exv4w2



 



Exhibit 4.2



EXHIBIT D-3



CERTIFICATE OF DESIGNATIONS

OF

CLASS 3 UNITS

OF JCM PARTNERS, LLC

(As Created by the Board of Managers

Pursuant to Section 2.1.6 of the Amended and

Restated Operating Agreement, dated as of June 25, 2003)


WHEREAS, Section 2.1.6 of that Amended and Restated Operating Agreement dated
as of June 25, 2003, as it may be amended thereafter (“Agreement”) of JCM
Partners, LLC, a Delaware limited liability company (“Company”), provides that
the Board of Managers may create a class of Units by approving a Certificate of
Designations for such class; and


WHEREAS, this Certificate of Designations sets forth the rights, preferences,
privileges and restrictions of the Class 3 Units;


NOW, THEREFORE, BE IT RESOLVED, that the Class 3 Units shall have the rights,
preferences, privileges and restrictions set forth herein. Capitalized terms
not otherwise defined herein have the meaning set forth in the Agreement.



	1.	 	Designation of Class.
	 
	 	 	The Company shall have a class of Units which shall be designated “Class
3 Units” (the “Class 3 Units”).
	 
	2.	 	Number of Class 3 Units.
	 
	 	 	The number of Class 3 Units that may be issued shall not exceed the
number of Units authorized for issuance as Units under Section 2.1.2 of
the Agreement.
	 
	3.	 	Status of Class 3 Units.
	 
	 	 	All Class 3 Units shall remain Class 3 Units until converted in
accordance with Section 7 of this Certificate of Designations and the
terms of the Agreement.
	 
	4.	 	Distributions to Holders of Class 3 Units.




			
	 	4.1	Priority of Distributions.




		
	 	The holders of Class 3 Units shall have the right to receive Class
3 Mandatory Monthly Distributions (see Section 4.2 below). The
Class 3 Mandatory Monthly Distributions shall be paid in full each
month prior to payment of any distributions 










 






		
	 	on any series of
Preferred Units or any Additional Distributions to any class of
Units. In addition, the Company shall not issue any class of Units
with the right to receive any distribution prior to payment of the
Class 3 Mandatory Monthly Distributions; provided, however, that
the Company is authorized to issue classes of Units or series of
Preferred Units with the right to receive Mandatory Distributions
on the terms set forth in Section 2.1.4.2(b) of the Agreement
without the need to obtain any additional authorization or vote of
the Class 3 Units. Class 3 Units shall have the same priority as
Class 1 Units for participating in any shortfall as set forth in
Section 2.1.4.2(b)(1) of the Agreement. Subject to Section
2.1.4.2(c) of the Agreement, the Class 3 Units shall receive
Additional Distributions as determined by the Board in its sole
discretion, but at no time will the amount of Additional
Distributions be less than the amount that the Class 1 Units
receive on a per Unit basis.




			
	 	4.2	Class 3 Mandatory Monthly Distributions.




		
	 	The Company shall make a monthly distribution to the holders of
Class 3 Units in an amount equal to one-twelfth (1/12th) of eight
and 25/100 cents ($0.0825) per Class 3 Unit (the “Class 3 Mandatory
Monthly Distributions”). If the Company fails, for any reason, to
pay any Class 3 Mandatory Monthly Distribution(s) in a timely
manner (“Overdue Class 3 Mandatory Monthly Distributions”), the
Company shall begin liquidating its assets as quickly as
commercially reasonable and shall pay the holders of Class 3 Units
interest on any Overdue Class 3 Mandatory Monthly Distributions at
the rate of ten percent (10%) per annum. The Company may cease
liquidating its assets when the Company no longer has any Overdue
Class 3 Mandatory Monthly Distributions.




			
	 	4.3	Payment.




		
	 	The Class 3 Mandatory Monthly Distributions shall be paid to the
holders of record of Class 3 Units as of the first day of the month
and mailed by the Company to such holders of record no later than
the last day of each month. In lieu of mailing, the Company may
transmit payment to a holder of Class 3 Units in any other manner
agreed to in writing by a holder of Class 3 Units.




			
	 	4.4	Termination of Class 3 Mandatory Monthly Distributions.




		
	 	The Class 3 Mandatory Monthly Distributions shall remain in effect
until the first to occur of the following events (each, a “Class 3
Mandatory Distribution Termination Event”):




			
	 	4.4.1	The monthly record date immediately prior to the
dissolution of the Company pursuant to Section 5.1.1 of the
Agreement; or



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	 	4.4.2	The closing of a Change of Control Merger or
Consolidation. “Change of Control Merger or Consolidation”
means any merger or consolidation in which the Company is not
the surviving entity, except a transaction that results in the
Members of the Company immediately prior to the transaction
owning securities representing at least fifty percent (50%) of
the voting power of the surviving entity after the
transaction.




	5.	 	[Intentionally Left Blank]
	 
	6.	 	Voting Rights.
	 
	 	 	The holders of the Class 3 Units shall have the voting rights granted to
Units in the Agreement, including the right to vote on certain matters as
a separate class of Units as set forth in Sections 2.2.2 and 2.2.3 of the
Agreement. In addition, provided the Board has first approved such
amendment, any amendment to this Certificate of Designations shall
require that a majority of the Class 3 Units who are present (by person
or proxy) at a duly called and held meeting at which a quorum is present
shall be required to approve such amendment (or if no meeting is to be
held, then upon the written consent executed by a majority in interest of
the outstanding Class 3 Units).
	 
	7.	 	Conversion Rights and Restrictions.




			
	 	7.1	The Right of Holders of Other Units to Convert to Class 3 Units.




			
	 	7.1.1	Any holder of Class 1 Units, who has not
exercised the holder’s Class 1 Put Right pursuant to Section
5.3 of the Certificate of Designations of Class 1 Units, may
convert the holder’s Class 1 Units into Class 3 Units at any
time by complying with the procedures herein.




			
	 	7.1.2	Any holder of Class 2 Units, who has not
exercised the holder’s Class 2 Put Right pursuant to Section
5.3 of the Certificate of Designations of Class 2 Units, may
convert the holder’s Class 2 Units into Class 3 Units at any
time by complying with the procedures herein.




			
	 	7.1.3	Any holder of Class 1 or Class 2 Units wishing
to convert such Units into Class 3 Units must convert their
Class 1 or Class 2 Units on both a Unit-for-Unit basis and a
certificate-by-certificate basis by delivering properly
completed conversion form(s) to the Company. (The Company has
not issued certificates for existing Units. However, the
Company has an internal system that creates book entry
certificates for the holders of existing Units. The Company
issues distribution checks on a book entry
certificate-by-certificate basis.)




			
	 	7.1.4	The Board shall have the right to impose
reasonable procedures and controls related to the conversion
of other Units to Class 3 Units as permitted by this Section 7
to include requiring holders of other Units to deliver written
notice to the Company that the holder elects to convert



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	 	 	those
Units to Class 3 Units. Any conversion shall be processed
according to the Company’s procedures.




			
	 	7.2	The Right of Holders of Class 3 Units to Convert to Other Units.




			
	 	7.2.1	The rights and conditions governing the
conversion of Class 3 Units to other Units are specified in
the Certificates of Designations for those other Units.




			
	 	7.2.2	When Class 3 Units are converted to another
class of Units, the holder shall then hold the new class of
Units, and the converted Class 3 Units shall assume the status
of authorized but unissued Units. The Company shall at all
time reserve and keep available out of its authorized Units
sufficient Units to satisfy any the conversion rights granted
to holders of Class 3 Units.




	8.	 	No Impairment.
	 
	 	 	The Company will not, by amendment of the Agreement or through any
reorganization, recapitalization, transfer of assets, consolidation,
merger, dissolution, issuance or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Certificate of Designations to be observed or
performed by the Company, but will at all times in good faith assist in
carrying out all the provisions of this Certificate of Designations and
in the taking of all such action as may be necessary or appropriate in
order to protect the rights (including but not limited to the conversion
rights) of the holders of Class 3 Units against impairment.
Notwithstanding any implication to the contrary, the foregoing shall not
have the affect of requiring the unanimous approval or consent of each
holder of Class 3 Units in order to amend the Agreement or this
Certificate of Designations, or to permit the Company to engage in a
reorganization, recapitalization, transfer or sale of assets,
consolidation, merger, dissolution, or issuance of Units or Preferred
Units.
	 
	9.	 	Residual Rights.
	 
	 	 	Except as expressly provided for herein, the Class 3 Units shall be
vested with the rights, preferences, privileges and restrictions accruing
to Units under the Agreement.





	 	 	 	 
	 	 	
JCM PARTNERS, LLC
	 
	 	 	By	/s/ Gayle M. Ing
	 	 	 	

	 	 	 	Gayle M. Ing,

Chief Executive Officer
	 
	 	 	
Dated:  Effective September 24, 2003




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