Document:

EXHIBIT 4.3

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

                                  MERRILL LYNCH

                                 ---------------
                                     SPECIAL
                                 ---------------

                                PROTOTYPE DEFINED

                                CONTRIBUTION PLAN

                               ADOPTION AGREEMENT

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

                                   401(K) PLAN

                              EMPLOYEE THRIFT PLAN

                               PROFIT-SHARING PLAN

                         LETTER SERIAL NUMBER: D359287B
                      NATIONAL OFFICE LETTER DATE: 6/29/93

THIS PROTOTYPE PLAN AND ADOPTION AGREEMENT ARE IMPORTANT LEGAL INSTRUMENTS WITH
LEGAL AND TAX IMPLICATIONS FOR WHICH THE SPONSOR, MERRILL LYNCH, PIERCE, FENNER
& SMITH, INCORPORATED, DOES NOT ASSUME RESPONSIBILITY. THE EMPLOYER IS URGED TO
CONSULT WITH ITS OWN ATTORNEY WITH REGARD TO THE ADOPTION OF THIS PLAN AND ITS
SUITABILITY TO ITS CIRCUMSTANCES.

<PAGE>

ADOPTION OF PLAN
----------------

The Employer named below hereby establishes or restates a profit-sharing plan
that includes a [X] 401(k), [ ] profit-sharing and/or [ ] thrift plan feature
(the "Plan") by adopting the Merrill Lynch Special Prototype Defined
Contribution Plan and Trust as modified by the terms and provisions of this
Adoption Agreement.

EMPLOYER AND PLAN INFORMATION
-----------------------------

Employer Name:*  SAMUELS JEWELERS, INC.

Business Address: 2914 Montopolis Drive, Suite 200

                  Austin, TX  78741

Telephone Number: (512) 369-1400

Employer Taxpayer ID Number: 95-3746316

Employer Taxable Year ends on: DECEMBER 31ST

Plan Name: SAMUELS JEWELERS, INC.
           401(K)

Plan Number: 001
<TABLE>
                                          401(K)        PROFIT SHARING          THRIFT
<S>                                      <C>             <C>                 <C>
Effective Date of Adoption
          or Restatement:                06/01/99        ___/___/___         ___/___/___

Original Effective Date:                 01/01/95        ___/___/___         ___/___/___
</TABLE>
IF THIS PLAN IS A CONTINUATION OR AN AMENDMENT OF A PRIOR PLAN, ALL OPTIONAL
FORMS OF BENEFITS PROVIDED IN THE PRIOR PLAN MUST BE PROVIDED UNDER THIS PLAN TO
ANY PARTICIPANT WHO HAD AN ACCOUNT BALANCE, WHETHER OR NOT VESTED, IN THE PRIOR
PLAN.

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

* If there are any Participating Affiliates in this Plan, list below the proper
name of each Participating Affiliate.

________.
________.
________.

                                       2
<PAGE>

                             ARTICLE I. DEFINITIONS
A.  "COMPENSATION"

(1)   With respect to each Participant, except as provided below, Compensation
      shall mean the (select all those applicable for each column):

401(K) AND/       PROFIT
OR THRIFT         SHARING

[X]               [ ] (a) amount reported in the "Wages Tips and Other
                  Compensation" Box on Form W-2 for the applicable period
                  selected in Item 5 below.

[ ]               [ ] (b) compensation for Code Section 415 safe-harbor purposes
                  (as defined in Section 3.9.1 (H)(i) of basic plan document
                  #03) for the applicable period selected in Item 5 below.

[ ]               [ ] (c) amount reported pursuant to Code Section 3401(a) for
                  the applicable period selected in Item 5 below.

[ ]               [ ] (d) all amounts received (under options (a) (b) or (c)
                  above) for personal services rendered to the Employer but
                  excluding (select one):

         [ ] overtime
         [ ] bonuses
         [ ] commissions
         [ ] amounts in excess of $_______
         [ ] other (specify)_______.

(2)  Treatment of Elective Contributions (select one):

    [X] (a) For purposes of contributions, Compensation shall include
         Elective Deferrals and amounts excludable from the gross income of the
         Employee under Code Section 125, Code Section 402(e)(3), Code Section
         402(h) or Code Section 403(b) ("elective contributions").

    [ ] (b) For purposes of contributions, Compensation shall not include
         "elective contributions."

(3)  CODA Compensation (select one):

    [X] (a) For purposes of the ADP and ACP Tests, Compensation shall include
         "elective contributions."

    [ ] (b) For purposes of the ADP and ACP Tests, Compensation shall not
         include "elective contributions."

                                       3
<PAGE>

(4) With respect to Contributions to an Employer Contributions Account,
Compensation shall include all Compensation (select one):

    [ ] (a) during the Plan Year in which the Participant enters the Plan.

    [X] (b) after the Participant's Entry Date.

(5)  The applicable period for determining Compensation shall be (select one):

    [X] (a) the Plan Year.

    [ ] (b) the Limitation Year.

    [ ] (c) the consecutive 12-month period ending on _____.

B.  "DISABILITY"

(1)  Definition

     Disability shall mean a condition which results in the Participant's
(select one):

    [ ] (a) inability to engage in any substantial gainful activity by reason
        of any medically determinable physical or mental impairment that can be
        expected to result in death or which has lasted or can be expected to
        last for a continuous period of not less than 12 months.

    [X] (b) total and permanent inability to meet the requirements of the
        Participant's customary employment which can be expected to last for a
        continuous period of not less than 12 months.

    [ ] (c) qualification for Social Security disability benefits.

    [ ] (d) qualification for benefits under the Employer's long-term
        disability plan.

(2)  Contributions Due to Disability (select one):

    [X] (a) No contributions to an Employer Contributions Account will be made
        on behalf of a Participant due to his or her Disability.

    [ ] (b) Contributions to an Employer Contributions Account will be made on
        behalf of a Participant due to his or her Disability provided that: the
        Employer elected option (a) or (c) above as the definition of
        Disability, contributions are not made on behalf of a Highly Compensated
        Employee, the contribution is 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 his or her Disability, and contributions made on behalf of such
        Participant will be nonforfeitable when made.

                                       4
<PAGE>

C "EARLY RETIREMENT" is (select one):

    [X] (1) not permitted.

    [ ] (2) permitted if a Participant terminates Employment before Normal
        Retirement Age and has (select one):

        [ ] (a) attained age ______.

        [ ] (b) attained age ______ and completed ______ Years of Service.

        [ ] (c) attained age ______ and completed ______ Years of Service as a
            Participant.

D.  "ELIGIBLE EMPLOYEES" (select one):

    [ ] (1) All Employees are eligible to participate in the Plan.

    [X] (2) The following Employees are not eligible to participate in the Plan
        (select all those applicable):

        [X] (a) Employees included in a unit of Employees covered by a
            collective bargaining agreement between the Employer or a
            Participating Affiliate and the Employee representatives (not
            including any organization more than half of whose members are
            Employees who are owners, officers, or executives of the Employer or
            Participating Affiliate) in the negotiation of which retirement
            benefits were the subject of good faith bargaining, unless the
            bargaining agreement provides for participation in the Plan.

        [ ] (b) non-resident aliens who received no earned income from the
            Employer or a Participating Affiliate which constitutes income from
            sources within the United States.

        [ ] (c) Employees of an Affiliate.

        [ ] (d) Employees employed in or by the following specified division,
            plant, location, job category or other identifiable individual or
            group of Employees: ______.

                                       5
<PAGE>

E. "ENTRY DATE"   Entry Date shall mean (select as applicable):

401(K)
AND/OR      PROFIT
THRIFT      SHARING

[ ]     [ ]     (1) If the initial Plan Year is less than twelve months, the
                _______ day of _______ and thereafter:

[ ]     [ ]     (2) the first day of the Plan Year following the date the
                Employee meets the eligibility requirements. If the Employer
                elects this option (2) establishing only one Entry Date, the
                eligibility "age and service" requirements elected in Article II
                must be no more than age 20-1/2 and 6 months of service.

[X]     [ ]     (3) the first day of the month following the date the Employee
                meets the eligibility requirements.

[ ]     [ ]     (4) the first day of the Plan Year and the first day of the
                seventh month of the Plan Year following the date the Employee
                meets the eligibility requirements.

[ ]     [ ]     (5) the first day of the Plan Year, the first day of the fourth
                month of the Plan Year, the first day of the seventh month of
                the Plan Year, and the first day of the tenth month of the Plan
                Year following the date the Employee meets the eligibility
                requirements.

[ ]     [ ]     (6) other:     .
                provided that the Entry Date or Dates selected are no later
                than any of the options above.

F.  "HOURS OF SERVICE"

Hours of Service for the purpose of determining a Participant's Period of
Severance and Year of Service shall be determined on the basis of the method
specified below:

    (1) Eligibility Service: For purposes of determining whether a Participant
    has satisfied the eligibility requirements, the following method shall be
    used (select one):

     401(K)
     AND/OR      PROFIT
     THRIFT      SHARING

     [ ]    [ ]    (a) elapsed time method
     [X]    [ ]    (b) hourly records method

                                       6
<PAGE>

    (2) Vesting Service: A Participant's nonforfeitable interest shall be
    determined on the basis of the method specified below (select one):

    [X] (a) elapsed time method
    [ ] (b) hourly records method
    [ ] (c) If this item (c) is checked, the Plan only provides for
        contributions that are always 100% vested and this item (2) will not
        apply.

    (3) Hourly Records: For the purpose of determining Hours of Service under
    the hourly record method (select one):

    [X] (a) only actual hours for which an Employee is paid or entitled to
        payment shall be counted.

    [ ] (b) an Employee shall be credited with 45 Hours of Service if such
        Employee would be credited with at least 1 Hour of Service during the
        week.

G.  "INTEGRATION LEVEL"

    [X] (1) This Plan is not integrated with Social Security.

    [ ] (2) This Plan is integrated with Social Security. The Integration Level
        shall be (select one):

        [ ] (a) the Taxable Wage Base.
        [ ] (b) $______ (a dollar amount less than the Taxable Wage Base).
        [ ] (c) ______% of the Taxable Wage Base (not to exceed 100%).
        [ ] (d) the greater of $10,000 or 20% of the Taxable Wage Base.

H.  "LIMITATION COMPENSATION"

For purposes of Code Section 415, Limitation Compensation shall be compensation
as determined for purposes of (select one):

    [ ] (1) Code Section 415 Safe-Harbor as defined in Section 3.9.1(H)(i) of
        basic plan document #03.

    [X] (2) the "Wages, Tips and Other Compensation" Box on Form W-2.

    [ ] (3) Code Section 3401(a) Federal Income Tax Withholding.

I.  "LIMITATION YEAR"

For purposes of Code Section 415, the Limitation Year shall be (select one):

    [X] (1) the Plan Year.

    [ ] (2) the twelve consecutive month period ending on the _______ day of the
    month of _______.

                                       7
<PAGE>

J. "NET PROFITS" are (select one):

    [X] (1) not necessary for any contribution.

    [ ] (2) necessary for (select all those applicable):

        [ ] (a) Profit-Sharing Contributions.
        [ ] (b) Matching 401(k) Contributions.
        [ ] (c) Matching Thrift Contributions.

K. "NORMAL RETIREMENT AGE"

Normal Retirement Age shall be (select one):

    [ ] (1) attainment of age ______ (not more than 65) by the Participant.

    [X] (2) attainment of age 65 (not more than 65) by the Participant or the
        5TH anniversary (not more than the 5th) of the first day of the Plan
        Year in which the Eligible Employee became a Participant, whichever is
        later.

    [ ] (3) attainment of age _____ (not more than 65) by the Participant or
        the ______. anniversary (not more than the 5th) of the first day on
        which the Eligible Employee performed an Hour of Service, whichever is
        later.

L. "PARTICIPANT DIRECTED ASSETS" are:

        401(K) AND/       PROFIT
        OR THRIFT         SHARING

        [X]      [ ]      (1) permitted.

        [ ]      [ ]      (2) not permitted.

M.  "PLAN YEAR"

The Plan Year shall end on the 31ST day of DECEMBER.

N.  "PREDECESSOR SERVICE"

Predecessor service will be credited (select one):

    [X] (1) only as required by the Plan.

    [ ] (2) to include, in addition to the Plan requirements and subject to
        the limitations set forth below, service with the following predecessor
        employer(s) determined as if such predecessors were the Employer: _____.

                                       8
<PAGE>

Service with such predecessor employer applies [select either or both (a) and/or
(b); (c) is only available in addition to (a) and/or (b)]:

        [ ] (a) for purposes of eligibility to participate;
        [ ] (b) for purposes of vesting;
        [ ] (c) except for the following service: _______.

O.  "VALUATION DATE"

Valuation Date shall mean (select one for each column, as applicable):

401(K) AND/      PROFIT
OR THRIFT        SHARING

    [ ]      [ ]    (1) the last business day of each month.

    [ ]      [ ]    (2) the last business day of each quarter within the Plan
                        Year.

    [ ]      [ ]    (3) the last business day of each semi-annual period within
                        the Plan Year.

    [ ]      [ ]    (4) the last business day of the Plan Year.

    [X]      [ ]    (5) other: DAILY BASIS.

                            ARTICLE II. PARTICIPATION

PARTICIPATION REQUIREMENTS

An Eligible Employee must meet the following requirements to become a
Participant (select one or more for each column, as applicable):

401(K) AND/       PROFIT
OR THRIFT         SHARING

[ ]         [ ]     (1) Performance of one Hour of Service.

[ ]         [ ]     (2) Attainment of age ________ (maximum 20 1/2) and
                        completion of ________ (not more than 1/2) Years
                        of Service. If this item is selected, no Hours of
                        Service shall be counted.

[X]         [ ]     (3) Attainment of age 21 (maximum 21) and completion
                        of 1 Year(s) of Service. If more than one Year of
                        Service is selected, the immediate 100% vesting
                        schedule must be selected in Article VII of this
                        Adoption Agreement.

                                       9
<PAGE>

401(K) AND/       PROFIT
OR THRIFT         SHARING

[ ]         [ ]     (4)       Attainment of age (maximum 21) and completion of
                              Year(s) of Service. If more than one Year of
                              Service is selected, the immediate l00% vesting
                              schedule must be selected in Article VII of this
                              Adoption Agreement.

[ ]         [ ]     (5)       Each Employee who is an Eligible Employee on will
                              be deemed to have satisfied the participation
                              requirements on the effective date without regard
                              to such Eligible Employee's actual age and/or
                              service.

            ARTICLE III. 401(K) CONTRIBUTIONS AND ACCOUNT ALLOCATION

A.  ELECTIVE DEFERRALS

If selected below, a Participant's Elective Deferrals will be (select all
applicable):

    [X] (1) a dollar amount or a percentage of Compensation, as specified by the
        Participant on his or her 401(k) Election form, which may not exceed
        _______ % of his or her Compensation.

    [ ] (2) with respect to bonuses, such dollar amount or percentage as
        specified by the Participant on his or her 401(k) Election form with
        respect to such bonus.

B.  MATCHING 401(K) CONTRIBUTIONS

If selected below, the Employer may make Matching 401(k) Contributions for each
Plan Year (select one):

    [ ] (1) Discretionary Formula:

    Discretionary Matching 401(k) Contribution equal to such a dollar amount or
    percentage of Elective Deferrals, as determined by the Employer, which shall
    be allocated (select one):

        [X] (a) based on the ratio of each Participant's Elective Deferral for
            the Plan Year to the total Elective Deferrals of all Participants
            for the Plan Year. If inserted, Matching 40l(k) Contributions shall
            be subject to a maximum amount of $_______ for each Participant or
            _______% of each Participant's Compensation.

                                       10
<PAGE>

        [ ] (b) in an amount not to exceed ______% of each Participant's first
            ______% of Compensation contributed as Elective Deferrals for the
            Plan Year. If any Matching 401(k) Contribution remains, it is
            allocated to each such Participant in an amount not to exceed
            ______% of the next ______% of each Participant's Compensation
            contributed as Elective Deferrals for the Plan Year.

    Any remaining Matching 401(k) Contribution shall be allocated to each such
    Participant in the ratio that such Participant's Elective Deferral for the
    Plan Year bears to the total Elective Deferrals of all such Participants for
    the Plan Year. If inserted, Matching 40l(k) Contributions shall be subject
    to a maximum amount of $______ for each Participant or ______% of each
    Participant's Compensation.

    [ ] (2) Nondiscretionary Formula:

    A nondiscretionary Matching 401(k) Contribution for each Plan Year equal to
    (select one):

        [ ] (a) _______% of each Participant's Compensation contributed as
            Elective Deferrals. If inserted, Matching 40l(k) Contributions shall
            be subject to a maximum amount of $_______ for each Participant or
            _______% of each Participant's Compensation.

        [ ] (b) _______% of the first _______% of the Participant's
            Compensation contributed as Elective Deferrals and _______% of the
            next _______% of the Participant's Compensation contributed as
            Elective Deferrals. If inserted, Matching 40l(k) Contributions shall
            be subject to a maximum amount of $_______ for each Participant or
            _______% of each Participant's Compensation.

C.  PARTICIPANTS ELIGIBLE FOR MATCHING 401(K) CONTRIBUTION ALLOCATION

The following Participants shall be eligible for an allocation to their Matching
401(k) Contributions Account (select all those applicable):

    [X] (1) Any Participant who makes Elective Deferrals.

    [ ] (2) Any Participant who satisfies those requirements elected by the
        Employer for an allocation to his or her Employer Contributions Account
        as provided in Article IV Section C.

    [ ] (3) Solely with respect to a Plan in which Matching 401(k)
        Contributions are made quarterly (or on any other regular interval that
        is more frequent than annually) any Participant whose 401(k) Election is
        in effect throughout such entire quarter (or other interval). ________
        (quarterly, monthly or semi-annual)

                                       11
<PAGE>

D.  QUALIFIED MATCHING CONTRIBUTIONS

If selected below, the Employer may make Qualified Matching Contributions for
each Plan Year (select all those applicable):

    (1) In its discretion, the Employer may make Qualified Matching
        Contributions on behalf of (select one):

        [ ] (a) all Participants who make Elective Deferrals in that Plan Year.

        [X] (b) only those Participants who are Nonhighly Compensated Employees
                and who make Elective Deferrals for that Plan Year.

    (2) Qualified Matching Contributions will be contributed and allocated to
        each Participant in an amount equal to (select one):

        [ ] (a) _______% of the Participant's Compensation contributed as
            Elective Deferrals. If inserted, Qualified Matching Contributions
            shall not exceed _______% of the Participant's Compensation.

        [X] (b) Such an amount, determined by the Employer, which is needed to
            meet the ACP Test.

    (3) In its discretion, the Employer may elect to designate all or any part
        of Matching 401(k) Contributions as Qualified Matching Contributions
        that are taken into account as Elective Deferrals -- included in the ADP
        Test and excluded from the ACP Test -- on behalf of (select one):

        [ ] (a) all Participants who make Elective Deferrals for that Plan
            Year.

        [X] (b) Only Participants who are Nonhighly Compensated Employees who
            make Elective Deferrals for that Plan Year.

E.  QUALIFIED NONELECTIVE CONTRIBUTIONS

If selected below, the Employer may make Qualified Nonelective Contributions for
each Plan Year (select all those applicable):

    (1) In its discretion, the Employer may make Qualified Nonelective
        Contributions on behalf of (select one):

        [ ] (a) all Eligible Participants.

        [X] (b) only Eligible Participants who are Nonhighly Compensated
            Employees.

                                       12
<PAGE>

    (2) Qualified Nonelective Contributions will be contributed and allocated to
        each Eligible Participant in an amount equal to (select one):

        [ ] (a) ______% (no more than 15%) of the Compensation of each Eligible
            Participant eligible to share in the allocation.

        [X] (b) Such an amount determined by the Employer, which is needed to
            meet either the ADP Test or ACP Test.

    (3) At the discretion of the Employer, as needed and taken into account as
        Elective Deferrals included in the ADP Test on behalf of (select one):

        [ ] (a) all Eligible Participants.

        [X] (b) only those Eligible Participants who are Nonhighly Compensated
            Employees.

F.  Elective Deferrals used in ACP Test (select one):

    [X] (1) At the discretion of the Employer, Elective Deferrals may be used to
        satisfy the ACP Test.

    [ ] (2) Elective Deferrals may not be used to satisfy the ACP Test.

G.  MAKING AND MODIFYING A 401(K) ELECTION

An Eligible Employee shall be entitled to increase, decrease or resume his or
her Elective Deferral percentage with the following frequency during the Plan
Year (select one):

    [ ] (1) annually.
    [ ] (2) semi-annually.
    [X] (3) quarterly.
    [ ] (4) monthly
    [ ] (5) other (specify): ________.

    Any such increase, decrease or resumption shall be effective as of the first
    payroll period coincident with or next following the first day of each
    period set forth above. A Participant may completely discontinue making
    Elective Deferrals at any time effective for the payroll period after
    written notice is provided to the Administrator.

                                       13
<PAGE>

         ARTICLE IV. PROFIT-SHARING CONTRIBUTIONS AND ACCOUNT ALLOCATION

A.  PROFIT-SHARING CONTRIBUTIONS

If selected below, the following contributions for each Plan Year will be made:

Contributions to Employer Contributions Accounts (select one):

    [ ] (a) Such an amount, if any, as determined by the Employer.
    [ ] (b) _______% of each Participant's Compensation.

B. ALLOCATION OF CONTRIBUTIONS TO EMPLOYER CONTRIBUTIONS ACCOUNTS (select one):

    [ ] (1) Non-Integrated Allocation

        The Employer Contributions Account of each Participant eligible to share
        in the allocation for a Plan Year shall be credited with a portion of
        the contribution, plus any forfeitures if forfeitures are reallocated to
        Participants, equal to the ratio that the Participant's Compensation for
        the Plan Year bears to the Compensation for that Plan Year of all
        Participants entitled to share in the contribution.

    [ ] (2) Integrated Allocation

        Contributions to Employer Contributions Accounts with respect to a Plan
        Year, plus any forfeitures if forfeitures are reallocated to
        Participants, shall be allocated to the Employer Contributions Account
        of each eligible Participant as follows:

        (a) First, in the ratio that each such eligible Participant's
            Compensation for the Plan Year bears to the Compensation for that
            Plan Year of all eligible Participants but not in excess of 3% of
            each Participant's Compensation.

        (b) Second, any remaining contributions and forfeitures will be
            allocated in the ratio that each eligible Participant's Compensation
            for the Plan Year in excess of the Integration Level bears to all
            such Participants' excess Compensation for the Plan Year but not in
            excess of 3%.

                                       14
<PAGE>

        (c) Third, any remaining contributions and forfeitures will be allocated
            in the ratio that the sum of each Participant's Compensation and
            Compensation in excess of the Integration Level bears to the sum of
            all Participants' Compensation and Compensation in excess of the
            Integration Level, but not in excess of the Maximum Profit-Sharing
            Disparity Rate (defined below).

        (d) Fourth, any remaining contributions or forfeitures will be allocated
            in the ratio that each Participant's Compensation for that year
            bears to all Participants' Compensation for that year.

        The Maximum Profit-Sharing Disparity Rate is equal to the lesser of:

        (a) 2.7% or

        (b) The applicable percentage determined in accordance with the
            following table:

IF THE INTEGRATION LEVEL IS
(AS A % OF THE TAXABLE WAGE
BASE ("TWB")).                                  THE APPLICABLE PERCENTAGE IS:

20% (or $10,000 if greater)
or less of the TWB                                             2.7%

More than 20% (but not less than $10,001 but
not
more than 80% of the TWB                                       1.3%

More than 80% but not less
than 100% of the TWB                                           2.4%

100% of the TWB                                                2.7%

                                       15
<PAGE>

C.  PARTICIPANTS ELIGIBLE FOR EMPLOYER CONTRIBUTION ALLOCATION

The following Participants shall be eligible for an allocation to their Employer
Contributions Account (select all those applicable):

    [ ] (1) Any Participant who was employed during the Plan Year.

    [ ] (2) In the case of a Plan using the hourly record method for
        determining Vesting Service, any Participant who was credited with a
        Year of Service during the Plan Year.

    [ ] (3) Any Participant who was employed on the last day of the Plan Year.

    [ ] (4) Any Participant who was on a leave of absence on the last day of
        the Plan Year.

    [ ] (5) Any Participant who during the Plan Year died or became Disabled
        while an Employee or terminated employment after attaining Normal
        Retirement Age.

    [ ] (6) Any Participant who was credited with at least 501 Hours of
        Service whether or not employed on the last day of the Plan Year.

    [ ] (7) Any Participant who was credited with at least 1,000 Hours of
        Service and was employed on the last day of the Plan Year.

                         ARTICLE V. THRIFT CONTRIBUTIONS

A.  EMPLOYEE THRIFT CONTRIBUTIONS

If selected below, Employee Thrift Contributions, which are required for
Matching Thrift Contributions, may be made by a Participant in an amount equal
to (select one):

    [ ] (1) A dollar amount or a percentage of the Participant's Compensation
        which may not be less than ________% nor may not exceed ________% of his
        or her Compensation.

    [ ] (2) An amount not less than ________% of and not more than ________%
        of each Participant's Compensation.

                                       16
<PAGE>

B.  MAKING AND MODIFYING AN EMPLOYEE THRIFT CONTRIBUTION ELECTION

A Participant shall be entitled to increase, decrease or resume his or her
Employee Thrift Contribution percentage with the following frequency during the
Plan Year (select one):

        [ ] (1) annually
        [ ] (2) semi-annually
        [ ] (3) quarterly
        [ ] (4) monthly
        [ ] (5) other (specify): _______.

Any such increase, decrease or resumption shall be effective as of the first
payroll period coincident with or next following the first day of each period
set forth above. A Participant may completely discontinue making Employee Thrift
Contributions at any time effective for the payroll period after written notice
is provided to the Administrator.

C.  THRIFT MATCHING CONTRIBUTIONS

If selected below, the Employer will make Matching Thrift Contributions for each
Plan Year (select one):

[ ] (1) Discretionary Formula:

    A discretionary Matching Thrift Contribution equal to such a dollar amount
    or percentage as determined by the Employer, which shall be allocated
    (select one):

        [ ] (a) based on the ratio of each Participant's Employee Thrift
            Contribution for the Plan Year to the total Employee Thrift
            Contributions of all Participants for the Plan Year. If inserted,
            Matching Thrift Contributions shall be subject to a maximum amount
            of $_______ for each Participant or _______% of each Participant's
            Compensation.

        [ ] (b) in an amount not to exceed _______% of each Participant's
            first _______% of Compensation contributed as Employee Thrift
            Contributions for the Plan Year. If any Matching Thrift Contribution
            remains, it is allocated to each such Participant in an amount not
            to exceed _______% of the next _______% of each Participant's
            Compensation contributed as Employee Thrift Contributions for the
            Plan Year.

    Any remaining Matching Thrift Contribution shall be allocated to each such
    Participant in the ratio that such Participant's Employee Thrift
    Contributions for the Plan Year bears to the total Employee Thrift
    Contributions of all such Participants for the Plan Year. If inserted,
    Matching Thrift Contributions shall be subject to a maximum amount of
    $_______ for each Participant or ________% of each Participant's
    Compensation.

                                       17
<PAGE>

    [ ] (2) Nondiscretionary Formula:

        A nondiscretionary Matching Thrift Contribution for each Plan Year equal
to (select one):

        [ ] (a) % of each Participant's Compensation contributed as Employee
            Thrift Contributions. If inserted, Matching Thrift Contributions
            shall be subject to a maximum amount of $_______ for each
            Participant or _______% of each Participant's Compensation.

        [ ] (b) _______% of the first _______% of the Participant's
            Compensation contributed as Employee Thrift Contributions and
            _______% of the next _______% of the Participant's Compensation
            contributed as Employee Thrift Contributions. If inserted, Matching
            Thrift Contributions shall be subject to a maximum amount of
            $_______ for each Participant or _______% of each Participant's
            Compensation.

D.  QUALIFIED MATCHING CONTRIBUTIONS

If selected below, the Employer may make Qualified Matching Contributions for
each Plan Year (select all those applicable):

    (1) In its discretion, the Employer may make Qualified Matching
        Contributions on behalf of (select one):

        [ ] (a) all Participants who make Employee Thrift Contributions.

        [ ] (b) only those Participants who are Nonhighly Compensated Employees
                and who make Employee Thrift Contributions.

    (2) Qualified Matching Contributions will be contributed and allocated to
        each Participant in an amount equal to:

        [ ] (a) _______% of the Participant's Employee Thrift Contributions.
            If inserted, Qualified Matching Contributions shall not exceed
            _______% of the Participant's Compensation.

        [ ] (b) such an amount, determined by the Employer, which is needed to
            meet the ACP Test.

                      ARTICLE VI. PARTICIPANT CONTRIBUTIONS

    PARTICIPANT VOLUNTARY NONDEDUCTIBLE CONTRIBUTIONS

    Participant Voluntary Nondeductible Contributions are (select one):

        [ ] (a) permitted.
        [X] (b) not permitted.

                                       18
<PAGE>

                              ARTICLE VII. VESTING

A.  EMPLOYER CONTRIBUTION ACCOUNTS

   (1)  A Participant shall have a vested percentage in his or her
        Profit-Sharing Contributions, Matching 401(k) Contributions and/or
        Matching Thrift Contributions, if applicable, in accordance with the
        following schedule (Select one):

MATCHING 401(K)
AND/OR MATCHING                  PROFIT-SHARING
THRIFT CONTRIBUTIONS            CONTRIBUTIONS

    [ ]      [ ]    (a) 100% vesting immediately upon participation.

    [ ]      [ ]    (b) 100% after ________ (not more than 5) years of Vesting
                    Service.

    [X]      [ ]    (c) Graded vesting schedule:

<TABLE>
<S>                  <C>               <C>
      0    %                  %        after 1 year of Vesting Service;
  ---------          ---------

     25    %                  %       after 2 years of Vesting Service;
  ---------          ---------

     40    %                  %       (not less than 20%) after 3 years of Vesting Service;
  ---------          ---------

     60    %                  %       (not less than 40%) after 4 years of Vesting Service;
  ---------          ---------

     80    %                  %       (not less than 60%) after 5 years of Vesting Service;
  ---------          ---------

</TABLE>

                100% after 5 years of Vesting Service.

                                       19
<PAGE>

    (2) Top Heavy Plan

MATCHING 401(K)
AND/OR MATCHING                  PROFIT-SHARING
THRIFT CONTRIBUTIONS             CONTRIBUTIONS

Vesting Schedule (Select one):

    [ ]    [ ]  (a) 100% vesting immediately upon participation.

    [ ]    [ ]  (b) 100% after_______ (not more than 3) years of Vesting
                    Service.

    [X]    [ ]  (c) Graded vesting schedule:

<TABLE>
<S>                  <C>               <C>
      0    %                  %        after 1 year of Vesting Service;
  ---------          ---------

     20    %                  %       (not less than 20%) after 2 years of Vesting Service;
  ---------          ---------

     40    %                  %       (not less than 40%) after 3 years of Vesting Service;
  ---------          ---------

     60    %                  %       (not less than 60%) after 4 years of Vesting Service;
  ---------          ---------

     80    %                  %       (not less than 80%) after 5 years of Vesting Service;
  ---------          ---------

</TABLE>

                  100% after 6 years of Vesting Service.

Top Heavy Ratio:

    (a) If the adopting Employer maintains or has ever maintained a qualified
        defined benefit plan, for purposes of establishing present value to
        compute the top-heavy ratio, any benefit shall be discounted only for
        mortality and interest based on the following:

            Interest Rate: 8%
            Mortality Table: UP'84

    (b) For purposes of computing the top-heavy ratio, the valuation date shall
        be the last business day of each Plan Year.

                                       20
<PAGE>

B.  ALLOCATION OF FORFEITURES

    Forfeitures shall be (select one from each applicable column):

MATCHING 401(K)
AND/OR MATCHING                PROFIT-SHARING
THRIFT CONTRIBUTIONS           CONTRIBUTIONS

    [X]       [ ]  (1) used to reduce Employer contributions for succeeding
                    Plan Year.

    [X]       [ ]  (2) allocated in the succeeding Plan Year in the ratio which
                   the Compensation of each Participant for the Plan Year bears
                   to the total Compensation of all Participants entitled to
                   share in the Contributions. If the Plan is integrated with
                   Social Security, forfeitures shall be allocated in accordance
                   with the formula elected by the Employer.

C.  VESTING SERVICE

For purposes of determining Years of Service for Vesting Service [select (1) or
(2) and/or (3)]:

    [X] (1) All Years of Service shall be included.

    [ ] (2) Years of Service before the Participant attained age 18 shall be
            excluded.

    [ ] (3) Service with the Employer prior to the effective date of the Plan
            shall be excluded.

                ARTICLE VIII. DEFERRAL OF BENEFIT DISTRIBUTIONS,
                        IN-SERVICE WITHDRAWALS AND LOANS

A.  DEFERRAL OF BENEFIT DISTRIBUTIONS

       401(K) AND/    PROFIT
       OR THRIFT      SHARING

         [ ]       [ ]     If this item is checked, a Participant's vested
                           benefit in his or her Employer Accounts shall be
                           payable as soon as practicable after the earlier of:
                           (1) the date the Participant terminates Employment
                           due to Disability or (2) the end of the Plan Year in
                           which a terminated Participant attains Early
                           Retirement Age, if applicable, or Normal Retirement
                           Age.

                                       21
<PAGE>

B.  IN-SERVICE DISTRIBUTIONS

    [X] (1) In-service distributions may be made from any of the Participant's
        vested Accounts, at any time upon or after the occurrence of the
        following events (select all applicable):

        [ ] (a) a Participant's attainment of age 59-1/2.
        [X] (b) due to hardships as defined in Section 5.9 of the Plan.

    [ ] (2) In-service distributions are not permitted.

C.  LOANS ARE:

401(K) AND/        PROFIT
OR THRIFT          SHARING

    [X]           [ ]   (1) permitted.

    [ ]           [ ]   (2) not permitted.

                             ARTICLE IX. GROUP TRUST

[ ] If this item is checked, the Employer elects to establish a Group Trust
    consisting of such Plan assets as shall from time to time be transferred to
    the Trustee pursuant to Article X of the Plan. The Trust Fund shall be a
    Group Trust consisting of assets of this Plan plus assets of the following
    plans of the Employer or of an Affiliate: _______.

                            ARTICLE X. MISCELLANEOUS

A.  IDENTIFICATION OF SPONSOR

    The address and telephone number of the Sponsor's authorized representative
    is 800 Scudders Mill Road, Plainsboro, New Jersey 08536; (609) 282-2272.
    This authorized representative can answer inquiries regarding the adoption
    of the Plan, the intended meaning of any Plan provisions, and the effect of
    the opinion letter.

    The Sponsor will inform the adopting Employer of any amendments made to the
    Plan or the discontinuance or abandonment of the Plan.

                                       22
<PAGE>

B.  PLAN REGISTRATION

    1. Initial Registration

        This Plan must be registered with the Sponsor, Merrill Lynch, Pierce,
        Fenner & Smith Incorporated, in order to be considered a Prototype Plan
        by the Sponsor. Registration is required so that the Sponsor is able to
        provide the Administrator with documents, forms and announcements
        relating to the administration of the Plan and with Plan amendments and
        other documents, all of which relate to administering the Plan in
        accordance with applicable law and maintaining compliance of the Plan
        with the law.

        The Employer must complete and sign the Adoption Agreement. Upon receipt
        of the Adoption Agreement, the Plan will be registered as a Prototype
        Plan of Merrill Lynch, Pierce, Fenner & Smith Incorporated. The Adoption
        Agreement will be countersigned by an authorized representative and a
        copy of the countersigned Adoption Agreement will be returned to the
        Employer.

    2. Registration Renewal

        Annual registration renewal is required in order for the Employer to
        continue to receive any and all necessary updating documents. There is
        an annual registration renewal fee in the amount set forth with the
        initial registration material. The adopting Employer authorizes Merrill
        Lynch, Pierce, Fenner & Smith Incorporated, to debit the account
        established for the Plan for payment of agreed upon annual fee;
        provided, however, if the assets of an account are invested solely in
        Participant-Directed Assets, a notice for this annual fee will be sent
        to the Employer annually. The Sponsor reserves the right to change this
        fee from time to time and will provide written notice in advance of any
        change.

C.  PROTOTYPE REPLACEMENT PLAN

       This Adoption Agreement is a replacement prototype plan for the (1)
       Merrill Lynch Special Prototype Defined Contribution Plan and Trust -
       401(k) Plan #03-004 and (2) Merrill Lynch Asset Management, Inc., Special
       Prototype Defined Contribution Plan and Trust - 401(k) Plan Adoption
       Agreement #03-004.

D.  RELIANCE

       The adopting Employer may not rely on the opinion letter issued by the
       National Office of the Internal Revenue Service as evidence that this
       Plan is qualified under Code Section 401. In order to obtain reliance,
       the Employer must apply to the appropriate Key District Director of the
       Internal Revenue Service for a determination letter with respect to the
       Plan.

                                       23
<PAGE>

                              EMPLOYER'S SIGNATURE
                              --------------------

     Name of Employer: /s/ Samuels Jewelers, Inc.
                       ---------------------------------------------
                       By: /s/ E. Peter Healey
                           -----------------------------------------
                           Authorized Signature

                               E. Peter Healey
                           -----------------------------------------
                                  Print Name

                       Chief Financial Officer - Plan Administrator
                       --------------------------------------------
                                      Title

DATED: JUNE 16, 1999

TO BE COMPLETED BY MERRILL LYNCH:
---------------------------------

SPONSOR ACCEPTANCE:
-------------------

Subject to the terms and conditions of the Prototype Plan and this Adoption
Agreement, this Adoption Agreement is accepted by Merrill Lynch, Pierce, Fenner
& Smith Incorporated as the Prototype Sponsor.

Authorized Signature: /s/ Donald Galnielartis
                      ---------------------------------------

                                       24
<PAGE>

                              TRUSTEE(S) SIGNATURE
                              --------------------

This Trustee Acceptance is to be completed only if the Employer appoints one or
more Trustees and does not appoint a Merrill Lynch Trust Company as Trustee.

The undersigned hereby accept all of the terms, conditions, and obligations of
appointment as Trustee under the Plan. If the Employer has elected a Group Trust
in this Adoption Agreement, the undersigned Trustee(s) shall be the Trustee(s)
of the Group Trust.

                                   AS TRUSTEE:

------------------------------------ ------------------------------------------
                  (Signature)                 (print or type name)

------------------------------------ ------------------------------------------
                  (Signature)                 (print or type name)

------------------------------------ ------------------------------------------
                  (Signature)                 (print or type name)

------------------------------------ ------------------------------------------
                  (Signature)                 (print or type name)

------------------------------------ ------------------------------------------
                  (Signature)                 (print or type name)

------------------------------------ ------------------------------------------
                  (Signature)                 (print or type name)

DATED:  ________________________,  19 ________

                                       25
<PAGE>

                  THE MERRILL LYNCH TRUST COMPANIES AS TRUSTEE
                  --------------------------------------------

This Trustee Acceptance and designation of Investment Committee are to be
completed only when a Merrill Lynch Trust Company is appointed as Trustee.

TO BE COMPLETED BY THE EMPLOYER:

                       DESIGNATION OF INVESTMENT COMMITTEE

The Investment Committee for the Plan is (print or type names):

Name: /s/ Randy McCullough, President and Chief Executive Officer
      -------------------------------------------------------------------------

Name: /s/ E. Peter Healey, Executive Vice President and Chief Financial Officer
      -------------------------------------------------------------------------

Name: /s/ Chad Haggar, Senior Vice President
      -------------------------------------------------------------------------

Name: /s/ Ronald P. Schott, Vice President
      -------------------------------------------------------------------------

Name: /s/ Emily Gray,  HR Director
      -------------------------------------------------------------------------

Name:
      -------------------------------------------------------------------------

TO BE COMPLETED BY MERRILL LYNCH TRUST COMPANY:
-----------------------------------------------

                             ACCEPTANCE BY TRUSTEE:

The undersigned hereby accept all of the terms, conditions, and obligations of
appointment as Trustee under the Plan. If the Employer has elected a Group Trust
in this Adoption Agreement, the undersigned Trustee(s) shall be the Trustee(s)
of the Group Trust.

SEAL                         MERRILL LYNCH TRUST COMPANY of Texas

                             By: /s/ Melanie Madecia
                                 -------------------

DATED: July 1, 1999

                                       26<PAGE>

                                    SHC CORP.
                      (F/K/A VICTORMAXX TECHNOLOGIES, INC.)
                        WARRANT TO PURCHASE COMMON STOCK
                                ($.001 Par Value)
                                                                   June 17, 1999

THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED OR QUALIFIED FOR SALE UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT") OR ANY STATE SECURITIES LAW AND MAY NOT BE SOLD, HYPOTHECATED OR
OTHERWISE TRANSFERRED UNLESS REGISTERED PURSUANT TO THE ACT AND QUALIFIED UNDER
APPLICABLE STATE LAW OR, IN THE OPINION OF COUNSEL TO SHC CORP. (F/K/A
VICTORMAXX TECHNOLOGIES, INC.), AN EXEMPTION THEREFROM IS AVAILABLE.

FOR VALUE RECEIVED, Terrence L. Donati (the "Holder") is entitled to purchase,
subject to the provisions of this Warrant, from SHC Corp. (f/k/a VictorMaxx
Technologies, Inc.), an Illinois corporation ("SHC" or the "Company"), at a
price of $.21 per share (the "Exercise Price") of $.001 par common stock of the
Company, ("Common Stock"), at any time from June 17, 1999 (the "First Exercise
Date") to the time of expiration of this Warrant at 5:00 p.m., Chicago, Illinois
time, on June 17, 2009 (the "Expiration Date"), 5,500,000 shares of Common
Stock, and the Holder shall be governed and bound by all of the covenants, terms
and conditions contained herein. The number of shares of Common Stock to be
received upon the exercise of this Warrant and the price to be paid for a share
of Common Stock may be adjusted from time to time as hereinafter set forth. The
shares of Common Stock deliverable upon such exercise and as adjusted from time
to time are hereinafter sometimes referred to as "Warrant Shares", and the
exercise price of a share of Common Stock in effect at any time and as adjusted
from time to time is hereinafter sometimes referred to as the "Exercise Price".

         1. EXERCISE OF WARRANT. This Warrant may be exercised in whole or in
part at any time after the First Exercise Date and on or before the Expiration
Date of this Warrant, or if such day is a day on which banking institutions are
authorized by law to close in Chicago, Illinois, then on the next succeeding
business day, by presentation and surrender hereof to the Company at its office
at 390 South Eighth Street, West Dundee, Illinois 60118, with the purchase form
annexed hereto duly executed and accompanied by payment of the Exercise Price
for the number of shares of Common Stock specified in such form. If this Warrant
should be exercised in part only, the Company shall, upon surrender of this
Warrant for cancellation, execute and deliver a new Warrant evidencing the
rights of the Holder to purchase the balance of the Warrant Shares purchasable
hereunder. Upon receipt by the Company of this Warrant at its office in proper
form for exercise, the Holder shall be deemed to be the holder of record of the
shares of Common Stock issuable upon such exercise, notwithstanding that
certificates representing such shares of Common Stock shall not then be actually
delivered to the Holder, but would be delivered at a later date in the normal
course.

                                        1
<PAGE>

         2. RESERVATION OF SHARES, FRACTIONAL SHARES.

                  (a) SHC hereby agrees that at all times it shall reserve for
issue and delivery upon exercise of this Warrant such number of shares of its
Common Stock as shall be required for issue and delivery upon exercise of this
Warrant.

                  (b) No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. With respect to any
fraction of a share called for upon exercise hereof, SHC shall pay to the Holder
an amount in cash equal to such fraction multiplied by the then current market
value of a share of Common Stock, determined as follows:

                           (i) If the Common Stock is listed on a national
securities exchange or admitted to unlisted trading privileges on such exchange
the current value shall be the last reported sale price of the Common Stock on
such exchange on the last business day prior to the date of exercise of this
Warrant or if no such sale is made on such day, the average closing bid and
asked prices for such day on such exchange; or

                           (ii) If the Common Stock is not listed or admitted to
unlisted trading privileges the current value shall be the mean of the last
reported bid and ask prices reported by the National Quotation Bureau, Inc. or
such other quotation service as the Company may choose, on the last business day
prior to the date of the exercise of this Warrant; or

                           (iii) If the Common Stock is not so listed or
admitted to unlisted trading privileges and bid and ask prices are not so
reported, the current value shall be an amount, not less than book value,
determined in such reasonable manner as may be prescribed by the Board of
Directors of the SHC.

         3. EXCHANGE, ASSIGNMENT, OR LOSS OF WARRANT. This Warrant is
exchangeable, without expense to the Holder, at the option of the Holder, upon
presentation and surrender hereof to the SHC for other Warrants of different
denominations entitling the Holder hereof to purchase in the aggregate the same
number of shares of Common Stock purchasable hereunder. Any such exchange shall
be made by surrender of this Warrant to SHC or at the office of its agent, if
any, with the assignment form annexed duly executed. Subject to compliance with
the provisions of applicable law, SHC, without charge to the Holder, shall
execute and deliver a new Warrant in the name of any assignee named in such
instrument or assignment, and this Warrant shall promptly be canceled. The term
"Warrant" as used herein includes any Warrants into which this Warrant may be
divided or exchanged. Upon receipt by SHC of evidence satisfactory to it of the
loss, theft, destruction or mutilation of this Warrant, and (in the case of
loss, theft or destruction) of reasonably satisfactory indemnification, and upon
surrender and cancellation of this Warrant, if mutilated, SHC will execute and
deliver a new Warrant of like tenor and date. Any such new Warrant executed and
delivered shall constitute an additional contractual obligation on the part of
SHC whether or not this Warrant so lost, stolen, destroyed or mutilated shall be
at any time enforceable by anyone.

<PAGE>

         4. RIGHTS OF THE HOLDER. Until the Expiration Date, this Warrant shall
entitle the holder hereof to any and all voting rights as a stockholder of SHC
with respect to all of the Warrant Shares issuable hereunder, whether or not
this Warrant has been exercised by Holder in whole or in part. No provision of
this Warrant, in the absence of affirmative action by the Holder to purchase
shares of Common Stock, and no mere enumeration herein of the rights or
privileges of the Holder, shall give rise to any liability of the Holder for the
warrant purchase price or as a stockholder of SHC, whether such liability is
asserted by SHC or by creditors of SHC.

         5. STOCK DIVIDENDS; RECLASSIFICATION, REORGANIZATION, ANTI-DILUTION
PROVISIONS. This Warrant is subject to the following further provisions:

                  (a) In case, prior to the expiration of this Warrant by
exercise or by its terms, SHC shall issue any shares of Common Stock as a stock
dividend or subdivide the number of outstanding shares of Common Stock into a
greater number of shares, then in either of such cases, the Exercise Price per
share of the Warrant Shares purchasable pursuant to this Warrant in effect at
the time of such action shall be proportionately reduced, and the number of
Warrant Shares at that time purchasable pursuant to this Warrant shall be
proportionately increased; and conversely, in the event SHC shall contract the
number of outstanding shares of Common Stock by combining such shares into a
smaller number of shares, then, in such case, the Exercise Price per share of
the Warrant Shares purchasable pursuant to this Warrant in effect at the time of
such action shall be proportionately increased, and the number of Warrant Shares
at the time purchasable pursuant to this Warrant shall be proportionally
decreased. Any dividend paid or distributed upon the Common Stock in stock of
any other class or securities convertible into shares of Common Stock shall be
treated as a dividend paid in Common Stock to the extent that shares of Common
Stock are issuable upon the conversion thereof.

                  (b) In case, prior to the expiration of this Warrant by
exercise or by its terms, SHC shall be recapitalized by reclassifying its Common
Stock into stock with a different par value, or the Company or a successor
corporation shall consolidate or merge with or convey all or substantially all
of its or of any successor corporation's property and assets to any other
corporation or corporations (any such corporation being included within the
meaning of the term "successor corporation" in the event of any consolidation or
merger of any such corporation with, or the sale of all or substantially all of
the property of any such corporation to another corporation or corporations), in
exchange for stock or securities of a successor corporation, the Holder of this
Warrant shall thereafter have the right to purchase, upon the terms and
conditions and during the time specified in this Warrant, in lieu of the Warrant
Shares theretofore purchasable upon the exercise of this Warrant, the kind and
number of shares of stock and other securities receivable upon such
recapitalization or consolidation, merger or conveyance by a holder of the
number of shares of Common Stock which the Holder of this Warrant might have
purchased immediately prior to such recapitalization or consolidation, merger or
conveyance.

                  (c) Upon the occurrence of each event requiring an adjustment
of the Exercise Price and of the number of Warrant Shares purchasable pursuant
to this Warrant in accordance with and as required by, the terms of subdivision
(a) of this Section 5, SHC shall compute the adjusted Exercise Price and the
adjusted number of Warrant Shares purchasable at such adjusted

                                       3
<PAGE>

Exercise Price by reason of such event in accordance with the provisions of
subdivision (a) and shall prepare an officer's certificate setting forth such
adjusted Exercise Price and the adjusted number of Warrant Shares and showing in
detail the facts upon which such conclusions are based. SHC shall forthwith mail
a copy of such certificate to each Holder of this Warrant at the Holder's
address shown in the Company's Warrant Registry, and thereafter such certificate
shall be conclusive and binding upon such Holder unless contested by such Holder
by written notice to SHC thirty (30) days after receipt of the certificate.

                  (d)      In case:

                           (i) SHC shall take a record of the holders of its
Common Stock for the purpose of entitling them to subscribe for or purchase any
shares of stock of any class or to receive any other rights; or

                           (ii) of a classification, reclassification or other
reorganization of the capital stock of SHC, consolidation or merger of SHC with
or into another corporation or conveyance of all or substantially all of the
assets of SHC; or

                           (iii) of the voluntary or involuntary dissolution,
liquidation or winding up of SHC,

then, and in any such case, SHC shall mail to the Holder of this Warrant at the
Holder's address shown in SHC's Warrant Registry a notice stating the date or
expected date (the "Record Date") on which a record is to be taken for the
purpose of such classification, reclassification, reorganization, consolidation,
merger, conveyance, dissolution, liquidation or winding up is to take place, as
the case may be. Such notice shall then specify the date or expected date, if
any is to be fixed, as of which holders of Common Stock of record shall be
entitled to participate in said subscription, or shall be entitled to exchange
shares of Common Stock for securities or other property deliverable upon such
liquidation or winding up, as the case may be. Such notice shall be provided at
least thirty (30) days prior to the Record Date.

                  (e) In case SHC at any time while this Warrant shall remain
unexpired and unexercised shall dissolve, liquidate or wind up its affairs, the
Holder of this Warrant may receive, upon exercise hereof prior to the Record
Date, in lieu of each share of Common Stock of SHC which it would have been
entitled to receive, the same number of any securities or assets as may be
issuable, distributable or payable upon any such dissolution, liquidation or
winding up with respect to each share of Common Stock of SHC.

         6. RESTRICTION ON TRANSFERABILITY. (a) This Warrant and the shares of
SHC issuable upon the exercise of this Warrant have not been registered under
the Securities Act of 1933, as amended (the "Act"). By acceptance hereof, the
Holder covenants, agrees and represents that:

                           (i) This Warrant has been acquired for, and such
shares, if acquired upon the exercise of this Warrant, shall be acquired for,
investment and may not be sold, offered for sale, pledged, hypothecated or
otherwise transferred, in the absence of an effective registration

<PAGE>

statement for such securities under the Act or an opinion of counsel reasonably
satisfactory to SHC to the effect that registration is not required under the
Act, and the Holder has the capacity to protect his interests in connection with
the purchase of this Warrant.

                           (ii) The Holder has had the opportunity to ask
questions and receive answers from SHC about SHC's business and the purchase by
him of these securities, and he has been given the opportunity to make any
inquiries that he may desire of any personnel of SHC concerning the proposed
operation of SHC and has been furnished with all of the information he has
requested. No advertisement has been used in connection with the offer or sale
of this Warrant to the Holder.

                           (iii) The Holder will not offer, sell, transfer,
mortgage, assign or otherwise dispose of this Warrant or the shares of Common
Stock issuable upon the exercise of this Warrant except pursuant to a
registration statement under the Act and qualification under applicable state
securities laws or pursuant to an opinion of counsel reasonably satisfactory to
SHC that such registration and qualification are not required, and that the
transaction (if it involves a sale in the over-the-counter market or on a
securities exchange) does not violate any provision of the Act. The Holder
understands that a stop-transfer order will be placed on the books of SHC
respecting this Warrant and any certificates representing the shares of Common
Stock issuable upon the exercise of this Warrant and that this Warrant and any
such certificates shall bear a restrictive legend and a stop transfer order
shall be placed with the transfer agent prohibiting any such transfer until such
time as the securities represented by such certificates shall have been
registered under the Act or shall have been transferred in accordance with an
opinion of counsel reasonably satisfactory to SHC that such registration is not
required; and

                           (iv) The Holder understands that he must hold the
shares issuable upon the exercise of this Warrant indefinitely unless they are
registered under the Act or an exemption from registration becomes available.
Although SHC files reports pursuant to the Securities Act of 1934 and
accordingly makes available to the public the information required by Rule 144,
nothing contained in this Warrant shall require SHC to continue to make
available to the public such information.

                  (b) Each certificate for the shares issued upon the exercise
of the Warrant shall bear a legend in substantially the following form:

                           "The shares represented by this Certificate have not
                  been registered under the Securities Act of 1933, as amended
                  (the "Act") and may not be sold, offered for sale, pledged,
                  hypothecated or otherwise transferred except pursuant to a
                  registration statement under the Act or an exemption from
                  registration under the Act or the rules and regulations
                  thereunder."

         7. REGISTRATION OF WARRANT SHARES FOR DISTRIBUTION. SHC hereby
covenants and agrees with the Holder that if, at any time before the time this
Warrant expires, SHC proposes to file with the Securities and Exchange
Commission ("SEC") on its own behalf and/or on behalf of any of the holders of
its Common Stock, a Registration Statement under the Act, on any form

                                       5
<PAGE>

permitting the resale of Warrant Shares under a "shelf registration" or on any
other form for the general registration of the Common Stock of SHC for cash,
then SHC shall give notice to the Holder, at least 20 days before the filing,
with the SEC, of such proposed Registration Statement. The notice shall offer to
include in such filing, to the extent then permissible under the Act, all of the
Warrant Shares on behalf of Holders of such shares. The Holder shall then have a
period of up to 10 days after the date of the mailing of such notice by SHC
within which to advise SHC of his election to include all or any part of his
Warrant Shares in such Registration Statement, setting forth the number of
Warrant Shares for which registration is being requested. SHC shall thereupon
include in such filing, subject to the limitation hereinafter referred to, such
Warrant Shares proposed to be offered for sale and shall use its best efforts to
effect registration under the Act of such Warrant Shares. The Holder may elect
to include Warrant Shares in such Registration Statement which have not yet been
acquired by exercise of the Warrants, provided, however, that in such event, the
Holder shall exercise the Warrants with respect to such shares, and shall pay
the Exercise Price of such Warrant Shares in the manner provided in Section 1
hereof, prior to any sale of such shares.

         The right of the Holder to include such Warrant Shares in a
Registration Statement provided for herein shall be subject to the following
conditions:

                  (a) SHC, in its sole discretion, shall select the underwriter
or underwriters, if any, who are to undertake the sale and distribution of the
Warrant Shares to be included in a Registration Statement filed under the
provisions of this Section 7; and

                  (b) SHC shall have the right to require, in any offering to be
made solely, or in part, for its own account, that the Holder delay any offering
of Warrant Shares to be included on behalf of the Holder for a period of ninety
(90) days after the first effective date of such Registration Statement, upon
SHC first having delivered to the Holder the written opinion of its underwriter
to the effect that the inclusion of such securities in the Registration
Statement may have an adverse effect on the marketing of such offering;
provided, however, that in the event of such delay, SHC shall maintain the
effectiveness of the Registration Statement, for which purpose SHC shall prepare
and file such amendments and supplements to the Registration Statement and
Prospectus used in connection therewith as may be necessary to keep the
Registration Statement effective for a period of ninety (90) days after the
effective date of the post-effective amendment pursuant to which the Holder is
entitled to sell the Warrant Shares.

         The Holder agrees to cooperate with SHC in the preparation and filing
of any Registration Statement hereunder and shall promptly provide to SHC such
information as it may reasonably request to enable it to comply with any
applicable law or regulation to facilitate the preparation of the Registration
Statement. SHC shall bear the legal, accounting and printing expenses in
connection with the preparation and filing of any Registration Statement
provided herein, together with all other expenses incidental thereto, except (i)
the expense of the underwriter or underwriters selected by the Holder (if other
than the underwriters selected by SHC), (ii) the legal fees and expenses of the
Holder's counsel, (iii) brokerage commissions and transfer taxes, if any, in
connection with the sale or distribution of the Shares by the Holder; and (iv)
the expense of registering, or obtaining (or determining the availability of) an
exemption

<PAGE>

from the registration of shares of SHC's Common Stock for sale in any state or
other jurisdiction other than Illinois or such other jurisdiction in which SHC
registers Shares or obtains an exemption from registration at the request of
another holder or other holders of warrants, provided that, if the Holder and
another holder or other holders of warrants each request that SHC register
Shares or obtain an exemption in such other jurisdiction, the expense thereof
may be allocated on an equitable basis between or among the Holder and such
other holder or holders who make such request.

         SHC shall furnish to the Holder, without charge, a copy of the
Registration Statement and of each amendment and supplement thereto, including
all financial statements and exhibits, and such number of conformed copies of
the Registration Statement and of each amendment thereto, including all
financial statements, but excluding exhibits, as the Holder may reasonably
request.

         SHC shall furnish to the Holder, as soon as possible after the
effective date of such Registration Statement or post-effective Amendment
thereto and thereafter, from time to time, during the period or ninety (90)
days, as many copies of the prospectus (and of any amended or supplemental
prospectus) as the Holder may reasonably request. If, during such period, any
event occurs as a result of which the prospectus, as then amended or
supplemented, would include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading, or it shall be
necessary to amend or supplement the prospectus to comply with the law or with
the rules and regulations promulgated by the SEC, SHC shall forthwith notify the
Holder thereof and at the request of Holder, prepare and furnish to the Holder,
in such quantity as the Holder may reasonably request, an amendment or
supplement which shall correct such statement or omission or cause the
prospectus to comply with the law and with said rules and regulations.

         SHC, when and as requested by the Holder, shall take all action
necessary to permit the offering of the Warrant Shares as contemplated hereby
under the securities laws of such states as the Holder shall designate at the
sole expense of the Holder; provided, however, that SHC shall not be required to
qualify as a foreign corporation or to file a consent to service of process in
any state in which it is not then so qualified or in which it has not then filed
such consent notwithstanding the Holder's agreement to pay the costs thereof.

         Except as set forth below, SHC, on the one hand, and the Holder, on the
other hand, shall each indemnify and hold harmless the other and any officer,
director, employee, agent or attorney thereof from and against any losses,
claims, actions, damages or liabilities to which the other may become subject,
under the Act or any State Act (as hereinafter defined) or otherwise, insofar as
such losses, claims, damages or liabilities arise out of, or are based upon, any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement, or any Prospectus, whether final or preliminary,
forming a part thereof, or any amendment or supplement thereto, or any blue sky
application or other document filed in any state or other jurisdiction in order
to qualify any shares for offer or sale under the laws of any such state or
other jurisdiction ("State Act") (all of the foregoing referred to herein as
"Registration Material"), or the omission or alleged omission of any material
fact required to be stated therein or necessary

                                       7
<PAGE>

to make the statements therein not misleading, or in breach, or non-compliance
with, any duty of disclosure imposed upon such party under the Act or any State
Act in connection with such Registration Material; provided, however, that the
Holder's obligation to indemnify SHC and any officer, director, employee, agent
or attorney thereof shall be limited to any losses, claims, actions, damages or
liabilities which are based on written information supplied to SHC by the Holder
(or the failure of the Holder to supply material information requested by SHC)
specifically for inclusion in the Registration Material, and SHC's obligation to
indemnify the Holder shall be discharged to the extent of the foregoing.

         The Holder further agrees to indemnify and hold harmless SHC and any
officer, director, employee, agent or attorney thereof from and against any
losses, claims, damages, fines, penalties, costs, expenses or liabilities
arising out of or based on the offer or sale or alleged offer or sale by the
Holder of any shares in, or to any person residing in any state in which the
shares have not been qualified for offer or sale, or otherwise in violation of
the Act or any State Act or of the terms and conditions of this Warrant.

         Promptly after receipt by an indemnified party of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof may be made against any indemnifying party pursuant to this Agreement,
notify each indemnifying party in writing of the commencement thereof; and the
omission so to notify each indemnifying party will relieve such party from any
liability pursuant to this Agreement as to the particular item for which
indemnification is then being sought. In case any such action is brought against
any indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel who shall be reasonably
satisfactory to the indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
for any legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation. An indemnifying party shall not be liable to any indemnified
party on account of any settlement of any claim or action effected without the
consent of an indemnifying party.

         The Holder shall execute and deliver to the underwriter or underwriters
an indemnification agreement in such form as may reasonably be requested and
refusal of a Holder to comply with this obligation shall nullify SHC's
obligation to register the Warrant shares.

         The inclusion of the Warrant Shares in any Registration Statement shall
not be required if counsel of SHC shall render an opinion, in writing, that all
of the Holder's Warrant Shares, proposed to be included in such Registration
Statement, may be publicly distributed by the Holder without registration under
the Act in which case the restrictive legend and stop transfer shall be removed.

         8. REGISTRATION ON THE BOOKS OF SHC. SHC shall keep, or cause to be
kept, at its office at 390 South Eighth Street, West Dundee, Illinois, 60118, a
register in which SHC shall

<PAGE>

register this Warrant. No transfer of this Warrant shall be valid unless made at
such office and noted on the Warrant register upon satisfaction of all
conditions for transfer. When presented for transfer or payment, this Warrant
shall be accompanied by a written instrument or instruments of transfer or
surrender, in form satisfactory to SHC, duly executed by the registered Holder
or by his duly authorized attorney. SHC may deem and treat the registered Holder
hereof as the absolute owner of this Warrant for all purposes, and SHC shall not
be affected by any notice to the contrary.

         9. GOVERNING LAW. This Warrant has been executed and delivered in the
State of Illinois and shall be construed in accordance with the internal laws of
the State of Illinois, and not its conflict of laws provisions.

         IN WITNESS WHEREOF, SHC has caused this Warrant to be executed by its
duly authorized officer.

                                            SHC CORP.

                                            By:      /s/ Frank A. Contaldo
                                                     ---------------------------

                                            Title:        CEO
                                                     ---------------------------
Agreed to and accepted.

HOLDER:
/s/ Terrence L. Donati
---------------------------------

Date:           8-15-99
         ---------------------------

                                       9
<PAGE>

                                  PURCHASE FORM

                                                   Dated _________________, ____

         The undersigned hereby irrevocably elects to exercise the within
Warrant to the extent of purchasing __________ shares of Common Stock and hereby
makes payment of $__________ in payment of the exercise price thereof.

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

                     INSTRUCTIONS FOR REGISTRATION OF STOCK

Name_____________________________________________________________
                  (Please typewrite or print in block letters)

Address__________________________________________________________

Social Security or other Taxpayer Identification Number__________

                                        Signature /s/ Terrence L. Donati
                                                 -------------------------------

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY
ONLY BE SOLD OR TRANSFERRED PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT OR, AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
SUCH ACT, PROVIDED THAT IN THE EVENT THAT ANY RESALE OF THIS SECURITY IS MADE
PURSUANT TO SUCH AN EXEMPTION AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY
AND ITS LEGAL COUNSEL, WILL BE PROVIDED TO THE EFFECT THAT SUCH TRANSFER IS MADE
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT OF 1933.

                                       11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00011-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00011-of-00352.parquet"}]]