V.R. DeAngelis M.D.P.C. & R.T. Domingo M.D.P.C., V. R. DeAngelis M.D.P.C., Tax Matters Partner, et al. - Page 20

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          reorganize the participating employers into other or separate               
          V.  VRD/RTD’s Introduction to the STEP Plan                                 
               A.  Introduction to the Plan                                           
               In late 1993, Drs. DeAngelis and Domingo were engaged in               
          estate planning with their accountant, Richard Freeman (Mr.                 
          Freeman), and an estate planning attorney, Victor Finmann (Mr.              
          Finmann).  Mr. Freeman advised Dr. DeAngelis to acquire                     
          additional life insurance coverage and suggested that he consider           
          a severance pay plan for VRD/RTD.  Mr. Freeman introduced Dr.               
          DeAngelis to Mr. Rapp.  Mr. Rapp discussed the STEP plan with Dr.           
          DeAngelis and Mr. Freeman, characterizing the plan as a way to              
          receive additional insurance coverage and to provide severance              
          benefits, both with pretax dollars.  Mr. Rapp recommended to Dr.            
          DeAngelis that VRD/RTD form a section 419 welfare benefit trust             
          because, he stated, it would secure immediate Federal income tax            
          deductions, allow the owner-employees to accumulate significant             
          wealth on a tax-deferred basis, secure assets with insurance                
          company guaranties, and protect assets from creditors.  Dr.                 
          DeAngelis discussed the STEP plan with the other doctors, their             
          wives, Mr. Finmann, and others.  Mr. Finmann advised Dr.                    
          DeAngelis that he was skeptical as to the validity of the STEP              
          plan, as promoted.                                                          

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