Document:

Exhibit 10.12

    
      

    

     

    NONSTANDARDIZED
      ADOPTION AGREEMENT

    PROTOTYPE
      CASH OR DEFERRED PROFIT-SHARING PLAN

    

    Sponsored
      by

    

    ATR,
      Inc

    

    The
      Employer named below hereby establishes a Cash or Deferred Profit-Sharing Plan
      for eligible Employees as provided in this Adoption Agreement and the
      accompanying Basic Plan Document #01.

    
      

      
        	I.	EMPLOYER
                INFORMATION

      

       

    

    
      	 	
              If
                more than one Employer is adopting the Plan, complete this section
                based
                on the lead Employer. Additional Employers who are members of the
                same
                controlled group or affiliated service group may adopt this Plan
                by
                completing and executing Section XX(A) of the Adoption Agreement.
                

            

    

    

    
      	 	
              A.

            	
              Name
                And Address:

            

    

    

    Atlas
      America, Inc.

    311
      Rouser Road

    Moon
      Township, PA 15108

    

    
      	 	
              B.

            	
              Telephone Number:

            	
              412-262-2830

            

    

    
      

      
        	 	
                C.

              	
                Employer’s
                  Tax ID Number: 

              	
                51-0404430

              

      

       

    

    
      	 	
              D.

            	
              Form
                Of Business:

            

    

    

    
      	 	
              o

            	
              1.

            	
              Sole
                Proprietor

            	
              
                o

              

            	
              5.

            	
              Limited
                Liability Company

            

    

    

    
      	 	
              
                o

              

            	
              2.

            	
              Partnership

            	
              
                o

              

            	
              6.

            	
              Limited
                Liability Partnership

            

    

    

    
      	 	
              
                o

              

            	
              3.

            	
              Corporation

            	
              
                o

              

            	
              7.

            	_______________________

    

    
      

      
        	 	
                
                  x

                

              	
                4.

              	
                S
                  Corporation

              	
                
                   

                

              	
                 

              	 

      

    

    

    
      	 	
              E.

            	
              Is
                The Employer Part Of A Controlled Group?

            	
              x  YES

            	
              
                o  NO

              

            

    

    
      	 	
              Part
                Of An Affiliated Service Group?

            	
              
                o  YES

              

            	
              x  NO

            

    

    

    
      	 	
              F.

            	
              Name
                Of Plan: Atlas
                America, Inc. Investment Savings
                Plan

            

    

    

    
      	 	
              G.

            	
              Three
                Digit Plan Number: 001

            

    

    

    
      	 	
              H.

            	
              Employer’s
                Tax Year End: 12/31

            

    

    

    
      	 	
              I.

            	
              Employer’s
                Business Code: 213110

            

    

     

    
      	
              II.

            	
              EFFECTIVE
                DATE

            

    

    

    
      	 	
              A.

            	
              New
                Plan: 

            

    

    

    This
      is a
      new Plan having an Effective Date of 06/30/05.

    

    
      	 	
              B.

            	
              Amended
                and Restated Plans: 

            

    

    

    This
      is
      an amendment or restatement of an existing Plan. The initial Effective Date
      of
      the Plan was ________________________________________.
      The
      Effective Date of this amendment or restatement is __________________________.
      

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
      	 	
              C.

            	
              Amended
                or Restated Plans for GUST:
                

            

    

    

    This
      is
      an amendment or restatement of an existing Plan to comply with GUST [The Uruguay
      Round Agreements, Pub. L. 103-465 (GATT); The Uniformed Services Employment
      and
      Reemployment Rights Act of 1994, Pub. L. 103-353 (USERRA); The Small Business
      Job Protection Act of 1996, Pub. L. 104-188 (SBJPA) [including Section 414(u)
      of
      the Internal Revenue Code]; The Taxpayer Relief Act of 1997, Pub. L. 105-34
      (TRA’97); The Internal Revenue Service Restructuring and Reform Act of 1998,
      Pub. L. 105-206 (IRSRRA), and The Community Renewal Tax Relief Act of 2000,
      Pub.
      L. 106-554 (CRA). The initial Effective Date of the Plan was ________________________________________.
      Except
      as provided for in the Plan, the Effective Date of this amendment or restatement
      is __________________________.
      (The
      restatement date should be no earlier than the first day of the current Plan
      Year. The Plan contains appropriate retroactive Effective Dates with respect
      to
      provisions of GUST.)

    

    Pursuant
      to Code Section 411(d)(6) and the Regulations issued thereunder, an Employer
      cannot reduce, eliminate or make subject to Employer discretion any Code Section
      411(d)(6) protected benefit. Where this Plan document is being adopted to amend
      another plan that contains a protected benefit not provided for in the Basic
      Plan Document #01, the Employer may complete Schedule A as an addendum to this
      Adoption Agreement. Schedule A describes such protected benefits and shall
      become part of this Plan. If
      a prior plan document contains a plan feature not provided for in the Basic
      Plan
      Document #01, the Employer may attach Schedule B describing such feature.
      Provisions listed on Schedule B are not covered by the IRS Opinion Letter issued
      with respect to the Basic Plan Document #01.

    

    
      	 	
              D.

            	
              Effective
                Date for Elective Deferrals: 

            

    

    

    If
      different from above, the Elective Deferral provisions shall be effective
__________________________.
      

     

    
      	
              III.

            	
              DEFINITIONS

            

    

    

    
      	 	
              A.

            	
              “Compensation”

            

    

    

    Select
      the definition of Compensation, the Compensation Computation Period, any
      Compensation Dollar Limitation and Exclusions from Compensation for each
      Contribution Type from the options listed below. Enter the letter of the option
      selected on the lines provided below. Leave the line blank if no election needs
      to be made. 

     

    
      
        	
                Employer

                Contribution
                  Type

              	
                Compensation

                Definition

              	
                Compensation

                Computation

                Period

              	
                Compensation

                Dollar
                  Limitation

              	
                Exclusions

                From
                  Compensation

              
	
                All
                  Contributions

              	
                b

              	
                a

              	
                $
                  

              	
                i

              
	
                Elective
                  Deferrals

              	 	 	
                $
                  

              	 
	
                Voluntary
                  After-tax

              	 	 	
                $
                  

              	 
	
                Required
                  After-tax

              	 	 	
                $
                  

              	 
	
                Safe
                  Harbor

              	 	 	
                $

              	 
	
                Non-Safe
                  Harbor

                Match
                  Formula 1

              	 	 	
                $
                  

              	 
	
                QNEC/QMAC

              	 	 	
                $
                  

              	 
	
                Discretionary

              	 	 	
                $
                  

              	 
	
                Non-Safe
                  Harbor

                Match
                  Formula 2

              	 	 	
                $
                  

              	 

      

      

      
        	
                Antidiscrimination

                Tests

              	
                Compensation
                  

                Definition

              	
                Compensation

                Computation
                  Period

              	
                Compensation

                Dollar
                  Limitation

              
	
                ADP/ACP

              	
                b

              	
                a

              	
                $
                  

              

      

       

      
        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

      

       

    

    Compensation
      Computation Periods must be consistent for all contribution types, except
      discretionary. If different Computation Periods are selected, the selection
      for
      ADP/ACP testing will be deemed to be the election for all purposes except for
      Discretionary Contributions.

    

    
      	 	
              1.

            	
              Compensation
                Definition:

            

    

    

    
      	 	
              a.

            	
              Code
                Section 3401(a) - W-2 Compensation subject to income tax withholding
                at
                the source.

            

    

    

    
      	 	
              b.

            	
              Code
                Section 3401(a) - W-2 Compensation subject to income tax withholding
                at
                the source, with all pre-tax contributions
                added.

            

    

    

    
      	 	
              c.

            	
              Code
                Section 6041/6051 - Income reportable on Form
                W-2.

            

    

    

    
      	 	
              d.

            	
              Code
                Section 6041/6051 - Income reportable on Form W-2, with all pre-tax
                contributions added.

            

    

    

    
      	 	
              e.

            	
              Code
                Section 415 - All income received for services performed for the
                Employer.
                

            

    

    

    
      	 	
              f.

            	
              Code
                Section 415 - All income received for services performed for the
                Employer,
                with all pre-tax contributions
                excluded.

            

    

    

    The
      Code Section 415 definition will always apply with respect to sole proprietors
      and partners.

    

    
      	 	
              2.

            	
              Compensation
                Computation Period:

            

    

    

    
      	 	
              a.

            	
              Compensation
                paid during a Plan Year while a
                Participant.

            

    

    

    
      	 	
              b.

            	
              Compensation
                paid during the entire Plan Year. 

            

    

    

    
      	 	
              c.

            	
              Compensation
                paid during the Employer's fiscal
                year.

            

    

    

    
      	 	
              d.

            	
              Compensation
                paid during the calendar year.

            

    

    

    
      	 	
              3.

            	
              Compensation
                Dollar Limitation: The dollar limitation section does not need to
                be
                completed unless Compensation of less than the Code Section 401(a)(17)
                limit of $160,000 (as indexed) is to be used.

            

    

    
      

      
        	 	
                4.

              	
                Exclusions
                  from Compensation (non-integrated
                  plans only):

              

      

       

    

    
      	 	
              a.

            	
              There
                will be no exclusions from Compensation under the
                Plan.

            

    

    

    
      	 	
              b.

            	
              Any
                amount included in a Participant’s gross income due to the application of
                Code Sections 125, 132(f)(4), 402(h)(1)(B), 402(e) or 403(b) will
                be
                excluded from the definition of Compensation under the Plan.
                

            

    

    

    
      	 	
              c.

            	
              Overtime

            

    

    

    
      	 	
              d.

            	
              Bonuses

            

    

    

    
      	 	
              e.

            	
              Commissions

            

    

    

    
      	 	
              f.

            	
              Exclusion
                applies only to Participants who are Highly Compensated
                Employees.

            

    

    

    
      	 	
              g.

            	
              Severance
                pay

            

    

    

    
      	 	
              h.

            	
              Holiday
                and vacation pay

            

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    
      	 	
              i.

            	
              Other:
                taxable
                income resulting from the exercise of nonqualified stock
                options

            

    

    

    
      	 	
              B.

            	
              “Disability”

            

    

    

    
      	 	
              x

            	
              1.

            	
              As
                defined in paragraph 1.26 of the Basic Plan Document
                #01.

            

    

    

    
      	 	
              *

            	
              2.

            	
              As
                defined in the Employer’s Disability Insurance
                Plan.

            

    

    

    
      	 	
              *

            	
              3.

            	
              An
                individual will be considered to be disabled if he or she is unable
                to
                engage in any substantial gainful activity by reason of any medically
                determinable physical or mental impairment which can be expected
                to result
                in death or to be of long continued and indefinite duration. An individual
                shall not be considered to be disabled unless he or she furnishes
                proof of
                the existence thereof in such form and manner as the Secretary may
                prescribe.

            

    

    

    
      	 	
              C.

            	
              “Highly
                Compensated Employees - Top-Paid Group Election” For
                Plans which are being amended and restated for GUST, please complete
                Schedule C outlining the preamendment operation of the Plan, as well
                as
                this section of the Adoption Agreement. The testing elections made
                below
                will apply to the future operation of the Plan. 

            

    

    

    
      	 	
              *

            	
              1.

            	
              Top-Paid
                Group Election:

            

    

    

    In
      determining who is a Highly Compensated Employee, the Employer makes the
      Top-Paid Group election. The effect of this election is that an Employee (who
      is
      not a 5% owner at any time during the determination year or the look-back year)
      who earned more than $80,000, as indexed for the look-back year, is a Highly
      Compensated Employee if the Employee was in the Top-Paid Group for the look-back
      year. This election is applicable for the Plan Year in which this Plan is
      effective.

    
      

      
        	 	
                *

              	
                2.

              	
                Calendar
                  Year Data Election:

              

      

    

     

    If
      the
      Plan Year is not the calendar year, the prior year computation period for
      purposes of determining if an Employee earned more than $80,000, as indexed,
      is
      the calendar year beginning in the prior Plan Year. This election is applicable
      for the Plan Year in which this Plan is effective. 

    

    
      	 	
              D.

            	
              “Hour
                Of Service” 

            

    

    

    Hours
      shall be determined by the method selected below. The method selected shall
      be
      applied to all Employees covered under the Plan as follows:

    

    
      	 	
              *

            	
              1.

            	
              Not
                applicable. For all purposes under the Plan, a Year of Service (Period
                of
                Service) is defined as Elapsed
                Time.

            

    

    

    
      	 	
              
                x

              

            	
              2.

            	
              On
                the basis of actual hours for which an Employee is paid or entitled
                to
                payment. 

            

    

    

    
      	 	
              *

            	
              3.

            	
              On
                the basis of days worked. An Employee shall be credited with ten
                (10)
                Hours of Service if such Employee would be credited with at least
                one (1)
                Hour of Service during the day.

            

    

    

    
      	 	
              *

            	
              4.

            	
              On
                the basis of weeks worked. An Employee shall be credited with forty-five
                (45) Hours of Service if the Employee would be credited with at least
                one
                (1) Hour of Service during the
                week.

            

    

    

    
      	 	
              *

            	
              5.

            	
              On
                the basis of semi-monthly payroll periods. An Employee shall be credited
                with ninety-five (95) Hours of Service if such Employee would be
                credited
                with at least one (1) Hour of Service during the semi-monthly payroll
                period.

            

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      	 	
              *

            	
              6.

            	
              On
                the basis of months worked. An Employee shall be credited with
                one-hundred-ninety (190) Hours of Service if such Employee would
                be
                credited with at least one (1) Hour of Service during the
                month.

            

    

    

    
      	 	
              E.

            	
              “Integration
                Level”

            

    

    

    
      	 	
              
                x

              

            	
              1.

            	
              Not
                applicable. The Plan’s allocation formula is not integrated with Social
                Security.

            

    

    

    
      	 	
              *

            	
              2.

            	
              The
                maximum earnings considered wages for such Plan Year for Social Security
                withholding purposes without regard to
                Medicare.

            

    

    

    
      	 	
              *

            	
              3.

            	
              ________%
                (not more than 100%) of the amount considered wages for such Plan
                Year for
                Social Security withholding purposes without regard to
                Medicare.

            

    

    

    
      	 	
              *

            	
              4.

            	
              $________,
                provided that such amount is not in excess of the amount determined
                under
                paragraph (E)(2) above. 

            

    

    

    
      	 	
              *

            	
              5.

            	
              One
                dollar over 80% of the amount considered wages for such Plan Year
                for
                Social Security withholding purposes without regard to
                Medicare.

            

    

    

    
      	 	
              *

            	
              6.

            	
              20%
                of the maximum earnings considered wages for such Plan Year for Social
                Security withholding purposes without regard to
                Medicare.

            

    

    

    
      	 	
              F.

            	
              “Limitation
                Year”

            

    

    

    Unless
      elected otherwise below, the Limitation Year shall be the Plan
      Year.

    

    The
      12-consecutive month period commencing on 01/01
      and
      ending on 12/31.

    

    If
      applicable, there will be a short Limitation Year commencing on ___________________________
      and
      ending on ___________________________.
      Thereafter, the Limitation Year shall end on the date specified
      above.

    
      

      
        	 	
                G.

              	“Net
                Profit”

      

       

    

    
      	 	
              
                x

              

            	
              1.

            	
              Not
                applicable. Employer contributions to the Plan are not conditioned
                on
                profits.

            

    

    

    
      	 	
              *

            	
              2.

            	
              Net
                Profits are defined as follows:

            

    

    

    
      	 	
              *

            	
              a.

            	
              As
                defined in paragraph 1.61 of Basic Plan Document
                #01.

            

    

    

    
      	 	
              *

            	
              b.

            	
              Net
                Profits will be defined in a uniform and nondiscriminatory manner
                which
                will not result in a deprivation of an eligible Participant of any
                Employer Contribution. 

            

    

    

    
      	 	
              c.

            	
              Net
                Profits are required for the following
                contributions:

            

    

    

    
      	 	
              *

            	
              i.

            	
              Employer
                Non-Safe Harbor Match Formula 1.

            

    

    

    
      	 	
              *

            	
              ii.

            	
              Employer
                Non-Safe Harbor Match Formula 2.

            

    

    

    
      	 	
              *

            	
              iii.

            	
              Employer
                QNEC and QMAC.

            

    

    

    
      	 	
              *

            	
              iv.

            	
              Employer
                discretionary.

            

    

    

    Elective
      Deferrals can always be contributed regardless of profits. Top-Heavy minimums
      are required regardless of profits. 

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
      	 	
              H.

            	
              “Plan
                Year”

            

    

    

    The
      12-consecutive month period commencing on 10/01
      and
      ending on 09/30.

    

    If
      applicable, there will be a short Plan Year commencing on 06/30/05
      and
      ending on 09/30/05.
      Thereafter, the Plan Year shall end on the date specified
      above.

    

    
      	 	
              I.

            	
              “QDRO
                Payment Date”

            

    

    

    
      	 	
              
                x

              

            	
              1.

            	
              The
                date the QDRO is determined to be qualified.

            

    

    

    
      	 	
              *

            	
              2.

            	
              The
                statutory age 50 requirement applies for purposes of making distribution
                to an alternate payee under the provisions of a
                QDRO.

            

    

    

    
      	 	
              J.

            	
              “Qualified
                Joint and Survivor
                Annuity”

            

    

    

    
      	 	
              
                x

              

            	
              1.

            	
              Not
                applicable. The Plan is not subject to Qualified Joint and Survivor
                Annuity rules. The safe harbor provisions of paragraph 8.7 of the
                Basic
                Plan Document #01 apply. The normal form of payment is a lump sum.
                No
                annuities are offered under the Plan.

            

    

    

    
      	 	
              *

            	
              2.

            	
              The
                normal form of payment is a lump sum. The Plan does provide for annuities
                as an optional form of payment at Section XVIII(C) of the Adoption
                Agreement. Joint and Survivor rules are avoided unless the Participant
                elects to receive his or her distribution in the form of an
                annuity.

            

    

    

    
      	 	
              *

            	
              3.

            	
              The
                Joint and Survivor Annuity rules are applicable and the survivor
                annuity
                will be __________%
                (50%, 66-2/3%, 75% or 100%) of the annuity payable during the lives
                of the
                Participant and his or her Spouse. If no selection is specified,
                50% shall
                be deemed elected. 

            

    

    

    
      	 	
              K.

            	
              “Qualified
                Preretirement Survivor
                Annuity”

            

    

    

    Do
      not complete this section if paragraph (J)(1) was elected.

    

    
      	 	
              *

            	
              1.

            	
              The
                Qualified Preretirement Survivor Annuity shall be 100% of the
                Participant’s Vested Account Balance in the Plan as of the date of the
                Participant’s death.

            

    

    

    
      	 	
              *

            	
              2.

            	
              The
                Qualified Preretirement Survivor Annuity shall be 50% of the Participant’s
                Vested Account Balance in the Plan as of the date of the Participant’s
                death.

            

    

    

    
      	 	
              L.

            	
              “Valuation
                of Plan Assets”

            

    

    

    The
      assets of the Plan shall be valued on the last day of the Plan Year and on
      the
      following Valuation Date(s):

    

    
      	 	
              *

            	
              1.

            	
              There
                are no other mandatory Valuation
                Dates.

            

    

    

    
      	 	
              
                x

              

            	
              2.

            	
              The
                Valuation Dates are applicable for the contribution type specified
                below:

            

    

     

    
      
        	
                 

                Contribution
                  Type

              	
                 

                Valuation
                  Date

              
	
                All
                  Contributions

              	
                a

              
	
                Elective
                  Deferrals

              	 
	
                Voluntary
                  After-tax

              	 
	
                Required
                  After-tax 

              	 
	
                Safe
                  Harbor

              	 
	
                Non-Safe
                  Harbor Match Formula 1

              	 
	
                QNEC/QMAC

              	 
	
                Discretionary

              	 
	
                Non-Safe
                  Harbor Match Formula 2

              	 

      

      

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

      

       

    

    
      	 	
              a.

            	
              Daily
                valued.

            

    

    

    
      	 	
              b.

            	
              The
                last day of each month.

            

    

    

    
      	 	
              c.

            	
              The
                last day of each quarter in the Plan
                Year.

            

    

    

    
      	 	
              d.

            	
              The
                last day of each semi-annual period in the Plan
                Year.

            

    

    

    
      	 	
              e.

            	
              At
                the discretion of the Plan
                Administrator.

            

    

    
      

      
        	 	
                f.

              	Other:
                ___________________________________.

      

       

    

    
      	
              IV.

            	
              ELIGIBILITY
                REQUIREMENTS

            

    

    

    Complete
      the following using the eligibility requirements as specified for each
      contribution type. To become a Participant in the Plan, the Employee must
      satisfy the following eligibility requirements.

    

      
        	
                Contribution
                  Type

              	
                Minimum

                Age

              	
                Service

                Requirement

              	
                Class

                Exclusions

              	
                Eligibility

                Computation

                Period

              	
                Entry
                  Date

              
	
                 

                All
                  Contributions

              	 	 	 	 	 
	
                 

                Elective
                  Deferrals

              	
                 

                1

              	
                 

                1

              	
                 

                1,
                  6

              	
                 

                1

              	
                 

                1

              
	
                 

                Voluntary
                  After-tax

              	 	 	 	 	 
	
                 

                Required
                  After-tax

              	 	 	 	 	 
	
                 

                Safe
                  Harbor Contribution*

              	 	 	 	 	 
	
                 

                Non-Safe
                  Harbor Match -

                Formula
                  1

              	 	
                 

                4

              	
                 

                1,
                  6

              	
                 

                3

              	
                 

                2

              
	
                 

                QNECs

              	
                 

                1

              	
                 

                1

              	
                 

                6,
                  1

              	
                 

                1

              	
                 

                1

              
	
                 

                QMACs

              	 	 	 	 	 
	
                 

                Employer
                  Discretionary

              	
                 

                1

              	
                 

                1

              	
                 

                1,
                  6

              	
                 

                1

              	
                 

                1

              
	
                 

                Non-Safe
                  Harbor Match -

                Formula
                  2

              	 	 	 	 	 

      

       

    

    *If
      any age or Service requirement selected is more restrictive than that which
      is
      imposed on any Employee contribution, that group of Employees will be subject
      to
      the ADP and/or ACP testing as prescribed under IRS Notices 98-52, 2000-3 and
      any
      applicable IRS Regulations.

    

    
      	 	
              A.

            	
              Age: 

            

    

    

    
      	 	
              1.

            	
              No
                age requirement. 

            

    

    

    
      	 	
              2.

            	
              Insert
                the applicable age in the chart above. The age may not be more than
                21.

            

    

    

    
      	 	
              B.

            	
              Service:
                

            

    

    

    
      	 	
              1.

            	
              No
                Service requirement.

            

    

    

    
      	 	
              2.

            	
              _______
                months of Service (insert number of months applicable to the specified
                contribution type).

            

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      	 	
              3.

            	
              _______
                months of Service (insert number of months applicable to the specified
                contribution type).

            

    

    

    
      	 	
              4.

            	
              1
                Year of Service or Period of
                Service.

            

    

    

    
      	 	
              5.

            	
              2
                Years of Service or Periods of
                Service.

            

    

    

    
      	 	
              6.

            	
              1
                Expected Year of Service. May enter after six (6) months of actual
                Service.

            

    

    

    
      	 	
              7.

            	
              1
                Expected Year of Service. May enter after __________
                months of actual Service [must be less than one (1)
                Year].

            

    

    

    
      	 	
              8.

            	
              1
                Expected Year of Service. May enter after __________
                months of actual Service [must be less than one (1)
                Year].

            

    

    

    
      	 	
              9.

            	
              Completion
                of ___________
                Hours of Service within the ___________
                month(s) time period following an Employee's commencement of
                employment.

            

    

    

    No
      more than 831⁄3 Hours of Service may be required during each such month; provided,
      however, that the Employee shall become a Participant no later than upon the
      completion of 1,000 Hours of Service within an Eligibility Computation Period
      and the attainment of the minimum age requirement.

    

    The
      maximum Service requirement for Elective Deferrals is 1 year. For all other
      contributions, the maximum is 2 years. If a Service requirement greater than
      1
      year is selected, Participants must be 100% vested in that
      contribution.

    

    A
      Year of
      Service for eligibility purposes is defined as follows (choose
      one):

    

    Do
      not enter this definition in the table above.

    

    
      	 	
              *

            	
              10.

            	
              Not
                applicable. There is no Service
                requirement.

            

    

    

    
      	 	
              *

            	
              11.

            	
              Not
                applicable. The Plan is using Expected Year of Service or has a Service
                requirement of less than one (1)
                year.

            

    

    

    
      	 	
              x

            	
              12.

            	
              Hours
                of Service method. A Year of Service will be credited upon completion
                of
                1000
                Hours of Service. A Year of Service for eligibility purposes may
                not be
                less than 1 Hour of Service nor greater than 1,000 hours by operation
                of
                law. If left blank, the Plan will use 1,000
                hours.

            

    

    

    
      	 	
              *

            	
              13.

            	
              Elapsed
                Time method.

            

    

    

    
      	 	
              C.

            	
              Employee
                Class Exclusions:

            

    

    

    
      	 	
              1.

            	
              Employees
                included in a unit of Employees covered by a collective bargaining
                agreement between the Employer and Employee Representatives, if benefits
                were the subject of good faith bargaining and if two percent or less
                of
                the Employees are covered pursuant to the agreement are professionals
                as
                defined in §1.410(b)-9 of the Regulations. For this purpose, the term
                “employee representative” does not include any organization more than half
                of whose members are owners, officers, or executives of the
                Employer.

            

    

    

    
      	 	
              2.

            	
              Employees
                who are non-resident aliens [within the meaning of Code Section
                7701(b)(1)(B)] who receive no Earned Income [within the meaning of
                Code
                Section 911(d)(2)] from the Employer which constitutes income from
                sources
                within the United States [within the meaning of Code Section
                861(a)(3)].

            

    

    

    
      	 	
              3.

            	
              Employees
                compensated on an hourly basis.

            

    

    

    
      	 	
              4.

            	
              Employees
                compensated on a salaried
                basis.

            

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
      	 	
              5.

            	
              Employees
                compensated on a commission basis. 

            

    

    

    
      	 	
              6.

            	
              Leased
                Employees.

            

    

    

    
      	 	
              7.

            	
              Highly
                Compensated Employees.

            

    

    
      

      
        	 	
                8.

              	
                The
                  Plan shall exclude from participation any nondiscriminatory classification
                  of Employees determined as follows:

              

      

      
        	 
	 

      

       

    

    
      	 	
              D.

            	
              Eligibility
                Computation Period:
                The initial Eligibility Computation Period shall commence on the
                date on
                which an Employee first performs an Hour of Service and the first
                anniversary thereof. Each subsequent Computation Period shall commence
                on:

            

    

    

    
      	 	
              1.

            	
              Not
                applicable. The Plan has a Service requirement of less than one (1)
                year
                or uses the Elapsed Time method to determine
                eligibility.

            

    

    

    
      	 	
              2.

            	
              The
                anniversary of the Employee’s employment commencement date and each
                subsequent 12-consecutive month period
                thereafter.

            

    

    

    
      	 	
              3.

            	
              The
                first day of the Plan Year which commences prior to the first anniversary
                date of the Employee’s employment commencement date and each subsequent
                Plan Year thereafter.

            

    

    

    
      	 	
              E.

            	
              Entry
                Date Options:

            

    

    
      

      
        	 	
                1.

              	
                The first day of the month
                  coinciding with
                  or next following the date on which an Employee meets the eligibility
                  requirements. 

              

      

      
        

        
          	 	
                  2.

                	
                  The first day of the payroll
                    period
                    coinciding with or next following the date on which an Employee
                    meets the
                    eligibility requirements.

                

        

        
          

          
            	 	
                    3.

                  	
                    The earlier of the first
                      day of the Plan
                      Year, or the first day of the fourth, seventh or tenth month
                      of the Plan
                      Year coinciding with or next following the date on which an
                      Employee meets
                      the eligibility
                      requirements.

                  

          

        

      

    

     

    
      	 	
              4.

            	
              The
                earlier of the first day of the Plan Year or the first day of the
                seventh
                month of the Plan Year coinciding with or next following the date
                on which
                an Employee meets the eligibility
                requirements.

            

    

    
      

      
        	 	
                5.

              	
                The first day of the Plan Year
                  following
                  the date on which the Employee meets the eligibility requirements.
                  If this
                  election is made, the Service waiting period cannot be greater
                  than
                  one-half year and the minimum age requirement may not be greater
                  than age
                  201⁄2.

              

      

      
        

        
          	 	
                  6.

                	
                  The first day of the Plan
                    Year nearest the
                    date on which an Employee meets the eligibility requirements.
This
                    option can only be selected for Employer related
                    contributions.

                

        

        
          

          
            	 	
                    7.

                  	
                    The first day of the Plan
                      Year during
                      which the Employee meets the eligibility requirements. This
                      option can only be selected for Employer related
                      contributions.

                  

          

        

      

    

     

    
      	 	
              8.

            	
              The
                Employee’s date of hire.

            

    

    

    
      	 	
              F.

            	
              Employees
                on Effective Date:

            

    

    

    
      	 	
              x

            	
              1.

            	
              All
                Employees will be required to satisfy both the age and Service
                requirements specified above.

            

    

    

    
      	 	
              *

            	
              2.

            	
              Employees
                employed on the Plan’s Effective Date do not have to satisfy the age
                requirement specified above. 

            

    

    

    
      	 	
              *

            	
              3.

            	
              Employees
                employed on the Plan's Effective Date do not have to satisfy the
                Service
                requirement specified above. 

            

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    
      	 	
              G.

            	
              Special
                Waiver of Eligibility
                Requirements:

            

    

     

    
      	 	 	
              The
                age and/or Service eligibility requirements specified above shall
                be
                waived for those eligible Employees who are employed on the following
                date
                for the contribution type(s) specified. This waiver applies to either
                the
                age or service requirement or both as elected
                below:

            

    

    
       

      
        
          	
                   

                  Waiver
                    Date

                	
                  Waiver
                    of Age

                  Requirement

                	
                  Waiver
                    of Service 

                  Requirement

                	
                   

                  Contribution
                    Type

                
	
                  09/01/99

                	
                  x

                	
                  x

                	
                  All
                    Contributions

                
	 	 	 	
                  Elective
                    Deferrals

                
	 	 	 	
                  Employer
                    Discretionary

                
	 	 	 	
                  Non-Safe
                    Harbor Match Formula 1

                
	 	 	 	
                  Safe
                    Harbor Contribution

                
	 	 	 	
                  QNEC

                
	 	 	 	
                  QMAC

                
	 	 	 	
                  Non-Safe
                    Harbor Match Formula 2

                

        

         

      

      
        	
                V.

              	RETIREMENT
                AGES

      

       

    

    
      	 	
              A.

            	Normal
              Retirement:

    

    
       

      
        	 	
                x

              	
                1.

              	Normal Retirement Age shall be age 65
                (not to exceed 65).

      

       

    

    
      	 	
              *

            	
              2.

            	
              Normal
                Retirement Age shall be the later of attaining age ________
                (not to exceed age 65) or the ________
                (not to exceed the fifth) anniversary of the first day of the first
                Plan
                Year in which the Participant commenced participation in the
                Plan.

            

    

    

    
      	 	 	
              3.

            	
              The
                Normal Retirement Date shall be:

            

    

    
       

      
        	 	 	
                
                  *

                

              	
                a.

              	
                as
                  of the date the Participant attains Normal Retirement
                  Age.

              

      

       

    

    
      	 	 	
              
                x

              

            	
              b.

            	
              the
                first day of the month next following the Participant’s attainment of
                Normal Retirement Age.

            

    

    
      

      
        	 	
                B.

              	
                Early
                  Retirement:

              

      

    

    
      

      
        	 	
                
                  x

                

              	
                1.

              	 Not
                applicable.

      

       

    

    
      	 	
              *

            	
              2.

            	
              The
                Plan shall have an Early Retirement Age of ________
                (not less than age 55) and completion of ________
                Years of Service.

            

    

    
       

      
        	 	
                 

              	
                3.

              	The Early Retirement Date shall
                be:

      

      
         

        
          	 	 	
                  *

                	
                  a.

                	as of the date the Participant attains Early
                  Retirement
                  Age.

        

    

     

    
      	 	 	
              *

            	
              b.

            	
              the
                first day of the month next following the Participant’s attainment of
                Early Retirement Age.

            

    

    
       

      
        	
                VI.

              	EMPLOYEE CONTRIBUTIONS

      

      
        
          

          
            	 	
                    A.

                  	
                    Elective
                      Deferrals:

                  

          

        

        
           

        

      

    

    
      
        	 	
                x

              	
                1.

              	
                Up
                  to 100%.

              

      

       

    

    
      	 	
              *

            	
              2.

            	
              Participants
                shall be permitted to make Elective Deferrals in any amount from
                a minimum
                of _______%
                to a maximum of _______%
                of their Compensation not to exceed $__________.

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	 	
              *

            	
              3.

            	
              Participants
                shall be permitted to make Elective Deferrals in a flat dollar amount
                from
                a minimum of $______________
                to
                a maximum of $_____________,
                not to exceed ______%
                of their Compensation.

            

    

    

    
      	 	
              *

            	
              4.

            	
              Up
                to the maximum percentage of Compensation and dollar amount permissible
                under Section 402(g) of the Internal Revenue Code not to exceed the
                limits
                of Code Sections 401(k), 404 and
                415.

            

    

    
      
        

        
          	 	
                  B.

                	
                  Bonus
                    Option:

                

        

      

      
        

        
          	 	
                  x

                	
                  1.

                	Not applicable.

        

        
          
            
               

            

          

        

      

    

    
      	 	
              *

            	
              2.

            	
              Bonuses
                paid by the Employer are
                included in the definition of Compensation and the Employer permits
                a
                Participant to amend their deferral election to defer to the Plan,
                an
                amount not to exceed __________%
                or $_________
                of
                any bonus received by the Participant for any Plan
                Year.

            

    

    
      
        

        
          	 	
                  C.

                	Automatic Enrollment: The
                  Employer elects the automatic enrollment provisions as
                  follows:

        

      

       

    

    
      	 	
              *

            	
              1.

            	
              New
                Employees.
                Employees who have not met the eligibility requirements shall have
                Elective Deferrals withheld in the amount of ________%
                of Compensation or $________
                of
                Compensation upon entering the Plan.

            

    

    

    
      	 	
              *

            	
              2.

            	
              Current
                Participants.
                Current Participants who are deferring at a percentage less than
                the
                amount selected herein shall have Elective Deferrals withheld in
                the
                amount of ________%
                of Compensation or $________
                of
                Compensation. 

            

    

    

    
      	 	
              *

            	
              3.

            	
              Current
                Employees.
                Employees who are eligible to participate but not deferring shall
                have
                Elective Deferrals withheld in the amount of ______
                %
                of Compensation or $_________
                of
                Compensation.

            

    

    

    Employees
      and Participants shall have the right to amend the stated automatic Elective
      Deferral percentage or receive cash in lieu of deferral into the
      Plan.

    
      
        

        
          	 	
                  D.

                	Voluntary After-tax
                  Contributions:

        

      

      
         

      

    

    
      
        	 	
                x

              	
                1.

              	
                The
                  Plan does not permit Voluntary After-tax
                  Contributions.

              

      

      
        

        
          	 	
                  *

                	
                  2.

                	
                  Participants
                    may make Voluntary After-tax
                    Contributions in any amount from a minimum of ________%
                    to a maximum of ______%
                    of their Compensation or
                    a
                    flat dollar amount from a minimum of $____________
                    to
                    a maximum of $______________.

                

        

      

    

    

    If
      recharacterization of Elective Deferrals has been elected at Section XII(D)
      in
      this Adoption Agreement, Voluntary After-tax Contributions must be permitted
      in
      the Plan by completing the section above.

    

    
      	 	
              E.

            	
              Required
                After-tax Contributions (Thrift Savings Plans
                only):

            

    

     

    
      
        	 	
                x

              	
                1.

              	
                The
                  Plan does not permit Required After-tax
                  Contributions.

              

      

      
        

        
          	 	
                  *

                	
                  2.

                	Participants shall be required to make Required
                  After-tax
                  Contributions as follows:

        

      

    

    
      

      
        	 	 	
                *

              	
                a.

              	________%
                of Compensation.

      

       

    

    
      	 	 	
              *

            	
              b.

            	
              A
                percentage determined by the
                Employee.

            

    

    
      
        

        
          	 	
                  F.

                	Rollover Contributions: 

        

      

      
         

      

    

    
      	 	
              *

            	
              1.

            	
              The
                Plan does not accept Rollover
                Contributions.

            

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	 	
              *

            	
              2.

            	
              Participants
                may make Rollover Contributions after meeting the eligibility requirements
                for participation in the Plan.

            

    

    
      
        
           

        

        
          	 	
                  x

                	
                  3.

                	Employees may make Rollover Contributions prior
                  to
                  meeting the eligibility requirements for participation in the Plan.
                  

        

        
          
             

          

        

      

      
        
          
            	 	
                    G.

                  	
                    Elective
                      Plan to Plan Transfer
                      Contributions:

                  

          

        

        
           

        

      

    

    
      	 	
              *

            	
              1.

            	
              The
                Plan does not accept Transfer
                Contributions.

            

    

     

    
      	 	
              
                *

              

            	
              2.

            	
              Participants
                may make Transfer Contributions after meeting the eligibility requirements
                for participation in the Plan.

            

    

    

    
      	 	
              
                x

              

            	
              3.

            	
              Employees
                may make Transfer Contributions prior to meeting the eligibility
                requirements for participation in the
                Plan.

            

    

    
      
        
           

        

      

      
        
          
            	 	
                    H.

                  	Changes to Elective
                    Deferrals:

          

        

        
           

        

      

    

    Participants
      shall be permitted to terminate their Elective Deferrals at any time upon proper
      and timely notice to the Employer. Modifications to Participants’ Elective
      Deferrals will become effective on a prospective basis as provided for
      below:

    

    
      	 	
              
                *

              

            	
              1.

            	
              On
                a daily basis. 

            

    

    

    
      	 	
              
                *

              

            	
              2.

            	
              Upon
                _____
                (not to exceed 90) days notice to the Plan
                Administrator.

            

    

    

    
      	 	
              
                x

              

            	
              3.

            	
              On
                the first day of each quarter.

            

    

    

    
      	 	
              
                *

              

            	
              4.

            	
              On
                the first day of the next month.

            

    

    
      

      
        	 	
                *

              	
                5.

              	The beginning of the next payroll
                period.

      

      
        
          
             

          

        

        
          
            
              	 	
                      I.

                    	Reinstatement of Elective Deferrals:

            

          

          
             

          

        

      

    

    Participants
      who terminate their Elective Deferrals shall be permitted to reinstate their
      Elective Deferrals on a prospective basis as provided for below:

     

    
      
        	 	
                
                  *

                

              	
                1.

              	On a daily basis.

      

       

    

    
      	 	
              
                *

              

            	
              2.

            	
              Upon
                _____
                (not to exceed 90) days notice to the Plan
                Administrator.

            

    

    

    
      	 	
              
                x

              

            	
              3.

            	
              On
                the first day of each quarter.

            

    

    

    
      	 	
              
                *

              

            	
              4.

            	
              On
                the first day of the next month.

            

    

    

    
      	 	
              
                *

              

            	
              5.

            	
              The
                beginning of the next payroll
                period.

            

    

     

    
      
        	
                VII.

              	SAFE HARBOR PLAN
                PROVISIONS

      

      
        
           

        

      

    

    
      	
              
                *

              

            	
              The
                Employer elects to comply with the Safe Harbor Cash or Deferred
                Arrangement provisions of Article XI of Basic Plan Document #01 and
                elects
                one of the following contribution
                formulas:

            

    

    

    
      	 	
              A.

            	
              Safe
                Harbor Tests:

            

    

    

    
      	 	
              
                *

              

            	
              1.

            	
              Only
                the ADP and not the ACP Test Safe Harbor provisions are
                applicable. 

            

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	 	
              
                *

              

            	
              2.

            	
              Both
                the ADP and ACP Test Safe Harbor provisions are applicable. If both
                ADP
                and ACP provisions are applicable:

            

    

    

    
      	 	
              
                *

              

            	
              a.

            	
              No
                additional Matching Contributions will be made in any Plan Year in
                which
                the Safe Harbor provisions are
                used.

            

    

    

    
      	 	
              
                *

              

            	
              b.

            	
              The
                Employer may make Matching Contributions in addition to any Safe
                Harbor
                Matching Contributions elected below. (Complete provisions in Article
                VIII
                regarding Matching Contributions that will be made in addition to
                those
                Safe Harbor Matching Contributions made
                below.)

            

    

    

    
      	
              
                *

              

            	
              B.

            	
              Designation
                of Alternate Plan to Receive Safe Harbor
                Contribution:

            

    

    

    If
      the
      Safe Harbor Contribution as elected below is not being made to this Plan, the
      name of the other plan that will receive the Safe Harbor Contribution
      is:  

    
      	 

    

     

    
      	
              
                *

              

            	
              C.

            	
              Basic
                Matching Contribution Formula:

            

    

    

    Matching
      Contributions will be made on behalf of Participants in an amount equal to
      100%
      of the amount of the Eligible Participant’s Elective Deferrals that do not
      exceed 3% of the Participant’s Compensation and 50% of the amount of the
      Participant’s Elective Deferrals that exceed 3% of the Participant’s
      Compensation but that do not exceed 5% of the Participant’s Compensation.

    

    
      	
              
                *

              

            	
              D.

            	
              Enhanced
                Matching Contribution Formula: 

            

    

    

    
      	 	 	
              Matching
                Contributions will be made in an amount equal to the sum
                of:

            

    

    

    
      	 	
              
                *

              

            	
              1.

            	
              _________%
                (may not be less than 100%) of the Participant’s Elective Deferrals that
                do not exceed _________%
                (if more than 6% or if left blank, the ACP Test will apply) of the
                Participant’s Compensation,
                plus

            

    

    

    
      	 	
              
                *

              

            	
              2.

            	
              _________%
                of the Participant’s Elective Deferrals that exceed _________%
                of the Participant’s Compensation but do not exceed _________%
                (if more than 6% or if left blank the ACP Test will apply) of the
                Participant’s Compensation.

            

    

    

    This
      section must be completed so that at any rate of Elective Deferrals, the
      Matching Contribution is at least equal to the Matching Contribution received
      if
      the Employer used the Basic Matching Contribution Formula. The rate of match
      cannot increase as Elective Deferrals increase. If an additional discretionary
      match is made, the dollar amount may not exceed 4% of the Participant’s
      Compensation.

    
      

      
        	
                
                  *

                

              	
                E.

              	Guaranteed Non-Elective Contribution
                Formula:

      

       

    

    
      	 	 	
              The
                Employer shall make a Non-Elective Contribution equal to _________%
                (not less than 3%) of the Compensation of each Eligible
                Participant.

            

    

    
      

      
        	
                
                  *

                

              	
                F.

              	Flexible Non-Elective Contribution
                Formula:

      

      
         

      

    

    
      	 	 	
              This
                provision provides the Employer with the ability to amend the Plan
                to
                comply with the Safe Harbor provisions during the Plan Year. To provide
                such option, the Employer must amend the Plan and indicate on Schedule
                D
                that the Safe Harbor Non-Elective Contribution (not less than 3%)
                will be
                made for the specified Plan Year. Such election must comply with
                all the
                applicable notice requirements.

            

    

    

    
      	 	 	
              Additional
                Non-Safe Harbor contributions may be made to the Plan pursuant to
                Article
                XI of Basic Plan Document
                #01.

            

    

    
       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      
        	
                
                  *

                

              	
                G.

              	
                Limitations
                  on Safe Harbor Matching
                  Contributions:

              

      

       

    

    If
      a Safe
      Harbor Matching Contribution is made to the Plan:

    
      

      
        	 	
                
                  *

                

              	
                1.

              	
                The
                  Employer will annualize the Safe Harbor Matching
                  Contributions.

              

      

       

    

    
      	 	
              
                *

              

            	
              2.

            	
              The
                Employer will not annualize the Safe Harbor Matching Contributions
                and
                elects to match actual Elective Deferrals
                made:

            

    

    

    
      	 	
              
                *

              

            	
              a.

            	
              on
                a payroll basis.

            

    

    

    
      	 	
              
                *

              

            	
              b.

            	
              on
                a monthly basis.

            

    

    

    
      	 	
              
                *

              

            	
              c.

            	
              on
                a Plan Year quarterly basis.

            

    

    

    If
      no
      election is made, the payroll period method will be used. If one of the Matching
      Contribution calculation periods at Section VII(G)(2) above is selected Matching
      Contributions must be deposited to the Plan not later than the last day of
      the
      calendar quarter next following the quarter following to which they
      relate.

    

    If
      the Safe Harbor Plan provisions are elected, the antidiscrimination tests at
      Article XI of the Basic Plan Document #01 are not applicable. Safe Harbor
      Contributions made are subject to the withdrawal restrictions of Code Section
      401(k)(2)(B) and Treasury Regulations Section 1.401(k)-1(d); such contributions
      (and earnings thereon) must not be distributable earlier than separation from
      Service, death, Disability, an event described in Code Section 401(k)(10),
      or in
      the case of a profit-sharing or stock bonus plan, the attainment of age 591⁄2.
      Safe Harbor Contributions are NOT available for Hardship
      withdrawals.

    

    The
      ACP Test Safe Harbor is automatically satisfied if the only Matching
      Contribution to the Plan is either a Basic Matching Contribution or an Enhanced
      Matching Contribution that does not provide a match on Elective Deferrals in
      excess of 6% of Compensation. For Plans that allow Voluntary or Required
      After-tax Contributions, the ACP Test is applicable with regard to such
      contributions.

    

    Employees
      eligible to make Elective Deferrals to this Plan must be eligible to receive
      the
      Safe Harbor Contribution in the Plan listed above, to the extent required by
      IRS
      Notices 98-2 and 2000-3.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    
       

      
        
          	
                  VIII.

                	EMPLOYER
                  CONTRIBUTIONS

        

        
          
             

          

        

      

    

    The
      Employer shall make contributions to the Plan in accordance with the formula
      or
      formulas selected below. The Employer’s contribution shall be subject to the
      limitations contained in Articles III and X. For this purpose, a contribution
      for a Plan Year shall be limited by Compensation earned in the Limitation Year
      which ends with or within such Plan Year. 

    

    Do
      not
      complete this Section of the Adoption Agreement if the Plan only offers a Safe
      Harbor Contribution. A Plan that offers both a Safe Harbor Matching Contribution
      as well as an additional Matching Contribution which is specified below, must
      complete both Sections VII and VIII of the Adoption Agreement.

    

    
      	 	
              A.

            	
              Matching
                Employer Contribution: 

            

    

    

    
      	 	 	
              Select
                the Matching Contribution Formula, Computation Period and special
                Limitations for each contribution type from the options listed below.
                Enter the letter of the option(s) selected on the lines provided.
                Leave
                the line blank if no election is required.

            

    

    

      
        	
                 

                 

                Type
                  of

                Contribution

              	
                Non-Safe
                  

                Harbor

                Matching

                Formula
                  1

              	
                 

                Matching

                Computation
                  Period

              	
                 

                 

                 

                Limitations

              	
                Non-Safe
                  

                Harbor

                Matching

                Formula
                  2

              	
                 

                Matching
                  

                Computation
                  

                Period

              	
                 

                 

                 

                Limitations

              
	
                Elective
                  Deferrals

              	
                a

              	
                h

              	 	 	 	 
	
                Voluntary
                  After-tax

              	 	 	 	 	 	 
	
                Required
                  

                After-tax

              	 	 	 	 	 	 
	
                403(b)
                  Deferrals

              	 	 	 	 	 	 

      

       

    

    
      	 	
              If
                any election is made with respect to “403(b) Deferrals” above, and if this
                Plan is used to fund any Employer Contributions, Employer Contributions
                will be based on the Elective Deferrals made to an existing 403(b)
                plan
                sponsored by the Employer.

            

    

     

    Name
      of
      corresponding 403(b) plan: ________________________________

     

    
      
        
          	 	
                  1.

                	
                  Matching
                    Contribution
                    Formulas:

                

        

      

    

    

    Elective
      Deferral Matching
      Contribution Formulas:

    

    
      	 	
              a.

            	
              Percentage
                of Deferral Match:
                The Employer shall contribute to each eligible Participant's account
                an
                amount equal to 50%
                of the Participant's Elective Deferrals up to a maximum of 10%
                or $_________
                of
                Compensation.

            

    

    

    
      	 	
              b.

            	
              Uniform
                Dollar Match:
                The Employer shall contribute to each eligible Participant’s account
                $________
                if
                the Participant who contributes at least ________%
                or $__________
                of
                Compensation. The Employer’s contribution will be made up to a maximum of
                _____%
                of Compensation.

            

    

    

    
      	 	
              c.

            	
              Discretionary Match:
                The
                Employer's Matching Contribution shall be determined by the Employer
                with
                respect to each Plan Year. The Matching Contribution shall be contributed
                to each eligible Participant in accordance with the nondiscriminatory
                formula determined by the Employer. If this Plan is also utilizing
                a Safe
                Harbor Contribution, pursuant to Section VII of this Adoption Agreement,
                Discretionary Matching Contributions may not exceed 4% of
                Compensation.

            

    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    
      	 	
              d.

            	
              Tiered Match:
                The Employer shall contribute to each eligible Participant's account
                an
                amount equal to: 

            

    

    
      

      
        	 	 	
                ________%
                  of the first ________%
                  of the Participant's Compensation contributed, and

              

      

       

    

    
      	 	 	
              ________%
                of the next ________%
                of the Participant's Compensation contributed,
                and

            

    

    

    
      	 	 	
              ________%
                of the next ________%
                of the Participant's Compensation
                contributed.

            

    

    

    The
      Employer’s contribution will be made up to the [ ]
      greater
      of [ ]
      lesser
      of _________%
      of
      Compensation, or $__________.

    

    
      	 	 	 	
              The
                percentages specified above may not increase as the percentage of
                Participant's contribution
                increases.

            

    

    

    
      	 	
              e.

            	
              Percentage
                of Compensation Match: The
                Employer shall contribute to each eligible Participant’s account ________%
                of Compensation if the eligible Participant contributes at least
                ________%
                of Compensation. 

            

    

    

    The
      Employer’s contribution will be made up to the [ ]
      greater
      of [ ]
      lesser
      of _________%
      of
      Compensation, or $__________.

    
      

      
        	 	
                f.

              	Proportionate Compensation Match:
                The Employer shall contribute to each eligible Participant who defers
                at
                least ________%
                of Compensation, an amount determined by multiplying such Employer
                Matching Contribution by a fraction, the numerator of which is the
                Participant's Compensation and the denominator of which is the
                Compensation of all Participants eligible to receive such an allocation.
                

      

       

    

    The
      Employer’s contribution will be made up to the [ ]
      greater
      of [ ]
      lesser
      of _________%
      of
      Compensation, or $__________.

    

    
      	 	
              g.

            	
              Length
                of Service Match:
                The Employer shall make Matching Contributions equal to the formula
                determined under the following
                schedule:

            

    

    

      
        	 	
                Participant’s
                  Total 

              	
                Matching

              

      

      
        
          	 	
                  Years
                    of Service

                	
                  Contribution
                    Formula

                

        

        
          	 	________	_______________________

        

        
          	 	________	_______________________

        

        
          	 	________	_______________________

        

      

    

    

    
      	 	 	
              Each
                separate matching percentage contribution must satisfy Code Section
                401(a)(4) nondiscrimination requirements and the ACP
                test.

            

    

    

    Voluntary
      After-tax Matching Contribution Formulas:

    

    
      	 	 	 	
              h.

            	
              Percentage
                of Deferral Match:
                The Employer shall contribute to each eligible Participant's account
                an
                amount equal to ______%
                of the Participant's Voluntary After-tax Contributions up to a maximum
                of
                ______%
                or $__________
                of
                Compensation. 

            

    

    

    
      	 	
              i.

            	
              Uniform
                Dollar Match:
                The Employer shall contribute to each eligible Participant's account
                $________
                if
                the Participant at contributes least ________%
                or $________
                of
                Compensation. The Employer’s contribution will be made up to a maximum of
                _____%
                of Compensation.

            

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    
      	 	
              j.

            	
              Discretionary Match: The
                Employer’s Matching Contribution shall be determined by the Employer with
                respect to each Plan Year. The Matching Contribution shall be contributed
                to each eligible Participant in accordance with the nondiscriminatory
                formula determined by the Employer.

            

    

     

    Required
      After-tax Matching Contribution Formulas:

    

    
      	 	 	
              k.

            	
              Percentage
                of Deferral Match:
                The Employer shall contribute to each eligible Participant's account
                an
                amount equal to ________%
                of the Participant's Required After-tax Contributions up to a maximum
                of
                ________%
                or $__________
                of
                Compensation. 

            

    

    

    
      	 	 	
              l.

            	
              Uniform
                Dollar Match:
                The Employer shall contribute to each eligible Participant's account
                $________
                if
                the Participant contributes at least _______%
                or $__________
                of
                Compensation. The Employer’s contribution will be made up to a maximum of
                ______%
                of Compensation.

            

    

    

    
      	 	
              m.

            	
              Discretionary Match: The
                Employer's Matching Contribution shall be determined by the Employer
                with
                respect to each Plan Year. The Matching Contribution shall be contributed
                to each eligible Participant in accordance with the nondiscriminatory
                formula determined by the Employer.

            

    

    

    
      	 	 	
              If
                the Matching Contribution formula selected by the Employer is 100%
                vested
                and may not be distributed to the Participant before the earlier
                of the
                date the Participant separates from Service, retires, becomes disabled,
                attains 591⁄2, or dies, it may be treated as a Qualified Matching
                Contribution.

            

    

    

    403(b)
      Matching Contribution Formulas:

    

    
      	 	
              n.

            	
              Percentage
                of Deferral Match:
                The Employer shall contribute to each eligible Participant's account
                an
                amount equal to ________%
                of the Participant's 403(b) Deferrals up to a maximum of ________%
                or $__________
                of
                Compensation.

            

    

    

    
      	 	
              o.

            	
              Uniform
                Dollar Match:
                The Employer shall contribute to each eligible Participant's account
                $________
                if
                the Participant contributes at least ______%
                or $___________
                of
                Compensation. The Employer’s contribution will be made up to a maximum of
                ______%
                of Compensation. 

            

    

    

    
      	 	
              p.

            	
              Discretionary Match: The
                Employer's Matching Contribution shall be determined by the Employer
                with
                respect to each Plan Year. The Matching Contribution shall be contributed
                to each eligible Participant in accordance with the nondiscriminatory
                formula determined by the Employer.

            

    

    

    
      	 	
              2.

            	
              Matching
                Contribution Computation Period: The
                Compensation or
                any dollar limitation imposed in calculating the match will be based
                on
                the period selected below. Matching Contributions will be calculated
                on
                the following basis:

            

    

    

      
        	 	
                a.

              	
                Weekly

              	
                e.

              	
                Quarterly

              

      

      

      
        	 	
                b.

              	
                Bi-weekly

              	
                f.

              	
                Semi-annually

              

      

      

      
        	 	
                c.

              	
                Semi-monthly

              	
                g.

              	
                Annually

              

      

       

      
        	 	
                d.

              	
                Monthly

              	
                h.

              	
                Payroll
                  Based

              

      

    

    

    The
      calculation of Matching Contributions based on the Computation Period selected
      above has no applicability as to when the Employer remits Matching Contributions
      to the Trust.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    
      	 	
              3.

            	
              Limitations
                on Matching Formulas:

            

    

    

    
      	 	
              a.

            	
              Annualization
                of Matching Contributions. The
                Employer elects to annualize Matching Contributions made to the
                Plan.

            

    

     

    If
      this election is not made, Matching Contributions will not be
      annualized.

    

    
      	 	
              b.

            	
              Contributions
                to Participants who are not Highly Compensated
                Employees:
                Contribution of the Employer’s Matching Contribution will be made only to
                eligible Participants who are Non-Highly Compensated Employees.
                

            

    

    
      

      
        	 	
                c.

              	Deferrals withdrawn prior to the end
                of the
                Matching Computation Period: Matching
                Contributions (whether or not Qualified) will not be made on Employee
                contributions withdrawn prior to the end of the o
                Matching Computation Period, or o
                Plan Year.

      

      
         

      

    

    
      	 	 	
              If
                elected o,
                this requirement shall apply in the event of a withdrawal occurring
                as the
                result of a termination of employment for reasons of retirement,
                Disability or death.

            

    

    

    
      	 	 	
              4.

            	
              Qualified
                Matching Contributions (QMAC): 

            

    

    

    
      	 	 	
              
                *

              

            	
              a.

            	
              For
                purposes of the ADP or ACP Test, all Matching Contributions made
                to the
                Plan will be deemed “Qualified” for purposes of calculating the Actual
                Deferral Percentage and/or Actual Contribution Percentage. All
                Matching Contributions must be fully vested when made and are not
                available for in-service withdrawal.

            

    

    

    
      	 	 	
              
                *

              

            	
              b.

            	
              For
                purposes of the ADP or ACP Test, only Matching Contributions made
                to the
                Plan that are needed to meet the Actual Deferral Percentage or Actual
                Contribution Percentage Test will be deemed “Qualified” for purposes of
                calculating the Actual Deferral Percentage and/or Actual Contribution
                Percentage. All
                such Matching Contributions used must be fully vested when made and
                are
                not available for in-service withdrawal.

            

    

    

    
      	 	 	
              5.

            	
              Qualified
                Non-Elective Contributions (QNEC): 

            

    

    

    
      	 	 	
              
                *

              

            	
              a.

            	
              For
                purposes of the ADP or ACP Test, all Non-Elective Contributions made
                to
                the Plan will be deemed “Qualified” for purposes of calculating the Actual
                Deferral Percentage and/or Actual Contribution Percentage. All
                Non-Elective Contributions must be fully vested when made and are
                not
                available for in-service withdrawal.

            

    

    

    
      	 	 	
              x

            	
              b.

            	
              For
                purposes of the ADP or ACP Test, only the Non-Elective Contributions
                made
                to the Plan that are needed to meet the Actual Deferral Percentage
                or
                Actual Contribution Percentage Test will be deemed “Qualified” for
                purposes of calculating the Actual Deferral Percentage and/or Actual
                Contribution Percentage. All
                such Non-Elective Contributions used must be fully vested when made
                and
                are not available for in-service withdrawal.

            

    

    

    
      	 	
              B.

            	
              Qualified
                Matching (QMAC) and Qualified Non-Elective (QNEC) Employer Contribution
                Formulas:

            

    

    

    
      	 	
              
                *

              

            	
              1.

            	
              QMAC
                Contribution Formula:
                The Employer may contribute to each eligible Participant’s Qualified
                Matching account an amount equal to (select
                one or more of the following):

            

    

    
      
        
          

          
            	 	 	
                    
                      *

                    

                  	
                    a.

                  	$________
                    or
                    _______%
                    of the Participant’s Elective
                    Deferrals.

          

        

        
          
            

            
              	 	 	
                      
                        *

                      

                    	
                      b.

                    	$________
                      or
                      _______%
                      of the Participant's Voluntary After-tax
                      Contributions.

            

          

          
            
              

              
                	 	 	
                        
                          *

                        

                      	
                        c.

                      	$________
                        or
                        _______%
                        of the Participant’s Required After-tax
                        Contributions.

              

            

             

            
              
                
                

              

              
                18

                
                  

                

              

              
                
                

              

            

             

          

        

      

    

    
      	 	
              
                *

              

            	
              2.

            	
              Discretionary
                QMAC Contribution Formula:
                The Employer shall have the right to make a discretionary QMAC
                contribution. The Employer's Matching Contribution shall be determined
                by
                the Employer with respect to each Plan Year’s eligible Participants. This
                part of the Employer's contribution shall be fully vested when made.
                

            

    

    

    
      	 	
              
                *

              

            	
              3.

            	
              Discretionary
                Percentage QNEC Contribution Formula:
                The Employer shall have the right to make a discretionary QNEC
                contribution which shall be allocated to each eligible Participant’s
                account in proportion to his or her Compensation as a percentage
                of the
                Compensation of all eligible Participants. This part of the Employer's
                contribution shall be fully vested when made. This contribution will
                be
                made to:

            

    

    

    
      	 	 	
              
                *

              

            	
              a.

            	
              All
                eligible Participants.

            

    

    

    
      	 	 	
              
                *

              

            	
              b.

            	
              Only
                eligible Participants who are Non-Highly Compensated
                Employees.

            

    

    

    
      	 	
              
                *

              

            	
              4.

            	
              Discretionary
                Uniform Dollar QNEC Contribution Formula:
                The Employer shall have the right to make a discretionary QNEC
                contribution which shall be allocated to each eligible Participant’s
                account in a uniform dollar amount to be determined by the Employer
                and
                allocated in a nondiscriminatory manner. This part of the Employer’s
                contribution shall be fully vested when made and not available for
                in-service withdrawal. This contribution will be made
                to:

            

    

    
      

      
        	 	 	
                
                  *

                

              	
                a.

              	All eligible
                Participants.

      

       

    

    
      	 	 	
              
                *

              

            	
              b.

            	
              Only
                eligible Participants who are Non-Highly Compensated
                Employees.

            

    

    

    
      	 	
              x

            	
              5.

            	
              Corrective
                QNEC Contribution Formula: The
                Employer shall have the right to make a QNEC contribution in the
                amount
                necessary to pass the ADP/ACP Test or the maximum permitted under
                Code
                Section 415. This contribution will be allocated to some or all Non-Highly
                Compensated Participants designated by the Plan Administrator. The
                allocation will be the lesser of the amount required to pass the
                ADP/ACP
                Test, or the maximum permitted under Code Section 415 and is not
                available
                for in-service withdrawal. This part of the Employer's contribution
                shall
                be fully vested when made. 

            

    

    
      

      
        	
                
                  x

              	
                C.

              	
                Discretionary
                  Employer Contribution - Non-Integrated Formula: The
                  Employer shall have the right to make a discretionary contribution.
                  The
                  Employer's contribution for the Plan Year shall be made to the
                  accounts of
                  eligible Participants as follows:

              

      

      
         

        
          
            	 	
                    
                      *

                    

                  	
                    1.

                  	Such contribution shall be allocated as a
                    percentage of
                    the Employer’s Net Profits.

          

      

    

     

    
      	 	
              
                x

              

            	
              2.

            	
              Such
                contribution shall be allocated as a percentage of Compensation of
                eligible Participants for the Plan
                Year.

            

    

    

    
      	 	
              
                *

              

            	
              3.

            	
              Such
                contribution shall be allocated in an amount fixed by an appropriate
                action of the Employer as of the time prescribed by law.
                

            

    

    

    
      	 	
              
                *

              

            	
              4.

            	
              Such
                contribution shall be allocated equally in a uniform dollar amount
                to each
                eligible Participant.

            

    

    

    
      	 	
              
                *

              

            	
              5.

            	
              Such
                contribution shall be allocated in the same dollar amount to each
                eligible
                Participant per Hour of Service the Participant is entitled to
                Compensation.

            

    

    

    
      	
              
                *

              

            	
              D.

            	
              Discretionary
                Employer Contribution - Excess Integrated Allocation Formula:
                The
                Employer shall have the right to make a discretionary contribution.
                The
                Employer's contribution for the Plan Year shall be allocated to the
                accounts of eligible Participants as
                follows:

            

    

    

    
      	 	 	
              Only
                one plan maintained by the Employer may be integrated with Social
                Security. Any Plan utilizing a Safe Harbor formula provided in Section
                VII
                of this Adoption Agreement may not apply the Safe Harbor Contribution
                to
                the integrated allocation formula. If the Plan is not Top-Heavy or
                if the
                Top-Heavy minimum contribution or benefit is provided under another
                Plan
                covering the same Employees, paragraphs (1) and (2) below may be
                disregarded and 5.7%, 5.4% or 4.3% may be substituted for 2.7%, 2.4%
                or
                1.3% where it appears in paragraph (3)
                below.

            

    

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

     

    
      	 	
              1.

            	
              Step
                One: To the extent contributions are sufficient, all Participants
                will
                receive an allocation equal to 3% of their Compensation.
                

            

    

    
       

      
        	 	
                2.

              	
                Step
                  Two: Any remaining Employer contributions will be allocated up
                  to a
                  maximum of 3% of excess Compensation of all Participants to Participants
                  who have Compensation in excess of the Integration Level (excess
                  Compensation). Each such Participant will receive an allocation
                  in the
                  ratio that his or her excess Compensation bears to the excess Compensation
                  of all Participants. If Employer contributions are insufficient
                  to fund to
                  this level, the Employer must determine the uniform allocation
                  percentage
                  to allocate to those Participants who have Compensation in excess
                  of the
                  Integration Level. To determine this uniform allocation percentage,
                  the
                  Employer must take the remaining contribution and divide that amount
                  by
                  the total excess Compensation of Participants.

              

      

       

    

    
      	 	
              3.

            	
              Step
                Three: Any remaining Employer contributions will be allocated to
                all
                Participants in the ratio that their Compensation plus excess Compensation
                bears to the total Compensation plus excess Compensation of all
                Participants. Participants may only receive an allocation of up to
                2.7% of
                their Compensation plus excess Compensation, under this allocation
                step.
                If the Integration Level defined at Section III(E) is less than or
                equal
                to the greater of $10,000 or 20% of the maximum, the 2.7% need not
                be
                reduced. If the amount specified is greater than the greater of $10,000
                or
                20% of the maximum Taxable Wage Base, but not more than 80%, 2.7%
                must be
                reduced to 1.3%. If the amount specified is greater than 80% but
                less than
                100% of the maximum Taxable Wage Base, the 2.7% must be reduced to
                2.4%.
                If Employer contributions are insufficient to fund to this level,
                the
                Employer must determine the uniform allocation percentage to allocate
                to
                those Participants who have Compensation up to the Integration Level
                and
                excess Compensation. To determine this uniform allocation percentage,
                the
                Employer must take the remaining contribution and divide that amount
                by
                the total Compensation including excess Compensation of Participants.
                

            

    

    
       

      
        	 	
                4.

              	Step Four: Any remaining Employer contributions
                will be
                allocated to all Participants in the ratio that each Participant's
                Compensation bears to all Participants'
                Compensation.

      

      

        
          	
                  
                    *

                  

                	
                  E.

                	
                  Discretionary
                    Employer Contribution - Base Integrated Allocation Formula:
                    The
                    Employer shall have the right to make a discretionary contribution.
                    To the
                    extent that such contributions are sufficient, they shall be
                    allocated as
                    follows:

                

        

        

        ________%
          of each
          eligible Participant's Compensation, plus 

        

        ________%
          of
          Compensation in excess of the Integration Level defined at Section III(E)
          hereof. 

        

        The
          percentage of excess Compensation may not exceed the lesser of (i) the
          amount
          first specified in this paragraph or (ii) the greater of 5.7% or the percentage
          rate of tax under Code Section 3111(a) as in effect on the first day of
          the Plan
          Year attributable to the Old Age (OA) portion of the OASDI provisions of
          the
          Social Security Act. If the Employer specifies an Integration Level in
          Section
          III(E) which is lower than the Taxable Wage Base for Social Security purposes
          (SSTWB) in effect as of the first day of the Plan Year, the percentage
          contributed with respect to excess Compensation must be adjusted. If the
          Plan's
          Integration Level is greater than the larger of $10,000 or 20% of the SSTWB
          but
          not more than 80% of the SSTWB, the excess percentage is 4.3%. If the Plan's
          Integration Level is greater than 80% of the SSTWB but less than 100% of
          the
          SSTWB, the excess percentage is 5.4%. 

        

        Only
          one Plan maintained by the Employer may be integrated with Social Security.
          Any
          Plan utilizing a Safe Harbor formula as provided in Section VII of this
          Adoption
          Agreement may not apply the Safe Harbor Contributions to the integrated
          allocation formula.

        
          	
                  
                    *

                  

                	
                  F.

                	
                  Uniform
                    Points Allocation Formula: The
                    allocation for each eligible Participant will be determined by
                    a uniform
                    points method. Each eligible Participant’s allocation shall bear the same
                    relationship to the Employer contribution as the Participant’s total
                    points bears to all points awarded. Each eligible Participant
                    will receive
                    _____
                    points for each of the following:

                

        

         

        
          
            
            

          

          
            20

            
              

            

          

          
            
            

          

        

         

        
          	 	
                  
                    *

                  

                	
                  1.

                	
                  _____
                    year(s) of age.

                

        

        

        
          	 	
                  
                    *

                  

                	
                  2.

                	
                  _____
                    Year(s) of Service determined:

                

        

        

        
          	 	
                  
                    *

                  

                	
                  a.

                	
                  In
                    the same manner as determined for
                    eligibility.

                

        

        

        
          	 	
                  
                    *

                  

                	
                  b.

                	
                  In
                    the same manner as determined for
                    vesting.

                

        

        

        
          	 	
                  
                    *

                  

                	
                  c.

                	
                  Points
                    will not be awarded with respect to Year(s) of Service in excess
                    of
                    _____.

                

        

        

        
          	 	
                  
                    *

                  

                	
                  3.

                	
                  $_________
                    (not to exceed $200) of
                    Compensation.

                

        

         

        
          	
                  x

                	
                  G.

                	
                  Additional
                    Adopting Employers:

                

        

        

        
          	 	
                  
                    T

                  

                	
                  1.

                	
                  All
                    participating Employers’ contributions under Section VIII entitled
                    “Employer Contributions” above and forfeitures, if applicable,
                    attributable to each specific contribution source shall be pooled
                    together
                    and allocated uniformly among all eligible
                    Participants.

                

        

        

        
          	 	
                  
                    *

                  

                	
                  2.

                	
                  Each
                    participating Employer’s contribution under Section VIII above and
                    forfeitures attributable to each specific contribution source
                    made by such
                    Employer shall be allocated only to eligible Participants of
                    the
                    participating Employer.

                

        

        

        Where
          contributions and forfeitures are to be allocated to eligible Participants
          by
          participating Employers, each such Employer must maintain data demonstrating
          that the allocations by group satisfy the nondiscrimination rules under
          Code
          Section 401(a)(4).

        

        
          	
                  
                    T

                  

                	
                  H.

                	
                  Minimum Employer Contribution
                    Formula Under Top-Heavy Plans:
                    

                

        

        

        
          	 	 	
                  For
                    any Plan Year during which the Plan is Top-Heavy, the sum of
                    the
                    contributions (excluding Elective Deferrals and/or Matching Contributions)
                    allocated to non-Key Employees shall not be less than the amount
                    required
                    under the Basic Plan Document #01. The eligibility of a Participant
                    to
                    receive Top-Heavy Contributions mirrors the eligibility for any
                    contribution with the earliest Entry Date. Top-Heavy minimums
                    will be
                    allocated to:

                

        

        

        
          	 	
                  
                    T

                  

                	
                  1.

                	
                  all
                    eligible Participants.

                

        

        

        
          	 	
                  
                    *

                  

                	
                  2.

                	
                  only
                    eligible non-Key Employees who are
                    Participants.

                

        

         

        
          	
                  IX.

                	
                  ALLOCATIONS
                    TO PARTICIPANTS 

                

        

        

        
          	 	
                  A.

                	
                  This
                    is a Safe Harbor Plan:

                

        

        

        
          	 	
                  
                    *

                  

                	
                  Employer
                    Non-Elective and/or Matching Contributions will be made to all
                    Employees
                    who have satisfied the Safe Harbor eligibility requirements.
                    

                

        

        

        
          	 	
                  B.

                	
                  Allocation
                    Accrual Requirements:

                

        

        

        
          	 	 	
                  A
                    Year of Service for eligibility to receive an allocation of Employer
                    contributions will be determined on the basis of
                    the:

                

        

        

        
          	 	
                  
                    *

                  

                	
                  1.

                	
                  Elapsed
                    Time method.

                

        

         

        
          
            
            

          

          
            21

            
              

            

          

          
            
            

          

        

         

        
          	 	
                  
                    T

                  

                	
                  2.

                	
                  Hours
                    of Service method. A Year of Service will be credited upon completion
                    of
                    the requirements below. A Year of Service for allocation accrual
                    purposes
                    cannot be less than 1 Hour of Service nor greater than 1,000
                    hours by
                    operation of law. If left blank, the Plan will use 1,000 hours.
                    Enter
                    whole digit numbers only.

                

        

        

        
          	 	
                  a.

                	
                  Active
                    Participants:

                

        

        

        
          	
                  Contribution
                    Type

                	
                  Hours
                    of Service Requirement

                
	
                  All
                    contributions

                	 
	
                  Non-Safe
                    Harbor Match Formula 1

                	
                  1

                
	
                  Employer
                    Discretionary

                	
                  501

                
	
                  QNECs

                	
                  1

                
	
                  QMACs

                	 
	
                  Non-Safe
                    Harbor Match Formula 2

                	 

        

        

        
          	 	
                  b.

                	
                  Terminated
                    Participants:

                

        

        

        
          	
                  Contribution
                    Type

                	
                  Hours
                    of Service Requirement

                
	
                  All
                    contributions

                	 
	
                  Non-Safe
                    Harbor Match Formula 1

                	
                  1

                
	
                  Employer
                    Discretionary

                	
                  501

                
	
                  QNECs

                	
                  1

                
	
                  QMACs

                	 
	
                  Non-Safe
                    Harbor Match Formula 2

                	 

        

        

        
          	 	
                  C.

                	
                  Allocation
                    of Contributions to
                    Participants:

                

        

        

        Employer
          contributions for a Plan Year will be allocated to all Participants who
          have met
          the allocation accrual requirements at Section IX(B) above and who have
          met the
          following allocation accrual requirements (check
          all applicable boxes):

        
           

          
            
              	 	 	 	
                      Match
                        

                      Formula
                        1

                    	
                      Match
                        

                      Formula
                        2

                    	
                      QNEC

                    	
                      QMAC

                    	
                      Discretionary

                    
	 	 	 	 	 	 	 	 
	
                      1.

                    	
                      For
                        Plans using the Elapsed Time method, contributions will be
                        allocated to
                        terminated Participants who have completed __________ (not
                        more than 12) months of Service

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    
	 	 	 	 	 	 	 	 
	
                      2.

                    	
                      Employed
                        on the last day of the Plan Year

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        T

                      

                    
	 	 	 	 	 	 	 	 
	
                      3.

                    	
                      The
                        Hours of Service or Period of Service requirement in the
                        Plan Year of
                        termination is waived due to:

                    	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	
                      a.

                    	
                      Retirement

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        T

                      

                    
	 	 	 	 	 	 	 	 
	 	
                      b.

                    	
                      Disability

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        T

                      

                    
	 	 	 	 	 	 	 	 
	 	
                      c.

                    	
                      Death

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        T

                      

                    
	 	 	 	 	 	 	 	 
	 	
                      d.

                    	
                      Other

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    
	 	 	 	
                      *

                    	
                    	 	 	 
	
                       

                    	 	 	 	 	 	 	 
	 	
                      e.

                    	
                      No
                        last day of the Plan Year requirement in Plan Year of any
                        of the above
                        events 

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        T

                      

                    

            

          

          
            

              
                
                  
                  

                

                
                  22

                  
                    

                  

                

                
                  
                  

                

              

            

          

        

        
          
            
              

              
                	 	
                        *

                      	
                        The
                          event designated by the Employer may be applied to all
                          Participants in a
                          nondiscriminatory manner.

                      

              

              

              
                	
                        
                          *

                        

                      	
                        D.

                      	
                        Contributions
                          to Disabled Participants:

                      

              

              

              
                	 	 	
                        The
                          Employer will make contributions on behalf of a Participant
                          who is
                          permanently and totally disabled. These contributions will
                          be based on the
                          Compensation each such Participant would have received
                          for the Limitation
                          Year if the Participant had been paid at the rate of Compensation
                          paid
                          immediately before becoming permanently and totally disabled.
                          Such imputed
                          Compensation for the disabled Participant may be taken
                          into account only
                          if the Participant is not a Highly Compensated Employee.
                          These
                          contributions will be 100% vested when
                          made.

                      

              

              

              

              
                	
                        X.

                      	
                        DISPOSITION
                          OF FORFEITURES

                      

              

              

              
                	
                        
                          *

                        

                      	
                        A.

                      	
                        Not
                          applicable. All
                          contributions are fully vested. 

                      

              

              

              If
                (A) is
                selected, do not complete (B) or (C) below.

              

              
                	 	
                        B.

                      	
                        Forfeiture
                          Allocation Alternatives:

                      

              

              

              
                	 	 	
                        Select
                          the method in which forfeitures associated with the contribution
                          type will
                          be allocated (number each item in order of
                          use).

                      

              

              

              
                	 	 	
                        Employer
                          Contribution Type

                      
	 	 	 	 	 
	 	
                        Disposition
                          Method

                      	
                        
                          All
                            Non-Safe Harbor

                        

                        Matching
                          Contributions

                      	 	
                        
                          All
                            Other

                        

                        Contributions

                      
	 	 	 	 	 
	
                        1.

                      	
                        Restoration
                          of Participant’s forfeitures.

                      	
                        1

                      	 	
                        1

                      
	 	 	 	 	 
	
                        2.

                      	
                        Used
                          to reduce the Employer’s contribution
                          under the Plan.

                      	  
	 	  

	 	 	 	 	 
	
                        3.

                      	
                        Used
                          to reduce the Employer’s Matching
                          Contribution.

                      	
                        2

                      	 	  

	 	 	 	 	 
	
                        4.

                      	
                        Used
                          to offset Plan expenses.

                      	 	 	 
	 	 	 	 	 
	
                        5.

                      	
                        Added
                          to the Employer’s contribution (other
                          than Matching) under the Plan.

                      	
                         

                      	 	  

                        2

                      
	 	 	 	 	 
	
                        6.

                      	
                        Added
                          to the Employer’s Matching Contribution
                          under the Plan.

                      	  
	 	  

	 	 	 	 	 
	
                        7.

                      	
                        Allocate
                          to all Participants eligible
                          to share in the allocations in
                          the same proportion that each Participant’s
                          Compensation for the year
                          bears to the Compensation of all other
                          Participant’s for such year.

                      	  
	 	  

	 	 	 	 	 
	
                        8.

                      	
                        Allocate
                          to all NHCEs eligible to share in
                          the allocations in proportion to each such Participant’s
                          Compensation for the year.

                      	 	 	 
	 	 	 	 	 
	
                        9.

                      	
                        Allocate
                          to all NHCEs eligible to share in the allocations
                          in proportion to each such Participant’s
                          Elective Deferrals for the year.

                      	  
	 	  

	 	 	 	 	 
	
                        10.

                      	
                        Allocate
                          to all Participants eligible to share in the
                          allocations in the same proportion that each
                          Participant’s Elective Deferrals for the year bears
                          to the Elective Deferrals of all Participants for
                          such year.

                      	  
	 	  

              

            

             

            
              
                
                

              

              
                23

                
                  

                

              

              
                
                

              

            

          

        

      

    

    Participants
      eligible to share in the allocation of other Employer Contributions under
      Section VIII shall be eligible to share in the allocation of forfeitures except
      where allocations are only to Non-Highly Compensated Employees.

    

    
      	 	
              C.

            	
              Timing
                of Allocation of
                Forfeitures:

            

    

    

    
      	 	 	
              If
                no distribution or deemed distribution has been made to a former
                Participant, nonvested portions shall be forfeited at the end of
                the Plan
                Year during which the former Participant incurs his or her fifth
                consecutive one-year Break in Service.

            

    

    

    If
      a
      former Participant has received the full amount of his or her vested interest,
      the nonvested portion of his or her account shall be forfeited and shall be
      disposed of: 

    

    
      	 	
              
                *

              

            	
              1.

            	
              during
                the Plan Year following the Plan Year in which the forfeiture
                arose.

            

    

    

    
      	 	
              
                
                  
                    T

                  

                

              

            	
              2.

            	
              as
                of any Valuation or Allocation Date during the Plan Year (or as soon
                as
                administratively feasible following the close of the Plan Year) in
                which
                the former Participant receives payment of his or her vested
                benefit. 

            

    

    

    
      	 	
              
                *

              

            	
              3.

            	
              at
                the end of the Plan Year during which the former Participant incurs
                his or
                her ___________
                (1st, 2nd, 3rd, 4th or 5th) consecutive one-year Break in Service.
                

            

    

    

    
      	 	
              
                *

              

            	
              4.

            	
              as
                of the end of the Plan Year during which the former Participant received
                full payment of his or her vested benefit.

            

    

    

    
      	 	
              
                *

              

            	
              5.

            	
              as
                of the earlier of the first day of the Plan Year, or the first day
                of the
                seventh month of the Plan Year following the date on which the former
                Participant has received full payment of his or her vested benefit.
                

            

    

    

    
      	 	
              
                *

              

            	
              6.

            	
              as
                of the next Valuation or Allocation Date following the date on which
                the
                former Participant receives full payment of his or her vested
                benefit.

            

    

    

    

    
      
        
          	XI.	
                  MULTIPLE
                    PLANS MAINTAINED BY THE EMPLOYER, LIMITATIONS
                    ON ALLOCATIONS, AND TOP-HEAVY
                    CONTRIBUTIONS

                

        

      

    

    

    
      	 	
              A.

            	
              Plans
                Maintained By The
                Employer:

            

    

    

    
      	 	
              
                *

              

            	
              1.

            	
              This
                is the only Plan the Employer maintains. In the event that the allocation
                formula results in an Excess Amount, such excess, after distribution
                of
                Employee contributions pursuant to paragraph 10.2 of the Basic Plan
                Document #01, shall be:

            

    

    

    
      	 	
              
                *

              

            	
              a.

            	
              Placed
                in a suspense account for the benefit of the Participant without
                the
                crediting of gains or losses for the benefit of the
                Participant.

            

    

    

    
      	 	
              
                *

              

            	
              b.

            	
              Reallocated
                as additional Employer contributions to all other Participants to
                the
                extent that they do not have any Excess Amount.

            

    

    

    If
      no method is specified, the suspense account method will be
      used.

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    
      
        

          
            	 	
                    
                      T

                    

                  	
                    2.

                  	
                    The
                      Employer does maintain another Plan [including a Welfare Benefit
                      Fund or
                      an individual medical account as defined in Code Section 415(l)(2)],
                      under
                      which amounts are treated as Annual Additions and has completed
                      the proper
                      sections below. 

                  

          

          

          
            	 	
                    a.

                  	
                    If
                      the Participant is covered under another qualified Defined
                      Contribution
                      Plan maintained by the Employer, other than a Master or Prototype
                      Plan:

                  

          

          

          
            	 	
                    
                      T

                    

                  	
                    i.

                  	
                    The
                      provisions of Article X of the Basic Plan Document #01 will
                      apply as if
                      the other plan were a Master or Prototype
                      Plan.

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    ii.

                  	
                    The
                      Employer has specified below the method under which the plans
                      will limit
                      total Annual Additions to the Maximum Permissible Amount, and
                      will
                      properly reduce any Excess Amounts in a manner that precludes
                      Employer
                      discretion.

                  

          

          
            	 
	 
	 

          

          

          Employers
            who maintained a qualified Defined Benefit Plan, prior to January 1,
            2000,
            should complete Schedule C to document the preamendment operation of
            the
            Plan.

          

          
            	 	
                    b.

                  	
                    Allocation
                      of Excess Annual Additions: In the event that the allocation
                      formula
                      results in an Excess Amount, such excess, after distribution
                      of Employee
                      contributions, shall be:

                  

          

          
            

            
              	 	
                      
                        T

                      

                    	
                      i.

                    	Placed in a suspense account for the benefit
                      of the
                      Participant without the crediting of gains or losses for the
                      benefit of
                      the Participant.

            

            
              

              
                	 	
                        
                          *

                        

                      	
                        ii.

                      	Reallocated as additional Employer contributions
                        to all
                        other Participants to the extent that they do not have any
                        Excess Amount.
                        

              

               

              If
                no method is specified, the suspense account method will be
                used.

            

          

          

          
            	 	
                    B.

                  	
                    Top-Heavy
                      Provisions:

                  

          

          

          In
            the
            event the Plan is or becomes Top-Heavy, the minimum contribution or benefit
            required under Code Section 416 relating to Top-Heavy Plans shall be
            satisfied
            in the elected manner:

          

          
            	 	
                    
                      *

                    

                  	
                    1.

                  	
                    This
                      is the only Plan the Employer maintains or ever maintained.
                      The minimum
                      contribution will be satisfied by this
                      Plan.

                  

          

          

          
            	 	
                    
                      T

                    

                  	
                    2.

                  	
                    The
                      Employer does maintain another Defined Contribution Plan. The
                      minimum
                      contribution will be satisfied by:

                  

          

          

          
            	 	
                    
                      T

                    

                  	
                    a.

                  	
                    this
                      Plan.

                  

          

          
            
              
                 

              

            

          

          
            
              
                	 	
                        
                           

                        

                      	
                        
                          *

                        

                      	
                        b.

                      

              

            
              
                	(Name
                        of other Qualified
                        Plan)

              

            

             

          

          
            
              	 	
                      
                        *

                      

                    	
                      3.

                    	
                      The
                        Employer maintains a Defined Benefit Plan. A method is stated
                        below under
                        which the minimum contribution and benefit provisions of
                        Code Section 416
                        will be satisfied. 

                    

            

          
            
              	 
	 
	 

            

          

           

          
            
              
              

            

            
              25

              
                

              

            

            
              
              

            

          

          
            	
                    XII.

                  	
                    ANTIDISCRIMINATION
                      TESTING

                  

          

           

          
            	 	
                    For
                      Plans which are being amended and restated for GUST, please
                      complete
                      Schedule C outlining the preamendment operation of the Plan,
                      as well as
                      this section of the Adoption Agreement. The testing elections
                      made below
                      will apply to the future operation of the Plan.
                      

                  

          

          

          
            	
                    
                      *

                    

                  	
                    A.

                  	
                    The
                      Plan is not subject to ADP or ACP testing. The Plan does not
                      offer
                      Voluntary After-tax or Required After-tax Contributions and
                      it either
                      meets the Safe Harbor provisions of Section VII of this Adoption
                      Agreement, or it does not benefit any Highly Compensated
                      Employees.

                  

          

          

          
            	
                    
                      T

                    

                  	
                    B.

                  	
                    Testing
                      Elections:

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    1.

                  	
                    This
                      Plan is using the Prior Year testing method for purposes of
                      the ADP and
                      ACP Tests.

                  

          

          

          
            	 	
                    
                      T

                    

                  	
                    2.

                  	
                    This
                      Plan is using the Current Year testing method for purposes
                      of the ADP and
                      ACP Tests. 

                  

          

          

          If
            no election is made, the Plan will use the Current Year testing
            method.

          

          
            	 	 	
                    This
                      election cannot be rescinded for a Plan Year unless (1) the
                      Plan has been
                      using the Current Year testing method for the preceding 5 Plan
                      Years or,
                      if lesser, the number of Plan Years the Plan has been in existence;
                      or (2)
                      the Plan otherwise meets one of the conditions specified in
                      IRS Notice
                      98-1 (or other superseding guidance) for changing from the
                      Current Year
                      testing method. 

                  

          

          

          A
            Prototype Plan must use the same testing method for both the ADP and
            ACP tests
            for Plan Years beginning on or after the date the Employer adopts its
            GUST-restated Plan document.

          

          
            	
                    
                      *

                    

                  	
                    C.

                  	
                    Testing
                      Elections for the First Plan
                      Year:

                  

          

          

          Complete
            only when Prior Year testing method election is made.

          

          
            	 	
                    
                      *

                    

                  	
                    1.

                  	
                    If
                      this is not a successor Plan, then for the first Plan Year
                      this Plan
                      permits (a) any Participant to make Employee contributions,
                      (b) provides
                      for Matching Contributions or (c) both, the ACP used in the
                      ACP Test for
                      Participants who are Non-Highly Compensated Employees shall
                      be such first
                      Plan Year’s ACP. Do
                      not select this option if the Employer is using the “deemed
                      3%” rule.

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    2.

                  	
                    If
                      this is not a successor Plan, then for the first Plan Year
                      this Plan
                      permits any Participant to make Elective Deferrals, the ADP
                      used in the
                      ADP Test for Participants who are Non-Highly Compensated Employees
                      shall
                      be such first Plan Year’s ADP. Do
                      not select this option if the Employer is using the “deemed
                      3%” rule.

                  

          

          

          
            	
                    
                      *

                    

                  	
                    D.

                  	
                    Recharacterization:

                  

          

          

          Elective
            Deferrals may be recharacterized as Voluntary After-tax Contributions
            to satisfy
            the ADP Test. The Employer must have elected to permit Voluntary After-tax
            Contributions in the Plan for this election to be operable.

           

          
            	
                    XIII.

                  	
                    VESTING

                  

          

          

          
            	 	
                    Participants
                      shall always have a fully vested and nonforfeitable interest
                      in their
                      Employee contributions (including Elective Deferrals, Required
                      After-tax
                      and Voluntary After-tax Contributions), Qualified Matching
                      Contributions
                      (“QMACs”), Qualified Non-Elective Contributions (“QNECs”) or Safe Harbor
                      Matching or Non-Elective Contributions and their investment
                      earnings.

                  

          

          

          
            	 	
                    Each
                      Participant shall acquire a vested and nonforfeitable percentage
                      in his or
                      her account balance attributable to Employer contributions
                      and their
                      earnings under the schedule(s) selected below except in any
                      Plan Year
                      during which the Plan is determined to be Top-Heavy. In any
                      Plan Year in
                      which the Plan is Top-Heavy, the Two-twenty vesting schedule
                      [option
                      (B)(4)] or the three-year cliff schedule [option (B)(3)] shall
                      automatically apply unless the Employer has already elected
                      a faster
                      vesting schedule. If the Plan is switched to option (B)(4)
                      or (B)(3),
                      because of its Top-Heavy status, that vesting schedule will
                      remain in
                      effect even if the Plan later becomes non-Top-Heavy until the
                      Employer
                      executes an amendment of this Adoption Agreement.
                      

                  

          

          
            
              
              

            

            
              26

              
                

              

            

            
              
              

            

          

          
            	 	
                    A.

                  	
                    Vesting
                      Computation Period:

                  

          

          

          A
            Year of
            Service for vesting will be determined on the basis of the
            (choose one):

          

          
            	 	
                    
                      *

                    

                  	
                    1.

                  	
                    Not
                      applicable. All contributions are fully
                      vested.

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    2.

                  	
                    Elapsed
                      Time method.

                  

          

          

          
            	 	
                    
                      T

                    

                  	
                    3.

                  	
                    Hours
                      of Service method. A Year of Service will be credited upon
                      completion of
                      1000
                      Hours of Service. A Year of Service for vesting purposes will
                      not be less
                      than 1 Hour of Service nor greater than 1,000 hours by operation
                      of law.
                      If left blank, the Plan will use 1,000
                      hours.

                  

          

          

          The
            computation period for purposes of determining Years of Service and Breaks
            in
            Service for purposes of computing a Participant's nonforfeitable right
            to his or
            her account balance derived from Employer contributions:

          

          
            	 	
                    
                      *

                    

                  	
                    4.

                  	
                    shall
                      not be applicable since Participants are always fully
                      vested.

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    5.

                  	
                    shall
                      not be applicable, as the Plan is using Elapsed
                      Time.

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    6.

                  	
                    shall
                      commence on the date on which an Employee first performs an
                      Hour of
                      Service for the Employer and each subsequent 12-consecutive
                      month period
                      shall commence on the anniversary
                      thereof.

                  

          

          

          
            	 	
                    
                      T

                    

                  	
                    7.

                  	
                    shall
                      commence on the first day of the Plan Year during which an
                      Employee first
                      performs an Hour of Service for the Employer and each subsequent
                      12-consecutive month period shall commence on the anniversary
                      thereof.

                  

          

          

          For
            Plans
            not using Elapsed Time, a Participant shall receive credit for a Year
            of Service
            if he or she completes the number of hours specified above at any time
            during
            the 12-consecutive month computation period. A Year of Service may be
            earned
            prior to the end of the 12-consecutive month computation period and the
            Participant need not be employed at the end of the 12-consecutive month
            computation period to receive credit for a Year of Service.

          

          
            	 	
                    B.

                  	
                    Vesting
                      Schedules:

                  

          

          

          Select
            the appropriate schedule for each contribution type and complete any
            blank
            vesting percentages from the list below and insert the option number
            in the
            vesting schedule chart below.

          

          
            	 	
                     Years of Service

                  
	 	
                    1

                  	
                    2

                  	
                    3

                  	
                    4

                  	
                    5

                  	
                    6
                      

                  	
                    7

                  
	 	 	 	 	 	 	 	 
	
                    1.

                  	
                    Full
                      and immediate Vesting

                  	 	 	 
	 	 	 	 	 	 	 	 
	
                    2.

                  	
                    ___%

                  	
                    100%

                  	 	 	 	 	 
	 	 	 	 	 	 	 	 
	
                    3.

                  	
                    ___%

                  	
                    ___%

                  	
                    100%

                  	 	 	 	 
	 	 	 	 	 	 	 	 
	
                    4.

                  	
                    ___%

                  	
                    20%

                  	
                    40%

                  	
                    60%

                  	
                    80%

                  	
                    100%

                  	 
	 	 	 	 	 	 	 	 
	
                    5.

                  	
                    ___%

                  	
                    ___%

                  	
                    20%

                  	
                    40%

                  	
                    60%

                  	
                    80%

                  	
                    100%

                  
	 	 	 	 	 	 	 	 
	
                    6.

                  	
                    10%

                  	
                    20%

                  	
                    30%

                  	
                    40%

                  	
                    60%

                  	
                    80%

                  	
                    100%

                  
	 	 	 	 	 	 	 	 
	
                    7.

                  	
                    20%

                  	
                    40%

                  	
                    60%

                  	
                    80%

                  	
                    100%

                  	 	 
	 	 	 	 	 	 	 	 
	
                    8.

                  	
                    ___%

                  	
                    ___%

                  	
                    ___%

                  	
                    ___%

                  	
                    ___%

                  	
                    ___%

                  	
                    100%

                  

          

          

          
            
              
              

            

            
              27

              
                

              

            

            
              
              

            

          

          The
            percentages selected for schedule (8) may not be less for any year than
            the
            percentages shown at schedule (5). 

           

          
            	
                    Vesting
                      Schedule Chart

                  	 	
                    Employer Contribution
                      Type

                  
	 	 	 
	
                    7

                  	 	
                    All
                      Employer Contributions

                  
	
                      

                  	 	
                    Safe
                      Harbor Contributions
                      (Matching or Non-Elective)

                  
	
                    1

                  	 	
                    QMACs
                      and QNECs

                  
	
                     

                  	 	
                    Non-Safe
                      Harbor Match - Formula 1

                  
	
                     

                  	 	
                    Non-Safe
                      Harbor Match - Formula 2

                  
	
                     

                  	 	
                    Match
                      on Voluntary After-tax Contributions

                  
	
                     

                  	 	
                    Match
                      on Required After-tax Contributions

                  
	
                     

                  	 	
                    Discretionary
                      Contributions 

                  
	
                    7

                  	 	
                    Top-Heavy
                      Minimum Contribution

                  
	 	 	
                    Other
                      Employer Contribution

                  

          

          

          
            	 	
                    C.

                  	
                    Service
                      Disregarded for Vesting:

                  

          

          

          
            	 	
                    
                      T

                    

                  	
                    1.

                  	
                    Not
                      applicable. All Service is
                      recognized.

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    2.

                  	
                    Service
                      prior to the Effective Date of this Plan or a predecessor plan
                      is
                      disregarded when computing a Participant's vested and nonforfeitable
                      interest.

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    3.

                  	
                    Service
                      prior to a Participant having attained age 18 is disregarded
                      when
                      computing a Participant's vested and nonforfeitable
                      interest.

                  

          

          

          
            	
                    
                      *

                    

                  	
                    D.

                  	
                    Full
                      Vesting of Employer Contributions for Current
                      Participants:

                  

          

          

          Notwithstanding
            the elections above, all Employer contributions made to a Participant’s account
            shall be 100% fully vested if the Participant is employed on the Effective
            Date
            of the Plan (or such other date as entered herein): 
________________________________.

           

           

          
            	
                    XIV.

                  	
                    SERVICE
                      WITH PREDECESSOR
                      ORGANIZATION

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    A.

                  	
                    Not
                      applicable. The Plan does not recognize Service with any predecessor
                      organization.

                  

          

          

          
            	 	
                    
                      T

                    

                  	
                    B.

                  	
                    The
                      Plan recognizes Service with all predecessor
                      organizations.

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    C.

                  	
                    Service
                      with the following organization(s) will be recognized for the
                      Plan purpose
                      indicated:

                  

          

           

          
            	 	 	
                    Eligibility

                  	
                    Allocation

                    Accrual

                  	
                    Vesting

                  
	 	 	
                    
                      
                        *      
                          

                      

                    

                  	
                    
                      *      
                        

                    

                  	
                    
                      *      
                        

                    

                  
	 	 	
                    
                      *      
                        

                    

                  	
                    
                      *      
                        

                    

                  	
                    
                      *      
                        

                    

                  

          

          Attach
            additional pages as necessary.

          

          

          
            	
                    XV.

                  	
                    IN-SERVICE
                      WITHDRAWALS

                  

          

          

          
            	 	
                    A.

                  	
                    In-Service
                      Withdrawals:

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    1.

                  	
                    In-service
                      withdrawals are not permitted in the
                      Plan.

                  

          

          
            
              
              

            

            
              28

              
                

              

            

            
              
              

            

          

          
            	 	
                    
                      T

                    

                  	
                    2.

                  	
                    In-service
                      withdrawals are permitted in the Plan. Participants may withdraw
                      the
                      following contribution types after meeting the following requirements
                      (select
                      one or more of the following options):

                  

          

          

          
            	 	
                    Withdrawal
                      Restrictions

                  
	
                    Contribution
                      Types

                  	
                     

                  	
                    A

                  	
                    B

                  	
                    C

                  	
                    D

                  	
                    E

                  	
                    F

                  	
                    G

                  
	 	 	 	 	 	 	 	 	 	 
	
                    a.

                  	
                    All
                      Contributions

                  	 	
                    
                      *

                    

                  	
                    n/a

                  	
                    n/a

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    n/a

                  	
                    n/a

                  
	 	 	 	 	 	 	 	 	 	 
	
                    b.

                  	
                    Voluntary
                      After-tax

                  	 	
                    
                      *

                    

                  	
                    
                      T

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    n/a

                  
	 	 	 	 	 	 	 	 	 	 
	
                    c.

                  	
                    Required
                      After-tax

                  	 	
                    
                      *

                    

                  	
                     

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    n/a

                  
	 	 	 	 	 	 	 	 	 	 
	
                    d.

                  	
                    Rollover

                  	 	
                    
                      *

                    

                  	
                    
                      T

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    n/a

                  
	 	 	 	 	 	 	 	 	 	 
	
                    e.

                  	
                    Transfer
                      

                  	 	
                    
                      *

                    

                  	
                    
                      T

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  
	 	 	 	 	 	 	 	 	 	 
	
                    f.

                  	
                    Elective
                      Deferrals

                  	 	
                    
                      *

                    

                  	
                    n/a

                  	
                    n/a

                  	
                    
                      *

                    

                  	
                    
                      T

                    

                  	
                    n/a

                  	
                    n/a

                  
	 	 	 	 	 	 	 	 	 	 
	
                    g.

                  	
                    Qualified
                      Non-Elective 

                  	 	
                    
                      *

                    

                  	
                    n/a

                  	
                    n/a

                  	
                    
                      *

                    

                  	
                    
                      T

                    

                  	
                    n/a

                  	
                    n/a

                  
	 	 	 	 	 	 	 	 	 	 
	
                    h.

                  	
                    Qualified
                      Matching

                  	 	
                    
                      *

                    

                  	
                    n/a

                  	
                    n/a

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    n/a

                  	
                    n/a

                  
	 	 	 	 	 	 	 	 	 	 
	
                    i.

                  	
                    Safe
                      Harbor Matching

                  	 	
                    
                      *

                    

                  	
                    n/a

                  	
                    n/a

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    n/a

                  	
                    n/a

                  
	 	 	 	 	 	 	 	 	 	 
	
                    j.

                  	
                    
                      Safe
                        Harbor Non-Elective

                    

                  	 	
                    
                      *

                    

                  	
                    n/a

                  	
                    n/a

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    n/a

                  	
                    n/a

                  
	 	 	 	 	 	 	 	 	 	 
	
                    k.

                  	
                    
                      Vested
                        Non-Safe Harbor Matching Formula 1

                    

                  	 	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      T

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  
	 	 	 	 	 	 	 	 	 	 
	
                    l.

                  	
                    Vested
                      Non-Safe Harbor Matching
                      Formula 2

                  	 	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  
	 	 	 	 	 	 	 	 	 	 
	
                    m.

                  	
                    Vested
                      Discretionary

                  	 	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      T

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  	
                    
                      *

                    

                  

          

          

          Withdrawal
            Restriction Key

          

          
            	 	
                    A.

                  	
                    Not
                      available for in-service
                      withdrawals.

                  

          

          

          
            	 	
                    B.

                  	
                    Available
                      for in-service withdrawals.

                  

          

          

          
            	 	
                    C.

                  	
                    Participants
                      having completed five years of Plan participation may elect
                      to withdraw
                      all or any part of their Vested Account
                      Balance.

                  

          

          

          
            	 	
                    D.

                  	
                    Participants
                      may withdraw all or any part of their Account Balance after
                      having
                      attained the Plan’s Normal Retirement
                      Age.

                  

          

          

          
            	 	
                    E.

                  	
                    Participants
                      may withdraw all or any part of their Vested Account Balance
                      after having
                      attained age 59.5
                      (not less than age 591⁄2).

                  

          

          

          
            	 	
                    F.

                  	
                    Participants
                      may elect to withdraw all or any part of their Vested Account
                      Balance
                      which has been credited to their account for a period in excess
                      of two
                      years.

                  

          

          

          
            	 	
                    G.

                  	
                    Available
                      for withdrawal only if the Participant is 100%
                      vested.

                  

          

          

          
            	 	
                    B.

                  	
                    Hardship
                      Withdrawals:

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    1.

                  	
                    Hardship
                      withdrawals are not permitted in the Plan.

                  

          

          

          
            	 	
                    
                      T

                    

                  	
                    2.

                  	
                    Hardship
                      withdrawals are permitted in the Plan and will be taken from
                      the
                      Participant’s account as follows (select
                      one or more of these options):  

                  

          

          
            
              
              

            

            
              29

              
                

              

            

            
              
              

            

          

          
            	 	 	
                    
                      *

                    

                  	
                    a.

                  	
                    Participants
                      may withdraw Elective Deferrals.

                  

          

          

          
            	 	 	
                    
                      T

                    

                  	
                    b.

                  	
                    Participants
                      may withdraw Elective Deferrals and any earnings credited as
                      of December
                      31, 1988 (or if later, the end of the last Plan Year ending
                      before July 1,
                      1989).

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    c.

                  	
                    Participants
                      may withdraw Rollover Contributions plus their
                      earnings.

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    d.

                  	
                    Participants
                      may withdraw Transfer Contributions plus their
                      earnings.

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    e.

                  	
                    Participants
                      may withdraw fully vested Employer contributions plus their
                      earnings.

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    f.

                  	
                    Participants
                      may withdraw vested Non-Safe Harbor Matching Formula 1 Contributions
                      plus
                      their earnings.

                  

          

           

          
            	 	
                    
                      *

                    

                  	
                    g.

                  	
                    Participants
                      may withdraw vested Non-Safe Harbor Matching Formula 2 Contributions
                      plus
                      their earnings.

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    h.

                  	
                    Participants
                      may withdraw Qualified Matching Contributions and Qualified
                      Non-Elective
                      Contributions plus their earnings, and the earnings on Elective
                      Deferrals
                      which have been credited to the Participant’s account as of December 31,
                      1988 (or if later, the end of the last Plan Year ending before
                      July 1,
                      1989). 

                  

          

          

          

          
            	
                    XVI.

                  	
                    LOAN
                      PROVISIONS

                  

          

          

          
            	
                    
                      T

                    

                  	
                    A.

                  	
                    Participant
                      loans are permitted in accordance with the Employer’s established loan
                      procedures. 

                  

          

          

          
            	
                    
                      T

                    

                  	
                    B.

                  	
                    Loan
                      payments will be suspended under the Plan as permitted under
                      Code Section
                      414(u) in compliance with the Uniformed Services Employment
                      and
                      Reemployment Rights Act of 1994.

                  

          

          

          

          
            	
                    XVII.

                  	
                    INVESTMENT
                      MANAGEMENT 

                  

          

          

          
            	 	
                    A.

                  	
                    Investment
                      Management Responsibility:

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    1.

                  	
                    The
                      Employer shall appoint a discretionary Trustee to manage the
                      assets of the
                      Plan. 

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    2.

                  	
                    The
                      Employer shall retain investment management responsibility
                      and/or
                      authority.

                  

          

          

          
            	 	
                    
                      T

                    

                  	
                    3.

                  	
                    The
                      party designated below shall be responsible for the investment
                      of the
                      Participant’s account. 

                  

          

          

          
            	 	 	 	
                    By
                      selecting a box, the Employer is making a designation as to
                      whom will have
                      authority to issue investment directives with respect to the
                      specified
                      contribution type (check
                      all applicable boxes):
                      

                  

          

           

          
            
              	 	 	
                      Trustee

                    	
                      Employer

                    	
                      Participant

                    
	 	 	 	 	 
	
                      a.

                    	
                      All
                        Contributions

                    	
                      n/a

                    	
                      n/a

                    	
                      
                        T

                      

                    
	 	 	 	 	 
	
                      b.

                    	
                      Employer
                        Contributions

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    
	 	 	 	 	 
	
                      c.

                    	
                      Elective
                        Deferrals

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    
	 	 	 	 	 
	
                      d.

                    	
                      Voluntary
                        After-tax

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    
	 	 	 	 	 
	
                      e.

                    	
                      Required
                        After-tax

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    
	 	 	
                       

                    	 	 
	
                      f.

                    	
                      Safe
                        Harbor Contributions

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    
	 	 	 	 	 
	
                      g.

                    	
                      Non-Safe
                        Harbor Match Formula 1

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        
                          *

                        

                      

                    
	 	 	 	 	 
	
                      h.

                    	
                      QMACs

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    
	 	 	 	 	 
	
                      i.

                    	
                      QNECs

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    
	 	 	 	 	 
	
                      j.

                    	
                      Non-Safe
                        Harbor Match Formula 2

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    
	 	 	 	 	 
	
                      k.

                    	
                      Rollover
                        Contributions

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    
	 	 	 	 	
                       

                    
	
                      l.

                    	
                      Transfer
                        Contributions

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    	
                      
                        *

                      

                    

            

          

           

          
            
              
              

            

            
              30

              
                

              

            

            
              
              

            

          

          To
            the extent that Participant self-direction was previously permitted,
            the
            Employer shall have the right to either make the assets part of the general
            fund, or leave them as self-directed subject to the provisions of the
            Basic Plan
            Document #01.

          
            

            
              	 	
                      B.

                    	Limitations on Participant Directed
                      Investments:

            

             

          

          
            	 	
                    
                      
                        T

                      

                    

                  	
                    1.

                  	
                    Participants
                      are permitted to invest among only those investment alternatives
                      made
                      available by the Employer under the Plan.

                  

          

          

          
            	 	
                    *

                  	
                    2.

                  	
                    Participants
                      are permitted to invest in any investment alternative permitted
                      under the
                      Basic Plan Document #01.

                  

          

          

          
            	
                    *

                  	
                    C.

                  	
                    Insurance:

                  

          

          

          The
            Plan
            permits insurance as an investment alternative.

          

          
            	
                    
                      T

                    

                  	
                    D.

                  	
                    ERISA
                      Section 404(c):

                  

          

          

          
            	 	 	
                    The
                      Employer intends to be covered by the fiduciary liability provisions
                      with
                      respect to Participant directed investments under ERISA Section
                      404(c).

                  

          

          

          

          
            	
                    XVIII.

                  	
                    DISTRIBUTION OPTIONS

                  

          

          
            

            
              	 	
                      A.

                    	Timing of Distributions [both
                      (1) and (2) must be completed]:

            

          

          

          
            	 	
                    1.

                  	
                    Distributions
                      payable as a result of termination for reasons other than death,
                      Disability or retirement shall be paid c 
                      [select from the list at (A)(3) below].

                  

          

          

          
            	 	
                    2.

                  	
                    Distributions
                      payable as a result of termination for death, Disability or
                      retirement
                      shall be paid c [select
                      from the list at (A)(3)
                      below].

                  

          

          

          
            	 	
                    3.

                  	
                    Distribution
                      Options:

                  

          

          

          
            	 	
                    a.

                  	
                    As
                      soon as administratively feasible on or after the Valuation
                      Date following
                      the date on which a distribution is requested or is otherwise
                      payable.

                  

          

          

          
            	 	
                    b.

                  	
                    As
                      soon as administratively feasible following the close of the
                      Plan Year
                      during which a distribution is requested or is otherwise payable.
                      

                  

          

          

          
            	 	
                    c.

                  	
                    As
                      soon as administratively feasible following the date on which
                      a
                      distribution is requested or is otherwise payable. (This
                      option is recommended for daily valuation
                      plans.)

                  

          

          

          
            	 	
                    d.

                  	
                    As
                      soon as administratively feasible after the close of the Plan
                      Year during
                      which the Participant incurs ___________
                      (cannot be more than 5) consecutive one-year Breaks in Service.
                      [This
                      formula can only be used in (A)(1).]

                  

          

          
            
              
              

            

            
              31

              
                

              

            

            
              
              

            

          

          
            	 	
                    e.

                  	
                    As
                      soon as administratively feasible after the close of the Plan
                      Year during
                      which the Participant incurs ___________
                      (cannot be more than 5) consecutive one-year Breaks in Service.
                      [This
                      formula can only be used in
                      (A)(2).]

                  

          

          

          
            	 	
                    f.

                  	
                    Only
                      after the Participant has attained the Plan's Normal Retirement
                      Age or
                      Early Retirement Age, if applicable.

                  

          

          

          
            	 	
                    B.

                  	
                    Required
                      Beginning Date:

                  

          

          

          The
            Required Beginning Date of a Participant with respect to a Plan is (select
            one from below):

          

          
            	 	
                    *

                  	
                    1.

                  	
                    The
                      April 1 of
                      the calendar year following the calendar year in which the
                      Participant
                      attains age 701⁄2. 

                  

          

          

          
            	 	
                    *

                  	
                    2.

                  	
                    The
                      April 1 of the calendar year following the calendar year in
                      which the
                      Participant attains age 701⁄2 except that distributions to a Participant
                      (other than a 5% owner) with respect to benefits accrued after
                      the later
                      of the adoption of this Plan or Effective Date of the amendment
                      of this
                      Plan must commence no later than the April 1 of the calendar
                      year
                      following the later of the calendar year in which the Participant
                      attains
                      age 701⁄2 or the calendar year in which the Participant
                      retires.

                  

          

          

          
            	 	
                    T

                  	
                    3.

                  	
                    The
                      later of the April 1 of the calendar year following the calendar
                      year in
                      which the Participant attains age 701⁄2 or retires except that distributions
                      to a 5% owner must commence by the April 1 of the calendar
                      year following
                      the calendar year in which the Participant attains age
                      701⁄2.

                  

          

          

          
            	 	 	 	
                    Except
                      that such Participant [x]
                      may [ ]
                      may not elect to begin receiving distributions as of April
                      1 of the
                      calendar year following the calendar year in which the Participant
                      attains
                      age 701⁄2. Any distributions made pursuant to such an election will
                      not be
                      considered required minimum distributions. Such distributions
                      will be
                      considered in-service distributions and as such, will be subject
                      to
                      applicable withholding.

                  

          

          

          Plans
            which are an amendment or restatement of an existing Plan which provided
            for the
            provisions of Code Section 401(a)(9) currently in effect prior to the
            amendment
            of the Small Business Job Protection Act of 1996 must complete Schedule
            C.

          

          
            	 	
                    C.

                  	
                    Forms
                      of Payment (select
                      all that apply):

                  

          

          

          
            	 	
                    T

                  	
                    1.

                  	
                    Lump
                      sum.

                  

          

          

          
            	 	
                    *

                  	
                    2.

                  	
                    Installment
                      payments.

                  

          

          

          
            	 	
                    *

                  	
                    3.

                  	
                    Partial
                      payments; the minimum amount will be $___________.

                  

          

          

          
            	 	
                    *

                  	
                    4.

                  	
                    Life
                      annuity. 

                  

          

          

          
            	 	
                    *

                  	
                    5.

                  	
                    Term
                      certain annuity with payments guaranteed for ___________
                      years (not to exceed 20). 

                  

          

          

          
            	 	
                    *

                  	
                    6

                  	
                    Joint
                      and [ ]
                      50%, [ ]
                      662⁄3%, [ ]
                      75% or [ ]
                      100% survivor annuity. 

                  

          

          

          
            	 	
                    *

                  	
                    7.

                  	
                    The
                      default form of payment will be a direct rollover into an individual
                      retirement account or annuity for any “cash out” distribution made
                      pursuant to Code Sections 411(a)(7), 411(a)(11) and
                      417(e)(1).

                  

          

          

          
            	 	
                    T

                  	
                    8.

                  	
                    Cash.

                  

          

          

          
            	 	
                    *

                  	
                    9.

                  	
                    Employer
                      securities.

                  

          

          

          
            	 	
                    T

                  	
                    10.

                  	
                    Other
                      marketable securities.

                  

          

          

          The
            normal form of payment is determined at Section III(J) of this Adoption
            Agreement. 

          
            
              
              

            

            
              32

              
                

              

            

            
              
              

            

          

          
            	 	
                    D.

                  	
                    Recalculation
                      of Life Expectancy:

                  

          

          

          
            	 	
                    T

                  	
                    1.

                  	
                    Recalculation
                      is not permitted.

                  

          

          

          
            	 	
                    *

                  	
                    2.

                  	
                    Recalculation
                      is permitted. When determining installment payments in satisfying
                      the
                      minimum distribution requirements under the Plan, and life
                      expectancy is
                      being recalculated:

                  

          

          

          
            	 	
                    *

                  	
                    a.

                  	
                    only
                      the Participant’s life expectancy shall be
                      recalculated.

                  

          

          

          
            	 	
                    *

                  	
                    b.

                  	
                    both
                      the Participant’s and Spouse’s life expectancy shall be
                      recalculated.

                  

          

          

          
            	 	
                    *

                  	
                    c.

                  	
                    the
                      Participant will determine whose life expectancy is
                      recalculated.

                  

          

          

          

          
            	
                    XIX.

                  	
                    SPONSOR INFORMATION
                      AND ACCEPTANCE

                  

          

          

          
            	 	
                    This
                      Plan may not be used and shall not be deemed to be a Prototype
                      Plan unless
                      an authorized representative of the Sponsor has acknowledged
                      the use of
                      the Plan. Such acknowledgment that the Employer is using the
                      Plan does not
                      represent that the Adoption Agreement (as completed) and Basic
                      Plan
                      Document have been reviewed by a representative of the Sponsor
                      or
                      constitute a qualified retirement
                      plan.

                  

          

          

          
            	 	
                    Acknowledged
                      and accepted by the Sponsor this __________ day of ________________,
                      __________.

                  

          

           

          
            
              	
                      Name:

                    	Barry
                      Subkow
	 	 
	Title:	Secretary
	 	  
                      
	Signature:	 

            

             

          

          Questions
            concerning the language contained in and qualification of the Prototype
            should
            be addressed to:

          Barry
            Subkow

          
            	 	
                    (Position):
                      Secretary

                  	
                    (Phone Number):

                  	
                    610-337-7270

                  

          

          

          In
            the
            event that the Sponsor amends, discontinues or abandons this Prototype
            Plan,
            notification will be provided to the Employer's address provided on the
            first
            page of this Adoption Agreement.

           

          
            
              
              

            

            
              33

              
                

              

            

            
              
              

            

          

          
            	
                    XX.

                  	
                    SIGNATURES

                  

          

          

          The
            Sponsor recommends that the Employer consult with its legal counsel and/or
            tax
            advisor before executing this Adoption Agreement. The Employer understands
            that
            its failure to properly complete or amend this Adoption Agreement may
            result in
            failure of the Plan to qualify or disqualification of the Plan. The Employer
            by
            executing this Adoption Agreement acknowledges that this is a legal document
            with significant tax and legal ramifications.

          

          
            	 	
                    A.

                  	
                    Employer:

                  

          

          

          
            	 	 	
                    This
                      Adoption Agreement and the corresponding provisions of Basic
                      Plan Document
                      #01 are adopted by the Employer this__________ day of
                      _____________________, ___________.

                  

          

          
             

            
              	
                      Name
                        of Employer:

                    	Atlas
                      America, Inc.
	 	 
	
                      Executed
                        on behalf of the Employer by:

                    	Matthew
                      A. Jones
	 	 
	Title:	Chief
                      Financial Officer
	 	 
	Signature:	 

            

          

          

          
            	 	 	
                    Participating Employer:

                  

          

          

          
            	 	 	
                    Name
                      and address of any Participating Employer.

                  

          

          
            	 
	 
	 
	 

          

           

          This
            Adoption Agreement and the corresponding provisions of Basic Plan Document
            #01
            are adopted by the Participating Employer this__________ day of
            _____________________, ___________. 

           

            
              	
                      Executed
                        on behalf of the

                      Participating
                        Employer by:

                    	 
	 	 
	Title:	 
	 	 
	Signature:	 

            

              

            Attach
              additional signature pages as necessary.

          

          

          
            	 	 	
                    Employer's
                      Reliance:
                      The adopting Employer may rely on an Opinion Letter issued
                      by the Internal
                      Revenue Service as evidence that the Plan is qualified under
                      Section 401
                      of the Internal Revenue Code only to the extent provided in
                      Announcement
                      2001-77, 2001-30 I.R.B. The Employer may not rely on the Opinion
                      Letter in
                      certain other circumstances or with respect to certain qualification
                      requirements, which are specified in the Opinion Letter issued
                      with
                      respect to the Plan and in Announcement 2001-77. In order to
                      obtain
                      reliance in such circumstances or with respect to such qualification
                      requirements, application for a determination letter must be
                      made to
                      Employee Plans Determinations of the Internal Revenue
                      Service.

                  

          

          

          This
            Adoption Agreement may only be used in conjunction with Basic Plan Document
            #01.

           

          
            
              
              

            

            
              34

              
                

              

            

            
              
              

            

          

          
            	 	
                    B.

                  	
                    Trustee:

                  

          

          

          Trust
            Agreement:

          

          
            	 	
                    
                      *

                    

                  	
                    Not
                      applicable. Plan assets will be invested in Group Annuity Contracts.
                      There
                      is no Trustee and the terms of the contract(s) will
                      apply.

                  

          

          

          
            	 	
                    
                      *

                    

                  	
                    The
                      Trust provisions used will be as contained in the Basic Plan
                      Document
                      #01.

                  

          

          

          
            	 	
                    
                      T

                    

                  	
                    The
                      Trust provisions used will be as contained in the accompanying
                      executed
                      Trust Agreement between the Employer and the Trustee attached
                      hereto.

                  

          

          

          
            	 	 	
                    Complete
                      the remainder of this section only if the Trust provisions
                      used are as
                      contained in the Basic Plan Document
                      #01.

                  

          

          

          
            	 	 	
                    Name and
                      address of Trustee:

                  

          

          

          American
            Stock Transfer and Trust Company

          2390
            E.
            Camelback Rd.

          Suite
            240

          Phoenix,
            AZ 85016

          

          
            	 	 	
                    The
                      assets of the Plan shall be invested in accordance with Article
                      XIII of
                      the Basic Plan Document #01. The Employer's Plan and Trust
                      as contained
                      herein is accepted by the Trustee this ____________ day of
                      ____________________, ___________.

                  

          

           

          
            	Accepted
                    on behalf of the Trustee by:	 
	 	 
	Title:	 
	 	 
	Signature:	 
	 	 
	Accepted
                    on behalf of the Trustee by:	 
	 	 
	Title:	 
	 	 
	Signature:	 
	 	 
	Accepted
                    on behalf of the Trustee by:	 
	 	 
	Title:	 
	 	 
	Signature:	 

          

           

          
            
              
              

            

            
              35

              
                

              

            

            
              
              

            

          

        

         

        
          
            	 	
                    C.

                  	
                    Custodian: 

                  

          

          

          
            	 	 	
                    Custodial
                      Agreement:

                  

          

           

          
            	 	 	T	Not applicable. There is no
                    Custodian.

          

           

          
            	 	 	
                    *

                  	
                    Not
                      applicable. Plan assets will be invested in Group Annuity Contracts.
                      There
                      is no Custodian and the terms of the contract(s) will
                      apply.

                  

          

           

          
            	 	 	* 	The Custodial provisions used will be as contained
                    in
                    Basic Plan Document #01.

          

           

          
            	 	 	
                    *

                  	
                    The
                      Custodial provisions used will be as contained in the accompanying
                      executed Custodial Agreement between the Employer and the Custodian
                      attached hereto.

                  

          

          

          
            	 	 	
                    Complete
                      the remainder of this section only if the Custodial provisions
                      used are as
                      contained in the Basic Plan Document
                      #01.

                  

          

        

           

        
          
            	 	 	
                    
                      Name and
                        address of Custodian:

                    

                  

          

          
            	 
	 
	 
	 

          

           

          
            
              
                The
                  assets of the Plan shall be invested in accordance with Article
                  XIII of the
                  Basic Plan Document #01. The Employer's Plan and Custodial Account
                  as contained
                  herein are accepted by the Custodian this __________ day of ________________,
                  __________.

                
                   

                  
                    	Accepted
                            on behalf of the Custodian by:	 
	 	 
	Title:	 
	 	 
	Signature:	 

                  

                    

                

              

            

          

          
            
              
              

            

            
              36

              
                

              

            

            
              
              

            

          

        

        

          SCHEDULE
            A

          

          PROTECTED
            BENEFITS 

           

          This
            Schedule includes any prior Plan protected benefits which are not available
            in
            Basic Plan Document #01. Complete as applicable.

          

          
            	
                    1.

                  	
                    Plan
                      Provision: 

                  

          

          Former
            employees of AEG Holdings, Inc. who participated in the Atlas 401(k)
            Profit
            Sharing Plan may have a QMAC account and/or Voluntary after-tax contribution
            account.

          

          
            	
                  	
                    Effective
                      Date:

                  	
                    09/01/99

                  

          

          

          
            	
                    2.

                  	
                    Plan
                      Provision:

                  

          

          Any
            retired or terminated Atlas Participant whose date of hire was before
            September
            1, 1999 may elect to receive the vested portion of his/her Account distributed
            in (1) approximately equal monthly, quarterly, semi-annual or annual
            installments over a period not to exceed the life expectancy of the Participant
            or the joint life expectancies of the Participant and his Beneficiary
            (with such
            life expectancy or expectancies determined on the basis of the applicable
            IRS
            regulations), or (3) a transf

          

          
            	
                  	
                    Effective
                      Date:

                  	
                    09/01/99

                  

          

          

          
            	
                    3.

                  	
                    Plan
                      Provision:

                  

          

          A
            Participant who is an Atlas employee may at any time withdraw any amount
            from
            his/her Voluntary After-Tax Contribution Account and Employer Contribution
            Account.

           

          
            	
                  	
                    Effective
                      Date:

                  	
                    09/01/99

                  

          

          

          
            	
                    4.

                  	
                    Plan
                      Provision: 

                  

          

          A
            Participant who is an Atlas employee who was employed before September
            1, 1999
            may withdraw up to the total value of his/her Employer Contribution Account
            as
            valued as of October 1, 1999 in the event of hardship. The definition
            of
            hardship withdrawal is the same for 401(k) withdrawals.

          

          
            	
                  	
                    Effective
                      Date:

                  	
                    09/01/99

                  

          

          

          

          
            	
                    5.

                  	
                    Plan
                      Provision: 

                  

          

          
            	 
	 
	 
	 

          

           

          
            
              	Effective
                      Date:	 	
                    

            

                

          

        

        
          
            
            

          

          
            37

            
              

            

          

          
            
            

          

        

        

          SCHEDULE
            B

          

          PRIOR
            PLAN PROVISIONS

          

          

          This
            Schedule should be used if a prior plan contains provisions not found
            in Basic
            Plan Document #01, or where the Employer wishes to document transactions
            or
            historical provisions of the Employer’s Plan.

          

          
            	
                    1.

                  	
                    Plan
                      Provision: 

                  

          

          
            
              	 
	 
	 
	 

            

            
               

              
                
                  	Effective
                          Date:	 	
                        

                

              

            

          

           

          
            	
                    2.

                  	
                    Plan
                      Provision:

                  

          

          
            
              	 
	 
	 
	 

            

            
               

              
                
                  	Effective
                          Date:	 	
                        

                

              

            

          

           

          
            	
                    3.

                  	
                    Plan
                      Provision:

                  

          

          
            
              	 
	 
	 
	 

            

            
               

              
                
                  	Effective
                          Date:	 	
                        

                

              

            

          

           

          
            
              	
                      4.

                    	
                      Plan
                        Provision: 

                    

            

          
            
              	 
	 
	 
	 

            

            
               

              
                
                  	Effective
                          Date:	 	
                        

                

              

            

          

           

          
            	
                    5.

                  	
                    Plan
                      Provision: 

                  

          

          
            	 
	 
	 
	 

          

           

          
            
              	Effective
                      Date:	 	
                    

            

          

      

       

      
        
          
          

        

        
          38

          
            

          

        

        
          
          

        

      

    

    SCHEDULE
      C

    

    PREAMENDMENT
      OPERATION OF THE PLAN

     

    The
      following are the adopting Employer’s elective Plan provisions which conform the
      terms of this Prototype Plan to the preamendment operation of the Plan during
      the transition period between the earliest effective date under GUST (as defined
      below) and the effective date of adoption of this Prototype Plan and Trust
      which
      takes into account all of the changes in the qualification requirements made
      by
      the following: The Uruguay Round Agreements, Pub. L. 103-465 (GATT); The
      Uniformed Services Employment and Reemployment Rights Act of 1994, Pub. L.
      103-353 (USERRA); The Small Business Job Protection Act of 1996, Pub. L. 104-188
      (SBJPA) [including Section 414(u) of the Internal Revenue Code]; The Taxpayer
      Relief Act of 1997, Pub. L. 105-34 (TRA’97); and The Internal Revenue Service
      Restructuring and Reform Act of 1998, Pub. L. 105-206 (IRSRRA);
      and The
      Community Renewal Tax Relief Act of 2000, Pub. L. 106-554 (CRA), hereinafter
      referred to collectively as GUST. 

    

    Complete
      as applicable and appropriate.

     

    
      	
              I.

            	
              Plan
                Provision: Highly
                Compensated
                Employees

            

    

     

    
      	 	
              For
                Plan Years beginning after 1996, the Employer may elect a “Top-Paid Group”
                election and the Calendar Year Data election to determine the definition
                of Highly Compensated Employee:

            

    

    

    
      	 	
              
                *

              

            	
              A.

            	
              Top-Paid
                Group Election: A Participant (who is not a 5% owner at any time
                during
                the determination year or the look-back year) who earned more than
                $80,000
                as indexed for the look-back year is a Highly Compensated Employee
                if the
                Employee was in the Top-Paid Group for the look-back year. The election
                was applicable for:

            

    

    

    
      	 	
              
                *

              

            	
              1.

            	
              1997
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              2.

            	
              1998
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              3.

            	
              1999
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              4.

            	
              2000
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              5.

            	
              2001
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              6.

            	
              2002
                Plan Year.

            

    

    

    
      	 	
              
                *

              

            	
              B.

            	
              Calendar
                Year Data Election: In determining who is a Highly Compensated Employee
                (other than a 5% owner) the Employer makes a calendar year data election.
                The look-back year is the calendar year beginning with or within
                the
                look-back year. The election was applicable
                for:

            

    

    

    
      	 	
              
                *

              

            	
              1.

            	
              1998
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              2.

            	
              1999
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              3.

            	
              2000
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              4.

            	
              2001
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              5.

            	
              2002
                Plan Year.

            

    

    

    If
      the
      elections above are made, such election shall apply to all Plans maintained
      by
      the Employer.

    

    
      	 	
              
                
                  *

                

              

            	
              C.

            	
              Calendar
                Year Calculation Election (for 1997 Plan Year only): Indicate below
                whether the Calendar Year calculation election was made for Plan
                Years
                beginning in 1997:

            

    

    

    
      	 	
              
                *

              

            	
              Yes

            	 	
              
                *

              

            	
              No

            

    

    
       

      
        	
                II.

              	
                Plan
                  Provision:
                   Family
                  Aggregation

              

      

       

    

    
      	 	
              Did
                the Pre-SBJPA Family Aggregation rules of Code Sections 401(a)(17)(a)
                and
                414(q)(6), both in effect for Plan Years beginning before January
                1, 1997,
                continue to apply for any purpose for Plan Years beginning after
                1996? 

            

    

    

    
      	 	
              
                *

              

            	
              No

            

    

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    
       

    

    
      	
              *

            	Yes;
              explain the application:	 
	 	 	 
	 	 	 
	 	 	 
	 	If
              this rule was subsequently discontinued, indicate when rule no longer
              applied:
	 	 	 
	 	 	 

    

     

    Employers
      who adopt this Prototype Plan may not elect to continue to apply the pre-SBJA
      Family Aggregation rules.

    
      
         

        
          	
                  III.

                	Plan Provision:
                   Combined
                  Plan Limit of Code Section
                  415(e)

        

      

    

    

    Did
      the
      Employer maintain a Defined Benefit Plan prior to January 1, 2000?

    

    
      	 	
              
                *

              

            	
              Yes

            	
              
                T

              

            	
              No

            

    

    

    
      	 	
              Did
                the Plan continue to apply the combined Plan limit of Code Section
                415(e)
                (as in effect for Limitation Years beginning before January 1, 2000)
                in
                limitation years beginning after December 31, 1999, to the extent
                that
                such election conforms to the Plan’s
                operation?

            

    

    

    
      	 	
              
                *

              

            	
              Yes

            	
              
                *

              

            	
              No

            

    

    

    If
      yes,
      specify provisions below that will satisfy the 1.0 limitation of Code Section
      415(e). Such language must preclude Employer discretion. The Employer must
      also
      specify the interest and mortality assumptions used in determining Present
      Value
      in the Defined Benefit Plan. 

     

    
      	 
	 
	 
	 

    

    

    
      	
            	 	
              Employers
                who adopt this Prototype Plan may not elect to continue to apply
                the
                combined Plan limit of Code Section 415(e) in years beginning after
                the
                date the Employer adopts its GUST-related Plan.
                

            

    

     

    
      	
              IV.

            	
              Plan
                Provision: Nondiscrimination
                Testing

            

    

    

    The
      Small
      Business Job Protection Act permits the Employer to use the ADP and/or ACP
      of
      Non-Highly Compensated Employees for the prior year or current year in
      determining whether the plan satisfied the nondiscrimination tests.

    

    Employers
      who adopt this Prototype Plan must use the same testing method for both the
      ADP
      and ACP tests for Plan Years beginning on or after the date the Employer adopts
      this GUST-restated Plan. This restriction does not apply with respect to Plan
      Years beginning before the date the Employer adopts this GUST-restated
      plan.

    

    
      	 	
              1.

            	
              ADP
                Testing Election:

            

    

    

    
      	 	
              
                *

              

            	
              a.

            	
              Current
                year data for all Participants was
                used.

            

    

     

    
      
        	 	
                *

              	1. 	1997 Plan Year. 

      

      
        	 	
                *

              	2. 	1998 Plan Year.

      

      
        	 	
                
                  *

                

              	
                3.

              	
                1999
                  Plan Year.

              

      

    

    
      	 	
              
                *

              

            	
              4.

            	
              2000
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              5.

            	
              2001
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              6.

            	
              2002
                Plan Year.

            

    

    

    
      	 	
              
                *

              

            	
              b.

            	
              Prior
                year data for Participants who are Non-Highly Compensated Employees
                was
                used.

            

    

      

    
      
        	 	
                *

              	1. 	1997 Plan Year.

      

      
        	 	
                *

              	2. 	1998 Plan Year.

      

      
        	 	
                
                  *

                

              	
                3.

              	
                1999
                  Plan Year.

              

      

    

    
      	 	
              
                *

              

            	
              4.

            	
              2000
                Plan Year. 

            

    

    
      	 	
              
                *

              

            	
              5.

            	
              2001
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              6.

            	
              2002
                Plan Year.

            

    

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    
      	 	
              2.

            	
              ACP
                Testing Election:

            

    

    

    
      	 	
              
                *

              

            	
              a.

            	
              Current
                year data for all Participants was
                used.

            

    

    

    
      	 	
              
                *

              

            	
              1.

            	
              1997
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              2.

            	
              1998
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              3.

            	
              1999
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              4.

            	
              2000
                Plan Year. 

            

    

    
      	 	
              
                *

              

            	
              5.

            	
              2001
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              6.

            	
              2002
                Plan Year.

            

    

    

    
      	 	
              
                *

              

            	
              b.

            	
              Prior
                year data for Participants who are Non-Highly Compensated Employees
                was
                used. 

            

    

    

    
      	 	
              
                *

              

            	
              1.

            	
              1997
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              2.

            	
              1998
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              3.

            	
              1999
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              4.

            	
              2000
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              5.

            	
              2001
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              6.

            	
              2002
                Plan Year.

            

    

    
       

      
        	
                V.

              	
                Plan
                  Provision: First
                  Plan Year Testing
                  Elections

              

      

    

    

    
      	 	
              For
                a new 401(k) Plan, the Employer could use either the current or prior
                year
                testing methods as well as a rule that deems the prior year ADP/ACP
                to be
                3%.

            

    

    

    
      	 	
              1.

            	
              ADP
                Testing Election:

            

    

    

    
      	 	
              
                *

              

            	
              a.

            	
              Current
                year data for all Participants was
                used.

            

    

    

    
      	 	
              
                *

              

            	
              1.

            	
              1997
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              2.

            	
              1998
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              3.

            	
              1999
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              4.

            	
              2000
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              5.

            	
              2001
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              6.

            	
              2002
                Plan Year.

            

    

    

    
      	 	
              
                *

              

            	
              b.

            	
              Current
                year data for Participants who are Highly Compensated Employees will
                be
                used. The ADP for Participants who are Non-Highly Compensated Employees
                was assumed to be 3% or the actual ADP if
                greater.

            

    

    

    
      	 	
              
                *

              

            	
              1.

            	
              1997
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              2.

            	
              1998
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              3.

            	
              1999
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              4.

            	
              2000
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              5.

            	
              2001
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              6.

            	
              2002
                Plan Year.

            

    

    

    
      	 	
              2.

            	
              ACP
                Testing Election:

            

    

    

    
      	 	
              
                *

              

            	
              a.

            	
              Current
                year data for all Participants was
                used.

            

    

    

    
      	 	
              
                *

              

            	
              1.

            	
              1997
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              2.

            	
              1998
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              3.

            	
              1999
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              4.

            	
              2000
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              5.

            	
              2001
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              6.

            	
              2002
                Plan Year.

            

    

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    
      	 	
              
                *

              

            	
              b.

            	
              Current
                year data for Participants who are Highly Compensated Employees will
                be
                used. The ACP for Participants who are Non-Highly Compensated Employees
                was assumed to be 3% or the actual ACP if
                greater.

            

    

    

    
      	 	
              
                *

              

            	
              1.

            	
              1997
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              2.

            	
              1998
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              3.

            	
              1999
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              4.

            	
              2000
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              5.

            	
              2001
                Plan Year.

            

    

    
      	 	
              
                *

              

            	
              6.

            	
              2002
                Plan Year.

            

    

    

    
      	
              VI.

            	
              Plan
                Provision:
                Distribution
                Alternatives For Participants Who Are Not A More Than 5% Owner
                

            

    

    

    Select
      (A), (B), (C) and/or (D), whichever is applicable. Subsection (D) must be
      selected to the extent that there would otherwise be an elimination of a
      pre-retirement age 701⁄2 distribution option for Employees other than those listed
      above.

    

    
      	 	
              
                *

              

            	
              A.

            	
              Any
                Participant who has not had a separation from Service who had attained
                age
                701⁄2 in years after 1995 may elect by April 1 of the calendar year
                following the calendar year in which the Participant attained age
                701⁄2 (or
                by December 31, 1997, in the case of a Participant attaining age
                701⁄2 in
                1996) to defer distributions until the calendar year in which the
                Participant retires. If no such election is made, the Participant
                will
                begin receiving distributions by the April 1 of the calendar year
                following the calendar year in which the Participant attained age
                701⁄2 (or
                by December 31, 1997, in the case of a Participant attaining age
                701⁄2 in
                1996).

            

    

    

    
      	 	
              
                *

              

            	
              B.

            	
              Any
                Participant who has not had a separation from Service and is currently
                in
                benefit payment status because of attainment of age 701⁄2 in years prior to
                1997 may elect to stop distributions and recommence by the April
                1 of the
                calendar year following the calendar year in which the Participant
                retires. There is either
                (select one):
                

            

    

    

    
      	 	
              
                *

              

            	
              1.

            	
              a
                new Annuity Starting Date upon recommencement,
                or

            

    

    
      	 	
              *

            	
              2.

            	
              no
                new Annuity Starting Date upon
                recommencement.

            

    

    

    
      	 	
              
                *

              

            	
              C.

            	
              Any
                Participant who has not had a separation from Service, and is currently
                in
                benefit payment status because of attainment of age 701⁄2 in 1997 or in a
                later year (or attained age 701⁄2 in 1996, but had not commenced required
                minimum distributions in 1996) may elect to stop distributions and
                recommence by the April 1 of the calendar year following the calendar
                year
                in which the Participant retires. There is either
                (select one):
                

            

    

    

    
      	 	
              
                *

              

            	
              1.

            	
              a
                new Annuity Starting Date upon recommencement,
                or

            

    

    
      	 	
              
                *

              

            	
              2.

            	
              no
                new Annuity Starting Date upon
                recommencement.

            

    

    

    
      	 	
              
                *

              

            	
              D.

            	
              The
                pre-retirement distribution option is only eliminated with respect
                to
                Employees who reach age 701⁄2 in or after a calendar year that begins after
                the later of December 31, 1998, or the adoption of the amendment
                to the
                Plan. The pre-retirement age 701⁄2 distribution option is an optional form
                of benefit under which benefits are payable in a particular distribution
                form (including any modifications that may be elected after benefit
                commencement) and commencing at a time during the period that begins
                on or
                after January 1 of the calendar year following the calendar year
                in which
                an Employee attains age 701⁄2 and ends April 1 of the immediately following
                calendar year. 

            

    

    
      

      
        	
                VII.

              	
                Plan
                  Provision: Mandatory
                  Cash-out Rule

              

      

    

    

    
      	 	
              
                *

              

            	
              For
                Plan Years beginning after August 5, 1997, the $3,500 cash-out limit
                is
                increased to $5,000.

            

    

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

    
      

      
        	
                VIII. 

              	
                Plan
                  Provision: 30-Day
                  Waiver
                  Period

              

      

    

     

    For
      Plan
      Years beginning after December 31, 1996, if the Plan is subject to the Joint
      and
      Survivor rules did the Plan provide distributions prior to the expiration of
      the
      30-day waiting period?

    

    
      	 	
              
                *

              

            	
              Yes

            	
              
                *

              

            	
              No

            

    

     

    
      
        
          	
                  IX. 

                	
                  Plan
                    Provision: Suspension
                    of Loan
                    Repayments

                

        

      

    

    

    On
      or
      after December 12, 1994, did the Employer permit the suspension of loan
      repayments due to qualified military leave?

    

    
      	 	
              
                *

              

            	
              Yes

            	
              
                *

              

            	
              No

            

    

    

    
      	
              Effective
                Date:

            	 
	 

    

     

    
      
        
          
            	
                    X. 

                  	Plan Provision: Hardship
                    Distributions Treated as Eligible Rollover
                    Distributions

          

      

    

    

    The
      Employer had the option with respect to Hardship distributions made after
      December 31, 1998 to treat as eligible rollover distributions, or to delay
      the
      Effective Date until January 1, 2000. Hardship distributions were not treated
      as
      eligible rollover distributions effective as of: 

    

    
      	 	
              
                *

              

            	
              January
                1, 1999

            

    

    
      
        	 	
                
                  *

                

              	
                January
                  1, 2000

              

      

      
        
          	
                   

                	
                  
                    *

                  

                	
                  Other
                    (specify date):

                

        

    

    
      	 

    

    
      
        
          
            
              	
                      XI.

                    	Plan Provision: 401(k)
                      Safe Harbor
                      Provisions

            

          

      

    

    

    
      	 	
              For
                Plan Years beginning after 1998, the Employer may implement safe
                harbor
                provisions under Code Sections 401(m)(11) and 401(k)(12). Did the
                Plan
                elect safe harbor status?

            

    

     

    
      	 	
              
                *

              

            	
              Yes

            

    

     

    
      
        	 	
                
                  
                    T

                  

                

              	
                No

              

      

      
         

      

    

    
      	 	
              If
                yes, enter the formulas below:

            

    

    

    
      	
               

              Date
                Plan Year Begins

            	
               

              Section
                401(k)

            	
               

              Section
                401(m)

            
	
              ______/_______/99

            	
               

            	
               

            
	
              ______/_______/00

            	
               

            	
               

            
	
              ______/_______/01

            	
               

            	
               

            
	
              ______/_______/02

            	
               

            	
               

            

    

     

    
      	
              XII.

            	
              Other
                Plan Provisions:

            

    

    
      	 
	 
	 
	 

    

     

    
      
        
          	Effective
                  Date:	 	 
                  

        

      

      

      
        
          
            
            

          

          
            43

            
              

            

          

          
            
            

          

        

      

      

      SCHEDULE
        D

      

      SAFE
        HARBOR ELECTIONS FOR FLEXIBLE NON-ELECTIVE CONTRIBUTION

       

      The
        following elections are made with regard to the Plan’s Safe Harbor status
        pursuant to Section VII herein. For Plan Years indicated below, the Plan
        hereby
        invokes a Safe Harbor status in accordance with IRS Notices 98-52 and
        2000-3.

      

      For
        all
        Plan Years in which this Safe Harbor election is being made, the limitations
        and
        restrictions found in Section VII herein apply.

      

      
        	
                1.

              	
                For
                  the Plan Year beginning _____
                  and ending _____,
                  the Employer hereby invokes a Safe Harbor status as provided in
                  IRS Notice
                  2000-3. The Safe Harbor Contribution will be an amount equal to
                  _____%
                  (not less than 3%) of Compensation. This election is made on this
                  _____
                  day of _____,
                  _____
                  (date may not be later than 30 days prior to the end of the Plan
                  Year in
                  which such election is being
                  made).

              

      

      

      
        	
                2.

              	
                For
                  the Plan Year beginning _____
                  and ending _____,
                  the Employer hereby invokes a Safe Harbor status as provided in
                  IRS Notice
                  2000-3. The Safe Harbor Contribution will be an amount equal to
                  _____%
                  (not less than 3%) of Compensation. This election is made on this
                  _____
                  day of _____,
                  _____
                  (date may not be later than 30 days prior to the end of the Plan
                  Year in
                  which such election is being
                  made).

              

      

      

      
        	
                3.

              	
                For
                  the Plan Year beginning _____
                  and ending _____,
                  the Employer hereby invokes a Safe Harbor status as provided in
                  IRS Notice
                  2000-3. The Safe Harbor Contribution will be an amount equal to
                  _____%
                  (not less than 3%) of Compensation. This election is made on this
                  _____
                  day of _____,
                  _____
                  (date may not be later than 30 days prior to the end of the Plan
                  Year in
                  which such election is being
                  made).

              

      

      

      
        	
                4.

              	
                For
                  the Plan Year beginning _____
                  and ending _____,
                  the Employer hereby invokes a Safe Harbor status as provided in
                  IRS Notice
                  2000-3. The Safe Harbor Contribution will be an amount equal to
                  _____%
                  (not less than 3%) of Compensation. This election is made on this
                  _____
                  day of _____,
                  _____
                  (date may not be later than 30 days prior to the end of the Plan
                  Year in
                  which such election is being
                  made).

              

      

      

      
        	
                5.

              	
                For
                  the Plan Year beginning _____
                  and ending _____,
                  the Employer hereby invokes a Safe Harbor status as provided in
                  IRS Notice
                  2000-3. The Safe Harbor Contribution will be an amount equal to
                  _____%
                  (not less than 3%) of Compensation. This election is made on this
                  _____
                  day of _____,
                  _____
                  (date may not be later than 30 days prior to the end of the Plan
                  Year in
                  which such election is being
                  made).

              

      

    

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

    

      SCHEDULE
        E

      

      COLLECTIVE
        AND COMMINGLED FUNDS

       

      The
        Trustee is authorized to invest all or any part of the Fund in the following
        Collective and Commingled Funds as provided for in the Basic Plan Document
        #01:

      

      

      1.

      

      2.

      

      3.

      

      4.

      

      5.

      

      6.

      

      7.

      

      8.

      

      9.

      

      10.

       

    

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

    

    AMENDMENT
      

    TO
      THE

     NONSTANDARDIZED 

    CASH
      OR DEFERRED PROFIT-SHARING PLAN

    ADOPTION
      AGREEMENT #010

    

    
      	
              1.

            	
              Except
                as otherwise noted, effective as of the first day of the first Plan
                Year
                beginning after December 31, 2001, Section VI of the Nonstandardized
                Cash
                or Deferred Profit-Sharing Plan Adoption Agreement #010
                entitled “EMPLOYEE
                CONTRIBUTIONS” is
                amended by adding the following new
                sections:

            

    

    

    
      	 	
              “J”.

            	
              Catch-up
                Contributions (select
                one):

            

    

    

    
      	 	
              
                T

            	
              1.

            	
              Shall
                apply to contributions after 06/29/05.
                (enter December 31, 2001 or a later
                date).

            

    

    

    
      	 	
              
                *

              

            	
              2.

            	
              Shall
                not apply.

            

    

    
       

      
        	 	
                K.

              	Direct
                Rollovers:

      

    

    

    The
      Plan
      will accept a Direct Rollover of an Eligible Rollover Distribution from (check
      each that apply): 

    

    
      	 	
              
                *

              

            	
              1.

            	
              A
                Qualified Plan described in Code Section 401(a) or 403(a), excluding
                Voluntary After-tax Contributions.

            

    

    

    
      	 	
              
                *

              

            	
              2.

            	
              A
                Qualified Plan described in Code Section 401(a) or 403(a), including
                Voluntary After-tax Contributions. 

            

    

    

    
      	 	
              
                *

              

            	
              3.

            	
              An
                annuity contract described in Code Section 403(b), excluding Voluntary
                After-tax Contributions. 

            

    

    

    
      	 	
              
                *

              

            	
              4.

            	
              An
                eligible plan under Code Section 457(b) which is maintained by a
                state,
                political subdivision of a state, or an agency or instrumentality
                of a
                state or political subdivision of a state.

            

    

    

    
      	 	
              L.

            	
              Participant
                Rollover Contributions from Other
                Plans:

            

    

    

    The
      Plan
      will accept a Participant Rollover Contribution of an Eligible Rollover
      Distribution from (check only those that apply): 

    

    
      	 	
              
                *

              

            	
              1.

            	
              A
                Qualified Plan described in Code Section 401(a) or 403(a).
                

            

    

    

    
      	 	
              
                *

              

            	
              2.

            	
              An
                annuity contract described in Code Section 403(b).
                

            

    

    

    
      	 	
              
                *

              

            	
              3.

            	
              An
                eligible plan under Code Section 457(b) which is maintained by a
                state,
                political subdivision of a state, or any agency or instrumentality
                of a
                state or political subdivision of a state.

            

    

    

    
      	 	
              M.

            	
              Participant
                Rollover Contributions from
                IRAs:

            

    

    

    The
      Plan
      (select one): 

    

    
      	 	
              
                T

              

            	
              1.

            	
              will

            

    

    

    
      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

    

    

    
      	 	
              
                *

              

            	
              2.

            	
              will
                not 

            

    

    

    accept
      a
      Participant Rollover Contribution of the portion of a distribution from an
      Individual Retirement Account [which was not used as a conduit] or Annuity
      described in Code Section 408(a) or 408(b) that is eligible to be rolled over
      and would otherwise be includable in gross income.

    

    
      	 	
              N.

            	
              Effective
                Date of Direct Rollover and Participant Rollover Contribution
                Provisions:

            

    

    

    The
      provisions of (K), (L) and (M) above as they apply to Paragraph 4.4 of the
      Basic
      Plan Document #01 entitled “Rollover Contributions” shall be effective 06/30/05
      (enter a
      date no earlier than January 1, 2002).”

    

    
      	
              2.

            	
              Section
                VIII(A) of the Nonstandardized Cash or Deferred Profit-Sharing Plan
                Adoption Agreement #010 entitled, “Matching Employer Contributions” will
                be amended effective 06/30/05
                by
                the addition of a new paragraph 6, which shall read as follows:
                

            

    

    

    
      	 	
              “6.

            	
              Catch-Up
                Contributions:

            

    

    

    
      	 	
              
                *

              

            	
              a.

            	
              Catch-Up
                contributions made by the Participants will not be matched by the
                Employer. 

            

    

     

    
      	 	
              
                T

              

            	
              b.

            	
              Catch-Up
                Contributions made by the Participants will be matched on the same
                formula, terms and conditions as provided in Section VIII of the
                Adoption
                Agreement. A Matching Contribution will be made on the basis of the
                contribution type(s) selected below:

            

    

    

    
      	 	
              
                T

              

            	
              i.

            	
              Elective
                Deferrals

            

    

    
      	 	
              
                *

              

            	
              ii.

            	
              403(b)
                Deferrals”

            

    

    

    
      	
              3.

            	
              Section
                XI of the Nonstandardized Cash or Deferred Profit-Sharing Plan Adoption
                Agreement #010 entitled, “MULTIPLE PLANS MAINTAINED BY THE SAME EMPLOYER,
                LIMITATIONS ON ALLOCATIONS, AND TOP-HEAVY CONTRIBUTIONS” will be amended
                effective 06/30/05
                by
                the addition of a new paragraph (C) which shall read as
                follows:

            

    

    

    
      	 	
              “C.

            	
              Minimum
                Benefits for Employees Also Covered Under Another
                Plan:

            

    

    

    The
      Employer should describe below the extent, if any, to which the Top-Heavy
      Minimum Benefit requirements of Code Section 416(c) and paragraph 14.2 of the
      Basic Plan Document #01 shall be met in another plan. Please list the name
      of
      the other plan, the minimum benefit that will be provided under such other
      plan,
      and the Employees who will receive the minimum benefit under such other
      plan.”

     

    
      	 
	 
	 
	 

    

    

    
      	
              4.

            	
              Section
                XIII of the Nonstandardized Cash or Deferred Profit-Sharing Plan
                Adoption
                Agreement #010 entitled, “VESTING” will be amended effective __________________
                by
                the addition of a new paragraph (E) which shall read as
                follows:

            

    

    

    
      	 	
              Note:

            	
              First
                select to whom the vesting schedule will apply. Number 1 should be
                elected
                if only active Participants' Matching Contributions accounts will
                be
                affected. Letter (a) should be selected if the Employer wishes only
                to
                change the vesting schedule for contributions made to the Plan after
                December 31, 2001. Letter (b) should be selected if the Employer
                wants to
                change the vesting schedule for all Matching Contributions to the
                Plan
                (regardless of when made). Number 2 should be selected if the Employer
                wants to change the vesting schedule on Matching Contributions for
                all
                Participants - regardless of whether they are active or inactive.
                The
                applicable vesting schedule shall be selected from number 3 through
                7
                below.

            

    

    

    
      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

    

    

    
      	 	
              “E.

            	
              Vesting
                of Employer Matching Contributions:

            

    

    

    
      	 	
              
                *

              

            	
              1.

            	
              Participants
                who have completed one Hour of Service after
                2001

            

    

    

    
      	 	
              
                *

              

            	
              a.

            	
              The
                vesting schedule of Employer Matching Contributions as described
                in
                paragraph 9.2 of the Basic Plan Document #01 shall be selected below
                and
                shall apply only to account balances derived from Employer Matching
                Contributions attributable to a Plan Year beginning after December
                31,
                2001. 

            

    

    

    
      	 	
              
                *

              

            	
              b.

            	
              The
                vesting schedule of Employer Matching Contributions as described
                in
                paragraph 9.2 of
                the Basic Plan Document #01 shall be selected below and shall apply
                to all
                Participants with an account balance derived from Employer Matching
                Contributions.

            

    

    

    
      	 	
              
                *

              

            	
              2.

            	
              All
                Plan Participants:

            

    

    

    The
      vesting schedule of Employer Matching Contributions as described in paragraph
      9.2 of
      the
      Basic Plan Document #01 shall be selected below and shall apply to all
      Participants with an account balance derived from Employer Matching
      Contributions.

    

    The
      vesting schedule for Employer Matching Contributions shall be as
      follows:

    

    
      	 	
              
                *

              

            	
              3.

            	
              Not
                applicable. There are no Matching Contributions made to the
                Plan.

            

    

    

    
      	 	
              
                T

              

            	
              4.

            	
              Not
                applicable. The current formula(s) are equal to or greater than the
                three
                year cliff or six year graded vesting
                schedules.

            

    

    

    
      	 	
              
                *

              

            	
              5.

            	
              A
                Participant’s account balance derived from Employer Matching Contributions
                shall be fully and immediately
                vested.

            

    

    

    
      	 	
              
                *

              

            	
              6.

            	
              A
                Participant’s account balance derived from Employer Matching Contributions
                shall be nonforfeitable upon the Participant’s completion of three (3)
                years of vesting Service.

            

    

    

    
      	 	
              
                *

              

            	
              7.

            	
              A
                Participant’s account balance derived from Employer Matching Contributions
                shall vest according to the following
                schedule:

            

    

    

    
      	
              Years
                of Vesting Service

            	
              Vested
                Percentage

            
	 	 
	
              2

            	
               
                20%

            
	
              3

            	
               
                40%

            
	
              4

            	
               
                60%

            
	
              5

            	
               
                80%

            
	
              6

            	
              100%

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

      
        	
                5.

              	
                Section
                  XV of the Nonstandardized Cash or Deferred Profit-Sharing Plan
                  Adoption
                  Agreement #010 entitled, “IN-SERVICE WITHDRAWALS” will be amended by the
                  addition of a new paragraph (C) which shall read as
                  follows:

              

      

      

      
        	 	
                “C.

              	
                Suspension
                  Period for Hardship Distribution (select
                  one):

              

      

      

      
        	 	
                
                  T

                

              	
                1.

              	
                A
                  Participant who receives a distribution in calendar year 2001 on
                  account
                  of Hardship shall be prohibited from making Elective Deferrals
                  and
                  Voluntary After-tax Contributions under this and all other plans
                  of the
                  Employer for six (6) months after receipt of the distribution or
                  until
                  January 1, 2002, if later.

              

      

      

      
        	 	
                
                  *

                

              	
                2.

              	
                A
                  Participant who receives a distribution in calendar year 2001 on
                  account
                  of Hardship shall be prohibited from making Elective Deferrals
                  and
                  Voluntary After-tax Contributions under this and all other plans
                  of the
                  Employer for the period specified in the provisions of the Plan
                  relating
                  to suspension of Elective Deferrals that were in effect prior to
                  this
                  Amendment.”

              

      

      

      
        	
                6.

              	
                Section
                  XVIII of the Nonstandardized Cash or Deferred Profit-Sharing Plan
                  Adoption
                  Agreement #010 entitled, “DISTRIBUTION OPTIONS” will be amended effective
                  06/30/05
                  by
                  the addition of the following:

              

      

      

      
        	 	
                “E.

              	
                Treatment
                  of Rollovers in Application of Involuntary Cash-out
                  Provisions:

              

      

      

      The
        Plan
        (select one):

      

      
        	 	
                
                  T

                

              	
                Elects
                  to exclude Rollover Contributions in determining the value of the
                  Participant's nonforfeitable account balance for purposes of the
                  Plan's
                  involuntary cash-out rules.

              

      

      

      
        	 	
                
                  *

                

              	
                Does
                  not elect to exclude Rollover Contributions in determining the
                  value of
                  the Participant's nonforfeitable account balance for purposes of
                  the
                  Plan's involuntary cash-out rules.

              

      

      

      If
        the
        Employer has elected to exclude Rollover Contributions, the election shall
        apply
        with respect to distributions made after 06/29/05
        (enter a
        date no earlier than December 31, 2001) with respect to Participants who
        separated from Service after 06/29/05
        (enter
        the date; this date may be earlier than December 31, 2001).”

      

      
        	 	
                F.

              	
                Distribution
                  Upon Severance from
                  Employment:

              

      

      

      Distribution
        upon severance from employment as described in paragraph 6.6(d) of the Basic
        Plan Document #01 shall apply for distributions after 06/30/05
        (enter a
        date no earlier than December 31, 2001):

      

      
        	 	
                
                  T

                

              	
                regardless
                  of when the severance from employment
                  occurred.

              

      

      

      
        	 	
                
                  *

                

              	
                for
                  severance from employment occurring after _______________
                  (enter the Effective Date if different than the Effective Date
                  above).”

              

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      Executed,
        this ______________________
        day of
        ______________,
        _______  .

       

      
        	 	
                Atlas
                  America, Inc.

              
	 	
                Name
                  of Employer

              
	 	 	 
	 	 	 	
              
	 	
                Signed
                  by

              	 
	 	 	 
	 	 	 	
              
	 	
                Signature

              	 

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      

        AMENDMENT
          TO THE ADOPTION AGREEMENT FOR THE

        FINAL
          AND TEMPORARY MINIMUM DISTRIBUTION RULES

        OF
          CODE SECTION 401(a)(9)

        

        

        Except
          as otherwise noted, effective as of the first day of the first Plan Year
          beginning after December 31, 2001, on the Adoption Agreement the section
          entitled “Distribution Options” is amended by adding the following new section
          to the Adoption Agreement.

        

        Minimum
          Distribution Requirements

        

        Check
          and
          complete Section A below if any required minimum distributions for the
          2002
          distribution calendar year were made in accordance with the §401(a)(9) Final and
          Temporary Regulations.

        

        
          	
                  
                    T

                  

                	
                  A.

                	
                  Effective
                    Date of Plan Amendment for Section 401(a)(9) Final and Temporary
                    Treasury
                    Regulations.

                

        

        

        
          	 	
                  Article
                    XVII, Minimum Distribution Requirements, applies for purposes
                    of
                    determining Required Minimum Distributions for Distribution Calendar
                    Years
                    beginning with the 2003 calendar year, as well as Required Minimum
                    Distributions for the 2002 Distribution Calendar Year that are
                    made on or
                    after 06/29/05
                    (insert Effective Date).

                

        

        

        Check
          and
          complete any of the remaining sections if you wish to modify the rules
          in
          paragraphs 17.7 and 17.12 of Article XVII of the Plan.

        

        
          	
                  
                    T

                  

                	
                  B.

                	
                  Election
                    to Apply 5-Year Rule to Distributions to Designated
                    Beneficiaries: 

                

        

        

        If
          the
          Participant dies before distributions begin and there is a designated
          Beneficiary, distribution to the designated Beneficiary is not required
          to begin
          by the date specified in paragraph 17.7 of the Basic Plan Document #01
          but the
          Participant’s entire interest will be distributed to the designated Beneficiary
          by December 31 of the calendar year containing the fifth anniversary of
          the
          Participant’s death. If the Participant’s surviving Spouse is the Participant’s
          sole designated Beneficiary and the surviving Spouse dies after the Participant
          but before distributions to either the Participant or the surviving Spouse
          begin, this election will apply as if the surviving Spouse were the Participant.
          

        

        This
          election will apply to: 

        

        
          	 	
                  
                    T

                  

                	
                  1.

                	
                  All
                    distributions. 

                

        

        

        
          	 	
                  
                    *

                  

                	
                  2.

                	
                  The
                    following distributions: 

                

        

        

        __________________________________

        

        
          	
                  
                    T

                  

                	
                  C.

                	
                  Election
                    to Allow Participants or Beneficiaries to Elect 5-Year
                    Rule:

                

        

        

        Participants
          or Beneficiaries may elect on an individual basis whether the 5-year rule
          or the
          life expectancy rule in paragraph 17.7 and 17.12 of the Basic Plan Document
          #01
          applies to distributions after the death of a Participant who has a designated
          Beneficiary. The election must be made no later than the earlier of September
          30
          of the calendar year in which distribution would be required to begin under
          paragraph 17.7, or by September 30 of the calendar year which contains
          the fifth
          anniversary of the Participant’s (or, if applicable, surviving Spouse’s) death.
          If neither the Participant nor Beneficiary makes an election under this
          paragraph, distributions will be made in accordance with paragraph 17.7
          and
          17.12 of the Basic Plan Document #01 and, if applicable, the elections
          in
          section B above.

        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

        

        
          	
                  
                    *

                  

                	
                  D.

                	
                  Election
                    to Allow Designated Beneficiary Receiving Distributions Under
                    5-Year Rule
                    to Elect Life Expectancy
                    Distributions:

                

        

        

        A
          designated Beneficiary who is receiving payments under the 5-year rule
          may make
          a new election to receive payments under the life expectancy rule until
          December
          31, 2003, provided that all amounts that would have been required to be
          distributed under the life expectancy rule for all distribution calendar
          years
          before 2004 are distributed by the earlier of December 31, 2003 or the
          end of
          the 5-year period.

        

        

        IN
          WITNESS WHEREOF, the Employer has caused this Amendment to be executed
          this
          __________________
          day of
          __________________,
          ________ .

        

        
          	 	
                  Atlas
                    America, Inc.

                
	 	
                  Name
                    of Employer

                
	 	 	 
	 	 	 	
                
	 	
                  Signed
                    by

                	 
	 	 	 
	 	 	 	
                
	 	
                  Signature

                	 

        

         

        2SECURITIES PURCHASE AGREEMENT

      THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of
December 13, 2005, by and among TELEPLUS ENTERPRISES, INC., a Nevada corporation
(the "Company"), and the Buyers listed on Schedule I attached hereto
(individually, a "Buyer" or collectively "Buyers").

                                   WITNESSETH

      WHEREAS, the Company and the Buyer(s) are executing and delivering this
Agreement in reliance upon an exemption from securities registration pursuant to
Section 4(2) and/or Rule 506 of Regulation D ("Regulation D") as promulgated by
the U.S. Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "Securities Act");

      WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the Buyer(s),
as provided herein, and the Buyer(s) shall purchase up to Nine Million Dollars
($9,000,000) of secured convertible debentures (the "Convertible Debentures"),
which shall be convertible into shares of the Company's common stock, par value
$0.001 (the "Common Stock") (as converted, the "Conversion Shares"), of which
the original principal amount of Five Million Six Hundred Twenty Five Thousand
Dollars ($5,625,000) has previously been funded under the Convertible Debenture
issued on July 15, 2005 and Three Million Three Hundred Seventy Five Thousand
Dollars ($3,375,000) shall be funded on the fifth (5th) business day following
the date hereof (the "Closing"), subject to notification of satisfaction of the
conditions to the Closing set forth herein and in Sections 6 and 7 below (or
such later date as is mutually agreed to by the Company and the Buyer(s)), for a
total purchase price of up to Nine Million Dollars ($9,000,000), (the "Purchase
Price") in the respective amounts set forth opposite each Buyer(s) name on
Schedule I (the "Subscription Amount");

      WHEREAS, the portion of the Convertible Debenture funded prior to the date
hereof in the original principal amount of Five Million Six Hundred Twenty Five
Thousand Dollars ($5,625,000) shall be amended and consolidated into a new
Convertible Debenture together with accrued but unpaid interest and the unfunded
portion of Three Million Three Hundred Seventy Five Thousand Dollars
($3,375,000) shall be consolidated into a new Convertible Debenture on the date
hereof, the terms of which shall be as set forth therein;

      WHEREAS, any and all agreements, documents and instruments in connection
with the Convertible Debenture funded prior to the date hereof, including
without limitation the Securities Purchase Agreement and Pledge and Escrow
Agreement, all of which are dated July 15, 2005, shall be superseded by the
Transaction Documents (as such term is defined herein);

      WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering an Amended and
Restated Investor Registration Rights Agreement substantially in the form
attached hereto as Exhibit A (the "Investor Registration Rights Agreement")
pursuant to which the Company has agreed to provide certain registration rights
under the Securities Act and the rules and regulations promulgated there under,
and applicable state securities laws;

<PAGE>

      WHEREAS, the aggregate proceeds of the sale of the Convertible Debentures
contemplated hereby shall be held in escrow pursuant to the terms of an escrow
agreement substantially in the form of the Escrow Agreement attached hereto as
Exhibit B;

      WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering an Amended and
Restated Security Agreement substantially in the form attached hereto as Exhibit
C (the "Security Agreement") pursuant to which the Company has agreed to provide
the Buyer a security interest in Pledged Collateral (as this term is defined in
the Security Agreement) to secure the Company's obligations under this
Agreement, the Convertible Debenture, the Investor Registration Rights
Agreement, the Irrevocable Transfer Agent Instructions, the Security Agreement,
the Pledge and Escrow Agreement or any other obligations of the Company to the
Buyer;

      WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering an Amended and
Restated Pledge and Escrow Agreement substantially in the form attached hereto
as Exhibit D (the "Pledge and Escrow Agreement") pursuant to which the Company
has agreed to provide the Buyer a security interest in the Pledged Shares (as
this term is defined in the Pledge and Escrow Agreement) to secure the Company's
obligations under this Agreement, the Convertible Debenture, the Investor
Registration Rights Agreement, the Irrevocable Transfer Agent Instructions, the
Security Agreement, the Pledge and Escrow Agreement or any other obligations of
the Company to the Buyer;

      WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering Irrevocable Transfer
Agent Instructions substantially in the form attached hereto as Exhibit E (the
"Irrevocable Transfer Agent Instructions"); and

      WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the parties hereto are executing and delivering an Amended and
Restated Security Agreement by and among the Company, the Buyer and TelePlus
Connect Corp., an Ontario corporation and a wholly owned subsidiary of the
Company (a "Subsidiary"), an Amended and Restated Security Agreement by and
among the Company, the Buyer and TelePlus Retail Services, a Quebec corporation
and a wholly owned subsidiary of the Company (a "Subsidiary") and an Amended and
Restated Security Agreement by and among the Company, the Buyer and TelePlus
Wireless Corp., a Nevada corporation and a wholly owned subsidiary of the
Company (a "Subsidiary"), substantially in the form attached hereto as Exhibit E
(collectively, the "Subsidiary Security Agreements") pursuant to which the
Company and the Subsidiary have agreed to provide the Buyer a security interest
in Pledged Collateral (as this term is defined in the Subsidiary Security
Agreements) to secure the Company's obligations under this Agreement, the
Convertible Debenture, the Investor Registration Rights Agreement, the
Irrevocable Transfer Agent Instructions, the Security Agreement, the Subsidiary
Security Agreements, the Pledge and Escrow Agreement or any other obligations of
the Company to the Buyer.

      NOW, THEREFORE, in consideration of the mutual covenants and other
agreements contained in this Agreement the Company and the Buyer(s) hereby agree
as follows:

                                       2
<PAGE>

      1. PURCHASE AND SALE OF CONVERTIBLE DEBENTURES.

            (a) Purchase of Convertible Debentures. Subject to the satisfaction
(or waiver) of the terms and conditions of this Agreement, each Buyer agrees,
severally and not jointly, to purchase at the Closing and the Company agrees to
sell and issue to each Buyer, severally and not jointly, at the Closing,
Convertible Debentures in amounts corresponding with the Subscription Amount set
forth opposite each Buyer's name on Schedule I hereto. Upon execution hereof by
a Buyer, the Buyer shall wire transfer the Subscription Amount set forth
opposite his name on Schedule I in same-day funds or a check payable to "David
Gonzalez, Esq., as Escrow Agent for Teleplus Enterprises, Inc./Cornell Capital
Partners, LP", which Subscription Amount shall be held in escrow pursuant to the
terms of the Escrow Agreement (as hereinafter defined) and disbursed in
accordance therewith. Notwithstanding the foregoing, a Buyer may withdraw his
Subscription Amount and terminate this Agreement as to such Buyer at any time
after the execution hereof and prior to Closing (as hereinafter defined).

            (b) Closing Date. The Closing of the purchase and sale of the
Convertible Debentures shall take place at 10:00 a.m. Eastern Standard Time on
the fifth (5th) business day following the date hereof, subject to notification
of satisfaction of the conditions to the Closing set forth herein and in
Sections 6 and 7 below (or such later date as is mutually agreed to by the
Company and the Buyer(s)) (the "Closing Date"). The Closing shall occur on the
Closing Date at the offices of Yorkville Advisors, LLC, 101 Hudson Street, Suite
3700, Jersey City, New Jersey 07302 (or such other place as is mutually agreed
to by the Company and the Buyer(s)).

            (c) Escrow Arrangements; Form of Payment. Upon execution hereof by
Buyer(s) and pending the Closing, the aggregate proceeds of the sale of the
Convertible Debentures to Buyer(s) pursuant hereto shall be deposited in a
non-interest bearing escrow account with David Gonzalez, Esq., as escrow agent
(the "Escrow Agent"), pursuant to the terms of an escrow agreement between the
Company, the Buyer(s) and the Escrow Agent in the form attached hereto as
Exhibit B (the "Escrow Agreement"). Subject to the satisfaction of the terms and
conditions of this Agreement, on the Closing Date, (i) the Escrow Agent shall
deliver to the Company in accordance with the terms of the Escrow Agreement such
aggregate proceeds for the Convertible Debentures to be issued and sold to such
Buyer(s), minus the unpaid structuring fees and expenses of Yorkville Advisors
Management, LLC of Five Thousand Dollars ($5,000) referenced in Section 4 herein
and the commitment fee of Three Hundred Thirty Seven Thousand Five Hundred
Dollars ($337,500) referenced in Section 4 herein, the 10% discount referenced
in section 4 herein, each of which shall be paid directly from the gross
proceeds held in escrow of the Closing and (ii) the Company shall deliver to
each Buyer, Convertible Debentures which such Buyer(s) is purchasing in amounts
indicated opposite such Buyer's name on Schedule I, duly executed on behalf of
the Company.

      2. BUYER'S REPRESENTATIONS AND WARRANTIES.

      Each Buyer represents and warrants, severally and not jointly, that:

                                       3
<PAGE>

            (a) Investment Purpose. Each Buyer is acquiring the Convertible
Debentures and, upon conversion of Convertible Debentures, the Buyer will
acquire the Conversion Shares then issuable, for its own account for investment
only and not with a view towards, or for resale in connection with, the public
sale or distribution thereof, except pursuant to sales registered or exempted
under the Securities Act; provided, however, that by making the representations
herein, such Buyer reserves the right to dispose of the Conversion Shares at any
time in accordance with or pursuant to an effective Registration Statement (the
"Registration Statement") covering such Conversion Shares or an available
exemption under the Securities Act.

            (b) Accredited Investor Status. Each Buyer is an "Accredited
Investor" as that term is defined in Rule 501(a)(3) of Regulation D.

            (c) Reliance on Exemptions. Each Buyer understands that the
Convertible Debentures are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and state
securities laws and that the Company is relying in part upon the truth and
accuracy of, and such Buyer's compliance with, the representations, warranties,
agreements, acknowledgments and understandings of such Buyer set forth herein in
order to determine the availability of such exemptions and the eligibility of
such Buyer to acquire such securities.

            (d) Information. Each Buyer and its advisors (and his or, its
counsel), if any, have been furnished with all materials relating to the
business, finances and operations of the Company and information he deemed
material to making an informed investment decision regarding his purchase of the
Convertible Debentures and the Conversion Shares, which have been requested by
such Buyer. Each Buyer and its advisors, if any, have been afforded the
opportunity to ask questions of the Company and its management. Neither such
inquiries nor any other due diligence investigations conducted by such Buyer or
its advisors, if any, or its representatives shall modify, amend or affect such
Buyer's right to rely on the Company's representations and warranties contained
in Section 3 below. Each Buyer understands that its investment in the
Convertible Debentures and the Conversion Shares involves a high degree of risk.
Each Buyer is in a position regarding the Company, which, based upon employment,
family relationship or economic bargaining power, enabled and enables such Buyer
to obtain information from the Company in order to evaluate the merits and risks
of this investment. Each Buyer has sought such accounting, legal and tax advice,
as it has considered necessary to make an informed investment decision with
respect to its acquisition of the Convertible Debentures and the Conversion
Shares.

            (e) No Governmental Review. Each Buyer understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Convertible
Debentures or the Conversion Shares, or the fairness or suitability of the
investment in the Convertible Debentures or the Conversion Shares, nor have such
authorities passed upon or endorsed the merits of the offering of the
Convertible Debentures or the Conversion Shares.

                                       4
<PAGE>

            (f) Transfer or Resale. Each Buyer understands that except as
provided in the Investor Registration Rights Agreement: (i) the Convertible
Debentures have not been and are not being registered under the Securities Act
or any state securities laws, and may not be offered for sale, sold, assigned or
transferred unless (A) subsequently registered thereunder, or (B) such Buyer
shall have delivered to the Company an opinion of counsel, in a generally
acceptable form, to the effect that such securities to be sold, assigned or
transferred may be sold, assigned or transferred pursuant to an exemption from
such registration requirements; (ii) any sale of such securities made in
reliance on Rule 144 under the Securities Act (or a successor rule thereto)
("Rule 144") may be made only in accordance with the terms of Rule 144 and
further, if Rule 144 is not applicable, any resale of such securities under
circumstances in which the seller (or the person through whom the sale is made)
may be deemed to be an underwriter (as that term is defined in the Securities
Act) may require compliance with some other exemption under the Securities Act
or the rules and regulations of the SEC thereunder; and (iii) neither the
Company nor any other person is under any obligation to register such securities
under the Securities Act or any state securities laws or to comply with the
terms and conditions of any exemption thereunder. The Company reserves the right
to place stop transfer instructions against the shares and certificates for the
Conversion Shares.

            (g) Legends. Each Buyer understands that the certificates or other
instruments representing the Convertible Debentures and or the Conversion Shares
shall bear a restrictive legend in substantially the following form (and a stop
transfer order may be placed against transfer of such stock certificates):

            THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
            REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
            APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED
            SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND
            MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
            ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
            UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
            SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE
            FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE
            STATE SECURITIES LAWS.

The legend set forth above shall be removed and the Company within two (2)
business days shall issue a certificate without such legend to the holder of the
Conversion Shares upon which it is stamped, if, unless otherwise required by
state securities laws, (i) in connection with a sale transaction, provided the
Conversion Shares are registered under the Securities Act or (ii) in connection
with a sale transaction, after such holder provides the Company with an opinion
of counsel, which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions, to the effect that a public
sale, assignment or transfer of the Conversion Shares may be made without
registration under the Securities Act.

            (h) Authorization, Enforcement. This Agreement has been duly and
validly authorized, executed and delivered on behalf of such Buyer and is a
valid and binding agreement of such Buyer enforceable in accordance with its
terms, except as such enforceability may be limited by general principles of
equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the
enforcement of applicable creditors' rights and remedies.

                                       5
<PAGE>

            (i) Receipt of Documents. Each Buyer and his or its counsel has
received and read in their entirety: (i) this Agreement and each representation,
warranty and covenant set forth herein, the Security Agreement, the Investor
Registration Rights Agreement, the Escrow Agreement, the Irrevocable Transfer
Agent Agreement, and the Pledge and Escrow Agreement; (ii) all due diligence and
other information necessary to verify the accuracy and completeness of such
representations, warranties and covenants; (iii) the Company's Form 10-KSB for
the fiscal year ended December 31, 2004; (iv) the Company's Form 10-QSB for the
fiscal quarter ended September 30, 2005 and (v) answers to all questions each
Buyer submitted to the Company regarding an investment in the Company; and each
Buyer has relied on the information contained therein and has not been furnished
any other documents, literature, memorandum or prospectus.

            (j) Due Formation of Corporate and Other Buyers. If the Buyer(s) is
a corporation, trust, partnership or other entity that is not an individual
person, it has been formed and validly exists and has not been organized for the
specific purpose of purchasing the Convertible Debentures and is not prohibited
from doing so.

            (k) No Legal Advice From the Company. Each Buyer acknowledges, that
it had the opportunity to review this Agreement and the transactions
contemplated by this Agreement with his or its own legal counsel and investment
and tax advisors. Each Buyer is relying solely on such counsel and advisors and
not on any statements or representations of the Company or any of its
representatives or agents for legal, tax or investment advice with respect to
this investment, the transactions contemplated by this Agreement or the
securities laws of any jurisdiction.

      3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

      The Company represents and warrants to each of the Buyers that, except as
set forth in the SEC Documents (as defined herein):

            (a) Organization and Qualification. The Company and its subsidiaries
are corporations duly organized and validly existing in good standing under the
laws of the jurisdiction in which they are incorporated, and have the requisite
corporate power to own their properties and to carry on their business as now
being conducted. Each of the Company and its subsidiaries is duly qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries taken as a whole.

                                       6
<PAGE>

            (b) Authorization, Enforcement, Compliance with Other Instruments.
(i) The Company has the requisite corporate power and authority to enter into
and perform this Agreement, the Security Agreement, the Subsidiary Security
Agreements, the Investor Registration Rights Agreement, the Irrevocable Transfer
Agent Agreement, the Escrow Agreement, the Pledge and Escrow Agreement, and any
related agreements (collectively the "Transaction Documents") and to issue the
Convertible Debentures and the Conversion Shares in accordance with the terms
hereof and thereof, (ii) the execution and delivery of the Transaction Documents
by the Company and the consummation by it of the transactions contemplated
hereby and thereby, including, without limitation, the issuance of the
Convertible Debentures the Conversion Shares and the reservation for issuance
and the issuance of the Conversion Shares issuable upon conversion or exercise
thereof, have been duly authorized by the Company's Board of Directors and no
further consent or authorization is required by the Company, its Board of
Directors or its stockholders, (iii) the Transaction Documents have been duly
executed and delivered by the Company, (iv) the Transaction Documents constitute
the valid and binding obligations of the Company enforceable against the Company
in accordance with their terms, except as such enforceability may be limited by
general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies. The
authorized officer of the Company executing the Transaction Documents knows of
no reason why the Company cannot file the registration statement as required
under the Investor Registration Rights Agreement or perform any of the Company's
other obligations under such documents.

            (c) Capitalization. As of the date hereof, the authorized capital
stock of the Company consists of 600,000,000 shares of Common Stock, par value
$0.001 per share and 10,000,000 shares of Preferred Stock, $0.01 par value per
share ("Preferred Stock"), of which 86,029,786 shares of Common Stock and
2,000,000 shares of Preferred Stock were issued and outstanding. All of such
outstanding shares have been validly issued and are fully paid and
nonassessable. Except as disclosed in the SEC Documents (as defined in Section
3(f)), no shares of Common Stock are subject to preemptive rights or any other
similar rights or any liens or encumbrances suffered or permitted by the
Company. Except as disclosed in the SEC Documents, as of the date of this
Agreement, (i) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
subsidiaries, (ii) there are no outstanding debt securities and (iii) there are
no agreements or arrangements under which the Company or any of its subsidiaries
is obligated to register the sale of any of their securities under the
Securities Act (except pursuant to the Registration Rights Agreement) and (iv)
there are no outstanding registration statements and there are no outstanding
comment letters from the SEC or any other regulatory agency. There are no
securities or instruments containing anti-dilution or similar provisions that
will be triggered by the issuance of the Convertible Debentures as described in
this Agreement. The Company has furnished to the Buyer true and correct copies
of the Company's Articles of Incorporation, as amended and as in effect on the
date hereof (the "Articles of Incorporation"), and the Company's By-laws, as in
effect on the date hereof (the "By-laws"), and the terms of all securities
convertible into or exercisable for Common Stock and the material rights of the
holders thereof in respect thereto other than stock options issued to employees
and consultants.

                                       7
<PAGE>

            (d) Issuance of Securities. The Convertible Debentures are duly
authorized and, upon issuance in accordance with the terms hereof, shall be duly
issued, fully paid and nonassessable, are free from all taxes, liens and charges
with respect to the issue thereof. The Conversion Shares issuable upon
conversion of the Convertible Debentures have been duly authorized and reserved
for issuance. Upon conversion or exercise in accordance with the Convertible
Debentures the Conversion Shares will be duly issued, fully paid and
nonassessable.

            (e) No Conflicts. Except as disclosed in the SEC Documents, the
execution, delivery and performance of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby will
not (i) result in a material violation of the Certificate of Incorporation, any
certificate of designations of any outstanding series of preferred stock of the
Company or the By-laws or (ii) conflict with or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its subsidiaries is a party, or result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations and the rules and regulations of The National Association
of Securities Dealers Inc.'s OTC Bulletin Board on which the Common Stock is
quoted) applicable to the Company or any of its subsidiaries or by which any
property or asset of the Company or any of its subsidiaries is bound or
affected. Except as disclosed in the SEC Documents, neither the Company nor its
subsidiaries is in violation of any term of or in default under its Articles of
Incorporation or By-laws or their organizational charter or by-laws,
respectively, or any material contract, agreement, mortgage, indebtedness,
indenture, instrument, judgment, decree or order or any statute, rule or
regulation applicable to the Company or its subsidiaries. The business of the
Company and its subsidiaries is not being conducted, and shall not be conducted
in violation of any material law, ordinance, or regulation of any governmental
entity. Except as specifically contemplated by this Agreement and as required
under the Securities Act and any applicable state securities laws, the Company
is not required to obtain any consent, authorization or order of, or make any
filing or registration with, any court or governmental agency in order for it to
execute, deliver or perform any of its obligations under or contemplated by this
Agreement or the Registration Rights Agreement in accordance with the terms
hereof or thereof. Except as disclosed in the SEC Documents, all consents,
authorizations, orders, filings and registrations which the Company is required
to obtain pursuant to the preceding sentence have been obtained or effected on
or prior to the date hereof. The Company and its subsidiaries are unaware of any
facts or circumstance, which might give rise to any of the foregoing.

            (f) SEC Documents: Financial Statements. Since January 1, 2003, the
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC under of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (all of the foregoing filed prior to the
date hereof or amended after the date hereof and all exhibits included therein
and financial statements and schedules thereto and documents incorporated by
reference therein, being hereinafter referred to as the "SEC Documents"). The
Company has delivered to the Buyers or their representatives, or made available
through the SEC's website at http://www.sec.gov., true and complete copies of
the SEC Documents. As of their respective dates, the financial statements of the
Company disclosed in the SEC Documents (the "Financial Statements") complied as
to form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such Financial Statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and, fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments). No other information provided by or on behalf of the Company to
the Buyer which is not included in the SEC Documents, including, without
limitation, information referred to in this Agreement, contains any untrue
statement of a material fact or omits to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.

                                       8
<PAGE>

            (g) 10(b)-5. The SEC Documents do not include any untrue statements
of material fact, nor do they omit to state any material fact required to be
stated therein necessary to make the statements made, in light of the
circumstances under which they were made, not misleading.

            (h) Absence of Litigation. Except as disclosed in the SEC Documents
and the Disclosure Schedule (the "Disclosure Schedule") attached hereto as
Exhibit G, there is no action, suit, proceeding, inquiry or investigation before
or by any court, public board, government agency, self-regulatory organization
or body pending against or affecting the Company, the Common Stock or any of the
Company's subsidiaries, wherein an unfavorable decision, ruling or finding would
(i) have a material adverse effect on the transactions contemplated hereby (ii)
adversely affect the validity or enforceability of, or the authority or ability
of the Company to perform its obligations under, this Agreement or any of the
documents contemplated herein, or (iii) except as expressly disclosed in the SEC
Documents, have a material adverse effect on the business, operations,
properties, financial condition or results of operations of the Company and its
subsidiaries taken as a whole.

            (i) Acknowledgment Regarding Buyer's Purchase of the Convertible
Debentures. The Company acknowledges and agrees that the Buyer(s) is acting
solely in the capacity of an arm's length purchaser with respect to this
Agreement and the transactions contemplated hereby. The Company further
acknowledges that the Buyer(s) is not acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect to this Agreement and
the transactions contemplated hereby and any advice given by the Buyer(s) or any
of their respective representatives or agents in connection with this Agreement
and the transactions contemplated hereby is merely incidental to such Buyer's
purchase of the Convertible Debentures or the Conversion Shares. The Company
further represents to the Buyer that the Company's decision to enter into this
Agreement has been based solely on the independent evaluation by the Company and
its representatives.

            (j) No General Solicitation. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or sale of
the Convertible Debentures or the Conversion Shares.

                                       9
<PAGE>

            (k) No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of the
Convertible Debentures or the Conversion Shares under the Securities Act or
cause this offering of the Convertible Debentures or the Conversion Shares to be
integrated with prior offerings by the Company for purposes of the Securities
Act.

            (l) Employee Relations. Neither the Company nor any of its
subsidiaries is involved in any labor dispute nor, to the knowledge of the
Company or any of its subsidiaries, is any such dispute threatened. None of the
Company's or its subsidiaries' employees is a member of a union and the Company
and its subsidiaries believe that their relations with their employees are good.

            (m) Intellectual Property Rights. The Company and its subsidiaries
own or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, patents, patent
rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and rights necessary to conduct their respective
businesses as now conducted. The Company and its subsidiaries do not have any
knowledge of any infringement by the Company or its subsidiaries of trademark,
trade name rights, patents, patent rights, copyrights, inventions, licenses,
service names, service marks, service mark registrations, trade secret or other
similar rights of others, and, to the knowledge of the Company there is no
claim, action or proceeding being made or brought against, or to the Company's
knowledge, being threatened against, the Company or its subsidiaries regarding
trademark, trade name, patents, patent rights, invention, copyright, license,
service names, service marks, service mark registrations, trade secret or other
infringement; and the Company and its subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing.

            (n) Environmental Laws. The Company and its subsidiaries are (i) in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval.

            (o) Title. Any real property and facilities held under lease by the
Company and its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company and its subsidiaries.

            (p) Insurance. The Company and each of its subsidiaries are insured
by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its subsidiaries are
engaged. Neither the Company nor any such subsidiary has been refused any
insurance coverage sought or applied for and neither the Company nor any such
subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition,
financial or otherwise, or the earnings, business or operations of the Company
and its subsidiaries, taken as a whole.

                                       10
<PAGE>

            (q) Regulatory Permits. The Company and its subsidiaries possess all
material certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their
respective businesses, and neither the Company nor any such subsidiary has
received any notice of proceedings relating to the revocation or modification of
any such certificate, authorization or permit.

            (r) Internal Accounting Controls. The Company and each of its
subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, and (iii) the recorded amounts for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

            (s) No Material Adverse Breaches, etc. Except as set forth in the
SEC Documents, neither the Company nor any of its subsidiaries is subject to any
charter, corporate or other legal restriction, or any judgment, decree, order,
rule or regulation which in the judgment of the Company's officers has or is
expected in the future to have a material adverse effect on the business,
properties, operations, financial condition, results of operations or prospects
of the Company or its subsidiaries. Except as set forth in the SEC Documents,
neither the Company nor any of its subsidiaries is in breach of any contract or
agreement which breach, in the judgment of the Company's officers, has or is
expected to have a material adverse effect on the business, properties,
operations, financial condition, results of operations or prospects of the
Company or its subsidiaries.

            (t) Tax Status. Except as set forth in the SEC Documents, the
Company and each of its subsidiaries has made and filed all federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject and (unless and only to the extent that the
Company and each of its subsidiaries has set aside on its books provisions
reasonably adequate for the payment of all unpaid and unreported taxes) has paid
all taxes and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and has set aside on its books
provision reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Company know of no basis
for any such claim.

                                       11
<PAGE>

            (u) Certain Transactions. Except as set forth in the SEC Documents,
and except for arm's length transactions pursuant to which the Company makes
payments in the ordinary course of business upon terms no less favorable than
the Company could obtain from third parties and other than the grant of stock
options disclosed in the SEC Documents, none of the officers, directors, or
employees of the Company is presently a party to any transaction with the
Company (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.

            (v) Fees and Rights of First Refusal. The Company is not obligated
to offer the securities offered hereunder on a right of first refusal basis or
otherwise to any third parties including, but not limited to, current or former
shareholders of the Company, underwriters, brokers, agents or other third
parties.

      4. COVENANTS.

            (a) Best Efforts. Each party shall use its best efforts to timely
satisfy each of the conditions to be satisfied by it as provided in Sections 6
and 7 of this Agreement.

            (b) Form D. The Company agrees to file a Form D with respect to the
Conversion Shares as required under Regulation D and to provide a copy thereof
to each Buyer promptly after such filing. The Company shall, on or before the
Closing Date, take such action as the Company shall reasonably determine is
necessary to qualify the Conversion Shares, or obtain an exemption for the
Conversion Shares for sale to the Buyers at the Closing pursuant to this
Agreement under applicable securities or "Blue Sky" laws of the states of the
United States, and shall provide evidence of any such action so taken to the
Buyers on or prior to the Closing Date.

            (c) Reporting Status. Until the earlier of (i) the date as of which
the Buyer(s) may sell all of the Conversion Shares without restriction pursuant
to Rule 144(k) promulgated under the Securities Act (or successor thereto), or
(ii) the date on which (A) the Buyer(s) shall have sold all the Conversion
Shares and (B) none of the Convertible Debentures are outstanding (the
"Registration Period"), the Company shall file in a timely manner all reports
required to be filed with the SEC pursuant to the Exchange Act and the
regulations of the SEC thereunder, and the Company shall not terminate its
status as an issuer required to file reports under the Exchange Act even if the
Exchange Act or the rules and regulations thereunder would otherwise permit such
termination.

            (d) Use of Proceeds. The Company will use the proceeds from the sale
of the Convertible Debentures for general corporate and working capital
purposes.

            (e) Reservation of Shares. The Company shall take all action
reasonably necessary to at all times have authorized, and reserved for the
purpose of issuance, such number of shares of Common Stock as shall be necessary
to effect the issuance of the Conversion Shares. If at any time the Company does
not have available such shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all of the Conversion Shares, the Company
shall call and hold a special meeting of the shareholders within thirty (30)
days of such occurrence, for the sole purpose of increasing the number of shares
authorized. The Company's management shall recommend to the shareholders to vote
in favor of increasing the number of shares of Common Stock authorized.
Management shall also vote all of its shares in favor of increasing the number
of authorized shares of Common Stock.

                                       12
<PAGE>

            (f) Listings or Quotation. The Company shall promptly secure the
listing or quotation of the Conversion Shares upon each national securities
exchange, automated quotation system or The National Association of Securities
Dealers Inc.'s Over-The-Counter Bulletin Board ("OTCBB") or other market, if
any, upon which shares of Common Stock are then listed or quoted (subject to
official notice of issuance) and shall use its best efforts to maintain, so long
as any other shares of Common Stock shall be so listed, such listing of all
Conversion Shares from time to time issuable under the terms of this Agreement.
The Company shall maintain the Common Stock's authorization for quotation on the
OTCBB.

            (g) Fees and Expenses.

                  (i) Each of the Company and the Buyer(s) shall pay all costs
and expenses incurred by such party in connection with the negotiation,
investigation, preparation, execution and delivery of the Transaction Documents.
The Company shall pay Yorkville Advisors Management LLC a fee equal to Two
Hundred Seventy Thousand Dollars ($270,000), which shall be paid from the
proceeds of the Closing.

                  (ii)The Company shall pay a structuring fee to Yorkville
Advisors Management, LLC of Five Thousand Dollars ($5,000), which shall be paid
directly from the proceeds of the Closing.

                  (iii) Warrants. Upon the execution of this Agreement, the
Company issue to the Investor a warrant to purchase Nine Million (9,000,000)
shares of the Company's Common Stock for a period of three (3) years at an
exercise price per share equal to $0.25 and an additional warrant to purchase
Four Million (4,000,000) shares of the Company's Common Stock for a period of
three (3) years at an exercise price of $0.20 per share. The Company previously
issued to the Investor on July 15, 2005 a warrant to purchase Ten Million
(10,000,000) shares of the Company's Common Stock for a period of three (3)
years at an exercise price per share equal to $0.38 and an additional warrant to
purchase Ten Million (10,000,000) shares of the Company's Common Stock for a
period of three (3) years at an exercise price of $0.25 per share (all warrants
referenced in this Section shall collectively be referred to as the "Warrant
Shares").

            (h) Corporate Existence. So long as any of the Convertible
Debentures remain outstanding, the Company shall not directly or indirectly
consummate any merger, reorganization, restructuring, reverse stock split
consolidation, sale of all or substantially all of the Company's assets or any
similar transaction or related transactions (each such transaction, an
"Organizational Change") unless, prior to the consummation an Organizational
Change, the Company obtains the written consent of each Buyer. In any such case,
the Company will make appropriate provision with respect to such holders' rights
and interests to insure that the provisions of this Section 4(h) will thereafter
be applicable to the Convertible Debentures.

                                       13
<PAGE>

            (i) Transactions With Affiliates. So long as any Convertible
Debentures are outstanding, the Company shall not, and shall cause each of its
subsidiaries not to, enter into, amend, modify or supplement, or permit any
subsidiary to enter into, amend, modify or supplement any agreement,
transaction, commitment, or arrangement with any of its or any subsidiary's
officers, directors, person who were officers or directors at any time during
the previous two (2) years, stockholders who beneficially own five percent (5%)
or more of the Common Stock, or Affiliates (as defined below) or with any
individual related by blood, marriage, or adoption to any such individual or
with any entity in which any such entity or individual owns a five percent (5%)
or more beneficial interest (each a "Related Party"), except for (a) customary
employment arrangements and benefit programs on reasonable terms, (b) any
investment in an Affiliate of the Company, (c) any agreement, transaction,
commitment, or arrangement on an arms-length basis on terms no less favorable
than terms which would have been obtainable from a person other than such
Related Party, (d) any agreement, transaction, commitment, or arrangement which
is approved by a majority of the disinterested directors of the Company; for
purposes hereof, any director who is also an officer of the Company or any
subsidiary of the Company shall not be a disinterested director with respect to
any such agreement, transaction, commitment, or arrangement. "Affiliate" for
purposes hereof means, with respect to any person or entity, another person or
entity that, directly or indirectly, (i) has a ten percent (10%) or more equity
interest in that person or entity, (ii) has ten percent (10%) or more common
ownership with that person or entity, (iii) controls that person or entity, or
(iv) shares common control with that person or entity. "Control" or "controls"
for purposes hereof means that a person or entity has the power, direct or
indirect, to conduct or govern the policies of another person or entity.

            (j) Transfer Agent. The Company covenants and agrees that, in the
event that the Company's agency relationship with the transfer agent should be
terminated for any reason prior to a date which is two (2) years after the
Closing Date, the Company shall immediately appoint a new transfer agent and
shall require that the new transfer agent execute and agree to be bound by the
terms of the Irrevocable Transfer Agent Instructions (as defined herein).

            (k) Restriction on Issuance of the Capital Stock. So long as any
Convertible Debentures are outstanding, the Company shall not, without the prior
written consent of the Buyer(s) which shall not be unreasonably withheld, (i)
issue or sell shares of Common Stock or Preferred Stock without or without
consideration (ii) issue any warrant, option, right, contract, call, or other
security instrument granting the holder thereof, the right to acquire Common
Stock with or without consideration, (iii) enter into any security instrument
granting the holder a security interest in any and all assets of the Company
except as otherwise provided in the Security Agreement of even date between the
Company and the Buyers, or (iv) file any registration statement on Form S-8,
except for a registration statement on Form S-8 registering up to Two Million
(2,000,000) shares of Common Stock under an Employee Stock Option Plan. The
foregoing restriction shall exclude options granted and outstanding before July
15, 2005 under the Company's bona fide Employee Stock Option Plan, and any
options, warrants or other securities convertible or exchangeable into shares of
Common Stock of the Company (as outlined in the Disclosure Schedule) that were
granted and outstanding prior to July 15, 2005. In addition, the foregoing
restriction shall exclude the issuance of restricted shares of Common Stock of
the Company in connection with an acquisition of another business or equity
financing up to Two Million (2,000,000) shares of Common Stock in the aggregate.

                                       14
<PAGE>

            (l) Neither the Buyer(s) nor any of its affiliates have an open
short position in the Common Stock of the Company, and the Buyer(s) agrees that
it shall not, and that it will cause its affiliates not to, engage in any short
sales of or hedging transactions with respect to the Common Stock as long as any
Convertible Debenture or warrants to purchase the Warrant Shares shall remain
outstanding.

            (m) Rights of First Refusal. So long as any portion of Convertible
Debentures are outstanding, if the Company intends to raise additional capital
by the issuance or sale of capital stock of the Company, including without
limitation shares of any class of common stock, any class of preferred stock,
options, warrants or any other securities convertible or exercisable into shares
of common stock (whether the offering is conducted by the Company, underwriter,
placement agent or any third party) the Company shall be obligated to offer to
the Buyers such issuance or sale of capital stock, by providing in writing the
principal amount of capital it intends to raise and outline of the material
terms of such capital raise, prior to the offering such issuance or sale of
capital stock to any third parties including, but not limited to, current or
former officers or directors, current or former shareholders and/or investors of
the obligor, underwriters, brokers, agents or other third parties. The Buyers
shall have ten (10) business days from receipt of such notice of the sale or
issuance of capital stock to accept or reject such capital raising offer. The
Buyer's acceptance shall be made in writing and shall be on the same terms as
the issuance or sale presented by the Company to the Buyer.

      5. TRANSFER AGENT INSTRUCTIONS.

            (a) The Company shall issue the Irrevocable Transfer Agent
Instructions to its transfer agent irrevocably appointing David Gonzalez, Esq.
as the Company's agent for purpose of having certificates issued, registered in
the name of the Buyer(s) or its respective nominee(s), for the Conversion Shares
representing such amounts of Convertible Debentures as specified from time to
time by the Buyer(s) to the Company upon conversion of the Convertible
Debentures, for interest owed pursuant to the Convertible Debenture, and for any
and all Liquidated Damages (as this term is defined in the Investor Registration
Rights Agreement). David Gonzalez, Esq. shall be paid a cash fee of Fifty
Dollars ($50) for every occasion they act pursuant to the Irrevocable Transfer
Agent Instructions. The Company shall not change its transfer agent without the
express written consent of the Buyer(s), which may be withheld by the Buyer(s)
in its sole discretion. Prior to registration of the Conversion Shares under the
Securities Act, all such certificates shall bear the restrictive legend
specified in Section 2(g) of this Agreement. The Company warrants that no
instruction other than the Irrevocable Transfer Agent Instructions referred to
in this Section 5, and stop transfer instructions to give effect to Section 2(g)
hereof (in the case of the Conversion Shares prior to registration of such
shares under the Securities Act) will be given by the Company to its transfer
agent and that the Conversion Shares shall otherwise be freely transferable on
the books and records of the Company as and to the extent provided in this
Agreement and the Investor Registration Rights Agreement. Nothing in this
Section 5 shall affect in any way the Buyer's obligations and agreement to
comply with all applicable securities laws upon resale of Conversion Shares. If
the Buyer(s) provides the Company with an opinion of counsel, in form, scope and
substance customary for opinions of counsel in comparable transactions to the
effect that registration of a resale by the Buyer(s) of any of the Conversion
Shares is not required under the Securities Act, the Company shall within two
(2) business days instruct its transfer agent to issue one or more certificates
in such name and in such denominations as specified by the Buyer. The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Buyer by vitiating the intent and purpose of the
transaction contemplated hereby. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Section 5 will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Section 5, that the Buyer(s) shall be
entitled, in addition to all other available remedies, to an injunction
restraining any breach and requiring immediate issuance and transfer, without
the necessity of showing economic loss and without any bond or other security
being required.

                                       15
<PAGE>

      6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

      The obligation of the Company hereunder to issue and sell the Convertible
Debentures to the Buyer(s) at the Closing is subject to the satisfaction, at or
before the Closing Date, of each of the following conditions, provided that
these conditions are for the Company's sole benefit and may be waived by the
Company at any time in its sole discretion:

            (a) Each Buyer shall have executed the Transaction Documents and
delivered them to the Company.

            (b) The Buyer(s) shall have delivered to the Escrow Agent the
Purchase Price for Convertible Debentures in respective amounts as set forth
next to each Buyer as outlined on Schedule I attached hereto and the Escrow
Agent shall have delivered the net proceeds to the Company by wire transfer of
immediately available U.S. funds pursuant to the wire instructions provided by
the Company.

            (c) The representations and warranties of the Buyer(s) shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and the Buyer(s) shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Buyer(s) at or prior to the Closing Date.

      7. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.

            (a) The obligation of the Buyer(s) hereunder to Purchase the
Convertible Debentures at the Closing is subject to the satisfaction, at or
before the Closing Date, of each of the following conditions:

                  (i) The Company shall have executed the Transaction Documents
and delivered the same to the Buyer(s).

                                       16
<PAGE>

                  (ii)The Common Stock shall be authorized for quotation on the
OTCBB, trading in the Common Stock shall not have been suspended for any reason,
and all the Conversion Shares issuable upon the conversion of the Convertible
Debentures shall be approved by the OTCBB.

                  (iii) The representations and warranties of the Company shall
be true and correct in all material respects (except to the extent that any of
such representations and warranties is already qualified as to materiality in
Section 3 above, in which case, such representations and warranties shall be
true and correct without further qualification) as of the date when made and as
of the Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date) and the Company shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by the Company at or prior to the Closing Date. If requested by
the Buyer, the Buyer shall have received a certificate, executed by the
President of the Company, dated as of the Closing Date, to the foregoing effect
and as to such other matters as may be reasonably requested by the Buyer
including, without limitation an update as of the Closing Date regarding the
representation contained in Section 3(c) above.

                  (iv)The Company shall have executed and delivered to the
Buyer(s) the Convertible Debentures in the respective amounts set forth opposite
each Buyer(s) name on Schedule I attached hereto.

                  (v) The Buyer(s) shall have received an opinion of counsel
from Kirkpatrick & Lockhart Nicholson Graham LLP in a form satisfactory to the
Buyer(s).

                  (vi)The Company shall have provided to the Buyer(s) a
certificate of good standing from the secretary of state from the state in which
the company is incorporated.

                  (vii) The Company shall have delivered to the Escrow Agent the
Pledged Shares as well executed and medallion guaranteed stock bond powers as
required pursuant to the Pledge and Escrow Agreement.

                  (viii) The Company shall have provided to the Buyer an
acknowledgement, to the satisfaction of the Buyer, from the Company's
independent certified public accountants as to its ability to provide all
consents required in order to file a registration statement in connection with
this transaction.

                  (ix)The Company shall have reserved out of its authorized and
unissued Common Stock, solely for the purpose of effecting the conversion of the
Convertible Debentures, shares of Common Stock to effect the conversion of all
of the Conversion Shares then outstanding.

                  (x) The Irrevocable Transfer Agent Instructions, in form and
substance satisfactory to the Buyer, shall have been delivered to and
acknowledged in writing by the Company's transfer agent.

                                       17
<PAGE>

      8. INDEMNIFICATION.

            (a) In consideration of the Buyer's execution and delivery of this
Agreement and acquiring the Convertible Debentures and the Conversion Shares
hereunder, and in addition to all of the Company's other obligations under this
Agreement, the Company shall defend, protect, indemnify and hold harmless the
Buyer(s) and each other holder of the Convertible Debentures and the Conversion
Shares, and all of their officers, directors, employees and agents (including,
without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the "Buyer Indemnitees") from and
against any and all actions, causes of action, suits, claims, losses, costs,
penalties, fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Buyer Indemnitee is a party to the action for
which indemnification hereunder is sought), and including reasonable attorneys'
fees and disbursements (the "Indemnified Liabilities"), incurred by the Buyer
Indemnitees or any of them as a result of, or arising out of, or relating to (a)
any misrepresentation or breach of any representation or warranty made by the
Company in this Agreement, the Convertible Debentures or the Investor
Registration Rights Agreement or any other certificate, instrument or document
contemplated hereby or thereby, (b) any breach of any covenant, agreement or
obligation of the Company contained in this Agreement, or the Investor
Registration Rights Agreement or any other certificate, instrument or document
contemplated hereby or thereby, or (c) any cause of action, suit or claim
brought or made against such Indemnitee and arising out of or resulting from the
execution, delivery, performance or enforcement of this Agreement or any other
instrument, document or agreement executed pursuant hereto by any of the parties
hereto, any transaction financed or to be financed in whole or in part, directly
or indirectly, with the proceeds of the issuance of the Convertible Debentures
or the status of the Buyer or holder of the Convertible Debentures the
Conversion Shares, as a Buyer of Convertible Debentures in the Company. To the
extent that the foregoing undertaking by the Company may be unenforceable for
any reason, the Company shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities, which is permissible under
applicable law.

            (b) In consideration of the Company's execution and delivery of this
Agreement, and in addition to all of the Buyer's other obligations under this
Agreement, the Buyer shall defend, protect, indemnify and hold harmless the
Company and all of its officers, directors, employees and agents (including,
without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the "Company Indemnitees") from
and against any and all Indemnified Liabilities incurred by the Indemnitees or
any of them as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Buyer(s) in this Agreement, instrument or document contemplated hereby or
thereby executed by the Buyer, (b) any breach of any covenant, agreement or
obligation of the Buyer(s) contained in this Agreement, the Investor
Registration Rights Agreement or any other certificate, instrument or document
contemplated hereby or thereby executed by the Buyer, or (c) any cause of
action, suit or claim brought or made against such Company Indemnitee based on
material misrepresentations or due to a material breach and arising out of or
resulting from the execution, delivery, performance or enforcement of this
Agreement, the Investor Registration Rights Agreement or any other instrument,
document or agreement executed pursuant hereto by any of the parties hereto. To
the extent that the foregoing undertaking by each Buyer may be unenforceable for
any reason, each Buyer shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities, which is permissible under
applicable law.

                                       18
<PAGE>

      9. GOVERNING LAW: MISCELLANEOUS.

            (a) Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New Jersey without
regard to the principles of conflict of laws. The parties further agree that any
action between them shall be heard in Hudson County, New Jersey, and expressly
consent to the jurisdiction and venue of the Superior Court of New Jersey,
sitting in Hudson County and the United States District Court for the District
of New Jersey sitting in Newark, New Jersey for the adjudication of any civil
action asserted pursuant to this Paragraph.

            (b) Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party. In the event any signature page is
delivered by facsimile transmission, the party using such means of delivery
shall cause four (4) additional original executed signature pages to be
physically delivered to the other party within five (5) days of the execution
and delivery hereof.

            (c) Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.

            (d) Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.

            (e) Entire Agreement, Amendments. This Agreement supersedes all
other prior oral or written agreements between the Buyer(s), the Company, their
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be waived or amended other than by an instrument in writing signed
by the party to be charged with enforcement.

            (f) Notices. Any notices, consents, waivers, or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii) upon confirmation of receipt, when sent by facsimile;
(iii) three (3) days after being sent by U.S. certified mail, return receipt
requested, or (iv) one (1) day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:

                                       19
<PAGE>

If to the Company, to:         Teleplus Enterprises, Inc.
                               7575 TransCanada - Suite 305
                               St-Laurent, Quebec H4T 1V6
                               Attention:        Marius Silvasan, CEO
                               Telephone:        (514) 344-0778
                               Facsimile:        (514) 344-8675

With a copy to:                Kirkpatrick & Lockhart Nicholson Graham LLP
                               201 S. Biscayne Blvd. - Suite 2000
                               Miami, Florida 33131
                               Attention:        Clayton E. Parker, Esq.
                               Telephone:        (305) 539-3306
                               Facsimile:        (305) 358-7095

      If to the Buyer(s), to its address and facsimile number on Schedule I,
with copies to the Buyer's counsel as set forth on Schedule I. Each party shall
provide five (5) days' prior written notice to the other party of any change in
address or facsimile number.

            (g) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
Neither the Company nor any Buyer shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other party
hereto.

            (h) No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.

            (i) Survival. Unless this Agreement is terminated under Section
9(l), the representations and warranties of the Company and the Buyer(s)
contained in Sections 2 and 3, the agreements and covenants set forth in
Sections 4, 5 and 9, and the indemnification provisions set forth in Section 8,
shall survive the Closing for a period of two (2) years following the date on
which the Convertible Debentures are converted in full. The Buyer(s) shall be
responsible only for its own representations, warranties, agreements and
covenants hereunder.

            (j) Publicity. The Company and the Buyer(s) shall have the right to
approve, before issuance any press release or any other public statement with
respect to the transactions contemplated hereby made by any party; provided,
however, that the Company shall be entitled, without the prior approval of the
Buyer(s), to issue any press release or other public disclosure with respect to
such transactions required under applicable securities or other laws or
regulations (the Company shall use its best efforts to consult the Buyer(s) in
connection with any such press release or other public disclosure prior to its
release and Buyer(s) shall be provided with a copy thereof upon release
thereof).

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

                                       20
<PAGE>

            (l) Termination. In the event that the Closing shall not have
occurred with respect to the Buyers on or before five (5) business days from the
date hereof due to the Company's or the Buyer's failure to satisfy the
conditions set forth in Sections 6 and 7 above (and the non-breaching party's
failure to waive such unsatisfied condition(s)), the non-breaching party shall
have the option to terminate this Agreement with respect to such breaching party
at the close of business on such date without liability of any party to any
other party; provided, however, that if this Agreement is terminated by the
Company pursuant to this Section 9(l), the Company shall remain obligated to
reimburse the Buyer(s) for the fees and expenses of Yorkville Advisors
Management, LLC described in Section 4(g) above.

            (m) No Strict Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.

                    [REMAINDER PAGE INTENTIONALLY LEFT BLANK]

                                       21
<PAGE>

      IN WITNESS WHEREOF, the Buyers and the Company have caused this Securities
Purchase Agreement to be duly executed as of the date first written above.

                                           COMPANY:
                                           TELEPLUS ENTERPRISES, INC.

                                           By: /s/ Marius Silvasan
                                               ---------------------------------
                                           Name:   Marius Silvasan
                                           Title:  CEO

                                       22
<PAGE>

                                    EXHIBIT A

                 FORM OF INVESTOR REGISTRATION RIGHTS AGREEMENT
                 ----------------------------------------------

<PAGE>

                                    EXHIBIT B

                            FORM OF ESCROW AGREEMENT
                            ------------------------

<PAGE>

                                    EXHIBIT C

                               SECURITY AGREEMENT
                               ------------------

<PAGE>

                                    EXHIBIT D

                           PLEDGE AND ESCROW AGREEMENT
                           ---------------------------

<PAGE>

                                    EXHIBIT E

                     IRREVOCABLE TRANSFER AGENT INSTRUCTIONS
                     ---------------------------------------

<PAGE>

                                    EXHIBIT F

                         SUBSIDIARY SECURITY AGREEMENTS
                         ------------------------------

<PAGE>

                                    EXHIBIT G

                               DISCLOSURE SCHEDULE
                               -------------------

(i) Securities: The Company has the following securities outstanding or
convertible into securities of the Company:

      Kelly McLaren: options to purchase: (i) 100,000 shares at an exercise
      price of USD$0.21 that vest on September 29, 2005; (ii) 100,000 shares at
      an exercise price of USD$0.22 that vest on April 1, 2007; (iii) 100,000
      shares at an exercise price of USD$0.23 that vest on April 1, 2008; (iv)
      100,000 shares at an exercise price of USD$0.24 that vest on April 1,
      2009; and (v) 100,000 shares at an exercise price of USD$0.25 that vest on
      April 1, 2010. 200,000 shares at an exercise price of USD$0.36 that vest
      the 29 of September 2005; 200,000 shares at an exercise price of USD$0.38
      that vest the 29 of September 2006; 200,000 shares at an exercise price of
      USD$0.40 that vest the 29 September 2007; 200,000 shares at an exercise
      price of USD$0.45 that vest 29 September 2008; 200,000 shares at an
      exercise price of USD$0.50 that vest 29 September 2009

      Robert Krebs: options to purchase: (i) 70,000 shares at an exercise price
      of USD$0.21 that vest on September 1, 2005; (ii) 75,000 shares at an
      exercise price of USD$0.22 that vest on June 1, 2006; and (iii) 100,000
      shares at an exercise price of USD$0.23 that vest on December 1, 2007.
      140,000 shares at an exercise price of USD$0.36 that vest the 1of December
      2004; 150,000 shares at an exercise price of USD$0.38 that vest the 1 of
      December 2005; 200,000 shares at an exercise price of USD$0.40 that vest 1
      June 2007

      Marius Silvasan: options to purchase: (i) 750,000 shares at an exercise
      price of USD $0.21 that vest on September 1, 2005; (ii) 1,000,000 shares
      at an exercise price of USD $0.22 that vest on December 1, 2005; and (iii)
      1,250,000 shares at an exercise price of USD $0.23 that vest on December
      1, 2006. 1,500,000 shares at an exercise price of $0.36 that vest the 3 of
      December 2004; 2,000,000 shares at an exercise price of $0.38 that vest
      the 3 of June 2005; 2,500,000 shares at an exercise price of $0.40 that
      vest the 3 of June 2006

      Tom Davis (the new COO) -- options to purchase: (i) 150,000 shares at an
      exercise price of USD $0.21 that vest on May 1, 2006; (ii) 150,000 shares
      at an exercise price of USD $0.22 that vest on November 1, 2006; (iii)
      150,000 shares at an exercise price of USD $0.23 that vest on May 1, 2007;
      and (iv) 150,000 shares at an exercise price of USD $0.24 that vest on
      November 1, 2007.

      Michael Karpheden: an option to purchase 50,000 shares at an exercise
      price of USD$0.21 that vest on December 1, 2005

<PAGE>

      Hakan Wretsell: an option to purchase 50,000 shares at an exercise price
      of USD$0.21 that vest on December 1, 2005

      Smart Cell: 60,000 shares of common stock will be issued to Smart Cell
      over the next 6 months. The shares were issued in relation to the
      acquisition of Smart Cell.

      Cellz: 280,000 shares of common stock will be issued to Cells over the
      next 6 months. The shares were issued in relation to the acquisition of
      Cells.

            The above Options expire three years after vesting date.

      Phantom Stock Plan:

      The Company has established a Phantom Stock Plan for senior executives and
      has initially granted phantom stock in an amount equal to five perecent
      (5%) of the Company's fair market value.

(ii) Litigation: The Company has the following pending litigation:

      This action was brought by Howard Salamon d/b/a "Salamon Brothers",
seeking the sum of $200,000 as a finder's fee for introducing TelePlus
Enterprises, Inc. (TelePlus) to a source of capital. Salamon claims 10% of the
total amount of financing received from Cornell Capital Partners, LP. TelePlus
has answered the Complaint and alleged several affirmative defenses including
the illegality of the alleged "finder's fee agreement" on the grounds that
Salamon is not a registered broker/dealer with either the NASD or SEC and under
well settled law cannot therefore enforce the finder's fee agreement. Cornell
has moved to intervene in the action and opposes Salamon's claim asserting
tortuous interference with a contract as well as seeking a declaratory judgment.
Salamon has made a motion for an attachment of Cornell's funds which has been
opposed by both Cornell and TelePlus and is on for a hearing before Judge Walls
in Newark Federal District Court on July 25, 2005.

BCGU (Company to include description of lawsuit filed by Company against BCGU)

<PAGE>

                                   SCHEDULE I
                                   ----------

                               SCHEDULE OF BUYERS
                               ------------------

<TABLE>
<CAPTION>
                                                                                 Address/Facsimile             Amount of
                Name                              Signature                       Number of Buyer             Subscription
                ----                              ---------                       ---------------             ------------
<S>                                    <C>                               <C>                                     <C>
Cornell Capital Partners, LP           By:      Yorkville Advisors, LLC  101 Hudson Street - Suite 3700          $9,000,000
                                       Its:     General Partner          Jersey City, NJ  07303
                                                                         Facsimile:        (201) 985-8266

                                       By: /s/ Mark Angelo
                                           ---------------------------
                                       Name:    Mark Angelo
                                       Its:     Portfolio Manager

With a copy to:                        David Gonzalez, Esq.              101 Hudson Street - Suite 3700
                                                                         Jersey City, NJ 07302
                                                                         Facsimile:        (201) 985-8266
</TABLE>

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