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EXHIBIT T3B
LIMITED LIABILITY COMPANY AGREEMENT OF
NEW MILLENNIUM HOMES, LLC
A Delaware Limited Liability Company
THIS LIMITED LIABILITY COMPANY AGREEMENT OF NEW MILLENNIUM HOMES, LLC dated
as of August 28, 1997, is adopted, executed and agreed to, for good and valuable
consideration, by and among NEW MILLENNIUM HOMES, LLC, a Delaware limited
liability company, and Jack McDonald, and any other Persons who become
Shareholders of the Company or parties hereto as provided herein.
ARTICLE 1
DEFINITIONS
1.01 Definitions. As used in this Agreement, the following terms have the
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respective meanings set forth below:
5 Percent Shareholder - has the meaning assigned to it in Section
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3.08(c).
Act - means the Delaware Limited Liability Company Act and any
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successor statute, as amended from time to time.
Agreement - means this Limited Liability Company Agreement, as amended
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from time to time.
Bankruptcy - means with respect to any Person, that (a) such Person
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(i) makes an assignment for the benefit of creditors; (ii) files a
voluntary petition in bankruptcy, (iii) is insolvent, or has entered
against such Person an order for relief in any bankruptcy or insolvency
proceeding; (iv) files a petition or answer seeking for such Person any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any Law; (v) files an answer or other
pleading admitting or failing to contest the material allegations of a
petition filed against such Person in a proceeding of the type described in
subclauses (i) through (iv) of this clause (a); or (vi) seeks, consents to
or acquiesces in the appointment of a trustee, receiver or liquidator of
such Person or of all or any substantial part of such Person's properties;
or (b) 120 days have passed after the commencement of any proceeding
seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any Law, if the proceeding
has not been dismissed, or 90 days have passed after the appointment
without such Person's consent or acquiescence of a trustee, receiver or
liquidator of such Person or of all or any substantial part of such
Person's properties, if the appointment is not vacated or stayed, or 90
days have passed after the date of expiration of any such stay, if the
appointment has not been vacated.
Board of Directors - means the Directors of the Company acting as a
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group to exercise management powers over the business and affairs of the
Company, as more fully described in Section 7.02(a).
Board Slate - has the meaning assigned to it in Section 7.02(c).
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Capital Account - means the account to be maintained by the Company
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for each Shareholder in accordance with Treasury Regulation Section 1.704-
l(b)(2)(iv), adjusted as permitted by Treasury Regulation Section 1.704-
1(b)(2)(iv)(f) and as required by the other provisions of Treasury
Regulation Section 1.704-1(b)(2)(iv) and Treasury Regulation Section 1.704-
l(b)(4).
Capital Contribution - has the meaning assigned to it in Section
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5.01(a).
Certificate - has the meaning assigned to it in Section 3.05.
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Code - means the United States Internal Revenue Code of 1986, as
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amended from time to time. All references herein to sections of the Code
shall include any corresponding provision or provisions of succeeding Law.
Common Shares - means the "Common Shares" described in Section 4.01(a)
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and having the designations, preferences and relative, participating,
optional or other special rights, powers and duties specified with respect
to Common Shares in this Agreement.
Company - means New Millennium Homes, LLC, a Delaware limited
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liability company.
Company Securities - means any equity securities of the Company,
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including, without limitation, the Common Shares and any Preferred Shares
and any other class or series of equity securities lawfully issued by the
Company. To the extent set forth in Article 4 and in any Designation
creating a class or series of Company Securities, Company Securities
represent a fractional part of the Shareholder Interests.
Delaware General Corporation Law - means Title 8 of the Delaware Code,
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as amended from time to time.
Designation - has the meaning assigned to it in Section 4.03(b).
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Director - has the meaning assigned to it in Section 7.02(a).
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Dissolution Event - has the meaning assigned to it in Section 10.01.
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Excess Interest - has the meaning assigned to it in Section 3.08.
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Indemnitee - has the meaning assigned to it in Section 7.06(a).
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Law - means any applicable constitutional provision, statute, act,
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code (including the Code) law, regulation, rule, ordinance, order, decree,
ruling, proclamation, resolution, judgment, decision, declaration, or
interpretative or advisory opinion or letter of a governmental authority.
Majority Interest - means, with respect to any matter, Shareholders
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holding Company Securities possessing a majority of the voting power of all
Outstanding Company Securities entitled to vote with respect to such
matter.
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Net Income - means, for any period, the excess, if any, of the
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Company's items of income and gain for such period over the Company's items
of loss and deduction for such period, including items described in
Sections 705(a)(1)(B) and 705(a)(2)(B) of the Code.
Net Loss or Net Losses - means, for any period, the excess, if any, of
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the Company's items of loss and deduction for such period over the
Company's items of income and gain for such period, including items
described in Sections 705(a)(1)(B) and 705(a)(2)(B) of the Code.
Newco Securities - has the meaning assigned to it in Section 7.10.
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Officer - means any Person elected as an officer of the Company as
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provided in Section 7.04, and unless the Board of Directors provides
otherwise, the Chairman of the Board; provided that such term does not
include any Person who has ceased to be an Officer of the Company or the
Chairman of the Board, as the case may be.
Opinion of Counsel - means a written opinion of counsel (who may be
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regular counsel to the Company or any Subsidiary of the Company) acceptable
to the Board of Directors, any committee thereof or any Officer.
Organizational Certificate - has the meaning assigned to it in Section
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2.01.
Outstanding - means, with respect to the Company Securities, all
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Company Securities that are issued by the Company and reflected as
outstanding on the Company's books and records as of the date of
determination.
Person - means a natural person, partnership (whether general or
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limited), limited liability company, limited liability partnership,
governmental entity, trust, estate, association, joint-venture,
corporation, custodian, nominee or any other individual or entity in its
own or any representative capacity.
Plan Effectiveness Date - means the first day on which the Official
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Committee of Unsecured Creditors' Amended Plan of Reorganization for
Baldwin Building Contractors, a California limited partnership, shall be
effective.
Preferred Shares - means any series of Preferred Shares created
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pursuant to a Designation pursuant to Section 4.03(b).
Record Holder - means the Person in whose name a Company Security is
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registered on the books and records of the Company as contemplated in
Section 3.05.
Shareholder - means any Person executing this Agreement as of the date
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of this Agreement and any person who thereafter becomes a Record Holder of
any Company Security as provided in this Agreement, but such term does not
include any Person who has ceased to be a Record Holder of any Company
Security. Shareholders are "members" (as such term is defined in the Act)
of the Company.
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Shareholder Interests - means all the limited liability company
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interests (as such term is defined in the Act) of the Shareholders,
including (i) the right to share in the income, gain, loss, deduction and
credits of, and the right to receive dividends and other distributions
from, the Company, (ii) all other rights, benefits and privileges enjoyed
by the Shareholders (under the Act, the Organizational Certificate, this
Agreement or otherwise) in their capacity as Shareholders, including rights
to vote, consent and approve and (iii) all obligations, duties and
liabilities imposed on the Shareholders (under the Act, the Organizational
Certificate, this Agreement or otherwise) in their capacity as
Shareholders.
Subsidiary - means any corporation or other entity more than 50% of
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the outstanding capital stock, membership interests or partnership
interests of which at the time of determination are owned by the Company,
whether directly or indirectly through one or more Subsidiaries, or both.
Supermajority Interest - means, with respect to any matter,
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Shareholders holding Company Securities possessing at least 75% of the
voting power of all Company Securities entitled to vote with respect to
such matter.
Tax Matters Shareholder - has the meaning assigned to it in Section
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8.03.
Transfer - has the meaning assigned to it in Section 3.08(a).
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Transfer Agent - means the Company or any bank, trust company or other
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Person appointed from time to time by the Board of Directors to act as
registrar and transfer agent for the Company Securities.
Transferee - has the meaning assigned to it in Section 3.08(a).
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Transferor - has the meaning assigned to it in Section 3.08(c).
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Treasury Regulations - means the regulations promulgated by the United
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States Department of the Treasury pursuant to and in respect of provisions
of the Code. All references herein to sections of the Treasury Regulations
shall include any corresponding provisions of succeeding, similar,
substitute, proposed or final Treasury Regulations.
Other terms defined herein have the meanings so given them.
1.02 Construction. Unless the context requires otherwise: (a) the gender
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(or lack of gender) of all words used in this Agreement includes the masculine,
feminine and neuter, (b) references to Articles and Sections refer to Articles
and Sections of this Agreement; (c) "including" means "including, without
limitation"; and (d) the Appendices attached hereto are incorporated herein by
reference.
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ARTICLE 2
ORGANIZATION
2.01 Formation. The Company has been organized as a Delaware limited
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liability company by the filing of a Certificate of Formation under and pursuant
to the Act. The Certificate of Formation may be amended in accordance with the
provisions of Article 12. The Certificate of Formation as so amended from time
to time, is referred to herein as the "Organizational Certificate." The Board
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of Directors shall deliver a copy of the Organizational Certificate and any
amendment thereto to any Shareholder who so requests.
2.02 Name. The name of the Company is "New Millennium Homes, LLC" and all
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Company business must be conducted in that name or such other names that comply
with Law as the Board of Directors may select.
2.03 Registered Office; Registered Agent; Principal Office; Other Offices.
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The registered office of the Company required by the Act to be maintained in the
State of Delaware shall be the office of the initial registered agent for
service of process named in the Organizational Certificate or such other office
(which need not be a place of business of the Company) as the Board of Directors
may designate as permitted by Law. The registered agent for service of process
of the Company in the State of Delaware shall be the initial registered agent
for service of process named in the Organizational Certificate or such other
Person or Persons as the Board of Directors may designate as permitted by Law.
The principal office of the Company in the United States shall be 2823 McGaw
Avenue, Irvine, California 92614, or such other place as the Board of Directors
may from time to time designate which need not be in the State of Delaware, and
the Company shall maintain records there and shall keep the street address of
such principal office at the registered office of the Company in the State of
Delaware. The Company may have such other offices as the Board of Directors may
designate.
2.04 Purpose. The purpose of the Company is to hold equity interests in
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certain entities engaging in the business of the construction, development and
sale of residential homes including, without limitation, all of the equity
interests of NM Homes One, LLC, a Delaware limited liability company, and NM
Homes Two, LLC, a Delaware limited liability company, including any successor
entities thereto. However, the business and purposes of the Company shall not
be limited to its initial principal business activity and, unless the Board of
Directors otherwise determines, it shall have authority to engage in any other
lawful business, purpose or activity permitted by the Act, and it shall possess
and may exercise all of the powers and privileges granted by the Act or which
may be exercised by any person, together with any powers incidental thereto, so
far as such powers or privileges are necessary or convenient to the conduct,
promotion or attainment of the business purposes or activities of the Company.
2.05 Foreign Qualification. The Board of Directors shall cause the
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Company to be qualified or registered under applicable laws of any jurisdiction
in which the Company transacts business and shall be authorized to execute,
deliver and file any certificates and documents necessary to effect such
qualification or registration.
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2.06 Term. The Company commenced on August 18, 1997 (by the filing of the
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Organizational Certificate with the Secretary of State of the State of Delaware)
and its existence shall be perpetual, unless and until it is dissolved in
accordance with Article 10.
2.07 No State-Law Partnership. The Shareholders intend that the Company
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not be a partnership (including a limited partnership) or joint venture, and
that no Shareholder be a partner or joint venturer of any other Shareholder, for
any purposes other than federal and state tax purposes, and this Agreement may
not be construed to suggest otherwise.
2.08 Title to Company Assets. Title to Company assets, whether real,
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personal or mixed and whether tangible or intangible, shall be deemed to be
owned by the Company as an entity, and no Shareholder, Director or Officer,
individually or collectively, shall have any ownership interest in such Company
assets or any portion thereof. Title to any or all of the Company assets may be
held in the name of the Company or one or more of its Subsidiaries or one or
more nominees, as the Board of Directors may determine. All Company assets
shall be recorded as the property of the Company in its books and records,
irrespective of the name in which record title to such Company asset is held.
2.09 Power of Attorney.
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(a) Each Shareholder hereby constitutes and appoints the Chief Executive
Officer and President and each Vice President, with full power of substitution,
as his true and lawful agent and attorney-in-fact, with full power and authority
in his name, place and stead, to:
(i) execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices (A) all certificates, documents and other
instruments (including, without limitation, this Agreement and the
Organizational Certificate and all amendments or restatements thereof) that
the Board of Directors deems necessary or appropriate to form, qualify or
continue the existence or qualification of the Company in the State of
Delaware and in all other jurisdictions in which the Company may conduct
business or own property; (B) all certificates, documents and other
instruments that the Board of Directors deems necessary or appropriate to
reflect, in accordance with it terms, any amendment, change, modification
or restatement of this Agreement; (C) all certificates, documents and other
instruments (including conveyances and a certificate of cancellation) that
the Board of Directors deems necessary or appropriate to reflect the
dissolution and liquidation of the Company pursuant to the terms of this
Agreement; (D) all certificates, documents and other instruments relating
to the registration or transfer of any Company Security or Capital
Contribution; (E) all certificates, documents and other instruments
relating to the determination of the rights, preferences and privileges of
any class or series of Company Securities; and (F) all certificates,
documents and other instruments (including agreements and certificates of
merger) relating to a merger or consolidation of the Company; and
(ii) execute, swear to, acknowledge, deliver, file and record all
ballots, consents, approvals, waivers, certificates, documents and other
instruments necessary or appropriate, in the sole discretion of the Board
of Directors, to make, evidence, give, confirm or ratify any vote, consent,
approval, agreement or other action that is made or
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given by the Shareholders hereunder or is consistent with the terms of this
Agreement or is necessary to effectuate the terms or intent of this
Agreement.
Nothing contained in this Section 2.09 shall be construed as authorizing the
Board of Directors to amend this Agreement except as expressly provided in this
Agreement.
(b) The foregoing power of attorney is hereby declared to be irrevocable
and a power coupled with an interest, and it shall survive and not be affected
by the subsequent death, incompetency, disability, incapacity, dissolution,
Bankruptcy or termination of any Shareholder or the transfer of any Company
Securities and shall extend to a Shareholder's heirs, successors, assigns and
personal representatives.
2.10 Fiscal Year. The fiscal year of the Company shall end on December 31
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in each year.
ARTICLE 3
SHAREHOLDERS; CERTIFICATES;
TRANSFER OF COMPANY SECURITIES
3.01 Shareholders.
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(a) A Person shall be admitted as a Shareholder, and shall become bound by
this Agreement, if such Person executes this Agreement or, without such
execution, if such Person purchases or otherwise lawfully acquires any Company
Securities and becomes the Record Holder of such Company Securities in
accordance with the provisions of Section 3.06 and Section 3.08. Unless
otherwise provided in this Agreement or as otherwise provided with respect to a
series of Preferred Shares in any Designation creating such series, a Person may
become a Record Holder without the consent or approval of any of the
Shareholders. Existing Shareholders shall have no preemptive or similar right
to subscribe to the issuance of new Company Securities.
(b) The name and mailing address of each Shareholder shall be listed on the
books and records of the Company. The Secretary of the Company shall be
required to update the books and records from time to time as necessary to
accurately reflect the information therein. A Shareholder's Company Securities
shall be represented by the Certificate or Certificates held by such
Shareholder.
3.02 Liability to Third Parties. No Shareholder or beneficial owner of
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Company Securities shall be liable for the debts, obligations or liabilities of
the Company.
3.03 Expulsion. A Shareholder may not be expelled or removed as a
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Shareholder of the Company.
3.04 No Duties. (a) To the fullest extent permitted by Law or in equity,
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none of the Shareholders shall owe any duties (including fiduciary duties) to
the other Shareholders in connection with the business of the Company, any
action by any Shareholder pursuant to this Agreement, any approval or
withholding of consent contemplated by this Agreement, in connection with
ownership of the Shareholder Interests, or in connection with their separate
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business activities or otherwise. Whenever in this Agreement the Shareholders
are permitted or required to make a decision or to give or withhold approval or
consent, (i) in their "sole discretion" or "discretion" or under a grant of
similar authority or latitude, each such Shareholder shall be entitled to
consider only such interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Company or the other Shareholders, or (ii)
in their "good faith" or under another expressed standard, each such Shareholder
shall act under such express standard and shall not be subject to any other or
different standards imposed by this Agreement or any other agreement
contemplated herein or by relevant provisions of Law or in equity or otherwise
or (iii) if no standard is expressed, the Shareholders shall be entitled to act
in their sole discretion. Moreover, no Shareholder shall have any obligation to
otherwise consider the interests of the other Shareholders in exercising any
rights pursuant to this Agreement.
(b) Except as expressly provided in this Agreement, nothing in this
Agreement shall (i) limit or restrict the right of any Shareholder, directly or
indirectly, to engage in any business ventures or investments other than the
Company, of any nature whatsoever, or (ii) be deemed to confer upon the Company
or the other Shareholders any right or interest in any other venture or
investment or any income, profit or other benefit derived therefrom, and the
pursuit of any such activities in competition with the business of the Company
shall not be deemed wrongful or improper.
3.05 Certificates. Certificates ("Certificates") evidencing Company
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Securities shall be in such form, not inconsistent with that required by the Act
or any other Law and this Agreement, as shall be approved by the Board of
Directors. The Company shall issue to each Shareholder one or more
Certificates, signed by the Chief Executive Officer, President, Vice President,
or the Treasurer of the Company certifying the number of Company Securities
(and, if there shall be more than one class or series of Company Securities, the
class and series of such Company Securities) owned by such Shareholder;
provided, however, that the signatures on the Certificate may be facsimile. In
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case any Officer who shall have signed or whose facsimile signature shall have
been placed upon any such Certificate or Certificates shall have ceased to be
such Officer before such Certificate is issued by the Company, such Certificate
may nevertheless be issued by the Company with the same effect as if such person
were such Officer at the date of issue. Certificates shall be consecutively
numbered and shall be entered in the books and records of the Company as they
are issued and shall exhibit the holder's name and number of Company Securities.
Each Certificate shall at all times bear the following legend and such
other legends as the Board of Directors determines are necessary or appropriate
under applicable law:
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
TRANSFER RESTRICTIONS CONTAINED IN THE NEW MILLENNIUM HOMES, LLC
LIMITED LIABILITY COMPANY AGREEMENT, DATED AS OF AUGUST 28, 1997, AS
AMENDED AND/OR AMENDED AND RESTATED FROM TIME TO TIME (A COPY OF WHICH
MAY BE OBTAINED FROM NEW MILLENNIUM HOMES, LLC WITHOUT CHARGE, UPON
REQUEST). THE HOLDER OF THIS CERTIFICATE, BY
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ACCEPTANCE HEREOF, SHALL BE DEEMED TO HAVE AGREED TO, AND SHALL BE
BOUND BY SUCH AGREEMENT.
3.06 Register, Registration of Transfer and Exchange.
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(a) The Company shall keep or cause to be kept on behalf of the Company a
register that, subject to any requirements of the Board of Directors and subject
to the provisions of Section 3.06(b) and Section 3.08, will provide for the
registration and transfer of Company Securities. The Transfer Agent is hereby
appointed registrar and transfer agent for the purpose of registering Company
Securities and transfers of Company Securities as herein provided. The Company
shall not recognize transfers of Company Securities unless such transfers are
(i) effected in the manner described in this Section 3.06 and (ii) in accordance
with the terms and provisions of Section 3.08. Upon surrender for registration
of transfer of any Certificate, and subject to the provisions of Section 3.06(b)
and Section 3.08, the appropriate Officer of the Company shall execute, and the
Transfer Agent shall deliver, in the name of the holder or the designated
transferee or transferees, as required pursuant to the Record Holder's
instructions, one or more new Certificates evidencing the same aggregate number
of shares of Company Securities as was evidenced by the Certificate so
surrendered.
(b) The Company shall not recognize any transfer of Company Securities
until the Certificates evidencing such Company Securities are surrendered to the
Transfer Agent for registration of transfer. No charge shall be imposed by the
Company for such transfer, provided, that, as a condition to the issuance of any
new Certificate under this Section 3.06, the Company may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed with respect thereto.
(c) By transfer of Company Securities in accordance with this Section 3.06,
subject to compliance with the provisions of Section 3.08, the transferor shall
be deemed to have given the transferee the right to be admitted to the Company
as a Shareholder, and each transferee of Company Securities (including, without
limitation, any nominee holder or an agent acquiring such Company Securities for
the account of another Person) shall become a Shareholder with respect to the
Company Securities so transferred to such Person when any such transfer and
admission is reflected in the books and records of the Company.
(d) The Company shall be entitled to recognize the Record Holder as the
owner of Company Securities and, accordingly, shall not be bound to recognize
any equitable or other claim to or interest in such Company Securities on the
part of any other Person, whether or not the Company shall have actual or other
notice thereof, except as otherwise provided by Law or any applicable rule,
regulation, guideline or requirement of any securities exchange on which the
Company Securities are listed for trading. Subject to (i) the foregoing
provisions of this Section 3.06(d), (ii) the provisions of Sections 3.08 and
Article 4 and (iii) with respect to any class or series of Company Securities,
the provisions of any Designations creating such class or series, Company
Securities shall be freely transferable to any Person. The transfer of any
Company Securities and the admission of any new Shareholder shall not constitute
an amendment to this Agreement.
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(e) Each dividend or other distribution in respect of Company Securities
shall be paid by the Company, directly or through the Transfer Agent or through
any other Person or agent, only to the Record Holders thereof as of the record
date set for the dividend or other distribution. Such payment shall constitute
full payment and satisfaction of the Company's liability in respect of such
payment, regardless of any claim of any Person who may have an interest in such
payment by reason of an assignment or otherwise.
3.07 Mutilated, Destroyed, Lost or Stolen Certificates.
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(a) If any mutilated Certificate is surrendered to the Transfer Agent, then
the appropriate Officer on behalf of the Company shall execute, and upon the
Company's request the Transfer Agent shall deliver in exchange therefor, a new
Certificate evidencing the same number and type of Company Securities as the
Certificate so surrendered.
(b) The appropriate Officers on behalf of the Company shall execute, and
upon its request the Transfer Agent shall deliver a new Certificate in place of,
any Certificate previously issued if the Record Holder of the Certificate:
(i) makes proof by affidavit in form and substance satisfactory to an
Officer, that a previously issued Certificate has been lost, destroyed or
stolen;
(ii) requests the issuance of a new Certificate before the Company has
notice that the Certificate has been acquired by a purchaser for value in
good faith and without notice of an adverse claim;
(iii) if requested, delivers to the Company a bond, in form and
substance satisfactory to the Company, with surety or sureties and with
fixed or open penalty as the Company may reasonably direct, in its sole
discretion, to indemnify the Company and the Transfer Agent against any
claim that may be made on account of the alleged loss, destruction or theft
of the Certificate; and
(iv) satisfies all other reasonable requirements imposed by the
Company.
If a Shareholder fails to notify the Company within a reasonable time after he
has notice of the loss, destruction or theft of a Certificate, and a transfer of
the Company Securities represented by the Certificate is registered before the
Company or the Transfer Agent receives such notification, the Shareholder shall
be precluded from making any claim against the Company or the Transfer Agent for
such transfer or for a new Certificate.
(c) As a condition to the issuance of any new Certificate under this
Section 3.07, the Company may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other expenses (including the fees and expenses of the Transfer Agent)
reasonably connected therewith.
3.08 Restrictions on Transfer.
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(a) No Shareholder and no transferee of Company Securities shall sell,
assign, transfer, pledge, hypothecate, gift or in any other manner dispose of or
encumber, whether
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voluntarily or by operation of law (in any such case, a "Transfer"), any Company
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Securities or interests therein now held or hereafter acquired to any Person (a
"Transferee") unless such Transfer is in accordance with the terms and
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conditions of this Section 3.08. Any attempted Transfer of Company Securities
not in accordance with the terms and conditions of this Section shall be null
and void ab initio, and the Company shall not reflect on its records any change
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in record ownership of any Company Securities as a result of any such attempted
transfer. In addition to any other legal or equitable remedies which it may
have, the Company may enforce its rights by actions for specific performance to
the extent permitted by law.
(b) During the Company's first taxable year, and until such time, if ever,
that the State of California adopts rules for determining the status of an
entity as a partnership or as an association taxable as a corporation that are
substantially similar to the rules in Treasury Regulations (S)(S) 301.7701-2, -3
and -4, Company Securities may be Transferred, subject to the provisions of
3.08(c), only with the approval of holders of a Majority Interest.
(c) Every Transfer of Company Securities, including any Transfer permitted
under Section 3.08(b), shall be subject to the following requirements:
(i) No Person may Transfer (a "Transferor") any Company Securities to
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a Person that, after the Transfer (whether or not as a result of
the Transfer), will qualify as, or will have its Company
Securities attributed to, a 5 Percent Shareholder of any wholly
owned subsidiary of the Company within the meaning of (S)
382(k)(7) of the Code (a "5 Percent Shareholder"). To the extent
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that any Transfer of Company Securities causes a Transferee to
become a 5 Percent Shareholder or otherwise increases the number
of Company Securities held by any 5 Percent Shareholder, that
Transfer shall be void ab initio and the Transferor of the
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Company Securities will be deemed to retain that portion of the
Transferred Company Securities that caused the Transferee or a
person to whom the Transferee's holdings are attributed to become
a 5 Percent Shareholder. The portion deemed retained by the
Transferor is referred to as the "Excess Interest." If any
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Transferee purports to own the Excess Interest, the Company is
authorized, as agent for the Transferor, to sell the Excess
Interest to a Person or Persons that would not be 5 Percent
Shareholders after the sale and shall apply the proceeds of any
sale, (x) first, to the costs of sale, (y) second, to reimburse
the purported owner an amount up to the purported owner's
purchase price, and (z) any remaining proceeds to be paid to the
Transferor.
(ii) Any Shareholder that qualifies as a 5 Percent Shareholder as of
the Plan Effectiveness Date may Transfer in any period of three
(3) consecutive years a maximum number of Company Securities
equal to that percentage of Company Securities held by such
Shareholder on the Plan Effectiveness Date that is equal to the
product of (x) ninety-five percent (95%) and (y) a fraction (not
greater than one), the numerator of which is fifty percent (50%)
and the denominator of which is the percentage interest in the
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Company owned by all Shareholders on the Plan Effectiveness Date
that are 5 Percent Shareholders.
(iii) No Person may acquire Company Securities that would cause that
Person or a Person to whom such Person's Company Securities are
attributed to 2 become a 5 Percent Shareholder. No 5 Percent
Shareholder may acquire Company Securities that would cause the
ownership interest of such 5 Percent Shareholder or of a Person
to whom such 5 Percent Shareholder's Company Securities are
attributed in the Company to increase. An attempted acquisition
of Company Securities that causes an acquiring person to violate
the preceding sentence shall be void ab initio and the relevant
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Company Securities shall be treated as Excess Interests.
(iv) For the purposes of this Section 3.08(c), a Person will not be
treated as a 5 Percent Shareholder solely because of the Person's
membership in a public group that is treated as a 5 Percent
Shareholder.
(v) The Board of Directors may, in its sole discretion, waive any of
the requirements in clauses (i), (ii) and (iii) above with
respect to any Transfer. The Board of Directors may condition
its waiver in any manner it chooses, including imposing
restrictions on subsequent Transfers by any Transferor or
Transferee in the Transfer as to which it granted a waiver.
ARTICLE 4
AUTHORIZATION AND ISSUANCE OF COMPANY SECURITIES
4.01 Company Securities Generally.
----------------------------
(a) Company Securities Authorized. The aggregate number of shares of
-----------------------------
Common Shares which the Company shall have authority to issue is 30,000,000 and
the aggregate number of shares of Preferred Shares which the Company shall have
authority to issue is 5,000,000.
(b) Nonvoting Company Securities. In accordance with Section 1123(a)(6)
----------------------------
of the Bankruptcy Code of 1978, as amended, all Company Securities shall be
voting securities and the Common Shares shall have such voicing rights as are
contained in this Agreement and, with respect to a series of Preferred Shares,
in the Designation creating such series of Preferred Shares; provided, however,
-------- -------
that all shares of a series of Preferred Shares shall have preferences,
limitations and relative rights identical with those of other Company Securities
of the same series.
(c) Listing on a Public Exchange. No Company Securities shall be listed
----------------------------
for trading on any securities exchange or quoted through the Nasdaq Stock Market
or any other comparable automated quotation system.
4.02 Common Shares. The powers, preferences, participating, optional or
-------------
other special rights of, and the qualifications, limitations and restrictions
of, and other matters relating to, the Common Shares are as set forth below in
this Section 4.02.
12
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(a) Ranking. The Common Shares are subject to all the powers,
-------
preferences, rights, privileges, preferences and priorities of any classes
or series of Preferred Shares, as set forth herein or in any Designation
creating a series of Preferred Shares.
(b) Distributions and Allocations. Subject to the preferences,
-----------------------------
limitations and relative rights of any series of Preferred Shares, each
holder of Common Shares shall share in each item of Company income, gain,
loss, deduction and credit as provided in Article 6.
(c) Redemption. The Common Shares are not subject to any right of
----------
redemption by the Company.
(d) Liquidation. Subject to the preferences, limitations and relative
-----------
rights of any series of Preferred Shares, each holder of Common Shares
shall upon liquidation, dissolution or winding up of the Company, be
entitled to all remaining assets after satisfaction of the Company's
liabilities to creditors, paid in proportion to the positive Capital
Account balances of such holders.
(e) Conversion. The Common Shares shall not have any conversion
----------
rights.
(f) Voting. Subject to the preferences, limitations and relative
------
rights of any series of Preferred Shares, each holder of Common Shares
shall be entitled to one vote per Common Share on matters submitted to a
vote or consent of Shareholders.
(g) Restrictions on Transfer. Each holder of Common Shares shall be
------------------------
subject to the restrictions on transfer set forth in Section 3.08.
Each Common Share shall be identical in all respects with each other Common
Share.
4.03 Additional Company Securities.
-----------------------------
(a) Subject to the guidelines set forth in this Section 4.03 and the
requirements of the Act and other applicable Law, the Board of Directors shall
have the power to cause the Company to issue (i) additional Common Shares up to
the maximum number authorized in Section 4.01(a)), and (ii) Preferred Shares up
to the maximum number authorized in Section 4.01(b), in each case for any
Company purpose, at any time or from time to time, for such consideration and on
such terms and conditions as shall be established by the Board of Directors in
its sole discretion, all without the approval of any Shareholder except as
otherwise provided in this Agreement or any Designation creating any series of
Preferred Shares. The consideration for subscriptions to, or the purchase of,
Company Securities shall be paid in such form and in such manner as the Board of
Directors shall determine. Company Securities so issued in accordance with the
determination of the Board of Directors shall be deemed to be fully paid and,
except to the extent specified in Section 18-607(b) of the Act, non-assessable
if the entire amount of such consideration has been received by the Company for
such Company Securities in the form of cash, property or services rendered, or a
promissory note or other obligation to contribute cash or property or to perform
services.
13
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(b) Preferred Shares shall be issuable from time to time in one or more
series, with such designations, preferences and relative, participating,
optional or other special rights powers and duties (including rights to
participate in allocations of income, gain, loss, deductions and credits) as
shall be fixed by the Board of Directors in the exercise of its sole discretion
(subject to the guidelines set forth in this Section 4.02 and the requirements
of the Act and other applicable Law) and reflected in a written action or
actions approved by the Board of Directors (each, a "Designation", each of which
-----------
shall be deemed an amendment to this Agreement). Each subsequent Designation
when approved by the Board of Directors shall be deemed to be set forth in this
Article 4. Each Designation shall provide for the issuance of Preferred Shares
of a particular series and shall set forth, without limitation, (i) the
allocations of items of Company income, gain, loss, deduction and credit to such
series of Preferred Shares, and the priority of such allocations relative to
other classes or series of Preferred Shares; (ii) the right of such series of
Preferred Shares to share in dividends and the priority of such series relative
to the rights of other classes or series to share in dividends; (iii) the rights
of such series of Preferred Shares upon dissolution and liquidation of the
Company; (iv) whether such series of Preferred Shares is redeemable by the
Company and, if so, the price at which, and the terms and conditions upon which,
such series of Preferred Shares may be redeemed by the Company; (v) whether such
series of Preferred Shares is issued with the privilege of conversion and, if so
the rate at which, and the terms and conditions upon which, such series of
Preferred Shares may be converted into any other class or series of Company
Securities or other property; (vi) the terms and conditions upon which such
series of Preferred Shares will be issued, and assigned or transferred; and
(vii) the right, if any, of such series of Preferred Shares to vote on Company
matters, including matters relating to the relative rights, preferences and
privileges of such series. Without limitation of the foregoing, the Board of
Directors may, in its sole discretion, authorize the issuance of Preferred
Shares that have preference over each or certain other classes or series of
Company Securities in any of the foregoing rights, including with respect to
voting rights, participation in the profits and asset of the Company, including
the right to receive dividends and the right to receive in-kind payments of the
assets of the Company upon voluntary or involuntary dissolution, winding up or
termination of the Company, conversion or redemption rights, or other rights,
privileges or matters. The Board of Directors may authorize one or more
Officers to execute, swear to, acknowledge, deliver, file and record whatever
documents may be required, convenient or desirable in connection with the issue
from time to time of such Preferred Shares, and to do all other things necessary
to comply with the Act and other applicable Law. A Designation shall be
effective when a duly executed and attested original of same is delivered to the
Secretary for inclusion among the permanent records of the Company and upon the
satisfaction of such other requirements, if any, of the Act.
(c) In addition, the Board of Directors shall have the power to create
and cause the Company to issue, whether or not in connection with the issue and
sale of any Company Securities, rights or options entitling the holders thereof
to purchase from the Company any Company Securities of any class or series
(whether or not such class or series had theretofore been created), such rights
or options to be evidenced by such instrument or instruments as shall be
approved by the Board of Directors. The terms upon which, including the time or
times (which may be limited or unlimited in duration) at or within which, and
the price or prices at which any such Company Securities may be purchased from
the Company upon the exercise of any such right or option, shall be such as
shall be stated in a resolution adopted by the Board of Directors provided for
the creation and issue of such rights or options, and, in every such case,
14
<PAGE>
shall be set forth or incorporated by reference in the instrument or instruments
evidencing such rights or options. The Board of Directors shall have sole
discretion, subject to the provisions of this Agreement and the requirements of
the Act and other applicable law, in determining the consideration to be paid to
the Company for, and the terms and conditions with respect to, the issuance of
any such rights or options.
4.04 Splits and Combinations.
-----------------------
(a) Subject to Section 4.04(b), the Board of Directors may make a pro
rata distribution of Company Securities to all Record Holders or may effect a
subdivision, combination or reclassification of any class or series of Company
Securities, including the Common Shares and any series of Preferred Shares;
provide, however, that after such distribution, subdivision, combination or
------- -------
reclassification, each Shareholder shall have the same Shareholder Interest
(except by operation of Section 4.04(b)) as before such distribution,
subdivision or combination.
(b) The Company shall not issue fractional shares of any Company
Securities (whether in connection with any distribution, subdivision or
combination of units or otherwise). If a distribution, subdivision or
combination of shares would result in the issuance of fractional shares but for
this Section 4.04(b), each fractional share shall be rounded to the nearest
whole share (and a 0.5 share shall be rounded to the next higher whole share).
ARTICLE 5
CAPITAL CONTRIBUTIONS
5.01 Capital Contributions. (a) The amount of money and the fair market
---------------------
value (as of the date of contribution) of any property (other than money)
contributed to the Company by a Shareholder in respect of the issuance of
Company Securities to such Shareholder shall constitute a "Capital
-------
Contribution." Any reference in this Agreement to the Capital Contribution of a
------------
Shareholder shall include a Capital Contribution of his predecessors in
interest.
(b) Except as otherwise provided in this Agreement, no Shareholder shall
have any right (or obligation) to make any Capital Contributions to the Company.
5.02 Return of Contributions. A Shareholder is not entitled to the return
-----------------------
of any part of its Capital Contributions or to be paid interest in respect of
either its Capital Account or its Capital Contributions. An unrepaid Capital
Contribution is not a liability of the Company or of any Shareholder. No
Shareholder will be required to contribute or to lend any cash or property to
the Company to enable the Company to return any Shareholder's Capital
Contributions.
5.03 Capital Accounts. A Capital Account shall be established and
----------------
maintained for each Shareholder. The initial balances of the Capital Accounts
of the Shareholders shall be as set forth on Schedule 1 hereto.
----------
5.04 Revaluations. Upon the issuance of any Company Securities, the Board
------------
of Directors may, in its discretion, cause the Capital Accounts of the
Shareholders to be adjusted (upward or downward, as applicable) in the manner
and to the extent that such Capital Accounts would be adjusted if the Company's
property were sold as of such date for its fair market value
15
<PAGE>
(determined in any manner selected by the Board of Directors) and the net gain
or net loss, as applicable, resulting from such deemed sale of assets were "Net
Income" or "Net Losses," as applicable, and allocated pursuant to Section 6.01
of this Agreement.
ARTICLE 6
ALLOCATIONS AND DISTRIBUTIONS
6.01 Allocations for Capital Account Purposes. Unless otherwise provided
----------------------------------------
with respect to a series of Preferred Shares in any Designation creating such
series, the Company's Net Income and Net Losses shall be allocated among the
Shareholders in accordance with their respective Shareholder Interests pursuant
to Treasury Regulation Section 1.704-l(b)(1)(i). The allocations pursuant to
the preceding sentence shall, unless successfully challenged by a federal or
state taxing authority, be made by the Board of Directors and shall be binding
on the Shareholders.
6.02 Allocations for Tax Purposes. For income tax purposes, each item of
----------------------------
income, gain, loss, deduction and credit of the Company shall be allocated among
the Shareholders in the same manner as the correlative item of Net Income or Net
Loss is allocated for Capital Account purposes, except that gain or loss with
respect to property contributed to the Company by a Shareholder or revalued
pursuant to Treasury Regulation Section 1.704-l(b)(2)(iv)(f) shall be allocated
among the Shareholders in a manner that takes into account the variation between
the adjusted tax basis of such property and its book value, as required by
Section 704(c) of the Code and Treasury Regulation Section 1.704-1(b)(4)(i),
using any method permitted by applicable Treasury Regulations as determined by
the Board of Directors.
6.03 Other Allocation Principles. (a) Net Income, Net Loss, or any item
---------------------------
of income, gain, loss, deduction and credit allocable to any period shall be
determined on a daily, monthly or other basis, as determined by the Board of
Directors using any method that is permissible under Section 706 of the Code and
the Treasury Regulations thereunder, provided that any transfer, issuance, or
reduction of a Shareholder Interest shall be effective for purposes of Section
706 as of the beginning of the next succeeding day, after such transfer,
issuance or reduction.
(b) The Board of Directors shall have sole discretion to (i) adopt such
conventions as it deems appropriate for determining items of income, gain, loss
and deduction; (ii) make special allocations of income or deductions for tax
purposes; and (iii) amend the provisions of this Agreement as appropriate to (x)
reflect the proposal or promulgation of Treasury Regulations or (y) preserve or
achieve uniformity of shares of Company Securities (or any class or classes or
series thereof) or the Capital Accounts underlying such shares; provided, that
such conventions, allocations or amendments do not have a material adverse
effect on the Shareholders or the Company and such allocations are consistent
with the principles of Section 704 of the Code.
(c) Any Shareholder who unexpectedly receives an adjustment, allocation
or distribution described in Treasury Regulations Section 1.704-
l(b)(2)(ii)(d)(4), (5) or (6) that causes a deficit balance in its Capital
Account (in excess of any deemed deficit restoration obligation pursuant to
Treasury Regulations Sections 1.704-2(g)(1) and (i)(5), and adjusted as provided
in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)) shall be allocated items
of income
16
<PAGE>
and gain in an amount and a manner sufficient to eliminate, to the extent
required by the Treasury Regulations, such deficit balance as quickly as
possible. This Section 6.03(c) is intended to comply with the alternate test for
economic effect set forth in Treasury Regulations Section l.704-l(b)(2)(ii)(d)
and shall be interpreted and applied in a manner consistent therewith.
(d) Allocations that otherwise would be made to a Shareholder under the
provisions of this Article 6 instead shall be made to the beneficial owner of
Company Securities held by a nominee in any case in which the nominee has
furnished the identity of such beneficial owner to the Company in accordance
with section 6031(c) of the Code and the Treasury Regulations thereunder.
6.04 Withholding. Notwithstanding any other provision of this Agreement,
-----------
the Company shall comply with any withholding requirements under federal, state
or local law and shall remit amounts withheld to and file required forms with
applicable taxing authorities. To the extent that the Company is required to
withhold and pay over any amounts to any taxing authority with respect to
distributions or allocations to any Shareholder, the amount withheld shall be
deemed to be a recourse loan by the Company to such Shareholder and shall not be
deemed to be a distribution to such Shareholder. The amount of such payments
made with respect to such Shareholder, plus interest thereon from the date of
each such payment until such amount is repaid to the Company at an interest rate
per annum equal to the prime rate plus two percent (2%) as published in The Wall
Street Journal from time to time, shall be repaid to the Company (i) upon demand
by the Company, (ii) by deduction from any dividends, distributions, redemption
payments or liquidation distributions payable to such Shareholder pursuant to
this Agreement or (iii) by earlier payment by such Shareholder to the Company,
in each case as determined by the Board of Directors in its sole discretion. In
the event of any claimed over-holding, Shareholders shall be limited to an
action against the applicable taxing authority. Each Shareholder agrees to
furnish the Company such forms or other documentation as are necessary to assist
the Company in determining the extent of, and in fulfilling, its withholding
obligations.
6.05 Distributions. Shareholders shall receive periodic dividends, if
-------------
any, redemption payments and liquidation distributions in accordance with the
terms of the applicable Company Securities.
ARTICLE 7
MANAGEMENT
7.01 Management of the Company's Affairs. As provided in this Agreement
-----------------------------------
all management powers over the business and affairs of the Company shall be
exclusively vested in the Board of Directors and, subject to the direction of
the Board of Directors, the Officers (who, together with the Board of Directors
of the Company shall collectively constitute "managers" of the Company within
--------
the meaning of the Act). No Shareholder, by virtue of having the status of a
Shareholder, shall have any management power over the business and affairs of
the Company or actual or apparent authority to enter into contracts on behalf
of, or to otherwise bind, the Company. Except as otherwise specifically
provided in this Agreement, the authority and functions of the Board of
Directors on the one hand and of the Officers on the other shall be identical to
the authority and functions of the board of directors and officers,
respectively, of a corporation organized under the Delaware General Corporation
Law. Thus, except as otherwise
17
<PAGE>
specifically provided in this Agreement, the business affairs of the Company
shall be managed under the direction of the Board of Directors, and the day-to-
day activities of the Company shall be conducted on the Company's behalf by the
Officers. In addition to the powers that now or hereafter can be granted to
managers under the Act and to all other powers granted under any other provision
of this Agreement, the Board of Directors (subject to Section 7.03) and the
Officers (subject to Section 7.04 and the direction of the Board of Directors)
shall have full power and authority to do all things on such terms as they, in
their sole discretion, may deem necessary or appropriate to conduct, or cause to
be conducted, the business of the Company, including (a) the making of any
expenditures, the lending or borrowing of money, the assumption or guarantee of,
or other contracting for, indebtedness and other liabilities, the issuance of
evidences of indebtedness and the incurring of any other obligations; (b) the
making of tax, regulatory and other filings, or rendering of periodic or other
reports to governmental or other agencies having jurisdiction over the business
or assets of the Company; (c) subject to the requirements of Section 7.11 and
Article 12, the merger or other combination of the Company with or into another
Person; (d) the use of the assets of the Company (including cash on hand) for
any purpose consistent with the terms of this Agreement and the repayment of
obligations of the Company; (e) the negotiation, execution and performance of
any contracts, conveyances or other instruments; (f) the distribution of Company
cash; (g) the selection, engagement and dismissal of Officers, employees and
agents, outside attorneys, accountants, engineers, consultants and contractors
and the determination of their compensation and other terms of employment or
hiring; (h) the maintenance of such insurance for the benefit of the Company, as
it deems necessary or appropriate; (i) the acquisition or disposition of assets;
(j) the formation of, or acquisition of an interest in, or the contribution of
property to, any Person; (k) the control of any matters affecting the rights and
obligations of the Company, including the commencement, prosecution and defense
of actions at law or in equity and otherwise engaging in the conduct of
litigation and the incurring of legal expense and the settlement of claims and
litigation; (1) the indemnification of any Person against liabilities and
contingencies to the extent permitted by law; and (m) the entering into of
listing agreements with any securities exchange and the delisting of some or all
of the Company Securities from, or requesting that trading be suspended on, any
such exchange.
7.02 Board of Directors.
------------------
(a) Composition; Initial Directors. Prior to 12:01 a.m. on the date
------------------------------
immediately following the Plan Effectiveness Date, the Company shall have one
Director, who shall initially be Jack McDonald. At and after 12:01 a.m., on the
date immediately following the Plan Effectiveness Date without any action by any
party, the Board of Directors shall consist of not less than 5 nor more than 7
natural persons and shall consist of the five (5) following persons: Jack
McDonald, Judy K. Mencher, Jay B. Burnham, Charles Yamarone and Dale V. Kesler.
Each member of the Board of Directors (each a "Director") shall be elected as
--------
provided in Section 7.02(b) and shall serve in such capacity until his successor
has been elected and qualified or until such member dies, resigns or is removed.
The Board of Directors may determine the number of Directors then constituting
the whole Board of Directors, but the Board of Directors shall not decrease the
number of Persons that constitute the whole Board of Directors if such decrease
would shorten the term of any Director, nor may it increase the size during any
twelve-month period in a manner that would cause the Board of Directors to elect
more than two additional Directors to fill the vacancies created by such
increase.
18
<PAGE>
(b) Election of Directors. The Directors shall be classified, with
---------------------
respect to the term for which they severally hold office, into three classes, as
nearly equal in number as possible. Initially, one class of Directors shall
serve for a term expiring at the annual meeting of Shareholders to be held in
1998, another class shall serve for a term expiring at the annual meeting of
Shareholders to be held in 1999, and another class shall serve for a term
expiring at the annual meeting of Shareholders to be held in 2000. Members of
each class shall hold office until their successors are duly elected and
qualified or until their earlier resignation or removal. At 12:01 a.m. on the
date immediately following the Plan Effectiveness Date, the Board of Directors
shall be classified as follows:
Class I (term expires in 1998)
------------------------------
Charles Yamarone
Class II (term expires in l999)
-------------------------------
Jay B. Burnham
Dale V. Kesler
Class III (term expires in 2000)
--------------------------------
Jack McDonald
Judy K. Mencher
At each succeeding annual meeting of the Shareholders of the Corporation,
the successors of the class of Directors whose term expires at that meeting
shall be elected at such meeting to hold office for a term expiring at the
annual meeting of Shareholders held in the third year following the year of
their election.
To be elected as a Director, a natural person must have been properly
nominated for a position as a Director in accordance with Section 7.02(c) and
must receive a majority of the votes cast for the position at a meeting of
Shareholders held for such purpose at which a quorum is present, in person or by
proxy, or if there are more than two nominees for such position, a plurality of
the votes cast. Vacancies existing on the Board of Directors (including,
subject to Section 7.02(a), a vacancy created by virtue of an increase in the
size of the Board of Directors) shall be filled by the affirmative vote of a
majority of the Directors then serving, even if less than a quorum; except that
a vacancy on the Board of Directors existing by virtue of the death, resignation
or removal of a member of the Board of Directors, shall be filled by the
affirmative vote of at least 75% of the Directors then serving. Any Director
chosen to fill a vacancy shall serve during the remainder of the term of the
Director that he or she replaces. Any Director may be removed, with or without
cause, by the written consent or other approval of a Majority Interest.
(c) Nominations; Qualifications. At least 90 days prior to the meeting of
---------------------------
the Shareholders at which an election of directors is to be held, the Board of
Directors shall nominate its slate of persons to be presented for election at
such meeting (the "Board Slate"). Other nominations for directors may be made
-----------
by any Shareholder, but any such Shareholder nominations must be in writing and
delivered to the Secretary not less than 90 nor more than 120
19
<PAGE>
days prior to the meeting of the Shareholders at which an election of directors
is to be held. To be in proper written form, such Shareholder nomination must
set forth in writing as to each Person whom such Shareholder proposes to
nominate for election or re-election as a director all information relating to
such Person as is required to be disclosed in solicitations of proxies for the
election of directors, or is otherwise required, in each case pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended, or any
successor or regulation promulgated thereunder.
(d) Voting; Quorum; Required Vote for Action. Unless otherwise required
----------------------------------------
by the Act, other Law or the provisions hereof,
(i) each member of the Board of Directors shall have one vote;
(ii) the presence at a meeting of a majority of the members of the
Board of Directors shall constitute a quorum at any such meeting for the
transaction of business; and
(iii) the act of a majority of the members of the Board of Directors
present at such meeting at which a quorum is present shall be deemed to
constitute the act of the Board of Directors.
(e) Meetings. Regular meetings of the Board of Directors shall be held
--------
at such times and places as shall be designated from time to time by resolution
of the Board of Directors. Notice of such regular meetings shall not be
required. Special meetings of the Board of Directors may be called by written
request of any member of the Board of Directors, on at least 48 hours prior
written notice to the other members. Any such notice, or waiver thereof, need
not state the purpose of such meeting except as may otherwise be required by
Law. Attendance of a Director at a meeting (including pursuant to the last
sentence of this Section 7.02(c)) shall constitute a waiver of notice of such
meeting, except where such Director attends the meeting for the express purpose
of objecting to the transaction of any business on the ground that the meeting
is not lawfully called or convened. Any action required or permitted to be taken
at a meeting of the Board of Directors, may be taken without a meeting, without
prior notice, and without a vote if a consent or consents in writing, setting
forth the action so taken, is signed by all members of the Board of Directors.
Members of the Board of Directors may participate in and hold a meeting by means
of conference telephone, videoconference or similar communications equipment by
means of which all Persons participating in the meeting can hear each other, and
participation in such meetings shall constitute presence in person at the
meeting.
(f) Committees. The Board of Directors may appoint one or more
----------
committees of the Board of Directors to consist of two or more Directors, which
committee(s) shall have and may exercise such of the powers and authority of the
Board of Directors with respect to the management of the business and affairs of
the Company as may be provided in a written resolution of the Board of
Directors. Any committee designated pursuant to this Section 7.02(f) shall
choose its own chairman, shall keep regular minutes of its proceedings and
report the same to the Board of Directors when requested, shall fix its own
rules or procedures, and shall meet at such times and at such place or places as
may be provided by such rules, or by resolution of such committee or resolution
of the Board of Directors. At every meeting of any such committee, the
20
<PAGE>
presence of a majority of all the members thereof shall constitute a quorum and
the affirmative vote of a majority of the members present shall be necessary for
the adoption by it of any resolution. Subject to the first sentence of this
Section 7.02(f), the Board of Directors may designate one or more directors as
alternate members of any committee who may replace any absent or disqualified
member at any meeting of such committee. Subject to the first sentence of this
Section 7.02(f), in the absence or disqualification of a member of a committee,
the member or members present at any meeting and not disqualified from voting,
whether or not constituting a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of the absent or
disqualified member.
(g) Chairman. The Board of Directors may elect one of its members as
--------
Chairman of the Board. The Chairman of the Board, if any, and if present and
acting, shall preside at all meetings of the Board of Directors and of the
Shareholders. Otherwise, the Chief Executive Officer and President, if present,
acting and a director, or any other Director chosen by the Board of Directors,
shall preside. Unless the Board of Directors provides otherwise, the Chairman
of the Board shall be an Officer of the Company and shall have the same power
and authority as the Chief Executive Officer and President.
7.03 Restrictions on the Board of Directors' Authority. The Board of
-------------------------------------------------
Directors may not, without approval of the specific act by a Majority Interest,
take any action in contravention of this Agreement, including, (i) any act that
would make it impossible to carry on the ordinary business of the Company,
except as otherwise provided in this Agreement; (ii) possessing Company
property, or assigning any rights in specific Company property, for other than a
Company purpose; or (iii) amending or modifying this Agreement in any manner,
except as otherwise provided in this Agreement. Except as otherwise
specifically provided in this Agreement or by resolution of the Board of
Directors, (i) no Director or group of Directors shall have any actual or
apparent authority to enter into contracts on behalf of, or to otherwise bind,
the Company, nor take any action in the name of or on behalf of the Company or
conduct any business of the Company other than by action of the Board of
Directors taken in accordance with the provisions of this Agreement, and (ii) no
Director shall have the power or authority to delegate to any other Person such
Director's right and powers as a Director to manage the business and affairs of
the Company.
7.04 Officers.
--------
(a) Generally. The Board of Directors, as set forth below, will appoint
---------
agents (the "Officers") of the Company. The Officers shall have such titles as
--------
the Board of Directors shall determine, which titles and authority shall
initially be those set forth in this Section 7.04.
(b) Titles and Number. The Officers of the Company shall be the Chief
-----------------
Executive Officer and President, any and all Vice Presidents, the Secretary, any
Treasurer and any and all Assistant Secretaries and Assistant Treasurers. There
shall be appointed from time to time, in accordance with Section 7.04(c) below,
such Vice Presidents, Secretaries, Assistant Secretaries, Treasurers and
Assistant Treasurers as the Board of Directors may desire. Any person may hold
two or more offices, except that the offices of Chief Executive Officer and
President and Secretary may not be held by the same person.
21
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(c) Appointment and Term of Office. The Officers shall be appointed by
------------------------------
the Board of Directors at such time and for such term as the Board of Directors
shall determine. Any Officer may be removed, with or without cause, only by the
Board of Directors. Vacancies in any office may be filled only by the Board of
Directors.
(d) Chief Executive Officer and President. Subject to the limitations
-------------------------------------
imposed by this Agreement, any employment agreement, any employee plan or any
determination of the Board of Directors, the Chief Executive Officer and
President, subject to the general control of the Board of Directors, shall be
the chief executive officer of the Company and, as such, shall be responsible
for the management and direction of the day-to-day business and affairs of the
Company, its other Officers, employees and agents, shall supervise generally the
affairs of the Company and shall have full authority to execute all documents
and take all actions that the Company may legally take. The Chief Executive
Officer and President shall exercise such other powers and perform such other
duties as may be assigned to him by this Agreement or the Board of Directors,
including any duties and powers stated in any employment agreement approved by
the Board of Directors.
(e) Vice Presidents. In the absence of the Chief Executive Officer and
---------------
President, each Vice President appointed by the Board of Directors shall, except
as hereinafter provided, have all of the powers and duties conferred upon the
Chief Executive Officer and President, including the same power as the Chief
Executive Officer and President to execute documents on behalf of the Company.
Each such Vice President shall perform such other duties and may exercise such
other powers as may from time to time be assigned to him by the Board of
Directors or the Chief Executive Officer and President.
(f) Secretary and Assistant Secretaries. The Secretary shall record or
-----------------------------------
cause to be recorded in books provided for that purpose the minutes of the
meetings or actions of the Board of Directors or the Officers, shall see that
all notices are duly given in accordance with the provisions of this Agreement
and as required by law shall be custodian of all records (other than financial),
shall see that the books, reports, statements, certificates and all other
documents and records required by law are properly kept and filed, and, in
general, shall perform all duties incident to the office of Secretary and such
other duties as may, from time to time, be assigned to him by this Agreement,
the Board of Directors or the Chief Executive Officer and President. The
Assistant Secretaries shall exercise the powers of the Secretary during that
Officer's absence or inability or refusal to act.
(g) Treasurer and Assistant Treasurers. The Treasurer shall keep or
----------------------------------
cause to be kept the books of account of the Company and shall render statements
of the financial affairs of the Company in such form and as often as required by
this Agreement, the Board of Directors or the Chief Executive Officer and
President. The Treasurer, subject to the order of the Board of Directors, shall
have the custody of all funds and securities of the Company. The Treasurer shall
perform all other duties commonly incident to his office and shall perform such
other duties and have such other powers as this Agreement, the Board of
Directors or the Chief Executive Officer and President shall designate from time
to time. The Assistant Treasurers shall exercise the power of the Treasurer
during that Officer's absence or inability or refusal to act. Each of the
Assistant Treasurers shall possess the same power as the Treasurer to sign all
certificates, contracts, obligations and other instruments of the Company. If no
Treasurer is appointed and
22
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serving or in the absence of the appointed Treasurer, or such other Officer as
the Board of Directors shall select shall have the powers and duties conferred
upon the Treasurer.
(h) Powers of Attorney. The Board of Directors may grant powers of
------------------
attorney or other authority as appropriate to establish and evidence the
authority of the Officers and other Persons.
7.05 Compensation. The Officers shall receive such compensation for their
------------
services as Directors or committee members as the Board of Directors shall
determine. In addition, the Officers shall be entitled to be reimbursed for
out-of-pocket costs and expenses incurred in the course of their service
hereunder. The members of the Board of Directors who are not employees of the
Company or its Subsidiaries shall receive $20,000 per annum plus $1,000 per each
meeting of the Board of Directors attended as compensation for their services.
The members of the Board of Directors who are not employees of the Company or
its Subsidiaries shall also each receive 2,000 Common Shares per annum directly,
through options or otherwise, the method of compensation and terms and
conditions of which shall be determined by the Board of Directors. In addition,
the members of the Board of Directors shall be entitled to be reimbursed for
out-of pocket costs and expenses incurred in the course of their service
hereunder.
7.06 Indemnification.
---------------
(a) To the fullest extent permitted by law but subject to the limitations
expressly provided in this Agreement, each Person shall be indemnified and held
harmless by the Company from and against any and all losses, claims, damages,
liabilities, joint or several expenses (including reasonable legal fees and
expenses), judgments, fines, penalties, interest, settlements and other amounts
arising from any and all claims, demands, actions, suits or proceedings, whether
civil, criminal, administrative or investigative, in which any such person may
be involved, or is threatened to be involved, as a party or otherwise, by reason
of such Person's status as (i) a present or former member of the Board of
Directors or any committee thereof, (ii) a present or former Officer, employee,
agent or trustee of the Company, or (iii) a Person serving at the request of the
Company in another entity in a similar capacity as that referred to in the
immediately preceding clauses (i) or (ii), provided, that in each case the
Person described in the immediately preceding clauses (i), (ii) or (iii) (the
"Indemnitee") acted in good faith and in a manner which such Indemnitee believed
-----------
to be in, or not opposed to, the best interests of the Company and, with respect
to any criminal proceeding, had no reasonable cause to believe such Indemnitee's
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that the Indemnitee acted in a
manner contrary to that specified above. Any indemnification pursuant to this
Section 7.06 shall be made only out of the assets of the Company.
(b) To the fullest extent permitted by law, expenses (including
reasonable legal fees and expenses) incurred by an Indemnitee who is indemnified
pursuant to Section 7.06(a) in defending any claim, demand, action, suit or
proceeding shall, from time to time, be advanced by the Company prior to the
final disposition of such claim, demand, action, suit or proceeding upon receipt
by the Company of an undertaking by or on behalf of the Indemnitee to repay such
23
<PAGE>
amount if it shall be determined that the Indemnitee is not entitled to be
indemnified as authorized in this Section 7.06.
(c) The indemnification provided by this Section 7.06 shall be in
addition to any other rights to which an Indemnitee may be entitled under any
agreement, as a matter of law or otherwise, both as to actions in the
Indemnitee's capacity as (i) a present or former member of the Board of
Directors or any committee thereof, (ii) a present or former Officer, employee,
partner, agent or trustee of the Company, or (iii) a Person serving at the
request of the Company in another entity in a similar capacity, and as to
actions in any other capacity, and shall continue as to an Indemnitee who has
ceased to serve in such capacity and shall inure to the benefit of the heirs,
successors, assigns and administrators of the Indemnitee.
(d) The Company may purchase and maintain insurance, on behalf of the
members of the Board of Directors, the Officers and such other Persons as the
Board of Directors shall determine, against any liability that may be asserted
against or expense that may be incurred by such Person in connection with the
Company's activities, regardless of whether the Company would have the power to
indemnify such Person against such liability under the provisions of this
Agreement.
(e) For purposes of this Section 7.06, the Company shall be deemed to
have requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by the Indemnitee of such Indemnitee's duties to the
Company also imposes duties on, or otherwise involves services by, the
Indemnitee to the plan or participants or beneficiaries of the plan; excise
taxes assessed on an Indemnitee with respect to an employee benefit plan
pursuant to applicable law shall constitute "fines" within the meaning of
Section 7.06(a); any action taken or omitted by the Indemnitee with respect to
an employee benefit plan in the performance of such Indemnitee's duties for a
purpose reasonably believed by such Indemnitee to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which is in, or not opposed to, the best interests of the Company.
(f) In no event may an Indemnitee subject the Shareholders to personal
liability by reason of the indemnification provisions set forth in this
Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in part
under this Section 7.06 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 7.06 are for the benefit of the
Indemnities, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.
(i) No amendment, modification or repeal of this Section 7.06 or any
provision hereof shall in any manner terminate, reduce or impair either the
right of any past, present or future Indemnitee to be indemnified by the Company
or the obligation of the Company to indemnify any such Indemnitee under and in
accordance with the provisions of this Section 7.06 as in effect immediately
prior to such amendment modification or repeal with respect to claims
24
<PAGE>
arising from or relating to matters occurring, in whole or in part, part to such
amendment, modification or repeal, regardless of when such claims may be
asserted.
(j) THE PROVISIONS OF THE INDEMNIFICATION PROVIDED IN THIS SECTION 7.06
ARE INTENDED BY THE PARTIES TO APPLY EVEN IF SUCH PROVISIONS HAVE THE EFFECT OF
EXCLUDING THE INDEMNITEE FROM LEGAL RESPONSIBILITY FOR THE CONSEQUENCES OF SUCH
PERSONS' NEGLIGENCE, FAULT OR OTHER CONDUCT.
7.07 Liability.
---------
(a) Notwithstanding anything to the contrary set forth in this agreement,
no Indemnitee shall be liable for monetary damages to the Company, the
Shareholders or any other Persons for losses sustained or liabilities incurred
as a result of any act or omission if such Indemnitee acted in good faith.
(b) Subject to its obligations and duties as set forth in this Article 7,
the Board of Directors and any committee thereof may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through the Company's agents, and neither the
Board of Directors nor any committee thereof shall be responsible for any
misconduct or negligence on the part of any such agent appointed by the Board of
Directors or any committee thereof in good faith.
(c) Any amendment, modification or repeal of this Section 7.07 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on liability under this Section 7.07 as in effect immediately prior
to such amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may be asserted.
7.08 Duties of Officers and Directors. Except as otherwise specifically
--------------------------------
provided in this Agreement, the duties and obligations owed to the Company and
to the Shareholders by the Officers of the Company and by members of the Board
of Directors of the Company, and any such duties that may be owed by any
Shareholder or by any affiliates of any Shareholder, shall be the same as the
respective duties and obligations owed to a corporation organized under the
Delaware General Corporation Law by its officers and directors and any such
duties that may be owed to such corporation by any similarly situated
stockholder or affiliate thereof, respectively.
7.09 Facsimile Signatures. In addition to the provisions for the use of
--------------------
facsimile signatures elsewhere specifically authorized in this Agreement,
facsimile signatures of any Officer or Officers of the Company may be used
whenever and as authorized by the Board of Directors.
7.10 Incorporation of Company. The Board of Directors shall have the
------------------------
authority to cause the Company to reorganize into a form taxable as a
corporation for U.S. federal income tax purposes. If the Board of Directors so
elects, then, unless otherwise specified in the terms of the applicable Company
Securities, each Shareholder shall be required and hereby consents, to
contribute its Company Securities to a newly formed domestic corporation in
exchange for securities of such corporation ("Newco Securities") as specified by
----------------
the terms of the applicable
25
<PAGE>
Company Securities. If the terms of the applicable Company Securities do not
specify the terms of the Newco Securities to be issued, then the applicable
Company Securities shall be exchanged for Newco Securities with economic terms
substantially similar to those of the Company Securities, to the extent
reasonably possible under applicable state law. Holders of Common Shares shall
exchange their Common Shares for common stock of the new corporation in
proportion to their Common Shares.
7.11 Extraordinary Transactions. Notwithstanding any other provision in
--------------------------
this Agreement to the contrary, without the affirmative vote of a Majority
Interest the Company shall not sell all or substantially all of its assets or
merge into or consolidate with any Person.
ARTICLE 8
TAX MATTERS
8.01 Tax Returns. The Tax Matters Shareholder (as defined in Section 8.03
-----------
below) shall prepare and timely file all federal, state and local tax returns
required to be filed by the Company (and make any elections in connection with
each such filing). The Company shall use all reasonable efforts to furnish, by
March 1 following the end of each calendar year, the tax information reasonably
required by Shareholders for federal and state tax reporting purposes.
8.02 Tax Elections. The Company shall make or adopt the following
-------------
elections and conventions on the appropriate tax returns:
(a) to adopt the calendar year as the Company's taxable year;
(b) to adopt the accrual method of accounting and to keep a set of the
Company's books and records on the method used for income tax purposes;
(c) to elect to amortize the organizational expenses of the Company
ratably over a period of 60 months as permitted by Section 709(b) of the Code;
and
(d) any election or convention the Board of Directors in its sole
discretion may deem appropriate.
8.03 Tax Matters Shareholder. The "tax matters partner" of the Company
-----------------------
pursuant to Section 6231(a)(7) of the Code shall be BIII Capital Partners, L.P.
until changed by vote of a Majority Interest (the "Tax Matters Shareholder").
-----------------------
The Tax Matters Shareholder is authorized to represent the Company (at the
Company's expense) in connection with all examinations of the Company's affairs
by tax authorities, including administrative and judicial proceedings and to
expend Company funds for professional services and costs associated therewith.
Each Shareholder agrees to cooperate with the Tax Matters Shareholder and to
take or refrain from taking any and all actions reasonably required by the Tax
Matters Shareholder to conduct such proceedings.
26
<PAGE>
ARTICLE 9
BOOKS AND RECORDS, REPORTS AND
INFORMATION AND ACCOUNTS
9.01 Maintenance of Books and Records. The Company shall keep at its
--------------------------------
principal office complete and accurate books and records of the Company,
supporting documentation of the transactions with respect to the conduct of the
Company's business and minutes of the proceedings of the Board of Directors, the
Shareholders and each committee of the Board of Directors. The records shall
include, but not be limited to, complete and accurate information regarding the
state of the business and financial condition of the Company; a copy of the
Organizational Certificate and this Agreement and all amendments thereto; a
current list of the names and last known business, residence, or mailing
addresses of all Directors and Officers; and the Company's federal, state and
local tax returns for the Company's six most recent tax years.
9.02 Reports and Information.
-----------------------
(a) On or before the 120th day following the end of each fiscal year of
the Company, the Board of Directors shall cause each Shareholder to be furnished
a balance sheet, an income statement, and a statement of changes in financial
condition of the Company for, or as of the end of, that year certified by a
recognized firm of certified public accountants. These financial statements must
be prepared in accordance with generally accepted accounting principles
generally employed for accrual basis records consistently applied (except as
therein noted) and must be accompanied by a report of the certified public
accountants certifying the statements and stating that (i) their examination was
made in accordance with generally accepted auditing standards and, in their
opinion, the financial statements fairly present the financial position,
financial results of operations, and changes in financial condition in
accordance with accounting principles employed for accrual basis records
consistently applied (except as therein noted) and (ii) in making the
examination and reporting on the financial statements described above, nothing
came to their attention that caused them to believe that (A) the income and
revenues were not paid or credited in accordance with the financial and
accounting provisions of this Agreement, (B) the costs and expenses were not
charged in accordance with the financial and accounting provisions of this
Agreement, or, specifying the nature and period of existence of the failure. On
or before the 45th day following the end of each fiscal quarter of the Company,
the Board of Directors shall cause each Shareholder to be furnished an unaudited
balance sheet, income statement, and statement of changes in financial condition
of the Company for, or as of the end of, that quarter, prepared in accordance
with generally accepted accounting principles generally employed for accrual
basis records consistently applied (except as noted therein). The Board of
Directors also may cause to be prepared or delivered such other reports as they
may deem appropriate. The Company shall bear the costs of all these reports.
Notwithstanding the foregoing, the Company shall be deemed to nave complied with
the requirements of this Section 9.02 so long as the Company is a reporting
company registered under the Securities Exchange Act of 1934, and files in a
timely manner the periodic reports required of it under the rules and
regulations promulgated thereunder.
(b) In addition to the other rights specifically set forth in this
Agreement and subject to such reasonable standards (including standards
governing what information and documents are to be furnished and at what time
and location and at whose expense) as may be established by
27
<PAGE>
the Board of Directors or any Officer, each Shareholder is entitled to all
information to which a member of a Delaware limited liability company is
entitled to have access pursuant to the Act under the circumstances and subject
to the conditions therein stated.
9.03 Accounts. The Board of Directors may establish one or more separate
--------
bank and investment accounts and arrangements for the Company, which shall be
maintained in the Company's name with financial institutions and firms that the
Board of Directors determines.
ARTICLE 10
DISSOLUTION, WINDING-UP AND TERMINATION
10.01 Dissolution.
-----------
(a) The Company shall dissolve and its affairs shall be wound up on the
first to occur of the following events (each a "Dissolution Event"):
-----------------
(i) the consent of a Supermajority Interest;
(ii) entry of a decree of judicial dissolution of the Company under
Section 18-802 of the Act; or
(iii) if such resignation, dissolution or Bankruptcy occurs during
the period during which the transfer restrictions set forth in Section
3.08(b) are in force, upon the resignation, dissolution or Bankruptcy of
BIII Capital Partners, L.P., unless Shareholders holding Company Securities
representing a majority in interest in the profits and assets of the
Company (as determined by the Board of Directors in accordance with the
standards set forth in Revenue Procedure 94-46, 1994-2 C.B. 688) consent to
the continuation of the Company within 90 days of such event.
(b) Except as provided in Section 10.01(a)(iii), the death, resignation,
dissolution or Bankruptcy of any Shareholder shall not constitute a Dissolution
Event (and the business of the Company shall be continued after such event).
10.02 Winding-Up and Termination.
--------------------------
(a) On the occurrence of a Dissolution Event, the Board of Directors
shall select one more Persons to act as liquidator. The liquidator shall proceed
diligently to wind up the affairs of the Company and make final distributions as
provided herein and in the Act. The costs of winding up shall be borne as a
Company expense. Until final distribution, the liquidator shall continue to
operate the Company properties with all of the power and authority of the Board
of Directors.
(b) Any assets of the Company remaining at the conclusion of the winding-
up process shall be distributed among the Shareholders in accordance with their
respective relative rights and preferences to liquidating distributions
specified in Article 4 or in the Designation authorizing the issuance of their
respective Company Securities. All distributions in kind to the Shareholders
shall be made subject to the liability of each distributee for costs, expenses,
and liabilities theretofore incurred or for the payment of which the Company has
committed prior to
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<PAGE>
the date of termination. The distribution of cash or property to a Shareholder
in accordance with the provisions of this Section 10.02(b) constitutes a
complete return to the Shareholder of its Capital Contributions and a complete
distribution to the Shareholder of its share of all the Company's property and
constitutes a compromise to which all Shareholders have consented within the
meaning of Section 18-502(b) of the Act.
(c) On completion of such final distribution, the liquidator shall file a
Certificate of Cancellation with the Secretary of State of the State of
Delaware, cancel any other filings made pursuant to Section 2.05, and take such
other actions as may be necessary to terminate the existence of the Company.
10.03 Deficit Capital Accounts. No Shareholder shall have any obligation
------------------------
to restore any negative balance in its Capital Account upon liquidation of the
Company.
ARTICLE 11
ACQUISITION BY COMPANY OF COMPANY
SECURITIES
11.01 Purchase or Sale of Company Securities. Unless otherwise provided
--------------------------------------
in this Agreement or as otherwise provided with respect to a series of Preferred
Shares in any Designation creating such series, the Board of Directors may cause
the Company to purchase, redeem or otherwise acquire Company Securities. Upon
acquisition thereof the Certificates representing such Company Securities shall
be canceled, and such Company Securities shall no longer be considered issued or
outstanding for any purpose.
ARTICLE 12
AMENDMENT OF AGREEMENT;
SHAREHOLDER MEETINGS; RECORD DATE
12.01 Amendment to be Adopted Solely by the Board of Directors. Each
--------------------------------------------------------
Shareholder agrees that the Board of Directors, without the approval of any
Shareholder, may amend any provision of this Agreement, and (pursuant to the
powers of attorney granted in Section 2.09) may execute, swear to, acknowledge,
deliver, file and record whatever documents may be required in connection
therewith, to reflect:
(a) a change in the name of the Company, the location of the principal
place of business of the Company, the registered agent of the Company or the
registered office of the Company;
(b) a change that, in the sole discretion of the Board of Directors, is
reasonable and necessary or appropriate to qualify or continue the qualification
of the Company as a limited liability company or an entity in which the
Shareholders have limited liability under the laws of any state or that is
necessary or advisable in the opinion of the Board of Directors to ensure that
the Company will not be treated as an association taxable as a corporation or
otherwise taxed as an entity for federal income tax purposes;
(c) a change (i) that, in the sole discretion of the Board of Directors,
does not adversely affect the Shareholders in any material respect, (ii) that is
necessary or desirable to
29
<PAGE>
satisfy any requirements, conditions or guidelines contained in any opinion,
directive, order, ruling or regulation of any federal or state agency or
judicial authority or contained in any federal or state statute (including,
without limitation, the Act) or that is necessary or desirable to facilitate the
trading of Company Securities (including, without limitation the division of
Company Securities into different classes to facilitate uniformity of tax
consequences within such class of Company Securities) or comply with any rules,
regulation, guidelines or requirement of any securities exchange on which
Company Securities are or will be listed for trading, compliance with any of
which the Board of Directors determines in its sole discretion to be in the best
interests of the Company and the Board of Directors or (iii) that is required to
effect the intent of the provisions of this Agreement or is otherwise
contemplated by this Agreement;
(d) an amendment that is necessary, in the Opinion of Counsel, to prevent
the Company or its Directors or Officers or affiliates from in any manner being
subjected to the provisions of the Investment Company Act of 1940, as amended,
the Investment Advisers Act of 1940, as amended, or "plan asset" regulations
adopted under the Employee Retirement Income Security Act of 1974, as amended,
whether or not substantially similar to plan asset regulations currently applied
or proposed by the United States Department of Labor;
(e) subject to the terms of Section 4.03, an amendment that the Board of
Directors determines in its sole discretion to be necessary or appropriate in
connection with the authorization for issuance of any class or series of Company
Securities;
(f) any amendment expressly permitted in this Agreement to be made by the
Board of Directors acting alone;
(g) an amendment that, in the sole discretion of the Board of Directors,
is necessary or desirable to reflect, account for and deal with appropriately
the formation by the Company of, or investment by the Company in, any
corporation, partnership, joint venture, limited liability company or other
Person, in connection with the conduct by the Company of activities permitted by
the terms of Section 2.04; or
(h) any other amendments substantially similar to the foregoing.
12.02 Amendment Procedures. Except as provided in Sections 12.01 and
--------------------
12.03, all amendments to this Agreement shall be made in accordance with the
following requirements. Amendments to this Agreement may be proposed only by or
with the consent of the Board of Directors. A proposed amendment shall be
effective upon its approval by the holders or at least a Majority Interest
unless a greater or different percentage is required under this Agreement. Each
proposed amendment that requires the approval of the holders of a specified
percentage of Company Securities shall be set forth in a writing that contains
the text of the proposed amendment. If such an amendment is proposed, the Board
of Directors shall seek the written approval of the holders of the requisite
percentage of Company Securities or call a meeting of the Shareholders to
consider and vote on such proposed amendment. The Board of Directors shall
notify all Record Holders upon final adoption of any such proposed amendments.
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<PAGE>
12.03 Amendment Requirements.
----------------------
(a) Notwithstanding the provisions of Sections 12.01 and 12.02, no
provision of this Agreement or any Designation that establishes a specified
percentage of Company Securities, the approval of the holders of which is
required to take any action shall be amended, altered, changed, repealed or
rescinded in any respect that would have the effect of reducing such voting
requirements unless such amendment is approved by the written consent or the
affirmative vote of Shareholders whose aggregate Company Securities constitute
not less than the voting requirement sought to be reduced.
(b) Notwithstanding the provisions of Sections 12.01 and 12.02, no
amendment to this Agreement may enlarge the obligations of any Shareholder
without its consent.
(c) Notwithstanding the provisions of Section 12.01 and 12.02, any
amendment that would have an adverse effect in any way on the powers, rights or
preferences of any class or series of Company Securities must be approved by the
holders of not less than two-thirds of the Company Securities of the class or
series affected.
(d) This Section 12.03 may be amended only with the approval of the
holders of at least a Supermajority Interest.
12.04 Meetings. All acts of Shareholders to be taken hereunder shall be
--------
taken in the manner provided in this Article 12. Meetings of the Shareholders
may be called by the Board of Directors or by Shareholders owning at least
twenty-five percent (25%) of the Company Securities of the class or classes for
which a meeting is proposed. Shareholders shall call a meeting by delivering to
the Board of Directors one or more requests in writing stating that the signing
Shareholders wish to call a meeting and indicating the general or specific
purposes for which the meeting is to be called. Within 60 days after receipt of
such a call from Shareholders or within such greater time as may be reasonably
necessary for the Company to comply with any statutes, rules, regulations,
listing agreements or similar requirements governing the holding of a meeting or
the solicitation of proxies for use at such meeting, the Board of Directors
shall send a notice of the meeting to the Shareholders either directly or
indirectly through the Transfer Agent. A meeting shall be held at a time and
place determined by the Board of Directors on a date not more than 60 nor less
than 10 days after the mailing of notice of the meeting.
12.05 Notice of a Meeting. Notice of a meeting called pursuant to Section
-------------------
12.04 shall be given to the Record Holders in writing by mail or other means of
written communication in accordance with Section 13.02. The notice shall be
deemed to have been given at the time when deposited in the mail or sent by
other means of written communication.
12.06 Record Date. For purposes of determining the Shareholders entitled
-----------
to notice of or to vote at a meeting of the Shareholders or to give approvals
without a meeting as provided in Section 12.11, the Board of Directors may set a
Record Date, which shall not be less than 10 nor more than 60 days before (a)
the date of the meeting (unless such requirement conflicts with any rule,
regulation, guideline or requirement of any securities exchange on which Company
Securities are listed for trading, in which case the rule, regulation, guideline
or requirement of such exchange shall govern) or (b) in the event that approvals
are sought without a meeting, the
31
<PAGE>
date by which Shareholders are requested in writing by the Board of Directors to
give such approvals.
12.07 Adjournment. When a meeting is adjourned to another time or place,
-----------
notice need not be given of the adjourned meeting and a new Record Date need not
be fixed, if the time and place thereof are announced at the meeting at which
the adjournment is taken, unless such adjournment shall be for more than 45
days. At the adjourned meeting, the Company may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than 45 days or if a new Record Date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given in accordance with this Article
12.
12.08 Waiver of Notice; Approval of Meeting; Approval of Minutes. The
----------------------------------------------------------
transaction of any meeting of Shareholders, however called and noticed, and
whenever held, shall be as valid as if conducted at a meeting duly held after
regular call and notice, if a quorum is present either in person or by proxy,
and if, either before or after the meeting, Shareholders representing such
quorum who were present in person or by proxy and entitled to vote, sign a
written waiver of notice or an approval of the holding of the meeting or an
approval of the minutes thereof. All waivers and approvals shall be filed with
the Company records or made a part of the minutes of the meeting. Attendance of
a Shareholder at a meeting shall constitute a waiver of notice of the meeting,
except when the Shareholder does not approve, at the beginning of the meeting,
of the transaction of any business because the meeting is not lawfully called or
convened; and except that attendance at a meeting is not a waiver of any right
to disapprove the consideration of matters required to be included in the notice
of the meeting, but not so included, if the disapproval is expressly made at the
meeting.
12.09 Quorum. The holders of 50% of the Company Securities of the class
------
or classes for which a meeting has been called represented in person or by proxy
shall constitute a quorum at a meeting of Shareholders of such class or classes
unless any such action by the Shareholders requires approval by holders of more
than 50% of such Company Securities, in which case the quorum shall be such
greater amount. At any meeting of the Shareholders duly called and held in
accordance with this Agreement at which a quorum is present, the act of
Shareholders holding Company Securities in the aggregate representing a majority
of the Company Securities entitled to vote and present in person or by proxy at
such meeting shall be deemed to constitute the act of all Shareholders, unless a
greater or different percentage is required with respect to such action under
the provisions of this Agreement, in which case the act of the Shareholders
holding Company Securities that in the aggregate represent at least such greater
or different percentage shall be required. The Shareholders present at a duly
called or held meeting at which a quorum is present may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
Shareholders to leave less than a quorum, if any action taken (other than
adjournment) is approved by the required percentage of Company Securities
specified in this Agreement. In the absence of a quorum, any meeting of
Shareholders may be adjourned from time to time by the affirmative vote of a
majority of the Company Securities represented either in person or by proxy, but
no other business may be transacted, except as provided in Section 12.07.
12.10 Conduct of Meeting. The Board of Directors shall have full power
------------------
and authority concerning the manner of conducting any meeting of the
Shareholders or solicitation of approvals in writing, including, without
limitation, the determination of Persons entitled to vote,
32
<PAGE>
the existence of a quorum, the satisfaction of the requirements of Section
12.04, the conduct of voting, the validity and effect of any proxies and the
determination of any controversies, votes or challenges arising in connection
with or during the meeting or voting. The Board of Directors shall designate a
Person to serve as chairman of any meeting and shall further designate a Person
to take the minutes of any meeting. All minutes shall be kept with the records
of the Company. The Board of Directors may make such other regulations
consistent with applicable law and this Agreement as it may deem advisable
concerning the conduct of any meeting of the Shareholders or solicitation of
approvals in writing, including, without limitation, regulation in regard to the
appointment of proxies, the appointment and duties of inspectors of votes and
approvals, the submission and examination of proxies and other evidence of the
right to vote, and the revocation of approvals in writing.
12.11 Action Without a Meeting. Any action that may be taken at a meeting
------------------------
of the Shareholders may be taken without a meeting if an approval in writing
setting forth such action is signed by Shareholders owning not less than the
minimum percentage of the Company Securities that would be necessary to
authorize or take such action at a meeting at which all the Shareholders were
present and voted. Prompt notice of the taking of action without a meeting
shall be given to the Shareholders who have not approved in writing. The Board
of Directors may specify that any written ballot submitted to Shareholders for
the purpose of taking any action without a meeting shall be returned to the
Company within the time period, which shall be not less than 20 days, specified
by the Board of Directors. If a ballot returned to the Company does not vote
all of the Company Securities held by the Shareholder, the Company shall be
deemed to have failed to receive a ballot for the Company Securities that were
not voted. If approval of the taking of any action by the Shareholders is
solicited by any Person other than by or on behalf of the Board of Directors,
the written approvals shall have no force and effect unless and until (a) they
are deposited with the Company in care of the Board of Directors, (b) approvals
sufficient to the action proposed are dated as of a date not more than 90 days
prior to the date sufficient approvals are deposited with the Company and (c) an
Opinion of Counsel is delivered to the Board of Directors to the effect that the
exercise of such right and the action proposed to be taken with respect to any
particular matter is permissible under the state statutes then governing the
rights, duties and liabilities of the Company and the Shareholders.
12.12 Voting and Other Rights.
-----------------------
(a) Only those Record Holders of Company Securities on the Record Date
set pursuant to Section 12.06 (and also subject to the limitations contained in
the definition of "Outstanding" in Section 1.01) shall be entitled to notice of,
and to vote at, a meeting of Shareholders or to act with respect to matters as
to which the holders of the Company Securities have the right to vote or to act.
All references in this Agreement to votes of, or other acts that may be taken
by, the Company Securities shall be deemed to be references to the votes or acts
of the Record Holders of such Company Securities.
(b) With respect to Company Securities that are held for a Person's
account by another Person (such as a broker, dealer, bank, trust company or
clearing corporation, or an agent of any of the foregoing), in whose name such
Company Securities are registered, such broker, dealer or other agent shall, in
exercising the voting rights in respect of such Company Securities on any
matter, and unless the arrangement between such Persons provides otherwise, vote
such
33
<PAGE>
units in favor of, and at the direction of, the Person who is the beneficial
owner, and the Company shall be entitled to assume it is so acting without
further inquiry.
ARTICLE 13
GENERAL PROVISIONS
13.01 Offset. Whenever the Company is to pay any sum to any Shareholder,
------
any amounts that Shareholder owes the Company may be deducted from that sum
before payment.
13.02 Notices. Except as expressly set forth to the contrary in this
-------
Agreement, all notices, requests or consents provided for or permitted to be
given under this Agreement must be in writing and must be delivered to the
recipient in person, by courier or mail; and a notice, request or consent given
under this Agreement is effective on receipt by the Person to receive it.
Whenever any notice is required to be given by Law, the Organizational
Certificate or this Agreement, a written waiver thereof, signed by the Person
entitled to notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice.
13.03 Effect of Waiver or Consent. A waiver or consent, express or
---------------------------
implied, to or of any breach or default by any Person in the performance by that
Person of its obligations with respect to the Company is not a consent or waiver
to or of any other breach or default in the performance by that Person of the
same or any other obligations of that Person with respect to the Company.
Failure on the part of a Person to complain of any act of any Person or to
declare any Person in default with respect to the Company, irrespective of how
long that failure continues, does not constitute a waiver by that Person of its
rights with respect to that default until the applicable statute of limitations
period has run.
13.04 Binding Effect. This Agreement is binding on and shall inure to the
--------------
benefit of the Shareholders and their respective heirs, legal representatives,
successors, and permitted assigns.
13.05 Governing Law; Severability. THIS AGREEMENT IS GOVERNED BY AND
---------------------------
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE EXCLUDING
ANY CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE
CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION. In the event
of a direct conflict between the provisions of this Agreement and (a) any
provision of the Organizational Certificate, or (b) any mandatory, non-waivable
provision of the Act, such provision of the Organizational Certificate or the
Act shall control. If any provision of the Act provides that it may be varied
or superseded in the limited liability company agreement (or otherwise by
agreement of the members or managers of a limited liability company), such
provision shall be deemed superseded and waived in its entirety if this
Agreement contains a provision addressing the same issue or subject matter. If
any provision of this Agreement or the application thereof to any Person or
circumstance is held invalid or unenforceable to any extent, the remainder of
this Agreement and the application of that provision to other Persons or
circumstances is not affected thereby and that provision shall be enforced to
the greatest extent permitted by Law.
13.06 Further Assurances. In connection with this Agreement and the
------------------
transactions contemplated hereby, each Shareholder shall execute and deliver any
additional documents and
34
<PAGE>
instruments and perform any additional acts that may be necessary or appropriate
to effectuate and perform the provisions of this Agreement and those
transactions.
13.07 Waiver of Certain Rights. Each Shareholder irrevocably waives any
------------------------
right it may have to maintain any action for dissolution of the Company or for
partition of the property of the Company.
13.08 Counterparts. This Agreement may be executed in any number of
------------
counterparts with the same effect as if all signing parties had signed the same
document. All counterparts shall be construed together and constitute the same
instrument.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
35
<PAGE>
IN WITNESS WHEREOF, the Shareholders have executed this Agreement as of the
date first set forth above.
Shareholders:
/s/ Jack McDonald
--------------------------
Name: Jack McDonald
Date of Execution: 8/28/97
36
<PAGE>
New Millennium Homes, LLC
First Amendment to
Limited Liability Company Agreement
-----------------------------------
This First Amendment is entered into as of November 5, 1997 for the purpose
of amending the Limited Liability Company Agreement of New Millennium Homes, LLC
dated August 28, 1997 (the "LLC Agreement"). All capitalized terms used herein
without definition shall have the meanings ascribed to them in the LLC
Agreement.
WHEREAS, in accordance with Article 12 of the LLC Agreement, the
undersigned Shareholders of the Company representing at least a Majority
Interest desire to amend Section 3.08(b) to allow for transfers of Common Shares
with the prior written consent of BIII Capital Partners, L.P., Jack L. McDonald,
Charles Yamarone and Dale V. Kesler, subject to restrictions contained elsewhere
in the LLC Agreement.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
Section 1. Amendment to Partnership Agreement.
--------- ----------------------------------
In accordance with Article 12 of the LLC Agreement, Section 3.08(b) is
hereby deleted and replaced in its entirety with the following:
(b) During the Company's first taxable year, and until such time,
if ever, that the State of California adopts rules for determining the
status of an entity as a partnership or as an association taxable as a
corporation that are substantially similar to the rules in Treasury
Regulations (S)(S) 301.7701-2, -3 and -4, Company Securities may be
Transferred, subject to the provisions of 3.08(c), with the prior written
consent of each of BIII Capital Partners, L.P., Jack L. McDonald, Charles
Yamarone and Dale V. Kesler, which consent may be granted or withheld in
such Shareholders' sole and absolute discretion, provided, however, that
-------- -------
the consent of any of the foregoing shall only be required so long as such
party is a Shareholder. In the event that any of the foregoing are no
longer Shareholders, then the Board of Directors shall have the power to
amend this Section in order to replace such party with another Shareholder
for the purposes of this Section 3.08(b), in the sole discretion of the
Board.
Section 2. Construction of LLC Agreement.
--------- -----------------------------
The LLC Agreement and this First Amendment shall be read together and shall
have the same force and effect as if the provisions of the LLC Agreement and
this First Amendment were contained in one document. Except as expressly
amended by this First Amendment, the LLC Agreement shall remain in full force
and effect in accordance with its terms.
<PAGE>
Section 3. Counterparts.
--------- ------------
This First Amendment may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
[END OF TEXT]
2
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this First Amendment as
of the date first set forth above.
Robert L. Berger and Associates, Inc., as escrow
agent
By: /s/ Robert L. Berger
-----------------------------------------------
Name: Robert L. Berger
Title: President
Estate of Baldwin Builders, a California
corporation
By:
-----------------------------------------------
Name:
Title:
/s/ Jack L. McDonald
-----------------------------------------------
Jack L. McDonald
/s/ Albert Fried, Jr.
-----------------------------------------------
Albert Fried, Jr.
BancBoston Investments, Inc.
By:
-----------------------------------------------
Name:
Title:
3
<PAGE>
B III Capital Partners, L.P.
By: DDJ Capital III, LLC, its General Partner
By: DDJ Capital Management, LLC, Manager
By: /s/ Judy K. Mencher
-----------------------------------------------
Name: Judy K. Mencher
Title: Member
Charles N. Mathewson Trust
By:
-----------------------------------------------
Name:
Title:
DayStar Special Situations Fund, L.P.
By: /s/ Bruce W. Gregory
-----------------------------------------------
Name: Bruce W. Gregory
Title: Managing Director
DayStar LLC, as agent
By: /s/ Bruce W. Gregory
-----------------------------------------------
Name: Bruce W. Gregory
Title: Managing Director
DFG Corporation
By:
-----------------------------------------------
Name:
Title:
4
<PAGE>
FAMCO Income Partners, L.P.
By:
-----------------------------------------------
Name:
Title:
FAMCO Offshore, LTD.
By:
-----------------------------------------------
Name:
Title:
FAMCO Value Income Partners, L.P.
By:
-----------------------------------------------
Name:
Title:
Goldman Sachs & Co.
By:
-----------------------------------------------
Name:
Title:
Highbridge International LDC
By:
-----------------------------------------------
Name:
Title:
5
<PAGE>
Ingalls & Snyder Value Partners, L.P.
By: /s/ Thomas O. Boucher, Jr.
-----------------------------------------------
Name: Thomas O. Boucher, Jr.
Title: General Partner
International Game Technology
By:
-----------------------------------------------
Name:
Title:
Koch Industries, Inc.
By:
-----------------------------------------------
Name:
Title:
Life Insurance Company of the Southwest
By:
-----------------------------------------------
Name:
Title:
Merrill Lynch Phoenix Fund, Inc.
By:
-----------------------------------------------
Name:
Title:
6
<PAGE>
National Life Insurance Company
By:
-----------------------------------------------
Name:
Title:
ZPG Securities, LLC
By:
-----------------------------------------------
Name:
Title:
/s/ Judy K. Mencher
-----------------------------------------------
Judy K. Mencher
/s/ Jay B. Burnham
-----------------------------------------------
Jay B. Burnham
/s/ Charles Yamarone
-----------------------------------------------
Charles Yamarone
/s/ Dale V. Kesler
-----------------------------------------------
Dale V. Kesler
/s/ Gregory R. Petersen
-----------------------------------------------
Gregory R. Petersen
/s/ J. Karl Kreutzer
-----------------------------------------------
J. Karl Kreutzer
7
<PAGE>
/s/ Cynthia Shaffer
-----------------------------------------------
Cynthia Shaffer
/s/ Louis J. Malone
-----------------------------------------------
Louis J. Malone
/s/ David Bedillion
-----------------------------------------------
David Bedillion
/s/ James M. Schliep
-----------------------------------------------
James M. Schliep
8
<PAGE>
New Millennium Homes, LLC
Second Amendment to
Limited Liability Company Agreement
-----------------------------------
This Second Amendment is entered into as of November 7, 1997 for the
purpose of amending the Limited Liability Company Agreement of New Millennium
Homes, LLC dated August 28, 1997 (the "LLC Agreement"). All capitalized terms
used herein without definition shall have the meanings ascribed to them in the
LLC Agreement.
WHEREAS, in order to reflect the issuance and grant of certain additional
Common Shares of New Millennium Homes, LLC (the "Company") to each of the
members of the Board of Directors that is not an employee of the Company or any
of its subsidiaries (the "Outside Directors") in the Capital Account balances
for all Shareholders;
WHEREAS, in order to reflect the issuance and grant of certain additional
Common Shares of the Company to certain employees of the Company and/or its
subsidiaries; and
NOW, THEREFORE, in consideration of the mutual covenants set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
Section 1. Amendment to Partnership Agreement.
--------- ----------------------------------
In order to reflect the issuance of additional Common Shares to the Outside
Directors and the Grantees in the Capital Account balances for all Shareholders,
Schedule 1 to the LLC Agreement is hereby deleted in its entirety and replaced
----------
with the Schedule 1 attached hereto pursuant to Section 5.04 of the LLC
----------
Agreement.
Section 2. Construction of LLC Agreement.
--------- -----------------------------
The LLC Agreement and this First Amendment shall be read together and shall
have the same force and effect as if the provisions of the LLC Agreement and
this First Amendment were contained in one document. Any provision of the LLC
Agreement not amended by this First Amendment shall remain in full force and
effect as provided in the LLC Agreement immediately prior to the date hereof.
Section 3. Counterparts.
--------- ------------
This First Amendment may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Second Amendment as
of the date first set forth above.
/s/
-----------------------------------------------
Jack L. McDonald
/s/
-----------------------------------------------
Judy K. Mencher
/s/
-----------------------------------------------
Jay B. Burnham
/s/
-----------------------------------------------
Charles Yamarone
/s/
-----------------------------------------------
Dale V. Kesler
2
<PAGE>
SCHEDULE 1
----------
Capital Accounts
----------------
<TABLE>
<S> <C>
Jack L. McDonald $ 0
Baldwin Builders 2,295,081.67
Robert Berger and Associates, as escrow agent 56,311,475.40
Koch Industries, Inc. 650,533.45
Ingalls & Snyder Value LLC 520,426.77
Merrill Lynch Phoenix Fund, Inc. 2,114,233.72
Albert Fried, Jr. 65,053.34
BIII Capital Partners, L.P. 3,024,980.53
BIII Capital Partners, L.P. 260,213.38
DayStar Partners, L.P. 1,561,280.27
DayStar Partners, L.P. 1,951,600.35
National Life Insurance Company 455,373.41
Life Insurance Company of the Southwest 195,160.01
Highbridge International LLC 1,951,600.37
Goldman Sachs & Co. 1,301,066.91
Charles N. Mathewson Trust 68,306.01
FAMCO Value Income Partners, L.P. 923,838.84
FAMCO Income Partners, L.P. 292,740.05
FAMCO Offshore, LTD. 221,151.45
DFG Corporation 292,740.05
ZPG Securities, LLC 68,306.01
International Game Technology 84,517.94
BancBoston Investments, Inc. 390,320.07
Gregory R. Petersen 0
J. Karl Kreutzer 0
Louis J. Malone 0
David Bedillion 0
James M. Schliep 0
Judy K. Mencher 0
Jay B. Burnham 0
Dale V. Kesler 0
Charles Yamarone 0
</TABLE>
