special coverage rules

[Guest JBeck]

A tax exempt entity buys a taxable entity. Tax exempt entity maintains a 403(b) program with a matching contribution made to a qualified plan established by the tax exempt entity. I read the coverage rules that I can set up a 401(k) plan for the taxable entity with matching contributions provided that all employees of the tax exempt entitly are not in the 401(k) plan and that the 401(k) plan covers 95% of the employees of the taxable entity. Is this correct?

Is there also an issue if the matching contributions for the taxable entity goes to the tax exempt entity's qualified plan?