Document:

ICON INCOME FUND TEN, LLC

             INSTRUCTIONS FOR COMPLETING THE SUBSCRIPTION AGREEMENT

Consult  with your  financial  planner  regarding  suitability  requirement  and
subscriber representations.

Section 1: Investment.

o     Each share  costs  $1,000.00.  The  minimum  initial  investment  for U.S.
      residents  is 5 shares  ($5,000.00).  For IRAs and  Qualified  Plans,  the
      minimum  initial  investment  is 3 shares  ($3,000.00),  and for  non-U.S.
      residents, the minimum is 50 shares ($50,000.00) . If you purchased shares
      of ICON Income Fund Nine, LLC, or limited partnership units in ICON Income
      Fund Eight A or B L.P., you may elect to reinvest your  distributions from
      those  funds into ICON Income  Fund Ten,  LLC  without  making the minimum
      investment.

Section 2: Registration Information.

o     Complete all of the  information  requested in 2(a) and 2(c). If you are a
      citizen or  resident  of a country  other than the United  States,  please
      specify the country.

o     Complete  section 2(b) only if this  investment  is for an IRA,  Qualified
      Plan, or Trust.

Section 3: Form of Ownership.

Mark only one box. Consult your registered representative with any questions for
designation on form of ownership.

Section 4: Distribution Alternatives.

o     For  non-qualified  accounts only,  complete this section if you want your
      distributions sent to an address other than as shown in Section 2(a).

Section 5: Signatures and Initials.

Signature(s) and initials of subscriber(s)  are required for all parties in each
of the spaces provided.  Subscriptions  cannot be accepted without  signature(s)
and initials.  Signature of an  authorized  partner or officer is required for a
Partnership or  Corporation.  Signature of a trustee is required for a Custodial
or Trust account.

Section 6: Broker/Dealer Information.

o     The   registered   representative   must  complete  this  section  of  the
      Subscription   Agreement.  An  authorized  branch  manager  or  registered
      principal of the broker/dealer firm must sign the Subscription  Agreement.
      Subscriptions cannot be accepted without this broker/dealer authorization.

Section 7: Investment Check & Subscriptions.

o     If your  registered  representative  notifies  you  that the sale of 5,000
      shares (or 7,500 shares in the case of residents of Pennsylvania)  has not
      been  completed,  make checks  payable to "The Chase  Manhattan  Bank ICON
      Income Fund Ten, LLC Escrow  Account."  Otherwise,  make checks payable to
      "ICON  Income Fund Ten,  LLC".  Your check should be in the amount of your
      subscription as shown in Section 1 of the Subscription Agreement.

o     Wiring instructions are available upon request.

Mailing:

o     For IRA or Qualified  Accounts,  mail the subscription  document with your
      check and any transfer instructions to your designated Custodian.

o     For all other accounts, mail the subscription document with your check to:

                                    Equity Department
                                    ICON Securities Corp.
                                    100 Fifth Avenue, Tenth Floor
                                    New York, New York 10011

The PINK copy of the  Subscription  Agreement  will be  returned to you for your
records  upon  confirmation  of your ICON  investment.  The yellow  copy for the
Subscription Agreement is for the Registered Representative.

NO  SUBSCRIPTION   AGREEMENT  WILL  BE  PROCESSED  UNLESS  FULLY  COMPLETED  AND
ACCOMPANIED  BY PAYMENT IN FULL.  ANY  SUBSCRIPTION  PAYMENT WHICH IS DISHONORED
WILL CAUSE THE  SUBSCRIPTION AND ANY CERTIFICATE FOR SHARES TO BE VOID AS OF THE
SUBSCRIPTION DATE AND SHALL OBLIGATE THE SUBSCRIBER TO PAY ALL COSTS AND CHARGES
ASSOCIATED THEREWITH

If you have any questions about completing this Subscription  Agreement,  please
call ICON Securities Corp., Subscription Processing Desk, at (800) 343-3736.

<PAGE>

                     IMPORTANT INFORMATION FOR SUBSCRIBER(S)

o        No offer to sell shares may be made except by means of this prospectus.

o        YOU SHOULD NOT RELY UPON ANY ORAL STATEMENTS BY ANY PERSON, OR UPON ANY
         WRITTEN  INFORMATION  OTHER  THAN AS  SPECIFICALLY  SET  FORTH  IN THIS
         PROSPECTUS AND SUPPLEMENTS THERETO OR IN PROMOTIONAL  BROCHURES CLEARLY
         MARKED AS BEING  PREPARED  AND  AUTHORIZED  BY THE MANAGER OF FUND TEN,
         ICON CAPITAL CORP., OR BY THE  DEALER-MANAGER,  ICON SECURITIES  CORP.,
         FOR USE IN CONNECTION  WITH OFFERING OF SHARES TO THE GENERAL PUBLIC BY
         MEANS OF THIS PROSPECTUS.

o        An investment in the shares involves certain risks  including,  without
         limitation,  the matters set forth in the Prospectus under the captions
         "Risk  Factors",  "Conflicts  of Interest",  "Management"  and "Federal
         Income Tax Considerations."

o        The  representations  you are  making on page C-4 do not  constitute  a
         waiver of any of your  rights  under  the  Delaware  Limited  Liability
         Company Act and applicable federal and state securities laws.

o        The shares are subject to substantial restrictions on transferability.

o        There will be no public market for the shares.

o        It may not be possible for you to readily  liquidate your shares, if at
         all, even in the event of an emergency.

o        Any  transfer of shares is subject to our approval and must comply with
         the terms of Section 10 of the Operating Agreement.

o        Some  states  impose  more   stringent   standards   than  the  general
         requirements  described under the "INVESTOR SUITABILITY" section in the
         Prospectus.

o        The State of California has additional  restrictions on the transfer of
         shares, as summarized in the following legend:

                  "IT IS  UNLAWFUL  TO  CONSUMMATE  A SALE OR  TRANSFER  OF THIS
                  SECURITY,   OR  ANY  INTEREST  THEREIN,   OR  TO  RECEIVE  ANY
                  CONSIDERATION  THEREFOR,  WITHOUT THE PRIOR WRITTEN CONSENT OF
                  THE  COMMISSIONER  OF CORPORATIONS OF THE STATE OF CALIFORNIA,
                  EXCEPT AS PERMITTED IN THE COMISSIONER'S RULES."

<PAGE>

        [ICON LOGO]
                             SUBSCRIPTION AGREEMENT
                            ICON INCOME FUND TEN, LLC
                      A Delaware Limited Liability Company

<TABLE>
<S>                  <C>

                                                                                                                --------------------
                                                                                                                ICON USE ONLY
                     |_| Initial Investment     Dollar Amount $_________________                                Date:_______________
1. Type of           |_| Additional Investment  No. of Shares ___________________                               No. of Shares:
Investment:                                                                                                     ___________
(Check one)                                                                                                     Blue Sky State:____
                                                                                                                Officer Approval:___
------------------------------------------------------------------------------------------------------------------------------------
2. Registration   (a) Subscriber Information
Information:          Name(s): Mr./Mrs./Ms. ____________________________________________________________
(Please type or       Tax I.D. No. or Social Security No. ______________________________________________
print clearly)        Street____________________________________________________________________________
                      City ___________________________________ State ______________ Zip Code ___________
                      Telephone No. (Day) __________________________ (Evening) _________________________
(b) Trustee or Custodial Information (Qualified Plans, other SEP, Keogh Trustee, etc.).  (if applicable)     (c) Citizenship.
    Trustee/Custodian's Name(s) ____________________ Tax I.D. No. _______________                            (Check One)
    FBO ____________________________________ Acct. No ___________________________                            |_| U.S. Citizen
    Date Trust or Account Established ____________________                                                   |_| U.S. Resident Alien
    Year to Which Subscription Applicable _________________                                                  |_| Non-Resident
    Trustee's or Custodian's Address_____________________________________________                            (Specify Country:
    Street ______________________________________________________________________                             ______________)
    City _________________________ State ___________ Zip Code ___________________
    Contact Name ___________________________________ Telephone No._______________
------------------------------------------------------------------------------------------------------------------------------------
3. Form of        |_| Individual Ownership  |_| Corporation    |_| Joint Tenants |_| IRA, SEP, Keough   FIDUCIARY ACCOUNTS ONLY
Ownership:        |_| Husband and wife, as  |_| Trust          |_| Tenants in    |_| Custodial Account  (All Sections in 2(b) must
(check only one)      Community Property    |_| Profit Sharing     Common                                be filled out)
                                                               |_| Partnership                           _____ IRA, SEP, Keogh
                                                                                                         _____ Custodial Account
                                                                                                         _____ Profit Sharing Plan
                                                                                                         ---------------------------
                  For Individual Ownership Only:  Transfer Upon Death (optional)
                  __________________________________________________________________________________________
                  *Transferee Name and Social Security No.
------------------------------------------------------------------------------------------------------------------------------------
4. Distribution       Check if:   |_| You would like to have distributions reinvested in additional shares during the
Alternatives:                         Offering Period. (Up to an 8% sales commission on the amount reinvested to be paid
(Complete if Payee                    to your broker)
is different than                 |_| You would like to have direct deposits of distributions or to have your
in Section 2(a) or                    distributions split between one or more Payees. (If you elect this alternative you
2(b) above, or if                     must complete the Special Payment Instruction Form.)
distributions are                 |_| You would like to have distributions sent to the Payee and Address listed below.
to be reinvested)                     Complete the following section:
                       Payee Name __________________________________________________________________________
                       Branch _________________________  Acct. No. ___________________ ABA No. _____________
                       Street Address ______________________________________________________________________
                       City ____________________________________ State ____________ Zip Code _______________
------------------------------------------------------------------------------------------------------------------------------------
5. Initials and Signatures:    The undersigned confirms that he/she/it:
                               o  (Initial _______) Received the Prospectus and has read page C-2 hereof.
                               o  (Initial _______) Makes the representations contained on page C-4 hereof.
                               o  (Initial _______) Acknowledges that an investment in shares is not liquid.
                               o  (Initial _______) Declares that, to the best of his/her/its knowledge, all
                                  information in Sections 1-4 on this page C-3 is accurate and may be relied upon by the Manager.
                               o  (Initial _______) Appoints the Manager as his/her/its attorney-in-fact as described in
                                  Paragraph 2 on page C-4.
                               o  (Initial _______) Meets the minimum income and net worth standards established by Fund Ten.
                               o  (Initial _______) Is purchasing the shares for his/her/its own account.

            BY SIGNING THIS AGREEMENT, THE SUBSCRIBER IS NOT WAIVING ANY RIGHTS UNDER THE SECURITIES ACT OF 1933

-------------         X _____________________________________                   Sign  X ____________________________________________
Subscriptions           Subscriber's Signature        Date                      Here  Authorized Signature                     Date
cannot be                                                                             (Custodian/Trustee/Officer/Partner)
accepted
without
initials and          X _____________________________________                         X ___________________________________________
signature(s)            Subscriber's Signature        Date                            Authorized Signature                     Date
------------                                                                          (Custodian/Trustee/Officer/Partner)
------------------------------------------------------------------------------------------------------------------------------------
6. Broker/Dealer Information.    The Selling Dealer must sign below and, by doing so, represents that both it and its registered
(Please type or print clearly)   representative which solicited the subscription (the "Registered Representative"): (i) is duly
                                 licensed by, and in good standing with, the NASD and may lawfully offer shares in the State(s)
                                 listed in Section 2(a); (ii) has reasonable grounds to believe, based on information obtained from
                                 the Subscriber concerning his/her investment objectives, other investments, financial situation and
                                 needs and any other information known by the Selling Dealer or Registered Representative, that the
                                 Investment described in Section 1 is suitable in light of Subscriber's income, net worth and other
                                 characteristics; (iii) the Registered Representative has (a) informed the Subscriber as to the
                                 risks of ownership and limited liquidity of the shares and (b) delivered a current copy of the
                                 Prospectus to the Subscriber in connection with the offering of shares; and (iv) the Selling Dealer
                                 is compliant with the terms of the Selling Dealer Agreement.

                                 Brokerage Firm Name _________________________________________________________________
                                 Supervisor __________________________________________ Telephone No. _________________
                                 Registered Representative Name ______________________________________________________
                                 Rep. No. ________________________________________ Telephone No.______________________
                                 Representative's Street Address _____________________________________________________
                                 City _____________________________________ State ____________ Zip Code ______________
                                 Authorized signature X ________________________________________
                                                        (Branch Manager or Registered Principal)

                                 Subscription cannot be completed without signature.
------------------------------------------------------------------------------------------------------------------------------------
7. Investment Check &            Mail the completed Subscription Agreement with a check payable as indicated in the instructions to
Subscriptions.                   Section 7 to: ICON Securities Corp.,  Attn:  Equity Department, 100 Fifth Avenue, Tenth Floor, New
                                 York, New York 10011.
                                 Wiring instructions available upon request.
------------------------------------------------------------------------------------------------------------------------------------
                                 ACCEPTANCE BY MANAGER OF                       ICON Capital Corp., Manager
                                 ICON INCOME FUND TEN, LLC

                                                                                By: _________________________________________
                                                                                    Authorized Signature                Date
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

INVESTOR SUITABILITY REQUIREMENTS AND SUBSCRIBER REPRESENTATIONS

1. Subscription for Shares.

o     Each  Subscriber,  by  signing  his/her  name in  Section  5 on Page  C-3,
      thereby:  (a)  subscribes  for the number and dollar  amount of shares set
      forth in Section 1 on Page C-3;  (b) agrees to become a member of Fund Ten
      upon acceptance of his/her  subscription  by the Manager;  and (c) adopts,
      and agrees to be bound by each and every provision of Fund Ten's Operating
      Agreement and this Subscription Agreement.

o     Each  Subscriber is tendering  good funds herewith in full payment for the
      shares (computed at $1,000 per share), subject to waiver of commissions by
      some brokers (as  described in the "Plan of  Distribution"  section of the
      prospectus) and to the minimum  investment  requirements  (as described in
      the  "SUBSCRIPTIONS; Minimum Investment" Section of the prospectus).

2. Appointment of the Manager as Subscriber's Attorney-in-Fact.

o     By signing  his/her  name in Section 5 on Page C-3,  (and  effective  upon
      admission  as a  member  of Fund  Ten),  each  Subscriber  thereby  makes,
      constitutes  and  appoints  the Manager,  each  authorized  officer of the
      Manager and each person who shall thereafter  become a substitute  Manager
      during the term of Fund Ten, with full power of substitution,  as the true
      and  lawful  attorney-in-fact  of, in the name,  place and stead of,  such
      member, to the full extent,  and for the purposes and duration,  set forth
      in Section 15 of the  Operating  Agreement  (all of the terms of which are
      hereby incorporated herein by this reference).

o     Such purposes include,  without  limitation,  the power to make,  execute,
      sign,  acknowledge,  affirm,  deliver, record and file any (a) document or
      instrument  which the Manager  deems  necessary  or desirable to carry out
      fully the provisions of the Operating Agreement (in the manner and for the
      purposes  provided in Section  15.1 of the  Operating  Agreement)  and (b)
      amendment to the  Operating  Agreement and to the  Certificate  of Limited
      Liability Company of Fund Ten (in the manner and for the purposes provided
      in Section 15.2 of the Operating Agreement, including, without limitation,
      admission  of  Members  to  Fund  Ten and  any  application,  certificate,
      instrument,  affidavit  or  other  document  required  or  appropriate  in
      connection with registration or documentation of Fund Ten's investments).

o     The foregoing  appointment shall not in any way limit the authority of the
      Manager as  attorney-in-fact  for each Member of Fund Ten under Section 15
      of the  Operating  Agreement.  The power of  attorney  hereby  granted  is
      coupled  with  an  interest,   is   irrevocable   and  shall  survive  the
      Subscriber's  death,  incapacity,  insolvency  or  dissolution  or his/her
      delivery of any assignment of all or any portion of his/her shares.

3. General Subscriber Representations.

o     As a condition  to  Subscriber's  being  admitted as a member of Fund Ten,
      Subscriber hereby represents that he/she/it:

      (a)   Either (i) has annual  gross  income of $60,000  plus a net worth of
            $60,000  (exclusive of his/her  investment in Fund Ten,  home,  home
            furnishings and automobiles) or a net worth of $225,000  (determined
            in the same manner),  or (ii) meets any higher investor gross income
            and/or net worth standards applicable to residents of his/her State,
            as  set  forth  in  the  "INVESTOR   SUITABILITY"   Section  of  the
            Prospectus;

      (b)   If Subscriber is an IRA or a Qualified  Plan, it has been accurately
            identified as such in Sections 2(b) and 3 on Page C-3;

      (c)   Has accurately  identified  himself/herself  in Section 2(c) on Page
            C-3 as either a U.S. Citizen or a non-U.S. Citizen and

      (d)   Each  subscriber who is purchasing  shares for Individual  Ownership
            (as  indicated in Section 3 on Page C-3) is in fact  purchasing  for
            his or her own account.

o     If Subscriber is investing in a fiduciary or representative capacity, such
      investment  is being  made for one or more  persons,  entities  or  trusts
      meeting the above requirements.

4. Additional Fiduciary and Entity Representations.

o     If the person signing this Subscription Agreement is doing so on behalf of
      another  person  or  entity  who is  the  Subscriber,  including,  without
      limitation, a corporation,  a partnership,  an IRA, a Qualified Plan, or a
      trust  (other  than  a  Qualified  Plan),   such  signatory,   by  signing
      his/her/its name in Section 5 of Page C-3, thereby represents and warrants
      that

      (a)   He or  she is  duly  authorized  to (i)  execute  and  deliver  this
            Subscription  Agreement,  (ii)  make the  representations  contained
            herein on behalf of Subscriber  and (iii) bind  Subscriber  thereby;
            and

      (b)   This  investment is an authorized  investment for  Subscriber  under
            applicable documents and/or agreements (articles of incorporation or
            corporate by-laws or action, partnership agreement, trust indenture,
            etc.) and applicable law.

5. Under penalty of perjury,  by signing  his/her name in Section 5 on Page C-3,
   each Subscriber thereby certifies that:

      (a)   The Taxpayer  Identification Number or Social Security Number listed
            in Sections 2(a) and 2(b) (if  applicable)  on Page C-3 are correct;
            and

      (b)   He/she/it is not subject to backup  withholding  either  because the
            Internal  Revenue  Service has (i) not notified such Subscriber that
            he/she/it is subject to backup  withholding as a result of a failure
            to report  all  interest  or  dividends  or (ii) has  notified  such
            Subscriber   that   he/she/it   is  no  longer   subject  to  backup
            withholding.  (If you have  been  notified  that  you are  currently
            subject to backup withholding,  strike the language under clause (b)
            of this paragraph 5 before signing).

UPON THE SUBSCRIBER'S  EXECUTION OF THIS  SUBSCRIPTION  AGREEMENT AND ACCEPTANCE
THEREOF BY THE MANGER,  THIS  SUBSCRIPTION  AGREEMENT  (CONSISTING  OF PAGES C-1
THROUGH C-4) WILL BECOME A PART OF THE OPERATING AGREEMENT.
<PAGE>

                            ICON INCOME FUND TEN, LLC
             100 Fifth Avenue, Tenth Floor, New York, New York 10010

                        SPECIAL PAYMENT INSTRUCTION FORM

         DISTRIBUTIONS TO DIRECT DEPOSIT ACCOUNTS AND/OR MULTIPLE PAYEES

Please  use this  form only if you would  like  your  cash  distributions  to be
directly  deposited  into an  account  and/or  sent to more  than  one  account,
location  or payee.  Note that all  distributions  in an IRA must be sent to the
custodian. You may designate up to five accounts, locations or payees.

<TABLE>
<S><C>
-------------------------------------------------------------------------------------------------------------
First Payee         Choose One:   Direct Deposit by    Wire Transfer |_| OR  Check |_|

                                                       Name of
Bank Name __________________________________________   Account Holder _____________________________________
Bank Address _______________________________________   Account No. ________________________________________
City _____________________ State ____ Zip __________   Account Type _______________________________________
Branch No. _________________________________________   Bank Routing No. ___________________________________
                                                       % to be Paid* ----------------------

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

Second Payee        Choose One:   Direct Deposit by Wire Transfer ________   OR  Check ________

Bank Name __________________________________________   Name of
                                                       Account Holder _____________________________________
Bank Address _______________________________________   Account No. ________________________________________
City _____________________ State ____ Zip __________   Account Type _______________________________________
Branch No. _________________________________________   Bank Routing No. ___________________________________
                                                       % to be Paid* ----------------------

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

Third Payee         Choose One:   Direct Deposit by Wire Transfer ________   OR  Check ________

Bank Name __________________________________________   Name of
                                                       Account Holder _____________________________________
Bank Address _______________________________________   Account No. ________________________________________
City _____________________ State ____ Zip __________   Account Type _______________________________________
Branch No. _________________________________________   Bank Routing No. ___________________________________
                                                       % to be Paid* ----------------------

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

Fourth Payee          Choose One:   Direct Deposit by Wire Transfer ________   OR  Check ________

Bank Name __________________________________________   Name of
                                                       Account Holder _____________________________________
Bank Address _______________________________________   Account No. ________________________________________
City _____________________ State ____ Zip __________   Account Type _______________________________________
Branch No. _________________________________________   Bank Routing No. ___________________________________
                                                       % to be Paid* ----------------------

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

Fifth Payee         Direct Deposit ______   Checking ______

Bank Name __________________________________________   Name of
                                                       Account Holder _____________________________________
Bank Address _______________________________________   Account No. ________________________________________
City _____________________ State ____ Zip __________   Account Type _______________________________________
Branch No. _________________________________________   Bank Routing No. ___________________________________
                                                       % to be Paid* ----------------------

                                                                     ----------------------
-------------------------------------------------------------------------------------------------------------
</TABLE>

Original  signatures  of all joint  investors  or  custodial  authorization  are
required.  *Please  note that the total of all the "% to be Paid"  boxes  should
equal 100%.

_________________________________              _________________________________
Original Signature - Subscriber -              Original Signature - Subscriber -
Member Or Authorized/Custodial                 Member Or Authorized/Custodial
Representative                                 Representative

Date Signed ____________________               _________________________________
                                               Original Signature - Subscriber
                                               Member Or Authorized/Custodial
                                               Representative

                       Please make a copy for your records
                 Attach this form to the Subscription Agreement

<PAGE>

                                     [LOGO]
                                    STERLING
                                     TRUST
                                    COMPANY

          The Sterling Trust Proprietary Self-Directed Traditional IRA
--------------------------------------------------------------------------------

Sterling Trust's Self-Directed Traditional IRA booklet may be used when you wish
to establish a new Traditional IRA account:

>     to accept a transfer or  rollover of an IRA held with  another IRA trustee
      or custodian,

>     to accept a rollover from an employer-sponsored  qualified retirement plan
      held with another IRA trustee or custodian,

>     to accept your regular IRA contributions, or

>     to accept  SEP  contributions  made by your  employer  under a  Simplified
      Employee Pension Plan.

Key features of a Sterling Trust Proprietary Self-Directed IRA enable you to:

>     Invest and hold  publicly  offered  investments  issued by the  investment
      sponsor and one mutual fund at a reduced annual fee

>     Direct automatic reinvestment of investment earnings into a mutual fund of
      your choice

>     Direct to receive periodic withdrawls of your investment earnings

>     Receive an  easy-to-read  comprehensive  statement  of your  account  that
      reflects your cash and investment activity

>     Communicate investment directions to qualified IRA service representatives
      via recorded phone lines or by fax

Now you can experience the Sterling Trust Advantage!

                          About Sterling Trust Company
--------------------------------------------------------------------------------

Sterling Trust is a non-bank trust company chartered under the laws of the state
of Texas and regulated by the Texas  Department of Banking.  Sterling Trust is a
wholly-owned  subsidiary  of Matrix  Bancorp,  Inc.  (NASDAQ:  MTXC),  a Denver,
Colorado-based financial services entity.

Since   1984,    Sterling   Trust   has   specialized   in   providing   quality
non-discretionary  custodial services on self-directed IRAs, business retirement
plans,  and personal  custodial  accounts.  From its corporate  offices in Waco,
Texas,  Sterling Trust services  individual and business  retirement accounts in
all 50 states.  Since Sterling  Trust's only business is the  administration  of
self-directed  accounts,  we have  become  a  leader  in  providing  specialized
services  designed to maximize  your  ability to control and manage your account
assets.

--------------------------------------------------------------------------------
Sterling Trust Company (C) 2002
<PAGE>

                                     [LOGO]
                                    STERLING
                                     TRUST
                                    COMPANY

                                Table Of Contents
--------------------------------------------------------------------------------

                                                                       Page(s)
                                                                       -------

Instructions ........................................................ 1-A to 1-D

Traditional IRA Adoption Agreement .................................. 2-A to 2-D

Instructions for Completing the Traditional IRA
   Transfer  Request Form / Direct  Rollover  Letter ................     3

Traditional IRA Transfer Request Form / Direct Rollover Letter ......     4

What Is A Simplified  Employee Pension? .............................     5

Form 5305-SEP .......................................................   6 to 7

Sterling Trust Company Traditional Individual Retirement
Custodial Account Agreement and
Traditional IRA Disclosure Statement ................................   8 to 18

--------------------------------------------------------------------------------
Sterling Trust Company (C) 2002
<PAGE>

 [LOGO]
STERLING                                          o Investments not FDIC-insured
 TRUST     How To Establish a Proprietary         o Investments not guaranteed
COMPANY    Self-Directed Traditional IRA Account  o Investments may lose value
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Important!  Sterling  Trust  Company does not sponsor or endorse any  investment
product; therefore, you assume sole responsibility for the success or failure of
your  investments.  All Sterling Trust accounts are  self-directed,  and you are
responsible  for  directing the  investment of assets in your account.  Sterling
Trust  Company does not provide any  investment  advice,  nor do we recommend or
evaluate the merits or suitability of any investment.

If  Sterling   Trust   Company's   services   were   suggested  by  a  financial
representative,  such  person  is not an  agent,  employee,  representative,  or
affiliate of Sterling Trust Company.  Sterling Trust Company is not  responsible
for  and  is  not  bound  by  any  representations,  warranties,  statements  or
agreements made by any financial  representative beyond the terms and provisions
contained within this booklet.
--------------------------------------------------------------------------------

1.    Read the entire 18-page Proprietary  Self-Directed Traditional IRA booklet
      first.

2.    Complete,  sign, and date the Proprietary  Individual Retirement Custodial
      Account  Adoption  Agreement for Traditional IRA on pages 2-A through 2-D.
      (Account cannot be processed  without your original  signature and date in
      Section 6.)

3.    Write a check, payable to Sterling Trust Company, for:

      o     Your IRA Contribution or Rollover (if making one); and

      o     $50 for the  establishment and first year annual fee as shown in the
            fee  schedule  on page  2-B.  If your  account  will be funded by an
            incoming  transfer or direct  rollover,  the $15  establishment  fee
            should be paid up front and the $35 annual fee may be deducted  from
            the  transfer/rollover   proceeds,   provided  that  Sterling  Trust
            receives  these  proceeds  within  60  days  after  the  account  is
            established.  Any fees  owed  after 60 days  will be  billed  to the
            accountholder, including late charges.

4.    If you wish to have  your  IRA  funds  transferred  from an  existing  IRA
      account held with another firm to your Sterling  Trust IRA, or rolled over
      directly from an eligible employer-sponsored retirement plan, refer to the
      instructions  on page 3.  Then  complete  and  sign  the  Traditional  IRA
      Transfer  Request Form / Direct Rollover letter on page 4. If rolling over
      from an employer-sponsored plan, check with the plan administrator for any
      additional requirements.

5.    If you wish to make an  initial  SEP  contribution  in  connection  with a
      Simplified Employee Pension Plan, include a copy of the completed IRS FORM
      5305-SEP  found on pages 6-10.  The original  signed  version of this form
      should be retained by the employer.

6.    Complete your investment  direction to Sterling Trust in Section 4 on page
      2-B and  provide  the  investment  sponsor's  application,  which has been
      properly  completed and signed.  This  proprietary IRA permits you to hold
      investment  products  offered  by the  investment  sponsor  and one public
      mutual  fund at a  reduced  fee.  Any  earnings  income  generated  by the
      investment may be handled one of two ways:

      o     You  may  elect  to   participate   in  the   investment   sponsor's
            reinvestment plan, if one is available, or

      o     You may  choose to have cash  distributions  paid  directly  to your
            Sterling Trust IRA.

      Either election can usually be marked directly on the investment sponsor's
      subscription application.

      If you elect to receive cash  distributions,  the investment  sponsor must
      send these  payments to your  Sterling  Trust IRA.  Once  received,  these
      payments will automatically be deposited into an FDIC-insured money market
      account within your Sterling Trust IRA where it will accumulate  until you
      provide further direction to Sterling Trust, or

      o     You may choose to direct the distributions to one mutual fund. To do
            this,  simply write your  instructions  in Section 4 on page 2-B and
            include the appropriate  mutual fund's Non-IRA  application with the
            broker-dealer section completed.

      o     You may choose to  withdraw  the  distributions  from your  Sterling
            Trust  IRA.  To do  this,  you will  need to  request  and  complete
            Sterling Trust's IRA Distribution request form.

--------------------------------------------------------------------------------
Sterling Trust Company (C) 2002         1-A
<PAGE>

7.    Send    all    forms,    all   of    your    checks,    your    investment
      applications/subscription  documents,  and any  other  documents  or forms
      directly to Sterling Trust Company at one of the following addresses:

           Mailing address: Post Office Box 2526, Waco, TX 76702-2526
           Physical address: 7901 Fish Pond Road, Waco, TX 76710

8.    Keep  pages  8-18 for your  records.  This is your IRA  Custodial  Account
      Agreement and Disclosure Statement. It contains very important information
      and disclosures about your Sterling Trust self-directed IRA account.

Account Acceptance

Your account will be opened upon acceptance of your IRA Adoption  Agreement,  by
an authorized  signatory of Sterling Trust Company.  Sterling Trust Company will
then  process  any   transfer/direct   rollover   requests  and  any  investment
instructions you provide. A copy of your accepted IRA Adoption  Agreement,  your
custodial  account  agreement and  disclosure  statement  will be mailed to you,
along with your new account number.

Account Statements and Asset Values

Sterling Trust Company will issue quarterly statements to you which reflect your
account  activity and  investment  holdings.  You should review your  statements
promptly and report any  discrepancies  to Sterling Trust Company within 60 days
of the ending  statement date.  After this time Sterling Trust Company shall not
be liable for the report or act.

Your quarterly  account  statements may not reflect  current or accurate  market
values  for  certain  types  of  assets,   particularly  limited   partnerships.
Valuations  appearing on your  quarterly  statements  may reflect the last known
value reported by the investment sponsor or the original cost of the investment.
If no valuation is reported by the investment  sponsor,  if the investment is in
bankruptcy,  or other relevant  condition exists, the value may be shown as "Not
Available".

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Sterling Trust Company (C) 2002         1-B
<PAGE>

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

 [LOGO]
STERLING
 TRUST
COMPANY

Sterling Trust Company Personal Information Privacy Protection Policy

At Sterling Trust Company,  protecting your privacy and the  confidentiality  of
your  personal  information  is important to us. We value your  business and the
trust you put in us, and to offer you the  financial  products  and services you
seek,  we collect,  maintain and use  information  about you. To help you better
understand how your personal information is protected at Sterling Trust Company,
we are providing you with the following  statement  describing our practices and
policies with respect to the privacy of your customer information.  In the event
you  terminate  your  customer  relationship  with us,  or  become  an  inactive
customer,  we will continue to adhere to the policies and practices described in
this notice.

Information We Collect About You

As your trusted  financial  institution,  we collect,  retain and use  nonpublic
personal  information  about individual  current and former customers to provide
products and services to our customers.  We may collect the following categories
of nonpublic personal information about you:

o     Information we receive from you, through  applications for our products or
      services or other forms; and

o     Information  about  your  transactions  with us,  our  affiliates  or with
      nonaffiliated third parties.

Information We Disclose About You and To Whom

We do not disclose any  nonpublic  personal  information  about our customers or
former customers to anyone, except as permitted by law.

Information We Share

Sterling Trust Company does not disclose  nonpublic  personal  information about
you to any affiliated or  unaffiliated  third parties,  unless  required by law.
Please note:  Sterling  Trust  Company will  continue to contact its  individual
customers  with offers for its own products and  services.  You will continue to
receive  marketing  messages  via your  statement,  as well as direct  marketing
solicitations.

We Protect Your Information

The protection of your nonpublic personal information is of utmost importance to
us. That's why Sterling Trust Company  maintains strict practices and procedures
to safeguard your privacy in accordance  with this privacy  policy.  We restrict
employee access to customer information to only those who have a business reason
to know such  information,  and we educate our employees about the importance of
confidentiality and customer privacy.

How To File A Complaint

Sterling Trust Company is chartered  under the laws of the State of Texas and by
state law is subject to regulatory oversight by the Texas Department of Banking.
Any consumer  wishing to file a complaint  against Sterling Trust Company should
contact  the Texas  Department  of Banking  through  one of the means  indicated
below:

In Person or U.S. Mail: 2601 North Lamar Blvd
                        Suite 300,
                        Austin, Texas 78705-4294
Telephone Number:       (877) 276-5554
Fax Number:             (512) 475-1313
Email:      consumer.complaints@banking.state.tx.us
Website:            www.banking.state.tx.us

We appreciate the opportunity to serve your financial needs. We pledge to follow
the policies,  safeguards  and  guidelines  as described in this notice,  and to
protect the  confidentiality  of your  information.  Your  relationship  is very
important to us, and we will take great care to honor these  commitments to you.
Thank you for choosing Sterling Trust Company.

This notice applies only to nonpublic personal information about individuals who
obtain  financial  products  or  services  primarily  for  personal,  family  or
household purposes.

Sterling Trust Company  reserves the right to change any of its privacy policies
and related  procedures at any time, in accordance with  applicable  federal and
state laws. You will receive appropriate notice if our Privacy Policy changes.

Sterling  Trust Company is a  wholly-owned  subsidiary of Matrix  Bancorp,  Inc.
("Matrix"). The Matrix group of companies includes:

Matrix Bancorp, Inc.
Sterling Trust Company
Matrix Capital Bank
Matrix Financial Services Corporation
United Financial, Inc.
United Special Services, Inc.
The Vintage Group, Inc.
First Matrix Investment Services Corporation
Matrix Advisory Services Corporation
Matrix Settlement and Clearance Services, LLC
ABS School Services, LLC

For More Information

If you have any questions regarding our Personal  Information Privacy Protection
Policy, or would like to receive a copy of this Policy, please call us toll-free
at (800) 955-3434 or visit our Internet site at http://www.sterling-trust.com.

                                                      [Last Revised: March 2002]

--------------------------------------------------------------------------------
Sterling Trust Company (C) 2002         1-C
<PAGE>

--------------------------------------------------------------------------------
Arbitration Agreement

Parties agree that, upon the request of either  Accountholder  or Sterling Trust
Company,  whether made before or after the institution on any legal  proceeding,
all  claims  and  disputes  of every  type and  matter  which may arise  between
Accountholder   and  Sterling  Trust  Company  shall  be  submitted  to  binding
arbitration  before a panel of arbitrators (as described below), of and pursuant
to  the  rules  of the  American  Arbitration  Association  ("AAA");  that  such
arbitration  hearings and proceedings  shall take place only in McLennan County,
Texas or another site selected by Sterling Trust Company in its sole discretion;
that this arbitration provision and the arbitration shall be administered by the
AAA pursuant to and construed  and enforced  under the Federal  Arbitration  Act
(Title 9 of the United States Code) ("FAA"); however, if the FAA is inapplicable
for any reason,  such arbitration shall be conducted pursuant to Texas law; that
there shall be no class  action,  class or  consolidated  arbitration;  that the
prevailing  party in any claim or dispute of any type between the  Accountholder
and Sterling Trust Company shall recover his/her/its  attorneys' fees, costs and
expenses,  including without limitation,  arbitration filing fees,  arbitrators'
fees, and other  arbitration  fees; and that this  arbitration  agreement  shall
govern  any  disputes   involving   Accountholder  and  Sterling  Trust  Company
notwithstanding   any  provisions,   including   without   limitation  venue  or
arbitration  provisions,  contained in any  agreement  signed by Sterling  Trust
Company in its custodial capacity. Any arbitration proceeding shall be conducted
by a panel of three neutral arbitrators unless the parties agree otherwise. Each
arbitrator shall be an attorney licensed by the state of Texas,  having at least
ten years of experience in the field of financial industries.  If arbitration is
requested as described  above,  the parties  expressly waive any right he/she/it
may have to institute or conduct litigation or arbitration before any other body
or tribunal.  The parties  further  agree that if a party is required to enforce
this  arbitration  agreement  against the other party and/or to compel the other
party to arbitration  pursuant to this  agreement,  the party shall recover from
the other party  his/her/its  attorneys'  fees,  costs and expenses so incurred.
Arbitration shall be final and binding upon the parties.
--------------------------------------------------------------------------------

Need Additional Help?

For additional  assistance in establishing your self-directed IRA account or for
more information on IRAs in general, you may contact Sterling Trust Company by:

        Telephone: (254) 751-1505 or (800) 955-3434
        Fax:       (254) 751-0872
        Email:     IRAServices@matrixbancorp.com

--------------------------------------------------------------------------------
Sterling Trust Company (C) 2002         1-D

<PAGE>

     Proprietary Traditional Individual Retirement Custodial             [LOGO]
     Account Adoption Agreement  (Revised 9/2002)                       STERLING
                                                                         TRUST
(This is a 4-page form. To avoid processing delays, be sure             COMPANY
to complete and submit all 4 pages to Sterling Trust Company.)
--------------------------------------------------------------------------------

I hereby apply to establish a Sterling Trust Company  Proprietary  Self-Directed
Traditional  Individual Retirement Custodial Account,  agree to the terms of the
related  Traditional  Individual  Retirement  Custodial  Account  Agreement  and
Traditional  IRA  Disclosure  Statement,  found  on pages 8  through  18 of this
booklet, and certify the accuracy of the following  information.  This Agreement
shall become effective upon Sterling Trust Company's acceptance, as evidenced by
the signature of an Authorized  Signatory of Sterling Trust Company in Section 6
of this Adoption Agreement.

--------------------------------------------------------------------------------
1. Accountholder Information: Please provide all information below.

       Full Name _______________________________________________________________

       Address _________________________________________________________________

       City ________________________________  State ______ Zip _______________

       Social Security                        Date of
       Number __ __ __ - __ __ - __ __ __ __  Birth  __ __ - __ __ - __ __ __ __
                                                     Month    Day       Year

       Work Phone (__ __ __) __ __ __ - __ __ __ __
       Home Phone (__ __ __) __ __ __ - __ __ __ __

       Email Address _____________________________________________

Beneficiary Designation:   I  designate  the  individual(s)  named  below  as my
                           primary and contingent  Beneficiary(ies) of this IRA.
----------------------     I understand  that I may change or add  Beneficiaries
   Must provide all        at any time by  completing  and  delivering  Sterling
   information for         Trust's Change of Beneficiary  form to Sterling Trust
   each beneficiary        Company. If you designate a trust as the beneficiary,
     designated.           please provide a copy of the trust. (If the following
----------------------     area does not provide  sufficient  space to designate
                           your account beneficiaries, you may attach a separate
                           sheet  that  contains  this   information   and  your
                           signature and date.)

Primary Beneficiary(ies)

The following individual(s) shall be my Primary Beneficiary(ies):

Name ______________________________    SSN _________________________________

Relationship ______________________    Date of Birth _______________Share _____%

Name ______________________________    SSN _________________________________

Relationship ______________________    Date of Birth _______________Share _____%

Contingent Beneficiary(ies)

If none of the  Primary  Beneficiaries  shown above  survive  me, the  following
individual(s) shall be my Beneficiary(ies):

Name ______________________________    SSN _________________________________

Relationship ______________________    Date of Birth _______________Share _____%

Name ______________________________    SSN _________________________________

Relationship ______________________    Date of Birth _______________Share _____%

Spousal Consent

This section to be completed only if:

(1)   Accountholder is married and has designated any Primary  Beneficiary other
      than his/her spouse; and

(2)   This IRA account will include property in which his/her spouse possesses a
      community  property  interest  or other type of property  interest.  As of
      December  31, 2000,  community  property  states are Arizona,  California,
      Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin.

I am the spouse of the IRA  accountholder  named  above.  I agree to my spouse's
naming of a primary  Beneficiary  other than myself.  I acknowledge  that I have
received a fair and reasonable  disclosure of my spouse's property and financial
obligations,  and I acknowledge  that I shall have no claim  whatsoever  against
Sterling Trust for any payment to my spouse's named Beneficiary(ies).

Spouse's Signature_________________________________________ Date _______________
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Sterling Trust Company (C) 2002         2-A                        (Page 1 of 4)
<PAGE>

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2.   Proprietary IRA Fee Schedule

      Set-up Fees:

      (Charged at time of account set-up.)
      o   One-Time Establishment Fee...................................  $15.00
      o   First Year Annual Fee........................................  $35.00

      Annual Renewal Fee..............................................   $35.00

      Special Service Fees:
      (Charged to account at time service rendered.)
      o   Distribution Fee.......................................... $5.00 each
      o   Federal Withholding Fee .................................. $5.00 each
      o   Stop Payment Fee ............................................ $25.00
      o   Wire Transfer Fee ........................................... $10.00
      o   Return Check Fee ............................................ $25.00
      o   Conversion Fee (for conversion to Flex or Basic IRA)......... $25.00
      o   Private Placement Administrative Review Fee................. $100.00
      o   Partial Termination Fee............................. $10.00 per asset
      o   Termination Fee ............................................. $50.00
      o   Additional Fees may be charged for extraordinary services.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
3. Type of Traditional IRA Account
   (check appropriate box)

  |_| Annual Contribution IRA:

      |_|   Regular IRA.............................................$___________
            The maximum annual  contribution  for an individual is the lesser of
            100% of compensation or $2,000.

      |_|   Spousal IRA.............................................$___________
            For an individual and non-working spouse,  $4,000 overall limit with
            not  more  than  $2,000   allocated  to  either  the  individual  or
            non-working spouse's account.

            The above  contribution(s)  are being  made for the tax year  ending
            December 31, 20 __________________.
            (Contribution  must be made by  April  15th  following  the year for
            which the tax deduction is taken.)

  |_| Direct Transfer of Existing IRA:
      (Please attach completed Transfer Request on page 4)

  |_| Rollover IRA:..................................................$__________
      This Rollover Contribution is the result of:

      |_|   Proceeds  which I have  actually or  constructively  received from a
            qualified  pension or profit  sharing plan, a 403(b) plan or another
            IRA.

      |_|   Direct Rollover from the Trustees of a qualified employer retirement
            plan.  (Please attach  completed  Transfer  Request/Direct  Rollover
            Letter on page 4.)

      I hereby certify that the cash and/or  in-kind  transfer of assets which I
      deposit as a Rollover  Contribution  meets all of the  requirements for an
      "eligible rollover  contribution"  under applicable law. I further certify
      that, if I have had constructive receipt of funds or property as indicated
      by checking the "Rollover IRA" box above, that this rollover is being made
      within 60 days of my receipt of same. I acknowledge that my designation of
      this account as a "Rollover IRA" is irrevocable,  unless I later determine
      that  all  or  any  portion  of  the  assets   deposited   are  an  excess
      contribution.

      I  understand  that  if  I  ever  elect  to  combine  regular  annual  IRA
      contributions,   accumulated   regular  IRA  contributions,   or  employer
      Simplified  Employee  Pension (SEP) plan  contributions  with funds rolled
      over from a qualified plan, I forfeit the right to subsequently  roll this
      IRA into another  qualified  retirement  plan. I understand  that Sterling
      Trust Company will not monitor the nature of  contributions to my Account,
      and has no duty to  question  my  actions  should I combine  rollover  IRA
      assets  with  regular  contribution  IRA assets.  I hereby  hold  harmless
      Sterling Trust Company from any liability for any financial loss,  damage,
      or injury  which I may  sustain  as a result  of  combining  rollover  and
      regular contribution IRA assets.

                                                               (continued above)
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
3. Type of Traditional IRA Account (continued)

  |_| Combination IRA: ..............................................$__________
      (Annual  Contribution  and Rollover  IRA) - By electing to combine  annual
      contribution  IRA funds with funds  rolled over from a  qualified  plan or
      403(b) plan, I understand  that I forfeit the right to  subsequently  roll
      this IRA into another  qualified plan or 403(b) plan. I hereby release and
      hold harmless  Sterling Trust Company from any liability for any financial
      loss, damage or injury which I may sustain as a result of this election.

  |_| SEP Provision:.................................................$__________
      If this Account is  established in connection  with a Simplified  Employee
      Pension  (SEP),  employer  contributions  of  up  to  15%  of  Depositor's
      compensation  or $30,000,  whichever  is less,  may be made in addition to
      contributions of up to $2,000 by Depositor.  Be sure to submit with a copy
      of IRS Form 5305-SEP found on page 10 of this booklet.

  |_| Beneficiary IRA:...............................................$__________
      For an  individual  who  wishes to  establish  a  Beneficiary  IRA for the
      purpose of receiving cash/assets from an inherited IRA.
--------------------------------------------------------------------------------

4. Optional Authorizations

      The following  selections are optional features available on your Sterling
      Trust  Proprietary  IRA.  Select only the item(s) you wish to authorize or
      not authorize.

      Telephone  Authorization:  I  authorize  Sterling  Trust  Company to honor
      telephone  transaction  requests from me or my  Representative  (if I have
      designated one) for my Account. My Social Security Number will be required
      as  verification  before any request  will be accepted.  I understand  and
      agree that Sterling Trust Company will not be liable for any loss, expense
      or  cost  arising  out of any  request  effected  hereunder.  (Note:  This
      authorization  applies  only to  investment  directions  given to Sterling
      Trust Company.  It does not automatically  authorize telephone exchange or
      redemption privileges for any investment.)

     |_|    Telephone Authorization automatically applies to your account unless
            this  box is  checked.  Check  this  box  only  if  you do not  want
            telephone authorization on your account.

      Payment of Account Fees:  The Annual Renewal Fee for my Account should be:
      (check only one box)

     |_|    Invoiced to me annually at the above address; or

     |_|    Automatically withdrawn from the assets of my Account. (Account must
            have liquid assets.)

      If no  option  is chosen  above,  Sterling  Trust  will  assume  automatic
      withdrawal of Annual Renewal Fee from the Account.  The Accountholder will
      be responsible  for any fee  deficiency  should the Account be illiquid or
      have  insufficient  funds to cover all fees.  Sterling  Trust reserves the
      right to charge a $5.00 late fee for every 30-day period that your account
      fees are past due.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Sterling Trust Company (C) 2002         2-B                        (Page 2 of 4)
<PAGE>

--------------------------------------------------------------------------------
5. Optional Representative Designation

Please  complete  the  information  and sign below only if you wish to authorize
your  financial  advisor,  broker,  financial  planner,  or other person of your
choice  as  your   Representative   on  your  Account.   Before  you  appoint  a
Representative on your Account, you should understand that your Representative:

      o     is  authorized  to give  investment  directions  on your  behalf  to
            Sterling Trust Company,

      o     will have unlimited access to your Account  information,  and

      o     will  receive  copies  of your  Account  statements  and  all  other
            correspondence.

By my  signature  below,  I choose to appoint  the  person(s)  shown below as my
Representative on my Sterling Trust Company ("Sterling") Account for the purpose
of communicating  investment directions to Sterling and receiving information on
my  Account,  in  accordance  with  this  Section,  Section  9.4  of  Sterling's
Traditional  Individual Retirement Custodial Account Agreement,  and Section "O"
of Sterling's IRA Disclosure Statement. I further acknowledge that:

1)    I understand that my  Representative  is my authorized agent and is not in
      any way an agent, employee, or representative of Sterling.

2)    I understand that my Representative may be a registered  representative of
      a broker dealer  organization,  a financial advisor or other person that I
      deem acceptable.

3)    I  understand   that   Sterling  has  not  made  and  will  not  make  any
      recommendation  or investigation  with respect to my  Representative,  nor
      does Sterling Trust Company compensate my Representative in any manner.

4)    I understand  that I may appoint  and/or remove my  Representative  at any
      time by delivering my written notice on a form acceptable to Sterling.  If
      I remove my Representative,  I understand that such removal shall not have
      the effect of  canceling  any notice,  instruction,  direction or approval
      received  by  Sterling  from my  removed  Representative  before  Sterling
      receives my notice of removal.

5)    I instruct  Sterling to pay for or receive  payment from security or other
      investment transactions  communicated by my Representative as shown below,
      as  indicated  by  broker  confirmations  of trade or other  requests  for
      payment received by Sterling.

6)    I  understand   that  it  is  solely  my   responsibility   to  direct  my
      Representative  to execute  trades or other  investments  for my  Sterling
      Account, and all instructions,  directions,  and/or confirmations received
      from my  Representative,  his  agent(s),  or his  broker  dealer,  whether
      written or oral,  shall be assumed by Sterling to have been  authorized by
      me.

7)    I agree to indemnify and hold  Sterling  harmless in its reliance upon any
      certificate,  notice, confirmation,  instruction, or other written or oral
      (if so elected)  communication  purporting  to have been  delivered  at my
      direction on behalf of my Account by my  Representative or brokerage firm.
      Sterling shall not be held liable for any loss or breach of any kind which
      may result from any action that it takes in good faith in accordance  with
      such   certificate,    notice,   confirmation,    instruction   or   other
      communication.

Must sign     \ Signature
and date here / of Individual ________________________________ Date __/__/____

Representative Name __________________________________  Rep # _________________

Representative Address _________________________________________________________

City ____________________________________________State _____________ Zip _______

Phone ____________________________________  Fax ________________________________

Email Address _____________________________________

Broker Dealer Name _____________________________________________________________

Broker Dealer Address __________________________________________________________

City ___________________________________________State _____________ Zip ________

Phone ____________________________________________________

Dealer Firm Authorized Signature (if required by Dealer) _______________________
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Sterling Trust Company (C) 2002         2-C                        (Page 3 of 4)
<PAGE>

--------------------------------------------------------------------------------
6. Signatures: By signing below, I hereby make the following representations:

1)    I appoint Sterling Trust Company  ("Sterling") as Custodian of my Account,
      and I  acknowledge  that I have received and read  Sterling's  Traditional
      Individual Retirement Custodial Account Agreement and Disclosure Statement
      on the  date  shown  below,  and I agree  to be  bound  by the  terms  and
      conditions  contained in these documents.  I understand that, within seven
      (7) days from the date that I open my  Account,  I may  revoke my  Account
      without penalty by mailing or delivering a written notice to Sterling.

2)    I acknowledge that my Account is  self-directed  and that I am responsible
      for the  selection,  management,  and  retention of all  investments  held
      within my Account. I understand that Sterling is in no way responsible for
      providing investment advice or recommendations, and that Sterling is not a
      "fiduciary" for my Account as such term is defined in the Internal Revenue
      Code, ERISA, or any other applicable federal, state, or local laws.

3)    I understand that if I have chosen to appoint a Representative  in Section
      5 of this Adoption Agreement, or should I ever appoint a Representative on
      a form  acceptable to Sterling,  such person is my agent and is not in any
      way an agent,  employee,  or representative of Sterling. I understand that
      Sterling   has  not  made  and  will  not  make  any   recommendation   or
      investigation  with  respect  to  my  Representative,  nor  does  Sterling
      compensate my Representative in any manner.

4)    I understand  that if a financial  representative  suggested that I retain
      Sterling's  services as custodian for investments made through my Account,
      that such financial  representative is not in any way an agent,  employee,
      representative,  or affiliate of Sterling.  I acknowledge that Sterling is
      not responsible for and is not bound by any  representations,  warranties,
      statements or agreements made by any financial  representative  beyond the
      terms  and  provisions  contained  in  Sterling's  Traditional  Individual
      Retirement  Custodial Account Agreement and Disclosure Statement and other
      Sterling forms and/or documents.  I further  understand that Sterling does
      not compensate such financial representatives in any manner.

5)    I understand  that  Sterling  does not review the  prudence,  viability or
      merits of any  investment or whether the  investment  is acceptable  under
      ERISA, the Internal Revenue Code, or any other applicable  federal,  state
      or local laws,  including  securities  laws. I  acknowledge  that it is my
      responsibility  to review any  investments to ensure  compliance  with the
      above   requirements  and  to  avoid  the  occurrence  of  any  prohibited
      transactions  in my Account  arising out of my  investments.  I understand
      that I should have all  investments  reviewed  by my  attorney  and/or tax
      advisor.

6)    I consent to  Sterling's  fee  schedule as  specified in this IRA Adoption
      Agreement, and any amendments made thereto.

7)    I agree to promptly give  instructions  to Sterling as necessary to enable
      Sterling Trust Company to carry out its duties under my Custodial  Account
      Agreement.

8)    I represent  that whenever  information as to any taxable year is required
      to be filed  with the  Internal  Revenue  Service,  that I will  file such
      information with the Internal Revenue Service unless filed by Sterling.

9)    I understand  that if Sterling  receives funds from any source,  including
      contributions,  transfers,  rollovers,  or  income  from  any  asset of my
      Account,  Sterling is  authorized  and  directed to place such funds in an
      interest-bearing instrument of Sterling or an affiliate of Sterling, until
      further investment direction is received.

10)   I understand that it is my sole responsibility to manage the investment(s)
      held  within  my  Account,  and that  Sterling  has no  responsibility  to
      question any investment  directions given by me or my Representative (if I
      have  appointed  one),  regardless  of the  nature  of the  investment.  I
      understand  that  Sterling is in no way  responsible  for  monitoring  the
      performance of investments or for the  performance of any investment  held
      within my Account.

11)   I understand that  investments  within my Account are not FDIC-insured nor
      guaranteed by Sterling Trust Company,  and that such  investments may lose
      value.

12)   I  understand  and agree that all claims  and  disputes  of every type and
      matter which may arise  between me and  Sterling  Trust  Company  shall be
      submitted  to binding  arbitration  pursuant to the rules of the  American
      Arbitration  Association,  as specified in Section 17.5 of Sterling  Trust
      Company's Traditional Individual Retirement Custodial Account Agreement.

Must sign     \ Signature
and date here / of Individual _______________________________ Date __/__/____
                                                              (Required - date
                                                               must be completed
                                                               above or
                                                               application will
                                                               be rejected)

Acceptance by Sterling Trust Company, as Custodian:
(to be completed by Sterling Trust Company)

               Authorized
               Signatory ____________________________________ Date __/__/____

                                                      Date last modified: 9/2002
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Sterling Trust Company (C) 2002         2-D                        (Page 4 of 4)
<PAGE>

Sterling Trust Company
P.O. Box 2526                                                            [LOGO]
Waco, Texas 76702-2526        Instructions for Completing the           STERLING
Phone: (800) 955-3434     Traditional IRA Transfer Request Form /        TRUST
       (254) 751-1505             Direct Rollover Letter                COMPANY
--------------------------------------------------------------------------------

Please use the  instructions  below to complete  the  Traditional  IRA  Transfer
Request  Form / Direct  Rollover  Letter.  A separate  Traditional  IRA Transfer
Request  Form / Direct  Rollover  Letter is needed for each  account you wish to
transfer in to your Sterling  Trust IRA. You may photocopy this form (before you
complete it) if more than one form is needed.

1.    Write the name,  appropriate address, and telephone number of your current
      trustee or custodian.

2.    Fill in the account number,  name on the account,  and type of account you
      are transferring to Sterling.

3.    Select  the manner in which you want your  current  trustee/custodian/plan
      administrator  to transfer  your  account to Sterling  Trust.  "Liquidate"
      means  that  the  asset(s)  will be sold  and  the  proceeds  sent to your
      Sterling account.  An "In-Kind"  transfer means that the asset(s) will not
      be sold,  but  rather  the  ownership  will  simply  be  re-registered  or
      re-titled  to your  Sterling IRA  account.  If only a partial  transfer is
      desired,  you should  list only the assets  that are to be  liquidated  or
      transferred  in-kind  in  the  spaces  provided.   Be  sure  to  mark  the
      appropriate  "Liquidate" or "In-Kind" box. A copy of your recent statement
      (dated   within  6  months)  from  your   current   trustee/custodian/plan
      administrator is required.

4.    Instructions to the Resigning  Trustee/Custodian  should include your name
      and Sterling  Traditional  IRA account  number (if  available).  Note: The
      abbreviation "FBO" means "for benefit of".

5.    The Special  Delivery  Instructions  section is to instruct the  Resigning
      Trustee/Custodian  on how to  transmit  liquid  funds  to  Sterling  Trust
      Company.  If you  desire  for the  Traditional  Transfer  Request / Direct
      Rollover Letter to be forwarded by an overnight courier, you may include a
      pre-addressed  airbill for our use; otherwise,  all correspondence will be
      sent First Class mail via U.S. Postal Service.

6.    Sign and date your  Transfer  Request  and provide  your  Social  Security
      Number  in  the   appropriate   spaces.   Please   contact   your  current
      trustee/custodian/plan administrator to see if they require your signature
      to be  guaranteed.  If a signature  guarantee  is  required,  it should be
      obtained  from an  authorized  member of the  Securities  Transfer  Agents
      Medallion Program (STAMP).  Check with your local bank or broker/dealer to
      see if they offer this  service  and are  members of STAMP.  Important:  a
      notary public is not acceptable.

7.    Send the completed  Transfer  Request form, along with a copy of your most
      recent  statement,  to Sterling  Trust  Company.  If your IRA account with
      Sterling Trust has not yet been established,  you should complete and send
      Sterling's  IRA  Adoption   Agreement  and  payment  of  your  set-up  and
      first-year  annual  fees to  Sterling  Trust,  along  with your  completed
      Transfer Request/Direct Rollover form.

o     If your Transfer Request/Direct Rollover form has been properly completed,
      Sterling  Trust  will sign the  Acceptance  section  (at the bottom of the
      form) and mail your request to your current trustee or custodian.  If your
      Transfer Request/Direct Rollover form is missing necessary information, it
      will be returned to you for completion.

o     Please note that some  transfers may take from two weeks to several months
      to  complete.  Sterling  Trust will follow up on your  request  until your
      transfer has been completed.

o     If your current trustee or custodian sends any additional forms for you to
      complete,  please do so promptly and return to them. Please send a copy of
      any such forms to Sterling Trust.

--------------------------------------------------------------------------------
Sterling Trust Company (C) 2002          3
<PAGE>

                                                          Please send request
                                                          form to:
                                                          Sterling Trust Company
  [LOGO]                                                  P.O. Box 2526
 STERLING         Traditional IRA Transfer Request        Waco, Texas 76702-2526
  TRUST            Form / Direct Rollover Letter          Phone: (800) 955-3434
 COMPANY   (Sterling Trust Company is Non-ACAT eligible.)        (254) 751-1505
--------------------------------------------------------------------------------

________________________________________________________________________________
                      Name of Present Trustee or Custodian

________________________________________________________________________________
                   Address where this request should be mailed
                 (check with your current Trustee or Custodian)

______________________________________________________________(___)_____________
City                             State         Zip Code       Phone number

________________________________________________________________________________
Account Number at Present Trustee/Custodian

________________________________________________________________________________
Name on Account at Present Trustee/Custodian

________________________________________________________________________________
Type of Account to be Transferred

                (This form is NOT to be used for a Roth transfer)

o     PLEASE SELECT ONLY ONE OPTION FROM THE FOLLOWING:

I.    Transfer of an existing IRA

      |_|   Transfer my entire account  In-Kind  (change  ownership  only).  Any
            money  market  funds must be  liquidated  and  transferred  as cash.
            Please attach a current statement less than 6 months old.

      |_|   Liquidate  all  assets  and  transfer  as cash to my IRA  account at
            Sterling Trust Company.

      |_|   Transfer only cash.
            Please transfer |_| All cash in the account or |_| only $ __________

      |_|   Please  transfer only the assets listed below:  (If In-Kind,  please
            attach current statement less than 6 months old.)

NOTE: If there are more than four assets,  please attach a signed and dated list
to this form.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
            QUANTITY                       DESCRIPTION OF ASSET                      INSTRUCTIONS
(All, # of Shares, or $ Amount)    (Name of Fund, Security, or Asset)    (Please Check only one box per asset)
-------------------------------------------------------------------------------------------------------------
<S>                                 <C>                                  <C>
                                                                         |_|  Liquidate    or   |_|  In-Kind
-------------------------------------------------------------------------------------------------------------
                                                                         |_|  Liquidate    or   |_|  In-Kind
-------------------------------------------------------------------------------------------------------------
                                                                         |_|  Liquidate    or   |_|  In-Kind
-------------------------------------------------------------------------------------------------------------
                                                                         |_|  Liquidate    or   |_|  In-Kind
-------------------------------------------------------------------------------------------------------------
</TABLE>

II.   Annuities  -- I  understand  applicable  surrender/penalty  charges may be
      deducted and are authorized by my signature below.

      |_|   Change  the  ownership  and  beneficiary  of  my  current   annuity.
            (Annuitant information should remain the same.)

      |_|   Surrender my entire  annuity.  The original policy or a statement of
            loss is attached.

      |_|   Partial    surrender    of   my    annuity    in   the   amount   of
            $____________________

III.  Direct Rollover from a Qualified Plan

            --    Please Note:  Your  employer may require  specific  withdrawal
                  forms and may not accept this form.  To avoid  delays,  please
                  contact   your  plan   administrator   to  verify   withdrawal
                  requirements and your eligibility.

      |_|   Direct rollover from my employer's sponsored plan

            |_| $____________________ or |_| ___________% of my vested benefit.

o     INSTRUCTIONS TO RESIGNING TRUSTEE / CUSTODIAN / PLAN SPONSOR:
      --------------------------------------------------------------------------
      As requested above, please re-register assets and / or make checks payable
      to: Sterling Trust Company, Custodian

      FBO ________________________________________ IRA _________________________
      P.O. Box 2526
      Waco, TX 76702-2526       Tax ID#:  76-0115756
      --------------------------------------------------------------------------

------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS:
|_| Send by Overnight delivery to:
    Sterling Trust Company
    7901 Fish Pond Road
    Waco, TX 76710
    VIA:   ____  Airborne   ____  FedEx   ____ UPS
    3rd Party Billing # ______________________________
|_| Send by Wire (see attached instructions)
|_| Other   _______________________________________
------------------------------------------------------

o     ACCOUNTHOLDER SIGNATURE

      This transfer of assets is to be executed  from  fiduciary to fiduciary in
      such a manner that will not place me in actual or constructive  receipt of
      all or any part of my assets.  If I have  attained  age 70 1/2 during this
      year,  I  understand  IRS  regulations  require  that my  current  trustee
      distribute or withhold from this transfer any amount which may be required
      to be paid as a Required Minimum Distribution.  Further, I understand that
      Sterling  Trust  Company  will  accept  the  transfer  of the  account  as
      referenced  above  on  the  basis  that  all  required  distributions  are
      satisfied prior to the transfer.

_________________________________________  ________     ________________________
   Original Signature of Accountholder      Date        Social Security Number

-------------------------------------------
Signature Guarantee (Affix Medallion Stamp)

Your resigning trustee/custodian may require
your signature be guaranteed by a Medallion
Program member.
-------------------------------------------

o     ACCEPTANCE BY STERLING TRUST

      Sterling Trust Company has entered into an Individual Retirement Custodial
      Agreement  with the person named above,  and Sterling  Trust  Company,  as
      Custodian  of such  account,  agrees  to  accept  and does  hereby  accept
      transfer of the assets described above to such account.

Date:_______________________ By: _______________________________________________
                                     Sterling Trust Company Authorized Signatory

--------------------------------------------------------------------------------
Sterling Trust Company (C) 2002          4
<PAGE>

                                                                         [LOGO]
                                                                        STERLING
What Is A Simplified                                                     TRUST
Employee Pension?                                                       COMPANY
--------------------------------------------------------------------------------

A  Simplified  Employee  Pension  (SEP)  is a plan  which,  subject  to  certain
conditions,  enables  an  employer  to  make  deductible  contributions  to  its
employees' IRAs. If the plan meets the SEP requirements, the employer may deduct
up to the lesser of $40,000 or 25% of the  employee's  compensation  for amounts
contributed to the IRA by the employer. In addition, an employee may make his or
her  own  contributions  to the  IRA,  up to the  lesser  of  $3,000  or 100% of
compensation,  and may be  entitled to a deduction  for such  contribution.  The
following is a general  description of the requirements of a Simplified Employee
Pension:

      1.    The employer makes  contributions to Individual  Retirement Accounts
            for all of his employees who have (a) attained age  twenty-one  (21)
            and  (b)  performed  service  during  at  least  three  of the  five
            preceding calendar years.

      2.    The  contributions  must  bear a uniform  relationship  to the total
            compensation   of  each   employee.   The   contributions   may  not
            discriminate in favor of officers,  10% shareholders,  self-employed
            or highly compensated individuals.

      3.    Only the first $200,000  (indexed for inflation) of compensation may
            be  taken  into  account  in  determining  the  amount  of  employer
            contribution.

      4.    The  contributions  must be 100% vested when made,  and the employer
            may make no restrictions on withdrawal from the IRAs.

      5.    The contributions  must be made under a written  allocation  formula
            specifying the requirements for  participation in the allocation and
            the method of computing the allocation.  Contributions  must be made
            no  later  than  the  due  date of the  employer  tax  return,  plus
            extensions.

      6.    The regular  individual  retirement plan tax rules generally  govern
            the IRA of each  employee  except  that  the  dollar  limitation  on
            deductibility of  contributions  is increased to $40,000.  Also, the
            employee can make his own contributions to the IRA (up to the lesser
            of $3,000 or 100% of compensation).

When the  requirements of the Simplified  Employee Pension are met, the employer
will be entitled to a tax deduction for  contributions  not exceeding 25% of the
compensation  paid to his  employees  during the  calendar  year  ending with or
within the taxable year. The employee will not be required to include the amount
of the employer's  contribution to his IRA in computing his gross income for tax
purposes.

An  employer   establishing  a  SEP  Plan  will  be   responsible   for  certain
administrative  tasks,   including   determination  of  eligible  employees  and
calculation  of  contributions  for each  participant.  Sterling  Trust does not
perform any of these employer administrative  functions,  nor does it offer such
services at an additional fee. Sterling's responsibility shall be limited to the
custodial duties  associated with any participant IRAs established with Sterling
under the Plan.

An  employer  may  establish  a  Simplified  Employee  Pension by  executing  an
Agreement  on IRS Form  5305-SEP,  which is included  in this  booklet and which
describes in more detail the  characteristics  and  requirements of a Simplified
Employee  Pension.  A copy of IRS Form  5305-SEP  must be given to each  covered
employee. Form 5305-SEP (Rev. March 2002)

--------------------------------------------------------------------------------
Sterling Trust Company (C) 2002          8
<PAGE>

                                                               OMB No. 1545-0499
                                                               -----------------
                                                               Do not file
                                                               with the Internal
                                                               Revenue Service
Form 5305-SEP
(Rev. March 2002)                  Simplified Employee Pension--Individual
Department of the Treasury       Retirement Accounts Contribution Agreement
Internal Revenue Service     (Under section 408(k) of the Internal Revenue Code)
--------------------------------------------------------------------------------

______________________ makes the following agreement under section 408(k) of the
(Name of employer)     Internal Revenue Code and the instructions to this form.

Article I--Eligibility Requirements (check applicable boxes--see instructions)

The employer agrees to provide discretionary contributions in each calendar year
to the individual  retirement account or individual  retirement annuity (IRA) of
all employees who are at least ______ years old (not to exceed 21 years old) and
have performed services for the employer in at least ______ years (not to exceed
3 years) of the immediately  preceding 5 years. This simplified employee pension
(SEP) |_| includes  |_| does not include  employees  covered  under a collective
bargaining  agreement,  |_|  includes |_| does not include  certain  nonresident
aliens, and |_| includes |_| does not include employees whose total compensation
during the year is less than $450*.

Article II--SEP Requirements (see instructions)

The employer agrees that  contributions made on behalf of each eligible employee
will be:

A.    Based only on the first $200,000* of compensation.
B.    The same percentage of compensation for every employee.
C.    Limited annually to the smaller of $40,000* or 25% of compensation.
D.    Paid to the employee's IRA trustee,  custodian,  or insurance company (for
      an annuity contract).

______________________________________     _____________________________________
     Employer's signature and date                 Name and title
--------------------------------------------------------------------------------

Instructions

Section  references  are to the Internal  Revenue Code unless  otherwise  noted.
Purpose of Form

      Form  5305-SEP  (Model SEP) is used by an employer to make an agreement to
provide benefits to all eligible  employees under a simplified  employee pension
(SEP) described in section 408(k).

      Do not  file  Form  5305-SEP  with  the IRS.  Instead,  keep it with  your
records.

      For more information on SEPs and IRAs, see Pub. 560,  Retirement Plans for
Small Business (SEP,  SIMPLE,  and Qualified  Plans),  and Pub. 590,  Individual
Retirement Arrangements (IRAs).

Instructions to the Employer

Simplified  employee  pension.  A SEP is a  written  arrangement  (a plan)  that
provides  you  with an easy way to make  contributions  toward  your  employees'
retirement income. Under a SEP, you can contribute to an employee's  traditional
individual   retirement   account  or  annuity   (traditional   IRA).  You  make
contributions  directly  to an IRA set up by or for each  employee  with a bank,
insurance company,  or other qualified  financial  institution.  When using Form
5305-SEP to establish a SEP, the IRA must be a Model traditional IRA established
on an IRS form or a master or  prototype  traditional  IRA for which the IRS has
issued a favorable opinion letter.  You may not make SEP contributions to a Roth
IRA or a SIMPLE IRA. Making the agreement on Form 5305-SEP does not establish an
employer IRA described in section 408(c).

When not to use Form 5305-SEP. Do not use this form if you:

      1. Currently  maintain any other qualified  retirement plan. This does not
prevent you from maintaining another SEP.

      2. Have any eligible employees for whom IRAs have not been established.

      3. Use the services of leased employees (described in section 414(n)).

      4. Are a member of an  affiliated  service  group  (described  in  section
414(m)),  a controlled group of corporations  (described in section 414(b)),  or
trades or businesses  under common  control  (described  in sections  414(c) and
414(o)),  unless all  eligible  employees  of all the  members  of such  groups,
trades, or businesses participate in the SEP.

      5.  Will  not pay  the  cost of the  SEP  contributions.  Do not use  Form
5305-SEP for a SEP that provides for elective employee contributions even if the
contributions are made under a salary reduction  agreement.  Use Form 5305A-SEP,
or a nonmodel SEP.

Note: SEPs permitting elective deferrals cannot be established after 1996.

Eligible employees. All eligible employees must be allowed to participate in the
SEP. An eligible employee is any employee who: (1) is at least 21 years old, and
(2) has performed "service" for you in at least 3 of the immediately preceding 5
years. You can establish less restrictive eligibility requirements, but not more
restrictive ones.

      Service  is any work  performed  for you for any  period of time,  however
short. If you are a member of an affiliated service group, a controlled group of
corporations, or trades or businesses under common control, service includes any
work  performed  for any  period  of time for any other  member  of such  group,
trades, or businesses.

Excludable  employees.  The following employees do not have to be covered by the
SEP: (1) employees covered by a collective bargaining agreement whose retirement
benefits  were  bargained  for  in  good  faith  by you  and  their  union,  (2)
nonresident  alien  employees who did not earn U.S.  source income from you, and
(3) employees who received less than $450* in compensation during the year.

Contribution  limits.  You may make an annual  contribution  of up to 25% of the
employee's compensation or $40,000*,  whichever is less. Compensation,  for this
purpose,  does not include  employer  contributions to the SEP or the employee's
compensation  in excess of $200,000*.  If you also  maintain a salary  reduction
SEP,  contributions  to the two SEPs  together  may not  exceed  the  smaller of
$40,000* or 25% of compensation for any employee.

      You are not required to make  contributions  every year,  but when you do,
you must  contribute  to the  SEP-IRAs of all  eligible  employees  who actually
performed  services during the year of the contribution.  This includes eligible
employees who die or quit working before the contribution is made.

      Contributions   cannot   discriminate  in  favor  of  highly   compensated
employees.  Also, you may not integrate your SEP  contributions  with, or offset
them by,  contributions  made  under the  Federal  Insurance  Contributions  Act
(FICA).

      If this SEP is intended to meet the top-heavy minimum  contribution  rules
of section 416, but it does not cover all your employees who participate in your
salary  reduction  SEP,  then  you  must  make  minimum  contributions  to  IRAs
established on behalf of those employees.

Deducting  contributions.  You may deduct  contributions to a SEP subject to the
limits of section  404(h).  This SEP is  maintained on a calendar year basis and
contributions to the SEP are deductible for your tax year with or

* For 2003 and later  years,  this  amount is subject  to annual  cost-of-living
adjustments.  The IRS announces the increase,  if any, in a news release, in the
Internal Revenue Bulletin, and on the IRS Web Site at www.irs.gov.
--------------------------------------------------------------------------------
For Paperwork Reduction Act Notice, see page 2.  Cat. No. 11825J  Form  5305-SEP
                                                                  (Rev. 3-2002)
--------------------------------------------------------------------------------
                                        9
<PAGE>

Form 5305-SEP (Rev. 3-2002)                                               Page 2
--------------------------------------------------------------------------------

within which the calendar  year ends.  Contributions  made for a particular  tax
year  must be  made  by the due  date  of  your  income  tax  return  (including
extensions) for that tax year.

Completing the agreement. This agreement is considered adopted when:

o IRAs have been established for all your eligible employees;

o You have completed all blanks on the agreement form without modification; and

o You have given all your eligible employees the following information:

      1. A copy of Form 5305-SEP.

      2. A statement that  traditional IRAs other than the traditional IRAs into
which employer SEP  contributions  will be made may provide  different  rates of
return and  different  terms  concerning,  among  other  things,  transfers  and
withdrawals of funds from the IRAs.

      3. A  statement  that,  in  addition  to the  information  provided  to an
employee  at  the  time  the  employee  becomes  eligible  to  participate,  the
administrator  of the SEP must  furnish each  participant  within 30 days of the
effective  date of any  amendment  to the  SEP,  a copy of the  amendment  and a
written explanation of its effects.

      4. A statement that the  administrator  will give written  notification to
each  participant  of any  employer  contributions  made  under  the SEP to that
participant's  IRA by the later of January 31 of the year following the year for
which a contribution is made or 30 days after the contribution is made.

      Employers  who  have  established  a SEP  using  Form  5305-SEP  and  have
furnished each eligible  employee with a copy of the completed Form 5305-SEP and
provided the other  documents and  disclosures  described in Instructions to the
Employer and Information  for the Employee,  are not required to file the annual
information returns,  Forms 5500 or 5500-EZ for the SEP. However,  under Title I
of the Employee Retirement Income Security Act of 1974 (ERISA), this relief from
the annual  reporting  requirements  may not be  available  to an  employer  who
selects,  recommends,  or  influences  its  employees  to choose IRAs into which
contributions  will be made  under  the  SEP,  if  those  IRAs  are  subject  to
provisions that impose any limits on a  participant's  ability to withdraw funds
(other  than  restrictions  imposed  by the Code that  apply to all  IRAs).  For
additional  information  on Title I  requirements,  see the  Department of Labor
regulation at 29 CFR 2520.104-48.

Information for the Employee

The information  below explains what a SEP is, how  contributions  are made, and
how  to  treat  your  employer's   contributions  for  tax  purposes.  For  more
information, see Pub. 590.

Simplified employee pension. A SEP is a written arrangement (a plan) that allows
an employer to make contributions toward your retirement. Contributions are made
to  a  traditional  individual  retirement  account/annuity  (traditional  IRA).
Contributions  must be made to either a Model traditional IRA executed on an IRS
form or a master or  prototype  traditional  IRA for which the IRS has  issued a
favorable opinion letter.

      An employer is not required to make SEP  contributions.  If a contribution
is made,  however,  it must be allocated to all eligible employees  according to
the SEP agreement. The Model SEP (Form 5305-SEP) specifies that the contribution
for  each  eligible  employee  will  be  the  same  percentage  of  compensation
(excluding compensation greater than $200,000*) for all employees.

      Your  employer  will provide you with a copy of the  agreement  containing
participation rules and a description of how employer  contributions may be made
to your IRA.  Your  employer  must also provide you with a copy of the completed
Form 5305-SEP and a yearly statement showing any contributions to your IRA.

      All amounts  contributed  to your IRA by your employer  belong to you even
after you stop working for that employer.

Contribution  limits.  Your employer will determine the amount to be contributed
to your IRA each  year.  However,  the  amount  for any year is  limited  to the
smaller of $40,000* or 25% of your compensation for that year. Compensation does
not include any amount that is  contributed  by your  employer to your IRA under
the SEP.  Your employer is not required to make  contributions  every year or to
maintain a particular level of contributions.

Tax  treatment  of  contributions.  Employer  contributions  to your SEP-IRA are
excluded  from  your  income  unless  there are  contributions  in excess of the
applicable  limit.  Employer  contributions  within  these  limits  will  not be
included on your Form W-2.

Employee  contributions.  You may  make  regular  IRA  contributions  to an IRA.
However,  the amount you can deduct may be reduced or eliminated  because,  as a
participant in a SEP, you are covered by an employer retirement plan.

SEP participation. If your employer does not require you to participate in a SEP
as a  condition  of  employment,  and you  elect not to  participate,  all other
employees of your employer may be prohibited from participating.  If one or more
eligible  employees do not participate and the employer tries to establish a SEP
for the remaining  employees,  it could cause adverse tax  consequences  for the
participating employees.

      An  employer  may not adopt this IRS Model SEP if the  employer  maintains
another  qualified  retirement  plan.  This does not prevent your  employer from
adopting this IRS Model SEP and also  maintaining an IRS Model Salary  Reduction
SEP or other SEP. However, if you work for several employers, you may be covered
by a SEP of one employer and a different SEP or pension or  profit-sharing  plan
of another employer.  SEP-IRA  amounts--rollover or transfer to another IRA. You
can withdraw or receive  funds from your SEP-IRA if,  within 60 days of receipt,
you place those funds in the same or another  IRA.  This is called a  "rollover"
and can be done without penalty only once in any 1-year period.  However,  there
are no  restrictions  on the  number  of times you may make  "transfers"  if you
arrange to have these funds  transferred  between the trustees or the custodians
so that you never have possession of the funds.

Withdrawals.  You may withdraw your employer's contribution at any time, but any
amount  withdrawn is  includible  in your income  unless  rolled over.  Also, if
withdrawals  occur  before you reach age  591/2,  you may be subject to a tax on
early withdrawal.

Excess SEP contributions.  Contributions exceeding the yearly limitations may be
withdrawn  without penalty by the due date (plus extensions) for filing your tax
return  (normally  April 15), but are  includible in your gross  income.  Excess
contributions  left in your  SEP-IRA  after  that  time  may  have  adverse  tax
consequences.  Withdrawals  of those  contributions  may be  taxed as  premature
withdrawals.

Financial institution requirements.  The financial institution where your IRA is
maintained  must  provide you with a  disclosure  statement  that  contains  the
following information in plain, nontechnical language:

      1. The law that relates to your IRA.

      2. The tax consequences of various options concerning your IRA.

      3.  Participation  eligibility  rules,  and rules on the  deductibility of
retirement savings.

      4.  Situations and  procedures for revoking your IRA,  including the name,
address,  and telephone  number of the person  designated  to receive  notice of
revocation.  This information must be clearly  displayed at the beginning of the
disclosure statement.

      5.  A  discussion  of  the  penalties  that  may be  assessed  because  of
prohibited activities concerning your IRA.

      6. Financial disclosure that provides the following information:

      a. Projects value growth rates of your IRA under various  contribution and
retirement schedules, or describes the method of determining annual earnings and
charges that may be assessed.

      b. Describes whether, and for when, the growth projections are guaranteed,
or a statement of the earnings rate and the terms on which the  projections  are
based.

      c. States the sales  commission for each year expressed as a percentage of
$1,000.

      In addition,  the financial  institution must provide you with a financial
statement  each year.  You may want to keep these  statements  to evaluate  your
IRA's investment performance.

Paperwork  Reduction Act Notice. You are not required to provide the information
requested on a form that is subject to the  Paperwork  Reduction  Act unless the
form displays a valid OMB control number. Books or records relating to a form or
its instructions  must be retained as long as their contents may become material
in the  administration of any Internal Revenue law.  Generally,  tax returns and
return information are confidential, as required by section 6103.

      The time needed to complete  this form will vary  depending on  individual
circumstances. The estimated average time is:

Recordkeeping ......................... 1 hr., 40 min.

Learning about the
law or the form ....................... 1 hr., 35 min.

Preparing the form .................... 1 hr., 41 min.

      If you have comments  concerning  the accuracy of these time  estimates or
suggestions  for making this form  simpler,  we would be happy to hear from you.
You can write to the Tax Forms  Committee,  Western  Area  Distribution  Center,
Rancho Cordova, CA 95743-0001.  Do not send this form to this address.  Instead,
keep it with your records.

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                                       10
<PAGE>

Form 5305-A
(Rev. March 2002)
Department of the Treasury
Internal Revenue Service

                             STERLING TRUST COMPANY
          Traditional Individual Retirement Custodial Account Agreement
               (Under section 408(a) of the Internal Revenue Code)

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This Traditional  Individual Retirement Account Custodial Agreement (hereinafter
called the  "Agreement") is made between  Sterling Trust Company,  a Texas Trust
Company  (hereinafter  called the "Custodian") and each individual  (hereinafter
called the "Depositor") who executes an Adoption  Agreement,  incorporating  the
terms  of  this  Agreement,  for  the  purpose  of  establishing  an  individual
retirement account  (hereinafter called the "custodial account") as described in
Section  408(a)  of the  Internal  Revenue  Code of  1986,  as  amended,  or any
successor  statute  (hereinafter  called the  "Code"),  upon the terms set forth
herein.

Article I.

1.1   Except in the case of a rollover contribution described in section 402(c),
      403(a)(4), 403(b)(8), 408(d)(3), or 57(e)(16), an Employer contribution to
      a simplified  employee  pension plan as described in section 408(k),  or a
      recharacterized contribution described in section 408A(d)(6),the custodian
      will  accept only cash  contributions  up to $3,000 per year for tax years
      2002 through 2004. That contribution  limit is increased to $4,000 for tax
      years  2005  through  2007  and  $5,000  for  2008  and  thereafter.   For
      individuals  who have  reached  the age of 50 before  the close of the tax
      year, the contribution limit is increased to $3,500 per year for tax years
      2002 through 2004,  $4,500 for 2005,  $5,000 for 2006 and 2007, and $6,000
      for 2008 and  thereafter.  For tax years after 2008, the above limits will
      be increased to reflect a cost-of-living adjustment, if any.

Article II

2.1   The  Depositor's  interest  in the  balance  in the  custodial  account is
      nonforfeitable.

Article III

3.1   No part of the custodial  account funds may be invested in life  insurance
      contracts,  nor may the assets of the custodial account be commingled with
      other  property  except in a common trust fund or common  investment  fund
      (within the meaning of section 408(a)(5)).

3.2   No part of the  custodial  account  funds may be invested in  collectibles
      (within the meaning of section  408(m))  except as otherwise  permitted by
      section  408(m)(3),  which provides an exception for certain gold, silver,
      and platinum coins,  coins issued under the laws of any state, and certain
      bullion.

Article IV

4.1   Notwithstanding  any  provision  of this  agreement to the  contrary,  the
      distribution of the Depositor's interest in the custodial account shall be
      made in accordance  with the following  requirements  and shall  otherwise
      comply  with  section  408(a)(6)  and  the  regulations  thereunder,   the
      provisions of which are herein incorporated by reference.

4.2   The Depositor's entire interest in the custodial account must be, or begin
      to be, distributed not later than the Depositor's required beginning date,
      April 1 following the calendar year in which the Depositor  reaches age 70
      1/2. By that date, the Depositor may elect, in a manner  acceptable to the
      custodian, to have the balance in the custodial account distributed in:

(a)   A single sum or

(b)   Payments  over a period not longer than the life of the  Depositor  or the
      joint lives of the Depositor and his or her designated beneficiary.

4.3   If the Depositor dies before his or her entire  interest is distributed to
      him or her, the remaining interest will be distributed as follows:

(a)   If the Depositor dies on or after the required beginning date and:

(i)   the  designated  beneficiary  is the  Depositor's  surviving  spouse,  the
      remaining  interest will be distributed  over the surviving  spouse's life
      expectancy as determined  each year until such spouse's death, or over the
      period in paragraph (a)(iii) below if longer. Any interest remaining after
      the spouse's death will be distributed  over such spouse's  remaining life
      expectancy as determined in the year of the spouse's  death and reduced by
      1 for each subsequent year, or, if  distributions  are being made over the
      period in paragraph (a)(iii) below, over such period.

(ii)  the designated  beneficiary is not the Depositor's  surviving spouse,  the
      remaining  interest will be distributed over the  beneficiary's  remaining
      life  expectancy  as  determined  in the year  following  the death of the
      Depositor and reduced by 1 for each subsequent year, or over the period in
      paragraph (a)(iii) below if longer.

(iii) there  is no  designated  beneficiary,  the  remaining  interest  will  be
      distributed  over  the  remaining  life  expectancy  of the  Depositor  as
      determined in the year of the Depositor's  death and reduced by 1 for each
      subsequent year.

(b)   If the Depositor  dies before the required  beginning  date, the remaining
      interest will be distributed  in accordance  with (i) below or, if elected
      or there is no designated beneficiary, in accordance with (ii) below:

(i)   The remaining  interest will be distributed in accordance  with paragraphs
      (a)(i) and (a)(ii)  above (but not over the period in paragraph  (a)(iii),
      even if longer),  starting by the end of the calendar  year  following the
      year of the Depositor's death. If, however, the designated  beneficiary is
      the Depositor's  surviving spouse,  then this distribution is not required
      to begin before the end of the calendar year in which the Depositor  would
      have reached age 70 1/2. But, in such case, if the  Depositor's  surviving
      spouse dies before distributions are required to begin, then the remaining
      interest will be  distributed  in  accordance  with (a)(ii) above (but not
      over the period in paragraph (a)(iii), even if longer), over such spouse's
      designated beneficiary's life expectancy, or in accordance with (ii) below
      if there is no such designated beneficiary.

(ii)  The remaining interest will be distributed by the end of the calendar year
      containing the fifth anniversary of the Depositor's death.

4.4   If the  Depositor  dies  before  his  or  her  entire  interest  has  been
      distributed  and if the  designated  beneficiary  is not  the  Depositor's
      surviving  spouse,  no  additional  contributions  may be  accepted in the
      account.

4.5   The minimum amount that must be distributed each year,  beginning with the
      year containing the Depositor's  required  beginning date, is known as the
      "required minimum distribution" and is determined as follows:

(a)   The  required  minimum  distribution  under  paragraph  2(b) for any year,
      beginning  with  the  year  the  Depositor  reaches  age  70  1/2,  is the
      Depositor's  account  value at the close of business on December 31 of the
      preceding year divided by the distribution  period in the uniform lifetime
      table in Regulations  section  1.401(a)(9)-9.  However, if the Depositor's
      designated  beneficiary  is his  or her  surviving  spouse,  the  required
      minimum  distribution  for a year  shall not be more than the  Depositor's
      account  value at the close of business  on  December 31 of the  preceding
      year  divided  by the  number  in the  joint  and last  survivor  table in
      Regulations section 1.401(a)(9)-9. The required minimum distribution for a
      year under this paragraph (a) is determined  using the Depositor's (or, if
      applicable,  the  Depositor  and  spouse's)  attained age (or ages) in the
      year.

(b)   The required minimum  distribution under paragraphs 3(a) and 3(b)(i) for a
      year,  beginning with the year following the year of the Depositor's death
      (or the year the  Depositor  would have reached age 70 1/2, if  applicable
      under paragraph  3(b)(i)) is the account value at the close of business on
      December 31 of the preceding  year divided by the life  expectancy (in the
      single life table in Regulations section  1.401(a)(9)-9) of the individual
      specified in such paragraphs 3(a) and 3(b)(i).

(c)   The required minimum  distribution for the year the Depositor  reaches age
      70 1/2 can be made as late as April 1 of the following  year. The required
      minimum  distribution  for any other  year must be made by the end of such
      year.

4.6   The  owner  of two or  more  traditional  IRAs  may  satisfy  the  minimum
      distribution  requirements  described above by taking from one traditional
      IRA the  amount  required  to  satisfy  the  requirement  for  another  in
      accordance with the regulations under section 408(a)(6).

Article V

5.1   The  Depositor  agrees  to  provide  the  Custodian  with all  information
      necessary  to  prepare  any  reports   required  by  section   408(i)  and
      Regulations sections 1.408-5 and 1.408-6.

5.2   The Custodian  agrees to submit to the Internal  Revenue Service (IRS) and
      Depositor the reports prescribed by the IRS.

Article VI

6.1   Notwithstanding any other articles which may be added or incorporated, the
      provisions   of  Articles  I  through  III  and  this   sentence  will  be
      controlling.  Any additional articles inconsistent with section 408(a) and
      the related regulations will be invalid.

Article VII

7.1   This  Agreement will be amended as necessary to comply with the provisions
      of the Code and the related regulations.  As permitted under the IRS model
      form, Sterling Trust Company has added all provisions which follow Article
      VII.

Article VIII. Contributions

8.1   All  contributions  made to the custodial account shall be in cash, except
      in the case of a rollover or transfer contribution.

8.2   For any  year,  Depositor  may  contribute  to his or her IRA  during  the
      calendar year and not later that the time prescribed by law for filing the
      return for such taxable year (not including extensions thereof).

8.3   Except  in the  case  of a  Rollover  IRA  or a  plan-to-  plan  transfer,
      contributions  made by or on behalf of Depositor  shall not be made during
      or after the calendar year in which Depositor attains age 70 1/2 years.

8.4   The  Depositor   assumes  sole   responsibility   for   determining   that
      contributions to the custodial  account do not exceed the limits specified
      in the Code. With respect to any contribution  designated by the Depositor
      as a rollover contribution, the Depositor warrants:

(a)   that such amount is an "eligible rollover  distribution" under Section 402
      of the  Code  received  from a  qualified  plan or  403(b)  plan,  another
      individual  retirement account or annuity,  or a U.S. retirement bond, and
      is rolled over directly from an eligible  retirement  plan, or contributed
      to the custodial account  established  hereunder within sixty (60) days of
      its receipt by Depositor.

(b)   that in case of a  rollover  from a  qualified  plan or 403(b)  plan,  the
      amount of such rollover

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Sterling Trust Company (C) 2002          11
<PAGE>

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contribution  is an  amount  equal to or less that the  excess of the  qualified
total distribution or partial  distribution over amounts  contributed thereto by
Depositor (other that qualified voluntary employee contributions as described in
Section 219 (e) of the Code) and, if any  portion of such  rollover  consists of
property other than cash, such  distribution to Depositor  consisted of the same
property being contributed to the custodial account established hereunder; and

(c)   that,  in the case of a  rollover  contribution  from  another  individual
      retirement account or individual retirement annuity, such other account or
      annuity was not itself funded by a rollover  contribution from another IRA
      within  one (1)  year of the  date of the  contribution  to the  custodial
      account established hereunder.

8.5   The  Custodian  will  not be  responsible  for  the  computation  and  the
      collection of any contributions  under this Agreement,  and shall be under
      no duty to determine  whether the nature or amount of any contributions is
      in accordance with this Agreement or the Code. In addition,  the Custodian
      shall not be  responsible  for  computing or  maintaining  a record of the
      deductible portion of any contribution.

ARTICLE IX. Investments

9.1   Depositor  retains  all  responsibilities  and duties  for the  selection,
      management,  and  retention  of  investments,  to  the  exclusion  of  the
      Custodian,  pursuant to his power as "Settlor" under Section114.003 of The
      Texas Trust Code. At the direction of the Depositor,  the Custodian  shall
      invest  all  contributions  to  the  account  and  earnings  thereon.  The
      Custodian  shall be  responsible  for the execution of such orders and for
      maintaining  adequate records thereof. If investment  direction orders are
      not received as required,  or, if received,  are unclear in the opinion of
      the Custodian, all or a portion of the contribution may be held uninvested
      without liability for loss of income or appreciation and without liability
      for interest pending receipt of such orders or  clarification.  Upon death
      of the  Depositor,  the  beneficiary(ies)  and/or  representative  for the
      estate  of the  Depositor  assume  all  rights  and  responsibilities  for
      investment of the account.

9.2   The Custodian shall retain in cash so much of the custodial account as the
      Depositor or his designated agent or representative directs or until other
      instructions  are  received  from  the  Depositor  or  his  agent,  and is
      authorized  to  place  such  cash  held  in the  custodial  account  in an
      interest-  bearing  instrument  of the  custodian  or an  affiliate of the
      Custodian  as defined in IRC  Section  1504.  The  Custodian  may  perform
      subaccounting  and interest  posting  functions  related to the account as
      described  in this  Section,  and may  receive  a fee  directly  from  the
      investment  sponsor  for  these  services.   Depositor  agrees  that  such
      subaccounting  services are necessary  for the proper  function of the IRA
      account and further agrees to such fees being paid to Custodian. Depositor
      understands that fees described in this Section are not to be borne by the
      Depositor.  It is understood by the Depositor that any Investment  Advisor
      (as defined in Section 9.3) of the  Depositor  may direct the Custodian to
      retain a  specific  amount of cash in the  Depositor's  account on deposit
      with the  Custodian,  partially in exchange for the  Custodian's  services
      hereunder,  and the  Depositor  agrees  that  any such  deposits  with the
      Custodian shall  constitute  additional  compensation due to the Custodian
      over and above the fees provided for in Article XIV.

9.3   The Depositor may appoint an Investment  Advisor,  qualified under Section
      3(38) of the Employee  Retirement  Income  Security Act of 1974, to direct
      the  investment  of the IRA. The  Depositor  shall notify the Custodian in
      writing of any such  appointment  by providing the Custodian a copy of the
      instruments   appointing  the   Investment   Advisor  and  evidencing  the
      Investment Advisor's acceptance of such appointment,  an acknowledgment by
      the  Investment  Advisor  that it is a  fiduciary  of the  account,  and a
      certificate evidencing the Investment Advisor's current registration under
      the Investment  Advisor's Act of 1940. The Custodian shall comply with any
      directions furnished to it by the Investment Advisor,  unless and until it
      receives  written  notification  from the  Depositor  that the  Investment
      Advisor's appointment has been terminated.

9.4   On a form  acceptable  to the  Custodian,  the  Depositor  may designate a
      representative for the purpose of communicating  investment  directions to
      the Custodian and receiving  information on the account.  Said Depositor's
      Representative   ("Rep")  may  be  a   registered   representative   of  a
      broker/dealer organization,  a financial advisor or other person as may be
      acceptable to the Depositor.  The Rep shall be the authorized agent of the
      Depositor, and not an agent of the Custodian. The Custodian shall construe
      any and all investment  directions  given by the Rep,  whether  written or
      oral,  as having been  authorized  by the  Depositor.  The  Depositor  may
      appoint  and/or remove a Rep by written  notice to the Custodian  provided
      that the  Depositor's  removal  of a Rep  shall  not have  the  effect  of
      canceling any notice,  instruction,  direction or approval received by the
      Custodian  from the removed Rep before the Custodian  receives said notice
      of removal from the Depositor.

9.5   On a form  acceptable  to the  Custodian,  the Depositor may authorize the
      Custodian to accept verbal investment directions from the Depositor or his
      Rep.  Said verbal  investment  directions  may be given by telephone or in
      person in the offices of the Custodian. Depositor agrees that Custodian is
      not  responsible  for  verifying  the  propriety of any verbal  investment
      direction which it may receive,  other than requiring  Depositor's  Social
      Security Number and Account Number for identification purposes.  Depositor
      further  agrees that the  Custodian is not  responsible  for  unauthorized
      trades in the account which may be effected under this Section.

9.6   If  publicly-traded  securities  are  to  be  included  in  the  specified
      investments,  orders shall be executed through a securities  broker/dealer
      registered  under the  Securities  Exchange Act of 1934  designated by the
      Depositor  upon such form as the  Custodian may  prescribe.  Any brokerage
      account  maintained  in  connection  herewith  shall be in the name of the
      Custodian  for the  benefit  of the  Depositor.  The  Custodian  shall  be
      authorized  to honor  transactions  within the brokerage  account  without
      obligation to verify prior  authorization  of same by the  Depositor.  Any
      cash received by the brokerage  account,  whether as income or proceeds of
      transactions,  shall be held by the brokerage account pending  directions,
      and the  Custodian  shall have no obligation to direct the broker to remit
      such  cash  until  directed  to do so by the  Depositor,  but may  receive
      remittances  without  direction  if the  same  are  made  by  the  broker.
      Investments outside the brokerage account shall be made in accordance with
      the other provisions of this Article.  Investment  directions may be given
      directly to the designated  broker by the Depositor (in such manner as the
      broker may require) and the broker shall be responsible  for the execution
      of such orders. When securities are purchased within the brokerage account
      requiring  that funds be remitted  by the  Custodian  to make  settlement,
      Depositor agrees to telephonically notify or instruct the broker or Rep to
      telephonically  notify  the  Custodian  on the trade  date of the  pending
      securities  transaction,  and to request delivery of the custodial account
      assets  necessary  to  settle  the  trade.  Depositor  agrees  to hold the
      Custodian  harmless for any losses resulting from the Depositor's  failure
      to notify the Custodian of the pending trade and request for settlement in
      the above prescribed manner.

9.7   Depositor may direct the Custodian to purchase "non-standard"  investments
      which  shall  include  but  not  be  limited  to  investments   which  are
      individually  negotiated by the Depositor or his Rep, or part of a private
      placement of securities  offered in reliance upon  exemptions  provided by
      Sections  3(B) and 4(2) of the  Securities  Act of 1933 and  Regulation  D
      promulgated thereunder.  The Custodian may identify investments or classes
      of   investments   which  are   unacceptable   due  to  their   posing  an
      administrative  burden,  or potential for prohibited  transactions  on the
      Custodian.  For such investments,  the Custodian reserves the right to not
      follow the  Depositor's or Rep's  direction or process such an investment.
      The  Custodian's   decision  to  reject  certain  assets  for  reasons  of
      administrative feasibility should not be construed as investment advice or
      an opinion of the Custodian as to the investment's  prudence or viability.
      If the  Depositor  or his Rep should  direct the  Custodian  to purchase a
      non-standard   investment,   as  defined  above,  the  following   special
      certifications and provisions shall apply:

(a)   Depositor  agrees  to  submit  or  cause  to  be  submitted  all  offering
      documentation related to the non-standard investment for an administrative
      review by the  Custodian.  The  Custodian  reserves  the right to charge a
      reasonable  fee  for  such  administrative  review  so  requested  by  the
      Depositor or his Rep;

(b)   If  the  non-standard   investment(s)  contains  a  provision  for  future
      contractual  payments or assessments,  including  margin calls,  Depositor
      acknowledges  that such payments shall be borne solely by the IRA account,
      that  authorization to make such payments shall come from Depositor or his
      Rep, and that making such  payments may reduce or exhaust the value of the
      IRA account.  Depositor further agrees to maintain sufficient liquid funds
      in his IRA account to cover any such payments or  assessments,  and agrees
      that the Custodian  shall not be responsible for monitoring the balance of
      the account to verify  compliance with this Section.  Depositor  agrees to
      indemnify  the  Custodian and hold it harmless for any and all payments or
      assessments  which may result  from  holding the  non-standard  investment
      within the IRA account,  and further  agrees that the  Custodian  shall be
      under  no  obligation  whatsoever  to  extend  credit  to the  account  or
      otherwise  disburse payment beyond the cash balance of the account for any
      payment or assessment related to the nonstandard investment(s);

(c)   If the non-standard investment(s) contain administrative and/or management
      requirements or duties beyond the Custodian's capabilities or expertise to
      provide,  then  Depositor  agrees to seek out  suitable  agents or counsel
      necessary to perform such duties and deliver a written  service  agreement
      acceptable to the Custodian for execution on behalf of the Depositor's IRA
      account;

(d)   If   the   Depositor    directs   the   Custodian   to   enter   into   an
      individually-negotiated debt instrument, including a promissory note, deed
      of trust, real estate contract, mortgage note or debenture, then Depositor
      agrees to enter into a Note Servicing  Agent  Agreement with a third-party
      Agent or Depositor may serve as his own Note  Servicing  Agent,  on a form
      acceptable to the Custodian.  Said Note Servicing Agent shall be the agent
      of the Depositor and not of the Custodian,  and shall be  responsible  for
      administering   the  terms  of  the  debt  instrument  on  behalf  of  the
      Depositor's Account. Should the Note Servicing Agent ever become unwilling
      or unable to  perform  the duties  outlined  in the Note  Servicing  Agent
      Agreement,  then Depositor  understands  and agrees that all duties of the
      Note Servicing  Agent shall revert to Depositor until a successor Agent is
      named. Should Depositor fail to appoint a Note Servicing Agent,  Depositor
      understands  that he/she becomes  responsible for fulfilling the duties of
      the Note Servicing  Agent until  Depositor  names a successor  third party
      Note Servicing Agent.  Depositor understands that Custodian does not offer
      or

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Sterling Trust Company (C) 2002          12
<PAGE>

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      provide any  servicing  or  collection  duties with respect to any note or
      debt instrument,  nor will Custodian monitor the maturity date or take any
      action  with   regards  to  the  maturity  of  any  note  or  debt  unless
      specifically authorized by Depositor in writing. Should Depositor elect to
      renew or renegotiate the terms of any note or debt  instrument,  Depositor
      agrees to notify  Custodian  in writing  and provide  appropriate  written
      instructions  for Custodian to return any original note or debt instrument
      to debtor.

(e)   The Custodian  shall have no duty to monitor the performance or actions of
      any  investment  or  to  monitor  the   sufficiency  or  adequacy  of  the
      Depositor's actions or duties or those of his heirs,  successors,  agents,
      or assigns, nor shall the Custodian be required to monitor the acts of any
      paid consultant to whom the Custodian may have contractually delegated any
      duties  or   responsibilities   pursuant  to   Depositor's  or  his  Rep's
      directions;

(f)   Depositor  agrees to be responsible  for any and all  collection  actions,
      including  contracting  with a  collection  agency  or  instituting  legal
      action, and bring any other suits or actions which may become necessary to
      protect  the  rights  of the  account  as a  result  of the  operation  or
      administration of the investment(s); and

(g)   Depositor  may not direct the purchase of a life  insurance  contract or a
      "collectible" as defined in Code Section 408(m).

9.8   The  Custodian  may  value  assets of the  account  on a  quarterly  basis
      utilizing  various sources  available to it. However,  the Custodian shall
      not guarantee the accuracy of prices  obtained  from  quotation  services,
      independent  appraisal services,  investment sponsors,  or parties related
      thereto or, any other  sources.  Values for  brokerage  accounts  shall be
      equal to the total  equity value of the  account,  and shall  reflect only
      those assets which are priced by the  brokerage  firm.  Individual  assets
      held within the  brokerage  account  shall not be listed  individually  on
      statements furnished by the Custodian.

      In the absence of direction  from the  Secretary  of the  Treasurer or his
      authorized  representative  to the contrary,  the value of illiquid assets
      such  as   limited   partnerships,   limited   liability   companies,   or
      privately-held  stock, shall be determined by a fair market value from the
      investment  sponsor  or  other  source  chosen  by  Custodian  in its sole
      discretion. Promissory notes and privately-offered corporate debt may have
      valuations  reflected at the face value shown on the original note or debt
      instrument,  or if the note is such that it is subject to an  amortization
      schedule, valuation may be shown at amortized value.

      If the investment  sponsor is unwilling or unable to provide a fair market
      value,  then the Custodian may list the value of the illiquid asset at its
      original  acquisition  cost or carry forward the last known value.  Assets
      which are reported by the  investment  sponsor as having no market  value,
      are in  bankruptcy,  or other  relevant  condition  exists,  may reflect a
      valuation of zero on the Custodian's periodic statement.

      For investments that are not publicly tradeable on a securities  exchange,
      the  Custodian  shall  seek  a  valuation  of  such  securities  from  the
      sponsor/issuer of the investment. If a value is not received within ninety
      (90) days after request,  then, upon notice from the Custodian,  it is the
      duty of the Depositor to provide the Custodian  with the fair market value
      of the  investment  from the  investment  sponsor  or from an  independent
      appraisal  service of the  Depositor's  choice,  provided  such  appraisal
      service  is  acceptable  to  Custodian.  Custodian  reserves  the right to
      resolve  differences in values in any manner Custodian deems  appropriate.
      If the Depositor fails to do so, within six (6) months after notice,  then
      the  Custodian  shall be  authorized,  entitled and directed to distribute
      such  investment  in-kind  at fair  market  value,  which may be  original
      acquisition cost or the last known value, to the Depositor.

9.9   If investment(s)  selected by the Depositor or his Rep generate  Unrelated
      Business  Taxable Income (UBTI),  Depositor  understands that such income,
      when considered in conjunction with all such income from all IRA accounts,
      may be taxable to the IRA  account to the extent that all UBTI for a given
      taxable  year  exceeds  the  threshold  amount  set by the IRS  (currently
      $1000). In such instances, the IRS requires that a Form 990-T be filed for
      the IRA  account  along  with the  appropriate  amount  of tax.  Depositor
      understands  that the Custodian does not monitor the amount of UBTI in the
      IRA account, and does not prepare Form 990-T.  Depositor agrees to monitor
      UBTI for this and any other IRA  account  which he may hold,  and  further
      agrees to prepare, or have prepared, the proper 990-T tax form and forward
      it to the Custodian for filing,  along with  authorization  to pay any tax
      due from the IRA account.

9.10  The Depositor  understands  that certain  transactions  are prohibited for
      tax-exempt  IRA  accounts  under  Code  Section  4975.  Depositor  further
      understands that the  determination  of whether a transaction  directed by
      Depositor or his Rep is  prohibited  depends on all of the relevant  facts
      and  circumstances  surrounding the purchase.  The Depositor  acknowledges
      that the  determination of whether a transaction  directed by Depositor or
      his  Rep  is  prohibited   depends  on  all  of  the  relevant  facts  and
      circumstances  surrounding the purchase.  The Depositor acknowledges that,
      should the IRA account engage in a prohibited  transaction,  that the fair
      market  value of the  account  will become a taxable  distribution  to the
      Depositor  in the  taxable  year in which the  transaction  was  made.  In
      addition,  if the  Depositor  is under  age 59 1/2,  additional  premature
      distribution  penalty taxes may apply.  Depositor  hereby warrants that he
      will not enter into a  transaction,  or cause a transaction  to be entered
      into,  which is  prohibited  under  Section  4975 of the  Code.  Depositor
      further warrants that, if a transaction is questionable due to Depositor's
      relationship  to the  investment  sponsor,  that he will consult with such
      counsel and advisors as Depositor may deem necessary prior to directing or
      causing the direction of that transaction.

9.11  Without   limiting  the  generality  of  the   foregoing,   the  Depositor
      understands and  acknowledges  that Custodian will act solely as agent for
      the Depositor,  and under the instructions of the Depositor,  with respect
      to the  investment  of the  assets  of the  Account  and,  acting  in that
      capacity, shall place orders for the purchases of securities providing the
      Depositor  has  sufficient  funds in the Account or arranges to make funds
      available in advance for such purposes, and will also place orders for the
      sale of securities  provided such  securities are held by Custodian and in
      deliverable  form.  The Depositor  authorizes  the Custodian to charge the
      Account for the cost of all  securities  purchased  or  received  from the
      securities sold or delivered against payment. If the Depositor directs the
      Custodian  to place an order for a mutual  fund  investment  and there are
      insufficient funds in the account to cover the settlement cost,  Depositor
      agrees to deposit in the account  immediately  (and in any event not later
      than the settlement date) sufficient liquid funds to cover the cost of the
      investment.  Depositor  agrees  that  the  Custodian  shall  be  under  no
      obligation  whatsoever  to  extend  credit  to the  account  or  otherwise
      disburse  payment  beyond the cash balance of the account for any purchase
      of a mutual  fund  investment.  In the  event  Depositor  fails to  timely
      deposit  sufficient  funds in the  account  to cover  the cost of any such
      investment,  the  Custodian,  at its option,  may cancel the order for the
      investment  or, if the  investment  already  has been  acquired,  sell the
      investment and reimburse itself for any costs or expenses  incurred by the
      Custodian in settling the purchase order.  Depositor agrees that Custodian
      shall  not be  liable  for any  actions  taken  in  accordance  with  this
      provision, and further agrees to indemnify and hold the Custodian harmless
      for its actions in canceling a purchase order for a mutual fund investment
      in the account or selling the  investment to reimburse  itself as provided
      above.

ARTICLE X. Trust Accounts

10.1  It shall be the sole duty of the Custodian to maintain a custodial account
      in the name of the  Depositor and to make  payments and  distributions  as
      directed by the  Depositor or his Rep.  Pursuant to the  directions of the
      Depositor or his Rep, the  Custodian  shall invest and reinvest the assets
      in the custodial  account without any duty to diversify and without regard
      to whether such  investment is authorized by the laws of any  jurisdiction
      for custodial  investment,  in securities obtainable "over the counter" or
      on a recognized exchange, savings media and any other acceptable public or
      non-standard  investment  which in the sole judgment of the Custodian will
      not impose an unreasonable  administrative burden (with such determination
      by  the  Custodian  not  to be  construed  in any  respect  as a  judgment
      concerning the prudence or advisability of such investment). The custodial
      account shall reflect the amounts contributed by the Depositor,  receipts,
      investments, distributions, disbursements, and all other transactions.

10.2  The  Custodian  shall  have the  following  powers  and  authority  in the
      administration of the custodial account:

(a)   Pursuant to the Depositor's or his Rep's  directions,  to exercise or sell
      options,  conversion  privileges  or rights to  subscribe  for  additional
      securities  and to make payments  therefore,  and to invest in any annuity
      contract issued by any legal reserve life insurance company.

(b)   In the absence of specific  investment  instructions from the Depositor or
      his  Rep,  to vote in  person  or by  proxy  upon  securities  held by the
      Custodian. The Custodian shall have no responsibility to notify or forward
      to the  Depositor or his Rep any notices,  proxies,  assessments  or other
      documents  received by the  Custodian on behalf of the account  unless the
      Depositor or his Rep so requests each such document in writing.

(c)   Pursuant to the  Depositor's  directions,  to consent to or participate in
      dissolutions,  reorganizations,  consolidations, mergers, sales, transfers
      or  other  changes  in  securities  held  by the  Custodian,  and in  such
      connection,  to delegate the  Custodian's  powers and to pay  assessments,
      subscriptions and other charges.

(d)   To make, execute and deliver as Custodian any and all contracts,  waivers,
      releases or other instruments  necessary or proper for the exercise of any
      of the foregoing powers.

(e)   In the absence of specific investment  instructions from the Depositor, to
      leave any property  comprising the custodial account for safekeeping or on
      deposit,  with or without  interest,  with such  banks,  brokers and other
      custodians as the Custodian may select.

(f)   To hold any securities in bearer form or in the name of banks, brokers and
      other custodians or in the name of the Custodian without qualifications or
      description or in the name of any nominee.

(g)   To employ suitable agents and counsel and to pay their reasonable expenses
      and compensation.

(h)   To do and perform all acts or things reasonably  necessary or desirable to
      carry out the power and authority granted to the Custodian.

10.3  Custodian shall process investment directions and/or invest funds which it
      receives  in  accordance  with  Depositor's  directions  within  seven (7)
      business days of receipt of such  directions  and/or funds plus  necessary
      administrative  and processing  time.  Custodian shall be under no duty to
      credit interest or earnings on the funds received, and Depositor

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      agrees that Custodian shall not be liable for any market value  adjustment
      which may occur during or after said processing time.

10.4  The  Custodian  shall have no duty other than to follow the  directions of
      the Depositor,  his Rep, or Investment Advisor, and shall be under no duty
      to  question  said  instructions.   The  Custodian  does  not  assume  any
      responsibility  for rendering  advice with respect to the  investment  and
      reinvestment of the Depositor's  account,  and shall not be liable for any
      loss which  results  from the  exercise of control over his account by the
      Depositor, his Rep, or Investment Advisor. In the case of any solicitation
      received  by  the  Custodian  with  respect  to  the  Depositor's  account
      (including  but not limited to third party  tender  offers with respect to
      limited partnership interests in the account), the Custodian will transmit
      such materials to the Depositor (or to his Rep or Investment  Advisor,  as
      directed by the Depositor);  however, the Custodian must have at least ten
      (10) days from the date it receives  instructions  from the  Depositor (or
      his Rep or  Investment  Advisor)  to  transmit  such  instructions  to the
      soliciting party by the date specified in the solicitation.  The Custodian
      shall  have  no  obligation  to  transmit  any  solicitation  received  or
      instructions  given with respect to the Depositor's  account by other than
      regular mail, and shall not be responsible for any failure to respond to a
      solicitation  by the deadline  specified  therein due to (i) delays in the
      mail or (ii) where the Custodian has less than ten (10) days from the date
      instructions  are  received  from  the  Depositor  (or  his or her  Rep or
      Investment  Advisor) and the specified deadline for responding.  Custodian
      need not honor offers or recognize  communications  that are not addressed
      to  each  Depositor's   account  by  name.  The  Custodian  shall  not  be
      responsible  for any action taken by the  Depositor or his Rep as a result
      of  information  concerning  the  account or any  investment  which may be
      transmitted or not  transmitted to the Depositor or his Rep. The Custodian
      shall have no  responsibility  or duty to review or monitor any securities
      or other property held within the account, nor shall the Custodian be held
      liable for its  failure to act  because of the  absence of any  directions
      from the Depositor.  The Custodian  shall not be liable for the actions or
      inactions of any prior trustee,  custodian,  or other service  provider or
      agent of the Depositor  which may have  occurred  prior to the transfer of
      the IRA account assets to the Custodian. The Depositor shall indemnify and
      hold  Custodian  harmless for any losses  resulting  from the  Custodian's
      action or inaction in relation to investment  directions received from the
      Depositor, his Rep, or Investment Advisor, for the actions or inactions of
      Agents appointed by the Depositor, or by the Custodian at the direction of
      the Depositor, and for any tax consequences resulting from the Depositor's
      or Rep's direction to engage in any unauthorized transaction, including an
      investment in life insurance  contracts,  investment in  collectibles,  or
      engaging in a  prohibited  transaction  as defined in Section  4975 of the
      Code.

ARTICLE XI. Beneficiary Designation

11.1  The  Depositor  may from  time to time  designate,  upon  such form as the
      Custodian shall prescribe,  any person, trust or persons,  contingently or
      successively,  to whom the Custodian shall pay the Depositor's interest in
      the  custodial  account  in the  event  of his  death.  Such  primary  and
      contingent beneficiary  designation shall be effective when filed with the
      Custodian and shall revoke all prior beneficiary  designations made before
      that date by Depositor.

11.2  If a Depositor  fails to name a  beneficiary  in  accordance  with Section
      11.1, or if all  beneficiaries  named by a Depositor  predecease him, then
      the  remaining  balance of the  custodial  account shall be payable to the
      spouse  of the  Depositor,  or if there is no spouse  living,  then to the
      estate of the Depositor.

11.3  When and after  distributions of the custodial  account to the Depositor's
      beneficiary  commence,  all rights and  obligations of the Depositor under
      this Agreement shall inure to, and be exercised by, such beneficiary.

11.4  If the beneficiary  designated to receive payments hereunder is a minor or
      person of  unsound  mind,  whether so  formally  adjudicated  or not,  the
      Custodian, in its discretion,  may make such payment to such person as may
      be acting as parent, guardian, committee, conservator, custodian, or legal
      representative  of such minor or  incompetent  and the receipt of any such
      person as selected by the Custodian shall be a full and complete discharge
      to the Custodian for any sums so paid.

ARTICLE XII. Payout of Benefits

12.1  If the  Depositor  has  selected  a  distribution  option  involving  life
      contingencies,  the  Depositor  may direct the  Custodian  to utilize  the
      amount in the custodial  account  which would  otherwise be available as a
      lump sum  distribution to purchase an annuity from such insurance  company
      as the Depositor may select to satisfy the  requirements  of Article IV of
      this Agreement.

12.2  Depositor's election as to the method of distribution under Section 4.3 of
      this  Agreement must be made at least thirty (30) days before the Required
      Beginning  Date,  which  is  defined  as  April  1 of  the  calendar  year
      immediately following the calendar year in which the Depositor reaches age
      70 1/2. If no election is made, the Custodian will make distributions over
      a period not to exceed the Depositor's single life expectancy.

12.3  When determining the amount to be distributed for the second  distribution
      calendar year and subsequent  distribution calendar years, the Depositor's
      life  expectancy  (or the joint life  expectancy  of the Depositor and his
      named beneficiary) shall not be recalculated  unless such recalculation is
      elected by the Depositor on a form acceptable to the Custodian.

ARTICLE XIII. Duties, Records, Reports

13.1  The Custodian's sole duties to the Depositor  regarding reporting shall be
      to send  Depositor a copy or  facsimile  of IRS Form 5498 and/or an annual
      calendar  year  statement of the assets of the account  within time frames
      established  by the IRS.  The  Custodian  may,  but is not  obligated  to,
      furnish periodic reports to the Depositor detailing transactions performed
      under  this  custodial  account  and the value of assets  held  within the
      account.

13.2  The Custodian shall have no liability or  responsibility  for transactions
      reported or not  reported on any periodic or annual  statement  unless the
      Depositor or his Rep file written  exceptions or objections within 60 days
      after  receipt  of the  report  or  statement.  Upon  receipt  of  written
      notification   under  this   Section,   the   Custodian's   liability  and
      responsibility shall be to fully investigate the exceptions or objections,
      and make any adjustments,  correct any entries, or otherwise reconcile the
      account as may be necessary.  If any such  adjustments or corrections  are
      required,  the Custodian shall issue a revised statement for the reporting
      period(s) in question.

ARTICLE XIV. Fees and Expenses

14.1  EXCEPT AS PROVIDED IN SECTION 9.2, THE  DEPOSITOR  SHALL BE CHARGED BY THE
      CUSTODIAN FOR ITS SERVICES HEREUNDER IN ACCORDANCE WITH THE CURRENT POSTED
      FEE SCHEDULE OF THE CUSTODIAN AS IT MAY BE AMENDED FROM TIME TO TIME.  ANY
      INCOME TAXES OR OTHER TAXES OF ANY KIND WHATSOEVER THAT MAY BE LEVIED UPON
      OR IN RESPECT OF THE CUSTODIAL  ACCOUNT,  ANY TRANSFER  TAXES  INCURRED IN
      CONNECTION WITH THE INVESTMENT AND REINVESTMENT OF ASSETS IN THE CUSTODIAL
      ACCOUNT, AND ALL OTHER  ADMINISTRATIVE  EXPENSES INCURRED BY THE CUSTODIAN
      IN THE  PERFORMANCE  OF ITS  DUTIES,  INCLUDING  FEES FOR  LEGAL  SERVICES
      RENDERED TO THE CUSTODIAN AND  COMPENSATION OF THE CUSTODIAN SHALL BY PAID
      BY THE DEPOSITOR AND THE DEPOSITOR  HEREBY COVENANTS AND AGREES TO PAY THE
      SAME.

14.2  In the  event  the  Depositor  shall at any  time  fail to  discharge  any
      liability  under  this  Article,  such  liability  shall be charged to the
      custodial  account,  and the Custodian may liquidate such of the assets of
      the custodial account for such purposes as in its sole discretion it shall
      determine.  Notwithstanding any provisions of this Agreement, all payments
      under  this  Article  and the  liquidations  of  assets  to  obtain  funds
      therefore may be made without the approval or direction of the  Depositor.
      If the custodial account is not sufficient to satisfy such liability,  the
      Depositor shall be liable for any deficiency.

14.3  THE  CUSTODIAN'S  CURRENT  POSTED FEE  SCHEDULE MAY BE AMENDED AT ANY TIME
      UPON 30 DAYS' WRITTEN NOTICE TO THE DEPOSITOR.  THE CUSTODIAN RESERVES THE
      RIGHT  TO  CHARGE  FEES  IN  ADDITION  TO  ITS  POSTED  FEE  SCHEDULE  FOR
      EXTRAORDINARY  OR SPECIAL  SERVICES,  OR FOR  UNFORESEEN  EXPENSES  TO THE
      ACCOUNT, INCLUDING LEGAL EXPENSES INCURRED BY THE CUSTODIAN. THE CUSTODIAN
      DOES  NOT  PRORATE  FEES.  ON A  FORM  ACCEPTABLE  TO THE  CUSTODIAN,  THE
      DEPOSITOR MAY ELECT TO PAY FEES DIRECTLY,  OR HAVE THEM WITHDRAWN FROM THE
      ASSETS  OF  THE  ACCOUNT.  TERMINATION  FEES  ARE  DUE  AND  PAYABLE  UPON
      DISTRIBUTION  TO THE  DEPOSITOR  OR UPON  TRANSFER  TO ANOTHER  TRUSTEE OR
      CUSTODIAN.

ARTICLE XV. Amendment and Termination

15.1  The Depositor  irrevocably  delegates to the Custodian the right and power
      to amend this Agreement.  Except as hereafter provided, the Custodian will
      give the Depositor 30 days' written notice of any amendment.  In case of a
      retroactive  amendment required by law, the Custodian will provide written
      notice  to the  Depositor  of the  amendment  within  30  days  after  the
      amendment is made,  or if later,  by the time that notice of the amendment
      is required to be given under  regulations or other  guidance  provided by
      the IRS.  The  Depositor  shall be  deemed to have  consented  to any such
      amendment  unless the  Depositor  notifies  the  Custodian to the contrary
      within 30 days after notice to the Depositor  and requests a  distribution
      or transfer of the balance of the account. The Custodian's termination fee
      shall be applicable to any account so distributed or transferred.

15.2  The  Depositor  may  terminate  this  agreement at any time by delivery of
      written  notice  of  such   termination   to  the  Custodian.   Upon  such
      termination,   the  Custodian  shall  continue  to  hold  the  assets  and
      distribute  them in  accordance  with  the  previous  instructions  of the
      Depositor  and the  provisions  of this  Agreement  unless  the  Custodian
      receives other  instructions from the Depositor (such as those involving a
      rollover)  which the Custodian may follow,  without  liability and without
      any duty to ascertain  whether such payout is proper under the  provisions
      of the Code or of any other plan.

15.3  Upon request of the Depositor in writing to the  Custodian,  the Custodian
      shall transfer all assets in the custodial account to the Depositor,

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      to a  qualified  retirement  plan,  or to  another  individual  retirement
      account  established  by  the  Depositor.  The  Custodian  is  authorized,
      however, to reserve such sum of money or property as it may deem advisable
      for payment of all its fees, compensation,  costs and expenses, or for any
      other  liabilities  constituting  a  charge  against  the  assets  of  the
      custodial  account  or against  the  Custodian,  with any  balance of such
      reserve  remaining  after the payment of all such items to be paid over to
      the successor custodian or custodian.

ARTICLE XVI. Resignation or Removal of Custodian

16.1  Upon written notice to the Custodian, the Depositor may remove it from its
      office  hereunder.  Such  notice,  to  be  effective,  shall  designate  a
      successor   custodian  or  custodian  and  shall  be  accompanied  by  the
      successor's written acceptance.  The Custodian may at any time resign upon
      thirty (30) days'  written  notice to  Depositor,  whereupon the Depositor
      shall appoint a successor to the Custodian. In the event of resignation of
      the Custodian and failure to appoint a qualified successor,  the Custodian
      may appoint a successor trustee or custodian,  or distribute the assets of
      the IRA account to the Depositor.

16.2  The successor trustee or custodian shall be a bank,  insured credit union,
      or other person  satisfactory to the Secretary of the Treasury pursuant to
      Section  408(a)(2) of the Code.  Upon receipt by the  Custodian of written
      acceptance by its successor of such successor's appointment, the Custodian
      shall  transfer and pay over to such successor the assets of the custodial
      account  and all  records  (or copies  thereof)  of  Custodian  pertaining
      thereto.  The  Custodian is  authorized,  however,  to reserve such sum of
      money or  property as it may deem  advisable  for payment of all its fees,
      compensation,  costs and expenses, or for payment of any other liabilities
      constituting a charge on or against the assets of the custodial account or
      on or against the  Custodian,  with any balance of such reserve  remaining
      after  the  payment  of all such  items to be paid  over to the  successor
      trustee or custodian.

16.3  The  Custodian  shall  not be  liable  for the  acts or  omissions  of its
      successor.

ARTICLE XVII. Miscellaneous

17.1  Neither the Depositor nor any  beneficiary of the Depositor shall have any
      right to pledge, hypothecate,  anticipate or in any way create a lien upon
      any  assets  or  part  of  the  custodial  account.  Distributions  to the
      Depositor,   his   beneficiaries,    spouse,   heirs-at-law,    or   legal
      representatives,  excepting  minors and persons  under  legal  disability,
      shall  be  made  only  to  them  and  upon  their  personal  receipts  and
      endorsements  and  no  interest  in the  custodial  account,  or any  part
      thereof,  shall  be  assignable  in  anticipation  of  payment  either  by
      voluntary or involuntary  act, or by operation of law, or be liable in any
      way for the  debts  or  defaults  of such  Depositor,  his  beneficiaries,
      spouse, or heirs-at-law.  The provisions of this paragraph shall not apply
      to the extent that they violate any applicable law.

17.2  The  custodial  account  created  hereunder  is created for the  exclusive
      benefit of the Depositor or his beneficiaries,  and at no time shall it be
      possible  for any part of the assets of the  custodial  account to be used
      for or diverted to purposes  other than for the  exclusive  benefit of the
      Depositor or his beneficiaries.

17.3  Notwithstanding  the  provisions of Sections  17.1 and 17.2 above,  in the
      event  the  Depositor  and the  Depositor's  spouse  obtain  a  Separation
      Instrument,  as described in Section  408(d)(6) of the Code, the Depositor
      may direct the Custodian in writing to transfer the appropriate portion of
      the assets in the Depositor's  account directly to the Depositor's  former
      spouse or to an IRA maintained by the Depositor's former spouse,  provided
      the transfer is in accordance  with the Separation  Instrument,  a copy of
      which shall be furnished to the  Custodian.  The transfer of assets to the
      Depositor's  former  spouse  may be in  cash  or  in-  kind,  pursuant  to
      directions contained in the Separation Instrument.

17.4  THE CUSTODIAN  SHALL BE UNDER NO DUTIES  WHATSOEVER  EXCEPT SUCH DUTIES AS
      ARE SPECIFICALLY SET FORTH IN THIS AGREEMENT. THE CUSTODIAN SHALL BE FULLY
      PROTECTED IN ACTING UPON ANY INSTRUMENT, CERTIFICATE, OR PAPER BELIEVED BY
      IT TO BE GENUINE  AND TO BE SIGNED OR  PRESENTED  BY THE PROPER  PERSON OR
      PERSONS,   AND  THE  CUSTODIAN   SHALL  BE  UNDER  NO  DUTY  TO  MAKE  ANY
      INVESTIGATION OR INQUIRY AS TO ANY STATEMENT CONTAINED IN ANY SUCH WRITING
      BUT MAY ACCEPT THE SAME AS  CONCLUSIVE  EVIDENCE OF THE TRUTH AND ACCURACY
      OF THE STATEMENTS THEREIN CONTAINED. THE DEPOSITOR SHALL AT ALL TIMES DULY
      INDEMNIFY  AND SAVE HARMLESS THE  CUSTODIAN  FROM ANY LIABILITY  WHICH MAY
      ARISE  HEREUNDER  EXCEPT  LIABILITY  ARISING FROM THE GROSS  NEGLIGENCE OR
      WILLFUL MISCONDUCT OF THE CUSTODIAN.

17.5  THE  PARTIES  AGREE  THAT,  UPON THE  REQUEST OF EITHER  DEPOSITOR  OR THE
      CUSTODIAN,  WHETHER  MADE  BEFORE  OR AFTER THE  INSTITUTION  OF ANY LEGAL
      PROCEEDING,  ALL CLAIMS AND  DISPUTES  OF EVERY TYPE AND MATTER  WHICH MAY
      ARISE BETWEEN  DEPOSITOR  AND THE CUSTODIAN  SHALL BE SUBMITTED TO BINDING
      ARBITRATION  BEFORE A PANEL OF ARBITRATORS  (AS DESCRIBED  BELOW),  OF AND
      PURSUANT TO THE RULES OF THE  AMERICAN  ARBITRATION  ASSOCIATION  ("AAA");
      THAT SUCH  ARBITRATION  HEARINGS AND PROCEEDINGS  SHALL TAKE PLACE ONLY IN
      MCLENNAN  COUNTY,  TEXAS OR ANOTHER SITE SELECTED BY CUSTODIAN IN ITS SOLE
      DISCRETION;  THAT THIS ARBITRATION  PROVISION AND THE ARBITRATION SHALL BE
      ADMINISTERED  BY THE AAA PURSUANT TO AND CONSTRUED AND ENFORCED  UNDER THE
      FEDERAL  ARBITRATION  ACT (TITLE 9 OF THE  UNITED  STATES  CODE)  ("FAA");
      HOWEVER, IF THE FAA IS INAPPLICABLE FOR ANY REASON, SUCH ARBITRATION SHALL
      BE CONDUCTED  PURSUANT TO TEXAS LAW;  THAT THERE SHALL BE NO CLASS ACTION,
      CLASS OR CONSOLIDATED ARBITRATION;  THAT THE PREVAILING PARTY IN ANY CLAIM
      OR DISPUTE OF ANY TYPE  BETWEEN  THE  DEPOSITOR  AND THE  CUSTODIAN  SHALL
      RECOVER HIS/HER/ITS ATTORNEYS' FEES, COSTS AND EXPENSES, INCLUDING WITHOUT
      LIMITATION,   ARBITRATION  FILING  FEES,   ARBITRATORS'  FEES,  AND  OTHER
      ARBITRATION  FEES; AND THAT THIS  ARBITRATION  AGREEMENT  SHALL GOVERN ANY
      DISPUTES  INVOLVING  DEPOSITOR  AND  THE  CUSTODIAN   NOTWITHSTANDING  ANY
      PROVISIONS,  INCLUDING WITHOUT LIMITATION VENUE OR ARBITRATION PROVISIONS,
      CONTAINED IN ANY AGREEMENT SIGNED BY CUSTODIAN IN ITS CUSTODIAL  CAPACITY.
      ANY ARBITRATION  PROCEEDING SHALL BE CONDUCTED BY A PANEL OF THREE NEUTRAL
      ARBITRATORS  UNLESS THE PARTIES AGREE OTHERWISE.  EACH ARBITRATOR SHALL BE
      AN ATTORNEY  LICENSED BY THE STATE OF TEXAS,  HAVING AT LEAST TEN YEARS OF
      EXPERIENCE  IN THE  FIELD  OF  FINANCIAL  INDUSTRIES.  IF  ARBITRATION  IS
      REQUESTED  AS  DESCRIBED  ABOVE,  THE  PARTIES  EXPRESSLY  WAIVE ANY RIGHT
      HE/SHE/IT  MAY HAVE TO  INSTITUTE  OR CONDUCT  LITIGATION  OR  ARBITRATION
      BEFORE ANY OTHER BODY OR  TRIBUNAL.  THE PARTIES  FURTHER  AGREE THAT IF A
      PARTY IS REQUIRED TO ENFORCE THIS ARBITRATION  AGREEMENT AGAINST THE OTHER
      PARTY  AND/OR TO COMPEL THE OTHER  PARTY TO  ARBITRATION  PURSUANT TO THIS
      AGREEMENT,  THE  PARTY  SHALL  RECOVER  FROM THE OTHER  PARTY  HIS/HER/ITS
      ATTORNEYS'  FEES,  COSTS AND  EXPENSES SO INCURRED.  ARBITRATION  SHALL BE
      FINAL AND BINDING UPON THE PARTIES.

17.6  The custodial  account created hereunder may be utilized by an employer in
      conjunction  with  IRS  FORM  5305-SEP  or  other  approved  prototype  or
      individually-designed  document to establish a Simplified Employee Pension
      (SEP) Plan.

17.7  Any notice or statement  which the Custodian is required to give hereunder
      shall be deemed  given when mailed to the  intended  recipient at his last
      known address.  Any notice or statement to be given to the Custodian shall
      be deemed given only when actually received by the Custodian.

17.8  Words used in the masculine  shall apply to the feminine where  applicable
      and wherever the context of this  Agreement  indicates the plural shall be
      read as the singular, and the singular as the plural.

17.9  The captions of Articles in this  Agreement  are included for  convenience
      only and shall not be considered a part of, or an aid to, the construction
      of this Agreement.

17.10 This Agreement is intended to qualify under Section 408(a) of the Code and
      if any term or provision hereof is subject to more than one interpretation
      or  construction,  such  ambiguity  shall  be  resolved  in  favor of that
      interpretation or construction which is consistent with that intent.

17.11 This  Agreement is accepted by the Custodian in, and  administered  under,
      the laws of the State of Texas.  All  contributions to the Custodian shall
      be deemed to take place in the State of Texas.

      GOVERNING LAW. THIS AGREEMENT AND ALL AMENDMENTS  HERETO SHALL BE GOVERNED
      BY AND  CONSTRUED  IN  ACCORDANCE  WITH  THE  LAWS OF THE  STATE  OF TEXAS
      APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED THEREIN.

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Sterling Trust Company (C) 2002          15
<PAGE>

                                                                         [LOGO]
                                                                        STERLING
Traditional IRA                                                          TRUST
Disclosure Statement                                                    COMPANY
--------------------------------------------------------------------------------

Sterling Trust Company presents the following  Disclosure  Statement pursuant to
Internal  Revenue  Service   Regulations  which  require  that  the  information
contained  therein be given to  individuals  for whom an  Individual  Retirement
Account (hereinafter "IRA" or "account") is established.

A. Right of revocation

Regulations  of the  Internal  Revenue  Service  require  that  this  Disclosure
Statement  be given to a  participant  at least seven days before the account is
established,  or, the  participant  may revoke the account within at least seven
days after it is established.  Copies of the Adoption Agreement establishing the
IRA and related documents are included in the booklet containing this Disclosure
Statement. By executing the Adoption Agreement,  you acknowledge receipt of this
Disclosure  Statement.  Accordingly,  you are  entitled to revoke the IRA within
seven days after the date of your  execution  of the  Adoption  Agreement.  Such
revocation may be made only by written notice which at your option may be mailed
or delivered to Sterling Trust Company as follows:

        Mailing address:   Sterling Trust Company
                           Post Office Box 2526
                           Waco, Texas 76702-2526

        Delivery address:  Sterling Trust Company
                           7901 Fish Pond Road
                           Waco, Texas 76710

If  mailed,  the  revocation  notice  shall be deemed  mailed on the date of the
postmark (or if by registered or certified  mail,  the date of  registration  or
certification)  if deposited in the mail in the United  States in an envelope or
other appropriate wrapper, first class postage prepaid, properly addressed. Upon
revocation within the seven-day  period,  Sterling Trust Company will return the
current fair market value of the amount contributed to the IRA, without penalty,
service charge, or administrative expense.

B. Statutory requirements of an IRA - Code Sec. 408(a)

An  individual  retirement  account  is a trust  account  created  by a  written
governing instrument that meets the following requirements:

1. The custodian or custodian  must be a bank,  federally  insured credit union,
savings and loan  association,  or another person eligible to act as a custodian
or custodian.

2.  Except  for  rollovers  and  direct  transfers  (the  tax free  transfer  of
retirement  funds from one  retirement  plan to  another,  described  below) and
employer  contributions  to a simplified  employed  pension plan or SIMPLE plan,
contributions may not exceed the lesser of 100% of your compensation,  or $3,000
for tax years 2002-2004,  $4,000 for years 2005-2007,  $5,000 for 2008, with the
potential for  cost-of-living  adjustment in 2009 and beyond.  The  contribution
must be in cash. At no time may the  contribution  ever exceed more than 100% of
compensation.

3. You will have a nonforfeitable interest in the account.

4. No part of the trust funds will be invested in life  insurance  contracts nor
may the assets be commingled  with other property  except in a common trust fund
or common investment fund.

5. You may not invest the assets of your IRA in  collectibles  (as  described in
Section  408(m) of the Internal  Revenue  Code). A collectible is defined as any
work of art, rug or antique, metal or gem, stamp or coin, alcoholic beverage, or
any other  tangible  personal  property  specified by the IRS.  However,  if the
Custodian  permits,  specially  minted US gold,  silver and  platinum  coins and
certain state-issued coins are permissible IRA investments.  Beginning on 1/1/98
you may also invest in certain gold, silver, platinum or palladium bullion. Such
bullion must be permitted by the Custodian  and held in the physical  possession
of the IRA trustee or custodian.

6. Your  interest in your IRA must begin to be  distributed  to you by the April
1st  following  the  calendar  year you attain the age of 70 1/2. The methods of
distribution,  election deadlines, and other limitations are described in detail
below.

C. Limitations and Restrictions on the Deduction or an IRA - Code Sec. 219

Eligible individuals

You are  permitted  to make a regular  contribution  to your IRA for any taxable
year  prior  to the  taxable  year you  attain  age 70 1/2,  and if you  receive
compensation for such taxable year. Compensation includes salaries, wages, tips,
commissions,  bonuses,  alimony,  royalties  from  creative  efforts and "earned
income" in the case of  self-employees.  The amount that is deductible,  depends
upon  whether  or not  you  are  an  active  participant  in a  retirement  plan
maintained  by your  employer;  your adjusted  gross income (AGI);  your marital
status; and your tax filing status.

Maximum contribution allowance

The maximum  amount you may contribute for any one year is the lesser of 100% of
your  compensation  or,  $3,000  for  tax  years  2002-2004,  $4,000  for  years
2005-2007,  $5,000 for 2008, with the potential for cost-of-living adjustment in
2009 and beyond.  This is your contribution  limit. The deductibility of regular
IRA contributions  depends upon your marital status, tax filing status,  whether
or not you are an "active participant" and your AGI.

Catch-Up Contributions

If you will attain the age of 50 by the end of the taxable year  (December  31),
you may make an  additional  "Catch-Up"  contribution  to your IRA.  The maximum
additional contribution limit is $500 for tax years 2002-2005 and $1,000 for tax
years 2006 and beyond.

Active participant

You are considered an active  participant if you  participate in your employer's
qualified pension,  profit-sharing,  or stock bonus plan qualified under Section
401(a) of the  Internal  Revenue  Code ("the  Code");  qualified  annuity  under
Section 403(a) of the Code; a simplified  employee pension plan (SEP); a Savings
Incentive Match Plan for Employees (SIMPLE);  a retirement plan established by a
government  for its  employees  (this  does not  include  a Section  457  plan);
tax-sheltered  annuities or custodial accounts under Section 403(b) of the Code;
and pre-1959 pension trusts under Section 501(c)(18) of the Code.

If you are not sure whether you are covered by an employer-sponsored  retirement
plan,  check with your employer or check your Form W-2 for the year in question.
The W-2 form will have a check in the "pension plan" box if you are covered by a
retirement plan. You can also obtain IRS Publication 923 for more information on
active participation in retirement plans for IRA deduction purposes.

Deductibility of regular contributions

If neither you or your spouse is an active participant in a qualified retirement
plan (including  qualified  pension,  profit sharing or stock bonus plans,  tax-
sheltered annuity plans,  Simplified Employee Pension (SEP) Plans, SIMPLE Plans,
certain government-sponsored plans, and plans described under Section 501(c)(18)
of the Internal  Revenue Code),  then you may deduct the full amount of your IRA
contribution without regard to your adjusted gross income or filing status.

If  you or  your  spouse  is an  active  participant  in an  employer  sponsored
retirement plan, you may be entitled to only a partial (reduced) deduction or no
deduction  at all,  depending  on your level of adjusted  gross income (AGI) and
your filing status.  Your deduction begins to decrease (phase out) when your AGI
falls  within  the  thresholds  set forth for the tax year as shown in the table
below, and a calculation must be made to determine your deductible limit for the
year.  Your  deduction is eliminated  altogether  when it reaches or exceeds the
upper threshold of the scale.

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Sterling Trust Company (C) 2002          16
<PAGE>

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

For contributions  made for taxable years,  beginning 2002 and after, the dollar
thresholds for active participants in employer-sponsored plans are as follows:

              Married Participants          Single Participants
              --------------------------------------------------
2002          $ 54,000 - $ 64,000           $ 34,000 - $ 44,000
2003          $ 60,000 - $ 70,000           $ 40,000 - $ 50,000
2004          $ 65,000 - $ 75,000           $ 45,000 - $ 55,000
2005          $ 70,000 - $ 80,000           $ 50,000 - $ 60,000
2006          $ 75,000 - $ 85,000           $ 50,000 - $ 60,000
2007          $ 80,000 - $100,000           $ 50,000 - $ 60,000

Married persons filing  separate  returns (who lived together at any time during
the year) have a  beginning  threshold  of zero.  Therefore  the phase out range
remains $0 - $10,000, the same as for pre-1998 years.

Nondeductible contributions

Even if you are not eligible for an IRA  deduction  or full  deduction,  the law
allows you to make a nondeductible  contribution up to the maximum of the lesser
of the  amounts  described  previously  above  or  100% of  compensation.  These
contributions,  while  not  currently  excludable  from  income,  do  accumulate
tax-deferred  earnings  until the account is  distributed.  The total  amount of
deductible  and  nondeductible  contributions  still must not exceed the maximum
amounts stated above.

You are responsible for reporting nondeductible contributions to the IRS on Form
8606,  filed with your annual tax filing.  In addition,  you are responsible for
keeping records as to the cumulative amount of nondeductible  contributions made
to your IRA.  You may be subject to IRS  penalties  should  you  overstate  your
nondeductible amount or fail to file Form 8606.

No deduction is allowed  with respect to a rollover  contribution  (the tax free
transfer of  retirement  funds from one  retirement  plan to another,  described
below).

Your employer may make a Simplified  Employer Pension (SEP) contribution on your
behalf  into this IRA up to the  lesser of 25% of your  compensation  or $40,000
(subject to annual cost of living adjustments, if any, announced by the IRS, for
tax years 2003 and following). This limit is a per employer limit. Your employer
may contribute to this IRA or any other IRA on your behalf under a SEP plan even
if you are age 70 1/2 or over,  and even if you are  covered  under a  qualified
plan of another employer for the year.

The contribution to your IRA reduces your gross income.  Therefore,  even if you
do not itemize your deductions and you use the standard deduction, you may still
claim a deduction for contributions to your IRA.

You must make  contributions  to your account prior to April 15th  following the
year in which you claim the deduction.

Tax Credits for Contributions

For tax years between 2002 and 2006, you may be eligible to receive a tax credit
on your IRA  contribution.  This tax credit is in addition to any deduction that
may be allowed, and may not exceed $1,000 in any given year. You may be eligible
for a tax credit if you are a) age 18 or older,  b) not a  dependent  of another
tax payer, and c) not a full time student.

The credit is based on income levels as shown in the chart below and will
range from 0 to 50 percent of eligible contributions not exceeding $2,000.

Joint Return*          Head of Household*    All other cases*         %
--------------------------------------------------------------------------------
     $1 - $30,000           $1 - $22,500          $1 - $15,000        50
$30,001 - $32,500      $22,501 - $24,375     $15,001 - $16,250        20
$32,500 - $50,000      $24,376 - $37,500     $16,251 - $25,000        10
Over      $50,000      Over      $37,500     Over      $25,000         0

*Adjusted Gross Income (see your tax advisor for more information)

Age 70 1/2.

No deduction  will be allowed for  contributions  made for the tax year in which
you attain age 70 1/2.

Marital status.

Since a deduction is available to each eligible individual,  your marital status
and whether or not you file a joint return will have no effect on  contributions
to an IRA. Both husband and wife can claim the  deduction if each  individual is
eligible and each adopts a separate  IRA. If they do, the  deduction is computed
separately for each spouse whether or not they file a joint tax return.

Community  property laws of a state or other  jurisdiction do not apply to IRAs.
Therefore,  you and your spouse must meet the  qualifications  individually  and
determine the amount of deductible  contributions on the income that each of you
has earned individually.  You may not claim a deduction based on the earnings of
your spouse, even though a state's law may provide that each spouse owns half of
the income.

The deductible  contribution  limitation is increased if you make a contribution
to an IRA established for your non-compensated spouse. (See SECTION "L" below.)

D. Prohibited transactions

If you or your beneficiary engage in a prohibited  transaction described in Code
Sec.  4975,  the entire  account will lose its exemption  from tax, and you must
include  the fair  market  value of the  account in your  income for the year in
which the prohibited  transaction took place. In addition, you may incur certain
penalties for engaging in the transaction as well as the premature  distribution
penalty  tax if you are under age 59 1/2 (see  below).  Examples  of  prohibited
transactions are the borrowing of the income or corpus from an account,  selling
property  to or  buying  property  from the  account,  or  receiving  more  than
reasonable compensation for service performed for the account.

E. Pledging account as security

If you use your  account or any  portion  thereof as  security  for a loan,  the
portion so used is treated as  distributed  to you and may be subject to the 10%
penalty tax on premature  distributions if you are under are 59 1/2 (see below).
Accordingly,  if you  invest in  securities,  you may not sell  short or execute
purchases in an amount greater than available cash.

F. Premature distributions

If you receive a payment  from your IRA before you attain the age of 59 1/2, the
payment will be considered a premature  distribution,  unless it falls under one
of the following exceptions:

(1) distributions made due to your death;

(2) distributions made due to your disability;

(3) any distribution to an alternate payee under a qualified  domestic relations
order;

(4) a series of substantially  equal periodic  payments at least annually over a
period not to exceed single or joint life expectancy;

(5)  distributions  made to pay for  medical  expenses  that exceed 7.5% of your
adjusted gross income; or

(6) distributions  made to pay health insurance  premiums by certain  unemployed
individuals;

(7) distributions made to pay for certain qualified higher education expenses;

(8) distributions  made to pay for qualified  first-time home purchases,  not to
exceed $10,000;

(9) a qualifying rollover distribution; or

(10) the timely withdrawal of the principal amount of an excess or nondeductible
contribution.

If you receive a premature distribution, the amount received is included in your
gross  income in the  taxable  year of  receipt.  In  addition,  your income tax
liability  for that  tax  year is  increased  by an  amount  equal to 10% of the
premature distribution includible in your gross income.

If your account is disqualified because you engaged in a prohibited transaction,
discussed above, the amount deemed  distributed to you is included in your gross
income. The premature  distribution penalty tax (10% of the amount of the deemed
distribution)  will also apply if you had not  attained the age of 59 1/2 before
the beginning of such tax year.

If you request a  distribution  in the form of a series of  substantially  equal
payments,  and you modify the  payments  before 5 years have  elapsed and before
attaining age 59 1/2, the 10% additional income tax will apply  retroactively to
the year payments began through the year of such modification.

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Sterling Trust Company (C) 2002          17
<PAGE>

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

G. Federal estate and gift taxes

Generally  there is no specific  exclusion  for IRAs under the estate tax rules.
Therefore,  in the event of your death,  your IRA balance will be  includible in
your gross estate for federal  estate tax purposes.  However,  if your surviving
spouse is the  beneficiary  of your IRA,  the amount in your IRA may qualify for
the marital deduction available under Section 2056 of the Internal Revenue Code.
A transfer of property for federal gift tax purposes  does not include an amount
which a beneficiary receives from an IRA plan.

H. Taxation of distributions

Taxable  distributions  from your IRA are taxed as ordinary income regardless of
their source.  They are not eligible for capital gains  treatment or the special
5-year or 10-year averaging rules that may apply to lump-sum  distributions from
qualified employer plans.

The  distributions  you receive from your IRA are subject to Federal  Income Tax
Withholding  unless you elect not to have the withholding  apply.  You may elect
not to have  withholding  apply  to  your  distribution.  If you do not  make an
election,  Federal  Income  tax  will  be  withheld  at the  rate  of 10% of the
distribution  amount.  If you  elect  not to  have  withholding  apply  to  your
distribution, or if you do not have enough Federal Income Tax withheld from your
distribution, you may be responsible for payment of estimated tax. You may incur
penalties  under the estimated tax rules if your  withholding  and estimated tax
payments are not sufficient.

Sterling  Trust will withhold state income tax according to the State Income Tax
Withholding  Requirements  chart  located on Sterling  Trust's IRA  Distribution
Request form, unless otherwise instructed. (Not applicable in all states.)

I. EXCISE TAX ON EXCESS CONTRIBUTIONS

Generally an excess IRA contribution which exceeds the contribution  limits, and
such excess  contribution is subject to a 6% excise tax penalty on the principal
amount of the excess each year until the excess is corrected.

Method of withdrawing excess in a timely manner. This 6% penalty may be avoided,
if  the  excess  amount  plus  the  earnings  attributable  to  the  excess  are
distributed by your tax filing  deadline  including  extensions for the year the
excess  contribution  was made,  and you do not take a deduction for such excess
amount.  If you decide to correct  your  excess in this  manner,  the  principal
amount of the excess returned is not taxable, however, the earnings attributable
to the excess are taxable to you in the year in which the contribution was made.
In addition,  if you are under age 59 1/2 the earnings  attributable are subject
to a 10% premature  distribution  penalty. THIS IS THE ONLY METHOD OF CORRECTING
AN EXCESS CONTRIBUTION THAT WILL AVOID THE 6% PENALTY.

Method of  withdrawing  excess after tax filing due date.  If you do not correct
your  excess  contribution  in the manner  prescribed  above by the due date for
filing your tax return, then you may withdraw the principal amount of the excess
(no earnings need be distributed).  The 6% penalty will, however, apply first to
the year in which  the  excess  was made and each  subsequent  year  until it is
withdrawn.

Undercontribution method. Another method of correcting an excess contribution is
to treat a prior year excess as a regular  contribution  in a  subsequent  year.
Basically all you do is  undercontribute  in the first subsequent year where you
have an unused  contribution limit until your excess amount is used up. However,
once  again you will be  subject  to the 6%  penalty  in the first year and each
subsequent year that an excess remains.

J. Required distributions

Taxation of  distributions.  When you start  withdrawing  from your IRA, you may
take the  distributions in regular payments,  random  withdrawals or in a single
sum payment. Generally all amounts distributed to you from your IRA are included
in your gross income in the taxable year in which they are received. However, if
you have made nondeductible contributions to your IRA, the nontaxable portion of
the  distribution,  if any,  will be a  percentage  based upon the ratio of your
unrecovered  nondeductible  contributions  to the aggregate of all IRA balances,
including SEP and rollover contributions, as of the end of the year in which you
take the distribution,  plus distributions from the account during the year. All
taxable  distributions  from your IRA are taxed at ordinary income tax rates for
federal  income tax  purposes  and are not  eligible  for either  capital  gains
treatment or 5/10 year averaging.

Age 70 1/2 required minimum  distributions.  Once you attain age 70 1/2, you are
required to take the minimum  distributions  from your IRA each year. Below is a
summary of the IRA distribution rules.

You are  required to take a minimum  distribution  from your IRA for the year in
which  you reach  age 70 1/2 and for each  year  thereafter.  You must take your
first distribution by your required beginning date, which is April 1 of the year
following  the year you  attain age 70 1/2.  The  minimum  distribution  for any
taxable year is equal to the amount  obtained by dividing your IRA balance as of
December 31 of the prior year by the applicable divisor (provided by the IRS and
located in IRS Publications 590).

The applicable divisor is generally  determined using the Uniform Lifetime Table
(provided  by the IRS).  The  table  assumes a  designated  beneficiary  that is
exactly 10 years  younger than you,  regardless  of who you  designated  as your
beneficiary(ies),  if any. If your spouse is your sole  designated  beneficiary,
and is more than 10 years younger than you, the required minimum distribution is
determined  annually  using the  actual  joint life  expectancy  of you and your
spouse  obtained  from the Joint and Last  Survivor  Table  provided by the IRS,
rather than the life expectancy divisor from the Uniform Lifetime Table.

Death Distributions

If you die,

a) On or after your required beginning date,  distributions must be made to your
beneficiary(ies)  over  the  longer  of  the  single  life  expectancy  of  your
designated beneficiary(ies), or your remaining life expectancy. If a beneficiary
other than an individual  or qualified  trust as defined in the  Regulations  is
named,  you will be treated as having no designated  beneficiary of your IRA for
the purpose of determining the distribution  period. If your IRA does not have a
designated  beneficiary,  distributions  will begin  utilizing  your single life
expectancy, reduced by one thereafter each year.

b) Before your required  beginning  date,  the entire  amount  remaining in your
account will, at the election of your designated beneficiary(ies), either

      i.    Be distributed by the December 31st of the year containing the fifth
            anniversary of your death, or

      ii.   Be distributed over the remaining life expectancy of your designated
            beneficiary(ies).

Your  designated  beneficiary(ies)  must elect either  option (i) or (ii) by the
December 31st of the year  following  the year of your death.  If no election is
made, distribution  calculations will default in accordance with option (ii). In
the case of distributions under option (ii),  distributions must commence by the
December 31st of the year following the year of your death.

If your spouse is the designated  beneficiary,  distributions  need not commence
until the  December  31st of the year you would  have  attained  age 70 1/2,  if
later.  If a  beneficiary(ies)  other than an individual  or qualified  trust as
defined in the Regulations is named, you will be treated as having no designated
beneficiary(ies)  of your  IRA for  purposes  of  determining  the  distribution
period.  If there is no designated  beneficiary of your IRA, the entire IRA must
be distributed by the December 31st of the year containing the fifth anniversary
of your death.

A spouse who is the sole designated  beneficiary of your entire IRA may elect to
redesignate your IRA at his or her own.  Regardless of whether or not the spouse
is the sole  designated  beneficiary of your IRA, a spouse  beneficiary may roll
over his or her share of the assets to his or her own IRA.

Caution  These  transactions  are  often  complex.  If you  have  any  questions
regarding minimum distributions, please see a competent tax advisor.

In any distribution  calendar year you may take more than the required  minimum.
However,  if you take  less  than  the  required  minimum  with  respect  to any
distribution  calendar  year,  you are subject to a federal excise tax of 50% of
the  difference  between the amount  required to be  distributed  and the amount
actually distributed.

K. Rollover IRAs

Rollover  contribution  from  another  IRA. A rollover  from  another IRA is any
amount  you  receive  from one IRA and roll some or all of it over into  another
IRA. You are not required to roll over the entire amount received from the first
IRA.  However,  any amount you do not roll over will be taxed at ordinary income
tax rates for federal income tax purposes.

The following special rules also apply to rollovers between IRAs:

1. The  rollover  must be completed no later than the 60th day after the day the
distribution was received by you.

2.  You may have  only one IRA to IRA  rollover  during a 12  consecutive  month
period measured from the date you received a distribution of an IRA which

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Sterling Trust Company (C) 2002          18
<PAGE>

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was rolled over to another IRA. (See IRS Publication 590 for more information.)

3. The same property you receive in a distribution must be the same property you
roll over into the second IRA. For example,  if you receive a distribution  from
an IRA of property, such as stocks, that same stock must be rolled over into the
second IRA.

4.  You are  required  to make an  irrevocable  election  indicating  that  this
transaction will be treated as a rollover contribution.

5. You are not  required  to  receive a complete  distribution  from your IRA in
order to make a rollover  contribution into another IRA, nor are you required to
roll over the entire amount you received from the first IRA.

6. If you inherit an IRA due to the death of the  participant,  you may not roll
this IRA into your own IRA unless you are the spouse of the decedent.

7. If you are age 70 1/2 or older and wish to roll over to another IRA, you must
first satisfy the minimum  distribution  requirement  for that year and then the
rollover of the remaining amount may be made.

8. Rollovers from a SEP or an Employer-IRA  follow the IRA to IRA rollover rules
since your  contributions  under these types of plans are funded  directly  into
your own IRA.

Rollovers  to Roth IRAs.  You are not  permitted  to make a  qualified  rollover
contribution  to a Roth IRA from any IRA plan (other than  another  Roth IRA) if
your AGI for the year during which the rollover is made exceeds  $100,000 or you
are a married  individual filing a separate return. AGI means the adjusted gross
income  determined  from the year during which the rollover is made, but reduced
by the taxable amount of an IRA distribution  includible in income but only with
respect  to such  amount  that  was  rolled  over  to a Roth  IRA.  Taxable  IRA
distributions  that are not rolled  over to a Roth IRA are  included  in the AGI
amount.  Qualified rollovers between Roth IRAs are permitted  regardless of your
AGI.

Taxation in Rolling Over from Traditional IRA to Roth IRA. Any rollovers from an
IRA to a Roth IRA after 12/31/98 will be fully  includible in income the year in
which rolled over.  The 10%  premature  distribution  tax shall not apply to the
taxable amount of an IRA rolled to a Roth IRA. Income tax withholding will apply
to the distribution.

Contribution  Conversion  of  Traditional  IRA  to  Roth  IRA.  Generally,   the
conversion of a traditional  IRA to a Roth IRA is treated as a distribution  and
subsequent rollover conversion  contribution.  However, if an individual decides
by their tax filing  deadline (not  including  extensions) to transfer a current
year  contribution  plus  earnings  thereon from an IRA to a Roth IRA, no amount
shall be  includible  in gross income as long as no deduction  was taken for the
contribution.  In addition,  you are permitted to "convert" a contribution  plus
earnings  from a Roth  IRA to a  traditional  IRA by your tax  filing  deadline,
including extensions.

Qualified Rollover Contribution.  This term includes: (a) Rollovers between Roth
IRA accounts;  and (b) Traditional IRA to a Roth IRA.  Qualified  rollovers must
meet the general IRA rollover  rules  outlined  above,  except that the 12 month
rollover  restriction shall not apply to rollovers between a traditional IRA and
a Roth IRA.  However,  the 12 month rule shall apply to  rollovers  between Roth
IRAs.  Rollovers  from  employer-sponsored  plans,  such as qualified  plans and
403(b)s, to a Roth IRA are not permitted.  However, you could roll over from the
employer plan to a traditional IRA, and then roll over to a Roth IRA. A rollover
conversion from a SEP IRA (provided the 2-year holding period has been met) to a
Roth IRA is permitted.

Rollovers from Employer-sponsored  Plans.  Employer-Sponsored Plans Eligible for
Rollovers  to IRAs - Rollovers  to IRAs are  permitted  if you have  received an
eligible rollover distribution from one of the following:

1. A qualified plan under Section 401(a);
2. A qualified annuity under Section 403(a); or
3. A Tax-Sheltered Annuity (TSA) or Custodial Account under Section 403(b).

Eligible rollover  distributions before 1/1/93:  Eligible rollover distributions
from a qualified plan, annuity or TSA include a qualified total distribution,  a
partial  distribution or a total  distribution  to you as an eligible  alternate
payee  under  a  qualified  domestic  relations  order  (QDRO).  (The  following
citations are from the Internal  Revenue Code prior to its  amendment  under the
Unemployment Compensation Amendments Act of 1992.)

A Qualified  Total  Distribution  includes  either a lump sum  distribution  (as
defined under  ss.402(e)(4)(A)),  a plan  termination  distribution  (as defined
under  ss.402(a)(5)(E)(i)(I)),  or  a  distribution  of  accumulated  deductible
employee  contributions  (as defined under  ss.402(a)(5)(E)(i)(III)).  A Partial
Distribution  is also  permitted to be rolled over if it meets the  requirements
under ss.402(a)(5)(D). A spouse or former spouse may make a rollover pursuant to
a  QDRO  (as  defined  under  ss.414(p))  if it  meets  the  requirements  under
ss.402(a)(6)(F).

The following special rules apply to a rollover from an employer-sponsored  plan
to an IRA:

1. The  rollover  must be completed no later than the 60th day after the day the
distribution was received by you.

2.  You are  required  to make an  irrevocable  election  indicating  that  this
transaction will be treated as a rollover contribution.

3. You are not required to  contribute  the entire  amount you received from the
qualified plan, qualified annuity or TSA distribution.

4. If you are age 70 1/2 or older  and wish to roll over  your  qualified  plan,
qualified  annuity or TSA  distribution  to an IRA,  your must first satisfy the
minimum  distribution  requirement  for that year and then the  rollover  of the
remaining amount may be made.

5. If your  distribution  consists  of money  which was  nondeductible  employee
contributions, these amounts may not be rolled over to an IRA.

6. If your distribution  consists of property (i.e., stocks) you may either roll
over the same property (the same stock) or you may sell the distributed property
and roll over the proceeds from the sale. This is true whether the proceeds from
the sale are more or less than the fair market value of the property on the date
of distribution.  You may not keep the property received in the distribution and
roll over cash which represents the fair market value of the property.

Conduit  IRAs  Before  1/1/93.  A  conduit  IRA is an IRA  which  contains  only
qualified total distributions from qualified plans,  annuities and TSAs. The IRA
is then used as a "holding  account" until you  subsequently  roll that IRA back
into another qualified plan,  annuity or TSA. In order to take advantage of this
conduit  treatment,  you must  establish  a  separate  IRA plan  into  which the
qualified  total  distribution  will be rolled over. When you decide to roll the
conduit IRA back into a  qualified  plan or TSA,  the entire  balance in the IRA
plan must be distributed.  However, you are not required to roll over the entire
amount  into a  qualified  plan or TSA.  Any  amounts  not  rolled  back  into a
qualified  plan or TSA will be taxed to you at  ordinary  income  tax  rates.  A
surviving  spouse who rolls a qualified  total  distribution to the spouse's own
IRA may not use that IRA as a Conduit IRA.

Eligible rollover distributions after 12/31/92:  Eligible rollover distributions
from a qualified plan,  annuity, or TSA generally include any distribution which
is not:

1. part of a series of substantially  equal payments that are made at least once
a year and that will last for:
a.) your lifetime (or your life expectancy), or
b.) your lifetime and your beneficiary's  lifetime (or joint life expectancies),
or
c.) a period of ten years or more.

2. attributable to your required minimum distribution for the year;

3.  attributable to your "after-tax"  employee  contributions to the plan, since
these amounts will be non-taxable when they are paid to you; or

4. attributable to a "hardship" distribution from a 401(k) plan.

Direct  rollover to another plan. You can elect a direct  rollover of all or any
portion  of  your  payment  that  is an  "eligible  rollover  distribution,"  as
described above. In a direct  rollover,  the eligible  rollover  distribution is
paid  directly  from the Plan to an IRA or another  employer  plan that  accepts
rollovers.  If you elect a direct  rollover,  you are not  taxed on the  payment
until you later take it out of the IRA or the employer plan, and you will not be
subject to the 20%  mandatory  income tax  withholding  otherwise  applicable to
Eligible Rollover Distributions which are paid directly to you. Your employer is
required to provide you with a Notice  regarding  the effects of electing or not
electing a direct rollover to an IRA or another employer plan. Although a direct
rollover is  accomplished  similar to a transfer,  the Custodian must report the
direct rollover on Form 5498 as a rollover contribution.

Eligible rollover  distribution paid to you. If you choose to have your eligible
rollover  distribution paid to you (instead of electing a direct rollover),  you
will receive only 80% of the payment, because the plan administrator is

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Sterling Trust Company (C) 2002          19
<PAGE><PAGE>
                                                                   EXHIBIT 4.01

THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO A NOMINEE OF DTC OR BY DTC OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITARY. UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
TO CITIGROUP GLOBAL MARKETS HOLDINGS INC. OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

No. R-1                                                 INITIAL PRINCIPAL AMOUNT
CUSIP 173073 87 5                                       REPRESENTED $45,000,000
                                                        representing 4,500,000
                                                        SEQUINS $10 per SEQUINS)

                     CITIGROUP GLOBAL MARKETS HOLDINGS INC.
                7.0% Select EQUity Indexed NoteS(SM) Based Upon
             the Common Stock of Intel Corporation Due May 27, 2005

         Citigroup Global Markets Holdings Inc., a New York corporation
(hereinafter referred to as the "Company", which term includes any successor
corporation under the Indenture herein referred to), for value received and on
condition that this Note is not redeemed by the Company prior to May 27, 2005
(the "Stated Maturity Date"), hereby promises to pay to CEDE & CO., or its
registered assigns, the Maturity Payment (as defined below), on the Stated
Maturity Date. This Note will bear quarterly payments of interest, is not
subject to any sinking fund, is not subject to redemption at the option of the
holder thereof prior to the Stated Maturity Date, and is not subject to the
defeasance provisions of the Indenture.

         Payment of the Maturity Payment with respect to this Note shall be made
upon presentation and surrender of this Note at the corporate trust office of
the Trustee in the Borough of Manhattan, The City and State of New York, in the
common stock of Intel Corporation ("Intel").

         This Note is one of the series of 7.0% Select EQUity Indexed NoteSSM
based upon the common stock of Intel Corporation due May 27, 2005 (the
"SEQUINS").

<PAGE>

INTEREST

         The SEQUINS bear interest at the rate of 7.0% per annum. Interest will
be paid in cash quarterly on each 27th day of each February, May, August and
November, commencing on August 27, 2003 (each such date, an "Interest Payment
Date").

         Interest will be payable to the persons in whose names the SEQUINS are
registered at the close of business on the Business Day preceding each Interest
Payment Date. If an Interest Payment Date falls on a day that is not a Business
Day, the interest payment to be made on such Interest Payment Date will be made
on the next succeeding Business Day with the same force and effect as if made on
such Interest Payment Date, and no additional interest will accrue as a result
of such delayed payment. Interest will be computed on the basis of a 360-day
year of twelve 30-day months.

         "Business Day" means any day that is not a Saturday, a Sunday or a day
on which the securities exchanges or banking institutions or trust companies in
the City of New York are authorized or obligated by law or executive order to
close.

PAYMENT AT MATURITY

         On the Stated Maturity Date, if the Company does not exercise its Call
Option (as described below) prior to or on such date, holders of the SEQUINS
will receive for each SEQUINS the final quarterly interest payment and the
Maturity Payment described below.

DETERMINATION OF THE MATURITY PAYMENT

         The Maturity Payment for each SEQUINS equals a number of shares of
Intel common stock equal to the Exchange Ratio. The Exchange Ratio equals
0.50556.

         In lieu of any fractional share of Intel common stock otherwise payable
in respect of any SEQUINS, at maturity each holder of a SEQUINS will receive an
amount in cash equal to the value of such fractional share. The number of full
shares of Intel common stock, and any cash in lieu of a fractional share, to be
delivered at maturity to a holder of a SEQUINS will be calculated based on the
aggregate number of SEQUINS held by such holder.

CALL OPTION

         The Company may exercise its option to call (its "Call Option") the
SEQUINS in whole, but not in part, on any Business Day beginning on June 1, 2004
through and including the Stated Maturity Date (such day being the "Call Date").
The Company will provide at least 10 Business Days' notice (as described below)
before the Call Date.

         If the Company exercises its Call Option, holders of the SEQUINS will
receive for each SEQUINS a price in cash (the "Call Price") that, together with
all other payments made on the SEQUINS from the date hereof (the "Issue Date")
to and including the Call Date, will provide a yield to call of 14.0% per annum
(compounded annually). The Call Price will be calculated by determining the
amount that, when discounted from the Call Date to the Issue Date by a discount

                                       2
<PAGE>
factor based on an annual yield to call of 14.0% (calculated on the basis of a
360-day year of twelve 30-day months, compounded annually) and added to the
present value of all interest payments made to and including the Call Date
discounted to the Issue Date by that same discount factor, will equal the
initial price of the SEQUINS. The present value of each interest payment on the
SEQUINS used to determine the Call Price will be calculated assuming each
payment is made on the calendar day scheduled for that payment. A delay in
payment may arise for reasons such as a scheduled Interest Payment Date falling
on a day that is not a Business Day and, as a result, the payment being delayed
until the next succeeding Business Day. Any such delay will not be taken into
account when calculating the Call Price. The Call Price will be rounded to the
fourth decimal place and will not include the amount of unpaid interest accrued
to and including the Call Date; however, on the Call Date holders of the SEQUINS
will receive the Call Price plus an amount equal to the accrued and unpaid
interest.

         So long as the SEQUINS are represented by this Note and are held on
behalf of DTC, notices relating to the Company's Call Option and all other
notices will be given by delivery to DTC, in which event such notice will be
deemed to have been given to holders of the SEQUINS on the seventh trading day
after the day on which such notice is delivered. If the SEQUINS are no longer
represented by this Note and are not held on behalf of DTC, notices relating to
the Company's Call Option and all other notices will be published in a leading
daily newspaper in the City of New York, which is expected to be The Wall Street
Journal.

DILUTION ADJUSTMENTS

         If Intel, after the closing date of the offering of the SEQUINS,

         (1) pays a stock dividend or makes a distribution with respect to its
         common stock in shares of the stock,

         (2) subdivides or splits the outstanding shares of its common stock
         into a greater number of shares,

         (3) combines the outstanding shares of the common stock into a smaller
         number of shares, or

         (4) issues by reclassification of shares of its common stock any shares
         of other common stock of Intel,

then, in each of these cases, the Exchange Ratio will be multiplied by a
dilution adjustment equal to a fraction, the numerator of which will be the
number of shares of common stock outstanding immediately after the event, plus,
in the case of a reclassification referred to in (4) above, the number of shares
of other common stock of Intel, and the denominator of which will be the number
of shares of common stock outstanding immediately before the event.

         If Intel, after the closing date, issues, or declares a record date in
respect of an issuance of, rights or warrants to all holders of its common stock
entitling them to subscribe for or

                                       3
<PAGE>

purchase shares of its common stock at a price per share less than the
Then-Current Market Price of the common stock, other than rights to purchase
common stock pursuant to a plan for the reinvestment of dividends or interest,
then, in each case, the Exchange Ratio will be multiplied by a dilution
adjustment equal to a fraction, the numerator of which will be the number of
shares of common stock outstanding immediately before the adjustment is
effected, plus the number of additional shares of common stock offered for
subscription or purchase pursuant to the rights or warrants, and the denominator
of which will be the number of shares of common stock outstanding immediately
before the adjustment is effected by reason of the issuance of the rights or
warrants, plus the number of additional shares of common stock which the
aggregate offering price of the total number of shares of common stock offered
for subscription or purchase pursuant to the rights or warrants would purchase
at the Then-Current Market Price of the common stock, which will be determined
by multiplying the total number of shares so offered for subscription or
purchase by the exercise price of the rights or warrants and dividing the
product obtained by the Then-Current Market Price. To the extent that, after the
expiration of the rights or warrants, the shares of common stock offered thereby
have not been delivered, the Exchange Ratio will be further adjusted to equal
the Exchange Ratio which would have been in effect had the adjustment for the
issuance of the rights or warrants been made upon the basis of delivery of only
the number of shares of common stock actually delivered.

         If Intel, after the closing date, declares or pays a dividend or makes
a distribution to all holders of the common stock of any class of its capital
stock, the capital stock of one or more of its subsidiaries, evidences of its
indebtedness or other non-cash assets, excluding any dividends or distributions
referred to in the above paragraph, or issues to all holders of its common stock
rights or warrants to subscribe for or purchase any of its or one or more of its
subsidiaries' securities, other than rights or warrants referred to in the above
paragraph, then, in each of these cases, the Exchange Ratio will be multiplied
by a dilution adjustment equal to a fraction, the numerator of which will be the
Then-Current Market Price of one share of the common stock, and the denominator
of which will be the Then-Current Market Price of one share of the common stock,
less the fair market value (as determined by a nationally recognized independent
investment banking firm retained for this purpose by the Company, whose
determination will be final) as of the time the adjustment is effected of the
portion of the capital stock, assets, evidences of indebtedness, rights or
warrants so distributed or issued applicable to one share of common stock.

         Notwithstanding the foregoing, in the event that, with respect to any
dividend or distribution to which the above paragraph would otherwise apply, the
denominator in the fraction referred to in the above formula is less than $1.00
or is a negative number, then the Company may, at its option, elect to have the
adjustment provided by the above paragraph not be made and in lieu of this
adjustment, the Maturity Payment will be deemed to be equal to the fair market
value of the capital stock, evidences of indebtedness, assets, rights or
warrants (determined, as of the date the dilution adjustment would otherwise be
effected as described below, by a nationally recognized independent investment
banking firm retained for this purpose by the Company, whose determination will
be final) so distributed or issued applicable to one share of Intel common stock
and each holder of the SEQUINS will have the right to receive at maturity cash
in an amount per SEQUINS equal to the Exchange Ratio multiplied by such fair
market value.

                                       4
<PAGE>

         If Intel, after the closing date, declares a record date in respect of
a distribution of cash, other than any Permitted Dividends described below, any
cash distributed in consideration of fractional shares of common stock and any
cash distributed in a Reorganization Event referred to below, by dividend or
otherwise, to all holders of its common stock, or makes an Excess Purchase
Payment, then the Exchange Ratio will be multiplied by a dilution adjustment
equal to a fraction, the numerator of which will be the Then-Current Market
Price of the common stock, and the denominator of which will be the Then-Current
Market Price of the common stock on the record date less the amount of the
distribution applicable to one share of common stock which would not be a
Permitted Dividend, or, in the case of an Excess Purchase Payment, less the
aggregate amount of the Excess Purchase Payment for which adjustment is being
made at the time divided by the number of shares of common stock outstanding on
the record date.

         For purposes of these adjustments:

         A "Permitted Dividend" is any quarterly cash dividend in respect of
Intel common stock, other than a quarterly cash dividend that exceeds the
immediately preceding quarterly cash dividend, and then only to the extent that
the per share amount of this dividend results in an annualized dividend yield on
the common stock in excess of 10%.

         An "Excess Purchase Payment" is the excess, if any, of (x) the cash and
the value (as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company, whose determination will
be final) of all other consideration paid by Intel with respect to one share of
common stock acquired in a tender offer or exchange offer by Intel, over (y) the
Then-Current Market Price of the common stock.

         Notwithstanding the foregoing, in the event that, with respect to any
dividend, distribution or Excess Purchase Payment to which the fifth paragraph
in this section would otherwise apply, the denominator in the fraction referred
to in the formula in that paragraph is less than $1.00 or is a negative number,
then the Company may, at its option, elect to have the adjustment provided by
the fifth paragraph in this section not be made and in lieu of this adjustment,
the Maturity Payment will be deemed to be equal to the sum of the amount of cash
and the fair market value of other consideration (determined, as of the date the
dilution adjustment would otherwise be effected as described below, by a
nationally recognized independent investment banking firm retained for this
purpose by the Company, whose determination will be final) so distributed or
applied to the acquisition of the common stock in the tender offer or exchange
offer applicable to one share of Intel common stock and each holder of the
SEQUINS will have the right to receive at maturity cash in an amount per SEQUINS
equal to the Exchange Ratio multiplied by such sum.

         Each dilution adjustment will be effected as follows:

         -        in the case of any dividend, distribution or issuance, at the
                  opening of business on the Business Day next following the
                  record date for determination of holders of Intel common stock
                  entitled to receive this dividend, distribution or issuance
                  or, if

                                       5
<PAGE>

                  the announcement of this dividend, distribution, or issuance
                  is after this record date, at the time this dividend,
                  distribution or issuance was announced by Intel;

         -        in the case of any subdivision, split, combination or
                  reclassification, on the effective date of the transaction;

         -        in the case of any Excess Purchase Payment for which Intel
                  announces, at or prior to the time it commences the relevant
                  share repurchase, the repurchase price per share for shares
                  proposed to be repurchased, on the date of the announcement;
                  and

         -        in the case of any other Excess Purchase Payment, on the date
                  that the holders of the repurchased shares become entitled to
                  payment in respect thereof.

         All dilution adjustments will be rounded upward or downward to the
nearest 1/10,000th or, if there is not a nearest 1/10,000th, to the next lower
1/10,000th. No adjustment in the Exchange Ratio will be required unless the
adjustment would require an increase or decrease of at least one percent
therein, provided, however, that any adjustments which by reason of this
sentence are not required to be made will be carried forward (on a percentage
basis) and taken into account in any subsequent adjustment. If any announcement
or declaration of a record date in respect of a dividend, distribution, issuance
or repurchase requiring an adjustment as described herein is subsequently
canceled by Intel, or this dividend, distribution, issuance or repurchase fails
to receive requisite approvals or fails to occur for any other reason, then,
upon the cancellation, failure of approval or failure to occur, the Exchange
Ratio will be further adjusted to the Exchange Ratio which would then have been
in effect had adjustment for the event not been made. If any Reorganization
Event, as described below, occurs after the occurrence of one or more events
requiring an adjustment as described herein, the dilution adjustments previously
applied to the Exchange Ratio will not be rescinded but will be applied to the
new Exchange Ratio provided for below.

         The "Then-Current Market Price" of the common stock, for the purpose of
applying any dilution adjustment, means the average Closing Price per share of
common stock for the ten Trading Days immediately before this adjustment is
effected or, in the case of an adjustment effected at the opening of business on
the Business Day next following a record date, immediately before the earlier of
the date the adjustment is effected and the related Ex-Date. For purposes of
determining the Then-Current Market Price, the determination of the Closing
Price by the calculation agent in the event of a Market Disruption Event, as
described in the definition of Closing Price, may be deferred by the calculation
agent for up to five consecutive Trading Days on which a Market Disruption Event
is occurring.

         The "Closing Price" of Intel common stock (or any other security for
which a Closing Price must be determined) on any date of determination will be
(1) if the common stock is listed on a national securities exchange on that date
of determination, the closing sale price or, if no closing sale price is
reported, the last reported sale price on that date on the principal U.S.
exchange on which the common stock is listed or admitted to trading, (2) if the
common stock is not listed on a national securities exchange on that date of
determination, or if the closing sale

                                       6
<PAGE>

price or last reported sale price is not obtainable (even if the common stock is
listed or admitted to trading on such exchange), and the common stock is quoted
on the Nasdaq National Market, the closing sale price or, if no closing sale
price is reported, the last reported sale price on that date as reported on the
Nasdaq, and (3) if the common stock is not quoted on the Nasdaq on that date of
determination or, if the closing sale price or last reported sale price is not
obtainable (even if the common stock is quoted on the Nasdaq), the last quoted
bid price for the common stock in the over-the-counter market on that date as
reported by the OTC Bulletin Board, the National Quotation Bureau or a similar
organization. If no closing sale price or last reported sale price is available
pursuant to clauses (1), (2) or (3) of the preceding sentence or if there is a
Market Disruption Event, the Closing Price on any date of determination, unless
deferred by the calculation agent as described in the preceding paragraph, will
be the arithmetic mean, as determined by the calculation agent, of the bid
prices of the common stock obtained from as many dealers in such stock (which
may include the Company or any of its other subsidiaries or affiliates), but not
exceeding three such dealers, as will make such bid prices available to the
calculation agent. A security "quoted on the Nasdaq National Market" will
include a security included for listing or quotation in any successor to such
system and the term "OTC Bulletin Board" will include any successor to such
service.

         A "Trading Day" means a day, as determined by the calculation agent, on
which trading is generally conducted (or was scheduled to have been generally
conducted, but for the occurrence of a Market Disruption Event) on the New York
Stock Exchange, the American Stock Exchange, the Nasdaq National Market, the
Chicago Mercantile Exchange and the Chicago Board Options Exchange, and in the
over-the-counter market for equity securities in the United States.

         The "Ex-Date" with respect to any dividend, distribution or issuance is
the first date on which the shares of the common stock trade in the regular way
on their principal market without the right to receive this dividend,
distribution or issuance.

         A "Market Disruption Event" means the occurrence or existence of any
suspension of or limitation imposed on trading (by reason of movements in price
exceeding limits permitted by any exchange or market or otherwise) of, or the
unavailability, through a recognized system of public dissemination of
transaction information, of accurate price, volume or related information in
respect of, (1) the shares of Intel common stock on any exchange or market, or
(2) any options contracts or futures contracts relating to the shares of Intel
common stock, or any options on such futures contracts, on any exchange or
market if, in each case, in the determination of the calculation agent, any such
suspension, limitation or unavailability is material.

         In the event of any of the following "Reorganization Events":

         -        any consolidation or merger of Intel, or any surviving entity
                  or subsequent surviving entity of Intel, with or into another
                  entity, other than a merger or consolidation in which Intel is
                  the continuing corporation and in which the common stock
                  outstanding immediately before the merger or consolidation is
                  not exchanged for cash, securities or other property of Intel
                  or another issuer;

                                       7
<PAGE>

         -        any sale, transfer, lease or conveyance to another corporation
                  of the property of Intel or any successor as an entirety or
                  substantially as an entirety;

         -        any statutory exchange of securities of Intel or any successor
                  of Intel with another issuer, other than in connection with a
                  merger or acquisition; or

         -        any liquidation, dissolution or winding up of Intel or any
                  successor of Intel,

each holder of the SEQUINS will have the right to receive a Maturity Payment per
SEQUINS of (i) cash in an amount equal to the Exchange Ratio multiplied by the
sum of clauses (1) and (2) in the definition of "Transaction Value" below and
(ii) the number of Marketable Securities received for each share of stock in the
Reorganization Event multiplied by the Exchange Ratio.

         The "Transaction Value" will be the sum of:

         (1)      for any cash received in a Reorganization Event, the amount of
                  cash received per share of common stock,

         (2)      for any property other than cash or Marketable Securities
                  received in a Reorganization Event, an amount equal to the
                  market value on the date the Reorganization Event is
                  consummated of that property received per share of common
                  stock, as determined by a nationally recognized independent
                  investment banking firm retained for this purpose by the
                  Company, whose determination will be final, and

         (3)      for any Marketable Securities received in a Reorganization
                  Event, an amount equal to the Closing Price per share of these
                  Marketable Securities on the applicable Trading Day multiplied
                  by the number of these Marketable Securities received for each
                  share of common stock.

         "Marketable Securities" are any perpetual equity securities or debt
securities with a stated maturity after the maturity date, in each case that are
listed on a U.S. national securities exchange or reported by the Nasdaq Stock
Market. The number of shares of any equity securities constituting Marketable
Securities included in the calculation of Transaction Value pursuant to clause
(3) above will be adjusted if any event occurs with respect to the Marketable
Securities or the issuer of the Marketable Securities between the time of the
Reorganization Event and maturity that would have required an adjustment as
described above, had it occurred with respect to Intel common stock or Intel.
Adjustment for these subsequent events will be as nearly equivalent as
practicable to the adjustments described above.

GENERAL

         This Note is one of a duly authorized issue of debt securities of the
Company (the "Debt Securities"), issued and to be issued in one or more series
under a Senior Debt Indenture, dated

                                       8
<PAGE>

as of October 27, 1993, as supplemented by a First Supplemental Indenture, dated
as of November 28, 1997, a Second Supplemental Indenture, dated as of July 1,
1999, and as further supplemented from time to time (the "Indenture"), between
the Company and The Bank of New York, as Trustee (the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
holders of the SEQUINS, and the terms upon which the SEQUINS are, and are to be,
authenticated and delivered.

         If an Event of Default with respect to the SEQUINS shall have occurred
and be continuing, the principal of the SEQUINS may be declared due and payable
in the manner and with the effect provided in the Indenture. In such case, the
amount declared due and payable upon any acceleration permitted by the Indenture
will be determined by the calculation agent and will be equal to, with respect
to this Note, the Maturity Payment calculated as though the Stated Maturity Date
of this Note were the date of early repayment. In case of default at Maturity of
this Note, this Note shall bear interest, payable upon demand of the beneficial
owners of this Note in accordance with the terms of the SEQUINS, from and after
Maturity through the date when payment of such amount has been made or duly
provided for, at the rate of - % per annum on the unpaid amount (or the cash
equivalent of such unpaid amount) due.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the holders of the Debt Securities of each series to
be affected under the Indenture at any time by the Company and a majority in
aggregate principal amount of the Debt Securities at the time Outstanding of
each series affected thereby. The Indenture also contains provisions permitting
the holders of specified percentages in aggregate principal amount of the Debt
Securities of any series at the time Outstanding, on behalf of the holders of
all Debt Securities of such series, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the holder of
this Note shall be conclusive and binding upon such holder and upon all future
holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange herefor or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.

         The holder of this Note may not enforce such holder's rights pursuant
to the Indenture or the SEQUINS except as provided in the Indenture. No
reference herein to the Indenture and no provision of this Note or of the
Indenture shall alter or impair the obligation of the Company to pay the
Maturity Payment with respect to this Note, and to pay any interest on any
overdue amount thereof at the time, place and rate, and in the coin or currency,
herein prescribed.

         All terms used in this Note which are defined in the Indenture but not
in this Note shall have the meanings assigned to them in the Indenture.

         Unless the certificate of authentication hereon has been executed by
the Trustee by manual signature, this Note shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purposes.

                                       9
<PAGE>

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

                                        CITIGROUP GLOBAL MARKETS HOLDINGS INC.

                                        By:  /s/  Mark I. Kleinman
                                            ------------------------------------
                                            Name: Mark I. Kleinman
                                            Title: Executive Vice President and
                                                   Treasurer

Corporate Seal
Attest:

By:  /s/  Douglas C. Turnbull
    ---------------------------
    Name: Douglas C. Turnbull
    Title: Assistant Secretary

Dated: May 30, 2003

CERTIFICATE OF AUTHENTICATION
   This is one of the Notes referred to in
   the within-mentioned Indenture.

The Bank of New York,
as Trustee

By: /s/  Geovanni Barris
    -----------------------------
    Authorized Signatory

                                       10

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