Document:

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                                                                     Exhibit 4.1

                                CERES GROUP, INC.

                     1998 KEY EMPLOYEE SHARE INCENTIVE PLAN
                    AS AMENDED JUNE 12, 2001 AND MAY 19, 2004

                1. General. This 1998 Key Employee Share Incentive Plan ("Plan")
provides key employees of Ceres Group, Inc. ("CERES") or subsidiary corporations
of CERES with the opportunity to acquire or expand their equity interest in
CERES by making available for award or purchase common shares, par value $0.001
per share, of CERES ("Common Shares"), through the granting of nontransferable
options to purchase Common Shares ("Options"), the granting of nontransferable
options to receive payments based on the appreciation of Common Shares ("SARs"),
the granting of stock ("Stock Grants"), and the granting of restricted stock
awards ("Restricted Stock Awards"). Options, SARs, Stock Grants and Restricted
Stock Awards are collectively referred to herein as "Grants"; an individual
grant of Options is individually referred to herein as a "Grant". CERES intends
that key employees may be granted, simultaneously or from time to time, Stock
Options that qualify as incentive stock options ("Incentive Stock Options" under
Section 422 of the Internal Revenue Code of 1986, as amended ("Code") or stock
options that do not so qualify ("Non-qualified Stock Options"). No provision of
the Plan is intended or shall be construed to grant employees alternative rights
in any Incentive Stock Option granted under the Plan so as to prevent such
Option from qualifying under Section 422 of the Code.

                2. Purpose of the Plan. The purpose of the Plan is to provide
incentives to key employees, non-employee directors, consultants and advisors of
CERES or of subsidiary corporations of CERES, by encouraging such individuals to
acquire a larger share ownership in the CERES, thereby increasing their
proprietary interest in CERES's business and enhancing their personal financial
interest in its success. For purposes of the Plan, a "subsidiary corporation"
consists of any corporation fifty percent (50%) of the shares of which are
directly or indirectly owned or controlled by CERES.

                3. Effective Date of the Plan. The Plan shall have a stated
effective date of October 1, 1998.

                4. Administration of the Plan. The Plan will be administered
by the Compensation Committee of the Board of Directors of CERES ("Committee")
which shall consist of not less than three members. None of the Committee
members shall be employees of CERES or its subsidiary corporations nor be
eligible to receive Grants while serving as a member of the Committee unless
such Grant is also approved by the entire Board of Directors. Each of the
Committee members shall be a "Non-Employee Director" within the meaning of Rule
16b-3 promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, or any successor definition adopted by the Securities
Exchange Commission, and each shall be an "outside director" within the meaning
of Section 162(m) of the Code. The Board may also select one or more qualified
Directors to serve as alternate

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members of the Committee, who may take the place of any absent member or
members at any meeting of the Committee. The Committee shall be authorized to
administer the Plan in accordance with its terms and may adopt, amend or repeal
such rules and regulations as the Committee may desire concerning the conduct of
its affairs. The interpretation and construction by the Committee of any
provision of the Plan or of any Grant under it and the administration of the
Plan by the Committee shall be final.

                A majority of the Committee shall constitute a quorum. The acts
of a majority of the members present at any meeting at which a quorum is present
(or acts unanimously approved in writing by the members of the Committee) shall
constitute binding acts of the Committee. No member of the Board of Directors or
the Committee shall be liable for any action taken or omitted, or any
determination made, in good faith in connection with the Plan.

                Subject to the terms and conditions of the Plan, the Committee
is authorized and empowered:

                (a)     To select the key employees, non-employee directors,
                        consultants and advisors to whom Grants may be made;

                (b)     To determine the number of Common Shares to be covered
                        by any Grant;

                (c)     To prescribe the terms and conditions of any Grants made
                        under the Plan, and the form and agreement used in
                        connection with such Grants;

                (d)     To determine the time or times when Options, SARs, Stock
                        Grants and Restricted Stock Awards will be granted and
                        when they will terminate in whole or in part;

                (e)     To determine the time or times when Options, SARs and
                        Restricted Stock Awards that are granted may be
                        exercised;

                (f)     To determine, at the time a Stock Option is granted
                        under the Plan, whether such Option is an Incentive
                        Stock Option entitled to the benefits of Section 422 of
                        the Code;

                (g)     To establish any other Option agreement provisions not
                        inconsistent with the terms and conditions of the Plan
                        or, where the Stock Option is an Incentive Stock Option,
                        with the terms and conditions of Section 422 of the
                        Code;

                (h)     To determine whether SARs will be made part of any
                        Grants consisting of Options, and to approve any SARs
                        made part of any such Grants pursuant to Section 8
                        hereof.

                (i)     To determine, at the time a Stock Grant is granted under
                        the Plan, the terms and conditions of such Grant; and

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                (j)     To determine, at the time a Restricted Stock Award is
                        granted under the Plan, the terms and conditions of such
                        Grant, including, but not limited to, vesting and
                        forfeiture provisions, voting rights and dividend
                        rights.

                5. Persons Eligible for Grants.

                (a) General. Grants may be made from time to time to those key
employees, non-employee directors, consultants and advisors of CERES or of a
subsidiary corporation who are designated by the Committee in its sole and
exclusive discretion. Key employees may include, but shall not necessarily be
limited to, employees who are also members of the Board of Directors, officers
of CERES, and officers of any subsidiary corporation. Options, SARS, Stock
Grants and Restricted Stock Awards may be granted to non-employee directors
while actually serving on the Board of Ceres or a subsidiary corporation, and
consultants and advisors retained by Ceres or a subsidiary corporation at the
time of grant. However, Options intended to qualify as Incentive Stock Options
shall only be granted to employees while actually employed by CERES or a
subsidiary corporation. The Committee may grant more than one Option, with or
without SARs, to the same key employee, director, consultant or advisor. No
Option, SAR, Stock Grant or Restricted Stock Award will be granted to any key
employee, director, consultant or advisor, during any period of time when such
key employee, director, consultant or advisor, is on a leave of absence.

                (b) Maximum Grant to Any Employee. The maximum number of Common
Shares with respect to which Options, SARs, Stock Grants or Restricted Stock
Awards may be granted to any employee under this Plan shall not exceed 500,000
annually; provided, however, this limitation may be increased or adjusted with
respect to any employee by one or more of the following events: (i) the deemed
exercise of an Option when a tandem SAR is exercised by the employee, pursuant
to Section 6, (ii) the increase, decrease or exchange of Common Shares, pursuant
to Section 6, and (iii) the surrender of an Option and the grant of a new Option
by the employee, pursuant to Section 7(h). All adjustments to the limitation on
grants of Options, SARs, Stock Grants or Restricted Stock Awards provided for in
this section shall be determined by the Committee, pursuant to Section 4.

                6. Shares Subject to the Plan; Adjustments to Options; Grants.
Three Million (3,000,000) presently authorized but unissued Common Shares of
CERES shall be reserved, allotted and set aside for issuance under the Plan,
subject to the next sentence and Section 7(h). If a SAR is granted in tandem
with an Option pursuant to Section 8 and such SAR is thereafter exercised in
whole or in part, then such Option or the portion thereof to which the duly
exercised SAR relates shall be deemed to have been exercised for purposes of
such Option, but the Common Shares which were issuable to such Option or the
portion thereof to which the duly exercised SAR relates may be made available
for reoffering under the Plan to any eligible key employee.

                If, at any time subsequent to the date of adoption of the Plan
by the Board of Directors, the number of Common Shares are increased or
decreased, or changed into or exchanged for a different number or kind of shares
of stock or other securities of CERES or of

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another corporation (whether as a result of a stock split, stock dividend,
combination or exchange of shares, exchange for other securities,
reclassification, reorganization, redesignation, merger, consolidation,
recapitalization or otherwise): (i) there shall automatically be substituted for
each Common Share subject to an unexercised Option or SAR (in whole or in part)
granted under the Plan, the number and kind of shares of stock or other
securities into which each outstanding Common Share shall be changed or for
which each such Common Share shall be exchanged; and (ii) the option price per
Common Share or unit of securities shall be increased or decreased
proportionately so that the aggregate purchase price for the securities subject
to an Option or SAR shall remain the same as immediately prior to such event. In
addition to the foregoing, the Committee shall be entitled in the event of any
such increase, decrease or exchange of Common Shares to make other adjustments
to the securities subject to an Option, SAR, Stock Grant or Restricted Stock
Award, the provisions of the Plan, and to any related Option, SAR, Stock Grant
or Restricted Stock Award agreements (including adjustments which may provide
for the elimination of fractional shares), where necessary to preserve the terms
and conditions of any Grants hereunder.

                7. Stock Option Provisions.

                (a) General. The Committee may grant to key employees (also
referred to as "optionees") nontransferable Options that either qualify as
Incentive Stock Options under Section 422 of the Code or do not so qualify.
However, any Option that is an Incentive Stock Option shall only be granted
within ten (10) years from the Effective Date of this Plan.

                (b) Stock Option Price. The option price per Common Share which
may be purchased under the Plan shall be determined by the Committee at the time
of Grant, but shall not be less than one hundred percent (100%) of the fair
market value of a Common Share, determined as of the date such Option is
granted; however, if a key employee to whom an Incentive Stock Option is granted
is, at the time of the grant of such Option, an "owner," as defined in Section
422(b)(6) of the Code (modified as provided in Section 424(d) of the Code) of
more than ten percent (10%) of the total combined voting power of all classes of
stock of CERES or any subsidiary corporation (a "Substantial Shareholder"), the
price per Common Share of such option, as determined by the Committee, shall not
be less than one hundred ten percent (110%) of the fair market value of a Common
Share on the date such Option is granted. The option price per Common Share
under each Option granted pursuant to the Plan that is not an Incentive Stock
Option shall be determined by the Committee at the time of Grant. The fair
market value of a Common Share shall be determined in accordance with procedures
to be established by the Committee; provided, that so long as Common Shares are
traded or exchanged on the NASDAQ National Market, the fair market value of a
Common Share for any given date shall be considered the average of the bid and
asked prices quoted on that date. The day on which the Committee approves the
granting of an Option shall be considered the date on which such Option is
granted.

                (c) Period of Option. The Committee shall determine when each
Option is to expire. However, no Option (including without limitation, an
Incentive Stock Option) may be exercisable for a period of more than ten (10)
years from the date it is granted. Further, no

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Incentive Stock Option granted to an employee who is a Substantial Shareholder
at the time of the grant of such Option shall be exercisable after the
expiration of five (5) years from the date of grant of such Option.

                (d) Limitation on Exercise and Transfer of Options. Only the key
employee, non-employee director, consultant or advisor to whom an Option is
granted may exercise such Option, except in those cases where a guardian or
other legal representative has been duly appointed for such individual, and
except as otherwise provided in the case of such individual's death. No Option
granted hereunder shall be transferable by an optionee other than by will or the
laws of descent and distribution; provided, however, that if so provided in the
instrument evidencing the Option, the Compensation Committee may permit an
optionee to transfer the Option during his lifetime to one or more members of
his family or to one or more trusts for the benefit of one or more members of
his family so long as no consideration is paid for such transfer and such
transfer would not result in the loss of any exemption under Rule 16b-3 for any
Option that the Compensation Committee does not permit to be so transferred. The
transferee of an Option shall be subject to all restrictions, terms, and
conditions applicable to the Option prior to its transfer, except that the
Option shall not be further transferable inter vivos by the transferee. The
Compensation Committee may impose on any transferable Option and on the Common
Shares to be issued upon the exercise of the Option such limitations and
conditions as the Committee deems appropriate. No Option granted hereunder can
be pledged or hypothecated, nor shall any such Option be subject to execution,
attachment or similar process.

                (e) Employment; Holding Period Requirements For Certain Options.
The Committee may condition the exercise of any Option granted hereunder upon
the continued employment of the optionee by CERES or by a subsidiary
corporation, and may make any such Option immediately exercisable. However, the
Committee will require that, from and after the date of grant of any Incentive
Stock Option until the date three (3) months prior to the date such Option is
exercised, such optionee must be an employee of the CERES or of a subsidiary
corporation, but always subject to the right of CERES or any subsidiary
corporation to terminate such optionee's employment of such during such period.
Each Option shall be subject to such additional restrictions as to the time and
method of exercise as shall be prescribed by the Committee. Upon satisfaction of
such requirements, if any, an Option or the appropriate portion thereof may be
exercised in whole or in part from time to time during the option period;
however, such exercise right(s) shall be limited to blocks of at least one
hundred (100) Common Shares.

                (f) Payment of Option Price. An Option shall be exercised by an
optionee giving written notice to CERES of his/her intention to exercise the
same, accompanied by full payment of the purchase price in cash or by check, or,
with the consent of the Committee, in whole or in part with a surrender of
Common Shares having a fair market value on the date of exercise equal to that
portion of the purchase price for which payment in cash or check is not made.
The Committee may, in its sole discretion, approve other methods of exercise for
an Option or payment of the option price, provided that no such method shall
cause any option granted under the Plan as an Incentive Stock Option to not
qualify under Section 422 of the Code

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or cause any Common Share issued in connection with the exercise of an option
not to be a fully paid and non-assessable Common Share.

                (g) Certain Reissuances of Options. To the extent Common Shares
are surrendered by an optionee in connection with the exercise of an Option in
accordance with Section 7(f), the Committee may in its sole discretion grant new
Options to such optionee (to the extent Common Shares remain available for
Grants), subject to the following terms and conditions:

                (i)     The number of Common Shares issuable pursuant to the new
                        Options shall be equal to the number of Common Shares
                        being surrendered by the optionee;

                (ii)    The option price per Common Share shall be equal to the
                        fair market value of a Common Share, on the date of
                        exercise of those Options whose exercise caused such
                        Grant; and

                (iii)   The terms and conditions of such Options shall in all
                        other respects replicate the terms and conditions of
                        those Options whose exercise caused such Grant, except
                        to the extent such terms and conditions are determined
                        to not be wholly consistent with the general provisions
                        of this Section 7, or in conflict with the remaining
                        provisions of the Plan.

                (h) Cancellation and Replacement of Options; Reallocation of
Unused Common Shares. The Committee may at any time or from time to time permit
the voluntary surrender by an optionee who is the holder of any outstanding
Options under the Plan, where such surrender is conditioned upon the granting to
such optionee of new Options for such number of shares as the Committee shall
determine, or may require such a voluntary surrender as a condition precedent to
the grant of new Options. The Committee shall determine the terms and conditions
of new Options, including the prices at and periods during which they may be
exercised, in accordance with the provisions of this Plan, all or any of which
may differ from the terms and conditions of the Options surrendered. Any such
new Options shall be subject to all the relevant provisions of this Plan. The
Common Shares subject to any Option so surrendered, and/or any Common Shares
subject to any Option that has lapsed, been forfeited, or been cancelled and
extinguished in connection with the exercise of an SAR, shall no longer be
charged against the limitation provided in Section 6 of this Plan and may again
become shares subject to the Plan. The granting of new Options in connection
with the surrender of outstanding Options under this Plan shall be considered
for the purposes of the Plan as the granting of new Options and not an
alteration, amendment or modification of the Plan or of the Options being
surrendered. Common Shares that are not purchased through the exercise of
Options that terminate or lapse may be used for further Grants under the Plan.

                (i) Limitation on Exercisable Incentive Stock Options. The
aggregate fair market value of the Common Shares first becoming subject to
exercise as Incentive Stock Options by a key employee during any given calendar
year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). Such
aggregate fair market value shall be determined as

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of the date such Option is granted, taking into account, in the order in which
granted, any other incentive stock options granted by CERES or by a parent or
subsidiary corporation.

                8. Share Appreciation Rights. A key employee may be granted the
right to receive a payment based on the increase in the value of Common Shares
occurring after the date of such Grant. Such rights shall be known as SARs. SARs
may (but need not) be granted to a key employee in tandem with, and exercisable
in lieu of exercising, a Grant of Options. SARs will be granted upon terms and
conditions specified by the Committee receiving such Grant, or by a subsidiary
corporation if such subsidiary corporation is the employer of the key employee
receiving such Grant. No optionee is entitled to a Grant of SARs solely as a
result of the grant of an Option to him. Any SAR if granted in tandem with a
Grant of Options, may only be exercised by the holder thereof with respect to
all, or a portion, of the Options to which such tandem SAR applies. When granted
in tandem with an Option, a SAR shall provide that the holder of an Option shall
have the right to receive an amount equal to one hundred percent (100%) of the
excess, if any, of the fair market value of the Common Shares covered by such
Option, determined as of the date of exercise of such SAR by the Committee (in
the same manner as such value is determined for purposes of the granting of
Options), over the price to be paid for such Common Shares under such Option.
Such amount will be payable by either the CERES or the subsidiary corporation,
whichever such corporation is the employer of the employee, in one or more of
the following manners, as determined by the Committee:

                (a) cash (or check);

                (b) Common Shares having a fair market value equal to such
                    amount; or

                (c) a combination of cash (or check) and Common Shares.

In the case of SARs granted in tandem with Options, in no event may any person
exercise any such SARs unless (i) such person is then permitted to exercise the
Options with respect to which such SARs relate, and (ii) the fair market value
of the Common Shares covered by the tandem Options, determined as provided
above, exceeds the option price of such Common Shares. Upon the exercise of any
SARs, the Stock Option, or that portion thereof to which such SARs relate, shall
be canceled and automatically extinguished. A SAR granted in tandem with a Stock
Option hereunder shall be made a part of the Stock Option agreement to which
such SAR relates, in a form approved by the Committee and not inconsistent with
this Plan. The granting of an Option or SAR shall impose no obligation upon the
optionee to exercise such Option or SAR. The obligation of CERES or a subsidiary
corporation to satisfy SARs shall not be funded or secured in any manner. No SAR
granted hereunder shall be transferable by the key employee granted such SAR,
other than by will or the laws of descent and distribution.

                After the Grant of an SAR, an optionee intending to rely on an
exemption from Section 16(b) of the Securities Exchange Act of 1934 (the
"Exchange Act") shall be required to hold such SAR for six (6) months from the
date the price for such SAR is fixed to the date of cash settlement.
Additionally, in order to remain exempt from Section 16(b) of the Exchange Act,
an SAR must be exercised by an optionee subject to such Section only during the
period beginning on the third business day following the release of a summary
statement of CERES's

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quarterly or annual sales and earnings and ending on the twelfth business day
following said date.

                9. Restricted Stock Awards.

                (a) General. Subject to the terms and conditions of the Plan,
the Committee, at any time and from time to time, may grant shares of restricted
stock ("Restricted Stock") to key employees, non-employee directors, consultants
and advisors in such amounts and upon such terms as the Committee shall
determine.

                (b) Restricted Stock Award Agreement. Each Restricted Stock
Award shall be evidenced by an award agreement (the "Award Agreement") that
shall specify any time-based restrictions on vesting or a period to which the
award is subject to forfeiture based on the passage of time or the occurrence of
events as determined by the Committee (the "Restriction Period"), the number of
shares of Restricted Stock granted, and any such other provisions as the
Committee shall determine.

                (c) Nontransferability of Restricted Stock Awards. Except as
otherwise provided in this Plan or the Award Agreement, the shares of Restricted
Stock granted herein may not be sold, transferred, pledged, assigned or
otherwise alienated or hypothecated until the end of the Restriction Period
specified in the Award Agreement, or upon earlier satisfaction of any other
conditions, as specified by the Committee in its sole discretion and set forth
in the Award Agreement at the time of grant or thereafter by the Committee. All
rights with respect to the Restricted Stock granted under the Plan shall be
available only during the lifetime of the recipient, except as otherwise
provided in the Award Agreement at the time of grant or thereafter by the
Committee.

                (d) Other Restrictions. The Committee shall impose, in the Award
Agreement at the time of grant of anytime thereafter, such other conditions
and/or restrictions on any Restricted Stock granted pursuant to this Plan as it
may deem advisable, including, without limitation, time-based restrictions,
restrictions under applicable laws or under the requirements of any stock
exchange or market upon which the Common Shares are listed or traded, or holding
requirements or sale restrictions placed on the Common Shares by CERES upon
vesting of such Restricted Stock.

                To the extent deemed appropriate by the Committee, CERES may
retain the certificates representing the shares of Restricted Stock in CERES's
possession until such time as all conditions and/or restrictions applicable to
such shares have been satisfied or lapsed.

                Except as otherwise provided in this Section 9, shares of
Restricted Stock covered by each Restricted Stock Award shall become freely
transferable by the recipient after all conditions and restrictions applicable
to such shares have been satisfied or lapse.

                (e) Certificate Legend. In addition to any legends placed on the
certificates pursuant to this Plan, each certificate representing shares of
Restricted Stock granted pursuant to this Plan may bear a legend such as the
following:

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                The sale or other transfer of the shares of stock represented by
                this certificate, whether voluntary, involuntary or by operation
                of law, is subject to certain restrictions on transfer as set
                forth in the Ceres Group, Inc. 1998 Key Employee Share Incentive
                Plan, and in the associated Award Agreement. A copy of the Plan
                and the Award Agreement may be obtained from Ceres Group, Inc.

                (f) Voting Rights. To the extent required by law, individuals
holding shares of Restricted Stock granted hereunder shall be granted the right
to exercise full voting rights with respect to those shares during the
Restriction Period.

                (g) Dividends and Other Distributions. During the Restriction
Period, individuals holding shares of Restricted Stock granted hereunder may, if
the Committee so determines, be credited with dividends paid with respect to the
underlying shares while they are so held in a manner determined by the Committee
in its sole discretion. The Committee may apply any restrictions to the
dividends that the Committee deems appropriate. The Committee, in its sole
discretion, may determine the form of payment of dividends, including cash,
Common Shares, or Restricted Stock.

                (h) Termination of Employment or Affiliation. Each Award
Agreement shall set forth the extent to which the recipient shall have the right
to retain the Restricted Stock following termination of such individual's
employment or affiliation with CERES or any of its affiliates. Such provisions
shall be determined in the sole discretion of the Committee, shall be included
in the Award agreement entered into with each recipient, need not be uniform
among all shares of Restricted Stock issued pursuant to this Plan, and may
reflect distinctions based on the reasons for termination.

                10. Stock Grants. Subject to the terms and provisions of this
Plan, the Committee, at any time and from time to time, may grant Common Shares
to any key employee, non-employee director, consultant or advisor in such
amounts and on such terms as the Committee shall determine. Such grant of Common
Shares shall be made based on the fair market value of a Common Share on the
date of grant. Such Stock shall be freely transferable by the recipient.

                11. Termination of Employment. If a key employee ceases to be an
employee of CERES and every subsidiary corporation, for a reason other than
death, retirement, or permanent and total disability, his/her Grants of Options
or SARs shall, unless extended by the Committee on or before his/her date of
termination of employment, terminate on the effective date of such termination
of employment. Neither the key employee nor any other person shall have any
right after such date to exercise all or any part of his Options or SARs.

                If termination of employment is due to death or permanent and
total disability, then outstanding Options and SARs may be exercised within the
one (1) year period ending on the first anniversary of such death or permanent
and total disability. In the case of death, such outstanding Options and SARs
shall be exercised by such key employee's estate, or the person designated by
such key employee by will, or as otherwise designated by the laws of descent and
distribution. Notwithstanding the foregoing, in no event shall any Option or SAR
be exercisable

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after the expiration of the option period, and in the case of exercises made
after a key employee's death, not to any greater extent than the key employee
would have been entitled to exercise such Option or SAR at the time of his
death.

                Subject to the discretion of the Committee, if a key employee
terminates employment with CERES and all subsidiary corporations because of
normal or early retirement under the Retirement Plan for Employees of Ceres
Group, Inc. (or any successor retirement plan), any then-outstanding Options or
SARs held by such key employee shall lapse at the earlier of the end of the term
of such Option or SAR, or ninety (90) days after such retirement or permanent
and total disability.

                If a key employee of CERES or one of its subsidiary corporations
is granted a leave of absence because of sickness or the need to enter military
service, his/her employment with CERES or such subsidiary corporation shall not
be considered terminated, and he/she shall be deemed an employee of CERES or
such subsidiary corporation during such leave of absence or any extension
thereof granted by CERES or such subsidiary corporation.

                12. Change in Control. Upon the occurrence of a Change in
Control (as defined below), notwithstanding any other provisions hereof or of
any agreement to the contrary, all Options, SARs and Restricted Stock Awards
granted under this Plan shall immediately vest and become exercisable in full.

                For purposes of this Plan, a Change in Control shall be deemed
to have occurred if: (i) a tender offer shall be made and consummated for the
ownership of 25% or more of the outstanding voting securities of CERES; (ii)
CERES shall be merged or consolidated with another corporation and, as a result
of such merger or consolidation, less than 75% of the outstanding voting
securities of the surviving or resulting corporation shall be owned in the
aggregate by the former shareholders of CERES as the same shall have existed
immediately prior to such merger or consolidation; (iii) CERES shall sell
substantially all of its operating assets to another corporation which is not a
wholly owned subsidiary; or (iv) a person, within the meaning of Section 3(a)(9)
or of Section 13(d)(3) (as in effect on the date hereof) of the Exchange Act
shall acquire, other than by reason of inheritance, twenty-five percent (25%) or
more of the outstanding voting securities of CERES (whether directly,
indirectly, beneficially or of record). In determining whether a Change in
Control has occurred, gratuitous transfers made by a person to an affiliate of
such person (as determined by the Board of Directors of CERES), whether by gift,
devise or otherwise, shall not be taken into account. For purposes of this Plan,
ownership of voting securities shall take into account and shall include
ownership as determined by applying the provisions of Rule 13d-3(d)(1)(i) as in
effect on the date hereof pursuant to the Exchange Act.

                13. Amendment, Suspension and Termination. The Committee is
authorized to interpret this Plan and from time to time adopt any rules and
regulations for carrying out this Plan that it may deem advisable. Subject to
the approval of the Board of Directors of CERES, the Committee may at any time
amend, modify, suspend or terminate this Plan. In no event,

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however, without the approval of shareholders, shall any action of the Committee
or the Board of Directors result in:

                (a)     Materially amending, modifying or altering the
                        eligibility requirements provided in Section 5 hereof;

                (b)     Materially increasing, except as provided in Section 6
                        hereof, the maximum number of shares subject to Grants;
                        or

                (c)     Materially increasing the benefits accruing to
                        participants under this Plan, except to conform this
                        Plan and any agreements made hereunder to changes in the
                        Code or governing law.

                14. Investment Representation; Approvals and Listing. The
Committee may condition any Grant hereunder upon receipt of the following
investment representation from the optionee/recipient:

        "I agree that any Common Shares of Ceres Group, Inc. that I may acquire
        by virtue of this Option, SAR, Stock Grant or Restricted Stock Award
        shall be acquired for investment purposes only and not with a view to
        distribution or resale, and may not be transferred, sold, assigned,
        pledged, hypothecated or otherwise disposed of by me unless (i) a
        registration statement or post-effective amendment to a registration
        statement under the Securities Act of 1933, as amended, with respect to
        said Common Shares has become effective so as to permit the sale or
        other disposition of said shares by me; or (ii) there is presented to
        Ceres Group, Inc.. an opinion of counsel satisfactory to Ceres Group,
        Inc. to the effect that the sale or other proposed disposition of said
        Common Shares by me may lawfully be made otherwise than pursuant to an
        effective registration statement or post-effective amendment to a
        registration statement relating to the said Shares under the Securities
        Act of 1933, as amended."

                CERES shall not be required to issue any certificate or
certificates for Common Shares upon the exercise of any Option, SAR or
Restricted Stock Award granted under this Plan prior to (i) the obtaining of any
approval from any governmental agency which the Committee shall, in its sole
discretion, determine to be necessary or advisable; (ii) the admission of such
shares to listing on any national securities exchange on which the Common Shares
may be listed or any other system for trading Common Shares (including, without
limitation, the NASDAQ National Market); (iii) the completion of any
registration or other qualifications of the Common Shares under any state or
federal law or ruling or regulations of any governmental body which the
Committee shall, in its sole discretion, determine to be necessary or advisable
or the determination by the Committee, in its sole discretion, that any
registration or other qualification of the Common Shares is not necessary or
advisable; and (iv) the obtaining of an investment representation from the
optionee in the form stated above or in such other form as the Committee, in its
sole discretion, shall determine to be adequate.

                15. General Provisions. The form and substance of Option
agreements, SAR agreements, and Restricted Stock Award Agreements made
hereunder, whether granted at the

--------------------------------------------------------------------------------
                                    Page 11
<PAGE>

same or different times, need not be identical. Nothing in this Plan or in any
agreement shall confer upon any key employee any right to continue in the employ
of CERES or any of its subsidiary corporations, to be entitled to any
remuneration or benefits not set forth in this Plan or such Grant, or to
interfere with or limit the right of CERES or any subsidiary corporation to
terminate his employment at any time, with or without cause. Nothing contained
in this Plan or in any Option agreement or SAR shall be construed as entitling
any optionee to any rights of a shareholder as a result of the grant of an
Option or an SAR, until such time as Common Shares are actually issued to such
optionee pursuant to the exercise of such Option or SAR. The successors and
assigns of CERES may assume this Plan. The liability of CERES under this Plan
and any sale made hereunder is limited to the obligations set forth herein with
respect to such sale and no term or provision of this Plan shall be construed to
impose any liability on CERES in favor of any employee with respect to any loss,
cost or expense which the employee may incur in connection with or arising out
of any transaction in connection with this Plan. The expense of administering
the Plan shall be borne by CERES. The Plan, and all options and actions taken
thereunder and any agreements relating thereto shall be governed by, and
controlled in accordance with the laws of CERES's state of incorporation,
without regard to its conflicts of law principles or statute. The captions and
section numbers appearing in this Plan are inserted only as a matter of
convenience; they do not define, limit, construe or describe the scope or intent
of the provisions of this Plan.

                Termination of the Plan. This Plan shall terminate on the tenth
(10th) anniversary of its effective date, as determined in accordance with
Section 3 of this Plan, but no later than September 30, 2008. This Plan may be
terminated earlier in accordance with Section 13 of this Plan. After the Plan
terminates, no Grants shall be made hereunder. All Options, SARs, Stock Grants
and Restricted Stock Awards outstanding at the time of termination of the Plan
shall continue in full force and effect according to their terms and the terms
and conditions of the Plan.

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                                    Page 12EXHIBIT 10.1

                      Exclusive Recording Artist Agreement
                      ------------------------------------

     This  Agreement is made as of the 24th day of June,  2004 by and between G2
VENTURES,  INC.  (hereinafter  "G2") and  Joseph  Donnelly,  individually  p/k/a
"Jeremiah Donnelly" (hereinafter "Artist").

1. ARTIST'S WARRANTIES AND REPRESENTATIONS

         1.01.  Artist  represents  and  warrants  that:  (a) it is  authorized,
empowered  and able to enter into and fully perform its  obligations  under this
Agreement;  (b) neither this Agreement nor the fulfillment  thereof by any party
infringes upon the rights of any other person or entity; (c) it has not and will
not do anything  that  impairs  G2's rights  under this  Agreement,  nor will it
permit any other  person or entity to do so; and (d) Artist is  resident  in the
United States of America for income tax purposes.

         1.02. Artist further  represents and warrants that: (a) there now exist
no prior recorded performances by Artist other than those listed on the attached
Exhibit A and that no recordings  from those Masters will be released during the
term  hereof;  (c)  none  of the  Masters  delivered  to G2 by  Artist,  nor the
performances  embodied thereon, nor any other Materials,  nor any use thereof by
G2 or its  grantees,  licensees or assigns,  will  violate or infringe  upon the
rights of any third party.  "Materials,"  as used in this  Paragraph,  means all
Controlled Compositions,  each name used by Artist, any logo used by Artist, and
all other  musical,  artistic,  literary  and other  materials,  ideas and other
intellectual  properties  furnished by Artist or any other  producer  engaged by
Artist and contained or used in connection with any Masters made  hereunder,  or
the packaging, sale, advertising or other exploitation thereof.

2. TERM AND RECORDING COMMITMENT

         2.01.  The  Term of  this  Agreement  shall  be for an  Initial  Period
commencing on the date hereof and expiring nine months thereafter.

         2.02.  Artist  hereby  grants to G2 three (3) separate and  irrevocable
options to extend the Term of this  Agreement  for further  periods (the "Option
Periods") commencing  immediately upon the expirations of the Initial Period and
expiring one year after delivery to G2 of the Minimum  Recording  Commitment for
said Option Period.  Each option shall be exercised by written notice from G2 to
Artist  postmarked or delivered  before upon the  expiration of the prior terms;
provided that, G2 shall have a thirty day right to cure any inadvertent  failure
to exercise such option.

         2.03.  During the Term of this  Agreement (as the same may be extended)
Artist agrees to produce and Artist shall deliver to G2 Masters comprising sound
alone sufficient to comprise the following (the "Minimum Recording Commitment"):

<PAGE>

         (a) during the Initial Period- - one (1) Album (the "First Album")

         (b)  during  the First  Option  Period- - one (1)  Album  (the  "Second
Album")

         (c)  during  the  Second  Option  Period- - one (1) Album  (the  "Third
Album")

         (d)  during  the Third  Option  Period- - one (1)  Album  (the  "Fourth
Album")

         2.04. Notwithstanding anything else herein to the contrary:

         (a) Each Album shall be  delivered  to G2 within four (4) months  after
the  commencement of the applicable  Initial Period of Option Period.  The Album
currently  being  recorded by the Artist  shall,  when  delivered,  count as the
Minimum Recording Commitment for the Initial Period.

         (b) Artist  shall not commence  the  recording  of any Album  hereunder
earlier than three (3) months following the delivery to G2 of the prior album.

         (c) G2 shall not be obliged to accept  delivery of any Album  hereunder
earlier than one year  following  the date of delivery to G2 of the prior album.
If any such  premature  delivery is tendered,  the  contractual  date of deliver
hereunder  of such Album shall be deemed to be the date one year  following  the
date of  delivery  of the prior  album,  provided  that the prior album has been
recorded and delivered in all respects in accordance with the provisions of this
Agreement and comprises acceptable Masters as herein provided.

         (d) In the event that, during the Initial Period of the Option Periods,
Artist produces more than the Minimum Recording Commitment, G2 shall as its sole
option be entitled to treat such additional material (or some of it) as counting
towards the Minimum Recording  Commitment (or not) but said additional  material
shall be and  remain  the sole  and  exclusive  property  of G2  subject  to the
provisions of this Agreement.

         (e) Each  Album  delivered  shall  consist  of not  less  than ten (10)
Masters  and not less  than  forty-five  (45) nor more  than  seventy-four  (74)
minutes of Artist's performances. Each Master shall consist of not less than two
minutes and thirty  seconds of Artist's  performances.  No Album  consisting  of
Artist's  "live"  performances  shall be deemed to be in  fulfillment  of any of
Artist's  obligations  hereunder except that upon mutual consent,  in writing, a
live  recording may be accepted in  fulfillment  of Artist's  Minimum  Recording
Commitment.  If any such  performances  are recorded during the Term hereof,  G2
shall be the owner  thereof  and shall have the right to exploit  same under the
same terms as contained herein for the First Album,  except that no advance will
be paid to Artist. No Multiple Albums shall be delivered  hereunder without G2's
prior written  consent;  any such Multiple Album delivered to and accepted by G2
shall be deemed a single Album for all purposes hereof. No Mini-Album shall form
part of the Minimum  Recording  Commitment unless expressly agreed in writing by
G2 at its absolute discretion.

<PAGE>

         (f) Artist shall  deliver to G2 each Master  hereunder in the form of a
digital  two-track  stereo tape  master,  as well as  reference  discs which are
representative of such tape masters.  Artist shall also deliver at the same time
any multi-track  master tapes recorded in connection with the same project.  The
two-track  stereo  master  tape  shall be fully  edited,  mixed,  equalized  and
leadered for the production of parts from which satisfactory  Phonograph Records
can be manufactured.

         (g) As used in this Agreement, "delivery" shall mean the receipt of all
tape masters as provided herein, as well as Artist's submission to G2 in written
form of all necessary  information,  consents,  licenses and permissions that G2
requires to  manufacture,  distribute  and  release  the  Masters as  Phonograph
Records,  including, but not limited to, mechanical licenses,  credits, musician
and producer releases, and any information required to be delivered to unions or
other third parties.  Payment of funds due at delivery by G2 shall not be deemed
a waiver of information or documents required hereunder.

         (h) Artist shall be available to G2 and shall  perform for the purposes
of making such music videos at such time and places as G2 shall reasonably agree
with  Artist.  The cost of making  such music  videos  shall be deemed  advances
hereunder  and  shall be  fifty  percent  (50%)  recoupable  from  all  sources,
excluding Mechanical Royalties, payable to Artist hereunder.

3. GRANT OF RIGHTS

         3.01. During the Term of this Agreement, Artist shall furnish to G2 its
exclusive recording services throughout the Universe.  Any contract entered into
by Artist or on Artist's behalf during the Term hereof or any extensions thereof
for Artist's  performances in television or radio  broadcasts or motion pictures
or stage productions shall  specifically  exclude the right to use any recording
of such performance for the manufacture and sale of Phonograph  Records or music
videos unless  previously  authorized  in writing by G2.  Artist shall  promptly
deliver  to G2 copies of the  pertinent  provisions  of each such  contract  and
Artist will  cooperate  fully with G2 in any  controversy  dispute or litigation
which may arise in relation to the rights of G2 under this Paragraph.

         3.02.  Artist  hereby grants and assigns to G2 all rights of every kind
and  the  complete,  unconditional,  exclusive,  perpetual,  unencumbered  title
throughout the Universe in and all results and products of Artist's services and
performances hereunder,  any and all Masters,  records, tapes, sound recordings,
music  videos,  long form  videos,  and  other  material  of every  kind made or
authorized  by G2 hereunder or  otherwise  produced  during the Option Terms and
which  include the voice,  instrumental  or other sound and/or  visual  effects,
services,  or performances of Artist,  including without limitation the right to
record,  reproduce,  broadcast,  transmit,  publish, sell, exhibit,  distribute,
advertise,  exploit, perform, and use the same separately or in combination with
any other material for any purpose in any manner, under any label, trademark, or
other identification and by any means or method, whether known or not now known,
invented, used or contemplated, and to refrain from all or any part thereof.

<PAGE>

         3.03.  Without in any way limiting  the  generality  of the  foregoing,
Artist hereby grants to G2 the following rights throughout the Universe which G2
may use or refrain from using as it elects in G2's sole discretion:

         (a)  the  exclusive  right  during  the  Term  hereof  to  manufacture,
distribute,  and sell  anywhere  in the  Universe  Phonograph  Records and music
videos reproducing Artist's performances;

         (b)  the  exclusive   right  for  the  full  periods  of  copyright  to
manufacture, distribute, and sell throughout the Universe Phonograph Records and
music videos produced from Masters made during the Option Terms hereunder;

         (c)  the  exclusive   right  for  the  full  periods  of  copyright  to
manufacture, distribute, and sell throughout the Universe Phonograph Records and
music videos produced from masters made during the Option Terms hereunder;

         (d)  the  exclusive  right  to  authorize  public  performances  in the
Universe of Phonograph Records and music videos produced during the Option Terms
hereunder;

         (e) the right to permit and authorize  others to exercise,  directly or
through persons designated by them, any and all G2's rights hereunder.

         3.04. (a) Each Master (including all sound recordings embodied thereon)
produced  hereunder or embodying  Artist's  performances and recorded during the
Initial Term shall belong to Artist. Artist grants G2 a security interest in and
to its copyright in the First Album to secure recoupment of all sums expended by
G2 in the recording and promotion of all Albums  recorded under this  Agreement.
Artist  further agrees to execute any document  reasonably  necessary to perfect
such security interest.  In the event Artist fails to execute any such documents
or instruments Artist hereby  irrevocably  grants G2 power of attorney,  coupled
with any interest, to execute all such security agreements.

         (b) Each  Master  (including  all sound  recordings  embodied  thereon)
produced  hereunder or embodying  Artist's  performances and recorded during the
Option Terms shall,  from the inception of its  creation,  be considered a "work
made for hire" for G2 within the  meaning of the U.S.  Copyright  Law.  If it is
determined that a Master does not so qualify then such Master, together with all
rights in it (including the sound  recording  copyright),  shall be deemed,  and
hereby  transferred  and  assigned  to G2 by this  Agreement.  Artist  agrees to
execute  and deliver to G2 any and all  documents  or  instruments  which G2 may
request  in  order to  confirm  G2's  acquisition  and/or  title to the  Masters
(including  the  copyright)  as described  herein.  In the event Artist fails to
execute any such documents or instruments Artist hereby irrevocably grants to G2
power of attorney,  coupled with an interest,  to execute all such  documents of
conveyance.  All Masters  recorded by Artist from the inception of the recording

<PAGE>

thereof and all reproductions derived therefrom,  together with the performances
embodied thereon, shall be entirely the property of G2 in perpetuity, throughout
the Universe, free of any claim whatsoever by Artist or any persons deriving any
rights or interests therefrom.

         3.05. Artist shall not authorize or permit Artist's  performances to be
recorded for any purpose without  obtaining an express  written  approval of G2,
and  Artist  shall  take  reasonable   measures  to  prevent  the   manufacture,
distribution  and sale of  Phonograph  Records or music  videos  containing  its
performances (and the use of Artist's name and likeness in connection therewith)
by any person or entity other than G2, its successors, licensees and assigns.

         3.06.  Artist  grants G2 the right to include any Master  produced  and
delivered  hereunder in a soundtrack  or  compilation  album,  at any time,  and
without any further advance,  except that royalties shall be payable as provided
herein.

         3.07. As used in this Agreement, "Phonograph Records" shall include any
and  all  mechanical   reproductions  of  the  Masters  produced  and  delivered
hereunder,  in any  format,  whether  now known or  unknown,  including  but not
limited to compact discs, cassette tapes, vinyl records, DAT tapes or any future
format.

4. RECORDING COSTS AND PROCEDURES

         4.01.  Advances  payable to Artist  pursuant to this  Agreement are and
shall be  inclusive  of all  costs  incurred  in the  course  of  producing  and
recording Masters hereunder  (including without limitation,  the costs of studio
time, musician fees, union payments,  instrument hire,  producer's fees, and the
cost of tape editing, mixing, remixing and masters,  advances, and other similar
costs  customarily  regarded in the industry as being recording costs.) All such
costs are sometimes herein referred to as "recording costs" and shall constitute
advances  recoupable from royalties payable  hereunder.  G2 shall, in accordance
with the  provisions of this  Agreement,  deduct and retain out of said advances
such sums as may be necessary  to pay the said  recording  coasts.  In the event
that, as a result of an event within the control of the Artist but unapproved by
G2,  any  recording  costs  shall  exceed  the  amount  of  the  recording  fund
specifically  referred to in Paragraph 5.01.  below, then the excess costs shall
(if paid by G2)  constitute  a loan to  Artist  payable  on demand  and  without
prejudice  to G2's  other  rights  and the  same  shall,  at G2's  election,  be
recoverable  by G2 out of any  monies  payable  by G2 to Artist  or on  Artist's
behalf  hereunder.  Any recording  cost that exceeds the amount of the recording
fund  specifically  referred  to in  Paragraph  5.01  below,  but which has been
approved by G2, shall be treated as an increase in said recording fund.

         4.02. G2 and Artist shall,  prior to the commencement of any recording:
(a) mutually designate the producer(s) of all Masters  hereunder;  and (b) agree
on a budget for recording costs. G2 shall not unreasonably  withhold its consent
to any budget for recording  costs that is less than ninety percent (90%) of the
recording fund for that album as specified in Paragraph  5.01. G2 has previously
approved the budgets for the First and Second Albums.

<PAGE>

         4.03. Artist shall be properly  rehearsed and shall appear at the times
and places  designated by G2 after  consultation  with and reasonable  notice to
Artist from time to time for all recording  sessions  required  hereunder and at
each session  Artist shall  tender  their  professional  services to the best of
their  ability.  G2 and Artist  shall  mutually  designate  the  material  to be
recorded and each Master shall be subject to G2's  approval as  technically  and
commercially  satisfactory.  Upon  G2's  request,  Artist  shall  re-record  any
material until a Master,  which in G2's sole judgment is satisfactory,  shall be
obtained.

         4.04.  The Masters  delivered to G2 by Artist under this  Agreement and
the performances embodied therein shall be produced in accordance with the rules
and the  regulations  of the  American  Federation  of  Musicians,  the American
Federation  of  Television  and  Radio  Artists  and  all  other  unions  having
jurisdiction.  Artist is or will become and remain,  to the extent  necessary to
fulfill this Agreement,  a member in good standing of all labor unions or guilds
in which  membership may be required for the  performance  of Artist's  services
hereunder.

         4.05. Artist shall not perform for or in connection with (and shall not
permit any other person or entity to use Artist's name or likeness in connection
with) the  recording or  exploitation  of any  Phonograph  Record  embodying any
Composition  recorded by Artist  under this  Agreement  prior to a date five (5)
years subsequent to the expiration or termination of the term of this Agreement,
or any extensions thereof.

         4.06. Without limiting the foregoing,  G2 shall not be required to make
any payments of any kind for, or in connection with, the  acquisition,  exercise
or  exploitation  of  rights  by G2  except  as  specifically  provided  in this
Agreement.  Artist shall be solely  responsible for all sums due to labor unions
or guilds,  individual  musicians,  producers  and all other persons or entities
entitled to received  royalties or other payments in connection with the sale of
Phonograph Records derived from Masters hereunder, although G2 will undertake to
make  all such  payments  to the  extent  of the  recording  fund  specified  in
Paragraph  5.01,  and Artist's  liability to producers  for  royalties  shall be
limited to two percent of retail.  None of the persons  whose  performances  are
embodied  in the Masters or whose  services  are used in  recording  the Masters
shall be bound by any  otherwise  bound or  restricted,  Artist shall obtain all
necessary clearances in writing.

5. ADVANCES AND RECORDING FUND

         5.01.  As  advances  against  and  recoupable  from  royalties  payable
hereunder,  G2 agrees to pay with respect to each Album constituting the Minimum
Recording Commitment hereunder a sum equal to the amount by which the applicable
sum set forth below ("Album  Recording  Fund") exceeds the sum of the documented
receipts for the recording costs concerned and any other advances made to Artist
prior to delivery of the applicable Album:

<PAGE>

Album Recording Fund:      First Album               $10,000
                           Second Album              $20,000
                           Third Album               $35,000
                           Fourth Album              $75,000

         5.02. If net sales through normal retail  channels in the United States
for which  royalties are payable  pursuant to Paragraph  6.01(a)  below,  net of
applicable  reserves of any album shall exceed  seventy-five  thousand  (75,000)
units as of the date nine (9) months after the initial  release of that album in
the United States,  then the Album Recording Fund on the next  subsequent  album
shall be increases by Ten Thousand Dollars ($10,000).

         5.03. The advances due under  Paragraph 5.01 shall be payable  promptly
following  the deliver to G2 of (a) the Minimum  Recording  Commitment;  (b) the
documents  required under Paragraph 2.4(g);  and (c) all invoices  pertaining to
the recording of the Minimum Recording  Commitment.  With respect to payments to
be made  following  delivery,  G2 shall have the right to  withhold  ten percent
(10%) for ninety (90) days to provide for  anticipated  costs which have not yet
been paid.

         5.04.  All  advances  paid to Artist  or on  Artist's  behalf  shall be
recoupable against the royalties payable under this Agreement, from whatever the
source,  except  that  advances  shall  not  be  recoupable  against  Mechanical
Royalties except as provided for in Paragraph 8.01.

6. ROYALTIES

         6.01. Subject to Artist's  compliance with all obligations  required of
Artist hereunder and subject as otherwise  granted herein, G2 will pay to Artist
for the rights  granted  herein and for the  services  performed  hereunder  the
royalties set out below, being percentages of one hundred percent (100%) of G2's
published  wholesale  price,  exclusive of taxes and duties actually paid by G2,
and the  container  cost  deductions  specified  below for all records and music
videos manufactured, sold and not returned, and for which G2 is paid reproducing
exclusively Masters recorded hereunder, namely:

         (a) With respect to the sales for  distribution in the United States of
Albums reproducing exclusively Masters hereunder: Twenty Percent (20%).

         (b) The royalty rate with respect to 12-inch  singles  shall be fifteen
percent (15%).

         (c) The royalty rate with respect of 7-inch  singles and other  records
shall be twelve percent (12%).

         (d) The royalty rate with respect to the following is thirteen  percent
(13%):  records sold to any  government  body,  PX sales,  sales to  educational
institutions,  record clubs,  soundtrack records,  compilation  records,  budget
records  (defined as a record which is sold as wholesale price of at least fifty
percent but less than eighty percent of G2's published  wholesale price), and EP
records (defined as records containing  between three and nine Masters):  except
that the royalty  rate for  compilations  releases  exclusively  on the G2 label
shall be twenty percent (20%).  Royalties for  soundtracks  and  compilations on
which  Artist  appears  with other  performers  shall be  pro-rated  in the same
proportion that Artist's Master bear to the entire album.

<PAGE>

         (e) Foreign  royalty rate: The rate for the records  manufactured by G2
or G2's  affiliates  and sold outside the United  States will be  sixty-six  and
two-thirds  percent (66 2/3%) of the applicable  royalty except that the royalty
rate for masters licensed by G2 outside the United States shall be fifty percent
(50%) of the net income  therefrom.  Net income  shall mean all income  received
less third party out of pocket  expenses to establish  the license,  third party
out of pocket collection costs,  foreign currency  exchange,  wire transfer fees
and applicable taxes.

         (f) Royalty rate for music  videos sold and not  returned  shall be ten
percent (10%) of G2's published wholesale price.

7. ROYALTY PAYMENTS

         7.01.  Royalties  earned  hereunder will be accrued  semi-annually  and
paid, less all advances,  taxes,  and any other charges,  within sixty (60) days
following  each  June 30th and  December  31st for the  preceding  six (6) month
period, in accordance with G2's regular accounting practices. G2 shall, however,
have the right to establish reasonable reserves for returns and exchanges,  said
reserves not to exceed thirty percent (30%). Each reserve established  hereunder
shall be liquidated at the end of the following  semi-annual period. If G2 makes
any overpayment of royalties  (e.g., by reason of an accounting  error or paying
royalties  on Records  returned  later),  G2 shall have the right to offset such
overpayment against any subsequent payment due to Artist from G2.

         7.02.  Each  royalty  payment  hereunder  shall  be  accompanied  by  a
statement in accordance with G2's regular accounting practices.  Said statements
shall be provided to Artist  within sixty (60) days of the end of each  calendar
quarter,  even though royalty  payments are  semi-annual.  Each statement  shall
become  binding  upon Artist and Artist  shall  neither  have nor make any claim
against G2 with  respect to such  statement,  unless  Artist shall advise G2, in
writing,  of the specific basis of such claim within one (1) year after the date
G2 mails such  statement.  G2's  accounting  books and records  will be kept and
maintained  in  accordance  with  generally  accepted   accounting   principles,
consistently applied.

         7.03.  Artist shall not be entitled to recover  damages or to terminate
this  Agreement for any reason because of a claimed breach by G2 of its material
obligations  hereunder,  unless G2 has failed to remedy such breach within sixty
(60) days following receipt of written notice thereof.  Artist will not have the
right  to  sue G2 in  connection  with  any  royalty  accounting,  or sue G2 for
royalties  accrued  by Artist  during the  period a royalty  accounting  covers,
unless  Artist  commences  the suit within two (2) years after the date when the
statement  in question is rendered to Artist.  If Artist  commences  suit on any
controversy or claim  concerning  royalty  accountings  rendered to Artist under
this Agreement,  the scope of the proceeding will be limited to determination of

<PAGE>

the amount of royalties due for the  accounting  periods  covered and reasonable
attorney fees, and the court will have no authority to consider any other issues
or award any relief  except  recovery of any  royalties  found  owing.  Artist's
recovery  of any such  royalties  and  attorney's  fees will be the sole  remedy
available to Artist by reason of G2's royalty accountings.  Without limiting the
generality  of the  preceding  sentence,  Artist will not have any right to seek
termination  of this  Agreement or avoid the  performance  of their  obligations
under it by reason of any such claim.  Artist's  remedy for G2's willful refusal
to permit it to record  its  Minimum  Recording  Commitment  shall be limited to
termination of this Agreement.

         7.04. G2 agrees that Artist may, not more than once during any calendar
year, but only once with respect to any statement rendered hereunder,  audit its
books and records for the purpose of determining the accuracy of G2's statements
to Artist.  If Artist wishes to perform any such audit,  Artist will be required
to notify G2 at least  thirty  (30) days  before the date when  Artist  plans to
begin the audit.  If Artist's audit has not been completed  within one (1) month
from the time Artist  begins it, G2 may require  Artist to terminate it on seven
(7) days  notice  to Artist  and G2 will not be  required  to  permit  Artist to
continue  the  examination  after the end of that seven (7) day  period.  Artist
shall not be entitled to examine any manufacturing  records or any other records
which do not specifically report sales of Records or calculation of net receipts
on which  royalties  are  accruable  hereunder.  All audits shall be made during
regular  business  hours,  and  shall be  conducted  on  Artist's  behalf  by an
independent  Certified  Public  Accountant.  Each  examination  shall be made at
Artist's  sole expense at G2's regular  place of business in the United  States,
where the books and records are maintained.

8. MECHANICAL LICENSES AND ROYALTIES

         8.01.  All  Controlled  Compositions  (defined as musical  compositions
composed  in whole or in part by any  individual  member of  Artist)  are hereby
licensed to G2 and its licenses for reproduction on Phonograph  Records anywhere
in the Universe. Royalties for the mechanical license herein granted shall be at
a rate equal to seventy-five percent (75%) of the current minimum U.S. statutory
rate (including the "long work" rate, if applicable) for royalty-bearing records
sold and not returned and for which G2 is paid,  excluding any instance where G2
and Artist are sharing income under  Paragraph  6.01(e) above. In no event shall
the mechanical  royalties  payable hereunder for any Album exceed ten (10) times
the rate set forth above. The foregoing also applies to music videos, as well as
to any  instance  where such a license must be executed in favor of G2, G2 shall
not recoup  from  mechanical  royalties  due to Artist any  advances  payable to
Artist except: (a) excess recording costs under Paragraph 4.01; (b) overpayments
under Paragraph 701; and (c) any advances or cash or consigned materials (or the
like) to Artist.

         8.02.  If any record  contains one or more  compositions  which are not
Controlled  Compositions,  then G2 will have the right to reduce  the  amount of
Mechanical  Royalties payable on the Controlled  Compositions by an amount equal
to the amount of mechanical royalties payable on non-Controlled Compositions.

<PAGE>

9. TRADEMARKS

         9.01.  Artist shall  perform  under the  professional  name,  "Jeremiah
Donnelly". Artist warrants and represents that it is the sole owner of such name
in connections with Phonograph Records during the term hereof.  Artist shall not
use a different name in connection with Phonograph  Records unless Artist and G2
mutually  agree in  writing.  Artist  agrees  that G2 may  cause a search  to be
instituted for the purpose of determining  whether any professional name used by
Artist has been or is being used by another person in connection with Phonograph
Records. G2 may cause one or more federal  applications for trademark protection
to be made in  favor of  Artist  for  Phonograph  Records  and/or  entertainment
purposes.  Any amounts up to One  Thousand  Seven  Hundred  Dollars  ($1,700.00)
expended by G2 pursuant to this Paragraph shall be deemed Advances hereunder. If
the trademark  search indicates that such name should not be used, G2 and Artist
shall mutually agree on a substitute name for Artist.  Nothing  contained herein
shall release Artist from its indemnification of G2 with respect to Artist's use
of such name.

10. FREE GOODS

         10.01. No royalties shall be payable with respect to records given away
or furnished on a "no charge"  basis to one-stops,  rack jobbers,  distributors,
dealers,  radio  stations,  television  stations or film  companies,  theatrical
hooking agencies,  print media, music publishers or the like, provided that such
records do not exceed one hundred (100) non-royalty bearing Singles out of every
one thousand  (1,000)  Singles  distributed  and one hundred  (100)  non-royalty
bearing  Albums out of every one thousand  (1,000)  Albums.  Any record sold for
less than  fifty  percent  (50%) of G2's  published  wholesale  price  will be a
non-royalty bearing record.

         10.02.  During each applicable contract period, G2 shall provide Artist
with fifteen (15)  non-royalty  bearing copies of Artist's then current Album at
no charge to the Artist.

11. CONTAINER COSTS

         11.01.  G2's  container  deduction  shall be a sum equal to: one dollar
($1.00) for singles,  one dollar and fifty cents ($1.50) for LPs and  cassettes,
two dollars ($2.00) for double LP sets and compact discs,  three dollars ($3.00)
for double  cassettes,  and four dollars  ($4.00) for other  formats,  including
double compact disks, and all video formats.

12. INDEMNIFICATIONS

         12.01. Artist agrees to and does hereby indemnify, save and hold G2 and
its licensees harmless of and from any and all liability, loss, damage, cost, or
expense (including all legal expenses and reasonable  attorney fees) arising out
of or  connected  with  any  breach  of this  Agreement  or any  claim  which is
inconsistent  with any of the  warranties or  representations  made by Artist in
this Agreement, and Artist agrees to reimburse G2 on demand for any payment made

<PAGE>

or  incurred  by G2 with  respect to the  foregoing  if the claim  concerned  is
settled or has resulted in a final judgment against G2 or its licensees. Pending
the  determination  of any  claim  with  respect  to  which  G2 is  entitled  to
indemnity,  G2 may withhold monies which would be otherwise payable to Artist up
to the amount of its potential liability.

13. DEFAULT AND TERMINATION

         13.01.  In  the  event  of any  default  or  breach  by  Artist  in the
performance of any of Artist's obligations hereunder,  G2 may, without prejudice
to its other rights,  claims or remedies,  suspend its obligations hereunder for
the  duration  of such  default  or breach and until the same has been cured and
may, at its option, extend the Term for a period equal to all or any part of the
period of such  default or breach,  and in such event the dates for the exercise
by G2 of the Option  Periods  hereunder  and the dates of  commencement  of each
subsequent Option Period shall be extended accordingly.

14. FORCE MAJEAUR

         14.01.  If G2's  material  performance  hereunder is delayed or becomes
impossible or impractical because of any act of God, fire,  earthquake,  strike,
act of government or any order, regulation, ruling, or action of any labor union
or  association  of  artist  affecting  G2 or Artist  or the  phonograph  record
industry,  G2,  upon notice to Artist may  suspend  its  obligations  under this
Agreement for a period not to exceed one (1) year,  and in such event the number
of days  equal to the  number of days of such  suspension  shall be added to the
then-current  period  of the Term  thereof.  In the  event  that  G2's  material
performance hereunder is delayed or becomes impossible or impractical because of
any civil strife,  G2, upon notice to Artist,  may suspend its obligations under
this Agreement for the duration of such delay, impossibility or impracticability
and in such  event  the  number  of days  equal  to the  number  of days of such
suspension shall be added to the then-current period of the Term thereof.

15. MERCHANDISING

         15.01.  Artist  hereby grants G2 the  exclusive  right to  manufacture,
sell,  license,  distribute and exploit,  through the Universe and by mail-order
and through retail sources of, without limitation, all merchandise or every kind
featuring the Artist (name/logo/likeness), during the term of this Agreement.

         15.02. It is expressly  agreed and understood that any contract for the
purpose  of  merchandising  Artist  entered  into by G2  during  the Term  shall
continue in full force and effect in accordance with the provisions  thereof for
a period not to exceed one (1) year following the expiration of the term of this
Agreement.

         15.03. In the case of such products or property  manufactured  and sole
by G2 or by any  associated  company,  Artist  shall be entitled to a royalty of
twenty percent (20%) of the adjusted gross receipts  therefrom.  As used in this
paragraph,  the term "adjusted gross" shall mean gross revenues from the sale of
applicable  merchandise,  less  venue  commissions  and  state  sales  tax where

<PAGE>

collected  and actually  paid. In the event that G2 licenses to other any of its
rights under this clause then Artist shall  received  fifty percent (50%) of the
net receipts therefrom. As used in this paragraph, the term "net receipts" shall
be calculated as gross  revenues  from the sale of the  applicable  merchandise,
less the cost  actually  incurred  and paid by G2 or its  licensing  company for
manufacturing;  sales personnel salaries and/or  commissions,  venue commissions
and state sales tax where collected and actually paid.

         15.04.  Artist has the right of approval of all merchandising  artwork,
so long as said approval is that unreasonably withheld.  During the Term of this
Agreement,  Artist  shall cause the  inclusion of G2's logo and proper name at a
reasonable size and position on all merchandise.

         15.05. No royalties shall be payable with respect to merchandise  given
away or furnished on a no-charge basis. Upon Artist's request,  G2 shall provide
Artist with twenty (20) non-royalty-bearing  samples of each item of merchandise
at no charge.

16. ARTWORK

         16.01.  Artist  agrees that G2 is the owner of any and all artwork,  LP
jacket art, and promotional  artistic renderings  undertaken or completed within
the Option Terms of this  Agreement.  Artist shall have the right to use artwork
which  has  been  mutually  approved  by  G2  and  Artist  for  the  purpose  of
Merchandising.

17. NOTICES

         17.01. All notices,  demands or the like which are required to be given
hereunder shall be in writing and may be served upon the other party  personally
by Registered Mail, Return Receipt Requested or by telecopy (facsimile).  Notice
to Artist will be received by:__________________________________________________
________________________________________________________________________________
and notice to G2 will be received by: Gust Kepler, G2 Companies,  Inc., 14110 N.
Dallas Parkway, Suite 365, Dallas, TX 75254.

18. PROMOTIONS AND ADVERTISING CAMPAIGNS

         18.01. Any promotional monies spent by G2 on behalf of Artist are fifty
percent (50%)  recoupable from monies otherwise due to Artist from G2, excluding
Mechanical  Royalties,  notwithstanding the source. Any promotional monies spent
on behalf of Artist in combination with other G2 Artist shall be recoupable from
Artist on a pro-rata basis.

         18.02.  G2 is not obligated to produce a promotional  video for Artist,
but if G2  undertakes  to produce said video,  the cost is fifty  percent  (50%)
recoupable from royalties,  excluding Mechanical Royalties,  notwithstanding the
source.  The cost of  producing  nonpromotional  videos  intended for resale are
fully recoupable.

<PAGE>

19. CONTROLLING LAW

         19.01. This Agreement is entered into and performable in Dallas County,
Texas and the validity,  interpretation and legal effect of this agreement shall
be governed by Texas law.  Venue for any legal action shall be in Dallas County,
Texas.

20. REMEDIES

         20.01.  Artist  acknowledges,  recognizes  and agrees that his services
hereunder are of a special,  unique,  unusual,  extraordinary  and  intellectual
character  which  gives  them a  peculiar  value,  the loss of which  cannot  be
reasonably  or  adequately  compensated  for by  damages  in an  action  of law.
Inasmuch as a breach of such  services  will cause G2  irreparable  damages,  G2
shall be entitled  to  injunctive  and other  equitable  relief,  in addition to
whatever  legal  remedies are  available,  to prevent or cure any such breach or
threatened breach.

21. HEADINGS

         21.02.  The headings of the clauses herein are intended for convenience
only,  and  shall  not be of any  effect  in  construing  the  contents  of this
Agreement.

22. RELATIONSHIP

         22.01.  Artist has the status of an independent  contractor and nothing
herein contained shall  contemplate or constitute  Artist of its members as G2's
agents or  employees.  This  Agreement  does not and shall not be  construed  to
create a partnership or joint venture between the parties to this Agreement.

23. VALIDITY AND MODIFICATIONS

         23.01.  The invalidity or  unenforceability  of any provision shall not
affect the validity or  enforceability  of any other  provision.  This Agreement
contains the entire understanding of the parties relating to its subject matter.
No change of this  Agreement will be binding unless signed by all parties hereto
or their  duly  authorized  representatives.  A waiver  by  either  party of any
provision of this  Agreement in any instance shall not be deemed to waive it for
the future. All remedies, rights, undertakings and obligations contained in this
Agreement  shall be  cumulative  and none of them shall limit any other  remedy,
right, undertaking or obligation.

24. ASSIGNMENT

         24.01.  G2 may assign its rights  under this  Agreement  in whole or in
part.

<PAGE>

25. LEGAL REPRESENTATION

         25.01. Artist, by their signature hereto,  confirms that G2 has advised
Artist to take independent legal counsel,  from a lawyer specializing  generally
in  the  music  business  and  specifically  in  the  negotiation  of  recording
agreements, on the terms and conditions of this Agreement and on the obligations
being undertaken by Artist in executing the Agreement.

26. COOPERATION

         26.01.  Artist shall  execute such other  documentation  and shall give
further  assurances as may  reasonably be necessary or desirable for the purpose
of vesting, confirming, protecting or further assuring any of the rights granted
herein.

27. DISCLAIMER

         27.01. G2 has not made and does not hereby make any  representation  or
warranty with respect to the extent of the sales of records or the  exploitation
of the music videos hereunder.

SIGNED THIS 24th DAY OF JUNE, 2004.

G2 VENTURES, INC.

By: /s/ Gust Kepler
   ----------------
Gust Kepler, President

14110 North Dallas Parkway
Suite 365
Dallas, TX 75254

ARTIST:

P/k/a: Jeremiah Donnelly
      ------------------

By: /s/ Joseph Donnelly
   --------------------
Printed Name: Joseph Donnelly
SSN: 505-230-5831

Artist Address: 812 Tenison Memorial,
Dallas, TX 75223

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