Indebtedness incurred in accordance with clause (a) of the definition of
Permitted Indebtedness and/or clause (a) of the definition of Permitted
Subsidiary Indebtedness;

     (y)  (i) Liens upon any Property of any Person existing at the time of
acquisition thereof by the Company or a Restricted Subsidiary, (ii) Liens upon
any Property of a Person existing at the time such Person is merged or
consolidated with the Company or any Restricted Subsidiary or existing at the
time of the sale or transfer of any such Property of such Person to the Company
or any Restricted Subsidiary, or (iii) Liens upon any Property of a Person
existing at the time such Person becomes a Restricted Subsidiary; provided that
in each case such Lien has not been created in contemplation of such sale,
merger or consolidation, transfer or acquisition, and provided that, in each
such case no such Lien shall extend to or cover any Property of the Company or
any Restricted Subsidiary other than the Property being acquired and
improvements thereon;

     (z)  purchase money Liens granted or assumed in connection with the
acquisition of assets in the ordinary course of business and consistent with
past practices; provided, that (A) such Liens attach only to the property so
acquired with the Purchase Money Indebtedness secured thereby and (B) such Liens
secure only Indebtedness that is not in excess of 100% of the purchase price of
such assets;

     (aa) other Liens of the Company that, at the date incurred, when taken
together with all other Liens theretofore incurred in reliance upon this clause
(aa), secure Indebtedness in an aggregate principal amount not in excess of 10%
of Adjusted Consolidated Net Tangible Assets; and

                                       14

<PAGE>

     (bb) any Lien that is deemed to arise as a result of the sale or transfer
of a Production Payment that does not involve the creation of a guaranty of the
type described in clause (g) of the definition of "Indebtedness."

     "Permitted Subsidiary Indebtedness" means any of the following:

     (a)  Indebtedness of any Restricted Subsidiary under one or more bank
credit or revolving credit facilities (and "refinancings" thereof) in an amount
at any one time outstanding not to exceed the Maximum Credit Amount (in the
aggregate for all Restricted Subsidiaries and the Company, pursuant to clause
(a) of the definition of "Permitted Indebtedness");

     (b)  Indebtedness of any Restricted Subsidiary outstanding on the Issue
Date;

     (c)  obligations of any Restricted Subsidiary pursuant to Interest Rate
Protection Obligations, but only to the extent such obligations do not exceed
105% of the aggregate principal amount of the Indebtedness covered by such
Interest Rate Protection Obligations, and obligations under any Oil and Gas
Hedging Contracts that any Restricted Subsidiary enters into in the ordinary
course of business;

     (d)  the Subsidiary Guarantees (and any assumption of the obligations
guaranteed thereby);

     (e)  Indebtedness of any Restricted Subsidiary relating to guarantees by
such Restricted Subsidiary of Permitted Indebtedness pursuant to clause (a) of
the definition of "Permitted Indebtedness;"

     (f)  in-kind obligations relating to net gas balancing positions arising in
the ordinary course of business and consistent with past practice;

     (g)  Indebtedness in respect of bid, performance or surety bonds or other
reimbursement obligations issued for the account of any Restricted Subsidiary in
the ordinary course of business, including guarantees and letters of credit
supporting such bid, performance, surety bonds or other reimbursement
obligations (in each case other than for an obligation for money borrowed);

     (h)  Indebtedness of any Restricted Subsidiary to any other Restricted
Subsidiary or to the Company;

     (i)  Indebtedness relating to guarantees by any Restricted Subsidiary
permitted to be incurred pursuant to Section 9.12(a) hereof;

     (j)  Non-Recourse Indebtedness;

     (k)  Purchase Money Indebtedness of any Restricted Subsidiary in an
aggregate principal amount (when added to (1) Purchase Money Indebtedness of all
other Restricted Subsidiaries under this clause (k) and all refinancings thereof
pursuant to clause (l) of this definition plus (2) Purchase Money Indebtedness
of the Company under clause (j) of the

                                       15

<PAGE>

definition of Permitted Indebtedness and all refinancings thereof pursuant to
clause (h) of such definition) not in excess of $50,000,000 at any one time
outstanding;

     (l)  any renewals, extensions, substitutions, refinancings or replacements
(each, for purposes of this clause, a "refinancing") by any Restricted
Subsidiary of any Indebtedness of such Restricted Subsidiary incurred in
compliance with clauses (i) and (ii) of the proviso to the first sentence of
Section 9.14 or pursuant to clause (b) or (k) of this definition, including any
successive refinancings by such Restricted Subsidiary, so long as (i) any such
new Indebtedness shall be in a principal amount that does not exceed the
principal amount (or, if such Indebtedness being refinanced provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration thereof, such lesser amount as of the date of
determination) so refinanced plus the amount of any premium required to be paid
in connection with such refinancing pursuant to the terms of the Indebtedness
refinanced or the amount of any premium reasonably determined by such Restricted
Subsidiary as necessary to accomplish such refinancing, plus the amount of
expenses of such Restricted Subsidiary incurred in connection with such
refinancing and (ii) such new Indebtedness has an Average Life equal to or
longer than the Average Life of the Indebtedness being refinanced and a final
Stated Maturity equal to or later than the final Stated Maturity of the
Indebtedness being refinanced; and

     (m)  other Indebtedness of the Restricted Subsidiaries in an aggregate
principal amount not in excess of $50,000,000 at any one time outstanding.

     "Preferred Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's preferred or preference stock, whether now outstanding or issued after
the date of this Indenture, including, without limitation, all classes and
series of preferred or preference stock of such Person.

     "Public Market" exists at any time with respect to the Qualified Capital
Stock of the Company if such Qualified Capital Stock of the Company is then (a)
registered with the Commission pursuant to Section 12(b) or 12(g) of the
Exchange Act and (b) traded either on a national securities exchange or on the
Nasdaq Stock Market.

     "Purchase Notice" has the meaning set forth in Section 9.16(c).

     "Qualified Capital Stock" of any Person means any and all Capital Stock of
such Person other than Redeemable Capital Stock.

     "Qualified Redemption Transaction" means a call for redemption of any
Capital Stock or Subordinated Indebtedness (including any Subordinated
Indebtedness accounted for as a minority interest of the Company that is held by
a Subsidiary that is a business trust or similar entity formed for the primary
purpose of issuing preferred securities the proceeds of which are loaned to the
Company or a Restricted Subsidiary) that by its terms is convertible into Common
Stock of the Company if on the date of notice of such call for redemption (a) a
Public Market exists in the shares of Common Stock of the Company and (b) the
average closing price on the Public Market for shares of Common Stock of the
Company for the twenty trading days immediately preceding the date of such
notice exceeds 120% of the conversion price per share of

                                       16

<PAGE>

Common Stock of the Company issuable upon conversion of the Capital Stock or
Subordinated Indebtedness called for redemption.

     "Rating Agency" means each of S&P and Moody's, or if S&P or Moody's or both
shall not make a rating on the 2012 Notes publicly available, a nationally
recognized statistical rating agency or agencies, as the case may be, selected
by the Company (as evidenced by a Board Resolution of the Board of Directors of
the Company) which shall be substituted for S&P or Moody's, or both, as the case
may be.

     "Regular Record Date" for the interest payable on any Interest Payment Date
means the        15 or     15 (whether or not a Business Day), as the case may
be, next preceding such Interest Payment Date.

     "Restricted Payment" has the meaning specified in Section 9.13.

     "Subordinated Indebtedness" means Indebtedness of the Company that is
expressly subordinated to the 2012 Notes, including the Existing Subordinated
Notes.

     "Subsidiary Guarantee" means any guarantee of the 2012 Notes by (i) any
Subsidiary Guarantor in accordance with the provisions of Section 14.1 hereof
and (ii) any Restricted Subsidiary in accordance with the provisions of Section
9.12.

     "Subsidiary Guarantor" means (a) each of the Company's Restricted
Subsidiaries that becomes a guarantor of the Securities in compliance with the
provisions of Section 9.12 or Section 14.1 hereof and (b) each of the Company's
Subsidiaries executing a supplemental indenture in which such Subsidiary agrees
to be bound by the terms of this Indenture and to guarantee the payment of the
2012 Notes pursuant to the provisions of Article XIV hereof.

     "Terminated Covenants" has the meaning specified in Section 9.21.

     "Trigger Date" has the meaning specified in Section 9.16(c).

     "Unrestricted Subsidiary" means (a) any Subsidiary of the Company that at
the time of determination will be designated an Unrestricted Subsidiary by the
Board of Directors of the Company as provided below, Hugoton Royalty Trust and
any other oil and gas royalty trust Subsidiary of the Company that meets the
criteria set forth in clauses (i) through (iv) of the second sentence of this
definition, and (b) any Subsidiary of an Unrestricted Subsidiary. The Board of
Directors of the Company may designate any Subsidiary of the Company as an
Unrestricted Subsidiary so long as (i) neither the Company nor any Restricted
Subsidiary is directly or indirectly liable pursuant to the terms of any
Indebtedness of such Subsidiary, (ii) no default with respect to any
Indebtedness of such Subsidiary would permit (upon notice, lapse of time or
otherwise) any holder of any other Indebtedness of the Company or any Restricted
Subsidiary to declare a default on such other Indebtedness or cause the payment
thereof to be accelerated or payable prior to its stated maturity, (iii) neither
the Company nor any Restricted Subsidiary has made an Investment in such
Subsidiary unless such Investment was made pursuant to, and in accordance with,
Section 9.13 hereof (other than Investments of the type described in clause (d)
of the definition of Permitted Investments), and (iv) such designation shall not
result in the creation or imposition of any Lien on any of the Properties of the
Company

                                       17

<PAGE>

or any Restricted Subsidiary (other than any Permitted Lien or any Lien the
creation or imposition of which shall have been in compliance with Section 9.10
hereof); provided, however, that with respect to clause (i), the Company or a
Restricted Subsidiary may be liable for Indebtedness of an Unrestricted
Subsidiary if (A) such liability constituted a Permitted Investment or a
Restricted Payment permitted by Section 9.13 hereof, in each case at the time of
incurrence, or (B) the liability would be a Permitted Investment at the time of
designation of such Subsidiary as an Unrestricted Subsidiary. Any such
designation by the Board of Directors of the Company shall be evidenced to the
Trustee by filing a Board Resolution with the Trustee giving effect to such
designation. The Board of Directors of the Company may designate any
Unrestricted Subsidiary as a Restricted Subsidiary if, immediately after giving
effect to such designation, (x) no Default or Event of Default shall have
occurred and be continuing, (y) the Company could incur $1.00 of additional
Indebtedness (not including the incurrence of Permitted Indebtedness) under the
first paragraph of Section 9.14 hereof and (z) if any of the Properties of the
Company or any of its Restricted Subsidiaries would upon such designation become
subject to any Lien (other than a Permitted Lien), the creation or imposition of
such Lien shall have been in compliance with Section 9.10 hereof.

     "2012 Notes" means the __% Senior Notes due 2012 of the Company to be
issued pursuant to this Indenture. For purposes of this Indenture, the term
"2012 Notes" shall, except where the context otherwise requires, include the
Subsidiary Guarantees, if any.

     SECTION 2.2. Consolidation, Merger and Sale.

     The Original Indenture shall be amended and supplemented by (i)
redesignating clause (d) of Section 7.1 as clause (f) and (ii) inserting the
following new clauses (d) and (e) in Section 7.1:

     "(d) except in the case of the consolidation or merger of any Restricted
Subsidiary with or into the Company, immediately after giving effect to such
transaction or transactions on a pro forma basis (on the assumption that the
transaction or transactions occurred on the first day of the period of four full
fiscal quarters ending immediately prior to the consummation of such transaction
or transactions with the appropriate adjustments with respect to the transaction
or transactions being included in such pro forma calculation) the Company (or
the Surviving Entity if the Company is not the continuing obligor under this
Indenture) could incur $1.00 of additional Indebtedness (excluding Permitted
Indebtedness) under Section 9.14 hereof;

     (e)  if the Company is not the continuing obligor under this Indenture,
then each Subsidiary Guarantor, unless it is the party to the transactions
described above, shall have by supplemental indenture confirmed that its
Subsidiary Guarantee shall apply to such Person's obligations under this
Indenture and the 2012 Notes; and".

     SECTION 2.3. Events of Default.

     (a)  The following Events of Default shall be substituted for those in
clauses (a)-(j) of Section 4.1 of the Original Indenture insofar as they relate
to the 2012 Notes:

                                       18

<PAGE>

     "(a)  default in the payment of the principal of or premium, if any, on any
of the 2012 Notes, whether such payment is due at Stated Maturity, upon
redemption, upon repurchase pursuant to a Change of Control Offer or a Net
Proceeds Offer, upon acceleration or otherwise; or

     (b)   default in the payment of any installment of interest on any of the
2012 Notes, when it becomes due and payable, and the continuance of such default
for a period of 30 days; or

     (c)   default in the performance or breach of the provisions of Article VII
hereof, the failure to make or consummate a Change of Control Offer in
accordance with Section 9.15 hereof or the failure to make or consummate a Net
Proceeds Offer in accordance with the provisions of Section 9.16 hereof; or

     (d)   the Company or any Subsidiary Guarantor shall fail to perform or
observe any other term, covenant or agreement (not theretofore terminated
pursuant to Section 9.21 hereof) contained in the 2012 Notes, any Subsidiary
Guarantee or this Indenture (other than a default specified in (a), (b) or (c)
above) for a period of 30 days after written notice of such failure requiring
the Company to remedy the same shall have been given (i) to the Company by the
Trustee or (ii) to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the 2012 Notes then Outstanding; or

     (e)   the occurrence and continuation beyond any applicable grace period of
any default in the payment of the principal of (or premium, if any, on) or
interest on any Indebtedness of the Company (other than the 2012 Notes) or any
Restricted Subsidiary for money borrowed when due, or any other default causing
acceleration of any Indebtedness of the Company or any Restricted Subsidiary for
money borrowed; provided that the aggregate principal amount of such
Indebtedness shall exceed $10,000,000; provided further that if any such default
is cured or waived or any such acceleration rescinded, or such debt is repaid,
within a period of 10 days from the continuation of such default beyond the
applicable grace period or the occurrence of such acceleration, as the case may
be, such Event of Default under this Indenture and any consequential
acceleration of the 2012 Notes shall be automatically rescinded, so long as such
rescission does not conflict with any judgment or decree; or

     (f)   the commencement of proceedings, or the taking of any enforcement
action (including by way of set-off), by any holder of at least $10,000,000 in
aggregate principal amount of Indebtedness of the Company or any Restricted
Subsidiary, after a default under such Indebtedness, to retain in satisfaction
of such Indebtedness or to collect or seize, dispose of or apply in satisfaction
of such Indebtedness, property or assets of the Company or any Restricted
Subsidiary having a Fair Market Value in excess of $10,000,000 individually or
in the aggregate; provided that if any such proceedings or actions are
terminated or rescinded, or such Indebtedness is repaid, such Event of Default
under this Indenture and any consequential acceleration of the Securities shall
be automatically rescinded, so long as (i) such rescission does not conflict
with any judgment or decree and (ii) the holder of such Indebtedness shall not
have applied any such property or assets in satisfaction of such Indebtedness;
or

                                       19

<PAGE>

     (g)   any Subsidiary Guarantee shall for any reason cease to be, or be
asserted by the Company or any Subsidiary Guarantor, as applicable, not to be,
in full force and effect, enforceable in accordance with its terms (except
pursuant to the release of any such Subsidiary Guarantee in accordance with this
Indenture); or

     (h)   if (i) any material "accumulated funding deficiency" (as defined in
Section 302 of ERISA or Section 412 of the Code), shall exist with respect to
any PBGC Plan or Multiple Employer Plan (unless a waiver or extension is
obtained under Section 412(d) or (e) of the Code and Sections 303 and 304 of
ERISA), if such accumulated funding deficiency would give rise to a material
liability of the Company, (ii) a Reportable Event shall occur with respect to
any PBGC Plan or Multiple Employer Plan, which Reportable Event is likely to
result in the termination of such PBGC Plan or Multiple Employer Plan for
purposes of Title IV of ERISA and to give rise to a material liability of the
Company, (iii) proceedings to have a trustee appointed shall commence, or a
trustee shall be appointed to terminate or administer a PBGC Plan or Multiple
Employer Plan, which proceeding is likely to result in the termination of such
PBGC Plan or Multiple Employer Plan and to give rise to a material liability of
the Company with respect to such termination, (iv) a notice of intent to
terminate a PBGC Plan or Multiple Employer Plan in a distress termination under
Section 4041(c) of ERISA is furnished to participants, (v) any Multiemployer
Plan is in reorganization or is insolvent and the circumstances are such that
such reorganization or insolvency will likely result in a material liability to
the Company, (vi) there is a complete or partial withdrawal from a Multiemployer
Plan under circumstances that would likely subject the Company to material
liability, or (vii) any event or condition described in (i) through (vi) above
(determined without regard to whether the event or condition taken alone would
or could result in a material liability) shall occur or exist with respect to a
PBGC Plan, Multiple Employer Plan or Multiemployer Plan which in combination
with one or more of any events described in (i) through (vi) above (determined
without regard to whether the event or condition taken alone would or could
result in a material liability) that has occurred or exists, would likely
subject the Company, any Subsidiary Guarantor or any other Restricted Subsidiary
to any material tax, penalty or other liability (for purposes of this paragraph
(h) the term "material" and "material liability" shall mean any tax, penalty or
liability in excess of $10,000,000); or

     (i)   final judgments or orders rendered against the Company or any
Restricted Subsidiary that are unsatisfied and that require the payment in
money, either individually or in an aggregate amount, that is more than
$10,000,000 over the coverage under applicable insurance policies and either (i)
commencement by any creditor of an enforcement proceeding upon such judgment
(other than a judgment that is stayed by reason of pending appeal or otherwise)
or (ii) the occurrence of a 60-day period during which a stay of such judgment
or order, by reason of pending appeal or otherwise, was not in effect; or

     (j)   the entry of a decree or order by a court having jurisdiction in the
premises (i) for relief in respect of the Company or any Restricted Subsidiary
in an involuntary case or proceeding under the Federal Bankruptcy Code or any
other applicable federal or state bankruptcy, insolvency, reorganization or
other similar law or (ii) adjudging the Company or any Restricted Subsidiary
bankrupt or insolvent, or approving a petition seeking reorganization,
arrangement, adjustment or composition of the Company or a Restricted Subsidiary
under the

                                       20

<PAGE>

Federal Bankruptcy Code or any other applicable federal or state law, or
appointing under any such law a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or any Subsidiary
Guarantor or any other Restricted Subsidiary or of a substantial part of their
consolidated assets, or ordering the winding up or liquidation of their affairs,
and the continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive days; or

     (k)   the commencement by the Company or any Restricted Subsidiary of a
voluntary case or proceeding under the Federal Bankruptcy Code or any other
applicable federal or state bankruptcy, insolvency, reorganization or other
similar law or any other case or proceeding to be adjudicated bankrupt or
insolvent, or the consent by the Company or any Subsidiary Guarantor or any
other Restricted Subsidiary to the entry of a decree or order for relief in
respect thereof in an involuntary case or proceeding under the Federal
Bankruptcy Code or any other applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by the Company or any
Subsidiary Guarantor or any other Restricted Subsidiary of a petition or consent
seeking reorganization or relief under any applicable federal or state law, or
the consent by it under any such law to the filing of any such petition or to
the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or other similar official) of any of the
Company or any Subsidiary Guarantor or any other Restricted Subsidiary or of any
substantial part of their consolidated assets, or the making by it of an
assignment for the benefit of creditors under any such law, or the admission by
it in writing of its inability to pay its debts generally as they become due or
taking of corporate action by the Company or any Subsidiary Guarantor or any
other Restricted Subsidiary in furtherance of any such action."

     (b)   The references in Sections 4.2 and 5.6 of the Original Indenture to
clause (i) or (j) of Section 4.1 shall be deemed to be references to clause (j)
or (k) of Section 4.1 in relation to the 2012 Notes.

     SECTION 2.4. Supplemental Indentures without Consent of Holders.

     Section 8.1 of the Original Indenture shall be amended and supplemented by
(i) inserting the words "any Subsidiary Guarantors, when authorized by a Board
Resolution," after the words "Board Resolution," in the first paragraph thereof,
(ii) deleting the period at the end of paragraph (k) and substituting therefor
"; or" and (iii) inserting the following paragraphs:

     "(l) to add any Person as a Subsidiary Guarantor as provided in Section
     14.1 hereof or as contemplated by the definition of "Permitted Subsidiary
     Indebtedness" to evidence the succession of another Person to any
     Subsidiary Guarantor and the assumption by any such successor of the
     covenants and agreements of such Subsidiary Guarantor contained herein, in
     the 2012 Notes and in the Subsidiary Guarantee; or

     (m)  to release a Subsidiary Guarantor from its Subsidiary Guarantee
     pursuant to Section 9.12 hereof."

                                       21

<PAGE>

     SECTION 2.5. Supplemental Indenture with Consent of Holders.

     Section 8.2 of the Original Indenture shall be amended and supplemented by
(i) inserting the words "any Subsidiary Guarantors, when authorized by a Board
Resolution," after the words "Board Resolution," in the first paragraph thereof,
(ii) deleting the period at the end of paragraph (c) and substituting therefor
"; or" and (iii) inserting the following paragraphs:

    "(d)   modify Section 9.12 hereof or any provisions of this Indenture
relating to any Subsidiary Guarantees in a manner adverse to the Holders
thereof; or

     (e)   amend, change or modify the obligation of the Company to make and
consummate a Change of Control Offer in the event of a Change of Control, or to
make and consummate a Net Proceeds Offer with respect to any Asset Sale or
modify any of the provisions or definitions with respect thereto."

     SECTION 2.6. Covenants.

     (a)   Article IX of the Original Indenture shall be amended and
supplemented by inserting the following in substitution for Section 9.9:

     "Section 9.9 Reports.

     The Company shall file on a timely basis with the Commission, to the extent
such filings are accepted by the Commission and whether or not the Company has a
class of securities registered under the Exchange Act, the annual reports,
quarterly reports and other documents that the Company would be required to file
if it were subject to Section 13 or 15(d) of the Exchange Act). The Company will
also be required to file with the Trustee copies of such reports and documents
within 15 days after the date on which the Company files such reports and
documents with the Commission or the date on which the Company would be required
to file such reports and documents if the Company were so required. The Company
also will furnish at its cost copies of such reports and documents to any holder
of 2012 Notes promptly upon written request, irrespective of whether or not the
Company files any such report or document with the Commission. The Company and
each Subsidiary Guarantor also shall comply with other provisions of TIA Section
314(a).

     Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates)."

     (b)   Article IX of the Original Indenture shall be further amended and
supplemented by inserting the following in substitution for Section 9.11:

     "Section 9.11 Waiver of Certain Covenants.

     The Company may omit in any particular instance to comply with any term,
provision or condition set forth in Sections 9.5 through 9.10, Sections 9.13 and
9.14 and Sections 9.17

                                       22

<PAGE>

through 9.20 hereof if, before or after the time for such compliance, the
Holders of at least a majority in principal amount of the Outstanding 2012 Notes
and the Subsidiary Guarantors, by act of such Holders and written agreement of
the Subsidiary Guarantors, waive such compliance in such instance with such
term, provision or condition, but no such waiver shall extend to or affect such
term, provision or condition except to the extent so expressly waived, and,
until such waiver shall become effective, the obligations of the Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect."

     (c)   Article IX of the Original Indenture shall be further amended and
supplemented by inserting the following new sections in their entirety:

     "Section 9.12 Limitation on Non-Guarantor Restricted Subsidiaries.

     (a)   The Company shall not permit any Restricted Subsidiary that is not a
Subsidiary Guarantor to guarantee the payment of any Indebtedness of the Company
unless (i) such Restricted Subsidiary simultaneously executes and delivers a
supplemental indenture to this Indenture providing for a Subsidiary Guarantee of
the 2012 Notes by such Restricted Subsidiary; (ii) such Restricted Subsidiary
waives, and agrees not in any manner whatsoever to claim or take the benefit or
advantage of, any rights of reimbursement, indemnity or subrogation or any other
rights against the Company or any other Restricted Subsidiary as a result of any
payment by such Restricted Subsidiary under its Subsidiary Guarantee until such
time as the obligations guaranteed thereby are paid in full; and (iii) such
Restricted Subsidiary shall deliver to the Trustee an Opinion of Counsel to the
effect that such supplemental indenture has been duly executed and authorized
and such Subsidiary Guarantee constitutes a valid, binding and enforceable
obligation of such Restricted Subsidiary, except insofar as enforcement thereof
may be limited by bankruptcy, insolvency or similar laws (including, without
limitation, all laws relating to fraudulent transfers) and except insofar as
enforcement thereof is subject to general principles of equity; provided that
this paragraph (a) shall not be applicable to (x) any guarantee of any
Restricted Subsidiary that (1) existed at the time such Person became a
Restricted Subsidiary of the Company and (2) was not incurred in connection
with, or in contemplation of, such Person becoming a Restricted Subsidiary of
the Company or (y) any guarantee of any Restricted Subsidiary of Indebtedness of
the Company described in clause (a) of the definition of Permitted Indebtedness.

     (b)   The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, transfer any assets, businesses, divisions, real property or
equipment to any Restricted Subsidiary (other than sales of oil and natural gas
production in the ordinary course of business at prices under contracts in
existence as of the date of this Indenture or on terms not less favorable to the
Subsidiary than would be obtainable at the time in comparable transactions
through arms-length dealings with Persons other than Affiliates of the Company
or any transfer that results in Permitted Subsidiary Indebtedness) or acquire
Capital Stock of a new Restricted Subsidiary that in either case is not a
Subsidiary Guarantor unless (i) such transferee or new Restricted Subsidiary
enters into a Subsidiary Guarantee by complying with Section 9.12(a) hereof or
(ii) the aggregate Fair Market Value at the time of such proposed transfer or
acquisition, of such assets, businesses, divisions, real property or equipment
proposed to be transferred or Capital Stock of a new Restricted Subsidiary
proposed to be acquired, together with the aggregate Fair Market Value of all
assets, businesses, divisions, real property or equipment previously

                                       23

<PAGE>

transferred pursuant to this clause (ii) and Capital Stock previously acquired
pursuant to this clause (ii) (in each case valued at the time of transfer or
acquisition) does not exceed (x) the greater of $50,000,000 and 5% of Adjusted
Consolidated Net Tangible Assets less (y) the book value of total combined
assets of all Subsidiaries of the Company at December 31, 2001, as reflected in
a consolidating balance sheet of the Company prepared in accordance with GAAP
(exclusive, in the case of each of clauses (x) and (y), of intercompany
receivables and liabilities due from the Company and assets subject to any
Sale/Leaseback Transaction treated as an operating lease in the consolidated
financial statements of the Company); provided that, in the case of clause (ii),
if the Restricted Subsidiary to which such transfer was made or whose Capital
Stock was acquired subsequently enters into a Subsidiary Guarantee, such
transfer or acquisition shall be treated as having been made pursuant to clause
(i).

     (c)  Notwithstanding the foregoing and the other provisions of this
Indenture, any Subsidiary Guarantee incurred by a Restricted Subsidiary pursuant
to this Section 9.12 shall provide by its terms that it shall be automatically
and unconditionally released and discharged upon (i) any sale, exchange or
transfer, to any Person that is not an Affiliate of the Company, of all of the
Company's Capital Stock in such Restricted Subsidiary (which sale, exchange or
transfer is not prohibited by this Indenture), (ii) the merger of such
Restricted Subsidiary into the Company or any other Restricted Subsidiary or the
liquidation and dissolution of such Restricted Subsidiary (in each case to the
extent not prohibited by this Indenture), or (iii) (x) the release or discharge
of all guarantees by such Restricted Subsidiary of any Indebtedness other than
Note Obligations, except a discharge or release by or as a result of payment
under such guarantees and (y) after giving effect to the proposed release and
discharge, the aggregate total combined assets of all Restricted Subsidiaries
that are not Subsidiary Guarantors (exclusive of intercompany receivables and
liabilities due from the Company and assets subject to any Sale/Leaseback
Transaction treated as an operating lease in the consolidated financial
statements of the Company) do not exceed the greater of $50,000,000 and 5% of
Adjusted Consolidated Net Tangible Assets."

     "SECTION 9.13 Limitation on Restricted Payments.

     (a)  The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, take the following actions:

          (i)   declare or pay any dividend on, or make any distribution to
     holders of, any shares of the Company's Capital Stock (other than dividends
     or distributions payable solely in shares of Qualified Capital Stock of the
     Company, options, warrants or other rights to purchase Qualified Capital
     Stock of the Company);

          (ii)  purchase, redeem or otherwise acquire or retire for value any
     Capital Stock of the Company or any Affiliate thereof (other than any
     Restricted Subsidiary of the Company) or any options, warrants or other
     rights to acquire such Capital Stock; provided, however, that the Company
     may purchase, redeem or otherwise retire common stock of the Company in an
     amount not to exceed $10,000,000 in the aggregate for all such transactions
     after the Issue Date, and; provided, further, that the Company may make any
     payment of the applicable redemption price in connection with a Qualified
     Redemption Transaction;

                                       24

<PAGE>

          (iii)   make any principal payment on or repurchase, redeem, defease
     or otherwise acquire or retire for value, prior to any scheduled principal
     payment, scheduled sinking fund payment or maturity, any Subordinated
     Indebtedness, provided, however, that the Company may make any payment of
     the applicable redemption price in connection with a Qualified Redemption
     Transaction;

          (iv)    declare or pay any dividend on, or make any distribution to
     the holders of, any shares of Capital Stock of any Restricted Subsidiary of
     the Company (other than to the Company or any of its Restricted
     Subsidiaries) or purchase, redeem or otherwise acquire or retire for value
     any Capital Stock of any Restricted Subsidiary or any options, warrants or
     other rights to acquire any such Capital Stock (other than with respect to
     any such Capital Stock held by the Company or any Wholly Owned Restricted
     Subsidiary of the Company);

          (v)     make any Investment (other than a Permitted Investment); or

          (vi)    incur any guarantee of Indebtedness of any Affiliate (other
     than (A) guarantees of Indebtedness of any Restricted Subsidiary by the
     Company or (B) guarantees of Indebtedness of the Company by any Restricted
     Subsidiary, in each case in accordance with the terms of this Indenture);

     (such payments or other actions described in (but not excluded from)
     clauses (i) through (vi) are collectively referred to as "Restricted
     Payments"), unless at the time of and after giving effect to the proposed
     Restricted Payment (with the amount of any such Restricted Payment, if
     other than cash, being the amount determined by the Board of Directors of
     the Company, whose determination shall be conclusive and evidenced by a
     Board Resolution), (1) no Default or Event of Default shall have occurred
     and be continuing, (2) the Company could incur $1.00 of additional
     Indebtedness (excluding Permitted Indebtedness) in accordance with Section
     9.14 hereof and (3) the aggregate amount of all Restricted Payments
     declared or made after April 1, 1997, shall not exceed the sum (without
     duplication) of the following:

                  (I)    50% of the aggregate cumulative Consolidated Net Income
          of the Company accrued on a cumulative basis during the period
          beginning on May 1, 1997, and ending on the last day of the Company's
          last fiscal quarter ending prior to the date of such proposed
          Restricted Payment (or, if such aggregate cumulative Consolidated Net
          Income shall be a loss, minus 100% of such loss), plus

                  (II)   the aggregate net cash proceeds received after April 1,
          1997, by the Company as capital contributions to the Company (other
          than from any Restricted Subsidiary), plus

                  (III)  the aggregate net cash proceeds, and the Fair Market
          Value at the date of acquisition of Property other than cash or Cash
          Equivalents, received after April 1, 1997 by the Company from or as
          the result of the issuance or sale (other

                                       25

<PAGE>

          than to any of its Restricted Subsidiaries) of shares of Qualified
          Capital Stock of the Company or any options, warrants or rights to
          purchase such shares of Qualified Capital Stock of the Company, plus

                  (IV)   the aggregate net cash proceeds received after April 1,
          1997 by the Company (other than from any of its Restricted
          Subsidiaries) upon the exercise of any options, warrants or rights to
          purchase shares of Qualified Capital Stock of the Company, plus

                  (V)    the aggregate net cash proceeds, and the Fair Market
          Value at the date of acquisition of Property other than cash or Cash
          Equivalents, received after April 1, 1997 by the Company from or as
          the result of the issuance or sale (other than to any of its
          Restricted Subsidiaries) of debt securities or shares of Redeemable
          Capital Stock that have been converted into or exchanged for Qualified
          Capital Stock of the Company, together with the aggregate cash and the
          Fair Market Value at the date of acquisition of Property other than
          cash or Cash Equivalents received by the Company at the time of such
          conversion or exchange, plus

                  (VI)   To the extent not otherwise included in the Company's
          Consolidated Net Income, the net reduction in Investments in
          Unrestricted Subsidiaries resulting from the payments of interest on
          Indebtedness, dividends, repayments of loans or advances, or other
          transfers of assets, in each case to the Company or a Restricted
          Subsidiary after April 1, 1997 from any Unrestricted Subsidiary or
          from the redesignation of an Unrestricted Subsidiary as a Restricted
          Subsidiary (valued in each case as provided in the definition of
          "Investment"), not to exceed in the case of any Unrestricted
          Subsidiary the total amount of Investments (other than Permitted
          Investments) in such Unrestricted Subsidiary made by the Company and
          its Restricted Subsidiaries in such Unrestricted Subsidiary after
          April 1, 1997, plus

          (VII) $50,000,000.

     (b)  Notwithstanding paragraph (a) above, the Company and its Restricted
Subsidiaries may take the following actions so long as (in the case of clauses
(ii), (iii), (iv) and (vi) below) no Default or Event of Default shall have
occurred and be continuing:

          (i)     the payment of any dividend within 60 days after the date
     of declaration thereof, if at such declaration date such declaration
     complied with the provisions of paragraph (a) above (and such payment shall
     be deemed to have been paid on such date of declaration for purposes of any
     calculation required by the provisions of paragraph (a) above);

          (ii)    the repurchase, redemption or other acquisition or retirement
     of any shares of any class of Capital Stock of the Company or any
     Restricted Subsidiary, in exchange for, or out of the aggregate net cash
     proceeds of, a substantially concurrent issue and sale

                                       26

<PAGE>

     (other than to a Restricted Subsidiary) of shares of Qualified Capital
     Stock of the Company;

          (iii)   the purchase, redemption, repayment, defeasance or other
     acquisition or retirement for value of any Subordinated Indebtedness (other
     than Redeemable Capital Stock) in exchange for or out of the aggregate net
     cash proceeds of a substantially concurrent issue and sale (other than to a
     Restricted Subsidiary) of shares of Qualified Capital Stock of the Company;

          (iv)    the purchase, redemption, repayment, defeasance or other
     acquisition or retirement for value of (A) any Existing Subordinated Notes
     or (B) any other Subordinated Indebtedness (other than Redeemable Capital
     Stock) so long as, in the case of this subclause (B) only, such other
     Subordinated Indebtedness (1) was issued after the Issue Date and (2) has
     an Average Life to Stated Maturity that is longer than the Average Life to
     Stated Maturity of the 2012 Notes and has a Stated Maturity for its final
     scheduled principal payment that is at least 91 days later than the Stated
     Maturity for the final scheduled principal payment of the 2012 Notes;

          (v)     repurchases, acquisitions or retirements of shares of
     Qualified Capital Stock of the Company deemed to occur upon the exercise of
     stock options or similar rights issued under employee benefit plans of the
     Company if such shares represent all or a portion of exercise price or are
     surrendered in connection with satisfying any federal income tax
     obligation; or

          (vi)    repurchases, redemptions, other acquisitions or retirements
     for value of Capital Stock of the Company held by employees of the Company
     or any Restricted Subsidiary in an amount not to exceed $2,000,000 in the
     aggregate during any calendar year.

     The actions described in clauses (i), (ii), (iii) and (vi) of this
     paragraph (b) shall be Restricted Payments that shall be permitted to be
     taken in accordance with this paragraph (b) but shall reduce the amount
     that would otherwise be available for Restricted Payments under clause (3)
     of paragraph (a) (provided that any dividend paid pursuant to clause (i) of
     this paragraph (b) shall reduce the amount that would otherwise be
     available under clause (3) of paragraph (a) when declared, but not also
     when subsequently paid pursuant to such clause (i)), and the actions
     described in clauses (iv) and (v) of this paragraph (b) shall be Restricted
     Payments that shall be permitted to be taken in accordance with this
     paragraph and shall not reduce the amount that would otherwise be available
     for Restricted Payments under clause (3) of paragraph (a).

     (c)  In computing Consolidated Net Income of the Company under paragraph
(a) above, (i) the Company shall use audited financial statements for the
portions of the relevant period for which audited financial statements are
available on the date of determination and unaudited financial statements and
other current financial data based on the books and records of the Company for
the remaining portion of such period and (ii) the Company shall be permitted to
rely in good faith on the financial statements and other financial data derived
from the books and

                                       27

<PAGE>

records of the Company that are available on the date of determination. If the
Company makes a Restricted Payment which, at the time of the making of such
Restricted Payment, would in the good faith determination of the Company be
permitted under the requirements of this Indenture, such Restricted Payment
shall be deemed to have been made in compliance with this Indenture
notwithstanding any subsequent adjustments made in good faith to the Company's
financial statements affecting Consolidated Net Income of the Company for any
period.

     Section 9.14 Limitation on Indebtedness.

     The Company shall not, and shall not permit any Restricted Subsidiary to,
create, incur, issue, assume, guarantee or in any manner become directly or
indirectly liable for the payment of (collectively "incur") any Indebtedness
(including any Acquired Indebtedness), other than Permitted Indebtedness and
Permitted Subsidiary Indebtedness, as the case may be; provided, however, that
the Company and its Restricted Subsidiaries that are Subsidiary Guarantors may
incur additional Indebtedness if (i) the Company's Consolidated Fixed Charge
Coverage Ratio for the four full fiscal quarters immediately preceding the
incurrence of such Indebtedness (and for which financial statements are
available), taken as one period (at the time of such incurrence, after giving
pro forma effect to: (x) the incurrence of such Indebtedness and (if applicable)
the application of the net proceeds therefrom, including to refinance other
Indebtedness or to acquire producing oil and natural gas Properties, as if such
Indebtedness had been incurred and the application of such proceeds had occurred
at the beginning of such four-quarter period; (y) the incurrence, repayment or
retirement of any other Indebtedness (including Permitted Indebtedness) by the
Company or its Restricted Subsidiaries since the first day of such four-quarter
period (including any other Indebtedness to be incurred concurrently with the
incurrence of such Indebtedness) as if such Indebtedness had been incurred,
repaid or retired at the beginning of such four-quarter period; and (z) the
acquisition (whether by purchase, merger or otherwise) or disposition (whether
by sale, merger or otherwise) of any Person acquired or disposed of by the
Company or its Restricted Subsidiaries, as the case may be, since the first day
of such four-quarter period, as if such acquisition or disposition had occurred
at the beginning of such four-quarter period), would have been equal to at least
2.50 to 1.0 and (ii) no Default or Event of Default shall have occurred and be
continuing at the time such additional Indebtedness is incurred or would occur
as a consequence of the incurrence of the additional Indebtedness.

     For purposes of determining compliance with this Section 9.14, in the event
that an item of Indebtedness (including Acquired Indebtedness) meets the
criteria of more than one of the categories of Permitted Indebtedness or
Permitted Subsidiary Indebtedness, as applicable, or is entitled to be incurred
pursuant to clauses (i) and (ii) of the proviso to the first sentence of the
preceding paragraph of this Section 9.14, the Company may, in its sole
discretion, classify (or later reclassify) in whole or in part such item of
Indebtedness in any manner that complies with this Section 9.14 and such item of
Indebtedness or a portion thereof may be classified (or later reclassified) in
whole or in part as having been incurred under more than one of the applicable
clauses of Permitted Indebtedness or Permitted Subsidiary Indebtedness or
pursuant to clauses (i) and (ii) of the proviso to the first sentence of the
preceding paragraph hereof. Accrual of interest, the accretion of accreted value
and the payment of interest in the form of additional Indebtedness will not be
deemed to be an incurrence of Indebtedness for purposes of this covenant.

                                       28

<PAGE>

     Section 9.15 Change of Control.

     (a)    Upon the occurrence of a Change of Control, the Company shall be
obligated to make an offer to purchase (a "Change of Control Offer") all of the
then Outstanding 2012 Notes, in whole or in part, from the Holders of such 2012
Notes in integral multiples of $1,000, at a purchase price (the "Change of
Control Purchase Price") equal to 101% of the aggregate principal amount of such
2012 Notes, plus accrued and unpaid interest to the Change of Control Purchase
Date (as defined below), in accordance with the procedures set forth in
paragraphs (b), (c) and (d) of this Section. The Company shall, subject to the
provisions described below, be required to purchase all 2012 Notes properly
tendered into the Change of Control Offer and not withdrawn. The Company will
not be required to make a Change of Control Offer upon a Change of Control if a
third party makes the Change of Control Offer at the same purchase price, at the
same times and otherwise in substantial compliance with the requirements
applicable to a Change of Control Offer made by the Company and purchases all
2012 Notes validly tendered and not withdrawn under such Change of Control
Offer.

     (b)    The Change of Control Offer is required to remain open for at least
20 Business Days and until the close of business on the fifth Business Day prior
to the Change of Control Purchase Date.

     (c)    Not later than the 30th day following any Change of Control, the
Company shall give to the Trustee in the manner provided in Section 13.4 and
each Holder of the 2012 Notes in the manner provided in Section 13.5, a notice
(the "Change of Control Notice") stating:

            (1)  that a Change in Control has occurred and that such Holder has
     the right to require the Company to repurchase such Holder's 2012 Notes, or
     portion thereof, at the Change of Control Purchase Price;

            (2)  any information regarding such Change of Control required to be
     furnished pursuant to Rule 14e-1 under the Exchange Act and any other
     securities laws and regulations thereunder;

            (3)  a purchase date (the "Change of Control Purchase Date") which
     shall be on a Business Day and no earlier than 30 days nor later than 70
     days from the date the Change of Control occurred;

            (4)  that any 2012 Note, or portion thereof, not tendered or
     accepted for payment will continue to accrue interest;

            (5)  that unless the Company defaults in depositing money with the
     Paying Agent in accordance with the last paragraph of paragraph (d) of this
     Section 9.15, or payment is otherwise prevented, any 2012 Note, or portion
     thereof, accepted for payment pursuant to the Change of Control Offer shall
     cease to accrue interest after the Change of Control Purchase Date; and

            (6)  the instructions a Holder must follow in order to have its 2012
     Notes repurchased in accordance with paragraph (d) of this Section.

                                       29

<PAGE>

     (d)    Holders electing to have 2012 Notes purchased will be required to
surrender such 2012 Notes to the Company at the address specified in the Change
of Control Notice at least five Business Days prior to the Change of Control
Purchase Date. Holders will be entitled to withdraw their election if the
Company receives, not later than three Business Days prior to the Change of
Control Purchase Date, a facsimile transmission or letter setting forth the name
of the Holder, the certificate number(s) and principal amount of the 2012 Notes
delivered for purchase by the Holder as to which his election is to be withdrawn
and a statement that such Holder is withdrawing his election to have such 2012
Notes purchased. Holders whose 2012 Notes are purchased only in part will be
issued new 2012 Notes equal in principal amount to the unpurchased portion of
the 2012 Notes surrendered.

     On the Change of Control Purchase Date, the Company shall (i) accept for
payment all 2012 Notes or portions thereof tendered pursuant to a Change of
Control Offer; (ii) deposit with the Paying Agent money sufficient to pay the
purchase price of all 2012 Notes or portions thereof so tendered; and (iii)
deliver or cause to be delivered to the Trustee the 2012 Notes so accepted. The
Paying Agent shall promptly mail or deliver to Holders of the 2012 Notes so
accepted payment in an amount equal to the purchase price, and the Company shall
execute and the Trustee will promptly authenticate and mail or make available
for delivery to such Holders a new 2012 Note equal in principal amount to any
unpurchased portion of the 2012 Note which any Holder did not surrender for
purchase. Any 2012 Notes not so accepted will be promptly mailed or delivered to
the Holder thereof. The Company shall announce the results of a Change of
Control Offer on or as soon as practicable after the Change of Control Purchase
Date. For purposes of this Section 9.15, the Trustee will act as the Paying
Agent.

     Section 9.16 Limitation on Disposition of Proceeds of Asset Sales.

     (a)    The Company shall not, and shall not permit any Restricted
Subsidiary to, engage in any Asset Sale unless (i) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the Fair Market Value of the Properties sold
or otherwise disposed of pursuant to the Asset Sale and (ii) the Fair Market
Value of all forms of consideration other than cash, Cash Equivalents and Liquid
Securities received with respect to any Asset Sale, when taken together with the
Fair Market Value of all consideration other than cash, Cash Equivalents and
Liquid Securities received by the Company and its Restricted Subsidiaries with
respect to all other Asset Sales since the Issue Date, shall not exceed an
aggregate amount equal to 10% of Adjusted Consolidated Net Tangible Assets at
the date of each determination.

     (b)    If the Company or any Restricted Subsidiary engages in an Asset
Sale, the Company may either (i) apply the Net Cash Proceeds thereof to
permanently reduce Pari Passu Indebtedness, or (ii) invest all or any part of
the Net Cash Proceeds thereof, within 365 days after such Asset Sale, in Oil and
Gas Properties, (iii) apply the Net Cash Proceeds thereof to acquire a
controlling interest in a Person that is primarily engaged in the Oil and Gas
Business or (iv) apply the Net Cash Proceeds thereof to develop or exploit the
Company's Oil and Gas Properties. The amount of such Net Cash Proceeds not
applied or invested as provided in this paragraph constitutes "Excess Proceeds,"
subject to disposition as provided below.

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<PAGE>

     (c)    When the aggregate amount of Excess Proceeds equals or exceeds
$15,000,000 (the "Trigger Date"), the Company shall make an offer to purchase,
from all Holders of the 2012 Notes then Outstanding and any then outstanding
Pari Passu Indebtedness required to be repurchased or repaid on a permanent
basis in connection with an Asset Sale, an aggregate principal amount of 2012
Notes and any then outstanding Pari Passu Indebtedness equal to such Excess
Proceeds as follows:

            (i)    (A)  No later than the 30th day following the Trigger Date,
     the Company shall give to the Trustee in the manner provided in Section
     13.4 hereof and each Holder of the 2012 Notes in the manner provided in
     Section 13.5 hereof, notice (a "Purchase Notice") offering to purchase (a
     "Net Proceeds Offer") from all Holders of the 2012 Notes the maximum
     principal amount (expressed as a multiple of $1,000) of 2012 Notes that may
     be purchased out of an amount (the "Payment Amount") equal to the product
     of such Excess Proceeds multiplied by a fraction, the numerator of which is
     the outstanding principal amount of the 2012 Notes and the denominator of
     which is the sum of the outstanding principal amount of the 2012 Notes and
     such Pari Passu Indebtedness, if any (subject to proration in the event
     such amount is less than the aggregate Offered Price of all 2012 Notes
     tendered), and (B) to the extent required by such Pari Passu Indebtedness
     and provided there is a permanent reduction in the principal amount of such
     Pari Passu Indebtedness, the Company shall make an offer to purchase Pari
     Passu Indebtedness (a "Pari Passu Offer") in an amount (the "Pari Passu
     Indebtedness Amount") equal to the excess of the Excess Proceeds over the
     Payment Amount.

            (ii)   The offer price for the 2012 Notes shall be payable in cash
     in an amount equal to 100% of the principal amount of the 2012 Notes
     tendered pursuant to a Net Proceeds Offer, plus accrued and unpaid interest
     to the date such Net Proceeds Offer is consummated (the "Offered Price"),
     in accordance with paragraph (d) of this Section. To the extent that the
     aggregate Offered Price of the 2012 Notes tendered pursuant to a Net
     Proceeds Offer is less than the Payment Amount relating thereto or the
     aggregate amount of the Pari Passu Indebtedness that is purchased or repaid
     pursuant to the Pari Passu Offer is less than the Pari Passu Indebtedness
     Amount (such shortfall constituting a "Net Proceeds Deficiency"), the
     Company may use such Net Proceeds Deficiency, or a portion thereof, for
     general corporate purposes, subject to the limitations of Section 9.13
     hereof.

            (iii)  If the aggregate Offered Price of 2012 Notes validly tendered
     and not withdrawn by Holders thereof exceeds the Payment Amount, 2012 Notes
     to be purchased will be selected on a pro rata basis. Upon completion of
     such Net Proceeds Offer and Pari Passu Offer, the amount of Excess Proceeds
     shall be reset to zero.

            (iv)   The Purchase Notice shall set forth a purchase date (the "Net
     Proceeds Payment Date"), which shall be on a Business Day no earlier than
     30 days nor later than 70 days from the Trigger Date. The Purchase Notice
     shall also state (A) that a Trigger Date with respect to one or more Asset
     Sales has occurred and that such Holder has the right to require the
     Company to repurchase such Holder's Securities at the Offered Price,
     subject to the limitations described in the forgoing paragraph (iii), (B)
     any information regarding such Net Proceeds Offer required to be furnished
     pursuant to Rule 14e-1 under the Exchange Act and any other securities laws
     and regulations thereunder, (C) that any

                                       31

<PAGE>

     2012 Note, or portion thereof, not tendered or accepted for payment will
     continue to accrue interest, (D) that, unless the Company defaults in
     depositing money with the Paying Agent in accordance with the last
     paragraph of paragraph (d) of this Section 9.16, or payment is otherwise
     prevented, any 2012 Note, or portion thereof, accepted for payment pursuant
     to the Net Proceeds Offer shall cease to accrue interest after the Net
     Proceeds Payment Date, and (E) the instructions a Holder must follow in
     order to have its Securities repurchased in accordance with paragraph (d)
     of this Section.

     (d)    Holders electing to have 2012 Notes purchased will be required to
surrender such 2012 Notes to the Company at the address specified in the
Purchase Notice at least five Business Days prior to the Net Proceeds Payment
Date. Holders will be entitled to withdraw their election if the Company
receives, not later than three Business Days prior to the Net Proceeds Payment
Date, a facsimile transmission or letter setting forth the name of the Holder,
the certificate number(s) and principal amount of the 2012 Notes delivered for
purchase by the Holder as to which his election is to be withdrawn and a
statement that such Holder is withdrawing his election to have such 2012 Notes
purchased. Holders whose 2012 Notes are purchased only in part will be issued
new 2012 Notes equal in principal amount to the unpurchased portion of the 2012
Notes surrendered.

     On the Net Proceeds Payment Date, the Company shall (i) accept for payment
2012 Notes or portions thereof tendered pursuant to a Net Proceeds Offer in an
aggregate principal amount equal to the Payment Amount or such lesser amount of
2012 Notes as has been tendered, (ii) deposit with the Paying Agent money
sufficient to pay the purchase price of all 2012 Notes or portions thereof so
tendered in an aggregate principal amount equal to the Payment Amount or such
lesser amount and (iii) deliver or cause to be delivered to the Trustee the 2012
Notes so accepted. The Paying Agent shall promptly mail or deliver to Holders of
the 2012 Notes so accepted payment in an amount equal to the purchase price, and
the Company shall execute and the Trustee will promptly authenticate and mail or
make available for delivery to such Holders a new 2012 Note equal in principal
amount to any unpurchased portion of the 2012 Note which any such Holder did not
surrender for purchase. Any 2012 Notes not so accepted will be promptly mailed
or delivered to the Holder thereof. The Company shall announce the results of a
Net Proceeds Offer on or as soon as practicable after the Net Proceeds Payment
Date. For purposes of this Section 9.16, the Trustee will act as the Paying
Agent.

     (e)    The Company shall not permit any Subsidiary to enter into or suffer
to exist any agreement that would place any restriction of any kind (other than
pursuant to law or regulation) on the ability of the Company to make a Net
Proceeds Offer following any Asset Sale.

     Section 9.17 Limitation on Transactions with Affiliates.

     The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, enter into or suffer to exist any transaction or series
of related transactions (including, without limitation, the sale, purchase,
exchange or lease of assets, property or the rendering of any services) with, or
for the benefit of, any Affiliate of the Company other than a Restricted
Subsidiary (each, other than a Restricted Subsidiary, being an "Interested
Person"), unless (a) such transaction or series of transactions is on terms that
are no less favorable to the Company or such Restricted Subsidiary, as the case
may be, than those that would be available in a

                                       32

<PAGE>

comparable arm's length transaction with unrelated third parties who are not
Interested Persons, (b) with respect to any one transaction or series of
transactions involving aggregate payments in excess of $5,000,000, the Company
delivers an Officers' Certificate to the Trustee certifying that such
transaction or series of transactions complies with clause (a) above and such
transaction or series of transactions has been approved by the Board of
Directors of the Company and (c) with respect to any one transaction or series
of transactions involving aggregate payments in excess of $25,000,000, the
Officers' Certificate referred to in clause (b) above also certifies that such
transaction or series of transactions has been approved by a majority of the
Disinterested Directors or, in the event there are no such Disinterested
Directors, that the Company has obtained a written opinion from an independent
nationally recognized investment banking firm or appraisal firm, in either case
specializing or having a specialty in the type and subject matter of the
transaction or series of transactions at issue, which opinion shall be to the
effect set forth in clause (a) above or shall state that such transaction or
series of transactions is fair from a financial point of view to the Company or
such Restricted Subsidiary; provided, however, that this covenant will not
restrict the Company from (i) paying reasonable and customary regular
compensation and fees to directors of the Company who are not employees of the
Company or any Restricted Subsidiary or (ii) paying dividends on, or making
distributions with respect to, shares of Capital Stock of the Company on a pro
rata basis to the extent permitted by Section 9.13 hereof.

     Section 9.18 Limitation on Dividends and Other Payment Restrictions
Affecting Restricted Subsidiaries.

     The Company shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any Restricted Subsidiary to (a) pay dividends, in cash or otherwise, or make
any other distributions on or in respect of its Capital Stock to the Company or
any Restricted Subsidiary, (b) pay any Indebtedness owed to the Company or any
Restricted Subsidiary, (c) make an Investment in the Company or any Restricted
Subsidiary or (d) transfer any of its properties or assets to the Company or any
Restricted Subsidiary, except for such encumbrances or restrictions (i) pursuant
to an agreement in effect or entered into on the date of this Indenture, (ii)
any agreement or other instrument of a Person acquired by the Company or any
Restricted Subsidiary in existence at the time of such acquisition (but not
created in contemplation thereof), which encumbrance or restriction is not
applicable to any other Person, or the properties or assets of any other Person,
other than the Person, or the property or assets of the Person, so acquired or
(iii) existing under any agreement that extends, renews, refinances or replaces
the agreements containing the restrictions in the foregoing clauses (i) and
(ii), provided that the terms and conditions of any such restrictions are not
materially less favorable to the Holders of the Securities than those under or
pursuant to the agreement evidencing the Indebtedness so extended, renewed,
refinanced or replaced.

     Section 9.19 Limitation on Sale/Leaseback Transactions.

     The Company will not, and will not permit any of its Restricted
Subsidiaries to, enter into any Sale/Leaseback Transaction with any Person
(other than the Company or any Wholly Owned Restricted Subsidiary) unless either
(i) the Company or such Restricted Subsidiary, as the case may be, at the date
of determination would be able to incur Indebtedness secured by a Lien on

                                       33

<PAGE>

the Property subject to such Sale/Leaseback Transaction without equally and
ratably securing the 2012 Notes or (ii) the Company, within six months after
such transaction, applies an amount equal to the Attributable Indebtedness of
such transaction in the same manner and to the same extent as Net Cash Proceeds
from an Asset Sale are applied pursuant to Section 9.16.

     Section 9.20  Limitation on Conduct of Business.

     The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, engage in the conduct of any business other than the Oil and
Gas Business, except that the Company and the Restricted Subsidiaries may engage
in any business other than the Oil and Gas Business, provided that the
consolidated assets of the Company and the Restricted Subsidiaries used in such
business shall not exceed, at any time, 10% of Adjusted Consolidated Net
Tangible Assets.

     Section 9.21  Termination of Covenants.

     From and after the time that the 2012 Notes have received an Investment
Grade Rating from both Rating Agencies (the "Covenant Termination Date"), so
long as no Default has occurred and is continuing, upon delivery to the Trustee
of notice to such effect the Company and the Restricted Subsidiaries shall no
longer be subject to Sections 9.12, 9.13, 9.14, 9.16 (except for purposes of
clause (ii) of Section 9.19), 9.17, 9.18, and 9.20 and clause (d) of Section 7.1
(collectively, the "Terminated Covenants"); provided, however, that all other
provisions of this Indenture shall continue to be in full force and effect.
Subject to the next sentence, after the Covenant Termination Date, solely for
purposes of Section 9.10, the Permitted Liens described in clauses (x) and (bb)
of that definition shall be Permitted Liens only to the extent that they secure
Indebtedness not exceeding, at the time of determination, 10% of Adjusted
Consolidated Net Tangible Assets. If, after the Covenant Termination Date,
either of the Rating Agencies withdraws its ratings or downgrades the ratings
assigned to the 2012 Notes below the Investment Grade Ratings, so that the 2012
Notes do not have an Investment Grade Rating from both Rating Agencies, then
upon delivery to the Trustee of notice to such effect the limitation on the
application of clauses (x) and (bb) of the definition of Permitted Liens set
forth in the preceding sentence shall not apply until such time as the 2012
Notes again have an Investment Grade Rating from both Rating Agencies.

     SECTION 2.7.  Redemption.

     Article X of the Original Indenture shall be amended and supplemented by
inserting the following new section in its entirety:

     Section 10.9  Optional Redemption at Make-Whole Price.

     At any time and from time to time, the Company may, at its option,
redeem all or any portion of the 2012 Notes at the Make-Whole Price plus accrued
and unpaid interest on the 2012 Notes so redeemed to the Redemption Date. Any
redemption pursuant to this Section 10.9 shall be made, to the extent
applicable, pursuant to the provisions of Sections 10.2 through 10.7 hereof.

                                       34

<PAGE>

     SECTION 2.8.  Defeasance and Covenant Defeasance.

     Article XI of the Original Indenture shall be amended and supplemented by
inserting the following in substitution therefor:

                                   "ARTICLE XI

                       DEFEASANCE AND COVENANT DEFEASANCE

     Section 11.1  Company's Option to Effect Defeasance or Covenant Defeasance.

     The Company may, at its option by Board Resolution, at any time, with
respect to the 2012 Notes, elect to have either Section 11.2 or Section 11.3
hereof be applied to all Outstanding 2012 Notes upon compliance with the
conditions set forth below in this Article XI.

     Section 11.2  Defeasance and Discharge.

     Upon the Company's exercise under Section 11.1 hereof of the option
applicable to this Section 11.2, the Company shall be deemed to have been
discharged from its obligations with respect to all Outstanding 2012 Notes on
the date the conditions set forth in Section 11.4 hereof are satisfied
(hereinafter, "legal defeasance"). For this purpose, such legal defeasance means
that the Company and the Subsidiary Guarantors shall be deemed (a) to have paid
and discharged their respective obligations under the Outstanding 2012 Notes;
provided, however that the 2012 Notes shall continue to be deemed to be
"Outstanding" for purposes of Section 11.5 hereof and the other Sections of this
Indenture referred to in clauses (i) and (ii) below, and (b) to have satisfied
all their other obligations under such 2012 Notes and this Indenture insofar as
such 2012 Notes are concerned (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of Outstanding 2012 Notes to receive,
solely from the trust fund described in Section 11.4 hereof and as more fully
set forth in such Section, payments in respect of the principal of (and premium,
if any, on) and interest on such 2012 Notes when such payments are due (or at
such time as the 2012 Notes would be subject to redemption at the option of the
Company in accordance with this Indenture), (ii) the respective obligations of
the Company and any Subsidiary Guarantors under Sections 2.4, 2.5, 2.6, 2.7,
2.8, 2.9, 4.8, 4.14, 5.6, 5.9, 5.10, 9.1, 9.2, 9.3, 9.4, 14.1 (to the extent it
relates to the foregoing Sections and Article XI hereof), 14.4 and 14.5 hereof,
(iii) the rights, powers, trusts, duties and immunities of the Trustee
hereunder, and (iv) the obligations of the Company and any Subsidiary Guarantors
under this Article XI. Subject to compliance with this Article XI, the Company
may exercise its option under this Section 11.2 notwithstanding the prior
exercise of its option under Section 11.3 hereof with respect to the Securities.

     Section 11.3  Covenant Defeasance.

     Upon the Company's exercise under Section 11.1 hereof of the option
applicable to this Section 11.3, the Company shall be released from its
obligations under any covenant contained in Article VII and in Sections 9.5
through 9.20 hereof with respect to the Outstanding 2012 Notes on and after the
date the conditions set forth below are satisfied (hereinafter, "covenant
defeasance"), and the 2012 Notes shall thereafter be deemed not to be
"Outstanding" for the

                                       35

<PAGE>

purposes of any direction, waiver, consent, declaration or other Act of Holders
(and the consequences of any thereof) in connection with such covenants, but
shall continue to be deemed "Outstanding" for all other purposes hereunder. For
this purpose, such covenant defeasance means that, with respect to the
Outstanding 2012 Notes, the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Sections
4.1(c) or 4.1(d) hereof, but, except as specified above, the remainder of this
Indenture and such 2012 Notes shall be unaffected thereby.

     Section 11.4  Conditions to Defeasance or Covenant Defeasance.

     The following shall be the conditions to application of either Section 11.2
or Section 11.3 hereof to the Outstanding 2012 Notes:

     (a)  The Company or any Subsidiary Guarantor shall irrevocably have
deposited or caused to be deposited with the Trustee (or another trustee
satisfying the requirements of Section 5.7 hereof who shall agree to comply with
the provisions of this Article XI applicable to it) as trust funds in trust for
the purpose of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of such 2012 Notes, (i)
cash in U.S. Dollars in an amount, or (ii) U.S. Government Obligations which
through the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the due
date of any payment, money in an amount, or (iii) a combination thereof,
sufficient, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge, and which shall be applied by the Trustee (or
other qualifying trustee) to pay and discharge, the principal of (and premium,
if any, on) and interest on the Outstanding 2012 Notes on the Stated Maturity
(or Redemption Date, if applicable) of such principal (and premium, if any) or
installment of interest; provided that the Trustee shall have been irrevocably
instructed in writing by the Company to apply such money or the proceeds of such
U.S. Government Obligations to said payments with respect to the 2012 Notes.
Before such a deposit, the Company may give to the Trustee, in accordance with
Section 10.2 hereof, a notice of its election to redeem all of the Outstanding
2012 Notes at a future date in accordance with Article X hereof, which notice
shall be irrevocable. Such irrevocable redemption notice, if given, shall be
given effect in applying the foregoing. For this purpose, "U.S. Government
Obligations" means securities that are (x) direct obligations of the United
States of America for the timely payment of which its full faith and credit is
pledged or (y) obligations of a Person controlled or supervised by and acting as
an agency or instrumentality of the United States of America the timely payment
of which is unconditionally guaranteed as a full faith and credit obligation by
the United States of America, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank (as defined in Section 3(a)(2) of the
Securities Act), as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by

                                       36

<PAGE>

the custodian in respect of the U.S. Government Obligation or the specific
payment of principal of or interest on the U.S. Government Obligation evidenced
by such depository receipt.

     (b)  No Default or Event of Default with respect to the 2012 Notes shall
have occurred and be continuing on the date of such deposit.

     (c)  Such legal defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest under this Indenture or the Trust
Indenture Act with respect to any securities of the Company.

     (d)  Such legal defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under any other material
agreement or instrument to which the Company or any Subsidiary Guarantor is a
party or by which it is bound, as evidenced to the Trustee in an Officers'
Certificate delivered to the Trustee concurrently with such deposit.

     (e)  In the case of an election under Section 11.2 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of this Indenture there has been a
change in the applicable federal income tax laws; in either case providing that
the Holders of the Outstanding 2012 Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such legal defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such legal defeasance had
not occurred (it being understood that (x) such Opinion of Counsel shall also
state that such ruling or applicable law is consistent with the conclusions
reached in such Opinion of Counsel and (y) the Trustee shall be under no
obligation to investigate the basis of correctness of such ruling).

     (f)  In the case of an election under Section 11.3 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the Outstanding 2012 Notes will not recognize income, gain or loss
for federal income tax purposes as a result of such covenant defeasance and will
be subject to federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if such covenant defeasance had not
occurred.

     (g)  The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the legal defeasance under Section
11.2 hereof or the covenant defeasance under Section 11.3 (as the case may be)
have been complied with.

     Section 11.5  Deposited Money and U.S. Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.

     Subject to the provisions of the last paragraph of Section 9.3 hereof, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee (or other qualifying trustee--collectively for purposes of this
Section 11.5, the "Trustee") pursuant to Section 11.4 hereof in respect of the
Outstanding 2012 Notes shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own

                                       37

<PAGE>

Paying Agent) as the Trustee may determine, to the Holders of such 2012 Notes of
all sums due and to become due thereon in respect of principal (and premium, if
any) and interest, but such money need not be segregated from other funds except
to the extent required by law.

     The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Governmental Obligations
deposited pursuant to Section 11.4 hereof or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the Outstanding Securities.

     Anything in this Article XI to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or U.S. Government Obligations held by it as provided in Section 11.4
hereof which, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof which would then be required to be
deposited to effect an equivalent legal defeasance or covenant defeasance, as
applicable, in accordance with this Article.

     Section 11.6  Reinstatement.

     If the Trustee or any Paying Agent is unable to apply any money in
accordance with Section 11.5 hereof by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's and the Subsidiary Guarantors' obligations
under this Indenture and the 2012 Notes shall be revived and reinstated as
though no deposit had occurred pursuant to Section 11.2 or 11.3 hereof, as the
case may be, until such time as the Trustee or Paying Agent is permitted to
apply all such money in accordance with Section 11.5 hereof; provided, however,
that if the Company or any Subsidiary Guarantor makes any payment of principal
of (or premium, if any, on) or interest on any 2012 Note following the
reinstatement of its obligations, the Company or such Subsidiary Guarantor shall
be subrogated to the rights of the Holders of such 2012 Notes to receive such
payment from the money held by the Trustee or Paying Agent."

     SECTION 2.9.  Guarantees.

     The Original Indenture shall be amended and supplemented by inserting the
following new article in its entirety:

                                  "ARTICLE XIV

                                   GUARANTEES

     Section 14.1  Unconditional Guarantee.

     Each Restricted Subsidiary that hereafter becomes a Subsidiary Guarantor
shall unconditionally, jointly and severally, guarantee (each such guarantee to
be referred to herein as a "Subsidiary Guarantee," with all such guarantees
being referred to herein as the "Subsidiary Guarantees") to each Holder of 2012
Notes authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, the full and prompt performance of the Company's
obligations under this Indenture and the 2012 Notes and that:

                                       38

<PAGE>

     (a)  the principal of (or premium, if any, on) and interest on the 2012
Notes will be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal of
and interest on the 2012 Notes, if any, to the extent lawful, and all other
obligations of the Company to the Holders or the Trustee hereunder or thereunder
will be promptly paid in full or performed, all in accordance with the terms
hereof and thereof; and

     (b)  in case of any extension of time of payment or renewal of any 2012
Notes or of any such other obligations, the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
whether at Stated Maturity, by acceleration or otherwise;

subject, however, in the case of clauses (a) and (b) above, to the limitations
set forth in Section 14.4 hereof.

     Failing payment when due of any amount so guaranteed or any performance so
guaranteed for whatever reason, the Subsidiary Guarantors will be jointly and
severally obligated to pay the same immediately. The obligations of each
Subsidiary Guarantor hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the 2012 Notes or this Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
of the 2012 Notes with respect to any provisions hereof or thereof, the recovery
of any judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor. Each Subsidiary Guarantor shall waive diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and shall
covenant that its Subsidiary Guarantee will not be discharged except by complete
performance of the obligations contained in the 2012 Notes, this Indenture and
in the Subsidiary Guarantee. If any Holder or the Trustee is required by any
court or otherwise to return to the Company, any Subsidiary Guarantor, or any
custodian, trustee, liquidator or other similar official acting in relation to
the Company or any Subsidiary Guarantor, any amount paid by the Company or any
Subsidiary Guarantor to the Trustee or such Holder, the Subsidiary Guarantee, to
the extent theretofore discharged, shall be reinstated in full force and effect.
No Subsidiary Guarantor shall be entitled to any right of subrogation in
relation to the Holders in respect of any obligations guaranteed by the
Subsidiary Guarantee until payment in full of all obligations guaranteed
thereby. Each Subsidiary Guarantor shall further agree that, as between each
Subsidiary Guarantor, on the one hand, and the Holders and the Trustee, on the
other hand, (i) the maturity of the obligations guaranteed by the Subsidiary
Guarantee may be accelerated as provided in Article IV hereof for the purposes
of the Subsidiary Guarantee, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the obligations
guaranteed by the Subsidiary Guarantee, and (ii) in the event of any
acceleration of such obligations as provided in Article IV hereof, such
obligations (whether or not due and payable) shall forthwith become due and
payable by each Subsidiary Guarantor for the purpose of the Subsidiary
Guarantee.

                                       39

<PAGE>

     Section 14.2  Subsidiary Guarantors May Consolidate, etc. on Certain Terms.

     (a)  Except as set forth in Articles VII and IX hereof, nothing contained
in this Indenture or in any of the 2012 Notes shall prevent any consolidation or
merger of a Subsidiary Guarantor with or into the Company or another Subsidiary
Guarantor or shall prevent any sale or conveyance of the assets of a Subsidiary
Guarantor as an entirety or substantially as an entirety, to the Company or
another Subsidiary Guarantor.

     (b)  Except as set forth in Articles VII and IX hereof, nothing contained
in this Indenture or in any of the 2012 Notes shall prevent any consolidation or
merger of a Subsidiary Guarantor with or into a Person or Persons other than the
Company or a Subsidiary Guarantor (whether or not affiliated with the Subsidiary
Guarantor), or successive consolidations or mergers in which a Subsidiary
Guarantor or its successor or successors shall be a party or parties, or shall
prevent any sale or conveyance of the Properties of a Subsidiary Guarantor as an
entirety or substantially as an entirety, to a Person other than the Company or
another Subsidiary Guarantor (whether or not Affiliated with the Subsidiary
Guarantor) authorized to acquire and operate the same; provided, however, that,
subject to Sections 14.2(a) and 14.3 hereof, (A) immediately after such
transaction, and giving effect thereto, no Default or Event of Default shall
have occurred as a result of such transaction and be continuing, (B) such
transaction shall not violate any of the covenants in Sections 9.1 through 9.20
hereof, and (C) each Subsidiary Guarantor shall covenant and agree that, upon
any such consolidation or merger, such Subsidiary Guarantor's Subsidiary
Guarantee set forth in this Article XIV, and the due and punctual performance
and observance of all of the covenants and conditions of this Indenture to be
performed by such Subsidiary Guarantor, shall be expressly assumed (in the event
that the Subsidiary Guarantor is not the surviving Person in the merger), by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee, by such Person formed by such consolidation, or into
which the Subsidiary Guarantor shall have merged (except to the extent the
following Section 14.3 would result in the release of such Subsidiary Guarantee
in which case such surviving Person does not have to execute any such
supplemental indenture). In the case of any such consolidation or merger, and
upon the assumption by the successor Person, by supplemental indenture executed
and delivered to the Trustee and satisfactory in form to the Trustee of the due
and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Subsidiary Guarantor, such successor Person
shall succeed to and be substituted for the Subsidiary Guarantor with the same
effect as if it had been named herein as a Subsidiary Guarantor.

     Section 14.3  Release of a Subsidiary Guarantor.

     The Subsidiary Guarantee of any Restricted Subsidiary may be released upon
the terms and subject to the conditions set forth in Section 9.12(c) hereof.
Each Subsidiary Guarantor that is designated as an Unrestricted Subsidiary in
accordance with the provisions of this Indenture shall be released from all of
its Subsidiary Guarantee and related obligations set forth in this Indenture for
so long as it remains an Unrestricted Subsidiary. The Trustee shall deliver an
appropriate instrument evidencing such release upon receipt of a Company Request
accompanied by an Officers' Certificate and an Opinion of Counsel certifying
that such sale or other disposition was made by the Company in accordance with
the provisions of this Indenture. Any

                                       40

<PAGE>

Subsidiary Guarantor not so released remains liable for the full amount of
principal of (and premium, if any, on) and interest on the 2012 Notes as
provided in this Article XIV.

     Section 14.4  Limitation of Subsidiary Guarantor's Liability.

     Each Subsidiary Guarantor shall confirm, and by its acceptance hereof each
Holder hereby confirms, that it is the intention of all such parties that the
Guarantee by such Subsidiary Guarantor pursuant to its Subsidiary Guarantee not
constitute a fraudulent transfer or conveyance for purposes of any federal or
state law. To effectuate the foregoing intention, the Holders hereby irrevocably
agree, and each Subsidiary Guarantor shall irrevocably agree, that the
obligations of each Subsidiary Guarantor under its Subsidiary Guarantee shall be
limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Subsidiary Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Subsidiary Guarantor in respect of the obligations of such other Subsidiary
Guarantor under its Subsidiary Guarantee or pursuant to Section 14.5 hereof,
result in the obligations of such Subsidiary Guarantor under its Subsidiary
Guarantee not constituting a fraudulent conveyance or fraudulent transfer under
federal or state law. This Section 14.4 is for the benefit of the creditors of
each Subsidiary Guarantor.

     Section 14.5  Contribution.

     In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors shall agree, inter se, that in
the event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under its Subsidiary Guarantee, such Funding Guarantor
shall be entitled to a contribution from each other Subsidiary Guarantor (if
any) in a pro rata amount based on the Adjusted Net Assets of each Subsidiary
Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the 2012 Notes or any other Subsidiary Guarantor's
obligations with respect to its Subsidiary Guarantee.

     Section 14.6  Execution and Delivery of Evidence of Subsidiary Guarantee.

     To evidence the Subsidiary Guarantee set forth in Section 14.1 hereof, the
Company shall cause this Indenture or a supplemental indenture to be executed on
behalf of each Subsidiary Guarantor by its President or one of its Vice
Presidents and attested to by one of its Secretaries or Assistant Secretaries.

     Section 14.7  Severability.

     In case any provision of the Subsidiary Guarantee shall be invalid, illegal
or unenforceable, that portion of such provision that is not invalid, illegal or
unenforceable shall remain in effect, and the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

     Section 14.8  Payment.

     For purposes of this Article XIV, a payment with respect to any Subsidiary
Guarantee or with respect to principal of or interest on any 2012 Note or any
Subsidiary Guarantee shall

                                       41

<PAGE>

include, without limitation, payment of principal of and interest on any 2012
Note, any depositing of funds under Article III, IV or XI hereof, any payment on
account of any repurchase or redemption of any 2012 Note and any payment or
recovery on any claim (whether for rescission or damages and whether based on
contract, tort, duty imposed by law, or any other theory of liability) relating
to or arising out of the offer, sale or purchase of any 2012 Note."

                                   ARTICLE 3

                            MISCELLANEOUS PROVISIONS

     SECTION 3.1.  Integral Part.

     This First Supplemental Indenture constitutes an integral part of the
Indenture.

     SECTION 3.2.  Rules of Construction.

     For all purposes of this First Supplemental Indenture:

     (a)  capitalized terms used herein without definition shall have the
meanings specified in the Original Indenture; and

     (b)  the terms "herein," "hereof," "hereunder" and other words of similar
import refer to this First Supplemental Indenture.

     SECTION 3.3.  Adoption, Ratification and Confirmation.

     The Original Indenture, as supplemented and amended by this First
Supplemental Indenture, is in all respects hereby adopted, ratified and
confirmed.

     SECTION 3.4.  Counterparts.

     This First Supplemental Indenture may be executed in any number of
counterparts, each of which when so executed shall be deemed an original; and
all such counterparts shall together constitute but one and the same instrument.

     SECTION 3.5.  Benefits of Indenture.

     Nothing in this First Supplemental Indenture or in the 2012 Notes, express
or implied, shall give to any Person (other than the parties hereto, any Paying
Agent, any Securities Registrar and their successors hereunder, the Holders and,
to the extent set forth in Section 14.4 hereof, creditors of Subsidiary
Guarantors) any benefit or any legal or equitable right, remedy or claim under
the Indenture.

     SECTION 3.6.  Governing Law.

     THIS FIRST SUPPLEMENTAL INDENTURE, THE 2012 NOTES AND THE SUBSIDIARY
GUARANTEES, IF ANY, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW

                                       42

<PAGE>

YORK, EXCEPT TO THE EXTENT THE TRUST INDENTURE ACT IS APPLICABLE. THE COMPANY
WILL CAUSE EACH SUBSIDIARY GUARANTOR, IF ANY, TO IRREVOCABLY SUBMIT TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT
SITTING IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THE INDENTURE, THE 2012 NOTES OR A
SUBSIDIARY GUARANTEE, AND THE COMPANY WILL CAUSE EACH SUBSIDIARY GUARANTOR TO
IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE
HEARD AND DETERMINED BY ANY SUCH COURT.

     SECTION 3.7.  Supplemental Indenture Controls.

     In the event there is any conflict or inconsistency between the Original
Indenture and this First Supplemental Indenture, the provisions of this First
Supplemental Indenture shall control.

                                       43

<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed as of the day and year first written above.

                                  XTO ENERGY INC.

                                  By: __________________________________________
                                      Name:  ___________________________________
                                      Title: ___________________________________

                                  THE BANK OF NEW YORK, as Trustee

                                  By: __________________________________________
                                      Name:  ___________________________________
                                      Title: ___________________________________

                                       44

<PAGE>

                                    EXHIBIT A
                           [FORM OF FACE OF 2012 NOTE]

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

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.]/1/

_____________________
/1/ These paragraphs should be included only if the Security is a Global
    Security.

                                      A-1

<PAGE>

                                 XTO ENERGY INC.

                            __% SENIOR NOTE DUE 2012

No. _____                                                           $___________

                                                      CUSIP No. ________________

     XTO Energy Inc., a Delaware corporation (herein called the "Company," which
term includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to ________________________ or
registered assigns the principal sum of _______________ Dollars on May 1, 2012
[or such greater or lesser amount as is indicated on the Schedule of Exchanges
of Securities attached hereto]/2/, at the office or agency of the Company
referred to below, and to pay interest thereon, commencing on November 1, 2002
and continuing semiannually thereafter, on May 1 and November 1 of each year,
from __________, or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, at the rate of _____% per annum, until the
principal hereof is paid or duly provided for, and (to the extent lawful) to pay
on demand, interest on any overdue interest at the rate borne by the Securities
from the date on which such overdue interest becomes payable to the date payment
of such interest has been made or duly provided for. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the April 15 or
October 15 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date and may be paid to the Person in whose name this Security (or one or
more Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to Holders of Securities of this series
not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture. Interest on the Securities of this series shall be computed
on the basis of a 360-day year comprised of twelve 30-day months.

     Payment of the principal of, premium, if any, and interest on this Security
will be made at the office or agency of the Company maintained for that purpose
in The City of New York, or at such other office or agency of the Company as may
be maintained for such purpose, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided however, that payment of interest may be made at the
option of the Company (i) by check mailed to Holders at their respective
addresses as shown in the Security Register or (ii) with respect to any Holder
owning Securities in the principal amount of $500,000 or more, by wire transfer
to an account maintained by the Holder located in the United States, as
specified in a written notice to the Trustee (received prior to the relevant
record date) by any such Holder requesting payment by wire transfer and
specifying the account to

___________________
/2/ This clause should be included only if the Security is a Global Security.

                                      A-2

<PAGE>

which transfer is requested. Notwithstanding the foregoing, so long as this
Security is registered in the name of a Depositary or its nominee, all payments
hereon shall be made by wire transfer of immediately available funds to the
account of such Depositary or its nominee. The Holder must surrender this
Security to a Paying Agent to collect payment of principal.

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

     Unless the certificate of authentication hereon has been duly executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

[SEAL]
                                            XTO ENERGY INC.

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

Attest:

______________________
Secretary

                     TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the series designated herein and referred to in
the within-mentioned Indenture.

Dated: _________                            THE BANK OF NEW YORK, as Trustee

                                            By  _______________________________
                                                      Authorized Signatory

                                      A-3

<PAGE>

                         [FORM OF REVERSE OF 2012 NOTE]

     This Security is one of a duly authorized issue of the series of securities
of the Company designated as its __% Senior Notes due 2012 (herein called the
"Securities"), which is issued under, with securities of one or more additional
series that may be issued under, an indenture dated as of April __, 2002,
between the Company and The Bank of New York, as trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), as
amended and supplemented by the First Supplemental Indenture of even date (such
Indenture, as so amended and supplemented, being called the "Indenture"), to
which Indenture and all future indentures supplemental thereto reference is
hereby made for a statement of the respective rights, limitations of rights,
duties, obligations and immunities thereunder of the Company, the Trustee and
the Holders of the Securities, and of the terms upon which the Securities are,
and are to be, authenticated and delivered.

     The Securities are subject to redemption at the option of the Company, in
whole or in part, at any time and from time to time, upon not less than 30 or
more than 60 days' notice, at a Redemption Price of 100% of their principal
amount plus a Make-Whole Amount, together in the case of any such redemption
with accrued and unpaid interest to the Redemption Date (subject to the right of
Holders of record on the relevant Regular Record Date to receive interest due on
an Interest Payment Date that is on or prior to the Redemption Date), all as
provided in the Indenture.

     In the case of any redemption of Securities, interest installments whose
Stated Maturity is on or prior to the Redemption Date will be payable to the
Holders of such Securities, or one or more Predecessor Securities, of record at
the close of business on the relevant Record Date referred to on the face
hereof. Securities (or portions thereof) for whose redemption and payment
provision is made in accordance with the Indenture shall cease to bear interest
from and after the Redemption Date. At the option of the Holder and subject to
the terms and conditions of the Indenture, the Company shall become obligated to
purchase all or any part specified by the Holder (so long as the principal
amount of such part is $1,000 or an integral multiple of $1,000 in excess
thereof) of the Securities held by such Holder on a Business Day selected by the
Company no earlier than 30 days nor later than 70 days after the occurrence of a
Change of Control, at a purchase price equal to 101% of the principal amount
thereof together with accrued and unpaid interest to the Change of Control
Purchase Date. The Holder shall have the right to withdraw any Change of Control
Notice (in whole or in a portion thereof that is $1,000 or an integral multiple
of $1,000 in excess thereof) at any time prior to the close of business on the
third Business Day next preceding the Change of Control Purchase Date by
delivering a written notice of withdrawal to the Company in accordance with the
terms of the Indenture.

     In the event of redemption or purchase of this Security in part only, a new
Security or Securities for the unredeemed or unpurchased portion hereof shall be
issued in the name of the Holder hereof upon the cancellation hereof.

     The Securities do not have the benefit of any sinking fund obligations.

                                      A-4

<PAGE>

     As set forth in the Indenture, an Event of Default is generally: (a)
failure to pay principal upon Stated Maturity, redemption or otherwise; (b)
default for 30 days in payment of interest on any of the Securities; (c) default
in the performance of agreements relating to mergers, consolidations and sales
of all or substantially all assets; (d) failure for 30 days after notice to
comply with any other covenants in the Indenture or the Securities; (e) certain
payment defaults under, the acceleration prior to the maturity of, and the
exercise of certain enforcement rights with respect to, certain Indebtedness of
the Company or any Restricted Subsidiary in an aggregate principal amount in
excess of $10,000,000; (f) certain events giving rise to ERISA liability; (g)
certain final judgments against the Company or any Restricted Subsidiary in an
aggregate amount of $10,000,000 or more which remain unsatisfied and either
become subject to commencement or enforcement proceedings or remain unstayed for
a period of 60 days; and (h) certain events of bankruptcy, insolvency or
reorganization of the Company or any Restricted Subsidiary.

     If any Event of Default occurs and is continuing, the Trustee or the
holders of at least 25% in aggregate principal amount of the Outstanding
Securities may declare the principal amount of all the Securities to be due and
payable immediately, except that (i) in the case of an Event of Default arising
from certain events of bankruptcy, insolvency or reorganization of the Company
or any Restricted Subsidiary, the principal amount of the Securities will become
due and payable immediately without further action or notice and (ii) in the
case of an Event of Default which relates to certain payment defaults,
acceleration or the exercise of certain enforcement rights with respect to
certain Indebtedness, any acceleration of the Securities will be automatically
rescinded if any such Indebtedness is repaid or if the default relating to such
Indebtedness is cured or waived and if the holders thereof have accelerated such
Indebtedness then such holders have rescinded their declaration of acceleration
or if in certain circumstances the proceedings or enforcement action with
respect to the Indebtedness that is the subject of such Event of Default is
terminated or rescinded.

     No Holder may pursue any remedy under the Indenture unless the Trustee
shall have failed to act after notice of an Event of Default and written request
by Holders of at least 25% in principal amount of the Outstanding Securities,
and the offer to the Trustee of indemnity reasonably satisfactory to it;
however, such provision does not affect the right to sue for enforcement of any
overdue payment on a Security by the Holder thereof. Subject to certain
limitations, Holders of a majority in principal amount of the Outstanding
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing default (except
default in payment of principal, premium or interest) if it determines in good
faith that withholding the notice is in the interest of the Holders. The Company
is required to file quarterly reports with the Trustee as to the absence or
existence of defaults.

     Under the circumstances set forth in the Indenture, the Company's payment
obligations under the Securities may be jointly and severally guaranteed by
existing or future Restricted Subsidiaries of the Company as Subsidiary
Guarantors.

     The Indenture contains provisions for defeasance at any time of (i) the
entire indebtedness of the Company and any Subsidiary Guarantor on this Security
and (ii) certain

                                      A-5

<PAGE>

restrictive covenants and the related Defaults and Events of Default, upon
compliance by the Company with certain conditions set forth therein, which
provisions apply to this Security.

     The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by or on behalf of the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security. Without the consent of any Holder, the Company and the
Trustee may amend or supplement the Indenture or the Securities to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Securities in
addition to or in place of Definitive Securities and to make certain other
specified changes and other changes that do not adversely affect the rights of
any Holder in any material respect.

     No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any, on)
and interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed.

     As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registerable in the Security Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company maintained for such purpose, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

     The Securities are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, the Securities
are exchangeable for a like aggregate principal amount of Securities of a
different authorized denomination, as requested by the Holder surrendering the
same.

     No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.

     A director, officer, employee or stockholder of the Company shall not have
any personal liability under this Security or the Indenture by reason of his or
its status as such director, officer,

                                      A-6

<PAGE>

employee or stockholder. Each Holder, by accepting this Security, waives and
releases all such liability. Such waiver and release are part of the
consideration for the issuance of this Security.

     Prior to the time of due presentment of this Security for registration of
transfer, the Company, Trustee and any agent of the Company or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security is overdue, and neither the
Company, the Trustee nor any agent shall be affected by notice to the contrary.

     All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture. The Company will furnish to
any Holder upon written request and without charge a copy of the Indenture.
Requests may be made to the Company, 810 Houston Street, Fort Worth, Texas
76102.

     Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused CUSIP numbers to be
printed on the Securities as a convenience to the Holders thereof. No
representation is made as to the accuracy of such numbers as printed on the
Securities and reliance may be placed only on the other identifying information
printed hereon.

     This Security shall be governed by and construed in accordance with the
laws of the State of New York, except to the extent that the Trust Indenture Act
is applicable.

                                      A-7

<PAGE>

                                 ASSIGNMENT FORM

(I) or (we) assign and transfer this Security to

________________________________________________________________________________
             (Insert assignee's social security or tax I.D. number)

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
             (Print or type assignee's name, address and zip code)

and irrevocably appoint ________________________________________________________
as agent to transfer this Security on the Security Register of the Company.
The agent may substitute another to act for him.

Dated: _____________       Signature:___________________________________________
                                     (Sign exactly as name appears on the face
                                      of this Security)

                           Name:________________________________________________

                           Address:_____________________________________________

                                   _____________________________________________

                           Phone No.:___________________________________________

Signature Guarantee

By:____________________________________
Signature guarantor must be an eligible
guarantor institution - a bank or trust
company or broker or dealer which is a
member of a registered exchange or the
NASD.

                                      A-8

<PAGE>

                     SCHEDULE OF EXCHANGES OF SECURITIES/3/

The following exchanges, redemptions or repurchases of a part of this Global
Security have been made:

<TABLE>
<CAPTION>
   Principal Amount
of this Global Security                Authorized                                                 Amount of
    Following Such                    Signatory of             Amount of Decrease in              Increase in
    Decrease Date                  Trustee or Security           Principal Amount               Principal Amount
of Exchange (or Increase)              Custodian             of this Global Security       of this Global Security
-------------------------          -------------------       -----------------------       -----------------------
<S>                                <C>                       <C>                           <C>
</TABLE>

______________________
/3/ This schedule should be included only if the Security is a Global Security.

                                      A-9<PAGE>

                                                                     EXHIBIT 4.1

                              UNITY HOLDINGS, INC.

                          EMPLOYEE STOCK OWNERSHIP PLAN
                            (WITH 401(k) PROVISIONS)

                            SUMMARY PLAN DESCRIPTION

                              Date: March 15, 2002

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
SECTION                                                                                              PAGE
-------                                                                                              ----
<S>                                                                                                  <C>
Name of Plan...................................................................................        1

Nature and Purpose ............................................................................        1

Effective Date ................................................................................        1

Plan Type .....................................................................................        1

Class of Stock ................................................................................        1

Eligibility and Entry .........................................................................        2

Service .......................................................................................        2

Contributions .................................................................................        3

Funding .......................................................................................        4

Account Valuation .............................................................................        5

Retirement Date ...............................................................................        5

Retirement Benefits ...........................................................................        5

Retirement Benefit Payments ...................................................................        5

Death Benefits ................................................................................        5

Disability Benefits ...........................................................................        6

Termination of Employment/Vesting .............................................................        6

Distribution of Benefits ......................................................................        7

Tax Effects ...................................................................................        7

Right of First Refusal ........................................................................        8

Non-Transferability of Benefits ...............................................................        9

Loans and Hardship Distributions ..............................................................        9
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                                   <C>
Termination of the Plan........................................................................       10

Filing for Benefits ...........................................................................       10

Your Legal Rights .............................................................................       11

Plan Administrator ............................................................................       12

Plan Trustees .................................................................................       13

Plan Committee Members ........................................................................       13

Identification Numbers ........................................................................       13

Sponsor .......................................................................................       13
</TABLE>

<PAGE>

                              UNITY HOLDINGS, INC.
                          EMPLOYEE STOCK OWNERSHIP PLAN
                             WITH 401(k) PROVISIONS
------------------------------------------------------------------------------

                            SUMMARY PLAN DESCRIPTION
------------------------------------------------------------------------------

Name of Plan
------------

         The name of the Plan is the Unity Holdings, Inc. Employee Stock
Ownership Plan with 401(k) provisions ("KSOP"), and the Company whose stock is
to be sold thereunder is Unity Holdings, Inc. ("Company"), the parent company of
Unity National Bank ("Bank").

Nature and Purpose
------------------

         The Plan is designed to be part of a retirement system to provide you
with fair and reasonable retirement benefits. It gives you the option to save
for your own retirement by allowing you to make pre-tax contributions. The
specific purpose of the Plan is to permit you to acquire beneficial interests in
the common stock of the Company funded through contributions made by the Bank
and, if you so choose, by your pre-tax salary reduction contributions.

Effective Date
--------------

         The effective date of the Plan is January 1, 2002. It is a complete
amendment and restatement of the Unity Holdings, Inc. 401(k) Profit Sharing
Plan, originally effective January 1, 1999. The Plan Year consists of the
12-month period beginning on each January 1 and ending on the following December
31. Records under the Plan are kept on a Plan Year basis.

Plan Type
---------

         The Plan is a defined contribution plan. Specifically, it is an
employee stock ownership plan with 401(k) provisions, which means that it is
intended to invest primarily in Company Stock and managed investments, funded by
contributions from both the Company and you. Bank contributions can be made each
year, in the discretion of the Board of Directors of the Company to your
account. This account is used to pay your Plan benefits.

Class of Stock
--------------

         The Employer stock to be offered under the Plan is the common stock of
the Company.

                                       1

<PAGE>

Eligibility and Entry
---------------------

         Employees will become eligible to participate in the Plan on the
January 1, April 1, July 1, or October 1 coinciding with or next following
attainment of age eighteen (18) and completion of 90 days of service.

Service
-------

         Service means your employment with us. An Hour of Service is based on
the number of hours you work each day.

Vesting Service
---------------

         A year of vesting service means any year of Employment in which you
work at least 1,000 hours. Vesting is discussed in "Termination of Employment."

Break-in-Service
----------------

         A one year break-in-service occurs during any Plan Year in which you
have not been credited with at least 500 Hours of Service. A one year (or more)
break-in-service may adversely affect your vesting percentage.

         The Plan credits you with certain service, but only to the extent
necessary to prevent a one year break-in-service, during an authorized leave of
absence. For certain maternity or paternity leaves, the Plan will credit you
with enough service to prevent a one year break-in-service, but only during the
first year in which you work less than 500 hours due to a maternity or paternity
leave.

         If you are reemployed after a one year (or more) break-in-service you
will not lose credit for your prior years of service (for vesting) if you had
any vested benefit when you left employment.

         Notwithstanding the above, if you received a distribution when you left
employment, you will lose credit for years of service earned prior to the first
one year break-in-service with respect to the portion of your account balance
you forfeited when you left. However, if upon your return to employment you
repay this distribution, you will again receive credit for years of service
earned prior to commencement of the one (or more) year break-in-service. The
Company will recredit your account with your forfeited balance. This
distribution must, in general, be repaid within 5 years from the date of
re-employment, or, if earlier, before you have incurred 5 consecutive one year
breaks-in-service. If you were fully vested when you left and you received a
distribution, you cannot repay your distribution and receive prior service
credit.

                                       2

<PAGE>

         If you have no vested benefit when you leave the following rules will
apply:

         1. For purposes of determining years of vesting service, you will lose
credit for prior years of service if the number of years in which you had a one
year break-in-service equals or exceeds the greater of: (i) 5 or (ii) years of
service before the break-in-service began.

         2. For purposes of determining years of vesting service to apply to
contributions earned before you left, you will not get credit for years of
service completed after you return if the number of consecutive years in which
you had a one year break-in-service equal or exceeds five (5).

Contributions
-------------

         Optional Company Contribution
         -----------------------------

         Every year the Board of Directors will decide whether to make a
Non-elective, or "Optional" contribution to the Plan and the amount of any such
Plan contribution.

         Optional Contributions and forfeitures will be allocated to you in the
ratio that your compensation bears to the total compensation of all
participants. Compensation generally means total taxable compensation, plus the
amount you defer under this Plan and any Bank sponsored cafeteria plan.
Compensation is limited to a maximum amount as provided by law. This maximum
amount may vary from year to year.

         This is only intended to provide a brief synopsis of the allocation
procedure for this Plan. This does not take into account, for example, the
effect of top heavy minimum benefits. Therefore, this procedure may be
inconsistent with that actually applied by the Plan. For greater detail, please
refer to the Plan document or ask the Plan Administrator for assistance.

         If you terminate employment before the end of the Plan Year, you may
not be eligible to receive an allocation of Optional Contributions and
forfeitures for the Plan Year. Please refer to the Plan document for details.

         Elective Employee Contribution
         ------------------------------

         You may authorize the Bank to contribute to the Trust on your behalf
Elective Contributions. Elective Contributions are withheld from the pay which
you would otherwise receive. Such Elective Contributions can be stated as a
dollar amount or percentage, and shall not be more than 15% of your
Compensation. The total amount of Elective Contributions for any Plan Year shall
not exceed $11,000, multiplied by any cost of living adjustment factor
prescribed by the Secretary of the Treasury under Section 415(d) of the Code.

                                       3

<PAGE>

         If you elect to have the Bank contribute Elective Contributions on your
behalf during the plan year you must file a written notice with the Plan
Administrator. This requirement shall be waived on adoption of the plan and you
shall be given a reasonable time to elect Elective Contributions. Such written
notice shall contain an election of the amount or percentage of your
Compensation to be contributed and authorization for the Bank to reduce your
compensation by such amount. You may change the amount or percentage of your
Elective Contributions only as of the January 1, April 1, July 1, or October 1
of any Plan Year, but upon not less than thirty (30) days prior written notice.

         Matching Company Contribution
         -----------------------------

         The Company may contribute on your behalf to the Plan an amount based
on your Elective Contributions. These are called Matching Contributions. The
Company has discretion to make a Matching Contribution of any amount up to $1.00
for every dollar of salary deferral you make up to 10% of your compensation.

Funding
-------

         The Plan Trustees have the responsibility and discretion to invest all
plan assets. If an Employer's contribution for any Plan year is in cash, such
cash shall be used first to make any scheduled or accelerated amortization
payment on a loan incurred to acquire Company Stock and, if any amounts remain
thereafter, to purchase Company Stock at such time as the Trustees, elected by
the Company's Board of Directors, may determine. Any cash dividends received by
the Trustees on Company Stock held in the KSOP shall be applied, in the
discretion of the Trustees, to the purchase of additional shares of Company
Stock.

         The Trustee is authorized to purchase Company Stock from the Company or
from any shareholder, and such stock may be outstanding, newly issued or
treasury stock. All such purchases must be at a price not in excess of fair
market value, as determined by an Independent Appraiser where such stock is not
publicly traded.

         Pending investment of cash in Company Stock, such cash may be invested
in savings accounts, certificates of deposit, high-grade short term securities,
common or preferred stocks, bonds, funds described below, or other investments,
or may be held in cash.

         Your Elective Contributions will not be invested in Company stock
unless you so direct in writing. The Plan administrator has forms for this
purpose, as stock becomes available from time to time.

                                       4

<PAGE>

Account Valuation
-----------------

         At least once a year you will be given a statement of your account
activity and the value of your account balance. Your account will reflect
changes due to investment gains and losses, administration costs, insurance
premiums (if applicable), and employer contributions.

Retirement Date
---------------

         Your normal retirement date is your 65th birthday.

Retirement Benefits
-------------------

         Upon reaching normal retirement age you will become 100% vested in your
account balance regardless of your years of service. We use your account balance
to pay your retirement benefits. If you continue working after normal retirement
age, your benefits can be deferred until you actually retire. In the meantime,
your account will receive allocations of investment gains and losses as well as
an allocation of Employer Contributions, until you actually retire. If you
continue in employment beyond your Retirement Date, you may elect to receive
distributions while still employed, subject to the rules provided in the Plan.

Retirement Benefit Payments
---------------------------

         When you retire, you will normally have your account balances
distributed in the form of a Lump Sum. In addition, the account balances of
Participants may be distributed in substantially equal annual installments not
to exceed five (5) years.

         If you should die, the beneficiary of your account balances will
normally be your spouse, or if you are not married, your estate. If you are
married and desire to designate a beneficiary other than your spouse, then your
spouse must consent to such designation.

Death Benefits
--------------

         If you die before retirement while you are employed by us and actively
participating in the Plan, a death benefit will be paid on your behalf.

         If you are married at the time of your death, we will pay all of your
death benefits to your spouse in a lump sum. If either of the following
conditions are satisfied, you may have the full amount of your death benefits
paid to any beneficiary you choose:

                                       5

<PAGE>

         1.   You are single at the time of your death, or

         2.   (a) You have designated a beneficiary to receive your death
                  benefits who is not your spouse; and

              (b) You and your spouse have elected to waive the spousal survivor
                  benefit and your spouse has consented to your designation of a
                  specific non-spousal beneficiary on forms provided by the Plan
                  Administrator; and

              (c) Your spouse's signature was notarized.

         If you die while an active participant in our Plan, your account
balance becomes fully vested. Your death benefit will equal the value of your
account balance.

Disability Benefits
-------------------

         If you become totally and permanently disabled (as defined for purpose
of Social Security disability benefits) while an active participant in the Plan,
your account balance becomes fully vested.

Termination of Employment/Vesting
---------------------------------

         If you terminate employment for any reason other than death or
retirement, you may be eligible for benefits under the Plan. The percentage of
your Bank Optional Contribution Account to which you would be entitled is
figured as of your termination date, as follows:

         ---------------------------------------------------------------
          Years of Vesting Service                  Vested Percentage
          ------------------------                  -----------------
          Less than One Year                               0%
          One Year                                        20%
          Two Years                                       40%
          Three Years                                     60%
          Four Years                                      80%
          Five Years or More                             100%
         ---------------------------------------------------------------

         If you are not 100% vested when you leave, you will forfeit the portion
of your account balance that is non-vested.

         You will be 100% vested at all times in the Elective Contributions
which you make to the Plan and in your Matching Contribution Account.

                                       6

<PAGE>

Distribution of Benefits
------------------------

         If the value of your vested account balance is $5,000 or less, the Plan
Administrator will pay you the value of your vested benefit in a lump sum in all
cases (regardless of whether you obtain spousal consent).

         Amounts you forfeited will be allocated among other participants as
previously provided. If you return to employment before 5 consecutive one year
breaks-in-service have elapsed, the company will re-credit the amounts you
forfeited to your account. You will become vested in these amounts under the
rules provided in the Plan for counting service earned subsequent to
re-employment and in some cases (if you have timely repaid your distribution as
provided above) service earned before the period of consecutive one year
breaks-in-service commenced. Please refer to the Plan document for details.

Tax Effects
-----------

         The Company will request a determination letter from the Internal
Revenue Service that the Plan and related Trust as amended and restated are
qualified under Sections 401(a) and 501(a) of the Internal Revenue Code. The tax
consequences of a qualified plan include:

         1.  Contributions made by the Company on your behalf, including those
             you elect to be made pursuant to a salary reduction agreement, are
             not taxable to you when they are made. You do not report them as
             income at that time.

         2.  Any investment earnings or profits received by the Trustee and
             allocated to your account are not taxable when they are received by
             the fund or allocated to the participant.

         3.  When benefits are paid to you, you will be subject to tax on all
             funds received and, in most cases, certain amounts will be withheld
             to pay tax in accordance with applicable law. You will be informed
             of these rules and penalties for underpayment of estimated taxes by
             the Trustee when you become eligible to receive a distribution from
             the Plan.

         4.  With certain exceptions, distributions and withdrawals from your
             account before you reach age 59 1/2 are subject to an additional
             tax equal to 10% of the taxable amount of the distribution or
             withdrawal.

         5.  Your participation in the Plan may affect your ability to make
             tax-deductible contributions to an individual retirement account.
             You should contact your personal tax advisor for further
             information regarding this rule.

                                       7

<PAGE>

         6.  You should consult your personal tax advisor before you receive any
             benefits to determine how the method of distribution may affect you
             and to obtain advice on directing the Administrator on the manner
             of distribution.

         The following circumstances may result in disqualification,
ineligibility, denial or loss of benefits:

         1.  If you are ineligible to participate in the Plan, you will not
             receive any Plan benefits.

         2.  If your employment with the Company terminates for reasons other
             than retirement, death or disability, you have not made any salary
             reduction contributions to the Plan, and you incur a
             five-consecutive year Break in Service before you have completed
             two Years of Service, you will not receive any portion of your
             accounts.

         3.  The Company may determine in any Plan year not to make Optional or
             Matching Contributions to the Plan for the Plan Year.

         4.  Contributions by the Company (other than pre-tax contributions) may
             be refunded to the Company if they were made on a mistake of fact,
             conditioned on a favorable Internal Revenue Service ruling and the
             ruling is not received, or conditioned on contributions being
             allowed as a deduction and the deduction is not allowed.

         5.  The investments in the Plan may decrease in value, resulting in a
             proportionate decrease in the value of your account.

         Various methods exist to help you defer or reduce the amount of taxes
which would otherwise be due. Upon your retirement or termination of employment,
the Administrator will provide you with a notice that explains these methods in
greater detail. Generally, you may roll distributions from this Plan into
another qualified retirement plan or individual retirement account (IRA) to
defer federal taxation. However, some payments, such as certain periodic
payments (as well as others), may not be eligible for a rollover. The notice
provided gives more detail on what type of distributions you may roll over to
defer federal taxation, and what kind of plan may receive these eligible
rollover distributions. However, neither this booklet, nor the notice are an
adequate substitute for consultation with your tax advisor.

Right of First Refusal
----------------------

         If the Company's stock is not traded on a stock exchange or NASDAQ at
the time it is distributed, it will be subject to a right of first refusal.
Generally, this means that, prior to any transfer by you, the stock must be
offered in writing to the Company and, if then refused by the Company, to the
Trustees, at the then Fair Market Value, as determined by an Independent
Appraiser. A bona fide written offer from an independent

                                       8

<PAGE>

prospective buyer shall be deemed to be the Fair Market Value of
such Company Stock for this purpose unless the value per share, as determined by
the Independent Appraiser as of the most recent Accounting Date, is greater.

Non-Transferability of Benefits
-------------------------------

         Generally, you may not transfer your interest in the Plan; that is, you
may not sell it, use it as collateral, or otherwise give it away. Your creditors
may not attach or garnish your interest in the Plan. However, there are two
circumstances where this general rule does not apply:

         1. The Plan Administrator may be required to use some or all of your
benefits to pay court-ordered alimony, child support, or other transfer of
assets directly to a spouse, former spouse, child or other dependent. The court
order must follow a certain form and contain certain information. If it does
not, the Administrator will not honor it. If it does, the Administrator must
comply with it. The Administrator will determine whether the court order must be
followed.

         2. If you are indebted to the Plan when a benefit becomes payable to
you or a beneficiary, the Administrator may direct that the indebtedness be
first satisfied before any benefits are paid.

Loans and Hardship Distributions
--------------------------------

         Under certain circumstances, our Plan will permit you to borrow from
it. Loans will be made only for the purposes that would otherwise entitle you to
a hardship distribution of your elective contributions, and in the
Administrator's discretion on a uniform and nondiscriminatory basis. The
Administrator will establish rules about availability and terms of repayment.

         You will be required to sign a note, which will be legally enforceable
according to its terms. In general, all loans must have the following features:

         1.  Loan must have adequate security;

         2.  Loan must have reasonable rate of interest;

         3.  There must be reasonable and definite repayment schedule (All loans
             must be repaid before your normal retirement date);

         4.  Generally loans may not exceed the lesser of: (a) one-half of the
             participant's vested account balance or (b) $50,000 reduced by the
             participant's greatest outstanding plan loan balance (including
             accrued interest and costs) during the 12 months preceding the date
             of the loan;

                                       9

<PAGE>

         5.  Plan loans must be repaid within 5 years. However, the term of a
             loan incurred for the purchase of a primary residence may exceed 5
             years. Payments must be made at least quarterly on a level basis
             that will fully amortize the loan over its term;

         6.  Plan loans must be secured by the participant's benefits under the
             Plan;

         7.  A participant's spouse must consent in writing to the loan as
             provided under the Plan; and

         8.  The Administrator may establish other loan rules which may be more
             restrictive than those above. Refer to the Plan document for
             greater detail on Plan loans.

         In the event you do not satisfy the requirements for a loan, you may
request a hardship distribution of the amount of your Elective Contributions.
Generally, you may receive a distribution to (1) avoid eviction from your
apartment or foreclosure on your principal residence, (2) pay medical expenses,
(3) obtain a downpayment on a commercial loan to acquire a principal residence,
or (4) pay 12 months college tuition for yourself or a dependent. However, such
a distribution is immediately subject to income taxation, and may not be in your
best interests.

Termination of the Plan
-----------------------

         No amendment to this Plan can retroactively reduce benefits already
accrued by you, except when required to comply with an act of Congress or an
Internal Revenue Service rule. Although we intend our Plan to be permanent, we
do reserve the right to terminate it at any time. Upon termination of the Plan,
you will become 100% vested in your current account balance.

         The Company will make distributions as soon as administratively
feasible, which will be in a lump sum.

Filing for Benefits
-------------------

         Claims for benefits should be submitted in writing to our Plan
Administrator. The Plan Administrator will either grant the claim, deny it, or
extend the time for claim processing. Any extension will not be longer than 180
days from the date the claim was submitted.

         If your claim is denied, you or your beneficiary will be notified by
our Plan Administrator within 30 days after you file. Notification will be
written and will give reasons for denial.

         You may appeal to the Plan Administrator within 60 days after receiving
the notice. Your appeal must be written to our Plan Administrator, requesting
that the denial

                                       10

<PAGE>

be reviewed. You will hear from the Plan Administrator within 60 days of the
date that you filed your appeal (unless the time to review the appeal has been
extended an additional 60 days).

Your Legal Rights
-----------------

         If you believe that your rights under the Plan have been violated, you
have the right to bring legal action against the Plan in a court of law. Our
Plan Administrator is the agent named to receive service of legal process. Our
Plan Trustee(s) may also receive service of legal process.

         As a participant in this Plan, you are entitled to certain rights and
protections under the Employee Retirement Income Security Act of 1974 (ERISA).
ERISA provides that all plan participants shall be entitled to:

         1.  Examine, without charge, at the Plan Administrator's office and at
             other locations, all plan documents, including insurance contracts,
             collective bargaining agreements and copies of all documents filed
             by the plan with the U.S. Department of Labor, such as annual
             reports and plan descriptions.

         2.  Obtain copies of all plan documents and other plan information upon
             written request to the Plan Administrator. The Administrator may
             make a reasonable charge for the copies.

         3.  Receive a summary of the Plan's annual financial report. The Plan
             Administrator is required by law to furnish each participant with a
             copy of this summary financial report.

         4.  Obtain, once a year, a statement telling you whether you have a
             right to receive a pension at normal retirement age and, if so,
             what your benefit would be at normal retirement age if you stopped
             working now. If you do not have the right to a pension, the
             statement will tell you how many more years you have to work to get
             a right to a pension. This statement must be requested in writing
             and it must be provided free of charge.

         In addition to creating rights for participants, ERISA imposes duties
upon the people who are responsible for the operation of the employee benefit
plan.

         The people who operate your plan, called "fiduciaries" of the Plan,
have a duty to do so prudently and in the interest of you and other plan
participants and beneficiaries. No one, including your employer, or any other
person, may fire you or otherwise discriminate against you in any way to prevent
you from obtaining a benefit or exercising your rights under ERISA.

                                       11

<PAGE>

         If your claim for a pension benefit is denied in whole or in part, you
must receive a written explanation of the reason for denial. You have the right
to have the plan review and reconsider your claim.

         Under ERISA, there are steps you can take to enforce the above rights.
For instance, if you request materials from the plan and do not receive them
within 30 days, you may file suit in federal court. In such a case, the court
may require the Plan Administrator to provide the materials and pay you up to
$100 a day until you receive the materials, unless the materials were not sent
because of reasons beyond the control of the Administrator. If you have a claim
for benefits which is denied or ignored, in whole or in part, you may file suit
in a state or federal court. If it should happen that plan fiduciaries misuse
the plan's money, or if you are discriminated against for asserting your rights,
you may seek assistance from the U.S. Department of Labor, or you may file suit
in a federal court. The court will decide who should pay court costs and legal
fees. If you are successful the court may order the person you have sued to pay
these costs and fees. If you lose, the court may order you to pay these costs
and fees, for example, if it finds your claim is frivolous.

         If you have any questions about your plan, you should contact the Plan
Administrator. If you have any questions about this statement or about your
rights under ERISA, you should contact the nearest Area Office of the U.S.
Labor-Management Services Administrator, Department of Labor.

         Benefits provided under this plan are not insured by the Pension
Benefit Guaranty Corporation.

Plan Administrator
------------------

         Participants may obtain additional information regarding the Plan from
the Administrator. The function of the Administrator is as follows:

         (a) To adopt such rules of procedure and regulations as, in its
             opinion, may be necessary for the proper and efficient
             administration of the Plan and as are consistent with the
             provisions of the Plan;

         (b) To enforce the Plan in accordance with its terms and with such
             applicable rules and regulations as may be adopted by the
             Committee;

         (c) To determine all questions arising under the Plan, including the
             power to determine the rights or eligibility of employees or
             Participants and their Beneficiaries and their respective benefits,
             and to remedy ambiguities, inconsistencies or omissions.

The Company is the legal Administrator of the Plan. Our third-party
administrator is:

Financial Consulting Group, LLC

                                       12

<PAGE>

8001 Centerview Parkway, #215
Cordova, TN  38018
(901) 309-2680

Plan Trustees
-------------

Jerry W. Braden, Donald D. George, John S. Lewis, Michael L. McPherson,
Stephen A. Taylor, and B. Don Temples
c/o Unity Holdings, Inc.
950 Joe Frank Harris Parkway
Cartersville, GA 30121

Plan Committee Members
----------------------

Michael L. McPherson, W. Stewart Griggs, and Connie Mitchell-White
c/o Unity Holdings, Inc.
950 Joe Frank Harris Parkway
Cartersville, GA 30121

Identification Numbers
----------------------

Employer Number:  The Company's Employer Identification Number is 58-2350609.
Plan Number:      001

Sponsor
-------

         This Plan is maintained by Unity Holdings, Inc.

         This booklet is intended only as a summary of our Plan's highlights and
is not the complete Plan document. In the event of any inconsistencies between
this booklet and the actual Plan provisions, the actual Plan governs. If you
wish to read the actual Plan, a copy is available for inspection upon request at
our main office during regular working hours. Our Plan Administrator will be
happy to show it to you and answer any questions you have.

                                       13

<PAGE>

--------------------------------------------------------------------------------
                              UNITY HOLDINGS, INC.
                          EMPLOYEE STOCK OWNERSHIP PLAN
                             WITH 401(k) PROVISIONS
--------------------------------------------------------------------------------

SECTION 1 - PURPOSE

1.1      PURPOSE AND EFFECTIVE DATE. Effective January 1, 2002 (the "Effective
         Date") Unity Holdings, Inc., a Georgia corporation (the "Company"),
         hereby amends and restates the Unity National Bank 401(k) Plan (the
         "Plan") as the Unity Holdings, Inc. Employee Stock Ownership Plan
         ("KSOP").

         The Plan was originally designed as a 401(k) profit sharing plan
         January 1, 1999, adopted pursuant to the Pension Financial Services,
         Inc. Standardized 401(k) Profit Sharing Plan, IRS Prototype Serial
         Number D7580280. Pursuant to Rev. Proc. 2000-20, it qualified for the
         GUST extended remedial amendment due to the adoption on February 28,
         2002 of a certification of intent to adopt the Manulife Financial
         prototype plan. The purpose of this amendment and restatement is to
         maintain the Plan's tax exempt status by incorporating those changes to
         qualification requirements mandated by the Small Business Job
         Protection Act of 1996 ("SBJPA") and the Taxpayer relief act of 1997
         ("TRA-97"). Another purpose is to permit participants to accumulate
         capital for their future economic security by acquiring stock ownership
         interests in the Company.

         The Plan is a stock bonus plan that is intended to be qualified under
         Section 401(a) of the Internal Revenue Code of 1986, as amended
         ("Code"). It includes this Plan and the related Trust Agreement. The
         Plan is intended to be an employee stock ownership plan within the
         meaning of Section 4975(e)(7) of the Code and Section 407(d)(6) of the
         Employee Retirement Income Security Act of 1974 ("ERISA"), and is
         designed to invest primarily in qualifying employer securities.

1.2      TRUST AGREEMENT AND PLAN ADMINISTRATION. All contributions made under
         the Plan will be held, managed and controlled by the trustee, or
         successor thereto, (the "Trustee") acting under a trust which forms a
         part of the Plan. The terms of the trust are set forth in a trust
         agreement known as the Unity Holdings, Inc. Employee Stock Ownership
         Trust (the "Trust"). The authority to control and manage the operation
         and administration of the Plan is vested in a Committee (the
         "Committee") appointed by the Board of Directors of the Company. The
         members of the Committee shall be "named fiduciaries" as described in
         Section 402 of the ERISA, with respect to their authority under the
         Plan. The Committee shall be the administrator of the Plan and shall
         have rights, duties and obligations of an "administrator" as that term
         is defined in section 3(16)(A) of ERISA and section 414(g) of the Code.

1.3      NO REVERSION TO EMPLOYERS. No part of the corpus or income of the Trust
         Fund shall revert to any Employer or be used for, or diverted to,
         purposes other than for the exclusive benefit of Participants and other
         persons entitled to benefits

                                        1

<PAGE>

         under the Plan, except as specifically provided in Article VI of the
         Trust Agreement.

SECTION 2 - DEFINITIONS

2.1      ACCOUNTS means the KSOP Stock Account and KSOP Cash Account,
         representing a Participant's total economic interest in the Plan, which
         are also referred to collectively as "Accounts" and individually as an
         "Account".

2.2      ACCOUNTING DATE means (i) the last day of each Plan Year, (ii) a date
         determined in the discretion of the Trustee in a uniform and
         nondiscriminatory manner, and (iii) the date of termination or partial
         termination of the Plan under Section 16.4.

2.3      ACQUISITION LOAN has the same meaning as an "exempt loan" as described
         in 26 CFR Section 54.4975-7(b), which is a loan incurred by the Trustee
         to finance the acquisition of Company Stock or to refinance a prior
         Acquisition Loan.

2.4      ADJUSTED COMPENSATION means the total compensation paid or accrued to
         the Participant during the Plan Year for services rendered to the
         Employers as an employee, including but not limited to wages, salaries,
         bonuses, overtime pay, commissions and salary reductions under a
         section 401(k) or section 125 plan, but excluding any amounts
         contributed by an Employer to a Related Defined Contribution Plan and
         any non-taxable fringe benefits provided by an Employer. Adjusted
         Compensation shall exclude amounts in excess of $160,000. This
         limitation shall be adjusted to the amounts prescribed by the Secretary
         of the Treasury in accordance with Sections 401(a)(17) and 415(d) of
         the Code.

2.5      ANNUAL ADDITIONS has the same meaning as described in Code Section
         415(c)(2), which is the sum of the Employer Contributions and
         Forfeitures allocable to a Participant's Accounts for a Plan Year.
         Annual Additions shall also include additions to an individual medical
         account under Code Section 415(l) and to a post retirement medical
         account under Code Section 419A(d)(2).

2.6      BENEFICIARY means the person or persons designated by a Participant to
         receive benefits pursuant to Section 10(c) upon his death.

2.7      CODE means the provisions and regulations of the Internal Revenue Code
         of 1986, as amended, and all successor laws thereto. Where the Plan
         refers to a particular section of the Code, such reference shall also
         apply to any successor to that section.

2.8      COMMITTEE means the individuals appointed by the Board of Directors of
         the Company to administer the Plan.

                                        2

<PAGE>

2.9      COMPANY STOCK has the same meaning as "employer securities" as
         described in Code Section 409(l), which is common stock issued by the
         Company or any Related Company having a combination of voting power and
         dividend rates equal to or in excess of:

         (a)   that class of common stock of the Company or a Related Company
               having the greatest voting power, and

         (b)   that class of common stock of the Company or a Related Company
               having the greatest dividend rights.

         Non-callable preferred stock shall be treated as Company Stock if such
         stock is convertible at any time into stock which meets the
         requirements of (a) and (b) next above and if such conversion is at a
         conversion price which (as of the date of the acquisition by the Plan)
         is reasonable.

2.10     DIRECT ROLLOVER means a payment by the Plan to the Eligible Retirement
         Plan specified by the Distributee.

2.11     DISTRIBUTEE means an Employee, former Employee, surviving spouse of an
         Employee or former Employee, or spouse or former spouse who is the
         alternate payee under a Qualified Domestic Relations Order.

2.12     ELECTIVE CONTRIBUTION means an Employer Contribution made to the Plan
         at the election of a Participant, in lieu of cash compensation,
         including contributions made pursuant to a salary reduction agreement
         or some other deferral mechanism.

2.13     ELECTIVE CONTRIBUTION ACCOUNT means the Account to which is credited a
         Participant's Elective Contributions pursuant to Section 8.2.

2.14     ELIGIBLE RETIREMENT PLAN means a qualified trust described in Section
         401(a) of the Code that accepts the Distributee's Eligible Rollover
         Distribution. However, in the case of an Eligible Rollover distribution
         to the surviving spouse, an Eligible Retirement Plan is an individual
         retirement account or individual retirement annuity.

2.15     ELIGIBLE ROLLOVER DISTRIBUTION means any distribution of all or a
         portion of the balance to the credit of the Distributee, except that an
         Eligible Rollover distribution does not include: any distribution that
         is one of a series of substantially equal periodic payments (not less
         frequently than annually) made for the life (or life expectancy) of the
         Distributee or the joint life (or joint life expectancies) of the
         Distributee and the Distributee's designated beneficiary, or for as
         specified period of ten years or more; any distribution to the extent
         such distribution is required under section 401(a)(9) of the Code; the
         portion of any distribution that is not includable in gross income
         determined without regard to the exclusion for net unrealized
         appreciation with respect to employer securities; and,

                                        3

<PAGE>

         effective for any distributions after December 31, 1998, any hardship
         distribution described in section 401(k)(2)(B)(i)(IV) of the Code.

2.16     EMPLOYER CONTRIBUTION means an Elective Contribution, Matching
         Contribution, Nonelective Contribution, and Qualified Nonelective
         Contribution.

2.17     EMPLOYERS AND RELATED COMPANIES means the Company and each Related
         Company which, with the Company's consent, adopts the Plan, which are
         also referred to collectively as the "Employers" and individually as
         the "Employer".

2.18     ERISA means the Employee Retirement Income Security Act of 1974, as
         amended, and the regulations promulgated thereunder.

2.19     FINANCED SHARES means shares of Company Stock acquired by the Trustee
         with the proceeds of an Acquisition Loan.

2.20     415 COMPENSATION means the same meaning as "compensation" described in
         26 CFR Section 1.415-2(d) for any Plan Year, which includes all amounts
         received or accrued as compensation for personal services rendered to
         an Employer or Related Company as an employee, including, but not
         limited to, wages, salaries, bonuses, commissions, fees, elective
         Contributions made under this Plan or any other 401(k) arrangement, and
         salary reduction contributions made to a cafeteria plan, but excluding
         other amounts contributed by an Employer or Related Company to a
         deferred compensation plan, amounts realized from the exercise of
         non-qualified stock options or lapse of restrictions on restricted
         property, or amounts realized from the sale, exchange or other
         dispositions of stock acquired under a qualified stock option; provided
         that Compensation accrued during a Plan Year shall be counted for that
         Plan Year only, and shall not be included as Compensation for the
         subsequent Plan Year in which the amount is paid.

2.21     FAIR MARKET VALUE means the price at which property will exchange hands
         between a buyer and seller, neither acting under any compulsion to buy
         or sell and both having knowledge of all material facts. Shares of
         Company Stock shall be valued as of each Accounting Date by an
         appraiser meeting the requirements of the regulations promulgated under
         Section 170(a)(1) of the Code.

2.22     FORFEITURE means the portion of a Participant's Accounts that is not
         distributable to him on his Termination Date by reason of the
         provisions of Section 11.1(d) and that is allocable to other
         Participants pursuant to Section 8.1.

2.23     FORFEITURE ACCOUNT means the account established pursuant to Section
         11.1(c) to hold the portion of a Participant's Accounts that is not
         distributable to him but which is not yet allocable to other
         Participants.

                                        4

<PAGE>

2.24     HIGHLY COMPENSATED EMPLOYEE means, effective for Plan Years beginning
         after december 31, 1996, the same meaning as described in Code Section
         414(q),which is any employee who:

         (a)   during the year or the preceding year; was a 5% owner (as defined
               in section 416(i) of the Code) of any Employer; or

         (b)   during the preceding year, received compensation from the
               Employers in excess of $80,000.

         The definition of a Highly Compensated Employee shall be determined
         pursuant to section 414(q) of the Code, any regulations issued
         thereunder, and any cost of living adjustments (as issued by the
         Secretary of Treasury or his delegate) applicable to the dollar figures
         specified above.

2.25     HOUR OF SERVICE means, with respect to any employee or Participant,
         each hour for which he is paid or entitled to payment for the
         performance of duties for the Company or a Related Company or for which
         back pay, irrespective of mitigation of damages, has been awarded to
         the employee or Participant or agreed to by the Company or a Related
         Company. Every full-time employee shall be credited with 8 Hours of
         Service per day for each day for which he is paid by the Employer. An
         employee or Participant shall be credited with 8 Hours of Service per
         day (to a maximum of 40 Hours of Service per week) for any period
         during which he performs no duties for the Company or Related Company
         (irrespective of whether the employment relationship has terminated) by
         reason of:

         (a)      vacation;
         (b)      holiday;
         (c)      illness;
         (d)      incapacity;
         (e)      layoff;
         (f)      jury duty
         (g)      military duty; or
         (h)      leave of absence for which he is directly or indirectly paid
                  or entitled to payment by the Company or a Related Company;

         provided, however, an employee or Participant shall not be credited
         with more than 501 Hours of Service under this subsection for any
         single continuous period during which he performs no duties for the
         Company or a Related Company. Payments considered for purposes of the
         foregoing shall include payments unrelated to the length or the period
         during which no duties are performed but shall not include payments
         made solely as reimbursement for medical related expenses or solely for
         the purpose of complying with applicable workmen's compensation,
         unemployment compensation or disability insurance laws. The provisions
         of 29 CFR Section 2530.200b-2(b) and (c) are incorporated herein by
         reference.

                                        5

<PAGE>

2.26     KSOP CASH ACCOUNTS means the accounts established in the name of
         Participants that reflect Employer Contributions made in cash, any cash
         dividends on Company Stock, any cash Forfeitures and any income, gains,
         losses, appreciation or depreciation attributable thereto.

2.27     KSOP STOCK ACCOUNTS means the accounts established in the name of
         Participants that reflect Employer Contributions made in Company Stock,
         the allocable share of released Financed Shares, the allocable share of
         Company Stock forfeitures and any Company Stock attributable to
         earnings on such stock.

2.28     LEASED EMPLOYEE means any person (other than an employee of the
         recipient) who pursuant to an agreement between the recipient and any
         other person has performed services for the recipient (or for the
         recipient and related persons determined in accordance with Code
         Section 414(n)(6)) on a substantially full time basis for a period of
         at least one year, and such services are performed under primary
         direction or control by the recipient.

2.29     LOAN SUSPENSE ACCOUNT means the bookkeeping account maintained to
         record the Plan's interest in Financed Shares which have not been
         released from encumbrance pursuant to 26 CFR Section 54.4975-7(b)(8).

2.30     MATCHING CONTRIBUTION means a contribution to the Plan by the Employer
         which matches in whole or in part an Elective Contribution on behalf of
         a Participant.

2.31     MATCHING CONTRIBUTION ACCOUNT means the account to which the Company's
         Matching Contributions on behalf of a Participant are credited pursuant
         to Section 8.2.

2.32     NET INCOME (OR LOSS) means the increase (or decrease) in the Fair
         Market Value of Trust assets (other than Company Stock), interest
         income, dividends and other income and gains (or loss) attributable to
         Plan assets (other than any dividends on shares of Company Stock
         allocated to Participants' Company Stock Accounts) since the preceding
         Accounting Date, reduced by any expenses charged to the Plan for that
         Plan Year.

2.33     NONELECTIVE CONTRIBUTION means an Employer Contribution which is
         neither an Elective Contribution, a Matching Contribution, or a
         Qualified Nonelective Contribution.

2.34     NONELECTIVE CONTRIBUTION ACCOUNT means the account to which the
         Company's Nonelective Contributions allocated to a Participant are
         credited pursuant to Section 8.1.

2.35     NORMAL RETIREMENT AGE means the date on which a Participant attains age
         65.

                                        6

<PAGE>

2.36     ONE YEAR BREAK IN SERVICE means a Plan Year during which an employee
         terminates employment with the Employer, and each subsequent Plan Year,
         provided he has completed less than 501 Hours of Service during such
         Plan Year.

         An employee or Participant shall be credited with up to 501 Hours of
         Service on account of an absence described in paragraphs (a) through
         (d) of this Section in the Plan Year in which his absence begins (if
         such crediting is necessary to prevent him from incurring a Break in
         Service in such Plan Year) or, in all other cases, in the following
         Plan Year. The periods of absence described in the next preceding
         sentence are those on account of:

         (a)   the pregnancy of the employee or Participant;

         (b)   the birth of a child of the employee or Participant;

         (c)   the placement of a child with the employee or Participant in
               connection with the adoption of such child by such employee or
               Participant; and

         (d)   caring for such child for a period beginning immediately
               following such birth or placement.

2.37     PARTICIPANT means any eligible employee who becomes entitled to
         participate in the Plan.

2.38     PLAN YEAR means the 12 consecutive month period commencing on each
         January 1 and ending on the next following December 31.

2.39     QUALIFIED DOMESTIC RELATIONS ORDER has the meaning described in Code
         Section 414(p), which is any judgment, decree, or order (including
         approval of a property settlement agreement) which:

         (a)   relates to the provision of child support, alimony payments, or
               marital property rights to a spouse, child or other dependent of
               a Participant,

         (b)   is made pursuant to a State domestic relations law (including a
               community property law),

         (c)   creates or recognizes the existence of an Alternate Payee's right
               to, or assigns to an Alternate Payee the right to, receive all or
               a portion of the benefits payable with respect to the
               Participant,

         (d)   clearly specifies the name and last known mailing address, if
               any, of the Participant and the name and mailing address of each
               Alternate Payee covered by the order, the amount and percentage
               of the Participant's benefits to be paid by the Plan to each
               Alternate Payee, or the manner in which such amount or percentage
               is to be determined, the number of

                                        7

<PAGE>

               payments or period to which such order applies and each plan to
               which such order applies, and

         does not require the Plan to provide (i) any form or type of benefit,
         or any option, not otherwise provided under the Plan, (ii) increased
         benefits, or (iii) benefits to an Alternate Payee which are required to
         be paid to another payee under another order previously determined by
         the Committee to be a Qualified Domestic Relations Order.

2.40     QUALIFIED ELECTION PERIOD has the meaning described in Code Section
         401(a)(28)(b)(iv), which is the six-Plan year period beginning with the
         later of (a) the first Plan Year in which the Employee first became a
         Qualified Participant, or (b) the first Plan Year beginning after
         December 31, 1986.

2.41     QUALIFIED NON-ELECTIVE CONTRIBUTION means an Employer Contribution
         which is neither a Matching Contribution nor an Elective Contribution,
         is one hundred percent (100%) vested and nonforfeitable when made,
         which a participant may not elect to have paid in cash instead of being
         contributed to the plan and which may not be distributed from the plan
         (except in the case of a hardship distribution) prior to the
         termination of employment or death of the participant, attainment of
         age 59 1/2 by the participant or termination of the plan without
         establishment of a successor plan.

2.42     QUALIFIED PARTICIPANT has the meaning described in Code Section
         401(a)(28)(B)(iii), which is an Employee who has completed at least 10
         years of participation since the effective date of the Plan's
         restatement as an employee stock ownership plan and has attained age
         55.

2.43     RELATED COMPANY means any corporation, trade or business during any
         period in which it is, along with the Company, a member of a controlled
         group of corporations, a group of trades or businesses under common
         control, or an affiliated service group, as described in Sections
         414(b),(c), and (m), respectively, of the Code, and the regulations
         issued thereunder, and any other entity required to be aggregated with
         the Company pursuant to regulations issued under section 414(o) of the
         Code.

2.44     RELATED DEFINED CONTRIBUTION PLAN means any defined contribution plan
         (as defined in Code Section 414(i)) which is maintained by an Employer
         or a Related Company.

2.45     REQUIRED BEGINNING DATE has the meaning described in Code Section
         401(a)(9), which is April 1 of the calendar year following the calendar
         year in which the Participant either attains age 70 1/2 or retires from
         the employment of the employer, whichever is later. In the case of an
         employee who is a 5-percent owner, (as defined in Code section 416),
         the Required Beginning Date is April 1 of the calendar year following
         the calendar year in which the Participant attains age 70 1/2, even if
         such 5-percent owner has not retired.

                                        8

<PAGE>

2.46 SUSPENSE ACCOUNT means an account to which excess Annual Additions have
     been allocated pursuant to 26 CFR Section 1.415-6(b)(6).

2.47 TERMINATION DATE means the date of a Participant's separation from service
     of an Employer or Related Company.

2.48 TOTAL AND PERMANENT DISABILITY means termination of employment due to a
     physical or mental condition that results in a total and permanent
     disability that would entitle the Participant to receive social security
     disability benefits.

2.49 TRUST AGREEMENT means the written agreement between the Company and the
     Trustee, which agreement is a part of this Plan.

2.50 TRUSTEE means, collectively, the trustees of the trust established by the
     Trust Agreement attached hereto and forming a part hereof, or any successor
     thereto.

2.51 TRUST FUND means the aggregate of all properties held pursuant to the Trust
     Agreement.

2.52 YEAR OF SERVICE has the meaning described in Code Section 411(a)(5), which
     is, with respect to any employee or Participant, any calendar year during
     which he completes at least 1,000 Hours of Service.

SECTION 3 - PLAN PARTICIPATION

3.1  ELIGIBILITY FOR PARTICIPATION. Subject to the conditions and limitations of
     the Plan, each Employee of an Employer shall become a Participant in the
     Plan as of the January 1, April 1, July 1, or October 1 coincident with or
     next following the date he satisfies the following requirements:

     (a)  completion of 90 days of Service during an eligibility computation
          period; and

     (b)  attainment of 18 years of age.

     For this purpose, an eligibility computation period shall first be the
     period of twelve (12) consecutive months beginning on the Employee's
     initial date of service and thereafter shall be either of two twelve (12)
     month periods, one period commencing on the January 1/st/ and the other
     commencing on the July 1/st/ of each Plan Year beginning after his initial
     date of service.

     A Leased Employee shall be considered eligible for participation upon
     satisfaction of these requirements, unless (i) such Leased Employee is
     covered by a money purchase pension plan providing: (1) a nonintegrated
     employer contribution rate of at least 10 percent of compensation, as
     defined in Code Section 415(c)(3), but

                                        9

<PAGE>

     including amounts contributed pursuant to a salary reduction agreement
     which are excludable from gross income under Code Sections 125, 402(e)(3),
     402(h)(1)(B), or 403(b), (2) immediate participation, and (3) full and
     immediate vesting; and (ii) Leased employees do not constitute more than 20
     percent of the Employer's nonhighly compensated work force.

3.2  PARTICIPATION AFTER REEMPLOYMENT.

     (a)  General Rule. An employee who has met the eligibility requirements set
          forth in paragraph 3.1 shall not be required to again meet those
          requirements as a condition of eligibility following a termination of
          employment, and such an employee shall become a Participant in the
          Plan on the date of his reemployment.

     (b)  Exception. Notwithstanding the foregoing, if an employee or
          Participant does not have a nonforfeitable right under the Plan to any
          portion of the aggregate balance of his KSOP Accounts and the number
          of his consecutive One Year Breaks in Service equals or exceeds five
          (5), then, his number of Years of Service, if any, completed prior to
          such a period of Breaks in Service shall be disregarded and he shall
          be considered as a new employee.

3.3  PARTICIPATION NOT GUARANTEE OF EMPLOYMENT. Participation in the Plan does
     not constitute a guarantee or contract of employment and will not give any
     employee the right to be retained in the employ of the Employers or Related
     Companies nor any right or claim to benefit under the terms of the Plan
     unless such right or claim has specifically accrued under the terms of the
     Plan.

3.4  RESTRICTED PARTICIPATION. Subject to the terms and conditions of the Plan,
     during the period between the Participant's Termination Date and the
     distribution of his entire KSOP Account balances, the Participant or, in
     the event of the Participant's death, the Beneficiary will be considered
     and treated as a Participant for all purposes of the Plan, except as
     follows:

     (a)  the Participant will not share in Employer Contributions and
          Forfeitures; and

     (b)  the Beneficiary of a deceased Participant cannot designate a
          Beneficiary under Section 10(c).

                                       10

<PAGE>

SECTION 4 - PLAN CONTRIBUTIONS

4.1  ANNUAL EMPLOYER NONELECTIVE CONTRIBUTIONS. For each Plan Year, each
     Employer shall make Nonelective Contributions in the form of cash or shares
     of Company Stock, or both, in such amounts as may be determined by the
     Board of Directors in its discretion with respect to that Employer, which
     amounts shall be delivered to the Trustee. Nonelective Contributions shall
     be paid in cash in such amounts and at such times as may be needed to
     provide the Trustee with cash sufficient to pay any currently maturing
     obligations under an Acquisition Loan. In no event will an Employer's
     Contribution for any Plan Year exceed the lesser of:

     (a)  the maximum amount deductible by that Employer as an expense for
          Federal income tax purposes; or

     (b)  the maximum amount which, together with the amounts released from a
          Loan Suspense Account pursuant to Section 4.2 or a Suspense Account
          pursuant to Section 8.4 for that Plan Year, can be credited for that
          year in accordance with the contribution limitation provisions of
          Section 8.4.

     An Employer's Nonelective Contribution under this Section 4.1 for any Plan
     Year will be due on the last day of the Plan Year and, if not paid by the
     end of that year, shall be payable to the Trustee as soon thereafter as
     practicable, but not later than the time prescribed for filing the
     Employer's Federal income tax return for that Plan Year, including any
     extensions of time, without interest.

4.2  ACQUISITION LOANS. The Trustee may incur Acquisition Loans from time to
     time to finance the acquisition of Company Stock for the Trust or to repay
     a prior Acquisition Loan. An Acquisition Loan shall be for a specific term,
     shall bear a reasonable rate of interest, and shall not be payable on
     demand except in the event of default. An Acquisition Loan may be secured
     by a collateral pledge of the Financed Shares so acquired and any other
     Plan assets which are permissible security under the provisions of 26 CFR
     Section 54.4975-7(b). No other assets of the Plan or Trust may be pledged
     as collateral for an Acquisition Loan, and no lender shall have any
     recourse against any other Trust assets.

     The Financed Shares shall initially be credited to a Loan Suspense Account
     and allocated to Participants' KSOP Stock Accounts only as payments of
     principal and interest on the Acquisition Loan are made by the Trustee.
     Payments of principal and interest on any Acquisition Loan shall be made by
     the Trustee only from Employer Nonelective and Matching Contributions paid
     in cash to enable the Trustee to repay such loan, from Elective
     Contributions of Participants who so direct, from earnings attributable to
     such contributions, and any cash dividends received by the Trustee on
     Financed Shares acquired with the proceeds of the Acquisition Loan
     (including such contributions, earnings and dividends received during or
     prior to the year of repayment less such payments in prior years), whether
     or not allocated. The number of Financed Shares to be released from the
     Loan Suspense Account shall be determined in the following manner:

                                       11

<PAGE>

     (a)  Priority Allocation. First, there shall be released a number of shares
          with an aggregate cost basis equal to the Elective Contributions, if
          any, of Participants who have so directed the application of such
          contributions to payments of principal on the Acquisition Loan.

     (b)  Principal and Interest Method. Next, there shall be released a number
          of shares based upon the ratio that the payments of principal and
          interest on the Acquisition Loan for that Plan Year bears to the total
          remaining payments of principal and interest projected on the
          Acquisition Loan over the duration of the Acquisition Loan repayment
          period, subject to the provisions of Section 8.4. The number of future
          payments under the Acquisition Loan must be definitely ascertainable
          and must be determined without taking into account any possible
          extensions or renewal periods. If the interest rate under the
          Acquisition Loan is variable, the interest to be paid in future years
          must be computed by using the interest rate applicable as of the end
          of the Plan Year.

     (c)  Principal Only Method. Alternatively, in the same manner as described
          in (b) above, except that such number shall be based solely on the
          amount of principal paid for the Plan Year in relation to the sum of
          such amount plus the principal to be paid for all future years; and
          provided that:

          (1)  the Acquisition Loan must provide for annual payments of
               principal and interest at a cumulative rate that is not less
               rapid at any time than level annual payments of such amounts for
               10 years;

          (2)  interest in any payment is disregarded only to the extent that it
               would be determined to be interest under standard loan
               amortization tables; and

          (3)  the alternative described in this subsection (b) is not
               applicable from the time t77hat, by reason of a renewal,
               extension or financing, the sum of the expired duration of the
               Acquisition Loan, the renewal period, the extension period, and
               the duration of a new Acquisition Loan exceeds 10 years.

SECTION 5 - ELECTIVE CONTRIBUTIONS

5.1  IN GENERAL. A Participant may authorize his Employer to contribute to the
     Trust on his behalf Elective Contributions. Such Elective Contributions
     shall be stated as either a dollar amount or a whole percentage, and shall
     not be more than 15% of the Participant's Adjusted Compensation. The total
     amount of Elective Contributions for any one Participant for any Plan Year
     shall not exceed $11,000, multiplied by any cost of living adjustment
     factor prescribed by the Secretary of the Treasury under Section 415(d) of
     the Code. Any Elective Contribution in excess

                                       12

<PAGE>

     of the aforementioned limitation, plus any income allocable thereto, shall
     be returned to the Participant no later than the first April 15/th/
     following the close of the tax year in which such contributions were made.
     The Elective Contribution shall be paid by the Employer to the Trustee no
     later than the 15/th/ business day of the month following the month in
     which the Contributions are received by the Employer.

     Each Participant electing to have his Employer contribute Elective
     Contributions on his behalf during the plan year shall file a written
     notice with the Plan Administrator at least thirty (30) days prior to the
     January 1/st/ or July 1/st/ that he intends such election to take effect.
     This requirement shall be waived on adoption of the plan and each
     Participant shall be given a reasonable time to elect Elective
     Contributions. Such written notice shall contain an election of the
     percentage of his Adjusted Compensation or the dollar amount to be
     contributed and authorization for his Employer to reduce his compensation
     by such amount. Elective Contributions may be suspended or reduced at any
     time by giving prior written notice. After suspension or reduction, the
     Participant shall not be eligible for further Elective Contributions until
     the beginning of the next Plan Year. A Participant may change the
     percentage of his Elective Contributions only as of the January 1/st/ or
     July 1/st/ of any Plan year, but upon not less than thirty (30) days prior
     written notice. A Participant shall be fully vested at all times in the
     portion of his Account from Elective Contributions.

5.2  ADP LIMIT. For any Plan Year, the Committee shall have the right to limit
     or reduce the Elective Contributions of Participants who are Highly
     Compensated Employees in order to insure that the actual deferral
     percentage limitation under Code Section 401(k)(3) (hereinafter "ADP
     Limit") is not exceeded. Furthermore, in accordance with 26 CFR Section
     1.401(k)-1(f), the Employer may make additional Qualified Nonelective
     Contributions and/or Matching Contributions or may distribute or
     recharacterize such contributions made during the Plan year in order to
     provide that the ADP Limit is not exceeded. The ADP Limit is equal to the
     greater of Limit 1 or Limit 2:

     Limit 1:       The average Actual Deferral Percentage for the Plan year of
                    Participants who are Highly Compensated Employees may not
                    exceed one hundred twenty-five percent (125%) of the Actual
                    Deferral Percentage for the previous Plan Year of all other
                    Participants; or

     Limit 2:       The Actual Deferral Percentage for the Plan year of
                    Participants who are Highly Compensated may not exceed the
                    lesser of:

                    (a)  The Actual Deferral Percentage for the previous Plan
                         Year of all other Participants, plus two percent (2%),
                         or

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<PAGE>

                    (b)  The actual Deferral Percentage for the previous Plan
                         Year of all other Participants, multiplied by two
                         hundred percent (200%).

     The Actual Deferral Percentage ("ADP") with respect to any specific group
     of Participants for a Plan Year shall mean the average of the ratios
     (calculated separately for each Participant in such group) of (A) the
     amount of Elective Contributions paid into the Trust Fund on behalf of each
     Participant for such Plan Year to (B) the Participant's Adjusted
     Compensation for such Plan Year(such ratio hereinafter referred to as
     "ADR"). In the case of a Participant who is a Highly Compensated Employee
     who is eligible to have Elective Contributions paid in to a Trust Fund to
     his account under two or more plans maintained by the Employer, the ADP
     shall be determined as if all such Elective Contributions were made under a
     single arrangement.

     For purposes of determining the ADP, the Plan will take into account the
     ADR of all eligible employees. An eligible employee is any employee who is
     directly eligible to make a cash or deferred election under the plan for
     all or a portion of a Plan Year, and includes: an employee who would be a
     Plan participant but for the failure to make required contributions; an
     employee whose eligibility to make Elective Contributions has been
     suspended because of an election (other than certain one-time elections)
     not to participate, a take a hardship distribution, or to obtain a
     participant loan; and an employee who cannot defer because of the Section
     415 limits on Annual Additions. In the case of an eligible employee who
     makes no Elective Contributions, the ADR that is to be included in
     determining the ADP is zero.

     For purposes of determining whether a plan satisfies the ADP Limit, all
     Elective Contributions that are made under two or more plans that are
     aggregated for purposes of Sections 401(a)(4) or 410(b) (other than Section
     410(b)(2)(A)(ii)) are to be treated as made under a single plan. If two or
     more plans are permissively aggregated for purposes of Section 401(k), the
     aggregated plans must also satisfy Sections 401(a)(4) and 410(b) as though
     they were a single plan. Plans will be aggregated only if they have the
     same plan year and use the same testing method.

     Qualified Nonelective Contributions and Matching Contributions may be
     treated as Elective Contributions for purposes of the ADP Limit only if
     such contributions are nonforfeitable when made and subject to the same
     distribution restrictions that apply to Elective Contributions. Qualified
     Nonelective Contributions which may be treated as Elective Contributions
     must satisfy these requirements without regard to whether they are actually
     taken into account as Elective Contributions. Qualified Nonelective
     Contributions and/or Matching Contributions may be treated as Elective
     Contributions only if (i) the conditions described in 26 CFR Section
     1.401(k)-1(b)(5) are satisfied, and (ii) they are allocated and paid within
     twelve (12) months of the end of the Plan Year to which they relate.

                                       14

<PAGE>

5.3  REMEDIES FOR CONTRIBUTIONS IN EXCESS OF ADP LIMIT. In the event the ADP
     Limit is exceeded, the amount of excess contributions for a Highly
     Compensated Participant shall be distributed pursuant to 26 CFR Section
     1.401(k)-1(f)(4), and will be determined in the following manner. First,
     the ADR of the Highly Compensated Employee with the highest ADR will be
     reduced to the extent necessary to satisfy the ADP Limit or to cause such
     Participant's ADR to equal the ADR of the Highly Compensated Employee with
     the next highest ADR. Second, this process is repeated until the ADP Limit
     is satisfied. For each such Highly Compensated Employee whose ADR is
     reduced, the amount of such Participant's excess contributions is equal to
     the Participant's total Qualified Nonelective and Elective Contributions
     (determined prior to the application of this paragraph) minus the amount
     determined by multiplying the Participant's ADR (determined after
     application of this paragraph) by such Participant's Compensation.

     The amount of a Participant's excess contributions that is actually
     distributed must be determined on the basis of the leveling method required
     by Code Section 401(k)(8)(C), as amended by the Small Business Job
     Protection Act of 1996. This leveling method requires that the distribution
     of excess contributions must be made on the basis of the dollar amount of
     the contribution made by each Highly Compensated employee, rather than such
     Participant's ADR.

     The amount of a Participant's excess contributions distributed pursuant to
     26 CFR Section 1.401(k)-1(f) shall be reduced by any excess deferrals
     previously distributed during such Plan Year. The distribution of any
     excess contribution is to be made prior to the two and one-half month
     period following the end of the plan Year in which such excess
     contributions were made.

     The distribution of excess contributions will include the income allocable
     thereto from the date such excess contributions were made until the date of
     the distribution. The income for the Plan Year allocable to Elective
     contributions will be multiplied by a fraction. The numerator of the
     fraction is the excess contributions for the Participant for the Plan Year.
     The denominator is the sum of (1) the total account balance of the
     Participant attributable to Elective contributions and amounts treated as
     Elective contributions as of the beginning of the Plan Year, plus (2) the
     Participant's Elective contributions and amounts treated as Elective
     contributions for the Plan Year.

5.4  INVESTMENT DIRECTION OF ELECTIVE CONTRIBUTIONS. The Company may permit the
     Trustee to elect to delegate its power of directing the investment of
     Elective Contributions to the Participants, subject to the following
     conditions:

     (a)  All Participants are offered the right to exercise independent control
     over the assets in their Elective Contribution Accounts; and

                                       15

<PAGE>

     (b) Each Participant informs the Trustee in writing that the individual
     does or does not desire to exercise independent control over the assets in
     his or her Elective Contribution Account; and

     (c) A broad range of investments are offered to the Participants from which
     they can select and direct the Trustee to invest in for their Elective
     Contribution Accounts, including Company Stock; and

     (d) With respect to any Elective Contributions directed to the payment of
     principal on an Acquisition Loan, the Participant specifically acknowledges
     in his written investment direction election the priority allocation
     provided in Section 4.2(a).

     Any Participant who has elected not to direct the investment of his
     Elective Contribution Account shall not again be offered the opportunity
     unless and until the Trustee deems it prudent to do so. Each new
     Participant shall be offered the right to direct the investment of his
     Elective Contribution account upon becoming a Participant, provided the
     Trustee has offered and delegated this power to any other Participant in
     accordance with this Section 5.4.

SECTION 6 - MATCHING CONTRIBUTIONS

6.1  IN GENERAL. The Employer shall contribute to the Trust for each Plan Year
     Matching Contributions in such amount as may be determined in the
     discretion of the Board of Directors. In no event shall a Matching
     Contribution exceed one hundred percent (100%) of a Participant's Elective
     Contributions or fifteen percent (15%) of a Participant's Adjusted
     Compensation.

6.2  ACP LIMIT. For any Plan Year, the Committee shall have the right to limit
     or reduce the Matching Contributions allocable to the Participants who are
     Highly Compensated Employees in order to insure that the Actual
     Contribution Percentage Limit under Code Section 401(m) (hereinafter "ACP
     Limit") is not exceeded. The ACP Limit is equal to the greater of the Limit
     1 or Limit 2:

     Limit 1:       The Actual Contribution Percentage for the Plan Year of the
                    Highly Compensated Employees may not exceed one hundred
                    twenty-five percent (125%) of the Actual Contribution
                    Percentage for the previous Plan Year of all other
                    Participants; or

     Limit 2:       The Actual Contribution Percentage for the Plan Year of the
                    Highly Compensated Participants may not exceed the lesser
                    of:

                                       16

<PAGE>

                    (a)  The Actual Contribution Percentage for the previous
                         Plan Year of all other Participants, plus two percent
                         (2%), or

                    (b)  The Actual Contribution Percentage for the previous
                         Plan Year of all other Participants, multiplied by two
                         hundred percent (200%).

         Actual Contribution Percentage ("ACP") with respect to any specific
         group of Participants for a Plan Year shall mean the average of the
         ratios (calculated separately for each Participant in such group) of
         (A) the amount of Matching Contributions paid into the Trust Fund on
         behalf of each Participant for such Plan Year to (B) the Participant's
         Adjusted Compensation for such Plan Year (such ratio hereinafter
         referred to as "ACR"). A Participant's Matching Contributions are to be
         taken into account if they are paid to the Trust during the Plan Year
         or are paid to an agent of the Plan and are transmitted to the Trust
         within a reasonable period after the end of the Plan Year. In the case
         of a Participant who has no Matching Contributions, the ACP is
         considered to be zero. In the case of a Highly Compensated Employee who
         is eligible to have Matching Contributions paid in to a trust fund to
         his account under two or more plans maintained by the Employer, the ACP
         shall be determined as if all such Matching Contributions were made
         under a single arrangement.

         For purposes of determining whether a plan satisfies the ACP Limit, all
         Matching Contributions that are made under two or more plans that are
         aggregated for purposes of Sections 401(a)(4) or 410(b) (other than
         Section 410(b)(2)(A)(ii)) are to be treated as made under a single
         plan. If two or more plans are permissively aggregated for purposes of
         Section 401(k), the aggregated plans must also satisfy Sections
         401(a)(4) and 410(b) as though they were a single plan. Plans will be
         aggregated only if they have the same plan year and use the same
         testing method.

6.3      REMEDIES FOR CONTRIBUTIONS IN EXCESS OF ACP LIMIT. In the event the ACP
         Limit is exceeded, the amount of excess aggregate contributions for a
         Highly Compensated Employee shall be distributed pursuant to 26 CFR
         Section 1.401(m)-1(e) and will be determined in the following manner.
         First, the ACR of the Highly Compensated Employee with the highest ACR
         will be reduced to the extent necessary to satisfy the ACP Limit or to
         cause such Participant's ACR to equal the ACR of the Highly Compensated
         Participant with the next highest ACR. Second, this process is repeated
         until the ACP Limit is satisfied. For each such Highly Compensated
         Employee whose ACR is reduced, the amount of such Participant's excess
         aggregate contributions is equal to the Participant's total Matching
         Contributions (determined prior to the application of this paragraph)
         minus the amount determined by multiplying the Participant's ACR
         (determined after application of this paragraph) by such Participant's
         Adjusted Compensation.

         The amount of a Participant's excess aggregate contributions that is
         actually distributed must be determined on the basis of the leveling
         method required by

                                       17

<PAGE>

         Code Section 401(m)(6)(C), as amended by the Small Business Job
         Protection Act of 1996. This leveling method requires that the
         distribution of excess aggregate contributions must be made on the
         basis of the dollar amount of the contribution allocable to each Highly
         Compensated employee, rather than such Participant's ACR.

         The distribution of excess aggregate contributions will include the
         income allocable thereto for the Plan Year from the date excess
         contributions were made until the date of the distribution. The income
         for the Plan Year allocable to Matching Contributions will be
         multiplied by a fraction. The numerator of the fraction is the excess
         aggregate contributions for the employee for the Plan Year. The
         denominator is the sum of (1) the total account balance of the employee
         attributable to Matching Contributions and amounts treated as Matching
         Contributions as of the beginning of the Plan Year, plus (2) the
         employee's Matching Contributions and amounts treated as Matching
         Contributions for the Plan Year.

         The amount of a Participant's excess aggregate contributions
         distributed shall be reduced by any excess aggregate contributions
         previously distributed during such Plan Year. The distribution of any
         excess aggregate contribution is to be made prior to the two and
         one-half month period following the end of the plan Year in which such
         excess aggregate contributions were made.

         For any Plan Year, the application of the ADP Limit and ACP Limit
         pursuant to Sections 5.2 and 6.2 of the Plan, respectively, shall be
         made in accordance with the multiple use limitations under 26 CFR
         Section 1.401(m)-2. If multiple use of the alternative limitation
         occurs, it must be corrected by reducing the ADP of all Highly
         Compensated Employees, regardless of whether they are eligible under
         both the arrangement subject to Section 401(k) and a plan subject to
         Section 401(m).

         To the extent Matching Contributions are used, pursuant to Section 5.2,
         to compute the ADP Limit, they will not be used to compute the ACP
         Limit. At the election of the Employer, Employer contributions (to the
         extent not utilized to compute the ADP Limit) may be used in the
         computation of the ACP Limit.

SECTION 7 - ROLLOVER CONTRIBUTIONS

(a)      With the Employer's consent, a Rollover Contribution may be made by or
         for an Employee if any of the following conditions are met:

         (1)  The Contribution is a rollover contribution which the Code
              permits to be transferred to a plan that meets the requirements
              of Section 401(a) of the Code; and

                                       18

<PAGE>

                  (2)   The Contribution is made within 60 days after the
                        Employee receives or would be entitled to receive the
                        distribution; and

                  (3)   The employee furnishes evidence satisfactory to the
                        Committee that the proposed transfer is in fact a
                        rollover contribution which meets conditions (1) and (2)
                        above.

                  OR

                  (4)   The contribution is made pursuant to Plan Section 11.9
                        diversification requirements.

                  The Rollover Contribution may be made by the Employee or may
                  be made with his consent by the named fiduciary of another
                  plan. The Contribution will be made according to procedures
                  set up by the Committee.

         (b)      If the Employee is not a Participant at the time the Rollover
                  Contribution is made, he will be deemed to be a Participant
                  only for the purposes of investment and distribution of the
                  Rollover Contribution. No Employer Contribution will be made
                  for him and he may not make Participant Contributions, until
                  the time he meets all of the requirements to become a
                  Participant.

         (c)      Any Rollover contribution made by or for an Employee is
                  credited to his Account when made and is at all times fully
                  vested and nonforfeitable.

         (d)      Notwithstanding any provision of the Plan to the contrary that
                  would otherwise limit a Distributee's election under code
                  Section 401(a)(31), a Distributee may elect, at the time and
                  in the manner prescribed by the Plan Administrator, to have
                  any portion of an Eligible Rollover Distribution paid directly
                  to an Eligible Retirement Plan specified by the Distributee in
                  a Direct Rollover.

         SECTION 8 - PLAN ACCOUNTING

         8.1      ALLOCATION AND CREDITING OF NONELECTIVE CONTRIBUTIONS AND
                  FORFEITURES.

                  (a)   In General. As of the Accounting Date, the following
                        amounts shall be allocated to the accounts of
                        Participants described in Section 8.1(b), in the manner
                        described in Section 8.1(c):

                        (1)   Nonelective Contributions for the Plan Year, less
                              the portion thereof used to pay principal and
                              interest on an Acquisition Loan;

                        (2)   Forfeitures arising pursuant to Section 11.1(c)
                              during the Plan Year; and

                                       19

<PAGE>

                  (3)   Shares of Company Stock released from a Loan Suspense
                        Account for the Plan Year.

         (b)      Conditions on Allocation. The amounts described in Section
                  8.1(a) shall be allocated to the accounts of the following
                  Participants:

                  (1)   Participants who complete 1000 Hours of Service during
                        the Plan Year and who are employed by the Employer on
                        the Accounting Date, and

                  (2)   Participants who attain Normal Retirement Age, suffer a
                        Total and Permanent Disability or die while in the
                        employ of the Employer during the Plan Year.

         (c)      Allocation formula. The amounts described in Section 8.1(a)
                  shall be allocated to the Accounts of Participants described
                  in Section 8.1(b) in the ratio that each such Participant's
                  Adjusted Compensation for the Plan Year bears to the total of
                  all such Participants' Adjusted Compensation for the Plan
                  Year.

8.2      ALLOCATION OF ELECTIVE AND MATCHING CONTRIBUTIONS

         (a)      Elective Contributions. The Elective Contributions by the
                  Employer on behalf of an electing Participant shall be
                  allocated to the Elective Contribution Account of such
                  electing Participant as soon as administratively feasible.

         (b)      Matching Contributions. The Matching Contributions by the
                  Employer on behalf of a Participant making Elective
                  Contributions shall be allocated to the Matching Contribution
                  Accounts of Participants described in Section 8.1(b) in an
                  amount equal to that contributed for each such Participant
                  under Section 6.1.

         (c)      Conditions on Allocation of Matching Contribution. The amounts
                  described in Section 8.2(b) shall be allocated to the accounts
                  of the following Participants:

                  (1)   Participants who are credited with at least 1,000 Hours
                        of Service during the Plan Year and who are employed by
                        the Employer on the Accounting Date, and

                  (2)   Participants who attain Normal Retirement Age, suffer a
                        Total and Permanent Disability or die while in the
                        employ of the Employer during the Plan Year.

                                       20

<PAGE>

8.3  KSOP STOCK ACCOUNTS, KSOP CASH ACCOUNTS, AND RESTRICTIONS ON ALLOCATIONS.

     (a)  KSOP Stock Accounts and KSOP Cash Accounts. Employer Contributions
          made in the form of shares of Company Stock, the number of shares of
          Company stock purchased with cash Employer Contributions, Forfeitures
          from other Participants' KSOP Stock Accounts, and shares of Company
          Stock released from a Loan Suspense Account shall be allocated to
          Participants' KSOP Stock Accounts. All other Employer contributions
          and Forfeitures shall be allocated to Participants' KSOP Cash
          Accounts.

     (b)  Restrictions on allocation. Notwithstanding any provision in this Plan
          to the contrary, if shares of Company Stock are sold to the Plan by a
          shareholder in a transaction for which special tax treatment is
          elected by such shareholder (or his representative) pursuant to
          section 1042 of the Code, no assets attributable to such Company Stock
          may be allocated to the KSOP Accounts of:

          (1)  any person who owns (after application of section 318(a) of the
               Code) more than 25 percent in value of the outstanding securities
               of the Employers; and

          (2)  the shareholder, and any person who is related to such
               shareholder (within the meaning of section 267(b) of the Code,
               but excluding lineal descendants of such shareholder as long as
               no more than 5% of the aggregate amount of all Company Stock sold
               by such shareholder in a transaction to which section 1042 of the
               Code applies is allocated to lineal descendants of such
               shareholder) during the Nonallocation Period (as defined below).

          Further, no allocation of Employer Contributions may be made to the
          Accounts of such persons unless additional allocations are made to
          other Participants, in accordance with the provisions of sections
          401(a) and 410 of the Code. The phrase "Nonallocation Period" means
          the period beginning on the date of sale and ending on the later of
          ten years after the date of sale or the date of the allocation
          attributable to the final payment on the Acquisition Loan incurred
          with respect to the sale.

     (c)  Subchapter S restrictions on allocation. Notwithstanding any provision
          in this Plan to the contrary, effective for Plan Years ending after
          March 14, 2001, if the Company makes an election to be an S
          corporation under Code Section 1362(a), no Company Stock may be
          allocated to the KSOP Accounts of any person ("Disqualified Person")
          who (i) is allocated 10 percent of the stock held by the Plan, or (ii)
          is allocated (after application of section 318(a) of the Code) 20
          percent of the stock held by the Plan, and (ii) owns (after
          application of section 318(a) of the Code) more than 50 percent of the
          outstanding securities of the Company.

                                       21

<PAGE>

          In order to facilitate an S corporation election by the Company and
          comply with this restriction, the Committee is authorized to direct
          the Trustee prior to the effective date to take the appropriate action
          under sections III-2(g) and IV-4(b) of the Trust Agreement to reduce
          the allocation of Company Stock to the KSOP Accounts of Disqualified
          Persons.

8.4  LIMITATION ON ALLOCATIONS TO PARTICIPANTS.

     (a)  In General. Notwithstanding any other provision of the Plan, the
          Annual Additions credited to a Participant's Accounts under this Plan
          and any Related Defined Contribution Plan for any Plan Year shall not
          exceed an amount equal to the lesser of:

          (1)  $30,000, multiplied by any cost of living adjustment factor
               prescribed by the Secretary of the Treasury under Section 415(d)
               of the Code (or, if greater, for Plan Years beginning on or
               before December 31, 1994, one-fourth of the defined benefit
               dollar limitation under Section 415(b) of the Code), or

          (2)  25 percent of the 415 Compensation paid to the Participant in
               that Plan Year.

          In the event a Participant herein is also a Participant at any time in
          a Related Defined Contribution Plan, the sum of Annual Additions under
          all such plans credited to a Participant's accounts in any Plan Year
          shall not exceed the limitations described in (1) or (2), above, but
          such limitations shall first be applied to reduce the Annual Additions
          under the Related Defined Contribution Plan before being applied to
          reduce the Annual Additions under this Plan. If, during any Plan Year,
          no more than one-third of the Employer Contributions which are
          deductible under section 404(a)(9) of the Code are allocated to the
          Accounts of Highly Compensated Employees during the Plan Year, then
          any Employer Contributions which are applied by the Trustee to pay
          interest on an Acquisition Loan, and any Financed Shares which are
          allocated as Forfeitures shall not be included in computing Annual
          Additions.

     (b)  415 Suspense Account. Prior to the allocation of the Employer
          Contributions for any Plan Year, the Committee shall determine whether
          the amount to be allocated would cause the limitation described in
          Section 8.4(a) herein to be exceeded by any Participant. In the event
          that the limitation is exceeded for any Participant due to the
          allocation of a Forfeiture, a reasonable error in the estimation of a
          Participant's Adjusted Compensation or 415 Compensation, or a
          reasonable error in determining Elective Contributions under Code
          Section 402(g), the excess shall be maintained in a Suspense Account
          and shall be allocated in the subsequent Plan Year as if such amounts
          were an additional contribution to the

                                       22

<PAGE>

          appropriate Account. No contributions which would be included in the
          next limitation year's Annual Addition for such Participant may be
          made before the total Suspense Account has been reallocated.

     (c)  Return of Elective Contributions. In addition to the remedy described
          in Section 8.4(b) herein, the Committee may distribute to affected
          Participants their Elective Contributions and the income attributable
          thereto, to the extent necessary to reduce the excess Annual Additions
          to a level that complies with the limitation described in Section
          8.4(a).

8.5  ADJUSTMENT OF KSOP STOCK ACCOUNTS.  As of each Accounting Date, the Trustee
     shall:

     (a)  First, charge to the KSOP Stock Account of each Participant all
          distributions and payments made to him, or on his account, since the
          last preceding Accounting Date that have not been charged previously;

     (b)  Next, credit to each Participant's KSOP Stock Account the shares of
          Company Stock, if any, that have been purchased with amounts from his
          KSOP Cash Account since the last preceding Accounting Date,

     (c)  Next, charge each Participant's KSOP Stock Account with the shares of
          Company Stock, if any, that have been sold since the last preceding
          Accounting Date;

     (d)  Next, allocate and credit to each Participant's KSOP Stock Account the
          shares of Company Stock (representing Employer Contributions made in
          Company Stock) and Company Stock Forfeitures that are to be allocated
          and credited as of that date in accordance with the provisions of
          Section 8.1(c).

     (e)  Next, credit or charge, as the case may be, the appreciation or
          depreciation in the Fair Market Value of Company Stock allocated to
          the Participant's KSOP Stock Account.

8.6  ADJUSTMENT OF KSOP CASH ACCOUNTS.  As of each Accounting Date, the  Trustee
     shall:

     (a)  First, charge each Participant's KSOP Cash Account with all
          distributions or payments made to him, or on his account, since the
          last preceding Accounting Date that have not been charged previously;

     (b)  Next, charge each Participant's KSOP Cash Account with any amounts
          applied to purchase Company Stock;

                                       23

<PAGE>

     (c)  Next, credit each Participant's KSOP Cash Account with any cash, if
          any, received from the sale of Company Stock from the Participant's
          KSOP Stock Account since the last preceding Accounting Date;

     (d)  Next, allocate and credit to each Participant's KSOP Cash Account the
          Employer Contributions made in cash and cash Forfeitures that are
          allocated and credited as of that date in accordance with Section
          8.1(c).

     (e)  Next, allocate to each Participant's KSOP Cash Account the Net Income
          (or Loss) of the Plan, determined as of the Accounting Date, in the
          ratio in which the balance of such KSOP Cash Account on the previous
          Accounting Date (reduced by the amount of any distribution from such
          Account and increased by Matching Contributions made during the first
          half of the Plan Year and 1/2 of Elective Contributions made during
          the Plan Year) bears to the total of the KSOP Cash Account balances
          for all Participants as of that date.

8.7  DIVIDENDS. Any stock dividends received on Company Stock shall be credited
     to the Account to which such Company stock was allocated. Cash dividends
     paid on shares of Company Stock held by the Trustee shall be disposed of as
     follows:

     (a)  Dividends paid on shares which have not been released from a Loan
          Suspense Account shall be used to make payment on Acquisition Loans
          the proceeds of which were used to acquire the shares with respect to
          which the dividends are paid. Any such dividends which are not so used
          shall be separately allocated to the KSOP Cash Accounts of all
          Participants and Beneficiaries as Net Income in accordance with
          Section 8.6(e). In the discretion of the Committee, such dividends may
          be distributed in cash to Participants and Beneficiaries within 90
          days after the close of the Plan Year in which paid to the extent of
          their respective nonforfeitable percentages determined as of the close
          of the Plan Year.

     (b)  Dividends paid on shares allocated to Participants' Company Stock
          Accounts shall be allocated thereto. In the discretion of the
          Committee, such dividends may be distributed in cash to Participants
          and Beneficiaries within 90 days after the close of the Plan Year in
          which paid to the extent of their respective nonforfeitable
          percentages determined as of the close of the Plan Year.

8.8  STATEMENT OF PLAN INTEREST. During each Plan Year the Committee shall
     provide each Participant with a statement of the Participant's interest
     under the Plan as of the close of the immediately preceding Plan Year.

                                       24

<PAGE>

SECTION 9 - RETIREMENT BENEFITS

     Upon attainment of Normal Retirement Age, a Participant shall have a fully
vested and nonforfeitable right to his Account. The Participant shall be
entitled to the commencement of the payment of his benefits as soon as
practicable following the close of the Plan Year in which he separates from
service due to attaining Normal Retirement Age. However, at such Participant's
request, the payment of benefits may commence as soon as practicable following
the close of any subsequent Plan Year.

SECTION 10 - DEATH BENEFITS

(a)  In General. If a Participant dies prior to receiving the entire
     nonforfeitable amount credited to his Accounts, all such undistributed
     amounts shall be paid to the Participant's Beneficiary as soon as
     practicable following the close of the Plan Year in which the participant
     died. However, at such Beneficiary's request, the payment of benefits may
     commence as soon as practicable following the close of any subsequent Plan
     Year. If there are two or more Beneficiaries, the Participants' Accounts
     shall be split into sub-accounts to reflect different methods of
     distribution elected by the Beneficiaries.

(b)  Married Participants. a Participant's sole Beneficiary shall be his
     surviving spouse, unless there is no surviving spouse or the surviving
     spouse had consented in writing to the Participant's designation of another
     Beneficiary. Such written consent shall be signed by the surviving spouse
     and witnessed by a member of the Committee or a notary public. Written
     consent need not be obtained if the Participant established to the
     satisfaction of the Committee that there is no spouse or the spouse cannot
     be located. Any consent by a spouse (or establishment that consent cannot
     be obtained) shall be limited to the specific Beneficiary designated by the
     Participant, and shall be effective only with respect to such spouse.

(c)  Beneficiary Designation. Each Participant may file with the Committee a
     designation of Beneficiary to receive amounts payable under this Plan upon
     his death. The designation may be changed from time to time by the
     Participant, except that a married Participant may name a Beneficiary other
     than his spouse only in accordance with Section 10(b), above. If no
     designation has been filed, or all designated Beneficiaries have
     predeceased the Participant, then the Participant shall be deemed to have
     designated the following as his Beneficiaries and contingent Beneficiaries
     with priority in the following order:

          (1)  Surviving Spouse; then

          (2)  Surviving children equally; then

          (3)  Estate.

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<PAGE>

(d)  Identification of Beneficiary. If at, after or during the time when a
     benefit is payable to any Beneficiary, the Committee, upon request of the
     Trustee or at its own instance, mails by registered or certified mail to
     the Beneficiary at the Beneficiary's last known address a written demand
     for his then address, or for satisfactory evidence of his continued life,
     or both, and, if the Beneficiary shall fail to furnish the information to
     the Committee within three years from the mailing of the demand, then the
     Committee shall distribute to the party next entitled thereto under Section
     10(c), above, as if the Beneficiary were then deceased.

SECTION 11 - PAYMENT OF ACCOUNT BALANCES ON ACCOUNT OF TERMINATION

11.1 DETERMINATION OF DISTRIBUTABLE ACCOUNT BALANCE.

     (a)  In General. If a Participant separates from service prior to Normal
          Retirement Age for reasons other than Total and Permanent Disability
          or death, he shall be entitled to the portion of his Accounts which is
          nonforfeitable. The Committee shall distribute the entire
          nonforfeitable portion of the Participant's Accounts to such
          Participant in a lump sum as soon as practicable following the close
          of the Plan Year in which he separates from service.

     (b)  Consent to distribution. If the nonforfeitable portion of a
          Participant's Accounts exceeds $5,000, no distribution shall be made
          pursuant to Section 11.1(a) above, unless the Participant consents to
          such distribution, in writing. The consent of the Participant shall be
          obtained, in writing, within the 90-day period ending on the date of
          the distribution. The Participant's consent shall not be required to
          the extent that a distribution is required to satisfy Section
          401(a)(9) and\or Section 415 of the Code.

     (c)  Forfeitures. If a distribution is made (or deemed made) to the
          Participant upon his separation from service pursuant to (a) or (b),
          above, the nonvested portion of his accounts will be treated as a
          Forfeiture and reallocated to other participants as provided in
          Sections 8.1 and 8.2(c). If a Participant separates from service and
          his nonforfeitable percentage, as determined pursuant to Section
          11.1(d), below, is 0%, he will be deemed to have received a
          distribution of his Accounts as of his separation from service.

          If the Accounts are not distributed to the Participant upon his
          separation from service, the non-vested portion shall be maintained in
          a Forfeiture Account and treated as a Forfeiture when the Participant
          incurs five (5) consecutive One-Year Breaks in Service.

          If a Participant returns to employment with an Employer or a Related
          Company after receiving (or having deemed to receive) distribution of
          the

                                       26

<PAGE>

          nonforfeitable portion of his Accounts, but before incurring 5
          consecutive One Year Breaks in Service, the amount forfeited from his
          respective Accounts by reason of such distribution (or deemed
          distribution)will be restored to his respective Accounts, but only
          upon the Participant's repayment of the amount previously distributed.
          Such restoration will be made, first, out of Forfeitures occurring in
          the year of restoration, second, out of Trust Fund earnings and,
          third, out of Employer KSOP contributions. Upon such Participant's
          subsequent Termination Date, his Accounts will be paid in accordance
          with either paragraph (a) or (b) of this Section, as applicable.

     (d)  Vesting Schedule. A Participant shall have a nonforfeitable right to
          the amount credited to his Nonelective Contribution Account in
          accordance with the following schedule:

                 Number of Years of Service        Vested Percentage
                 --------------------------        -----------------

                 Less than 1 year                         0%
                 1 year but less than 2 years            20%
                 2 years but less than 3 years           40%
                 3 years but less than 4 years           60%
                 4 years but less than 5 years           80%
                 5 years or more                        100%

          A Participant will have a 100% vested and nonforfeitable interest at
          all times in his Elective Contribution Account and his Matching
          Contribution Account.

          The balances in his KSOP Cash Account and KSOP Stock Account, if any,
          after the foregoing multiplication, as at the Accounting Date
          coincident with or next following the Termination Date (after all
          adjustments then required under the Plan have been made), will become
          distributable to or for his benefit or, in the case of his death, to
          or for the benefit of his Beneficiary, in accordance with the
          provisions of Section 11.2.

     (e)  Vesting after Reemployment. If a Participant returns to employment
          with an Employer or a Related Employer prior to incurring a One Year
          Break in Service and again resigns or is dismissed prior to completing
          six (6) Years of Service, then, as of the Accounting Date coincident
          with or next following the date on which the Participant first incurs
          a One Year Break in Service after such subsequent resignation or
          dismissal (after all adjustments then required under the Plan have
          been made), the balances in his Forfeiture Accounts shall be
          determined by multiplying those balances by the following:

                                      X - y
                                      -----
                                     100% - y

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<PAGE>

          For purposes of the above formula, x equals the Participant's vested
          percentage on the date of his subsequent One Year Break in Service and
          y equals the Participant's vested percentage on the date of his prior
          termination of employment. If a Participant does not have a
          nonforfeitable right to any of his KSOP Accounts on his Termination
          Date, then he will be deemed to be cashed out of his KSOP Accounts as
          of his Termination Date.

11.2 MANNER OF MAKING PAYMENTS. Distribution will be made, to or for the benefit
     of the Participant or, in the case of the Participant's death, his
     Beneficiary, by either, or a combination of, the following methods:

     (a)  By payment in a lump sum, or

     (b)  By payment in a series of substantially equal annual installments over
          a period not to exceed the lesser of (i) 5 years, or (ii) the
          Participant's life expectancy.

11.3 TIME FOR DISTRIBUTION.

     (a)  In General. Unless the Participant otherwise elects, distribution of
          the portion of the Participant's Accounts attributable to shares of
          Company Stock shall commence not later than one year after the close
          of the Plan Year:

          (1)  in which the Participant separates from service by reason of the
               attainment of Normal Retirement Age, Total and Permanent
               Disability, or death; or

          (2)  which is the fifth Plan Year following the Plan year in which the
               Participant otherwise separates from service, except that this
               paragraph (2) shall not apply if the Participant is reemployed by
               the Employer before distribution is required to begin under this
               paragraph (2).

     (b)  Exception for Acquisition Loan. Subsection (a) shall not apply to any
          shares of Company Stock acquired with the proceeds of an Acquisition
          Loan until the close of the Plan Year in which such Acquisition Loan
          is repaid in full.

     (c)  Installment Payments. Unless the Participant elects otherwise, a
          distribution required under subsection (a) shall be in substantially
          equal periodic payments (not less frequently than annually) over a
          period not longer than the greater of:

          (1)  five years, or

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<PAGE>

          (2)  in the case of a Participant the balances of whose KSOP Stock
               Account is in excess of $500,000, five years plus one additional
               year (but not more than five additional years for each $100,000
               or fraction thereof by which such balance exceeds $500,000.

          The dollar amounts set forth in paragraph (2), above, shall be
          adjusted in accordance with adjustments prescribed by the Secretary of
          the Treasury.

     (d)  Distribution of Company Stock. Distribution of a Participant's vested
          KSOP Stock Accounts will be made in whole shares of Company Stock,
          cash or a combination of both, as determined by the Committee;
          provided, however, that the Committee shall notify the Participant of
          his right to demand distribution of his vested KSOP Stock Account
          balance entirely in whole shares of Company Stock (with the value of
          any fractional share paid in cash). However, a Participant shall have
          no right to receive a distribution of any portion of his Accounts in
          Company Stock if there is in effect an election by the Company to be
          an S corporation under Code Section 1362(a).

     (e)  Age 70 1/2 Distribution Date. Notwithstanding any provision in this
          Section 11.3 to the contrary, distribution of a Participant's KSOP
          Accounts shall commence not later than the Required Beginning Date. If
          a Participant's interest is to be distributed in other than a single
          sum, the following minimum distribution rules shall apply on or after
          the Required Beginning Date:

          (1)  If a Participant's benefit is to be distributed over (i) a period
               not extending beyond the life expectancy of the Participant or
               the joint life and last survivor expectancy of the Participant
               and the Participant's designated beneficiary, or (ii) a period
               not extending beyond the life expectancy of the designated
               beneficiary, the amount required to be distributed for each
               calendar year, beginning with distributions for the first
               distribution calendar year, must at least equal the quotient
               obtained by dividing the Participant's benefit by the applicable
               life expectancy.

          (2)  The minimum distribution required for the Participant's first
               distribution calendar year must be made on or before the
               Participant's Required Beginning Date. The minimum distribution
               for other calendar years, including the minimum distribution for
               the distribution calendar year in which the Participant's
               Required Beginning Date occurs, must be made on or before
               December 31 of that distribution calendar year.

     (f)  Distributions to Beneficiary upon Death. Notwithstanding the
          provisions of paragraphs (b) and (c) above, distributions upon the
          death of

                                       29

<PAGE>

          a Participant shall be made in accordance with the following
          requirements and shall otherwise comply with section 401(a)(9) of the
          Code and any regulations issued thereunder. If a Participant dies
          before his distribution has commenced, distribution of his Accounts to
          his Beneficiary shall commence not later than the earlier of:

          (1)  one year after the end of the Plan Year in which the Participant
               died, or

          (2)  if the Beneficiary is the surviving spouse, the latter of one
               year after the Participant's death or the date the Participant
               would have attained age 701/2,

          and shall be completed within five years after the Participant's
          death.

11.4 FACILITY OF PAYMENT. Notwithstanding the provisions of this Section 11, if,
     in the opinion of the Committee a Participant or other person entitled to
     benefits under the Plan is under a legal disability or is in any way
     incapacitated so as to be unable to manage his financial affairs, the
     Committee may direct the Trustee to make payment to a conservator or other
     person legally charged with the care of his person or of his estate.
     Thereafter, any benefits under the Plan to which such Participant or other
     person is entitled shall be paid to such conservator or other person
     legally charged with the care of his person or his estate, which shall then
     fully discharge the obligation of the Trustee to pay benefits under the
     Plan with respect to such Participant.

11.5 INTERESTS NOT TRANSFERABLE. The interests of Participants and other persons
     entitled to benefits under the Plan are not subject to the claims of their
     creditors and may not be voluntarily or involuntarily assigned, alienated
     or encumbered, except as otherwise provided in Section 11.8.

11.6 ABSENCE OF GUARANTY. Neither the Trustee, the Committee nor the Employers
     in any way guarantee the Trust Fund from loss or depreciation. The
     Employers do not guarantee any payment to any person. The liability of the
     Trustee to make any payment is limited to the available assets of the Trust
     Fund.

11.7 MISSING PARTICIPANTS OR BENEFICIARIES. Each Participant and each designated
     Beneficiary may file with the Committee from time to time in writing his
     post office address and each change of post office address. Any
     communication, statement or notice addressed to a Participant or designated
     Beneficiary at his last post office address filed with the Committee, or if
     no address is filed with the Committee then, in the case of a Participant,
     at his last post office address as shown on the Employers' records, will be
     binding on the Participant and his designated Beneficiary for all purposes
     of the Plan. The Employers, the Committee, and the Trustee are not required
     to search for or locate a Participant or designated Beneficiary.

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<PAGE>

11.8 QUALIFIED DOMESTIC RELATIONS ORDER. In addition to payments made under
     Section 11 on account of a Participant's termination of employment,
     payments may be made to an Alternate Payee (as defined below) prior to,
     coincident with, or after a Participant's termination of employment if made
     pursuant to a Qualified Domestic Relations Order. A distribution to an
     Alternate Payee may be made out of a Participant's Accounts on a date
     coincident with the Participant's "earliest retirement age", defined as the
     earlier of (i) the date on which the Participant is entitled to a
     distribution under the Plan, or (ii) the later of (A) the date the
     Participant attains age 50, or (B) the earliest date on which the
     Participant could begin receiving benefits under the Plan if he had
     separated from service. In addition, this Plan specifically authorizes
     distributions to an Alternate Payee under a Qualified Domestic Relations
     Order prior to the Participant's attainment of the earliest retirement age
     (as defined above and in section 414(p) of the Code) but only if (1) the
     order specifies distribution at the earlier date or permits an agreement
     between the Plan and the Alternate Payee authorizing an earlier
     distribution; and (2) the Alternate Payee consents to a distribution prior
     to the Participant's earliest retirement age if the present value of the
     Alternate Payee benefits under the Plan exceeds $5,000. Nothing in this
     Section 11.8 shall provide a Participant with a right to receive a
     distribution at a time not otherwise permitted under the Plan, nor shall it
     provide the Alternate Payee with a right to receive a form of payment not
     permitted under the Plan.

     The Committee shall establish reasonable procedures to determine the
     qualified status of domestic relations orders and to determine
     distributions under such qualified orders. Any expenses incurred by the
     Committee in determining the status of domestic relations orders or
     administering a qualified order shall be charged to the Accounts of the
     Participant to whom such order relates. The Committee may, in its sole
     discretion, establish and maintain a segregated account for each Alternate
     Payee. The term "Alternate Payee" means any spouse, former spouse, child or
     other dependent of a Participant who is recognized by a Qualified Domestic
     Relations Order as having a right to receive all, or a portion of, the
     benefits payable under the Plan with respect to the Participant.

11.9 PRE-RETIREMENT DIVERSIFICATION RIGHTS. Any Qualified Participant shall have
     the right to make an election to direct the Plan as to investment of his
     KSOP Stock Account. Such a Qualified Participant may elect within 90 days
     after the close of each Plan Year in the Qualified Election Period to
     diversify 25% of his KSOP Stock Account, less any amount to which a prior
     election applies. In the case of the last year to which an election
     applies, 50% shall be substituted for 25%. If the Fair Market Value of the
     Company Stock in a Qualified Participant's KSOP Stock Account is $500 or
     less as of the Accounting Date immediately preceding the first day of any
     Qualified Election Period, then such Qualified Participant shall not be
     entitled to an election under this Section 11.9 for that Qualified Election
     Period.

     The Plan may satisfy the requirements of this Section 11.9 by offering at
     least three (3) investment options to the Qualified Participant. In
     addition, if the Qualified

                                       31

<PAGE>

     Participant consents, the Plan may distribute the portion of the KSOP Stock
     Account covered by the election to the Qualified Participant within the 90
     day period after the election is made.

SECTION 12 - VOTING OF COMPANY STOCK

     For any Plan Year in which the Company has a class of securities registered
under section 12 of the Securities Exchange Act of 1934, each Participant (or,
in the event of his death, his Beneficiary) shall have the right to direct the
Trustee as to the manner in which whole and partial shares of Company Stock
allocated to his KSOP Stock Account as of the record date are to be voted on
each matter brought before an annual or special shareholders' meeting. Before
each such meeting of shareholders, the Trustee shall furnish to each Participant
(or Beneficiary) a copy of the proxy solicitation material, together with a form
requesting directions on how such shares of Company Stock allocated to such
Participant's KSOP Stock Account shall be voted on each matter. Upon timely
receipt of such directions, the Trustee shall on each such matter vote as
directed the number of shares (including fractional shares) of Company Stock
allocated to such Participant's KSOP Stock Account, and the Trustee shall have
no discretion in such matter. The directions received by the Trustee from
Participants shall be held by the Trustee in confidence and shall not be
divulged or released to any person, including officers or employees of any
Employer. The Trustee shall vote allocated shares for which it has received no
direction and unallocated shares in accordance with the fiduciary standards of
Title I of ERISA.

     For any Plan Year in which the Company does not have a class of securities
registered under section 12 of the Securities Exchange Act of 1934, all Company
Stock in the Trust shall be voted by the Trustee in such manner as it shall
determine in its sole direction. However, with respect to any corporate matter
which involves the voting of Company Stock as to the approval or disapproval of
any corporate merger or consolidation, recapitalization, reclassification,
liquidation, dissolution, sale of substantially all assets of a trade or
business, or such similar transactions as may be prescribed in the Code or
regulations promulgated thereunder, each Participant will be entitled to direct
the Trustee as to the exercise of any voting rights attributable to shares of
Company Stock then allocated to his KSOP Stock Account, but only to the extent
required by sections 401(a)(22) and 409(e)(3) of the Code and the regulations
promulgated thereunder. In that event, the Trustee shall vote allocated shares
for which it has received no direction and unallocated shares in accordance with
the fiduciary standards of Title I of ERISA.

                                       32

<PAGE>

SECTION 13 - RIGHTS, RESTRICTIONS AND OPTIONS ON COMPANY STOCK

13.1 RIGHT OF FIRST REFUSAL. Subject to the provisions of the last sentence of
     this Section 13.1, shares of the Company Stock distributed by the Trustee
     shall be subject to a "Right of First Refusal". The Right of First Refusal
     shall provide that, prior to any subsequent transfer, such Company Stock
     must first be offered in writing to the Company and, if then refused by the
     Company, to the Trustee, at the then Fair Market Value, as determined by an
     Independent Appraiser (as defined in section 401(a)(28) of the Code). A
     bona fide written offer from an independent prospective buyer shall be
     deemed to be the Fair Market Value of such Company Stock for this purpose
     unless the value per share, as determined by the Independent Appraiser as
     of the most recent Accounting Date, is greater. The Company and the Trustee
     shall have a total of 14 days (from the date the Company receives the
     offer) to exercise the Right of First Refusal on the same terms offered by
     the prospective buyer. A Participant (or Beneficiary) entitled to a
     distribution of Company Stock may be required to execute an appropriate
     stock transfer agreement (evidencing the Right of First Refusal) prior to
     receiving a certificate for Company Stock. No Right of First Refusal shall
     be exercisable by reason of any of the following transfers:

     (a)  the transfer upon the death of a Participant or Beneficiary of any
          shares of Company Stock to his legal representatives, heirs and
          legatees, provided, however, that any proposed sale or other
          disposition of any such shares by any legal representative, heir or
          legatee shall remain subject to the Right of First Refusal;

     (b)  the transfer by a Participant or Beneficiary in accordance with the
          Put Option pursuant to Section 13.2 below; or

     (c)  the transfer while the Company Stock is listed on a national
          securities exchange registered under Section 6 of the Securities
          Exchange Act of 1934, or quoted on a system sponsored by a national
          securities association registered under Section 15A(b) of the
          Securities Exchange Act of 1934.

13.2 PUT OPTION. In the event Company Stock is not "publicly traded" within the
     meaning of 26 CFR Section 54.4975-7(b)(1)(iv), the Company shall issue a
     "Put Option" to each Participant or Beneficiary receiving a distribution of
     Company Stock from the Plan. The Put Option shall permit the Participant or
     Beneficiary to sell such Company Stock at its then Fair Market Value, as
     determined by an Independent Appraiser, to the Company, at any time during
     the 60 day period commencing on the date the Company Stock was distributed
     and to the recipient and, if not exercised within that period, the Put
     Option will temporarily lapse. Upon the close of the Plan Year in which
     such temporary lapse of the Put Option occurs, the Independent Appraiser
     shall determine the value of the Company Stock, and the Trustee shall
     notify each distributee who did not exercise the initial Put Option prior
     to its temporary lapse in the preceding Plan Year of the revised value of
     the Company Stock. The time during which the Put Option may be

                                       33

<PAGE>

     exercised shall recommence on the date such notice or revaluation is given
     and shall permanently terminate 60 days thereafter. The Trustee may be
     permitted by the Company to purchase Company Stock put to the Company under
     a Put Option. At the option of the Company or the Trustee, as the case may
     be, the payment for Company Stock sold pursuant to a Put Option shall be
     made in the following forms:

     (a)  if the Company Stock was distributed as part of a total distribution
          (that is, a distribution within one taxable year of a Participant of
          the balance of the credit of his KSOP Accounts), then payments may be
          made in substantially equal annual installments commencing within 30
          days from the date of the exercise of the Put Option and over a period
          not exceeding 5 years, with interest payable at a reasonable rate (as
          determined by the Company) on any unpaid installment balance, with
          adequate security provided, and without penalty for any prepayment of
          such installments; or

     (b)  if a Participant or Beneficiary exercises a Put Option on a
          distribution of Company Stock made to him in periodic payments (in
          accordance with Section 11.3(c), then the payment for such Company
          Stock may be made in a lump sum no later than 30 days after such
          Participant exercises the Put Option.

     The Trustee on behalf of the Trust may offer to purchase any shares of
     Company Stock (which are not sold pursuant to a Put Option) from any former
     Participant or Beneficiary at any time in the future, at their then fair
     market value.

13.3 SHARE LEGEND. Shares of Company Stock held or distributed by the Trustee
     may include such legend restrictions on transferability as the Company may
     reasonably require in order to assure compliance with applicable Federal
     and State securities laws.

13.4 NONTERMINABLE RIGHTS. The provisions of this Section 13 shall continue to
     be applicable to shares of Company Stock even if the Plan ceases to be an
     Employee Stock Ownership within the meaning of section 4975(e)(7) of the
     Code.

SECTION 14 - HARDSHIP LOANS AND DISTRIBUTIONS

     The Committee may, upon written application of the Participant, authorize a
loan or loans to the Participant subject to the following:

     (a)  Purpose. Loans will be permitted only for purposes described in 26 CFR
          Section 1.401(k)-1(d)(2), which establish standards deemed to satisfy
          the hardship condition for distribution of Elective Contributions.
          Specifically, these purposes are:

                                       34

<PAGE>

          (a)  expenses for medical care previously incurred by the Participant,
               the Participant's spouse, or any dependents of the Participant,
               or necessary for these persons to obtain medical care; or

          (b)  costs directly related to the purchase of a principal residence
               for the Participant, excluding mortgage payments; or

          (c)  payment of tuition, related educational fees, and room and board
               expenses, for the next 12 months of post-secondary education for
               the Participant, or the Participant's spouse, children, or
               dependents; or

          (d)  payments necessary to prevent the eviction of the Participant
               from the Participant's principal residence or foreclosure on the
               mortgage on that residence.

     (b)  Maximum Limits. Loans will be limited to the lesser of:

          (1)  the lesser of (i) 1/2 of the value of the Participant's
               nonforfeitable Account balance, or (ii) one hundred percent
               (100%) of the Participant's KSOP Cash Account;

          (2)  $50,000 reduced by the maximum outstanding loan balance (if any)
               during the 12-month period ending on the day before the loan is
               taken.

     (c)  Availability. Loans must be available to all Participants on a
          reasonably equitable basis and the availability shall be communicated
          to all Participants. Loans shall not be made available to Highly
          Compensated Employees in an amount greater than that made available to
          other employees.

     (d)  Interest Rate. A reasonable rate of interest shall be charged on each
          loan. What is reasonable depends on factors such as the amount of
          loan, adequacy of security, duration of loan, repayment schedule,
          current market conditions, variable or fixed rate of interest, what is
          customary in similar arm's length transactions in the community, and
          other economic and time factors.

     (e)  Schedule of Loan Payments. Loan agreements shall provide for repayment
          within five (5) years from the date of the loan, except when a loan is
          used to purchase a residence in which the period of repayment shall
          not exceed fifteen (15) years.

                                       35

<PAGE>

     (f)  Other Rules:

          (1) All plans of all related businesses are to be combined for
          purposes of maximum limits on loans.

          (2) All loans must be evidenced by a written loan agreement signed by
          all relevant parties to the loan and evidenced by as promissory note
          of the borrower where the borrower personally guarantees the repayment
          of the loan and secures the loan on the Participant's account balance.

          (3) A Participant's spouse must consent in writing for a Participant
          to use any part of their account balance as security for the loan.
          Spousal consent shall be obtained no earlier than the beginning of the
          90-day period ending on the date the loan is made. The consent must
          acknowledge the effect of the loan and must be witnessed by a plan
          representative or notary public. The consent is binding with respect
          to the loan for which it is given. A new consent shall be required if
          the loan is revised, renegotiated, renewed or extended.

          (4) The loan document must provide for payments to be made at least
          quarterly, in a level amount, which will fully amortize the loan over
          its duration.

          (5) The Trustee may provide for loans to be considered an asset of the
          Trust Fund or as an investment of the borrower's account. The Trustee
          shall act consistently in making this determination.

          (6) Any loan outstanding at the time a Participant receives a
          distribution shall be repaid by offsetting the balance due (plus
          accrued interest and any costs) against the amount to be distributed.

     In the event a loan is not sufficient to meet the need described in Section
14(a), the Participant may request and the Committee may direct a distribution
of the Participant's Elective Contributions. In such event, the Participant's
Elective contributions shall be suspended for 12 months beginning with the first
day of the month following the Participant's receipt of the hardship
distribution.

SECTION 15 - THE COMMITTEE

15.1 APPOINTMENT AND AUTHORITY. The Committee referred to in Section 1.2 shall
     be appointed by the Board of Directors of the Company. Except as otherwise
     specifically provided in this Section 15, the Committee shall have the
     following powers, rights and duties in addition to those vested in it
     elsewhere in the Plan:

     (a)  To adopt such rules of procedure and regulations as, in its opinion,
          may be necessary for the proper and efficient administration of the
          Plan and as are consistent with the provisions of the Plan;

                                       36

<PAGE>

     (b)  To enforce the Plan in accordance with its terms and with such
          applicable rules and regulations as may be adopted by the Committee;

     (c)  To determine all questions arising under the Plan, including the power
          to determine the rights or eligibility of employees or Participants
          and their Beneficiaries and their respective benefits, and to remedy
          ambiguities, inconsistencies or omissions;

     (d)  To give such directions to the Trustee with respect to the Trust Fund
          as may be provided in the Trust Agreement, including the depositories
          which have been designated by the Board, which must be an incorporated
          Federally insured bank or trust company;

     (e)  To maintain and keep adequate books, records and other data as shall
          be necessary to administer the Plan, except those that are maintained
          by the Company of the Trustee, and to meet the disclosure and
          reporting requirements of ERISA;

     (f)  To direct all payments of benefits under the Plan;

     (g)  To establish an investment policy and objective for the Plan;

     (h)  To be agent for the service of legal process on behalf of the Plan;

     (i)  To execute any documents on behalf of the Committee, in which event
          the Committee shall notify the Trustee in writing of such action;

     (j)  To perform any other acts necessary or appropriate to the
          administration of the Plan and the discharge of its duties.

     (k)  To perform any other acts necessary or appropriate to the
          administration of the Plan and the discharge of its duties.

     The certificate of a Committee member that the Committee has taken or
     authorized any action shall be conclusive in favor of any person relying on
     the certificate.

15.2 DELEGATION BY COMMITTEE. The Committee may establish procedures for
     allocation of fiduciary responsibilities and delegation of fiduciary
     responsibilities to persons other than named fiduciaries; however, the
     delegation of the power to manage or control Plan assets may only be
     delegated to an Investment Manager, as defined in section 3(38) of ERISA.
     In exercising its authority to control and manage the operation and
     administration of the Plan, the Committee may employ agents and counsel
     (who may also be employed by or represent any Employer) and to delegate to
     them such powers as the Committee deems desirable. Any such delegation or
     appointment shall be in writing. The writing contemplated by the

                                       37

<PAGE>

     foregoing sentence shall fully describe the advice to be rendered or the
     functions and duties to be performed by the delegate.

15.3 UNIFORM RULES. In managing the Plan, the Committee will uniformly apply
     rules and regulations.

15.4 INFORMATION TO BE FURNISHED TO COMMITTEE. The Employers shall furnish the
     Committee such data and information as may be required. The Committee shall
     be entitled to rely on any information furnished by the Company that is
     needed for calculation of benefits due under the Plan, or any matters
     relating to administration of the Plan. A Participant, surviving spouse, or
     other person entitled to benefits under the Plan must furnish to the
     Committee such evidence, data or information as the Committee considers
     desirable to carry out the Plan. Any benefits under the Plan may be
     conditional upon the prompt submission of such information. Any adjustment
     by the Committee by reason of a misstatement of age or lack of information
     will be made in a manner the Committee deems equitable.

15.5 COMMITTEE'S DECISION FINAL. To the extent permitted by law, any
     interpretation of the Plan and any decision on any matter within the
     discretion of the Committee (such as eligibility for participation and the
     timing and amount of benefit payments) made by the Committee in good faith
     is binding on all persons. A misstatement or other mistake of fact shall be
     corrected when it becomes known, and the Committee shall make such
     adjustment on account thereof as they consider equitable and practicable.

15.6 EXERCISE OF COMMITTEE'S DUTIES. Notwithstanding any other provision of the
     Plan, the Committee members shall discharge their duties hereunder solely
     in the interests of the Participants and other persons entitled to benefits
     under the Plan, and:

     (a)  for the exclusive purpose of providing benefits to Participants and
          other persons entitled to benefits under the Plan;

     (b)  with the care, skill, prudence and diligence under the circumstances
          then prevailing that a prudent person acting in a like capacity and
          familiar with such matters would use in the conduct of an enterprise
          of a alike character and with like aims; and

     (c)  in accordance with the documents and instruments governing the Plan
          insofar as they are consistent with ERISA.

15.7 REMUNERATION AND EXPENSES. No remuneration shall be paid to a Committee
     member as such. However, the reasonable expenses of a Committee incurred in
     the performance of a Committee function shall be reimbursed by the
     Employers.

                                       38

<PAGE>

15.8   INDEMNIFICATION OF THE COMMITTEE. To the extent permitted by applicable
       law, any person or entity appointed by the Board of Directors to serve as
       a Committee member shall be indemnified by the Company against any and
       all liabilities, settlements, losses, costs, and expenses ( including
       reasonable legal fees and expenses) of whatever kind and nature which may
       be imposed on, incurred by or asserted against the Committee or its
       members by reason of the performance or nonperformance of a Committee
       function if, in the opinion of the Board of Directors of the Company,
       such action was not dishonest or in willful violation of the law or
       regulations under which such liability, loss, cost, or expense arose.
       Furthermore, the Company agrees to indemnify the Committee members
       against any liability imposed as a result of a claim asserted by any
       person or persons under Federal or state law where the Committee acts in
       good faith or in reliance on a written direction or certification of the
       Company. The foregoing right of indemnification shall be in addition to
       other rights the members by law or by reason of insurance coverage of any
       kind. The Company may, at its own expense, settle any claim asserted or
       proceeding brought against any member of the Committee when such
       settlement appears to be in the best interests of the Company. If the
       Company obtains fiduciary liability insurance to protect the Committee or
       any of its members, the provisions of this Section 15.8 shall be
       applicable only to the extent that such insurance coverage is
       insufficient.

15.9   RESIGNATION OR REMOVAL OF COMMITTEE MEMBER. Any person or entity
       appointed as a Committee member may resign at any time by delivering
       their written resignation to the Company. The Company, at its discretion,
       may immediately remove any or all of the Committee members with or
       without cause upon delivery of written notice to them.

15.10  APPOINTMENT OF SUCCESSOR COMMITTEE. The Board will promptly fill any
       vacancy in the membership of the Committee and shall give prompt written
       notice thereof to the other Employers and the Trustee.

15.11  INTERESTED PERSON. A fiduciary may not decide or determine any matter or
       question concerning his own benefits under the Plan or as to how they are
       to be paid to him unless such decision should be made by him under the
       Plan if he were not a member of the Committee, except when such decision
       applies to all Participants similarly. If a person is disqualified to
       act, the Company may appoint a temporary member to exercise the powers of
       the interested person concerning the matter as to which he is
       disqualified, or the remaining Committee members may act without the
       appointment of a new Committee member.

15.12  CLAIMS PROCEDURE. Any Participant or Beneficiary who disputes the
       Committee's determination of the benefits due to him under the Plan may
       file a claim with the Committee. A claim must be in writing, in a form
       which gives the Committee reasonable notice of the claim, and authorizes
       the Committee to take all steps necessary to determine the validity of
       the claim and to facilitate the payment of any benefits to which the
       claimant is entitled. The Committee will, if reasonably possible, decide
       whether to grant or to deny a claim within ninety (90)

                                       39

<PAGE>

       days after it is filed. If a longer period is needed, the Committee will,
       no later than the last day of the ninety (90) day period, notify the
       claimant of the extension of time and the reasons why it is needed. A
       decision must then be rendered within ninety (90) days after the claimant
       was notified of the extension. If the Committee does not act within the
       time specified by this Section 15.12, the claim is automatically denied,
       and the claimant may appeal in accordance with this Section 15.12. If the
       Committee determines that a claim should be denied, it will give the
       claimant written notice of denial. This notice must be written in a
       manner calculated to be understood by the claimant, state specific
       reasons for denying the claim, citing the provisions of the Plan on which
       the denial is based, explain the procedure for reviewing the Committee's
       decision, and if the claim is denied because the Committee lacks adequate
       information to reach a decision, state what information is needed to make
       a decision possible and why it is needed. If a claim is denied, the
       claimant may appeal to the Company. His appeal must be submitted in
       writing to the Company no later than sixty (60) days after the earlier of
       the date on which he receives notice of denial or the expiration of the
       period within which the Company is required to make a decision. The
       claimant or his representative may submit any documents or written
       arguments that he desires in support of his claim, and the Company may,
       but is not required to, hold a hearing on the claim. The Company will, if
       reasonably possible, decided the claimant's appeal within sixty (60) days
       after it is filed. If a longer period is needed, the Company will, no
       later than the last day of the sixty (60) period, notify the claimant of
       the extension of time and the reasons why it is needed. A decision must
       then be rendered within sixty (60) days after the claimant was notified
       of the extension. If the Company does not act within the time specified
       by this Section 15.12, the appeal is automatically denied. If the Company
       determines that an appeal should be denied, it must give the claimant
       written notice of the denial in the same manner as required on initial
       denial of the claim by the Company.

SECTION 16 - AMENDMENT AND TERMINATION

16.1   AMENDMENT. While the Employers expect and intend to continue the Plan,
       the Company must reserve and reserves the right, subject to the
       provisions of Section 1.3, to amend the Plan at any time, except as
       follows:

       (a)   the duties and liabilities of the Trustee cannot be substantially
             changed without their consent; and

       (b)   no amendment shall reduce a Participant's benefits to less than the
             amount such Participant would be entitled to receive if such
             Participant had resigned from the employ of all of the Employers
             and Related Companies on the date of the amendment.

16.2   TERMINATION. The Plan will terminate as to all of the Employers on any
       day specified by the Company. The Plan will terminate as to any Employer
       on the first to occur of the following:

                                       40

<PAGE>

       (a)   the date it is terminated by that Employer if 30 days' advance
             written notice is given to the Trustee,

       (b)   the date that Employer's contributions under the Plan are
             completely discontinued;

       (c)   the date that the Employer is judicially declared bankrupt under
             Chapter 7 of the U.S. Bankruptcy Code;

       (d)   the dissolution, merger, consolidation or reorganization of that
             Employer, or the sale by that Employer of all or substantially all
             of its assets, except that, subject to the provisions of Section
             16.3, with the consent of the Company, in any event such
             arrangements may be made whereby the Plan will be continued by any
             successor to that Employer or substituted for that Employer under
             the Plan.

16.3   MERGER AND CONSOLIDATION OF PLAN, TRANSFER OF PLAN ASSETS. In the case of
       any merger or consolidation with, or transfer of assets and liabilities
       to, any other plan, provisions shall be made so that each Participant in
       the plan on the date thereof, if the Plan then terminated, would receive
       a benefit immediately after the merger, consolidation or transfer which
       is equal to or greater than the benefit which he would have been entitled
       to receive immediately prior to the merger, consolidation or transfer, if
       the Plan had then terminated.

16.4   VESTING AND DISTRIBUTION ON TERMINATION AND PARTIAL TERMINATION. On
       termination of the Plan in accordance with the provisions of Section 16.2
       or on partial termination of the Plan by operation of law, the date of
       termination or partial termination, as the case may be, will be an
       Accounting Date and, after all adjustments then required under the Plan
       have been made, each affected employee's benefits will be nonforfeitable.
       If, on termination of the Plan, a Participant remains an employee of an
       Employer or a Related Company, the amount of the Participant's benefits
       may be retained in the Trust until after the Participant's termination of
       employment with the Employers and the Related Companies and shall be paid
       to such Participant or, in the event of the Participant's death, to the
       Beneficiary thereof in a lump sum. The benefits payable to a Participant
       whose employment with the employers and Related Companies is terminated
       coincident with the termination of the Plan (and the benefits payable to
       an affected employee on partial termination of the Plan) shall be paid to
       the Participant or, in the event of the Participant's death, to the
       Beneficiary thereof in a lump sum. All appropriate accounting provisions
       of the Plan will continue to apply until the benefits of all affected
       persons have been distributed to them.

16.5   NOTICE OF AMENDMENT, TERMINATION OR PARTIAL TERMINATION. Affected
       Participants will be notified of an amendment, termination or partial
       termination of the Plan as required by law.

                                       41

<PAGE>

SECTION 17 - TOP HEAVY PROVISIONS

     The Plan will be a "top-heavy Plan" if, as of the last day of the Plan year
or, as of the day next preceding the beginning of any later Plan Year (the
"Determination Date") and determined in accordance with the provisions of
section 416(g) of the Code, the aggregate present value of the accrued benefits
and account balances of all "Key Employees" (within the meaning of section
416(i) of the Code) and their Beneficiaries exceeds sixty percent (60%) of the
aggregate present value of the accrued benefits and account balances of all
Participants and Beneficiaries. The aggregate present value of the accrued
benefits and account balances of a Participant who has not performed any
services for an Employer or a Related Company during the five year period ending
on the Determination Date shall not be taken into account. The term "Aggregation
Group" shall include each plan of an Employer or Related Company which includes
a Key Employee and each Plan of the Employer or related company (including a
plan terminated during the 5 preceding years) which allows the Plan to meet the
requirements of sections 401(a)(4) or 410 of the Code and may include any other
plan of an Employer or Related Company, if the Aggregation Group would continue
to meet the requirements of sections 401(a)(4) and 410 of the Code.

     If the Plan is a top-heavy plan, effective as of the first day of the Plan
Year, Section 4 will automatically be amended to provide that the aggregate
amount of Employer Contributions allocated in each Plan Year to the KSOP Stock
Account and the KSOP Cash Account of each Participant who is not a Key Employee
(within the meaning of section 416(i)(1) of the Code), and who is employed by
the Employer as of the last day of the Plan Year, may not be less than the
lesser of:

          (1)  three percent of his Adjusted Compensation for the Plan Year; or

          (2)  a percentage of his Adjusted Compensation equal to the largest
               percentage obtained by dividing the sum of the amount credited to
               the KSOP Stock Account and the KSOP Cash Account of any Key
               Employee by that Key Employee's Adjusted Compensation.

     The preceding provisions will remain in effect for the period in which the
Plan is top-heavy. If, for any particular years thereafter, the Plan is no
longer top-heavy, the Company may amend or delete such provisions from the Plan,
except that the vesting schedule described in this Section 17 may not be made
less favorable for any Participant who has completed three or more years of
Service, and no amendment may cause any previously vested portion of any Account
balance to become forfeitable.

                                       42

<PAGE>

SECTION 18 - MISCELLANEOUS

18.1   APPLICABLE LAWS. The Plan shall be construed and administered according
       to the laws of the state of Georgia, to the extent that such laws are not
       preempted by the laws of the United States of America.

18.2   GENDER AND NUMBER. Where the context permits, words in any gender shall
       include any other gender, words in the singular shall include the plural,
       and the plural shall include the singular.

18.3   NOTICES. Any notice or document required to be filed with the Committee
       or Trustee under the Plan will be properly filed if delivered or mailed
       by registered mail, postage prepaid, to the Committee or Trustee in care
       of the Company at its principal executive offices. Any notice required
       under the Plan may be waived in writing by the person entitled to notice.

18.4   EVIDENCE. Evidence required of anyone under the Plan may be by
       certificate, affidavit, document or other information which the person
       acting on it considers pertinent and reliable, and signed, made or
       presented by the proper party or parties.

18.5   ACTION BY EMPLOYER. Any action required or permitted to be taken by an
       Employer under the Plan shall be by resolution of its Board of Directors
       or by a person or person authorized by its Board of Directors.

18.6   QUALIFIED MILITARY SERVICE. Effective December 12, 1994, if any employee
       or participant acquires rights under chapter 43 of title 38, United
       States Code, resulting from qualified military service, then the
       following rules shall apply to such employee or participant:

       1.    Any Employer contribution on behalf of such participant shall not
             be subject to any otherwise applicable limitation contained in code
             Section 402(g), 402(h), 403(b), 404(a), 404(h), 408, 415, and 457,
             and shall not be taken into account in applying such limitations to
             other contributions or benefits under such plan or any other plan,
             with respect to the year in which the contribution is made;

       2.    such contribution shall be subject to the aforementioned
             limitations with respect to the year to which the contribution
             relates (in accordance with rules prescribed by the secretary);

       3.    The participant may make additional elective deferrals during the
             period which begins on the date of reemployment of such employee
             with the employer and has the same length as the lesser of (i)the
             product of 3 and the period of qualified military service which
             resulted in such rights, and (ii) 5 years;

       4.    If the plan suspends the obligation to repay any loan made to a
             participant from the Plan for any part of any period during which
             such employee is

                                       43

<PAGE>

             performing service in the uniformed services ( as defined in
             chapter 43 of title 38, United states Code), whether or not
             qualified military service, such suspension shall not be taken into
             account for purposes of Section 72(p), 401(a), or 4975(d)(1);

       5.    An individual reemployed under such chapter is treated with respect
             to the plan as not having incurred a break in service with the
             employer by reason of such individual's period of qualified
             military service.

       6.    Each period of qualified military service served by an individual
             is, upon reemployment under such chapter, deemed with respect to
             the Plan to constitute service with the employer for the purpose of
             determining the nonforfeitability of the individual's account
             balance and for the purposes of determining contribution
             allocations.

       7.    An individual reemployed under such chapter is entitled to
             contribution allocations that are conditioned on the making of
             elective contributions only to the extent such individual makes
             such matching contributions within the period beginning with the
             date of reemployment and continuing for 3 times the period of
             qualified military service (but not greater than 5 years. An
             individual reemployed under such chapter is entitled to
             contribution allocations that are conditioned on the making of
             elective contributions only to the extent such individual makes
             such matching contributions within the period beginning with the
             date of reemployment and continuing for 3 times the period of
             qualified military service (but not greater than 5 years.

       IN WITNESS WHEREOF, the undersigned officers of the Employers, duly
authorized, have formally adopted this Plan on the ______ day of _____________,
2002.

                                            UNITY HOLDINGS, INC.

                                            By:_________________________________

                                            As Its:_____________________________

                                            UNITY NATIONAL BANK

                                            By:_________________________________

                                            As Its:_____________________________

                                       44

<PAGE>

                              UNITY HOLDINGS, INC.

                         EMPLOYEE STOCK OWNERSHIP TRUST

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
Section                                                                                                 Page
-------                                                                                                 ----
<S>                                                                                                   <C>
I.       Name ...........................................................................................  1

II.      Definitions ....................................................................................  2
         II-1     Account ...............................................................................  2
         II-2     Accounting Date .......................................................................  2
         II-3     Acquisition Loan ......................................................................  2
         II-4     Cash Accounts .........................................................................  2
         II-5     Committee .............................................................................  2
         II-6     Company Stock .........................................................................  2
         II-7     Employer Contributions ................................................................  2
         II-8     ERISA .................................................................................  2
         II-9     Net Equity ............................................................................  2
         II-10    Participant ...........................................................................  2
         II-11    Plan Year .............................................................................  2
         II-12    Related Company .......................................................................  2
         II-13    Suspense Account ......................................................................  3

III.     Management and Control of Trust Fund Assets ....................................................  3
         III-1    The Trust Fund ........................................................................  3
         III-2    General Powers ........................................................................  3
         III-3    Compensation and Expenses .............................................................  5
         III-4    Exercise of Trustee's Duties ..........................................................  5
         III-5    Plan Administration ...................................................................  6

IV.      Provisions Related to Investment in Company Stock ..............................................  6
         IV-1     Investment of Cash ....................................................................  6
         IV-2     Stock Dividends, Splits and other Capital Reorganizations .............................  6
         IV-3     Voting of Shares and Tender of Exchange Offers ........................................  7
         IV-4     Liquidity Requirements ................................................................  7

V.       Miscellaneous ..................................................................................  8
         V-1      Disagreement as to Acts ...............................................................  8
         V-2      Persons Dealing with Trustee ..........................................................  8
         V-3      Benefits May Not Be Assigned or Alienated .............................................  8
         V-4      Indemnification of Trustee ............................................................  8
         V-5      Evidence ..............................................................................  9
         V-6      Waiver of Notice ......................................................................  9
         V-7      Counterparts ..........................................................................  9
         V-8      Governing Laws ........................................................................  9
</TABLE>

<PAGE>

<TABLE>
<S>                                                                          <C>
         V-9      Successors, Etc. ........................................    9
         V-10     Successors to Employers .................................    9
         V-11     Action by Employers .....................................    9

VI.      No Reversion to Employers ........................................   10

VII.     Change of Trustee ................................................   10
         VII-1    Resignation .............................................   10
         VII-2    Approval of the Trustee .................................   10
         VII-3    Duties of Resigning or Removed Trustee and of
                  Successor Trustee .......................................   11
         VII-4    Filling Trustee Vacancy .................................   11

VIII.    Additional Employers .............................................   11

IX.      Amendment and Termination ........................................   11
         IX-1     Amendment ...............................................   11
         IX-2     Termination .............................................   11
</TABLE>

<PAGE>

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

                              UNITY HOLDINGS, INC.
                      EMPLOYEE STOCK OWNERSHIP/401(k) TRUST

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

         THIS AGREEMENT is made and entered into this _______ day of _________,
2002, by and between Unity Holdings, Inc., a Georgia corporation (the
"Company"), and Jerry W. Braden, Donald D. George, John S. Lewis, Michael L.
McPherson, Stephen A. Taylor, and B. Don Temples, said individuals hereinafter
collectively referred to as the "Trustee".

                                WITNESSETH THAT:

         WHEREAS, the Company has established an employee stock ownership plan
(as described in section 4975(e)(7) of the Internal Revenue Code of 1986, as it
may be amended from time to time (the "Code")), which is known as the Unity
Holdings, Inc. Employee Stock Ownership Plan With 401(k) Provisions ("Plan");
and

         WHEREAS, the Plan is established for the exclusive benefit of the
eligible employees of the Company and those of any Related Company (as defined
in Article II) which adopts the Plan and becomes a party to this Trust Agreement
as provided in Article VIII (the Company and the Related Companies that are
parties hereto are sometimes referred to below collectively as the "Employers"
and individually as an "Employer").

         NOW, THEREFORE, and pursuant to the authority delegated to the
undersigned officers of the Company by resolution of its Board of Directors
adopted on ________ ___, 2002, IT IS AGREED, by and between the parties hereto,
that the trust provisions shall constitute the agreement between the Company and
the Trustees in connection with the Plan; and

         IT IS FURTHER AGREED, that the Trustee hereby accepts their appointment
as such under this Trust Agreement, effective as of the day and year first
written above; and

         IT IS FURTHER AGREED, by and between the parties hereto as follows:

                                ARTICLE I - NAME
                                ----------------

         This Trust Agreement and Trust hereby evidenced shall be known as the
"UNITY HOLDINGS, INC. EMPLOYEE STOCK OWNERSHIP/401(k) TRUST".

                                       1

<PAGE>

                            ARTICLE II - DEFINITIONS
                            ------------------------

II-1.    ACCOUNT means a Participant's total economic interest in the Plan.

II-2.    ACCOUNTING DATE means December 31st, the last day of the Trust's
         accounting year or such date(s) as specified pursuant to Article III-1.

II-3.    ACQUISITION LOAN means a loan incurred by the Trustee to finance the
         acquisition of Company Stock or to refinance a prior Acquisition Loan,
         and which complies with the requirements of 26 CFR Section
         54.4975-7(b).

II-4.    CASH ACCOUNTS means the accounts established in the name of
         Participants that reflect Employer Contributions made in cash, any cash
         dividends on Company Stock, any cash forfeitures and any income, gains,
         losses, appreciation or depreciation attributable thereto.

II-5.    COMMITTEE means the individuals appointed by the Board of Directors of
         the Company to administer the Plan.

II-6.    COMPANY STOCK means common or preferred stock issued by the Company or
         a Related Company that meets the definition of "employer securities"
         contained in Code Section 409(l).

II.7.    EMPLOYER CONTRIBUTIONS means contributions made to the Plan by the
         Company or a Related Company which are (i) discretionary, or (ii) made
         at the direction of a Participant.

II-8.    ERISA means the Employee Retirement Income Security Act of 1974, as
         amended, and the regulations promulgated thereunder.

II-9.    NET EQUITY means the fair market value of all property held in the
         Trust Fund, reduced by any liabilities other than liabilities to
         Participants in the Plan and their Beneficiaries, as determined by the
         Trustee.

II-10.   PARTICIPANT means any eligible employee who becomes entitled to
         participate in the Plan.

II-11.   PLAN YEAR means the 12 consecutive month period commencing on each
         January 1 and ending on the next following December 31.

II-12.   RELATED COMPANY means any corporation, trade or business during any
         period in which it is, along with the Company, a member of a controlled
         group of corporations, a group of trades or businesses under common
         control, or an affiliated service group, as described in Sections
         414(b), (c), and (m), respectively, of the Code, and the regulations
         issued thereunder, and any other entity required to be aggregated with
         the Company pursuant to regulations issued under section 414(o) of the
         Code.

                                       2

<PAGE>

II-13.   SUSPENSE ACCOUNT means an account to which excess annual additions have
         been allocated pursuant to 26 CFR Section 1.415-6(b)(6).

            ARTICLE III - MANAGEMENT AND CONTROL OF TRUST FUND ASSETS
            ---------------------------------------------------------

III-1.   THE TRUST FUND. The Trust Fund at any date means all property of every
         --------------
         kind then held by the Trustee. The Trustee may manage, administer and
         invest all contributions made by the several Employers under the Plan
         as one Trust Fund. If, for any reason, it becomes necessary to
         determine the portion of the Trust Fund allocable to employees and
         former employees of any Employer as of any date, the Trustee shall
         specify such date as an Accounting Date, and after all adjustments
         required under the Plan as of that Accounting Date have been made, the
         portion of the Trust Fund attributable to such employees and former
         employees shall be determined and shall consist of an amount equal to
         the aggregate of the account balances of employees and former employees
         of that Employer plus an amount equal to any contributions made by that
         Employer since the close of the immediately preceding Plan Year.

III-2.   GENERAL POWERS. Subject to the provisions of paragraphs III-4 and III-5
         --------------
         and Article IV, with respect to the Trust Fund, the Trustee shall have
         the following powers, rights and duties in addition to those provided
         elsewhere in the Trust Agreement, the Plan or by law:

         (a)      to receive and to hold all contributions paid to it under the
                  Plan; provided, however, that the Trustee shall have no duty
                  to require any contributions to be made to it, or to determine
                  that the contributions received by it comply with the
                  provisions of the Plan or with any resolution of the Board of
                  Directors of any Employer providing therefor;

         (b)      to retain in cash (pending investment, reinvestment or the
                  payment of dividends) such reasonable amount as may be
                  required for the proper administration of the Trust and to
                  invest such cash as provided in paragraph IV-1;

         (c)      to make payments from the Trust Fund to such persons, in such
                  manner, at such times and in such amounts as the Committee
                  shall direct without inquiring as to whether a payee is
                  entitled to the payment, or as to whether a payment is proper,
                  and without liability for a payment made in good faith without
                  actual notice or knowledge of the changed condition or status
                  of the payee;

         (d)      as directed by the Committee, to borrow from any lender
                  (including the Company or any Employer) to finance the
                  acquisition of Company Stock, giving its note as Trustee with
                  such reasonable interest and security (which shall only
                  consist of Company Stock to the extent that proceeds of the
                  loan are used to purchase Company Stock or to finance a prior
                  Acquisition Loan) for the loan as may be appropriate or
                  necessary, provided that such borrowing shall comply with the
                  applicable provisions of the Plan;

                                       3

<PAGE>

         (e)      as directed by the Board of Directors of the Company, to vote
                  any stocks (including Company Stock as provided in Section 12
                  of the Plan), bonds or other securities held in the Trust, or
                  otherwise consent to or request any action on the part of the
                  issuer in person or by proxy;

         (f)      as directed by the Committee, to deposit securities in any
                  voting trust, or with any protective or like committee, or
                  with a trustee or with depositories designated thereby;

         (g)      as directed by the Committee, to contract or otherwise enter
                  into transactions between themselves, as Trustee, and the
                  Company or any Employer or any Company shareholder, for the
                  purpose of acquiring or selling Company Stock and, absent any
                  direction by the Committee, shall retain such Company Stock;

         (h)      as directed by the Committee, to compromise, contest,
                  arbitrate, settle or abandon claims and demands;

         (i)      as directed by the Committee, to begin, maintain or defend any
                  litigation necessary in connection with the investment,
                  reinvestment and administration of the Trust;

         (j)      to retain any funds or property subject to any dispute without
                  liability for the payment of interest, or to decline to make
                  payment or delivery thereof until final adjudication is made
                  by a court of competent jurisdiction;

         (k)      to report to the Committee and the Employers as of the last
                  day of each Plan Year, as of any Accounting Date (or as soon
                  thereafter as practicable), or at such other times as may be
                  required under the Plan, the then Net Equity of the Trust
                  Fund;

         (l)      to furnish to the Committee and the Employers an annual
                  written account and accounts for such other periods as may be
                  required under the Plan, showing the Net Equity of the Trust
                  Fund at the end of the period, all investments, receipts,
                  disbursements and other transactions made by the Trustee
                  during the accounting period, and such other information as
                  the Trustee may possess which the Committee or the employers
                  require in order to comply with Section 103 of the ERISA. All
                  accounts of the Trustee shall be kept on an accrual basis. If,
                  during the term of this Trust Agreement, the Department of
                  Labor issues regulations under ERISA regarding the valuation
                  of securities or other assets for purposes of the reports
                  required by ERISA, the Trustee shall use such valuation
                  methods for purposes of the accounts described by this
                  paragraph. All valuations of shares of Company Stock, which
                  are not publicly traded on a national securities market or
                  exchange, shall be made by an "Independent Appraiser" (as
                  described in section 401(a)(28) of the Code);

         (m)      to pay any estate, inheritance, income or other tax, charge or
                  assessment attributable to any benefit which, as directed by
                  the Committee, it shall or may be

                                       4

<PAGE>

                  required to pay out of such benefit; and to require before
                  making any payment such release or other document from any
                  taxing authority and such indemnity from the intended payee as
                  the Trustee shall deem necessary for its protection;

         (n)      to employ agents, attorneys, actuaries, accountants,
                  investment managers or other persons (who also may be employed
                  by or may represent any Employer) for such purposes as the
                  Trustee considers desirable;

         (o)      to assume, until advised to the contrary, that the Trust
                  evidenced by this Trust Agreement is qualified under section
                  401(a) of the Code and is entitled to tax exemption under
                  section 501(a) thereof;

         (p)      to have the authority to invest and reinvest the assets of the
                  Trust Fund in real or personal property of any kind, except
                  that assets attributable to Employer contributions shall, at
                  such time or times as directed by the Committee, primarily be
                  invested in Company Stock;

         (q)      to invest any portion of the Trust Fund in one or more common,
                  commingled, or collective investment trusts which provide for
                  the pooling of assets of plans described in section 401(a) of
                  the Code and exempt from tax under section 501(a) of the Code,
                  including any such trust maintained by the Trustee; and

         (r)      to perform any and all acts in its judgment necessary or
                  appropriate for the proper and advantageous management,
                  investment and distribution of the Trust Fund.

III-3.   COMPENSATION AND EXPENSES. The Trustee shall be entitled to reasonable
         -------------------------
         compensation for its services, as agreed to between the Company and the
         Trustee from time to time in writing. The Trustee is authorized to pay
         from the Trust Fund such fees and all of the Trustee's expenses, taxes
         and charges (including fees of persons employed by them in accordance
         with subparagraph III-2(n)) incurred in connection with the collection,
         administration, management, investment, protection, and distribution of
         the Trust Fund to the extent that they are not paid directly by the
         Employers.

III-4.   EXERCISE OF TRUSTEE'S DUTIES. The Trustee shall discharge its duties
         ----------------------------
         hereunder solely in the interest of the Plan Participants and other
         persons entitled to benefits under the Plan, and:

         (a)      for the exclusive purpose of:

                  (i)   providing benefits to Participants and other persons
                        entitled to benefits under the Plan; and

                  (ii)  defraying reasonable expenses of administering the Plan;

         (b)      with the care, skill, prudence, and diligence under the
                  circumstances then prevailing that a prudent person acting in
                  a like capacity and familiar with such

                                       5

<PAGE>

                  matters would use in the conduct of an enterprise of a like
                  character and with like aims; and

         (c)      in accordance with the documents and instruments governing the
                  Plan insofar as such documents and instruments are consistent
                  with the provisions of ERISA.

III-5.   PLAN ADMINISTRATION. Except as provided in paragraph III-6 below, the
         -------------------
         Plan shall be administered by a Committee appointed by the Board of
         Directors of the Company (the "Administrative Committee"). The
         Secretary of the Company shall from time to time, certify the names of
         the members of the Administrative Committee.

         ARTICLE IV - PROVISIONS RELATED TO INVESTMENT IN COMPANY STOCK
         --------------------------------------------------------------

IV-1.    INVESTMENT OF CASH. If an Employer's contribution made pursuant to the
         ------------------
         provisions of Section 4 of the Plan for any Plan year is in cash, such
         cash shall be used first to make any scheduled or accelerated
         amortization payment on an Acquisition Loan and, if any amounts remain
         thereafter, to purchase Company Stock at such time as the Trustee is
         directed by the Committee. Subject to the provisions of paragraph III-2
         and Section 8.7 of the Plan, any cash dividends received by the Trustee
         on Company Stock held in the Trust Fund shall be applied, at such time
         as the Committee directs after the receipt of such cash dividends, to
         the purchase of additional shares of Company Stock. The Trustee is
         authorized to purchase Company Stock with the assets contained in the
         Participants' Cash Accounts. The Trustee is further authorized to
         purchase Company Stock from the Company or from any shareholder, and
         such stock may be outstanding, newly issued or treasury stock. All such
         purchases must be at a price not in excess of fair market value, as
         determined by an Independent Appraiser where such stock is not publicly
         traded. Pending investment of cash in Company Stock, such cash may be
         invested in savings accounts, certificates of deposit, high-grade short
         term securities, common or preferred stocks, bonds, funds described in
         subparagraph III-2(q), or other investments, or may be held in cash.

IV-2.    STOCK DIVIDENDS, SPLITS AND OTHER CAPITAL REORGANIZATIONS. Any Company
         ---------------------------------------------------------
         Stock received by the Trustee as a stock split or dividend or as a
         result of a reorganization or other recapitalization of the Company
         shall be allocated as of each Accounting Date under the Plan in
         proportion to the Company Stock to which it is attributable.

IV-3.    VOTING OF SHARES AND TENDER OF EXCHANGE OFFERS. Company Stock held in
         ----------------------------------------------
         the Trust Fund shall be voted in the manner set forth in Section 12 of
         the Plan.

IV-4.    LIQUIDITY REQUIREMENTS. If the distribution of a Participant's Account
         ----------------------
         is to be made in cash or the Trustee expect to incur substantial Trust
         expenses which will not be paid directly by the Employers, and the
         Trustee determines that the Trust Fund

                                       6

<PAGE>

         has insufficient cash to make anticipated distributions or pay Trust
         expenses, the Trustee may generate the necessary liquidity pursuant to
         one or more of the following arrangements, as the Committee shall
         determine:

         (a)      The Trustee may put Company Stock to the Company on an
                  Accounting Date in an amount sufficient to provide an amount
                  of cash estimated in good faith by the Committee to be
                  sufficient to make anticipated distributions from the Trust
                  for payment of benefits or expenses until the next succeeding
                  Accounting Date.

         (b)      If permitted under applicable law, rulings and regulations,
                  and not a prohibited transaction under section 4975(c) of the
                  Code or Section 406 or 407 of ERISA (or a prohibited
                  transaction exemption) the Trustee, in their discretion, may
                  put Company Stock to the Company on a date other than an
                  Accounting Date, and shall be paid therefor the fair market
                  value of such Company Stock determined as of the next
                  preceding Accounting Date.

         (c)      If permitted under applicable law, rulings , or regulations,
                  and is not a prohibited transaction under section 4975(c) of
                  the Code or Section 406 or 407 of ERISA (or a prohibited
                  transaction exemption), the Committee, at the request of the
                  Trustee, may cause the Employers to advance to the Trustee the
                  amounts needed to make distributions of benefits or payment of
                  expenses. Such amounts shall be reimbursed by the Trustee to
                  the Employers, with such interest as may be permitted under
                  ERISA, as of the next succeeding Accounting Date exercising
                  its put option to the extent appropriate to make such
                  reimbursement.

         (d)      The Committee, in its discretion, may direct the Trustee to
                  cause a special valuation of the Company Stock to be made by
                  an Independent Appraiser as of the date of the put option to
                  the Company, or it may cause benefits to be distributed based
                  on the value of a Participant's Accounts as of the Accounting
                  Date next succeeding the later of the Participant's
                  Termination Date or the date for which the payment is
                  requested.

         (e)      The Committee, in its discretion, may direct the Trustee to
                  defer the commencement of distributions for the purpose of
                  benefit payments until not later than one year after the close
                  of the plan year: (a) in which the Participant separates from
                  service by reason of the attainment of normal retirement age
                  under the Plan, disability or death; or (b) which is the fifth
                  plan year following the plan year in which the Participant
                  separates from service.

         (f)      The Trustee may exercise a put option to the Company and cause
                  the fair market value of such Company Stock to be paid by the
                  Company pursuant to any other arrangement agreed upon by the
                  Trustee and the Committee to the extent permitted by
                  applicable law, rulings and regulations.

                            ARTICLE V - MISCELLANEOUS
                            -------------------------

                                       7

<PAGE>

V-1.     DISAGREEMENT AS TO ACTS. If there is a disagreement between the Trustee
         -----------------------
         and anyone as to any act or transaction reported in any accounting, the
         Trustee shall have the right to have its account settled by a court of
         competent jurisdiction.

V-2.     PERSONS DEALING WITH TRUSTEE. No person dealing with the Trustee shall
         ----------------------------
         be required to see to the application of any money paid or property
         delivered to the Trustee, or to determine whether or not the Trustee is
         acting pursuant to any authority granted to it under this Trust
         Agreement or the Plan.

V-3.     BENEFITS MAY NOT BE ASSIGNED OR ALIENATED. The interests under the Plan
         -----------------------------------------
         and this Trust Agreement of Participants and other persons entitled to
         benefits under the Plan are not subject to the claims of their
         creditors and may not be voluntarily or involuntarily assigned,
         alienated , or encumbered, except to the extent provided in Section
         11.8 of the Plan.

V-4.     INDEMNIFICATION OF TRUSTEE. To the extent permitted by applicable law,
         --------------------------
         the Trustee shall be indemnified by the Company against any and all
         liabilities, settlements, judgments, losses, costs, and expenses
         (including reasonable legal fees and expenses) of whatever kind and
         nature which may be imposed on, incurred by or asserted against the
         Trustee by reason of the performance or nonperformance of a Trustee's
         function if such action did not constitute gross negligence or willful
         misconduct. Furthermore, the Company agrees to indemnify the Trustee
         against any liability imposed as a result of a claim asserted by any
         person or persons under Federal or state law where the Trustee acts in
         good faith. The foregoing right of indemnification shall be in addition
         to other rights of the Trustee by law or by reason of insurance
         coverage of any kind. The Company may, at its own expense, and as
         allowed by law, settle any claim asserted or proceeding brought against
         the Trustee when such settlement appears to be in the best interests of
         the Company. If the Company obtains fiduciary liability insurance to
         protect the Trustee, the provisions of this paragraph V-4 shall be
         applicable only to the extent that such insurance coverage is
         insufficient.

V-5.     EVIDENCE. Evidence required of anyone under this Trust agreement may be
         --------
         by certificate, affidavit, document or other instrument which the
         person acting in reliance thereon considered pertinent and reliable,
         and signed, made or presented by the proper party.

V-6.     WAIVER OF NOTICE. Any notice required under this Trust Agreement may be
         ----------------
         waived in writing by the person entitled thereto.

V-7.     COUNTERPARTS. This Trust Agreement may be executed in any number of
         ------------
         counterparts, each of which shall be deemed an original and no other
         counterparts need be produced.

V-8.     GOVERNING LAWS. This Trust Agreement shall be construed and
         --------------
         administered according to the laws of the State of Georgia to the
         extent that such laws are not preempted by the laws of the United
         States of America.

                                       8

<PAGE>

V-9.     SUCCESSORS, ETC. This Trust Agreement shall be binding on the
         ---------------
         Employers, the Trustee and their successors and on all persons entitled
         to benefits under the Plan and their respective heirs and legal
         representatives.

V-10.    SUCCESSORS TO EMPLOYERS. If provision is made for a successor to any
         -----------------------
         Employer or a purchaser of all or substantially all of any Employer's
         assets to continue the Plan, such successor or purchaser shall be
         substituted for that Employer under this Trust Agreement.

V-11.    ACTION BY EMPLOYERS. Any action required or permitted to be taken by an
         -------------------
         Employer under this Trust Agreement shall be by resolution of its Board
         of Directors or by a person or persons authorized by resolution of its
         Board of Directors.

                                       9

<PAGE>

                     ARTICLE VI - NO REVERSION TO EMPLOYERS
                     --------------------------------------

         No part of the corpus or income of the Trust Fund shall revert to any
Employer or be used for, or diverted to, purposes other than for the exclusive
benefit of Participants and other persons entitled to benefits under the Plan,
except as provided below:

         (a)      Employer contributions under the Plan for the first Plan Year
                  are conditioned on the initial qualification of the Plan under
                  section 401(a) of the Code for that Plan Year, and, if the
                  Plan does not so qualify, the Trustee shall, upon written
                  request of an Employer, return to that Employer the amount of
                  any contribution made by that Employer under the Plan for such
                  year, reduced by the amount of any losses thereon, increased
                  by the amount of any increment thereon, within one year after
                  the date that qualification is denied, but only if an
                  application for qualification is submitted within the time
                  prescribed by law;

         (b)      if a contribution or any portion thereof is made by an
                  Employer under a mistake of fact, the Trustee shall, upon
                  written request of an Employer, return the contribution or
                  such portion, reduced by the amount of any losses thereon, to
                  that Employer within one year after the date of payment to the
                  Trustee;

         (c)      the contributions of each Employer under the Plan are
                  conditioned upon the deductibility thereof under section 404
                  of the Internal Revenue Code, and, to the extent any such
                  deduction is disallowed, the Trustee shall, upon written
                  request of that Employer, return the amount of the
                  contribution, (to the extent disallowed), reduced by the
                  amount of any losses thereon, to that Employer within one year
                  after the date the deduction is disallowed;

         (d)      if, upon termination of the Plan with respect to any Employer,
                  any amounts are held in a Suspense Account which are
                  attributable to the contributions of such Employer, and such
                  amounts may not be credited to the Accounts of Participants,
                  such amounts will be returned to that Employer as soon as
                  practicable after the termination of the Plan with respect to
                  that Employer.

                         ARTICLE VII - CHANGE OF TRUSTEE
                         -------------------------------

VII-1.   RESIGNATION. The Trustee may resign at any time by giving thirty (30)
         -----------
         days advance written notice to the Company.

VII-2.   APPROVAL OF THE TRUSTEE. The Company may, at its discretion, remove a
         -----------------------
         Trustee by giving thirty (30) days advance written notice to the
         Trustee, subject to providing the removed Trustee with satisfactory
         written evidence of the appointment of a successor Trustee and the
         successor Trustee's acceptance of the trusteeship.

                                       10

<PAGE>

VII-3.   DUTIES OF RESIGNING OR REMOVED TRUSTEE AND OF SUCCESSOR TRUSTEE. If the
         ---------------------------------------------------------------
         Trustee resigns or is removed, it shall promptly transfer and deliver
         the assets of the Trust Fund to the successor Trustee, after reserving
         such reasonable amount as it shall deem necessary to provide for
         expenses and any sums chargeable against the Trust Fund for which it
         may be liable. Within 120 days, the resigned or removed Trustee shall
         furnish to the Company and the successor Trustee an account of its
         administration of the Trust from the date of its last account. Each
         successor Trustee shall succeed to the title of the Trust Fund vested
         in his predecessor without the signing or filing of any further
         instrument, but any resigning or removed Trustee shall execute all
         documents and do all acts necessary to vest such title or record in any
         successor Trustee. Each successor shall have all the powers, rights and
         duties conferred by this Trust agreement as if originally named
         Trustee. No successor Trustee shall be personally liable for any act or
         failure to act of a predecessor Trustee.

VII-4.   FILLING TRUSTEE VACANCY. The Company may fill a vacancy in the office
         -----------------------
         of Trustee as soon as practicable by writing filed with the person or
         entity appointed to fill the vacancy and with the other Employers.

                       ARTICLE VIII - ADDITIONAL EMPLOYERS
                       -----------------------------------

         Any Related Company may become a party to this Trust Agreement by
filing with the Company and the Trustee a certified copy of a resolution of its
Board of Directors to that effect and a certified copy of a resolution of the
Board of Directors of the Company consenting to such action.

                     ARTICLE IX - AMENDMENT AND TERMINATION
                     --------------------------------------

IX-1.    AMENDMENT. Subject to the provisions of Article VI, the Company
         ---------
         reserves the right to amend the Trust Agreement at any time, except
         that no amendment shall substantially change the rights, duties and
         liabilities of the Trustee under this Trust Agreement without its
         consent.

IX-2.    TERMINATION. If the Plan, as applied to all of the Employers, is
         -----------
         terminated, all of the provisions of the Trust evidenced by this Trust
         Agreement nevertheless shall continue in effect until the entire Trust
         Fund has been distributed by the Trustee in accordance with the
         provisions of the Plan. If the Plan, as applied to any Employer, is
         terminated, all of the provisions of the Trust evidenced by this Trust
         Agreement, as applied to that Employer, nevertheless shall continue in
         effect until the portion of the Trust Fund attributable to employees
         and former employees of that Employer has been distributed in its
         entirety by the Trustee in accordance with the provisions of the Plan.

         IN WITNESS WHEREOF, the Company and the Trustees have caused this
Agreement to be signed and attested all as of the day and year first above
written.

                                       11

<PAGE>

                                    UNITY HOLDINGS, INC.

ATTEST:                             By:______________________________________

__________________                  As its:__________________________________
Secretary

                                    TRUSTEES:

                                    __________________________________________
                                    Jerry W. Braden

                                    __________________________________________
                                    Donald D. George

                                    __________________________________________
                                    John S. Lewis

                                    __________________________________________
                                    Michael L. McPherson

                                    __________________________________________
                                    Stephen A. Taylor

                                    __________________________________________
                                    B. Don Temples

                                       12

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