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Exhibit 10.3  

 
 

EVERGREEN RESOURCES, INC.
  
    CHANGE IN CONTROL AGREEMENT    
  

        This CHANGE IN CONTROL AGREEMENT (the "Agreement") is entered into effective as of March 1, 2002, by and between EVERGREEN RESOURCES, INC., a
Colorado corporation (the "Company"), and Kevin R. Collins (the "Executive"). 

        WHEREAS,
the Executive is currently employed by the Company; and 

        WHEREAS,
the Company considers the establishment and maintenance of a sound and vital management group to be essential to protecting and enhancing the best interests of the Company and
its shareholders; and 

        WHEREAS,
the Company has determined that the best interests of the Company and its shareholders will be served by reinforcing and encouraging the continued dedication of the Executive to
his assigned duties without distractions arising from a potential change in control of the Company; and 

        WHEREAS,
this Agreement is intended to remove such distractions and to reinforce the continued attention and dedication of the Executive to his assigned duties; and 

        WHEREAS,
the Executive acknowledges that the Company and its affiliates possess certain secret, confidential and proprietary information regarding the Company and its affiliates (as
defined in Section 7(b)(i) herein, "Confidential Information"), the protection of which Confidential Information is essential to the business and operations of the Company and its
affiliates; and 

        WHEREAS,
the Executive also acknowledges that the protection and enhancement of the Company's competitive position and its relationships with its employees, other service providers,
suppliers, customers and others in similar relationships with the Company or its affiliates are essential to the business and operations of the Company and its affiliates; and 

        WHEREAS,
the Executive understands that the benefits payable pursuant to this Agreement are conditioned in part on the Executive's agreement to comply with the spirit and terms of this
Agreement, including but not limited to the non-competition, non-disclosure and non-solicitation covenants contained in Section 7 herein; 

        NOW,
THEREFORE, in consideration of the mutual promises and agreements contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Executive and the Company hereby agree as follows: 

        1.    Certain Definitions. In addition to terms defined elsewhere in this Agreement, the following terms shall have the meanings
set forth below: 

        (a)  For
purposes of this Agreement, "Cause" shall be determined solely by the Board in the exercise of good faith and reasonable judgment, and shall mean the occurrence of
any one or more of the following: 

          (i)  The
continued failure of the Executive to perform his duties with the Company (other than any such failure resulting from the Executive's incapacity due to Disability
or any such failure after the Executive has received a Notice of Termination without Cause by the Company or has delivered a Notice of Termination for Good Reason to the Company) which has not been
corrected within thirty (30) days after a written demand for performance is delivered to the Executive by the Board which specifically identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive's duties; 

        (ii)  The
Executive's engaging in conduct that materially damages or prejudices the Company or any affiliate or engaging in conduct or activities materially damaging to the
property, business or reputation of the Company or any affiliate, including but not limited to a material breach of 

 

Company policies including those related to equal employment opportunity and unlawful harassment; 

        (iii)  The
conviction of the Executive of, or a plea by the Executive of nolo contendere to, a felony; 

        (iv)  The
Executive's engaging in any act of fraud, theft, misappropriation, embezzlement or dishonesty to the material detriment of the Company; 

        (v)  Any
diversion by the Executive of a business opportunity from the Company or an affiliate that is materially and detrimentally adverse to the Company's interests without
the written consent of the Board; 

        (vi)  Any
breach by the Executive of a material term of the Agreement (including but not limited to the Executive's breach of any covenant contained in Section 7
herein) without the written consent of the Board; or 

      (vii)  The
Executive's continued substance abuse, as determined by the Board after written notice from the Board and a reasonable opportunity to undergo appropriate treatment
for a reasonable period. 

Any
act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board shall be conclusively presumed to be done, or omitted to be done, by the Executive in good
faith and in the best interests of the Company. Cause shall not exist unless and until the Company has delivered to the Executive a copy of a resolution duly adopted by the majority of the Board
(excluding the Executive if the Executive is a Board member). Such resolution is effective only if adopted at a meeting of the Board called and held for such purpose, after notice of at least ten days
to the Executive and an opportunity for the Executive, together with counsel, to be heard before the Board, finding that in the good faith opinion of the Board an event set forth in any one or more of
clauses (i) through (vii) herein has occurred and specifying the particulars thereof in detail. 

        (b)  For
the purposes of this Agreement, a "Change in Control" of the Company shall be deemed to have occurred on the first to occur of the following: 

          (i)  The
date any entity or person shall have become the beneficial owner of, or shall have obtained voting control over, fifty percent (50%) or more of the outstanding
common stock (the "Common Stock") of the Company; 

        (ii)  The
date the shareholders of the Company approve a definitive agreement (A) to merge or consolidate the Company with or into another corporation or other
business entity (for these purposes, each, a "corporation"), in which the Company is not the continuing or surviving corporation or
pursuant to which any shares of Common Stock of the Company would be converted into cash, securities or other property of another corporation, other than a merger or consolidation of the Company in
which holders of Common Stock immediately prior to the merger or consolidation have the same proportionate ownership of Common Stock of the surviving corporation immediately after the merger as
immediately before, or (B) to sell or otherwise dispose of all or substantially all the assets of the Company; or 

        (iii)  The
date there shall have been a change in a majority of the Board of Directors of the Company within a 12-month period unless the nomination for election
by the Company's shareholders of each new director was approved by the vote of two-thirds of the directors then still in office who were in office at the beginning of the
12-month period. 

For
purposes herein, the term "person" shall mean any individual, corporation, partnership, group, association or other person, as such term is defined in Section 13(d)(3) or
Section 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), other than the Company, a 

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subsidiary of the Company or any employee benefit plan(s) sponsored or maintained by the Company or any subsidiary thereof, and the term "beneficial owner" shall have the meaning given the term in
Rule 13d-3 under the Exchange Act. 

        (c)  "Compensation
Period" shall mean the twenty-four (24)-month period following the Qualifying Termination of the Executive and during which the benefits
provided by Section 5(a)(ii) and Section 5(b) shall be provided. 

        (d)  "Covenant
Period" shall mean the period commencing with the first day of the Term of this Agreement and ending immediately following the last day of the
twenty-four (24)-month period following the Date of Termination of the Executive (regardless of whether the termination is a Qualifying Termination or Termination for any other reason). 

        (e)  For
the purposes of this Agreement, "Good Reason" shall mean any of the following: 

          (i)  A
material reduction by the Company without the Executive's written consent of the Executive's basic duties and responsibilities; 

        (ii)  Any
material reduction by the Company without the Executive's written consent of the Executive's base salary as in effect on the date hereof (or as the same may be
adjusted with Executive's written consent from time to time during the Term), other than a reduction which is part of an organization-wide salary reduction plan (and not applicable to the
Executive singly); 

        (iii)  Any
failure by the Company to continue the Executive's ability to participate in any plan or arrangement, including, without limitation, any life insurance, accident,
disability or health insurance plan, thrift plan, pension plan, retirement plan, profit-sharing plan, or any other qualified or non-qualified employee benefit plan, bonus plan, incentive
plan, stock option, restricted stock, stock purchase or other stock-based plan, and all other similar plans or arrangements which are from time to time made generally available to officers of the
Company and in which the Executive participates, unless there are substituted therefore plans or arrangements providing the Executive with essentially equivalent and no less favorable benefits, or any
action or inaction by the Company which would adversely affect the Executive's participation in or materially reduce the Executive's benefits under any such plan or successor plan or deprive the
Executive of any material fringe benefit enjoyed by the Executive; provided, however, that (A) a reduction in the Executive's incentive or bonus
plan payments due to the failure to attain certain performance-based objectives or (B) a reduction in the Executive's benefits due to the Company's decision to discontinue the availability of
any plan or arrangement to all officers or all employees, as the case may be (and not the Executive singly), shall not be deemed to constitute "Good Reason" under this Section 1(e)(iii); 

        (iv)  A
relocation of the Company's principal executive offices to a location in excess of 30 miles from Denver, Colorado, or the Executive's relocation to any place other
than the location at which the Executive performed the Executive's duties prior to a Change in Control of the Company, except for (A) required travel by the Executive on the Company's business
to an extent substantially consistent with the Executive's business travel obligations during the 12 months immediately preceding a Change of Control of the Company or (B) a relocation
with the Executive's express written consent; 

        (v)  Any
material reduction in the number of paid vacation days to which the Executive is entitled at the time of a Change of Control of the Company (other than a reduction
with the Executive's written consent); or 

        (vi)  Any
failure by the Company without the Executive's written consent to obtain the express assumption of this Agreement by any successor or assignee of the Company (and
parent corporation of such successor or assignee, if applicable) as provided in Section 12(a) herein. 

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        (f)    For
the purposes of the Agreement, a "Qualifying Termination" means (i) the Company's termination of the Executive's employment during the Termination Period  other than because of death, Disability,
Retirement or Cause, as provided in Sections 4(b), 4(c) and 4(d) herein, or (ii) the Executive's
termination of his employment during the Termination Period for Good Reason pursuant to Section 4(e) herein. 

        (g)  "Termination
Period" shall mean the twenty-four (24)-month period following a Change in Control. 

        2.    Term of Agreement. This Agreement shall become effective on the date hereof and shall continue in effect until the
earliest of (a) December 31, 2004, if no Change in Control has occurred before that date; provided, however, that commencing on December 31, 2004 and each year thereafter, the
term of this Agreement shall automatically be extended for an additional one year unless, not later than October 31 of the same year, the Company shall have given notice to the Executive that
it does not wish to extend this Agreement (such three-year period, as it may be extended as described in Section 2(a) herein, being referred to as the "Term"); (b) the
termination by either party of the Executive's employment with the Company for any reason prior to a Change in Control; or (c) the expiration following a Change in Control of two years and the
fulfillment by the Company and the Executive of all of their obligations hereunder. Notwithstanding the above, if the Company is engaged in bonafide negotiations which would, if successful, culminate
in a Change in Control at the time when the Term would end pursuant to Subsection (a) above, then the Term shall be extended indefinitely until (i) the Change in Control which was under
negotiation actually occurs or (ii) the negotiations are terminated, for any reason. In the event there shall be any ambiguity or disagreement between the parties as to whether bonafide
negotiations are being conducted or whether such negotiations have terminated, the question shall be resolved by a resolution passed by the Board of Directors at a regular meeting or a meeting
specially called for that purpose, such meeting to be held following notice of at least five (5) days to the Executive and an opportunity for the Executive, together with counsel, to be heard
before the Board if requested. Notice by the Company of its intention not to extend the term of this Agreement and its expiration at the end of the Term shall not constitute termination of employment
and the Executive shall not be entitled to the payment of benefits under Sections 5 and 6 unless he is otherwise entitled to such benefits pursuant to the terms herein. Furthermore, nothing in
Section 2 shall cause this Agreement to terminate before both the Company and the Executive have fulfilled all of their obligations hereunder. 

        3.    Change in Control. 

        (a)  No
compensation shall be payable under this Agreement unless and until (i) there has been a Change in Control of the Company while the Executive is still an
employee of the Company and (ii) the Executive's employment by the Company is terminated for a reason other than one or more of the circumstances specified in
Section 4(a)(i) through (v). 

        (b)  The
Executive specifically acknowledges that the change in beneficial ownership of the Company's Common Stock described in Section 1(b)(i) herein may
differ from the change in beneficial ownership provisions which may constitute a "change in control" under the terms of stock options, restricted stock awards and/or other stock awards (collectively,
"stock awards") granted to the Executive pursuant to the 2000 Stock Incentive Plan of Evergreen Resources, Inc. (the "2000 Plan") and/or other stock-based plans maintained by the Corporation
(the 2000 Plan and such other stock-based plans being referred to herein as the "Stock Plans"), and, specifically, that the terms of the Executive's stock awards under such Stock Plan's change in
control provisions relating to the effect of a change in beneficial ownership on the Executive's stock awards may be more favorable to the Executive than the provisions contained in the Agreement. The
Executive specifically agrees that (i) the terms of all such stock awards and related stock award agreements granted under the Stock Plans shall hereby be deemed modified and amended to conform
with the provisions and intent of Section 1(b)(i) herein; 

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and (ii) the Executive shall not be entitled to accelerated vesting or other enhanced benefits as a result of a change in beneficial ownership under such Stock Plans unless and until the
provisions of Section 1(b)(i) and Section 4(a) herein are satisfied and the Executive has incurred a Qualifying Termination as defined in Section 1(f) herein. 

        4.    Termination Following Change in Control. 

        (a)  Termination. If a Change in Control of the Company shall have occurred while the Executive is still an employee of the
Company, the Executive shall be entitled to the payments provided in Sections 5 and 6 herein upon the termination of the Executive's employment with the Company during the Termination Period, whether
such termination is by the Executive or by the Company, unless such termination is as a result of (i) the Executive's death; (ii) the
Executive's Disability (as defined in Section 4(b) below); (iii) the Executive's Retirement (as defined in Section 4(c) below); (iv) the Executive's termination of
employment by the Company for Cause (as defined in Section 1(a) herein); or (v) the Executive's decision to terminate employment other than for Good Reason (as defined in
Section 1(e) herein). 

        (b)  Death or Disability. 

          (i)  Disability. In the event that the Executive's employment terminates during the Termination Period because of Disability,
the Company shall have no obligation or liability to the Executive pursuant to this Agreement by reason of such termination (except as may be otherwise provided in Section 5(d) herein), and
this Agreement shall terminate (except with respect to the Executive's obligations described in Section 7 herein) upon the Executive's termination of employment due to Disability; provided,
however, that the Executive's termination of employment due to Disability shall be effective only at the end of thirty (30) days following the delivery of written notice by the Company to the
Executive of such termination due to Disability and only if Executive fails to return to the full-time performance of duties by the end of such 30-day notice period. For the
purposes of this Agreement, "Disability" shall mean a physical or mental illness or injury that prevents the Executive from performing the essential functions of his duties (as they existed
immediately before the illness or injury) on a full-time basis for a period of at least nine (9) consecutive months. The Board of Directors of the Company (the "Board") shall
consult with and secure the written opinion of two practicing medical physicians, one chosen by the Company and the other chosen by the Executive, each of whom shall conclude in his opinion that the
Executive has a Disability as that term is defined herein. If the physicians are unable to agree with respect to a determination of Disability, then such dispute shall be determined by the dispute
resolution mechanism provided for under Section 18 of this Agreement. Until the date on which a Disability occurs, the Executive's status as an employee under this Agreement will continue, and
the Executive shall be entitled to compensation and employee benefits according to the other provisions of this Agreement. 

        (ii)  Death. This Agreement shall terminate immediately in the event of the death of the Executive occurring at any time
during the Term hereof, and in such event the Company shall have no obligation or liability to the Executive or his legal representatives by reason of such termination (except as may be otherwise
provided in Section 5(d) herein). 

        (c)  Retirement. In the event that the Executive's employment terminates during the Termination Period due to his Retirement,
the Company shall have no obligation or liability to the Executive pursuant to this Agreement upon such termination (except as otherwise provided in Section 5(d) herein), and the Agreement
shall terminate (except with respect to the Executive's obligations described in Section 7 herein) upon the Executive's termination of employment due to such Retirement. "Retirement" as used in
this Agreement shall mean the earlier to occur of (i) the Executive's normal retirement date under the Company's tax-qualified retirement plan or any successor plan thereto
applicable to the Executive or (ii) the Executive's retirement date under a contract, if any, 

5

 

between the Executive and the Company providing for his retirement from the employment of the Company or an affiliate (as defined in Section 12(a) herein) on a date other than such normal
retirement date. 

        (d)  Cause. If the Executive's employment with the Company or an affiliate is terminated during the Termination Period for
Cause, the Company shall have no obligation or liability to the Executive under this Agreement (except as may be otherwise provided in Section 5(d) herein), and this Agreement shall terminate
(except with respect to the Executive's obligations described in Section 7 herein) upon the Executive's termination of employment for Cause. 

        (e)  Good Reason. The Executive may terminate his employment for Good Reason at any time after a Change of Control during the
Termination Period (provided, however, that the Executive shall remain subject to the obligations described in Section 7, herein). 

        (f)    Notice of Termination. Any termination of the Executive's employment (i) by the Company due to Disability,
Retirement or for Cause or (ii) by the Executive for Good Reason shall be communicated by a Notice of Termination. For purposes of this Agreement, a "Notice of Termination" shall mean a written
notice which shall indicate those specific termination provisions in this Agreement relied upon and which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provisions so indicated. For purposes of this Agreement, no such purported termination by the Company or the Executive shall be effective without
such Notice of Termination. 

        (g)  Date of Termination. "Date of Termination" shall mean (i) if the Executive is terminated by the Company for
Disability, thirty (30) days after Notice of Termination is given to the Executive (provided that the Executive shall not have returned to the performance of the Executive's duties on a
full-time basis during such 30-day period); (ii) if the Executive is terminated by the Company for any other reason, the date on which a Notice of Termination is given
(or such later date as is specified in such
notice); or (iii) if the Executive terminates (whether for Good Reason or for any other reason), the date on which a Notice of Termination is given (or such later date as is specified in such
notice). 

        5.    Payment of Compensation upon Termination of Employment. If, during the Termination Period, the employment of the Executive
shall terminate pursuant to a "Qualifying Termination" (as defined herein), then the Company shall provide to the Executive the payments described in this Section 5 and, if applicable,
Section 6. 

        (a)  Cash Payments. If, during the Termination Period, the employment of the Executive shall terminate pursuant to a
Qualifying Termination, then the Company shall provide to the Executive the following cash payments: 

          (i)  Within
ten (10) days following the Date of Termination (or such other date, if any, as may be required under applicable wage payment laws), a
lump-sum cash amount equal to the sum of (A) the Executive's base salary through the Date of Termination and any bonus amounts which have been earned or become payable, to the
extent not theretofore paid or deferred, (B) a pro rata portion of the Executive's annual bonus for the fiscal year in which the Executive's Date of Termination occurs in an amount at least
equal to (1) the Executive's Average Bonus Amount, multiplied by (2) a fraction, the numerator of which is the number of days in the fiscal year in which the Date of Termination occurs
through the Date of Termination and the denominator of which is three hundred sixty-five (365), and reduced by (3) any amounts paid from the Company's incentive plan for the fiscal
year in which the Executive's Date of Termination occurs and (C) any accrued vacation pay, to the extent not theretofore paid; plus 

        (ii)  A
severance benefit equal to the sum of (i) three (3) times the Executive's Average Base Salary, plus (ii) three (3) times the Executive's
Average Bonus Amount. The severance benefits provided for pursuant to this Section 5(a)(ii) shall be paid in a lump sum within ten (10) days after 

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the Qualifying Termination occurs, subject, however, to the Executive's compliance with the terms of this Agreement, including but in no way limited to the Executive's obligations under
Section 7 herein. For the purposes of Section 5(a) herein, "Average Base Salary" shall mean the average annual base salary paid or payable by the Company (or its affiliates) to the
Executive during any two (2) years in the three (3)-year period prior to the Executive's Date of Termination (including the year in which the Qualifying Termination occurs if the
base salary payable during such year, on an annualized basis, would produce a higher Average Base Salary). Also, for the purposes of Section 5(a) herein, "Average Bonus Amount" shall mean the
average annual incentive bonus earned by the Executive under any incentive bonus plan or plans of the Company (or its affiliates) during any two years in the three (3)-year period prior to
the Executive's Date of Termination (including the year in which the Qualifying Termination occurs if the annual incentive bonus earned in that year would produce a higher Average Bonus Amount). 

        (b)  Continued Coverage. If, during the Termination Period, the employment of the Executive shall terminate pursuant to a
Qualifying Termination, the Company shall continue to provide, during the Compensation Period (as defined in this Section 1(c) herein), the Executive (and the Executive's dependents, if
applicable) with the same level of medical, dental, vision, accident, disability and life insurance benefits upon substantially the same terms and conditions (including contributions required by the
Executive for such benefits) as existed immediately prior to the Executive's Date of Termination; provided, however, that if the Company is unable to provide any of these benefits under its benefit
plans in effect during the Compensation Period, the Company shall pay to the Executive an amount sufficient to enable the Executive to procure comparable benefits on his own. Notwithstanding the
foregoing, in the event the Executive becomes reemployed with another employer and becomes eligible to receive welfare benefits from such employer, the welfare benefits described herein shall be
secondary to such benefits during the period of the Executive's eligibility, but only to the extent that the Company reimburses the Executive for any increased cost and provides any additional
benefits necessary to give the Executive the benefits provided hereunder. The Executive's accrued benefits as of the Date of Termination under the Company's employee benefit plans shall be paid to the
Executive in accordance with the terms of such plans. In addition, if, during the Termination Period, the employment of the Executive shall terminate pursuant to a Qualifying Termination, the Company
shall provide the Executive with two (2) additional years of service credit under all non-qualified retirement plans and excess benefit plans in which the Executive participated as
of his Date of Termination. 

        (c)  Stock Awards. If, during the Termination Period, the employment of the Executive shall terminate pursuant to a Qualifying
Termination, then the following shall apply with respect to any stock-based awards granted by the Company. 

          (i)  Stock Options and Stock Appreciation Rights. All Company stock options, stock appreciation rights or similar stock-based
awards held by the Executive will be accelerated and exercisable in full as of the Date of Termination, without regard to the exercisability or vesting of such awards prior to the Date of Termination. 

        (ii)  Restricted Stock and Performance Stock. All restrictions on any restricted stock, performance stock or similar
stock-based awards granted by the Company, including without limitation any vesting or performance criteria, held by the Executive as of the Date of Termination shall be removed and such awards shall
be deemed vested and earned in full. 

        (d)  Payments Due to Termination Other than Qualifying Termination. If, during the Termination Period, the Executive shall
terminate other than by reason of a Qualifying Termination, then the Company shall pay to Executive within thirty (30) days following the Date of Termination (or such other date, if any, as may
be required under applicable wage payment laws) a lump-sum cash amount equal to the sum of (i) Executive's base salary through the Date of Termination and any bonus amounts which
have become payable, to the extent not theretofore paid or deferred, and (ii) any 

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accrued vacation pay, to the extent not theretofore paid. The Company may make such additional payments, and provide such additional benefits, to Executive as the Company and Executive may agree
in writing. The Executive's accrued benefits as of the Date of Termination under the Company's employee benefit plans shall be paid to Executive in accordance with the terms of such plans. 

        6.    Certain Additional Payments by the Company. 

        (a)  Anything
in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment, award, benefit or distribution (or any acceleration of
any payment, award, benefit or distribution) by the Company (or any of its affiliates) or any entity which effectuates a Change in Control (or any of its affiliates) to or for the benefit of the
Executive (whether pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 6) (the "Payments") would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties are incurred by the Executive with respect to such
excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Company shall pay to the Executive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any Excise Tax) imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the sum of (i) the Excise Tax imposed upon the Payments and (ii) the product of any deductions disallowed because of the
inclusion of the Gross-Up Payment in the Executive's adjusted gross income and the highest applicable marginal rate of federal income taxation for the calendar year in which the
Gross-Up Payment is to be made. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to (i) pay federal income taxes at the
highest marginal rates of federal income taxation for the calendar year in which the Gross-Up Payment is to be made, (ii) pay applicable state and local income taxes at the highest
marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of
such state and local taxes and (iii) have otherwise allowable deductions for federal income tax purposes at least equal to the Gross-Up Payment. Notwithstanding the foregoing
provisions of this Section 6(a), if it shall be determined that the Executive is entitled to a Gross-Up Payment, but that the Payments would not be subject to the Excise Tax if the
Payments were reduced by an amount that is less than 5% of the portion of the Payments that would be treated as "parachute payments" under Section 280G of the Code, then the amounts payable to
the Executive under this Agreement shall be reduced (but not below zero) to the maximum amount that could be paid to Executive without giving rise to the Excise Tax (the "Safe Harbor Cap"), and no
Gross-Up Payment shall be made to the Executive. The reduction of the amounts payable hereunder, if applicable, shall be made by reducing first the payments under Section 5(a)(ii),
unless an alternative method of reduction is elected by the Executive. For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable under this Agreement (and no other Payments)
shall be reduced. If the reduction of the amounts payable hereunder would not result in a reduction of the Payments to the Safe Harbor Cap, no amounts payable under this Agreement shall be reduced
pursuant to this provision. 

        (b)  Subject
to the provisions of Section 6(a), all determinations required to be made under this Section 6, including whether and when a Gross-Up
Payment is required, the amount of such Gross-Up Payment, the reduction of the Payments to the Safe Harbor Cap and the assumptions to be utilized in arriving at such determinations, shall
be made by the public accounting firm that is retained by the Company as of the date immediately prior to the Change in Control (the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive within forty-five (45) business days of the receipt of notice from the Company or the Executive that there has been a Payment, or
such earlier time as is requested by the Company (collectively, the "Determination"). In the event that
the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, the Company and the Executive may agree to appoint another 

8

 

nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the Company and the Company shall enter into any agreement requested by the Accounting Firm in connection with the performance of the services hereunder.
The Gross-Up Payment under this Section 6 with respect to any Payments shall be made no later than thirty (30) days following such Payment. If the Accounting Firm determines
that no Excise Tax is payable by the Executive, it shall furnish the Executive with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on the
Executive's applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to
the Safe Harbor Cap, it shall furnish the Executive with a written opinion to such effect. The Determination by the Accounting Firm shall be binding upon the Company and the Executive. As a result of
the uncertainty in the application of Section 4999 of the Code at the time of the Determination, it is possible that Gross-Up Payments which will not have been made by the Company
should have been made ("Underpayment") or Gross-Up Payments are made by the Company which should not have been made ("Overpayment"), consistent with the calculations required to be made
hereunder. In the event that the Executive thereafter is required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that
has occurred and any such Underpayment (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be promptly paid by the Company to or for the benefit of
Executive. In the event the amount of the Gross-Up Payment exceeds the amount necessary to reimburse the Executive for his Excise Tax, the Accounting Firm shall determine the amount of the
Overpayment that has been made and any such Overpayment (together with interest at the rate provided in Section 1274(b)(2) of the Code) shall be promptly paid by the Executive (to the extent he
has received a refund if the applicable Excise Tax has been paid to the Internal Revenue Service) to or for the benefit of the Company. The Executive shall cooperate, to the extent his expenses are
reimbursed by the Company, with any reasonable requests by the Company in connection with any contests or disputes with the Internal Revenue Service in connection with the Excise Tax. 

        7.    Confidentiality; Competition; Solicitation.

        (a)  Covenants of Executive. The Company and the Executive recognize that the Executive's services are special and unique and
that the provisions herein for compensation under Section 5 and Section 6 are partly in consideration of and conditioned upon the Executive's compliance with the covenants contained in
this Section 7. Accordingly, during the Covenant Period (that is, during the Term of the Agreement and until the end of the twenty-four (24)-month period following the Date of
Termination of the Executive, regardless of whether the termination is a Qualifying Termination or termination for any other reason, the Executive shall be subject to the covenants contained in
Sections 7(b), 7(c) and 7(d) herein. 

        (b)  Confidentiality. 

          (i)  The
Executive acknowledges and agrees that his relationship with the Company and its affiliates is one of high trust and confidence, and that, during the course of his
employment, the Executive shall have access to and contact with trade secrets and other secret, confidential or proprietary information, knowledge and/or data relating to the Company and its
affiliates and their respective businesses and operations (all such trade secrets, information, knowledge and/or data being referred to herein as "Confidential Information"). 

        (ii)  During
the Covenant Period, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such Confidential Information to anyone other than the Company and those designated by it. 

9

 

        (iii)  The
Executive also acknowledges and agrees that upon termination of his employment with the Company (or an affiliate) or at any other time upon request, he will
promptly deliver to the Company all notes, memoranda, notebooks, drawings, records, reports, files and other documents (and all copies or reproductions of such materials) in the Executive's possession
or under his control, whether prepared by the Executive or others, which contain Confidential Information. The Executive further acknowledges and agrees that such materials are the sole property of
the Company. 

        (c)  Solicitation. During the Covenant Period, the Executive covenants and agrees that he shall not directly or indirectly
disrupt, damage or interfere with the operation or business of the Company by soliciting or recruiting the employees of the Company or an affiliate to work for Executive or other persons or entities. 

        (d)  Non-Competition. During the Covenant Period, the Executive covenants and agrees that he shall not render
services for any organization or engage directly or indirectly in any business that competes with or is in conflict with the interests of the Company in the Noncompetition Area. For purposes of this
Section 7(d), the "Noncompetition Area" shall mean the following geographic areas: 

        The
Noncompetition Area shall mean any area within or without the United States in which the Company or an affiliate is, during the Covenant Period, engaged in production, drilling and
developmental operations, and any area within a 20-mile radius of any well, experimental well, production facility, compressor, pipeline or any other equipment or operation related to such
areas of operations, including but in no way limited to the following: (A) the southern Colorado portion of the Raton Basin, including the Nine-Mile Anticline located in Rio Blanco
County, Colorado; (B) the Cheshire Basin, Great Britain; (C) the Northwest Carboniferous Basin, Northern Ireland and the Republic of Ireland; (D) the Cook Inlet Basin, Alaska;
(E) the Tamarugal Basin, Chile; and (F) the North Falkland Island Basin, the Falkland Islands. 

        (e)  Enforceability. If any of the restrictions contained in this Section 7 shall be deemed to be unenforceable by
reason of the extent, duration, geographical scope or other provisions thereof, then the parties hereto contemplate that the court shall reduce such extent, duration, geographical scope or other
provision hereof and enforce this Section 7 in its reduced form for all purposes in the manner contemplated thereby. 

        (f)    Failure to Comply. The Executive acknowledges that the covenants included in Section 7 of this Agreement are
crucial to the success of the Company and that violation of the covenants would immeasurably damage the Company and/or its affiliates. In the event that the Executive shall fail to comply with any
provision of this Section 7, and the failure shall continue for ten (10) days following delivery of notice by the Company to the Executive, all rights of the Executive and any person
claiming under or through him to the payments or benefits described in this Agreement shall thereupon terminate, and no person shall be entitled thereafter to receive any payments or benefits
hereunder. In addition to the foregoing, in the event of a breach by the Executive of the provisions of this Section 7, the Company shall have and may exercise any and all other rights and
remedies available to the Company at law or otherwise, including but not limited to obtaining an injunction from a court of competent jurisdiction enjoining and restraining the Executive from
committing a violation, and the Executive hereby consents to the issuance of an injunction. The provisions of this Section 7(f) shall control in the event that the Executive fails to comply
with any covenant or term contained in Section 7 herein, notwithstanding the terms of Section 18 herein. 

        8.    Withholding. The Company shall withhold from any amount payable to the Executive (or to his beneficiary or estate or any
other person) hereunder all federal, state, local or other taxes that the Company may reasonably determine are required to be withheld pursuant to any applicable law, rule or regulation. 

10

 

        9.    No Right to Continued Employment. Nothing in this Agreement shall be deemed to entitle Executive to continued employment
with the Company or any of its affiliates, and if Executive's employment with the Company or an affiliate shall terminate prior to a Change in Control, Executive shall have no further rights under
this Agreement (except as otherwise provided hereunder); provided, however, that, notwithstanding the foregoing, any termination of Executive's employment during the Termination Period shall be
subject to the provisions of this Agreement. 

        10.  Offset; No Obligation to Mitigate Damages. 

        (a)  Offset. The Company's obligation to make any payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall be subject to, and may be reduced by the amount related to, any right of set-off, counterclaim, recoupment, defense or other claim, right or action which the
Company may have against the Executive. 

        (b)  No Obligation to Mitigate. In no event shall the Executive be obligated to seek other employment or take any other action
by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment
(except as otherwise provided in Section 5(b) with respect to the payment of welfare plan benefits). 

        11.  Nonalienability. No right of or amount payable to the Executive under this Agreement shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, hypothecation, encumbrance, charge, execution, attachment, levy or similar process or to setoff against any obligations (other than as
provided in Section 10(a) herein), or to assignment by operation of law. Any attempt, voluntary or involuntary, to effect any action specified in the immediately preceding sentence shall be
void. However, this Section 11 shall not prohibit the Executive from designating one or more persons, on a form satisfactory to the Company, as beneficiary to receive amounts payable to him
under this Agreement in the event that he should die before receiving them. 

        12.  Successors and Assigns. 

        (a)  The Company. As used in this Agreement, "Company" shall mean the Company as defined above, an affiliate (as defined
herein) of the Company (unless the context otherwise requires), and any successor or assignee to its business and/or assets as aforesaid which assumes the obligations of the Company under this
Agreement or which otherwise becomes bound by all of the terms and provisions of this Agreement by operation of law. If at any time during the term of this Agreement the Executive is employed by an
affiliate of the Company, such indirect employment of the Executive by the Company shall not excuse the Company from performing its obligations under this Agreement as if the Executive were directly
employed by the Company, and the Company agrees that it shall pay or shall cause such employer to pay any amounts owed to the Executive pursuant to Section 5 and Section 6 hereof,
notwithstanding any such indirect employment relationship. For the purposes of this Agreement, an "affiliate" of the Company shall mean a corporation or other entity a majority of the voting
securities of which is beneficially owned by the Company, or any other corporation or other entity controlling, controlled by, or under common control with the Company. 

        (b)  The Executive. This Agreement shall inure to the benefit of and be enforceable by the Executive's personal and legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amounts are still payable to him hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive's beneficiary (in accordance with Section 11 herein) or, if there be no such
beneficiary, to the Executive's estate. 

        13.  Waiver; Governing Law. No waiver by either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or 

11

 

conditions at the same or at any prior or subsequent time. This Agreement shall be governed by and construed in accordance with the laws of the State of Colorado, without regard to the conflict of
laws provisions of any state. 

        14.  Entire Agreement; Amendment. This Agreement contains all of the terms agreed upon between the Executive and the Company
with respect to the subject matter hereof and replaces and supersedes all prior understandings and agreements (including but not limited to any Stock Plans award agreements to the extent provided in
Section 3(b) herein) between the Executive and the Company with respect to the matters contemplated in the Agreement (except for any understandings or agreements reflected in a separate
non-competition, confidentiality, invention, or other similar agreement or agreements between the Company and the Executive). The Executive and the Company agree that no term, provision or
condition of this Agreement shall be held to be altered, amended, changed or waived in any respect except as evidenced by the written agreement of the Executive and the Company. 

        15.  Reasonable and Necessary Restrictions. Based on matters known by or disclosed to the Executive as of the effective date
of this Agreement, the Executive acknowledges that the restrictions, prohibitions and other provisions set forth in this Agreement, including without limitation the provisions of Section 7
herein, are reasonable, fair and equitable in scope, terms and duration, are necessary to protect the legitimate business interests of the Company, and are a material inducement to the Company to
enter into this Agreement. 

        16.  No Trust Fund; Unfunded Obligation. The obligation of the Company to make payments hereunder shall constitute an
unsecured liability of the Company to the Executive. The Company shall not be required to establish or maintain any special or separate fund, or otherwise to segregate assets to assure that such
payments shall be made, and the Executive shall not have any interest in any particular assets of the Company by reason of its obligations hereunder. Nothing contained in this Agreement shall create
or be construed as creating a trust of any kind or any other fiduciary relationship between or among the Company, the Executive, or any other person. To the extent that any person acquires a right to
receive payment from the Company, such right shall be no greater than the right of an unsecured creditor of the Company. 

        17.  Notices. For purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when delivered, one business day after being sent for overnight delivery by a nationally recognized overnight courier or three business days after
being mailed by United States registered mail, return-receipt requested, postage-prepaid, addressed as follows: 

        If
to the Company: 

Evergreen
Resources, Inc.

1401 17th Street, Suite 1200

Denver, Colorado 80002 

        With
a copy to: 

Larry
D. Estridge

Womble Carlyle Sandridge & Rice, PLLC

Poinsett Plaza, Suite 700

104 South Main Street (29601)

Post Office Box 10208

Greenville, SC 29603 

        If
to the Executive: 

Kevin
R. Collins 

12

 

or
such other address as either party have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 

        18.  Dispute Resolution. In the event of any controversy, claim or dispute between the parties hereto arising out of or
relating to this Agreement (except for any dispute or controversy arising under or in connection with Sections 7 of the Agreement), the matter shall be determined by mediation or arbitration, as
provided herein. 

        (a)  Mediation. Before a dispute or claim between the parties may be arbitrated, each party may have the option to mediate (a
"Mediation") any dispute that cannot otherwise be resolved between the parties (including any dispute about whether the dispute should be mediated, through mediation by the American Arbitration
Association, before one (1) mediator agreed to by the Executive and the Company. Each party will each bear its or his own attorney's fees and costs in Mediation, and the parties will equally
share the mediator's fees and expenses. 

        (b)  Arbitration. In the event that Mediation fails, within ten (10) days after such failure, each party shall have the
option to arbitrate any dispute, through binding arbitration by the American Arbitration Association, before one (1) arbitrator through the submission of a written brief not to exceed fifteen
(15) pages to the arbitrator and the other party, with supporting true and correct copies of all records and documentation that the parties desire the arbitrator to utilize in rendering his
opinion (the "Dispute Documents"). Within fifteen (15) business days of the last party's submission of the Dispute Documents, the arbitrator will make an initial review thereof, in order to
determine what, if any, additional documents may be required for submission (the "Initial Review"). 

        (c)  Following
the Initial Review, the arbitrator shall, if in his sole discretion it is deemed necessary, within ten (10) days from the completion of his Initial
Review, set a date and the time for a hearing (the "Presentment Hearing") during which time the arbitrator may ask questions regarding the issues and each party shall be afforded an opportunity to
present its position and answer such questions as the arbitrator may have for such party. No direct presentation of witnesses, rebuttal or cross-examination shall be permitted. At the Presentment
Hearing, each party shall be allowed to present to the arbitrator, in the presence of the other party, evidence and arguments in connection with said party's position. The parties agree that the
allotted time to present evidence at the Presentment Hearing shall be one hour each unless otherwise agreed to between the parties with approval from the arbitrator. 

        (d)  Thereafter,
the arbitrator shall be retained for another review period (the "Second Review") of ten (10) business days, during which the arbitrator may review the
Dispute Documents in conjunction with the evidence presented during the Presentment Hearing. The arbitrator's fees and expenses shall be divided equally between the Company and the Executive. The
arbitrator shall render a conclusive opinion which shall be binding upon the parties and the Company. 

        (e)  The
parties agree that in rendering the opinion, the arbitrator will rely only upon the Dispute Documents provided and those statements presented during the Presentment
Hearing. The arbitrator is neither obligated nor expected to review or discover all documents that may be relevant to the matter. 

        (f)    The
arbitrator shall render his opinion in writing within fifteen (15) business days after the completion of the Second Review period unless the parties agree to
another date due to the arbitrator's request for additional time to review the matter, and the parties stipulate to further retain the services of the arbitrator therefore. 

        (g)  THE
EXECUTIVE AND THE COMPANY UNDERSTAND THAT THIS AGREEMENT TO ARBITRATE ALL ARBITRATABLE DISPUTES (OTHER THAN AS PROVIDED IN SECTION 7(F) HEREIN) MEANS THAT THE
COMPANY AND THE EXECUTIVE ARE AGREEING TO WAIVE TO THE MAXIMUM EXTENT PERMITTED BY LAW ANY RIGHT 

13

 

THEY MAY HAVE TO ASK FOR A JURY OR COURT TRIAL IN ANY DISPUTE UNDER THIS AGREEMENT. 

        (h)  Dispute Resolution Agreement Governed by the Federal Arbitration Act. The parties recognize that a dispute governed by
the dispute resolution provisions of Section 18 of this Agreement may involve interstate commerce and may arise in another state or country. To ensure these provisions are applied uniformly and
consistently and are as enforceable as possible, the parties agree that any mediation and arbitration agreement should be governed by and interpreted according to the Federal Arbitration Act, 9
U.S.C.A. §2. 

        19.  Severability. If any provision of this Agreement shall be held invalid or unenforceable in whole or in part, such
invalidity or unenforceability shall not affect any other provision of this Agreement or part thereof, each of which shall remain in full force and effect. 

        20.  Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original
but all of which together will constitute one and the same instrument. 

        21.  Captions; Gender. The headings and captions contained in the Agreement are intended for convenience of reference only and
have no substantive significance. References to the masculine gender shall include references to the feminine gender, and vice versa. 

14

 

        IN
WITNESS WHEREOF, the parties have executed this Agreement effective as of the date and year first above written. 

	 	 	EVERGREEN RESOURCES, INC.
	

 	
 	

By: ____________________________________
	 	 	Printed Name: __________________________
	 	 	Title: __________________________________

ATTEST:
______________________________ 

Secretary

[Corporate
Seal] 

EXECUTIVE

_______________________________________

Printed Name: __________________________ 

15

QuickLinks

EVERGREEN RESOURCES, INC. CHANGE IN CONTROL AGREEMENTExhibit 4.1

                                WARRANT AGREEMENT

                                     between

                               MOTIENT CORPORATION

                                       and

                         EquiServe Trust Company, N.A.,

                                  Warrant Agent

                             Dated as of May 1, 2002

<PAGE>

                                TABLE OF CONTENTS

                                                                            Page

1.    DEFINITIONS..............................................................1

               Affiliate.......................................................1
               Common Stock....................................................1
               Company.........................................................1
               Current Market Value............................................1
               Determination Date..............................................1
               Exchange Act....................................................1
               Exercise Price..................................................1
               Expiration Date.................................................2
               Holders.........................................................2
               Independent Financial Expert....................................2
               Non-Surviving Combination.......................................2
               Person..........................................................2
               Underlying Common Stock.........................................2
               Warrant Agent...................................................2
               Warrant Certificates............................................2
               Warrants........................................................2

2.    ORIGINAL ISSUE OF WARRANTS...............................................3

               2.1    Form of Warrant Certificates.............................3
               2.2    Execution and Delivery of Warrant Certificates...........3

3.    EXERCISE PRICE; EXERCISE OF WARRANTS GENERALLY...........................3

               3.1.   Exercise Price...........................................3
               3.2.   Exercise of Warrants.....................................3
               3.3.   Expiration of Warrants...................................4
               3.4.   Method of Exercise; Payment of Exercise Price............4
               3.5.   Non-Surviving Combination................................4

4.    ADJUSTMENTS..............................................................5

               4.1.   Adjustments..............................................5
               4.2.   Notice of Adjustment.....................................9
               4.3.   Statement on Warrants....................................9
               4.4.   No Fractional Shares.....................................9

5.    WARRANT TRANSFER BOOKS..................................................10

6.    WARRANT HOLDERS.........................................................10

               6.1.   No Voting Rights........................................10
               6.2.   Right of Action.........................................11

7.    WARRANT AGENT...........................................................11

               7.1.   Nature of Duties and Responsibilities Assumed...........11
               7.2.   Right to Consult Counsel................................13
               7.3.   Compensation and Reimbursement..........................13
               7.4.   Warrant Agent May Hold Company Securities...............13
               7.5.   Resignation and Removal; Appointment of
                      Successor...............................................13

8.    COVENANTS OF THE COMPANY................................................14

               8.1    Reservation of Common Stock for Issuance
                      on Exercise of Warrants.................................14
               8.2.   Reports to Holders......................................14

9.    MISCELLANEOUS...........................................................15

               9.1.   Money and Other Property Deposited with
                      the Warrant Agent.......................................15
               9.2.   Payment of Taxes........................................15
               9.3.   Surrender of Certificates...............................15
               9.4.   Mutilated, Destroyed, Lost and Stolen
                      Warrant Certificates....................................15
               9.5.   Notices.................................................16
               9.6.   Applicable Law..........................................16
               9.7.   Persons Benefitting.....................................16
               9.8.   Counterparts............................................17
               9.9.   Amendments..............................................17
               9.10.  Headings................................................17
               9.11.  Specific Performance....................................17

<PAGE>
                                WARRANT AGREEMENT

     AGREEMENT dated as of May 1, 2002 between Motient  Corporation,  a Delaware
corporation (the "Company"), and EquiServe Trust Company, N.A., as Warrant Agent
(the "Warrant Agent").

     The Company  proposes to issue and  deliver its warrant  certificates  (the
"Warrant  Certificates")  evidencing warrants (the "Warrants") to acquire, under
certain  circumstances,  up to an  aggregate  of  1,496,512  shares,  subject to
adjustment, of its Common Stock (defined below) pursuant to the Debtors' Amended
Joint  Plan of  Reorganization  under  Chapter  11 of the  Bankruptcy  Code (the
"Plan"),  confirmed  by order of the  United  States  Bankruptcy  Court  for the
Eastern  District  of  Virginia  entered  on April 26,  2002,  in In re  Motient
Corporation et al (Case No. 02-80125).  Each Warrant will entitle the registered
holder thereof to purchase one share of the Company's  Common Stock,  subject to
adjustment.

     In consideration of the foregoing and for the purpose of defining the terms
and  provisions  of the  Warrants  and the  respective  rights  and  obligations
thereunder of the Company and the record  holders of the  Warrants,  the Company
and the Warrant Agent hereby agree as follows:

1.  DEFINITIONS.

     As used in this  Agreement,  the  following  terms shall have the following
meanings:

     "Affiliate"  of any  specified  Person means any other  Person  directly or
indirectly  controlling  or  controlled  by or under  direct or indirect  common
control with such specified Person.  For purposes of this definition,  "control"
when used with  respect to any Person  means the power to direct the  management
and  policies  of such  Person,  directly  or  indirectly,  whether  through the
ownership  of  voting  securities,  by  contract  or  otherwise,  and the  terms
"controlling" and "controlled" have meanings correlative to the foregoing.

     "Closing  Price" of a share of Common Stock for any day shall mean the last
reported sales price,  regular way, or, in the event that no sale takes place on
such day, the average of the reported closing bid and asked prices, regular way,
in either case as  reported on the  principal  national  securities  exchange on
which  such  security  is listed or  admitted  to  trading  or, if not listed or
admitted to trading on any national securities exchange,  on the NASDAQ National
Market or the NASDAQ  SmallCap  Market or, if such security is not quoted on the
NASDAQ National Market or the NASDAQ SmallCap Market, the average of the closing
bid and asked prices on each such day in the over-the-counter market as reported
by NASDAQ or, if bid and asked  prices for such  security on each such day shall
not have been reported  through NASDAQ,  the average of the bid and asked prices
for such day as furnished by any  reputable  investment  banking firm  regularly
making a market  in such  security  selected  for such  purpose  by the Board of
Directors of the Company or a committee thereof.  If the Closing Price cannot be
calculated on such date on any of the foregoing bases, the Closing Price of such
security on such date shall be the fair market value as reasonably determined by
an  Independent  Financial  Expert  selected  for such  purpose  by the Board of
Directors of the Company or a committee thereof.

     "Common  Stock" means the common stock,  par value $0.01 per share,  of the
Company.

     "Company"  has the meaning set forth in the preamble to this  Agreement and
the successors and assigns of such entity.

     "Current  Market  Value"  means the  average of the  Closing  Prices of the
Common Stock for the 10 consecutive  trading days immediately  preceding the day
as of which "Current Market Value" is being determined.

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

     "Exercise Date" means the trading day  immediately  following the date that
the average of the  Closing  Prices of the Common  Stock for ninety  consecutive
trading days is equal to or greater than the Minimum Share Price.

     "Exercise  Period"  means the period  commencing  on the Exercise  Date and
extending to and through the Expiration Date.

     "Exercise Price" has the meaning set forth in Section 3.1.

     "Expiration  Date"  means the date which is the second  anniversary  of the
effective date of the Plan;  provided,  if such date shall be a holiday or a day
on which banks are  authorized to close,  then  Expiration  Date shall mean 5:00
p.m.,  New York  City time on the next  following  day which in the State of New
York is not a holiday or a day on which banks are authorized to close.

     "Holders"  means from time to time, the registered  holders of the Warrants
and, unless otherwise  provided or indicated herein,  the registered  holders of
the  Underlying  Common Stock,  in each case as registered  upon the books to be
maintained by the Warrant Agent for that purpose pursuant to Section 5 hereof.

     "Independent  Financial  Expert" means a nationally  recognized  investment
banking  firm  that  does not (and  whose  directors,  officers,  employees  and
Affiliates do not) have a direct or indirect  financial  interest in the Company
or any of its Affiliates, that has not been and at the time it is called upon to
give  independent  financial  advice  to the  Company  is not (and none of whose
directors, officers, employees or Affiliates is) a promoter, director or officer
of the Company or any of its Affiliates, and that does not provide any advice or
opinions  to the  Company  or any of its  Affiliates  except  as an  Independent
Financial Expert retained by the Company hereunder.

     "Minimum  Share  Price" means  $15.44,  subject to  adjustment  as provided
herein.

     "Non-Surviving  Combination"  means  any  merger,  consolidation  or  other
business  combination  by the  Company  with one or more  Persons  (other than a
direct or indirect  wholly owned  subsidiary  of the Company) in which the other
Person is the survivor,  or a sale of all or substantially  all of the assets of
the  Company to one or more such  Persons in a single  transaction  or series of
related transactions, and with respect to which consideration (other than common
equity  securities of the Company) is  distributed to holders of Common Stock in
exchange for all or  substantially  all of their equity interest in the Company;
provided that, if any such merger,  consolidation or other business  combination
in which such  consideration is so distributed is structured so that the Company
is the surviving entity,  such transaction shall  nevertheless be deemed to be a
Non-Surviving Combination.

     "Person" means any natural person, corporation, partnership, joint venture,
firm,  association,  joint-stock company,  trust,  unincorporated  organization,
government,  or  governmental  agency  or  political  subdivision,  or any other
entity, whether acting in an individual, fiduciary or other capacity.

     "Underlying  Common  Stock"  means the shares of Common  Stock  issuable or
issued upon the exercise of the Warrants.

     "Warrant Agent" has the meaning set forth in the preamble to this Agreement
or the successor or  successors  of such Warrant  Agent  appointed in accordance
with the terms hereof.

     "Warrant  Certificates"  have the meaning set forth in the preamble to this
Agreement.

     "Warrants" have the meaning set forth in the preamble to this Agreement.

2.  ORIGINAL ISSUE OF WARRANTS.

     2.1. Form of Warrant  Certificates.  The Warrant  Certificates  shall be in
registered form only and substantially in the form attached hereto as Exhibit A,
shall be dated the date on which countersigned by the Warrant Agent and may have
such legends,  summaries and endorsements typed, stamped, printed,  lithographed
or  engraved  thereon  as the  Company  may  deem  appropriate  and  as are  not
inconsistent  with the  provisions of this  Agreement,  or as may be required to
comply  with any law or with  any rule or  regulation  pursuant  thereto,  or to
conform to usage.

     2.2. Execution and Delivery of Warrant  Certificates.  Warrant Certificates
evidencing Warrants to purchase initially an aggregate of up to 1,496,512 shares
of Common Stock may be executed, on or after the date of this Agreement,  by the
Company and delivered to the Warrant Agent for countersignature, and the Warrant
Agent shall thereupon  countersign and deliver such Warrant  Certificates to the
Company or upon the order and at the  direction  of the  Company to the  Persons
entitled to receive such  Warrants  pursuant to the Plan.  The Warrant  Agent is
hereby authorized to countersign and deliver Warrant Certificates as required by
this Section 2.2 or by Sections 3.4, 5 or 9.4. The Warrant Certificates shall be
executed on behalf of the Company by its Chairman of the Board,  Chief Executive
Officer, President or Vice President,  either manually or by facsimile signature
printed thereon. The Warrant Certificates shall be manually countersigned by the
Warrant Agent and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company whose  signature shall have been placed upon any
of the Warrant Certificates shall cease to be such officer of the Company before
countersignature  by the  Warrant  Agent and issue and  delivery  thereof,  such
Warrant  Certificates may,  nevertheless,  be countersigned by the Warrant Agent
and issued and  delivered  with the same force and effect as though  such Person
had not ceased to be such officer of the Company.

3.  EXERCISE PRICE; EXERCISE OF WARRANTS GENERALLY.

     3.1. Exercise Price. Each Warrant  Certificate shall, when countersigned by
the  Warrant  Agent,  entitle  the  respective  Holder  thereof,  subject to the
provisions  of this  Agreement,  to purchase  one share of Common Stock for each
Warrant represented thereby at an exercise price (the "Exercise Price") of $0.01
per share, subject to adjustment as provided in Section 4.

     3.2.  Exercise of Warrants.  Subject to the terms and  conditions set forth
herein,  the Warrants shall be exercisable in full or in part on or prior to the
Expiration Date as follows:

          3.2(a) The Warrants  shall be  exercisable at any time or from time to
     time on or after the Exercise Date through but not including the Expiration
     Date.

          3.2(b) The Warrants shall be  exercisable  in connection  with certain
     Non-Surviving Combinations, in accordance with Section 3.5.

Notwithstanding  anything contained herein to the contrary,  the exercise of the
Warrants in accordance  with this Agreement  shall only be permitted  during the
Exercise  Period  and if the  Warrants  have not been  exercised  for any reason
during the Exercise Period,  including without limitation because there has been
no  Exercise  Date prior to the  Expiration  Date,  then the  Warrants  shall be
cancelled and shall be of no further force or effect.

     3.3.  Expiration of Warrants.  The Warrants shall terminate and become void
as of 5:00 P.M. New York City time on the Expiration Date.

     All  obligations of the Company under this  Agreement  shall cease upon the
Expiration  Date,  except any obligations that  specifically  survive under this
Agreement.

     3.4. Method of Exercise;  Payment of Exercise Price. In order to exercise a
Warrant,  the Holder thereof must surrender the Warrant  Certificate  evidencing
such Warrant to the Warrant Agent,  with the exercise  subscription  form on the
reverse of or attached to the Warrant  Certificate duly executed,  together with
any required  payment in full of the Exercise Price for the shares of Underlying
Common Stock as to which the Warrant Certificate is submitted for exercise.  Any
such payment of the Exercise  Price shall be in cash or by certified or official
bank check payable in United States  currency to the order of the Warrant Agent.
All funds  received  upon the  exercise of Warrants  shall be  deposited  by the
Warrant  Agent for the account of the Company,  unless  otherwise  instructed in
writing by the Company.

     If fewer than all the Warrants  represented  by a Warrant  Certificate  are
exercised,  such  Warrant  Certificate  shall be  surrendered  and a new Warrant
Certificate  for the number of Warrants that were not exercised  shall be issued
by the Warrant  Agent.  The  Warrant  Agent  shall  countersign  the new Warrant
Certificate,  register it in such name or names as may be directed in writing by
the Holder and  deliver  the new  Warrant  Certificate  to the Person or Persons
entitled to receive the same.

     Upon surrender of a Warrant  Certificate  in conformity  with the foregoing
provisions,  the Warrant Agent shall thereupon requisition from the Company, and
after  receipt  thereof  the Warrant  Agent shall  deliver to the Holder of such
Warrant Certificate, a certificate or other appropriate evidence of ownership of
any shares of Underlying Common Stock or other securities or property (including
any money) to which the Holder is entitled,  registered or otherwise  placed in,
or payable to the order of,  such name or names as may be directed in writing by
the  Holder,  and  shall  deliver  such  evidence  of  ownership  and any  other
securities or property  (including any money) to the Person or Persons  entitled
to receive the same,  together with an amount in cash in lieu of any fraction of
a share as provided in Section 4.4. Such surrender  shall be deemed to have been
effected  as of  the  close  of  business  on  the  day on  which  such  Warrant
Certificate  shall  have been  surrendered,  and at such time the  rights of the
Holder of the Warrant Certificate,  in its capacity as such Holder, shall cease,
and the Person or Person in which  name or name any  securities  evidencing  the
Warrant Certificate are to be issued upon such surrender shall be deemed to have
become the holder or holders of record of the such securities.

     3.5 Non-Surviving Combination.

          3.5(a) If the Company proposes, prior to the Expiration Date, to enter
     into a transaction  that would  constitute a  Non-Surviving  Combination if
     closed, the Company shall give written notice thereof to the Holders of the
     Warrants,  promptly after a definitive  agreement or agreement in principle
     is reached with respect to the Non-Surviving Combination. Such notice shall
     describe  the  transaction  in  reasonable  detail and specify  whether the
     consideration  to be received by the holders of Company  Common  Stock will
     consist of cash or items other than cash. The Company also shall furnish to
     each Holder of Warrants all notices and materials  furnished by the Company
     to its stockholders in connection with such transaction.

          3.5.(b)  The Company  agrees that it will not enter into an  agreement
     prior to the Expiration Date providing for a  Non-Surviving  Combination in
     which only cash is paid to the  holders  of Common  Stock and the amount of
     cash  payable per share of Common  Stock  exceeds the Minimum  Share Price,
     unless the party to such  transaction  that is the  surviving  entity  (the
     "Survivor")  shall be obligated to purchase each outstanding  Warrant for a
     cash purchase price equal to (i) the cash amount the Holder of such Warrant
     would have received if such Holder had exercised  such Warrant  immediately
     prior to such Non-Surviving Combination (or, if applicable, the record date
     therefor) and the Survivor had purchased the number of shares of Underlying
     Common  Stock  then  issuable  upon  such  exercise  in such  Non-Surviving
     Combination, less (ii) the Exercise Price for such Warrant then in effect.

          3.5(c) If the Company consummates a Non-Surviving Combination prior to
     the Expiration  Date and Section 3.5(b) above does not apply,  the Warrants
     shall  automatically  become  warrants to  purchase  the kind and amount of
     securities,  cash or other assets which the Holder of a Warrant  would have
     owned  immediately  after  Non-Surviving  Combination  if the  Holder  of a
     Warrant had exercised the Warrant  immediately before the effective date of
     the Non-Surviving Combination,  subject to all of the terms, conditions and
     restrictions set forth herein;  provided,  that if the quotient obtained by
     dividing (x) value of the consideration (both the cash and items other than
     cash) to be received by the Holders of the Warrants in a  transaction  that
     would  constitute a  Non-Surviving  Combination if closed (such value to be
     determined  by the Board of  Directors of the Company in good faith) by (y)
     the number of shares of Common  Stock then  outstanding  plus the number of
     shares of Underlying  Common Stock,  exceeds the Minimum Share Price,  then
     the  Warrants  shall  be  immediately   exercisable   from  and  after  the
     consummation of the Non-Surviving  Combination (and the Exercise Date shall
     be deemed to have  occurred).  Concurrently  with the  consummation of such
     Non-Surviving Combination,  the corporation formed by or surviving any such
     consolidation  or merger if other than the Company,  or the person to which
     such  sale  or  conveyance  shall  have  been  made,  shall  enter  into  a
     supplemental  Warrant  Agreement so  providing  and further  providing  for
     adjustments  which shall be as nearly equivalent as may be practical to the
     adjustments  provided for in this Section 3.5. The successor  company shall
     mail to each  Holder  of a  Warrant a notice  describing  the  supplemental
     Warrant Agreement. If the issuer of securities deliverable upon exercise of
     Warrants under the  supplemental  Warrant  Agreement is an affiliate of the
     formed, surviving, transferee or lessee corporation, that issuer shall join
     in the supplemental Warrant Agreement.

          3.5(d) If this Section 3.5 applies, Section 4.1 hereof does not apply.

4.  ADJUSTMENTS.

     4.1.  Adjustments.  The  Exercise  Price,  the Minimum  Share Price and, in
certain  circumstances,  the kind of  property  receivable  upon  exercise  of a
Warrant  shall  be  subject  to  adjustment  from  time to time as  provided  in
paragraphs  4.1(a),  4.1(b) and 4.1(c) below, and the number of shares of Common
Stock issuable upon exercise of each Warrant shall be subject to adjustment from
time to time as provided in paragraph 4.1(g) below.

          4.1(a) Stock Splits; Reverse Stock Splits; Reclassifications.  In case
     the Company  shall (i) declare or pay a dividend or other  distribution  on
     its outstanding  Common Stock in shares of Common Stock, (ii) subdivide its
     outstanding  shares of Common Stock,  (iii) combine its outstanding  Common
     Stock  into a smaller  number of  shares,  or (iv)  issue any shares of its
     capital   stock  in  a   reclassification   of  the  Common   Stock  (which
     reclassification  also involves any of the events described in clauses (i),
     (ii) or (iii) above, including any such reclassification in connection with
     a merger,  consolidation or other business combination in which the Company
     is the  continuing  corporation),  (A) the Exercise  Price in effect at the
     record date for such dividend or distribution or the effective date of such
     subdivision,  combination or reclassification shall be adjusted so that the
     Holder of each  Warrant  exercised  after  such time shall be  entitled  to
     receive the kind and number of shares of Common  Stock or other  securities
     of the Company that such Holder  would have owned or have been  entitled to
     receive after the happening of any of the events  described above, had such
     Warrant been exercised in full  immediately  prior to the happening of such
     event or any  record  date  with  respect  thereto  (with any  record  date
     requirement  being deemed to have been satisfied) and (B) the Minimum Share
     Price in effect at the record date for such dividend or distribution or the
     effective date of such subdivision,  combination or reclassification  shall
     be proportionately  increased or decreased, as the case may be. In the case
     of a  reclassification  which  does  not  also  involve  any of the  events
     described in clauses (i), (ii) or (iii) above, there shall be no adjustment
     in the Minimum Share Price.  In the case of a  reclassification  which does
     not also involve any of the events  described in clauses (i), (ii) or (iii)
     above,  there shall be no adjustment in the Exercise  Price,  but rather an
     adjustment  shall be made in the kind of property  receivable upon exercise
     of a Warrant.  An  adjustment  made  pursuant to this Section  4.1(a) shall
     become  effective  immediately  after  the  effective  date of  such  event
     retroactive to the record date, if any, for such event.

          4.1(b)  Rights;  Options;  Warrants.  In case the Company  shall issue
     rights, options,  warrants or convertible or exchangeable securities (other
     than a convertible or exchangeable  security  subject to Section 4.1(a)) to
     no fewer than all holders of its Common Stock,  entitling them to subscribe
     for or  purchase  Common  Stock  at a  price  per  share  of  Common  Stock
     (determined in the case of such rights, options, warrants or convertible or
     exchangeable securities, by dividing (A) the total consideration receivable
     by the Company in  connection  with the issuance of such  rights,  options,
     warrants or convertible or exchangeable securities (as specified below), by
     (B) the total  number of shares of Common  Stock  covered  by such  rights,
     options,  warrants or convertible or exchangeable securities) that is lower
     (at the record date for such  issuance)  than the then Current Market Value
     per share of Common Stock in effect immediately prior to such issuance, the
     Exercise  Price shall be  adjusted by  multiplying  the  Exercise  Price in
     effect  immediately  prior  thereto by a fraction,  of which the  numerator
     shall be an amount  equal to the sum of (A) the  number of shares of Common
     Stock outstanding immediately prior to such issuance plus (B) the number of
     shares of Common  Stock  which the total  consideration  receivable  by the
     Company in connection with the issuance of such rights,  options,  warrants
     or convertible or  exchangeable  securities  would purchase to such Current
     Market  Value per share,  and of which the  denominator  shall be an amount
     equal  to the sum of (A)  the  total  number  of  shares  of  Common  Stock
     outstanding immediately prior to such issuance plus (B) the total number of
     shares of Common  Stock  covered  by such  rights,  options,  warrants,  or
     convertible or exchangeable securities; provided, that no adjustment of the
     Exercise  Price shall be made with respect to  additional  shares of Common
     Stock  which  are   distributed  to  the  holders  of  Common  Stock  as  a
     distribution  or  subdivision  for which an  adjustment  is provided  under
     Section 4.1(a) above.

          For purposes of this Section 4.1(b),  the consideration  receivable by
     the Company in connection with the issuance of rights, options, warrants or
     convertible  or  exchangeable   securities   shall  be  deemed  to  be  the
     consideration received by the Company for such rights, options, warrants or
     convertible or exchangeable securities, plus the aggregate consideration or
     premiums  stated  in such  rights,  options,  warrants  or  convertible  or
     exchangeable  securities  to be paid for the shares of Common Stock covered
     thereby.  Any  adjustment  pursuant to this  Section  4.1(b)  shall be made
     whenever any such rights, options,  warrants or convertible or exchangeable
     securities are issued,  but shall be effective  retroactively in respect of
     exercises of Warrants made between the record date for the determination of
     stockholders  entitled  to  receive  such  rights,  options,   warrants  or
     convertible or exchangeable  securities and the date such rights,  options,
     warrants or convertible or exchangeable securities are issued.

          4.1(c) Distribution of Assets or Securities. In case the Company shall
     make a  distribution  to all  holders  of  shares  of  Common  Stock of any
     evidences  of its  indebtedness  or assets  (other than cash  dividends  or
     distributions  paid out of net profit or surplus) or securities (other than
     those  referred  to in  Section  4.1(a)  or  4.1(b)  ) and  other  than  in
     connection  with the total  liquidation,  dissolution  or winding-up of the
     Company, the Exercise Price to be in effect after such record date shall be
     determined by multiplying the Exercise Price in effect immediately prior to
     such record date by a fraction, of which the numerator shall be the Current
     Market Value per share of Common  Stock on such record date,  less the fair
     market  value  (as  determined  in good  faith  by the  Company's  board of
     directors,  whose  determination shall be conclusive) of the portion of the
     indebtedness,  assets or securities so to be distributed  applicable to one
     share of Common  Stock and of which the  denominator  shall be the  Current
     Market Value per share of Common Stock. An adjustment made pursuant to this
     Section 4.1(c) shall be made whenever such  distribution is made, but shall
     be effective retroactively in respect of exercises of Warrants made between
     the record date for such distribution and the date of such distribution.

          4.1(d) Expiration of Rights, Options and Conversion  Privileges.  Upon
     the expiration of any rights,  options,  warrants or conversion or exchange
     rights that have  previously  resulted in an adjustment  hereunder,  if any
     thereof shall not have been  exercised,  the Exercise  Price then in effect
     shall, upon such expiration,  be readjusted and shall thereafter,  upon any
     future  exercise,  be such as it would  have  been  had it been  originally
     adjusted (or had the original adjustment not been required, as the case may
     be) as if (i) the only shares of Common  Stock so issued were the shares of
     Common  Stock,  if any,  actually  issued or sold upon the exercise of such
     rights,  options,  warrants or conversion or exchange  rights and (ii) such
     shares of Common Stock,  if any, were issued or sold for the  consideration
     actually received by the Company upon such exercise plus the consideration,
     if any,  actually  received by the Company for issuance of all such rights,
     options,   warrants  or  conversion  or  exchange  rights  whether  or  not
     exercised;  provided,  that no such  readjustment  shall have the effect of
     decreasing  the number of shares  issuable upon exercise of each Warrant at
     such  Exercise  Price by a number that is in excess of the amount or number
     of the adjustment initially made in respect of the issuance of such rights,
     options, warrants or conversion or exchange rights.

          4.1(e) No Adjustment for Cash Dividends.  No adjustment  shall be made
     in the Exercise  Price or Minimum  Share Price or the  property  receivable
     upon  exercise of a Warrant by reason of a cash  dividend  or  distribution
     made during the term of the Warrant out of net profits or surplus.

          4.1(f) De Minimis Adjustments.  No adjustment in the Exercise Price or
     Minimum Share Price shall be required unless such adjustment  would require
     an increase or decrease of at least $0.01;  provided,  that any adjustments
     which by reason of this Section 4.1(f) are not required to be made shall be
     carried forward and taken into account in any subsequent adjustment.

          4.1(g)  Adjustment of Number of Shares.  Unless the Company shall have
     exercised its election as provided in Section 4.1(h),  upon each adjustment
     of the  Exercise  Price as a result of the  calculations  made in  Sections
     4.1(a),  (b) or (c),  each  Warrant  outstanding  immediately  prior to the
     making of such adjustment shall thereafter  evidence the right to purchase,
     at the  adjusted  Exercise  Price  that  number of  shares of Common  Stock
     obtained  by (A)  multiplying  (i) the  number of  shares  of Common  Stock
     purchasable upon exercise of a Warrant immediately prior to such adjustment
     of the  Exercise  Price by (ii) the  Exercise  Price in effect  immediately
     prior to such adjustment of the Exercise Price and (B) dividing the product
     so  obtained  by the  Exercise  Price  in  effect  immediately  after  such
     adjustment of the Exercise Price.

          4.1(h) Adjustment of Number of Warrants.  The Company may elect, on or
     after the date of any  adjustment  of the  Exercise  Price,  to adjust  the
     number of  Warrants  in  substitution  for an  adjustment  in the number of
     shares  of Common  Stock  purchasable  upon the  exercise  of a Warrant  as
     provided in Section 4.1(g).

          4.1(i)  Rounding.  All adjustments to the Exercise Price shall be made
     to the nearest one-tenth of a cent. All adjustments to the number of shares
     of Common Stock  issuable  upon  exercise of a Warrant shall be made to the
     nearest one-thousandth of a share; provided, that no fractional shares will
     be issued.

     4.2.  Notice of  Adjustment.  Whenever the Exercise  Price is adjusted,  as
herein provided, the Company shall deliver to the Warrant Agent a certificate of
a firm of independent public  accountants  selected by the Board of Directors of
the Company  (who may be the  accountants  regularly  employed  by the  Company)
setting  forth the number of shares of Common  Stock or other  stock or property
issuable upon the exercise of each Warrant after such adjustment,  setting forth
a brief  statement of the facts  requiring such adjustment and setting forth the
computation by which such adjustment was made, and shall cause the Warrant Agent
promptly to mail by first class mail, postage prepaid,  to each Holder notice of
such adjustment or adjustments and a copy of such accountant's certificate.  The
Warrant Agent shall be entitled to rely on such  certificate  and shall be under
no duty or responsibility with respect to any such certificate, except to mail a
copy to each Holder as provided in this Section 4.2.

     4.3. Statement on Warrants. Irrespective of any adjustment in the number or
kind of shares issuable upon the exercise of the Warrants,  Warrants theretofore
or thereafter  issued may continue to express the same number and kind of shares
as are stated in the Warrants  initially  issuable  pursuant to this  Agreement;
provided,  that the  actual  number of shares of capital  stock  subject to such
Warrants  shall take into account any  adjustments  thereto  required to be made
pursuant to the provisions of this Agreement.

     4.4.  No  Fractional  Shares.  The  Company  shall not be required to issue
fractional shares of Common Stock on the exercise of Warrants.  If more than one
Warrant  shall be  presented  for  exercise in full at the same time by the same
Holder,  the number of full shares of Common Stock which shall be issuable  upon
such exercise  thereof shall be computed on the basis of the aggregate number of
shares of Common Stock  acquirable on exercise of the Warrants so presented.  If
any fraction of a share of Common Stock would, except for the provisions of this
Section,  be issuable on the  exercise  of any  Warrant  (or  specified  portion
thereof),  the Company  shall  deliver to the Warrant  Agent and,  after receipt
thereof, the Warrant Agent shall pay an amount in cash calculated by the Company
to be equal  to the  then  Current  Market  Value  per  share  of  Common  Stock
multiplied by such fraction computed to the nearest whole cent.

5.  WARRANT TRANSFER BOOKS.

     The  Warrant  Certificates  shall be issued in  registered  form only.  The
Company  shall cause to be kept at the office of the Warrant Agent a register in
which, subject to such reasonable  regulations as it may prescribe,  the Company
shall provide for the  registration of Warrant  Certificates and of transfers or
exchanges of Warrant Certificates as herein provided.

     At the option of the Holder,  Warrant Certificates may be exchanged at such
office,  and upon  payment of the charges  hereinafter  provided.  Whenever  any
Warrant Certificates are so surrendered for exchange, the Company shall execute,
and the Warrant Agent shall  countersign and deliver,  the Warrant  Certificates
that the Holder making the exchange is entitled to receive.

     All  Warrant  Certificates  issued  upon any  registration  of  transfer or
exchange of Warrant  Certificates shall be the valid obligations of the Company,
evidencing  the same  obligations,  and entitled to the same benefits under this
Agreement,  as the Warrant  Certificates  surrendered  for such  registration of
transfer or exchange.

     Every  Warrant  Certificate  surrendered  for  registration  of transfer or
exchange  shall be duly endorsed,  or be accompanied by a written  instrument of
transfer  in form  satisfactory  to the  Company  and the  Warrant  Agent,  duly
executed by the Holder thereof or his attorney duly authorized in writing.

     No  service  charge  shall  be made to a  Holder  for any  registration  of
transfer or exchange of Warrant Certificates. The Company may require payment of
a sum  sufficient  to cover  any tax or other  governmental  charge  that may be
imposed in connection  with any  registration of transfer or exchange of Warrant
Certificates.

     Any  Warrant  Certificate  when  duly  endorsed  in blank  shall be  deemed
negotiable,  and when a Warrant  Certificate  shall have been so  endorsed,  the
Holder  thereof may be treated by the Company,  the Warrant  Agent and all other
Persons  dealing  therewith as the absolute owner thereof for any purpose and as
the Person  entitled  to  exercise  the rights  represented  thereby,  or to the
transfer thereof on the register of the Company maintained by the Warrant Agent,
any notice to the  contrary  notwithstanding;  but until such  transfer  on such
register,  the  Company and the Warrant  Agent may treat the  registered  Holder
thereof as the owner for all purposes.

6.  WARRANT HOLDERS.

     6.1. No Voting Rights. Prior to the exercise of the Warrants,  no Holder of
a Warrant Certificate, as such, shall be entitled to any rights of a stockholder
of the Company, including, without limitation, the right to vote, to consent, to
exercise any preemptive  right,  or to receive any notice of any  proceedings of
the  Company,  except  with  respect  to  notices  or  other  rights  as  may be
specifically provided for herein.

     6.2. Right of Action. All rights of action in respect of this Agreement are
vested in the Holders of the Warrants and the Underlying  Common Stock,  and any
Holder of any Warrant or  Underlying  Common  Stock,  without the consent of the
Warrant  Agent or the  Holder of any other  Warrant or other  Underlying  Common
Stock,  may, in such  Holder's  own behalf and for such  Holder's  own  benefit,
enforce,  and may institute and maintain any suit, action or proceeding  against
the Company suitable to enforce, or otherwise in respect of, such Holder's right
to  exercise,  exchange or tender for  purchase  such  Holder's  Warrants in the
manner provided in this Agreement.

7.  WARRANT AGENT.

     7.1.  Nature of Duties and  Responsibilities  Assumed.  The Company  hereby
appoints the Warrant Agent to act as agent of the Company in accordance with the
provisions of this  Agreement.  The Warrant Agent hereby accepts the appointment
as agent of the  Company  and agrees to perform  that  agency upon the terms and
conditions  herein set forth,  by all of which the  Company  and the  Holders of
Warrants,  by their acceptance thereof,  shall be bound. The Warrant Agent shall
not by  countersigning  Warrant  Certificates  or by any other act  hereunder be
deemed  to make any  representations  as to  validity  or  authorization  of the
Warrants or the Warrant Certificates (except as to its countersignature thereon)
or of any securities or other property  delivered upon exercise or tender of any
Warrant,  or as to the accuracy of the  computation of the Exercise Price or the
number  or kind or  amount  of  stock  or other  securities  or  other  property
deliverable   upon  exercise  of  any  Warrant,   or  the   correctness  of  the
representations  of the Company  made in  certificates  that the  Warrant  Agent
receives.  The Warrant  Agent shall not have any duty to  calculate or determine
any  adjustments  with respect to any of the Exercise  Price,  the Minimum Share
Price or the kind and  amount  of  shares or other  securities  or any  property
receivable by Holders upon the exercise or tender of Warrants required from time
to  time,  and the  Warrant  Agent  shall  have no  duty  or  responsibility  in
determining the accuracy or correctness of such  calculation.  The Warrant Agent
shall not (a) be liable for any recital or statement of fact contained herein or
in the Warrant  Certificates or for any action taken,  suffered or omitted by it
in good faith on the belief that any Warrant  Certificate or any other documents
or any signatures are genuine or properly authorized, (b) be responsible for any
failure  on the part of the  Company  to comply  with any of its  covenants  and
obligations contained in this Agreement or in the Warrant  Certificates,  or (c)
be liable for any act or omission in connection  with this Agreement  except for
its own gross  negligence  or willful  misconduct.  The Warrant  Agent is hereby
authorized to accept  instructions with respect to the performance of its duties
hereunder from the President, any Vice President or the Secretary of the Company
and to apply to any such officer for instructions  (which  instructions  will be
promptly  given in writing when  requested),  and the Warrant Agent shall not be
liable to the Company or any Holder for any action taken or suffered to be taken
by it in good faith in accordance with the instructions of any such officer, but
in its discretion the Warrant Agent may in lieu thereof accept other evidence of
such  or may  require  such  further  or  additional  evidence  as it  may  deem
reasonable.  Anything in this Agreement to the contrary  notwithstanding,  in no
event shall the Warrant Agent be liable for special,  indirect or  consequential
loss or damage of any kind  whatsoever  (including,  but not  limited  to,  lost
profits)  even if the Warrant  Agent has been advised of the  likelihood of such
loss or damage and regardless of the form of action.

     Whenever in the performance of its duties,  the Warrant Agent shall deem it
necessary or desirable  that any fact or matter be proved or  established by the
Company prior to taking any action hereunder,  such fact or matter (unless other
evidence in respect thereof is specifically  prescribed herein) may be deemed to
be conclusively proved and established by a certificate signed by the President,
any Vice President, or the Secretary of the Company and delivered to the Warrant
Agent.  The Warrant  Agent shall not be charged with any knowledge it may obtain
in its individual capacity or in any capacity other than as Warrant Agent.

     The Warrant Agent shall not at any time be under any duty or responsibility
to any  Holders  to  determine  whether  any facts  exist that may  require  any
adjustment  of the  Exercise  Price or the  number of shares of Common  Stock or
other stock or property issuable on exercise of the Warrants, or with respect to
the nature or extent of any such  adjustment  when made,  or with respect to the
method  employed in making such adjustment or the validity or value (or the kind
or amount) of any shares of Common Stock or other stock or property which may be
issuable on exercise of the Warrants.

     The Warrant Agent shall not be  responsible  for any failure of the Company
to make any cash  payment or to issue,  transfer or deliver any shares of Common
Stock or  stock  certificates  or other  common  stock  or  properties  upon the
exercise of any Warrant.

     The Warrant  Agent may execute  and  exercise  any of the rights and powers
hereby vested in it or perform any duty hereunder either itself or by or through
its attorneys, agents or employees,  provided reasonable care has been exercised
in the selection and in the continued employment of any such attorney,  agent or
employee.  The  Warrant  Agent  shall  not be under  any  obligation  or duty to
institute,  appear in or defend any action,  suit or legal proceeding in respect
hereof,  unless first indemnified to its satisfaction,  but this provision shall
not affect the power of the  Warrant  Agent to take such  action as the  Warrant
Agent may consider proper,  whether with or without such indemnity.  The Warrant
Agent shall promptly  notify the Company in writing of any claim made or action,
suit or proceeding  instituted  against it arising out of or in connection  with
this Agreement.

     The Company will perform,  execute,  acknowledge and deliver or cause to be
performed,   executed,   acknowledged  and  delivered  all  such  further  acts,
instruments and assurances as may reasonably be required by the Warrant Agent in
order to enable the Warrant  Agent to carry out or perform its duties under this
Agreement.

     The Warrant Agent shall act solely as agent of the Company  hereunder.  The
Warrant  Agent shall not be liable except for the failure to perform such duties
as are  specifically set forth herein,  and no implied  covenants or obligations
shall be read into this Agreement  against the Warrant  Agent,  whose duties and
obligations shall be determined solely by the express provisions hereof.

     7.2.  Right to Consult  Counsel.  The Warrant Agent may at any time consult
with  legal  counsel  satisfactory  to it  (who  may be  legal  counsel  for the
Company),  and the Warrant Agent shall incur no liability or  responsibility  to
the Company or to any Holder for any action taken,  suffered or omitted by it in
good faith in accordance with the opinion or advice of such counsel.

     7.3.  Compensation  and  Reimbursement.  The  Company  agrees to pay to the
Warrant  Agent from time to time  compensation  for all services  rendered by it
hereunder as the Company and the Warrant Agent may agree from time to time,  and
to  reimburse  the  Warrant  Agent for  reasonable  expenses  and  disbursements
incurred in connection with the execution and  administration  of this Agreement
(including  the  reasonable  compensation  and the  reasonable  expenses  of its
counsel),  and further agrees to indemnify the Warrant Agent for, and to hold it
harmless  against,  any  loss,  liability  or  expense  incurred  without  gross
negligence or bad faith on its part,  arising out of or in  connection  with the
acceptance  and  administration  of this  Agreement,  including  the  costs  and
expenses of defending  itself against any claim or liability in connection  with
the  exercise  or  performance  of any of its  powers  or duties  hereunder.  No
provision of this  Agreement  shall  require the Warrant Agent to expend or risk
its own funds or otherwise  incur any financial  liability in the performance of
any of its duties hereunder,  or in the exercise of any of its rights or powers,
if it shall have  reasonable  grounds for believing that repayment of such funds
or adequate  indemnity against such risk or liability is not reasonably  assured
of it.

     7.4. Warrant Agent May Hold Company  Securities.  The Warrant Agent and any
stockholder, director, officer or employee of the Warrant Agent may buy, sell or
deal in any of the Warrants or other securities of the Company or its Affiliates
or become  pecuniarily  interested in  transactions  in which the Company or its
Affiliates may be  interested,  or contract with or lend money to the Company or
its  Affiliates  or otherwise  act as fully and freely as though it were not the
Warrant Agent under this  Agreement.  Nothing  herein shall preclude the Warrant
Agent from acting in any other  capacity  for the Company or for any other legal
entity.

     7.5. Resignation and Removal; Appointment of Successor.

          7.5(a)  No  resignation  or  removal  of  the  Warrant  Agent  and  no
     appointment of a successor  warrant agent shall become  effective until the
     acceptance  of  appointment  by the  successor  warrant  agent as  provided
     herein.  The Warrant Agent may resign its duties and be discharged from all
     further  duties and  liability  hereunder  (except  liability  arising as a
     result of the Warrant Agent's own gross  negligence or willful  misconduct)
     thirty days after giving written notice to the Company.  The Company or the
     Holders of a majority of the  Warrants  may remove the  Warrant  Agent upon
     written  notice,  and the Warrant  Agent shall  thereupon in like manner be
     discharged  from all further duties and  liabilities  hereunder,  except as
     aforesaid.  The Warrant Agent shall, at the Company's expense,  cause to be
     mailed (by first-class  mail,  postage prepaid) to each Holder of a Warrant
     at his last address as shown on the register of the Company  maintained  by
     the  Warrant  Agent a copy of said  notice  of  resignation  or  notice  of
     removal, as the case may be. Upon such resignation or removal,  the Company
     shall appoint in writing a new warrant agent.  If the Company shall fail to
     make such appointment within a period of 30 days after it has been notified
     in writing of such resignation by the resigning Warrant Agent or after such
     removal, then the Holder of any Warrant may apply to any court of competent
     jurisdiction  for the  appointment of a new warrant agent.  Any new warrant
     agent,  whether  appointed  by the  Company or by such a court,  shall be a
     corporation doing business under the laws of the United States or any state
     thereof,  in good standing and having a combined capital and surplus of not
     less than  $50,000,000.  The  combined  capital and surplus of any such new
     warrant agent shall be deemed to be the combined capital and surplus as set
     forth in the most recent annual  report of its condition  published by such
     warrant  agent prior to its  appointment,  provided  that such  reports are
     published at least  annually  pursuant to law or to the  requirements  of a
     Federal or state  supervising or examining  authority.  After acceptance in
     writing of such  appointment by the new warrant  agent,  it shall be vested
     with the same powers, rights, duties and responsibilities as if it had been
     originally  named  herein  as  the  Warrant  Agent,   without  any  further
     assurance,  conveyance,  act or  deed;  but if for any  reason  it shall be
     necessary  or  expedient  to execute and  deliver  any  further  assurance,
     conveyance,  act or deed,  the same  shall  be done at the  expense  of the
     Company and shall be legally  and validly  executed  and  delivered  by the
     resigning or removed  Warrant  Agent.  Not later than the effective date of
     any  such  appointment,  the  Company  shall  give  notice  thereof  to the
     resigning or removed Warrant Agent. Failure to give any notice provided for
     in this  Section,  however,  or any  defect  therein,  shall not affect the
     legality  or  validity  of the  resignation  of the  Warrant  Agent  or the
     appointment of a new warrant agent, as the case may be.

          7.5(b) Any corporation into which the Warrant Agent or any new warrant
     agent may be merged, or any corporation resulting from any consolidation to
     which the Warrant Agent or any new warrant agent shall be a party, shall be
     a successor  Warrant  Agent under this  Agreement  without any further act,
     provided  that  such  corporation  would be  eligible  for  appointment  as
     successor to the Warrant Agent under the provisions of Section 7.5(a).  Any
     such successor  Warrant Agent shall promptly cause notice of its succession
     as Warrant Agent to be mailed (by  first-class  mail,  postage  prepaid) to
     each  Holder of a Warrant  at such  Holder's  last  address as shown on the
     register of the Company maintained by the Warrant Agent.

8.  COVENANTS OF THE COMPANY.

     8.1. Reservation of Common Stock for Issuance on Exercise of Warrants.  The
Company  covenants  that it will at all times reserve and keep  available,  free
from pre-emptive rights, out of its authorized but unissued Common Stock, solely
for the purpose of issue upon  exercise of  Warrants  as herein  provided,  such
number of shares of Common Stock as shall then be issuable  upon the exercise of
all outstanding Warrants.  The Company covenants that all shares of Common Stock
which shall be so issuable  shall,  upon such issue,  be duly and validly issued
and fully paid and non-assessable.

     8.2.  Reports to Holders.  The Company  will  supply  without  cost to each
Holder and file with the Warrant Agent,  contemporaneously  with mailing them to
stockholders of the Company,  copies of any annual reports and quarterly reports
that the company furnishes to its stockholders.

9.  MISCELLANEOUS.

     9.1. Money and Other Property Deposited with the Warrant Agent. Any moneys,
securities or other property which at any time shall be deposited by the Company
or on its behalf with the Warrant Agent pursuant to this Agreement  shall be and
are hereby  assigned,  transferred  and set over to the Warrant Agent solely and
exclusively for the purpose for which such moneys,  securities or other property
shall have been  deposited;  but such moneys,  securities or other property need
not be segregated  from other funds,  securities or other property except to the
extent  required by law. The Warrant Agent shall  distribute any money deposited
with it for payment and  distribution  to the Holders by mailing by  first-class
mail a check,  in such  amount as is  appropriate,  to each  such  Holder at the
address shown on the Warrant register of the Company,  or as it may be otherwise
directed in writing by such Holder.  Any money  deposited with the Warrant Agent
for payment and distribution to the Holders that remains unclaimed for two years
after the date the money was  deposited  with the Warrant Agent shall be paid to
the Company upon its request therefor.

     9.2.  Payment  of  Taxes.  The  Company  shall  pay  all  taxes  and  other
governmental charges that may be imposed on the Company or on the Warrants or on
any securities  deliverable upon exercise of Warrants with respect thereto.  The
Company shall not be required,  however,  to pay any income taxes imposed on the
Holder of any Warrant or any tax or other charge imposed in connection  with any
transfer  involved in the issue of any certificate for shares of Common Stock or
other securities  underlying the Warrants or payment of cash to any Person other
than the  Holder of a  Warrant  Certificate  surrendered  upon the  exercise  or
purchase of a Warrant,  and in case of such  transfer  or  payment,  the Company
shall not be required to issue any stock  certificate or pay any cash until such
tax or  charge  has  been  paid  or it has  been  established  to the  Company's
satisfaction that no such tax or other charge is due.

     9.3.  Surrender of Certificates.  Any Warrant  Certificate  surrendered for
exercise,  payment of any Exercise  Price,  or purchase shall, if surrendered to
the Company,  be delivered to the Warrant  Agent,  and all Warrant  Certificates
surrendered or so delivered to the Warrant Agent shall be promptly  cancelled by
such Warrant  Agent and shall not be reissued by the Company.  The Warrant Agent
shall promptly return such cancelled Warrant Certificates to the Company.

     9.4. Mutilated, Destroyed, Lost and Stolen Warrant Certificates. If (a) any
mutilated  Warrant  Certificate  is  surrendered to the Warrant Agent or (b) the
Company and the Warrant  Agent  receive  evidence to their  satisfaction  of the
destruction, loss or theft of any Warrant Certificate, and there is delivered to
the Company and the Warrant  Agent such  indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Company or the
Warrant  Agent that such Warrant  Certificate  has been  acquired by a bona fide
purchaser,  the Company shall execute and upon the Company's written request the
Warrant Agent shall countersign and deliver,  in exchange for any such mutilated
Warrant  Certificate  or in lieu of any such  destroyed,  lost or stolen Warrant
Certificate,  a new Warrant  Certificate  of like tenor and for a like aggregate
number of Warrants.

     Upon the  issuance of any new Warrant  Certificate  under this Section 9.4,
the Company may  require  the  payment of a sum  sufficient  to cover any tax or
other  governmental  charge  that may be imposed in  relation  thereto and other
expenses (including the reasonable fees and expenses of the Warrant Agent and of
counsel to the Company) in connection therewith.

     Every new  Warrant  Certificate  executed  and  delivered  pursuant to this
Section 9.4 in lieu of any destroyed,  lost or stolen Warrant  Certificate shall
constitute an original contractual obligation of the Company, whether or not the
destroyed,  lost or stolen Warrant  Certificate shall be at any time enforceable
by anyone,  and shall be entitled to the benefits of this Agreement  equally and
proportionately  with any and all other Warrant  Certificates  duly executed and
delivered hereunder.

     The provisions of this Section 9.4 are exclusive and shall preclude (to the
extent  lawful) all other rights or remedies with respect to the  replacement of
mutilated, destroyed, lost, or stolen Warrant Certificates.

     9.5. Notices.  Any notice,  demand or delivery authorized by this Agreement
shall be  sufficiently  given or made when mailed if sent by  first-class  mail,
postage  prepaid,  addressed to any Holder of a Warrant at such Holder's address
shown on the register of the Company  maintained by the Warrant Agent and to the
Company or the Warrant Agent as follows:

If to the Company:             Motient Corporation
                               10802 Parkridge Boulevard
                               Reston, Virginia 20191-5416
                               Attention:  General Counsel

If to the Warrant Agent:       EquiServe Trust Company, N.A.
                               c/o EquiServe, Inc.
                               525 Washington Blvd - 3rd Floor - Suite 4660
                               Jersey City, NJ 07310
                               Attn: Reorganization Department

or such other  address  as shall  have been  furnished  in  accordance  with the
foregoing to the party giving or making such notice, demand or delivery.

     9.6.  Applicable Law. This Agreement and each Warrant issued  hereunder and
all  rights  arising  hereunder  shall be  governed  by the laws of the State of
Delaware,  except that the rights and  obligations  of the Warrant  Agent as set
forth in Sections 7.1 et. seq. shall be governed by the laws of the Commonwealth
of Massachusetts.

     9.7. Persons Benefiting.  This Agreement shall be binding upon and inure to
the  benefit  of the  Company  and  the  Warrant  Agent,  and  their  respective
successors,  assigns,  beneficiaries,  executors  and  administrators,  and  the
Holders from time to time of the Warrants. Nothing in this Agreement is intended
or shall be  construed to confer upon any Person,  other than the  Company,  the
Warrant Agent and the Holders of the Warrants,  any right, remedy or claim under
or by reason of this Agreement or any part hereof.

     9.8.  Counterparts.  This  Agreement  may  be  executed  in any  number  of
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together constitute one and the same instrument.

     9.9.  Amendments.  The Company and the Warrant  Agent may from time to time
supplement or amend this Agreement without the consent of any Holder in order to
cure any  ambiguity,  manifest error or other mistake in this  Agreement,  or to
make provision in regard to any matters or questions arising hereunder which the
Company and the Warrant  Agent may deem  necessary or desirable  and which shall
not adversely affect, alter or change the interests of the Holders.

     9.10.  Headings.  The descriptive  headings of the several Sections of this
Agreement  are  inserted  for  convenience  and shall not  control or affect the
meaning or construction of any of the provisions hereof.

     9.11.  Specific  Performance.  In addition to any other  remedies which the
Company or the Holders may have at law or in equity, the Company and the Holders
shall  have  the  right  to  have  all  obligations,  undertakings,  agreements,
covenants and other  provisions  of this  Agreement  specifically  performed and
shall have the right to obtain an order or decree of such  specific  performance
in any of the  courts of the  United  States or of any state or other  political
subdivision thereof.

<PAGE>

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

                                       MOTIENT CORPORATION

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

                                       EquiServe Trust Company, N.A.,
                                         as Warrant Agent

                                       By: /s/Walter V. Purnell, Jr.
                                           -------------------------------------
                                           Name:  Walter V. Purnell, Jr.
                                           Title: President and Chief Executive
                                                  Officer

<PAGE>

                                       A-1

                                    EXHIBIT A

                                   (Attached)

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