Document:

OPERATING AGREEMENT OF
                              TUSCANY SERVICES LLC,
                       A NEVADA LIMITED LIABILITY COMPANY

     THIS OPERATING AGREEMENT is made as of the 9th day of April, 2007 (the
"Effective Date"), by and among the members of Tuscany Services LLC, a Nevada
limited liability company, all of whom have signed this Agreement.

     NOW THEREFORE, pursuant to the Act (as hereinafter defined), the following
agreement, including, without limitation, Appendix 1 (Tax Accounting Procedures)
attached hereto and by reference incorporated herein shall constitute the
operating agreement, as amended from time to time, for the Company.

                                    ARTICLE 1
                                   DEFINITIONS

     1.1. General Definitions. The following terms used in this Operating
Agreement shall have the following meanings (unless otherwise expressly provided
herein). Other capitalized terms used herein and not defined have the meanings
set forth in Section 1.1 (Tax Definitions) of Appendix 1 (Tax Accounting
Procedures).

     "Act" means the Nevada Limited Liability Company Act, Nev. Rev. Stat.
ss.ss. 86.011 to 86.590, as amended from time to time.

     "Affiliate" means a Person that directly, or indirectly through one or more
intermediaries, Controls, is Controlled by, or is under common Control with, a
specified Person. For the purpose of this definition, the term "Control" shall
mean the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

     "Agreement" shall mean this Operating Agreement, including Appendix 1 (Tax
Accounting Procedures) hereto as originally executed and as amended from time to
time.

     "Business Day" shall mean a day other than a Saturday, a Sunday, or a state
or federally recognized holiday on which banks in Nevada are permitted to close.

     "Business Hours" shall mean 8:00 A.M. to 5:00 P.M. Standard Time or
Daylight Time, as the case may be, on Business Days at a location specified in
this Agreement. If no location is specified, a reference to Business Hours shall
refer to Business Hours as determined by Pacific Standard Time or Pacific
Daylight Time, as the case may be.

     "Capital Contribution" means the Initial Capital Contribution of a Member
together with the amount of money and the fair market value (as determined by
the Managers as of the date of contribution) of other Property contributed to
the Company, or services rendered or to be rendered, to the Company by a Member
with respect to such Membership Interest in the Company.

     "Code" shall mean the Internal Revenue Code of 1986 or corresponding
provisions of subsequent superceding federal revenue laws.

     "Company" shall refer to Tuscany Services LLC, a Nevada limited liability
company.

     "Entity" shall mean any general partnership, government entity, limited
partnership, limited liability company, corporation, joint venture, trust,
business trust, cooperative, association or similar organization.

     "Fiscal Year" shall mean the taxable year of the Company for federal income
tax purposes as determined by Code Section 706 and the Regulations thereunder.

     "Initial Capital Contribution" means the Capital Contributions agreed to be
made by the initial Members as described in Section 5.1.

     "Kelley Communication" shall mean Kelley Communication Company, Inc., a
Nevada corporation.

     "Managers" shall mean one or more Managers. Specifically, the two Managers
appointed by the Members, or any other Persons that succeed such Managers in
that capacity. References to a Manager in the singular or as him, her, it,
itself, or other like references shall also, where the context so requires, be
deemed to include the plural or the masculine or feminine references as the case
may be.

     "Managing Person" shall mean a Manager, officer, director and their agents.

     "MCS" shall mean MC Services LLC, a Nevada limited liability company.

     "Member" shall mean those Persons executing this Agreement and any Person
who may hereafter become an additional or Substitute Member.

     "Membership Interest" means a Member's Units, and the associated right to
vote on or participate in management, the right to share in Profits, Losses, and
distributions, and any and all benefits to which the holder of such Units may be
entitled pursuant to this Agreement, together with all obligations to comply
with the terms and provisions of this Agreement.

     "Net Cash Flow from Operations" means the gross cash proceeds from Company
operations (including sales and dispositions of Property in the ordinary course
of business) less the portion thereof used to pay or establish reserves for all
Company expenses, debt payments, capital improvements, replacements, and
contingencies, all as determined by the Managers in their sole discretion. Net
Cash Flow from Operations shall not be reduced by depreciation, amortization,
cost recovery deductions or similar allowances, but shall be increased by any
reductions of reserves.

     "Net Cash Flow from Sales or Refinancings" means the net cash proceeds from
all sales and other dispositions (other than in the ordinary course of business)
and all refinancings of Property, less any portion thereof used to establish
reserves, all as determined by the Managers in their sole discretion

     "Percentage Interest" for a Member shall mean the number of Units held by a
Member divided by the total number of Units held by all Members, expressed as a
percentage.

     "Person" shall mean any individual or Entity, and the heirs, executors,
administrators, legal representatives, successors, and assigns of such Person
where the context so requires.

     "Property" means all real and personal property, tangible and intangible,
owned by the Company.

     "Regulations" means the federal income tax regulations, including temporary
(but not proposed) regulations promulgated under the Code.

     "Substitute Member" means a transferee of a Membership Interest who has
been admitted to all of the rights of membership pursuant to Article 11.

     "Units" as to any Member shall mean and refer to Units which entitle the
holder to cast one vote for each such Unit held (except pursuant to Article 11
hereof) on all matters reserved for their approval, consent or consideration.
The initial number of Units in the Company are as shown next to the name of such
Member in Section 5.1 hereof.

                                    ARTICLE 2
                              FORMATION OF COMPANY

     2.1. Formation. The initial Articles of Organization as filed with the
Nevada Secretary of State on March 22, 2007, are hereby ratified and
incorporated by reference in this Agreement. Upon the filing of the Articles of
Organization the Company was formed as Tuscany Services LLC, a Nevada limited
liability company under and pursuant to the Act, and the parties hereto shall
take all action necessary or consistent with such formation.

     2.2. Name. The name of the Company is Tuscany Services LLC.

     2.3. Principal Place of Business. The principal place of business of the
Company within the State of Nevada shall first be at 5625 South Arville Street,
Suite E, Las Vegas, Nevada 89118. The Company may locate its places of business
and registered office at any other place or places as the Members or Managers
may from time to time deem advisable.

     2.4. Registered Office and Agent. The Company's registered office shall
first be at 1000 North Green Valley Parkway #400-251, Henderson, Nevada 89074.
The initial registered agent at such address shall be Robert E. Broz.

     2.5. Term. Unless the Company is dissolved in accordance with the
provisions of this Agreement, the Act, or other Nevada law, the existence of the
Company shall be perpetual.

                                    ARTICLE 3
                               BUSINESS OF COMPANY

     3.1. Permitted Businesses. The purpose of the Company shall be to provide
cable and affiliated communication services to the Tuscany Master Association, a
homeowners association in the vicinity of Lake Las Vegas; and to engage in any
other lawful business and to do any lawful act concerning any and all lawful
business for which a limited liability company may be organized under the laws
of the State of Nevada.

     3.2. Limits on Foreign Activity. The Company shall not directly engage in
business in any state, territory or country which does not recognize limited
liability companies or the effectiveness of the Act in limiting the liabilities
of the Members of the Company. If the Company desires to conduct business in any
such state, it shall do so through an Entity which will ensure limited liability
to the Members.

                                    ARTICLE 4
                            CONTRIBUTIONS TO COMPANY

     4.1. Issuance of Units and Members' Initial Capital Contributions. There
are hereby authorized and issued one hundred (100) Units divided as set forth in
Section 5.1. hereof. Each Member shall contribute the Initial Capital
Contribution as set forth in Section 5.1 hereof. After the Initial Cash
Distribution (as defined in Section 5.1 hereof) the Initial Capital Contribution
first shall be applied to the organizational expenses of the Company, including
without limitation, legal, accounting and promotional fees and costs and
thereafter retained as initial working capital for the Company.

     4.2. Additional Capital Contributions.

          a. The Members shall fund equally any expected cash flow shortage each
     month at the beginning of the month based on an estimated expense report
     prepared by the Managers. Any excess amounts contributed shall be retained
     as working capital and any shortages shall be reconciled at the end of each
     month. b. Except with respect to Section 4.2(a) above and the Initial
     Capital Contributions (and as otherwise provided under the Act) no Member
     shall be obligated to make any additional Capital Contributions to the
     Company. If the Company needs additional capital to meet its obligations,
     it shall seek such capital in the following manner:

               i. First, from additional Capital Contributions from the Members
          of the Company in proportion to their Units;

               ii. Second, from any source from which the Company may borrow
          additional capital, including, without limitation, any Member,
          provided, however, no Member shall be obligated to make a loan to the
          Company;

               iii. Third, from an additional disproportionate Capital
          Contribution from one or more Members of the Company. Such
          disproportionate Capital Contributions shall be deemed "Extraordinary
          Capital Contributions" and shall be entitled to a Priority Return as
          calculated in Section 7.3 hereof.

     4.3. Defaults.

          a. If a Member does not timely contribute all or any portion of its
     required Capital Contribution under this Agreement (a "Shortfall"), the
     Company may exercise, on notice to that Member (the "Delinquent Member"),
     one or more of the following remedies:

               i. Taking such action (including, without limitation, court
          proceedings) as the Managers may deem appropriate to obtain payment by
          the Delinquent Member of the Shortfall, together with interest thereon
          at the Default Interest Rate (defined herein) from the date that the
          Shortfall was due until the date that it is made, all at the cost and
          expense of the Delinquent Member. The Default Interest Rate shall be a
          per annum rate equal to the prime interest rate at the largest bank in
          Nevada, established as provided in NRS 99.040 and as ascertained by
          the Nevada Commissioner of Financial Institutions, on the January 1 or
          the July 1, as the case may be, immediately proceeding the date of the
          foregoing notice to the Delinquent Member plus five (5) percentage
          points.

               ii. Permitting the other Members in proportion to their Units, or
          in such other percentages as they may agree (the "Lending Member(s)"),
          to advance the Shortfall, with the following results.

                    A. The sum advanced constitutes a loan from the Lending
               Member(s) to the Delinquent Member and a Capital Contribution of
               that sum to the Company by the Delinquent Member, Any such loan
               shall not be treated as a loan to the Company and any interest
               accruing on such loan will not affect the income of the Company.
               However, if for any reason any such loan is characterized in a
               manner that is inconsistent with the previous sentence, any tax
               item attributable to the interest accruing on such loan shall be
               allocated solely to the Defaulting Member;

                    B. The principal balance of the loan and all accrued unpaid
               interest thereon is due and payable in whole on the tenth day
               after written demand therefor by the Lending Member(s) to the
               Delinquent Member. If the Defaulting Member fails to timely repay
               such loan together with accrued interest thereon after such
               written demand, the Units of the Defaulting Member shall be
               adjusted pursuant to Section 4.3(a)(iii) below;

                    C. The amount lent bears interest at the Default Interest
               Rate from the day that the advance is deemed made until the date
               that the loan, together with all interest accrued on it, is
               repaid to the Lending Member(s);

                    D. All distributions from the Company that otherwise would
               be made to the Delinquent Member (whether before or after
               dissolution of the Company) instead shall be paid to the Lending
               Member(s) until the loan and all interest accrued on it have been
               paid in full to the Lending Member(s) (with payments being
               applied first to accrued and unpaid interest and then to
               principal), Such payments shall in all other respects be treated
               as if distributed to the Delinquent Member;

                    E. The payment of the loan and interest accrued on it shall
               be secured by a security interest in the Delinquent Member's
               Membership Interest, as set forth in Section 4.3(b); and

                    F. The Lending Member(s) have the right, in addition to the
               other rights and remedies granted to it pursuant to this
               Agreement or available to it at law or in equity, to take any
               action (including, without limitation, court proceedings) that
               the Lending Member(s) may deem appropriate to obtain payment by
               the Delinquent Member of the loan and all accrued and unpaid
               interest on it, at the cost and expense of the Delinquent Member.

               iii. Adjusting the Units held by the Members in a manner that
          reduces the Defaulting Member's Percentage Interest by the lesser of
          the following:

                    A. The aggregate amount of capital that would have been
               required from such Defaulting Member if no default had occurred
               (less any distributions representing a return of capital),
               divided by the aggregate amount of capital that would have been
               required from all Members if no default had occurred (all less
               any distributions representing a return of capital), multiplied
               by one hundred (100); or

                    B. The product of two (2) times (I) the Shortfall (or the
               amount of the unpaid loan, including accrued and unpaid interest,
               in the case of an unpaid loan after a demand made pursuant to
               Section 4.3(a)(ii)(B)); divided by (II) the aggregate amount of
               capital contributed by the Members (less any distributions
               representing a return of capital); multiplied by (III) one
               hundred (100);

               and increases the Percentage Interest of the non-defaulting
               Members (in proportion to their Units), in an amount equal to
               such reduction in the Percentage Interest of the Defaulting
               Member. iv. Adjusting the Units held by the Members in a manner
               as unanimously agreed upon by the Members;

                    v. Exercising the rights of a secured party under the
               Uniform Commercial Code of the State of Nevada, as set forth in
               Section 4.3(b) below; or

                    vi. Exercising any other rights and remedies available at
               law or in equity.

          b. Each Member grants to the Company, and to each Lending Member with
     respect to any loans made by the Lending Member(s) to that Member as a
     Delinquent Member pursuant to Section 4.3(a)(ii), as security, equally and
     ratably, for the payment of all Capital Contributions that Member has
     agreed to make and the payment of all loans and interest accrued on them
     made by Lending Member(s) to that Member as a Delinquent Member pursuant to
     Section 4.3(a)(ii), a security interest in and a general lien on its
     Membership Interest and the proceeds thereof, all under the Uniform
     Commercial Code of the State of Nevada. On any default in the payment of a
     Capital Contribution or in the payment of such a loan or interest accrued
     on it, the Company or the Lending Member(s), as applicable, is entitled to
     all the rights and remedies of a secured party under the Uniform Commercial
     Code of the State of Nevada with respect to the security interest granted
     in this Section 4.3(b). Each Member shall execute and deliver to the
     Company and the other Members all financing statements and other
     instruments that the Managers or the Lending Member(s), as applicable, may
     request to effectuate and carry out the preceding provisions of this
     Section 4.3(b). At the option of the Managers or a Lending Member, this
     Agreement or a carbon, photographic, or other copy hereof may serve as a
     financing statement.

          c. Each Member hereby appoints each non-defaulting Member as its
     attorney-in-fact for the purpose of executing any and all documents and
     instruments necessary to confirm a recalculation of its Units as a
     Defaulting Member pursuant to Section 4.3(a)(iii). Each Member expressly
     agrees that the power of attorney shall, to the extent permitted by Nevada
     law, survive the death, dissolution, adjudication of incompetency or
     insanity, withdrawal, retirement, removal, bankruptcy or insolvency, of a
     Defaulting Member.

     4.4. Withdrawal or Reduction of Members' Contributions to Capital.

          a. Subject to the Initial Cash Distribution as set forth in Sections
     4.1 and 5.1 hereof, a Member shall not receive out of the Company's
     Property any part of such Member's contributions to capital until all
     liabilities of the Company (excluding liabilities to Members on account of
     their contributions to capital) have been paid or there remains Property of
     the Company sufficient to pay them.

          b. Subject to the Initial Cash Distribution as set forth in Sections
     4.1 and 5.1 hereof, a Member may rightfully demand distribution of its
     Capital Account only upon the dissolution of the Company.

          c. A Member shall not resign from the Company before the dissolution
     and winding up of the Company pursuant to Article 13 hereof, unless Members
     holding a majority of the Units consent. A resigning Member's vote shall be
     included in determining whether such majority consent has been granted.

          d. A Member resigning with the consent of Members holding a majority
     of the Units shall be entitled to receive, within a reasonable time after
     resignation, the fair market value of its interest as of the date of
     resignation as determined by the accountants regularly employed by the
     Company.

          e. A Member, irrespective of the nature of such Member's contribution,
     has the right to demand and receive only cash in return for such Member's
     contribution to capital.

     4.5. Miscellaneous.

          a. No Interest on Capital Contribution. No Member shall be entitled to
     or shall receive interest on such Member's Capital Contribution.

          b. No Withdrawal of Capital Contribution. No Member may demand a
     return of his Capital Contribution except as expressly provided herein or
     in the Act.

     4.6. No Third Party Beneficiaries. The provisions of this Article 4 are not
intended to be for the benefit of and shall not confer any rights on any
creditor or other Person (other than a Member in such Member's capacity as a
Member) to whom any debts, liabilities or obligations are owed by the Company or
any of the Members.

                                    ARTICLE 5
             INITIAL CAPITAL CONTRIBUTIONS AND MEMBERSHIP INTERESTS

     5.1. Initial Interests. The Initial Capital Contribution and the initial
Membership Interest of each Member is as follows:

<TABLE>
<CAPTION>
                           Initial Capital                       Percentage
Member                     Contribution *               Units     Interest
------                     ---------------              -----    ----------
<S>                        <C>                           <C>        <C>
MCS                        Four Hundred Thousand         50         50 %
                           Dollars ($400,000)

Kelley Communication       Cash and assets in a total    50         50 %
                           agreed fair market value of
                           Seven Hundred Seventy-Five
                           Thousand Dollars ($775,000) <F1>

<FN>
<F1>  Kelley Communication shall receive an initial cash distribution (the
     "Initial Cash Distribution") of Three Hundred Seventy Five Thousand Dollars
     ($375,000) within thirty (30) days of making its Initial Capital
     Contributions, reducing its Capital Contributions and Capital Account to
     Four Hundred Thousand Dollars ($400,000).
</FN>
</TABLE>

     5.2. Securities Law Qualification. THE MEMBERS ACKNOWLEDGE AND AGREE THAT
THE MEMBERSHIP INTERESTS HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE
SECURITIES LAWS OF ANY STATE AND, THEREFORE, THE MEMBERS MUST BEAR THE ECONOMIC
RISK OF INVESTMENT IN THE COMPANY FOR AN INDEFINITE PERIOD OF TIME. THERE IS NO
PUBLIC TRADING MARKET FOR THE MEMBERSHIP INTERESTS AND IT IS NOT ANTICIPATED
THAT ONE WILL DEVELOP. ADDITIONALLY, THERE ARE SUBSTANTIAL RESTRICTIONS UPON THE
TRANSFERABILITY OF THE MEMBERSHIP INTERESTS. SALE OR ASSIGNMENT BY A MEMBER OF
ITS MEMBERSHIP INTERESTS OR SUBSTITUTION OF MEMBERS MAY BE SUBJECT TO CERTAIN
CONSENTS. THE MEMBERSHIP INTERESTS CANNOT BE RESOLD OR TRANSFERRED WITHOUT (i)
REGISTRATION UNDER THE 1933 ACT, OR (ii) AN EXEMPTION FROM REGISTRATION.
THEREFORE, MEMBERS MAY NOT BE ABLE TO LIQUIDATE THEIR INVESTMENTS IN THE EVENT
OF AN EMERGENCY. FURTHER, MEMBERSHIP INTERESTS MAY NOT BE READILY ACCEPTED AS
COLLATERAL FOR A LOAN. MEMBERSHIP INTERESTS SHOULD BE CONSIDERED ONLY AS A LONG
TERM INVESTMENT.

                                    ARTICLE 6
                        ALLOCATIONS OF PROFITS AND LOSSES

     6.1. Allocation of Profits. After giving effect to the special allocations
set forth in Section 1.2 of Appendix 1, Profits for any Fiscal Year shall be
allocated as follows:

          a. First, one hundred percent (100%) to the Members, in proportion to,
     and to the extent of the excess, if any, of (i) the cumulative Losses
     allocated to each Member pursuant to Section 6.3 hereof for all prior
     Fiscal Years, over (ii) the cumulative Profits allocated to each Member
     pursuant to this Section 6.1(a) for all prior Fiscal Years;

          b. Second, one hundred percent (100%) to the Members, in proportion
     to, and to the extent of the excess, if any, of (i) the cumulative Losses
     allocated to each Member pursuant to Section 6.2(c) hereof for all prior
     Fiscal Years, over (ii) the cumulative Profits allocated to each Member
     pursuant to this Section 6.1(b) for all prior Fiscal Years;

          c. Third, one hundred percent (100%) to the Members, in proportion to,
     and to the extent of the excess, if any, of (i) the sum of (A) the
     cumulative Priority Return (as defined in Section 7.3 hereof) of each
     Member from the commencement of the Company to the last day of such Fiscal
     Year, plus (B) the cumulative Losses allocated to each Member pursuant to
     Section 6.2(b) hereof for all prior Fiscal Years, over (ii) the cumulative
     Profits allocated to such Member pursuant to this Section 6.1(c) for all
     prior Fiscal Years.

          d. The balance, if any, to each Member in proportion to their Units.

     6.2. Allocation of Losses. After giving effect to the special allocations
set forth in Section 1.2 of Appendix 1, Losses for any Fiscal Year shall be
allocated as follows, subject to Section 6.3 hereof:

          a. First, one hundred percent (100%) to the Members, in proportion to,
     and to the extent of the excess, if any, of (i) the cumulative Profits
     allocated pursuant to Section 6.1(d) hereof for all prior Fiscal Years,
     over (ii) the cumulative Losses allocated pursuant to this Section 6.2(a)
     for all prior Fiscal Years;

          b. Second, one hundred percent (100%) to the Members, in proportion
     to, and to the extent of the excess, if any, of (i) the cumulative Profits
     allocated to each such Member pursuant to Section 6.1(c) hereof for all
     prior Fiscal Years, over (ii) the cumulative Losses allocated to such
     Members pursuant to this Section 6.2(b) for all prior Fiscal Years;

          c. Third, the balance, if any, to the Members in proportion to their
     Units.

     6.3. Loss Limitation and Reallocation. The Losses allocated pursuant to
Section 6.2 hereof shall not exceed the maximum amount of Losses that can be so
allocated without causing any Member to have an Adjusted Capital Account Deficit
at the end of the Fiscal Year. In the event that some, but not all of the
Members would have an Adjusted Capital Account Deficit as a consequence of an
allocation of Losses pursuant to Section 6.2 hereof, the limitation set forth in
this Section 6.3 shall be applied on a Member by Member basis and Losses not
allocable to any Member as a result of such limitation shall be allocated to the
other Members in accordance with the positive balances in such Members' Capital
Accounts so as to allocate the maximum permissible Losses to each Member under
Regulations Section 1.704-1(b)(2)(ii)(d).

                                    ARTICLE 7
                                  DISTRIBUTIONS

     7.1. Net Cash Flow from Operations. Subject to Sections 5.1 (the Initial
Cash Distribution), 13.2 (distributions upon liquidation), and 7.4 (Tax
Distribution) hereof, Net Cash Flow from Operations shall be distributed with
respect to a Fiscal Year at times determined by the Managers in the following
order and priority:

          a. First, to the Members in proportion to and until each Member has
     received an amount equal to the excess, if any, of such Member's cumulative
     Priority Return (as defined in Section 7.3 below) from the inception of the
     Company to the end of such Fiscal Year, over the sum of all prior
     distributions to such Member pursuant to this Section 7.1(a) or Section
     7.2(a) hereof; and

          b. The balance, if any, to each Member, pro rata in proportion to such
     Member's Units.

     7.2. Net Cash Flow from Sales and Refinancings. Subject to Sections 5.1
(the Initial Cash Distribution), 13.2 (distributions upon liquidation), and 7.4
(Tax Distribution) hereof, Cash Flow from Sales and Refinancings shall be
distributed with respect to a Fiscal Year at times determined by the Managers in
the following order and priority:

          a. First, to the Members in proportion to and until each Member has
     received an amount equal to the excess, if any, of such Member's cumulative
     Priority Return (as defined in Section 7.3 below) from the inception of the
     Company to the end of such Fiscal Year, over the sum of all prior
     distributions to such Member pursuant to this Section 7.2(a) or 7.1(a)
     hereof;

          b. Second, to the Members in proportion and to the extent of their
     respective Unreturned Extraordinary Capital Contributions (as defined in
     Section 7.3 below); and

          c. The balance, if any, to each Member, pro rata in proportion to such
     Member's Units.

     7.3. Unreturned Extraordinary Capital Contribution and Priority Return. The
"Priority Return" of any particular Member means a sum equal to ten percent
(10%) per annum, determined on the basis of a year of 365 or 366 days, as the
case may be, for the actual number of days occurring in the period for which the
Priority Return is being determined, cumulative (but not compounded), of the
average daily balance of such Member's Unreturned Extraordinary Capital
Contribution (as hereinafter defined) from time to time during the period for
which the Priority Return relates, commencing on the date that such Member first
makes an Extraordinary Capital Contribution pursuant to Section 4.2(b)(iii)
hereof. The "Unreturned Extraordinary Capital Contribution" of any Member on any
particular date shall be equal to the excess, if any, of the aggregate
Extraordinary Capital Contributions then made as of such date by such Member
pursuant to Section 4.2(b)(iii) hereof, over the aggregate distributions then
made as of such date to such Member pursuant to Section 7.2(b) or Section 13.2
hereof.

     7.4. Tax Distribution. Except as otherwise provided in Section 13.2 (on
liquidation), and provided that no distribution shall be made which will cause
or increase an Adjusted Capital Account Deficit (as defined in Appendix 1) for a
Member, the Managers shall distribute to each Member an amount that is at least
equal to such Member's Presumed Tax Liability (as defined herein) for such
Fiscal Year (a "Tax Distribution"), unless the Managers reasonably determine
that such Tax Distribution is not in the best interests of the Company. Any
amount distributed pursuant to this Section 7.4 shall be deemed to be an advance
distribution of amounts that otherwise would have been distributed to such
Members subsequently pursuant to Sections 7.1 and 7.2 hereof, and shall thereby
reduce the amounts that are subsequently distributable to such Members pursuant
to Sections 7.1 and 7.2, in the order that such amounts would have been
distributed. The "Presumed Tax Liability" for any Member for a Fiscal Year shall
mean an amount equal to the product of (a) the amount of taxable income of the
Company allocated to such Member for that Fiscal Year and (b) the highest tax
rate that would be imposed on any Member under either Section 1 or 11 of the
Code, whichever is higher, for that Fiscal Year.

     7.5. Suspended Distributions. Notwithstanding any other provision of this
Article 7, a Member may not receive a distribution from the Company to the
extent that such distribution would create or increase such Member's Adjusted
Capital Account Deficit as defined in Appendix 1 (a "Suspended Distribution").
However, for purposes of Sections 7.1 and 7.2 hereof, any Suspended
Distributions which would otherwise have been made pursuant to Sections 7.1 and
7.2 hereof shall be treated as having been made. All or any portion of any
Member's Suspended Distribution shall be made to such Member at the earliest
possible time that such distribution can be made without violating the
provisions of this Section 7.5.

                                    ARTICLE 8
                         BOOKS, RECORDS, AND ACCOUNTING

     8.1. Books and Records.

          a. The Company shall maintain or cause to be maintained books of
     account that accurately reflect all items of income and expenditure
     relating to the business of the Company and that accurately and completely
     disclose the results of the operations of the Company. Such books of
     account shall be maintained on the method of accounting selected by the
     Company and on the basis of the Fiscal Year. Each Member, upon not less
     than thirty (30) days advance written notice to the Managers of the
     Company, at such Member's own expense, shall have the right to inspect,
     copy, and audit the Company's books and records at any time during normal
     Business Hours without notice to any other Member.

          b. The Company shall keep at its registered office such records as are
     required by the Act.

     8.2. Financial Reports and Tax Returns. The Company shall timely prepare,
or cause to be prepared, quarterly and annual financial reports and information
reasonably required by Members; and shall timely prepare and file, or cause to
be prepared and timely filed, all income tax and other tax returns of the
Company. The Company shall furnish to each Member a copy of all such financial
reports and information and tax returns, together with all schedules thereto and
such other information which each Member may reasonably request in connection
with such Member's own tax and financial reporting obligations and affairs. The
Managers shall strive to produce such quarterly financial reports and
information within twenty (20) days after the end of each quarter, and annual
reports, information and tax returns within forty-five (45) days after the end
of each Fiscal Year.

     8.3. Bank Accounts. The Company shall establish and maintain one or more
separate accounts in the name of the Company in one or more federally insured
banking institutions of its choosing into which shall be deposited all funds of
the Company and from which all Company expenditures and other disbursements
shall be made. Funds may be withdrawn from such accounts on the signature of any
Manager except that the signatures of two (2) Managers shall be required for (a)
any amounts in excess of Twenty-Five Thousand Dollars ($25,000) or (b) any
amounts that are made payable to any Member.

                                   ARTICLE 9
                                   MANAGEMENT

     9.1. General Management.

          a. The business and affairs of the Company shall be managed by or
     under the direction of one or more Managers, who need not be Members of the
     Company.

               i. Each Member shall appoint one (1) Manager. The two initial
          appointed Managers shall be Robert E. Broz who is hereby appointed by
          MCS, and James Michael Kelley, who is hereby appointed by Kelley
          Communications. Such Member-appointed Managers shall remain as a
          Manager until such Manager's death, bankruptcy, incompetence,
          resignation or removal by the appointing Member. In the event of such
          death, bankruptcy, incompetence, resignation or removal, a successor
          Manager shall be appointed by the respective appointing Member.

               ii. The Members shall agree upon a means of resolving Manager
          deadlocks within sixty (60) days after the Effective Date which shall
          be set forth in either (A) a separate written agreement that is hereby
          incorporated by reference herein or (B) a written amendment to this
          Agreement.

          b. The Managers shall direct, manage and control the business of the
     Company and, subject to the limitations and qualifications set forth in
     this Article 9, shall have full and complete authority, power and
     discretion to make any and all decisions and to do any and all things which
     the Managers shall deem to be reasonably required in light of the Company's
     business and objectives. Without limiting the generality of the foregoing,
     the Managers shall have sole power and authority to:

               i. acquire property from any Person as the Managers may
          determine. The fact that a Member is directly or indirectly an
          Affiliate of such Person shall not prohibit the Managers from dealing
          with that Person;

               ii. establish policies for investment and invest Company funds
          (by way of example but not limitation, in time deposits, short term
          governmental obligations, commercial paper or other investments);

               iii. make distributions of available cash to Members pursuant to
          Article 7 hereof;

               iv. employ accountants, legal counsel, managing agents or other
          experts or consultants to perform services for the Company with
          compensation from Company funds;

               v. enter into any transaction on behalf of the Company involving
          the incurrence of any indebtedness or the hypothecation, encumbrance,
          or granting of a security interest or lien upon any Company Property;

               vi. purchase liability and other insurance to protect the
          Company's Property and business;

               vii. organize Entities to serve as the Company's subsidiaries and
          to determine the form and structure thereof;

               viii. establish a board of directors; delegate management
          decisions thereto; appoint directors thereto and remove directors
          therefrom;

               ix. establish offices of President, Vice President, Secretary and
          Treasurer; delegate to such offices daily management and operational
          responsibilities; appoint Persons to act as such officers and remove
          Persons therefrom; and

               x. establish reasonable payments or salaries to Persons appointed
          as officers and directors.

          c. Where this Agreement specifies an act of the Managers, it means an
     act taken by majority vote of the Managers when more than one Manager
     exists.

          d. Unless authorized to do so by this Agreement or by the Managers, no
     Managing Person, Member, agent, or employee of the Company shall have any
     power or authority to bind the Company in any way, to pledge its credit or
     to render it liable pecuniarily for any purpose. However, the Managers may
     act (or may cause the company to act) by a duly authorized power of
     attorney.

     9.2. Act Requiring Member Unanimous or Supermajority Approval and
Limitation on Powers of Managers.

          a. Notwithstanding anything to the contrary in this Agreement, the
     Managers shall not engage in any of the following transactions without the
     affirmative vote or written consent of Members owning collectively
     seventy-five percent (75%) of the Units:

               i. the merger or consolidation of the Company with any other
          Entity;

               ii. a sale of all or substantially all of the Company's assets;
          or

               iii. the voluntary commencement of a bankruptcy proceeding with
          the Company as a debtor or any assignment for the benefit of creditors
          of the Company.

          b. Notwithstanding anything to the contrary in this Agreement, the
     Managers shall not engage in any of the following transactions without the
     unanimous vote or written consent of the Members:

               i. any action which would result in a change in any Member's
          Percentage Interest of profits, losses, or distributions, except
          pursuant to compliance with Appendix 1;

               ii. any action which would result in a change in the Capital
          Contributions required from any Member;

               iii. any action which would result in an increase in the personal
          liability imposed upon any Member;

               iv. the issuance of any additional Membership Interests; or

               v. any amendments to the Articles of Organization or this
          Agreement.

     9.3 Compensation. A Manager shall not receive compensation for services
rendered as a Manager unless all Members consent.

     9.4 Mediation and Arbitration.

          a. If a dispute arises out of or relates to this Agreement, or the
     breach thereof, and if said dispute cannot be settled through direct
     discussions within five (5) days after a Member or Manager notifies the
     other Members and/or Manager it has a dispute, the Members and Manager
     agree that on the sixth (6th) day after such notice has been delivered (or
     if the sixth (6th) day is not a Business Day, then on the next Business Day
     thereafter) to start proceedings to settle the dispute in an amicable
     manner by mediation administered by the American Arbitration Association
     (the "AAA") under its Commercial Mediation Rules, before resorting to
     arbitration. If all disputes have not been resolved within ten (10) days
     after the start of such mediation, any Member or the Manager may elect to
     settle any unresolved controversy or claim arising out of or relating to
     this Agreement, or breach thereof, by arbitration administered by the
     American Arbitration Association in accordance with its Commercial
     Arbitration Rules (except as otherwise provided herein) by written notice
     to the other Members and Managers, as applicable. The Member or Manager
     electing arbitration shall by such notice to the other Members or Manager
     name an arbitrator. The second arbitrator shall be chosen by the noticed
     Members or Manager, as applicable, within ten (10) days after such notice.
     If the noticed Member or Manager does not appoint such second arbitrator,
     then the AAA shall be requested to submit a list of five (5) persons to
     serve as the second arbitrator, and the second arbitrator shall be
     appointed by the first arbitrator from such list within five (5) days of
     its submission. The two (2) appointed arbitrators shall agree upon the
     appointment of a third arbitrator within five (5) days after the second
     arbitrator is appointed. If the two (2) arbitrators so appointed do not
     agree upon a third arbitrator, then the AAA shall be requested to submit a
     list of five (5) persons to serve as the third arbitrator. The parties to
     the arbitration shall select the third arbitrator from the list submitted
     within five (5) days of its submission; provided that if the parties to the
     arbitration cannot agree upon the third arbitrator, then the arbitrator
     shall be selected from the list of five (5) through the process of each of
     the first two (2) arbitrators in turn striking names from the list until
     one (1) name remains.

          b. The decision of any two (2) of the arbitrators shall be final and
     binding upon the Members and Managers. The arbitrators shall determine the
     rights and obligations of the Members and Managers according to this
     Agreement and the substantive laws of Nevada. The parties hereby agree that
     in any such arbitration each Member and Manager shall be entitled to
     discovery of the others as provided by the Nevada Revised Statutes
     pertaining to civil procedure; provided, however, any such discovery shall
     be completed within four (4) months from the date of the selection of the
     second arbitrator, unless such period is extended by agreement of the
     affected Members and Manager or by order of the arbitrators, and any
     disputes concerning discovery shall be determined by the arbitrators with
     any such determination being binding on the Members and Managers. The
     arbitrators shall be requested to render an opinion within fifteen (15)
     days after the date that discovery is completed. The arbitrators shall
     apply Nevada substantive law and Nevada evidentiary law to the proceeding.
     The arbitrators shall have the power to grant all legal and equitable
     remedies and award compensatory damages provided by Nevada law. Punitive or
     exemplary damages shall not be awarded for any breach or alleged breach of
     this Agreement and the Members and Managers waive any right to seek, claim
     or receive such punitive or exemplary damages. The arbitrators shall be
     bound by the terms of this Agreement. The arbitrators shall not be
     empowered or authorized to add to, subtract from, delete or in any other
     way modify the terms of this Agreement. The arbitrators shall prepare in
     writing and provide to the parties an award including factual findings and
     the reasons on which the decision is based. The decision of the arbitrators
     shall be final and binding on the Members and Managers and judgment thereon
     may be entered by any court having jurisdiction. Each party shall bear its
     own expenses of the arbitration including without limitation attorney fees
     and the parties shall divide the arbitration expenses and fees equally.

          c. Notwithstanding any other provision of this Section 9.4, no resort
     to arbitration shall be required if a third Person's participation is
     essential to avoid the possibility of an inconsistent or otherwise
     incomplete resolution of all associated issues or controversies, and such
     third Person declines to participate in and be bound by the results of the
     arbitration.

          d. No Member, whether or not a party to such arbitration, and no
     arbitrator, shall disclose the existence, content or results of any
     arbitration hereunder without the prior written consent of all parties to
     such arbitration.

     9.5. No Liability for Certain Acts. A Managing Person of the Company shall
perform such Managing Person's duties, in good faith, in a manner such Managing
Person reasonably believes to be in the best interests of the Company. A
Managing Person does not, in any way, guarantee the return of the Members'
Capital Contributions or a profit for the Members from the operations of the
Company. A Managing Person shall not be responsible to any Members because of a
loss of their investment in the Company or a loss in the operations of the
Company, unless the loss shall have been the result of the Managing Person not
acting in good faith as provided in this Section. A Managing Person shall incur
no liability to the Company or to any of the Members as a result of engaging in
any other business or venture. A Manager shall be entitled to any other
protection afforded to managers under the Act. A Managing Person who so performs
such Managing Person's duties shall not have any liability by reason of being or
having been a Managing Person of the Company. In performing the duties of a
Managing Person, a Managing Person shall be entitled to rely on information,
opinions, reports or statements, including financial statements and other
financial data, in each case prepared or presented by persons and groups listed
below unless such Managing Person has knowledge concerning the matter in
question that would cause such reliance to be unwarranted:

          a. one or more employees or other agents of the Company whom the
     Managing Person believes in good faith to be reliable and competent in the
     matters presented;

          b. legal counsel, public accountants, or other Persons as to matters
     that the Managing Person believes in good faith to be within such Persons'
     professional or expert competence; or

          c. a committee, upon which such Managing Person does not serve, duly
     designated in accordance with the provisions of this Agreement, as to
     matters within its designated authority, which committee the Managing
     Person believes in good faith to merit confidence.

     9.6. Managing Persons Have No Exclusive Duty to Company. A Managing Person
shall not be required to manage the Company as such Managing Person's sole and
exclusive activity, and each Managing Person may have other business interests
and may engage in other activities in addition to those relating to the Company,
even if such activities may be in competition with the business of the Company.
Neither the Company nor any Member shall have any right, by virtue of this
Agreement or the existence of the Company, to share or participate in such other
investments or activities of any Managing Person regardless of whether such
opportunities have been presented to the Company.

     9.7. Indemnity of Managing Persons.

          a. The Company agrees to indemnify, pay, protect and hold harmless
     Managing Persons from and against any and all liabilities, obligations,
     losses, damages, penalties, actions, judgments, suits, proceedings, costs,
     expenses and disbursements of any kind or nature whatsoever (including,
     without limitation, all reasonable costs and expenses of defense, appeal
     and settlement of any and all suits, actions or proceedings instituted
     against the Managing Persons or the Company and all costs of investigation
     in connection therewith) which may be imposed on, incurred by, or asserted
     against the Managing Persons or the Company in any way relating to or
     arising out of, or alleged to relate to or arise out of, any action or
     inaction on the part of the Company or on the part of a Managing Person,
     acting in a manner believed in good faith to be in the best interests of
     the Company, in connection with the formation, operation and/or management
     of the Company, the Company's purchase and operation of Property, and/or as
     a result of the Managing Person agreeing to act as a Managing Person of the
     Company. If any action, suit or proceeding shall be pending or threatened
     against the Company or a Manager relating to or arising out of, or alleged
     to relate to or arise out of, any such action or nonaction, a Manager shall
     have the right to employ, at the expense of the Company, separate counsel
     of such Manager's choice in such action, suit or proceeding and the Company
     shall advance the reasonable out-of-pocket expenses in connection
     therewith. The satisfaction of the obligations of the Company under this
     Section shall be from and limited to the assets of the Company and no
     Member shall have any personal liability on account thereof. The foregoing
     rights of indemnification are in addition to and shall not be a limitation
     of any rights of indemnification as provided in Sections 86.411 through
     86.451 of the Act, as such may be amended from time to time.

          b. This Section shall not limit the Company's power to pay or
     reimburse expenses incurred by a Managing Person in connection with such
     Managing Person's appearance as a witness in a proceeding at a time when
     the Managing Person has not been made a named defendant or respondent in
     the proceeding.

          c. The Company may indemnify and advance expenses to an employee or
     agent of the Company who is not a Managing Person to the same or to a
     greater extent as the Company may indemnify and advance expenses to a
     Managing Person.

          d. The Company may purchase and maintain insurance on behalf of any
     Person who is or was a Managing Person, Member, employee, fiduciary, or
     agent of the Company or who, while a Managing Person, Member, employee,
     fiduciary, or agent of the Company, is or was serving at the request of the
     Company as a manager, member, director, officer, partner, trustee,
     employee, fiduciary, or agent of any other foreign or domestic limited
     liability company or any corporation, partnership, joint venture, trust,
     other enterprise, or employee benefit plan against any liability asserted
     against or incurred by such Person in any such capacity or arising out of
     such Person's status as such, whether or not the Company would have the
     power to indemnify such Person against such liability under the provisions
     of this Section. Any such insurance may be procured from any insurance
     company designated by the Managers whether such insurance company is formed
     under the laws of this state or any other jurisdiction of the United States
     or elsewhere.

          e. Any indemnification of or advance of expenses to a Managing Person
     in accordance with this Section, if arising out of a proceeding by or on
     behalf of the Company, shall be reported in writing to the Members with or
     before the notice of the next Members' meeting.

          f. Notwithstanding the termination of employment, it is recognized
     that disputes may arise between the Company and third parties, or between a
     Managing Person and third parties, the resolution of which may require the
     cooperation of the Managing Person or the Company, respectively, including,
     but not limited to, conferring with counsel and assisting in preparation
     work in litigation matters, providing factual information to the other
     party, and giving depositions and testimony in judicial and administrative
     proceedings. Notwithstanding the termination of a Managing Person's
     employment, both the Company and Managing Person shall cooperate and
     thereby act reasonably and in good faith to assist the other, without any
     charge or compensation, except the requesting party shall reimburse the
     other party for all reasonable out-of-pocket costs incurred in connection
     herewith. The Managing Person's cooperation is a continuing condition to
     the indemnification and hold harmless provisions under this Section.

          g. Notwithstanding the provisions of the above subsections (a) through
     (f) of this Section 9.7, no Managing Person shall be indemnified from any
     liability resulting from fraud, bad faith, willful misconduct or gross
     negligence.

                                   ARTICLE 10
                        RIGHTS AND OBLIGATIONS OF MEMBERS

     10.1. Limitation of Liability.

          a. Each Member's liability shall be limited as set forth herein in the
     Act and other applicable law. A Member will not personally be liable for
     any debts or losses of the Company, except as provided in the Act.

          b. When a Member has received a distribution wrongfully conveyed by
     the Company, the Member shall hold such distribution as trustee for the
     Company.

     10.2. Member Indemnity. The Company agrees to indemnify, pay, protect and
hold harmless any Member (on demand and to the satisfaction of the Member) from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, proceedings, costs, expenses and disbursements of any
kind or nature whatsoever (collectively "Liabilities") in any way relating to
any agreement, liability, commitment, expense or obligation of the Company which
may be imposed on, incurred by, or asserted against the Member solely as a
result of such Member being a Member (including, without limitation, all
reasonable costs and expenses of defense, appeal and settlement of any and all
suits, actions or proceedings instituted against the Member and all costs of
investigation in connection therewith). Such indemnification shall include
Liabilities arising from the acts of any Member's own employee, agent or other
representative acting in good faith on behalf of the Company. The satisfaction
of the obligations of the Company under this Section shall be from and limited
to the assets of the Company and no Member shall have any personal liability on
account thereof. The foregoing rights of indemnification are in addition to and
shall not be a limitation of any rights that may be provided in the Act.

     10.3. List of Members. Upon written request of any Member, the Company
shall provide such Member a list showing the names, addresses and Units of the
Members in the Company.

     10.4. Voting. Subject to Section 11.2 hereof, Members shall be entitled to
one vote for each Unit held, on all matters reserved for their approval or
consent, including but not limited to Section 9.2 hereof.

     10.5. Additional Members. Except as provided in Section 11.2 hereof, no
Person shall be admitted to the Company as an additional Member without the
unanimous consent of the Members.

                                   ARTICLE 11
                         RESTRICTIONS ON TRANSFERABILITY

     11.1. Right to Pledge. Every Membership Interest may be pledged to secure
any borrowing of a Member or its Affiliate, provided that any Person acquiring
such Membership Interest pursuant to such pledge shall not have the right to be
admitted as a Member but shall be entitled only to receive such allocations and
distributions as are otherwise payable with respect to such Member's Membership
Interest under this Agreement.

     11.2. Admission of Substitute Member. A Member may transfer or assign all
or any portion of its Membership Interest to a Permitted Transferee that is
described in Section 11.3, which Permitted Transferee shall immediately become a
Substituted Member. If a Member transfers or assigns some or all of its
Membership Interest to a transferee other than a Permitted Transferee (or
transfers title as a result of exercise of rights under a security interest) and
Members holding a majority of the Units approve of such proposed transfer or
assignment, the transferee or assignee of the Membership Interest shall likewise
become a Substitute Member. If Members holding a majority of the Units do not
approve of such transfer or assignment, the transferee or assignee of the
Membership Interest shall have no right to participate in the management of the
business and affairs of the Company, to vote, or to be admitted as a Member, but
shall only be entitled to receive the share of profits, losses and
distributions, to which the transferring or assigning Member would otherwise be
entitled. As a condition to the receipt of same, the transferee or assignee may
be required by the Members to pay the associated Capital Contributions to which
the transferor or assignor would have been liable. With respect to all or any
portion of a Membership Interest that is transferred or assigned, the Substitute
Member has the rights and powers and is subject to the restrictions and
liabilities that are associated with all or any portion of such Membership
Interest which accrued prior to the date of substitution, except that the
substitution of the assignee does not release the assignor from existing
liability to the Company. In any event, no transfer or assignment of all or any
portion of a Membership Interest in the Company (including the transfer or
assignment of any right to receive or share in profits, losses, or
distributions) shall be effective unless and until written notice (including the
name and address of the proposed transferee or assignee, the interest to be
transferred or assigned, and the date of such transfer or assignment) has been
provided to the Company and the nontransferring or nonassigning Member(s). Every
Person before becoming a Substitute Member must assume this Agreement, as
amended from time to time, in writing.

     11.3. Permitted Transferees.

          a. Subject to Sections 11.3(b) below, a Member may at any time
     transfer all or any portion of such Member's Interest to: (i) any other
     Member; (ii) an Affiliate of any Member; (iii) if the Member is a natural
     person, any member of the transferor's Family (as defined below); (iv) if
     the Member is a natural person, the transferor's executor, administrator,
     trustee, or personal representative to whom such Member's Interests are
     transferred at death (collectively, "Permitted Transferees"). For the
     purposes of this Section 11.3, a Member's "Family" shall include only the
     transferor Member's spouse, natural or adoptive lineal ancestors or
     descendants, their Affiliates, and trusts for their exclusive benefit.

          b. Notwithstanding the foregoing Section 11.3(a), no transfer to a
     Permitted Transferee shall be permitted unless: (i) the Permitted
     Transferee shall assume this Agreement in writing; (ii) the Company shall
     receive evidence reasonably satisfactory to it of the qualifying
     relationship of each Permitted Transferee to the transferor Member; and
     (iii) Members holding a majority of the Units consent, which consent shall
     not be unreasonably withheld.

                                   ARTICLE 12
                                    BUY-SELL

     12.1 Buy-Sell Offering Notice.

     At any time after the two year anniversary of the Effective Date of this
Agreement, either party (the "Offering Member") may give written notice ("the
Offering Notice") to the other party (the "Non-Offering Member") of its intent
to purchase all, but not less than all, of the Non-Offering Member's interest in
the Company. In no event may the purchase price be less than the value of the
Non-Offering Member's Capital Account plus an amount equal to an annual rate of
return of 15% of the amount of the Capital Account (the "Purchase Price"). The
Purchase Price must be paid in cash. Once given, an Offering Notice may not be
revoked or withdrawn by the Offering Member without the written consent of the
Non-Offering Member.

     12.2 Exercise of Buy-Sell.

     Upon receipt of the Offering Notice, the Non-Offering Member shall then be
obligated either:

          a. To sell to the Offering Member its Interest for the Purchase Price;
     or

          b. To purchase the Interest of the Offering Member for the Purchase
     Price.

     The Non-Offering Member shall notify the Offering Member of its election
     within thirty (30) days after the date the Offering Notice was received by
     the Non-Offering Member (the "Buy-Sell Election Date"). Failure to give
     notice within the required time period shall be deemed an election to sell.
     For purposes of this Section 12 the term "Purchasing Member" shall mean the
     Member who is obligated to purchase the other Member's Interest pursuant to
     either Section 12.2(a) or Section 12.2(b) (whether such Member is MCS or
     Kelley Communication) and the term "Selling Member" shall mean the Member
     who is obligated to sell its Interests to the Purchasing Member.

     12.3 Closing. The Purchasing Member and the Selling Member shall meet and
exchange documents and pay any amounts due, and otherwise do all things
necessary to conclude the transaction set forth herein at the closing of such
purchase (the "Closing"). The Closing shall occur at the office of Purchasing
Member's legal counsel at 9:00 a.m., on the first Business Day after the
ninetieth (90th) day after the Buy-Sell Election Date (the "Closing Date"). The
Selling Member shall, upon the request of the Purchasing Member, concurrently
therewith (or at any time and from time to time thereafter) execute and deliver
such other documents and records as the Purchasing Member determines are
reasonably necessary or desirable to conclude the Closing and to otherwise allow
the Purchasing Member to use, sell, or dispose of the Company Property. The
Purchasing Member shall deliver to the Selling Member cash for the full amount
of the Purchase Price, and shall also, upon the request of the Selling Member,
concurrently therewith (or at any time and from time to time thereafter) execute
and deliver such other documents and records as the Selling Member determines
are reasonably necessary or desirable to conclude the Closing. Further, on the
Closing, the Selling Member and/or its Affiliates shall be released from its
liability under any third party loans to the Company and any guarantees made in
connection therewith. If a Company creditor refuses to so release the Selling
Member and/or its Affiliates, the Purchasing Member shall indemnify the Selling
Member and/or its Affiliates from liability under such loans and guarantees. In
addition, any and all outstanding loans, fees and reimbursements owed by the
Company or the Purchasing Member to the Selling Member or any of its Affiliates
("Repayment Rights") shall be satisfied in full by the Purchasing Member out of
its own funds at Closing, and the satisfaction of all Repayment Rights, if any,
shall be a condition precedent to the Selling Member's obligation to close
hereunder. If the Selling Member's Interest is subject to any lien, claim or
encumbrance, the same shall constitute a default and the Purchasing Member may
elect (a) to cause the purchase price (or a portion thereof) to be applied to
discharge such lien, claim or encumbrance, (b) to take the Interest subject to
such lien, claim or encumbrance and to reduce the purchase price otherwise
payable to the Purchasing Member to the Selling Member by the amount of such
lien, claim or encumbrance, or (c) to terminate the buy-sell proceedings under
this Article 12 because of the existence of such lien, claim or encumbrance and
in such event pursue any and all remedies available at law and equity.
Notwithstanding anything in this Agreement to the contrary, (i) the Purchasing
Member shall be entitled to designate any Affiliate or third party to be the
transferee of such interest or obtain financing from any third party with
respect to such purchase, provided that the foregoing shall not delay the
closing of any such transaction and (ii) the Selling Member's Manager
appointment shall be automatically terminated effective as of the Closing. The
reasonable costs of the Closing shall be divided equally between the Selling
Member and the Purchasing Member, provided that each shall bear its own
attorneys' fees and costs.

     12.4 Failure to Close. Subject to the terms of Section 12.3, if the
Purchasing Member fails to close on the purchase of the Selling Member's
Interest by the Closing Date, then (i) the Purchasing Member's rights to
purchase the Selling Member's interest pursuant to the Offering Notice delivered
with respect to that offer shall immediately terminate and be of no further
force and effect, and (ii) the Purchasing Member shall have no further rights to
make give an Offering Notice under this Article 12. Notwithstanding the
foregoing, this Section 12.4 shall not apply to a Purchasing Member whose
failure to Close is caused by the action, inaction or delay of the Selling
Member.

                                   ARTICLE 13
                           DISSOLUTION AND TERMINATION

     13.1. Dissolution.

          a. The Company shall be dissolved upon the occurrence of any of the
     following events (a "Dissolution Event"):

               i. if the Company voluntarily enters bankruptcy chapter VII or
          another insolvency proceeding that contemplates its final liquidation,
          or does so involuntarily and such proceeding is not vacated or
          dismissed within one hundred twenty (120) days after commencement
          thereof; or

               ii. by the vote or written consent of Members owning collectively
          a majority of the Units.

          b. As soon as possible following the occurrence of any Dissolution
     Event the appropriate representative of the Company shall make all filings
     and do all acts necessary to dissolve the Company.

     13.2 Distribution of Assets Upon Dissolution. In settling accounts after
dissolution, the assets of the Company shall be distributed in the following
order:

          a. First, to pay those liabilities to creditors (including liabilities
     on account of loans from Members pursuant to Article 4 hereof, but
     excluding liabilities on account of Members' Capital Contributions), in the
     order of priority as provided by law;

          b. The balance, if any, to the Members pro rata in accordance with the
     positive balances in their Capital Accounts, after giving effect to all
     contributions, distributions and allocations for all periods.

     13.3. Winding Up. Except as provided by law, upon dissolution, each Member
shall look solely to the assets of the Company for the return of its Capital
Contribution. If the Company Property remaining after the payment or discharge
of the debts and liabilities of the Company is insufficient to return the
Capital Contribution of each Member, such Member shall have no recourse against
any other Member. The winding up of the affairs of the Company and the
distribution of its assets shall be conducted exclusively by the Managers, who
are hereby authorized to take all actions necessary to accomplish such
distribution, including without limitation, selling any Company assets the
Managers deem necessary or appropriate to sell. In the discretion of the
Managers, a pro rata portion of the amounts that otherwise would be distributed
to the Members under this Article may be withheld to provide a reasonable
reserve for unknown or contingent liabilities of the Company.

     13.4. Notice of Dissolution. Within ninety (90) days of the happening of a
Dissolution Event, the Managers shall give written notice thereof to each of the
Members, to the banks and other financial institutions with which the Company
normally does business, and to all other parties with whom the Company regularly
conducts business, and shall publish notice of dissolution in a newspaper of
general circulation in each place in which the Company generally conducts
business.

                                   ARTICLE 14
                            MISCELLANEOUS PROVISIONS

     14.1. Notices. Any notice or communication required or permitted to be
given by any provision of this Agreement, including but not limited to any
consents, shall be in writing and shall be conclusively deemed to have been
given and received by the Person to whom directed, as follows:

          a. on the day delivered if personally delivered to such Person or to
     an officer or representative of the Person;

          b. on the first Business Day delivery is attempted when service is by
     overnight courier addressed to the Person at the address, if any, shown on
     the page containing their signatures, or such other address of which such
     Person has notified the Company and every other Member;

          c. if transmitted by way of facsimile to the facsimile number of such
     Person who has notified the Company and every other Member of its facsimile
     number, with evidence of a confirmed transmission, such notice received
     during Business Hours during a Business Day shall be deemed made on such
     Business Day; facsimile transmissions received at any other time shall be
     deemed received on the next Business Day;

          d. three (3) Business Days after being posted in the United States or
     upon receipt, whichever is sooner, if sent by registered, express or
     certified mail, return receipt requested, postage and charges prepaid
     addressed to the Person at the address, if any, shown on the page
     containing their signatures, or such other address of which such Person has
     notified the Company and every other Member.

     If no address appears on the page containing a Member's signature and if
     the Company and the Members have not been notified of any other address at
     which such Person shall receive notifications, then a notice delivered to
     the Managers, who shall reasonably attempt to forward the notice to such
     Person, shall constitute sufficient notice to such Person.

     14.2. Application of Nevada Law. This Agreement, and the application and
interpretation hereof, shall be governed exclusively by its terms and by the
laws of the State of Nevada, and specifically the Act. Clark County, Nevada
shall be the exclusive venue for any action brought by any party in any way
related to this Agreement.

     14.3. Waiver of Action for Partition. Each Member irrevocably waives during
the term of the Company any right that such Member may have to maintain any
action for partition with respect to the Property of the Company.

     14.4. Amendments. A proposed amendment to this Agreement shall become
effective at such time as it has been unanimously approved by the Members.

     14.5. Construction. Whenever the singular number is used in this Agreement
and when required by the context, the same shall include the plural, and the
masculine gender shall include the feminine and neuter genders and vice versa.

     14.6. Headings. The headings in this Agreement are inserted for convenience
only and are in no way intended to describe, interpret, define, or limit the
scope, extent or intent of this Agreement or any provision hereof.

     14.7. Waivers. The failure of any party to seek redress for violation of or
to insist upon the strict performance of any covenant or condition of this
Agreement shall not prevent a subsequent act, which would have originally
constituted a violation, from having the effect of an original violation, except
in the event of a written waiver to the contrary that specifically states that
this Section 14.7 shall be inapplicable.

     14.8. Rights and Remedies Cumulative. The rights and remedies provided by
this Agreement are cumulative and the use of any one right or remedy by any
party shall not preclude or waive the right to use any or all other remedies.
Said rights and remedies are given in addition to any other rights the parties
may have by law, statute, ordinance or otherwise.

     14.9 Severability. If any provision of this Agreement or the application
thereof to any Person or circumstance shall be invalid, illegal or unenforceable
to any extent, the remainder of this Agreement and the applications thereof
shall not be affected and shall be enforceable to the fullest extent permitted
by law.

     14.10. Heirs, Successors and Assigns. Each and all of the covenants, terms,
provisions and agreements herein contained shall be binding upon and inure to
the benefit of the parties hereto and, to the extent permitted by this
Agreement, their respective heirs, legal representatives, successors and
assigns.

     14.11. Creditors. None of the provisions of this Agreement shall be for the
benefit of or enforceable by any creditors of the Company.

     14.12. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which shall constitute one and
the same instrument.

     14.13. Further Assurances. The Members and the Company agree that they and
each of them will take whatever action or actions as are deemed by counsel to
the Company to be reasonably necessary or desirable from time to time to
effectuate the provisions or intent of this Agreement, and to that end, the
Members and the Company agree that they will execute, acknowledge, seal, and
deliver any further instruments or documents which may be necessary to give
force and effect to this Agreement or any of the provisions hereof, or to carry
out the intent of this Agreement or any of the provisions hereof.

     14.14. Entire Agreement. This Agreement, including every Appendix attached
hereto, sets forth all (and is intended by all parties hereto to be an
integration of all) of the promises, agreements, conditions, understandings,
warranties, and representations among the parties hereto with respect to the
organization of the Company; and there are no promises, agreements, conditions,
understandings, warranties, or representations, oral or written, express or
implied, among them other than as set forth herein.

     14.15. Time of Essence. Time is of the essence of this Agreement and all of
the terms, provisions, covenants and conditions hereof.

     14.16. Conflicts of Interest. The Members hereby acknowledge that (i)
Lionel Sawyer & Collins, a Nevada professional corporation ("LSC") has
represented MCS in connection with the formation of the Company and the drafting
of this Operating Agreement, (ii) that each of the other parties has been
advised to seek independent counsel in connection with such matters, and (iii)
that LSC does not represent any Member other than MCS either directly or
indirectly through the Company. Payment of LSC's fees by the Company shall not
alter or amend any of the relationships contemplated in this paragraph.

IN WITNESS WHEREOF, the Members have executed this Agreement to be effective as
of the date first written above.

                         MC Services LLC, a Nevada limited liability company,
                         Member
                         Notice Address: P.O. Box 53001
                         Henderson, Nevada  89053

                         By:  /s/ Robert E. Broz
                              Robert E. Broz, Manager

                         Kelley Communication Company, Inc., a Nevada
                         corporation, Member
                         Notice Address: Attn: James Michael Kelley
                         5625 South Arville Street - Suite E
                         Las Vegas, Nevada  89118

                         By:  /s/ James Michael Kelley
                              James Michael Kelley, President
<PAGE>
                                   APPENDIX 1
                            TAX ACCOUNTING PROCEDURES

     1.0. References to Sections of the Code or Regulations. References within
this Appendix to sections of the Code or Regulations shall be applied by
substituting for the Regulations' terms of "partnership" and "partner" the terms
"limited liability company" (or "company") and "member," respectively.

     1.1. Tax Definitions. The following terms used in this Agreement and
Appendix shall have the following meanings:

          a. "Adjusted Capital Account Deficit" with respect to any Member means
     the deficit balance, if any, in such Member's Capital Account as of the end
     of any Fiscal Year after giving effect to the following adjustments: (i)
     credit to such Capital Account the sum of (A) any amount which such Member
     is obligated to restore to such Capital Account pursuant to any provision
     of this Agreement, plus (B) an amount equal to such Member's share of
     Company Minimum Gain (as defined in Section 1.2(a) hereof) and determined
     under Regulations Section 1.704-2(g), and such Member's share of Member
     Nonrecourse Debt Minimum Gain (as defined in Section 1.2(b) hereof) and as
     determined under Regulations Section 1.704-2(i)(5), plus (C) any amounts
     which such Member is deemed to be obligated to restore pursuant to
     Regulations Section 1.704-1(b)(2)(ii)(c); and (ii) debit to such Capital
     Account the items described in Regulations Sections
     1.704-1(b)(2)(ii)(d)(4), (5) and (6).

          b. "Asset Value" with respect to any Company asset means:

               i. The fair market value when contributed of any asset
          contributed to the Company by any Member;

               ii. The fair market value of any Company asset when such asset is
          distributed to any Member;

               iii. The fair market value of all Property at the time of the
          happening of any of the following events: (A) the admission of a
          Member to, or the increase of a Membership Interest of an existing
          Member in, the Company in exchange for a Capital Contribution; (B) the
          grant of an interest in the Company as consideration for the provision
          of services to, or for the benefit of, the Company by an existing
          Member acting in a Member capacity, or by a new Member acting in a
          Member capacity or in anticipation of being a Member; (C) the
          distribution of any asset distributed by the Company to any Member as
          consideration for a Membership Interest in the Company; (D) the
          liquidation of the Company under Regulations Section
          1.704-1(b)(2)(ii)(g); or

               iv. The Basis of the asset in all other circumstances.

          For purposes of this definition, fair market value shall be determined
          by the Managers.

          c. "Basis" with respect to an asset means the adjusted basis from time
     to time of such asset for federal income tax purposes.

          d. "Capital Account" means an account maintained for each Member in
     accordance with Regulations Sections 1.704-1(b) and 1.704-2 and to which
     the following provisions apply to the extent not inconsistent with such
     Regulations:

               i. There shall be credited to each Member's Capital Account: (1)
          such Member's Capital Contributions; (2) such Member's distributive
          share of Profits; (3) any items of income or gain specially allocated
          to such Member under this Agreement; and (4) the amount of any Company
          liabilities (determined as provided in Code Section 752(c) and the
          Regulations thereunder) assumed by such Member or to which Property
          distributed to such Member is subject;

               ii. There shall be debited to each Member's Capital Account (1)
          the amount of money and the Asset Value of any Property distributed to
          such Member pursuant to this Agreement; (2) such Member's distributive
          share of Losses; (3) any items of expense or loss which are specially
          allocated to such Member under this Agreement, and (4) the amount of
          liabilities (determined as provided in Code Section 752(c) and the
          Regulations thereunder) of such Member assumed by the Company (within
          the meaning of Code Section 704) or to which Property contributed to
          the Company by such Member is subject; and

               iii. The Capital Account of any transferee Member shall include
          the appropriate portion of the Capital Account of the Member from whom
          the transferee Membership Interest was obtained.

          e. "Depreciation" for any Fiscal Year or other period means the cost
     recovery deduction with respect to an asset for such year or other period
     as determined for federal income tax purposes, provided that if the Asset
     Value of such asset differs from its Basis at the beginning of such year or
     other period, depreciation shall be determined as provided in Regulations
     Section 1.704-1(b)(2)(iv)(g)(3).

          f. "Profits" and "Losses" for any Fiscal Year or other period means an
     amount equal to the Company's taxable income or loss for such year or
     period determined in accordance with Code Section 703(a) and the
     Regulations thereunder with the following adjustments:

               i. All items of income, gain, loss and deduction of the Company
          required to be stated separately shall be included in taxable income
          or loss;

               ii. Income of the Company exempt from federal income tax shall be
          treated as taxable income;

               iii. Expenditures of the Company described in Code Section
          705(a)(2)(B) or treated as such expenditures under Regulations Section
          1.704-1(b)(2)(iv)(i) shall be subtracted from taxable income;

               iv. In the event the Asset Value of any Company asset is adjusted
          pursuant to Sections 1.1(b)(ii) or (iii) of this Appendix, the amount
          of such adjustment shall be taken into account as gain or loss from
          the disposition of such asset for the purposes of computing Profits or
          Losses;

               v. Gain or loss resulting from the disposition of Property from
          which gain or loss is recognized for federal income tax purposes shall
          be determined with reference to the Asset Value of such Property;

               vi. Depreciation shall be determined based upon Asset Value as
          determined under Regulations Section 1.704-1(b)(2)(iv)(g)(3) instead
          of as determined for federal income tax purposes; and

               vii. To the extent an adjustment to the adjusted tax basis of any
          Company asset pursuant to Code Section 734(b) or Code Section 743(b)
          is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to
          be taken into account in determining Capital Accounts as a result of a
          distribution other than in complete liquidation of a Membership
          Interest, the amount of such adjustment shall be treated as an item of
          gain (if the adjustment increases the basis of the asset) or loss (if
          the adjustment decreases the basis of the asset) from the disposition
          of the asset and shall be taken into account for purposes of computing
          Profits and Losses.

               viii. Items which are specially allocated shall not be taken into
          account.

     1.2. Special Allocations of Profits and Losses.

          a. Minimum Gain Chargeback. Notwithstanding any other provision of
     this Appendix, if there is a net decrease in Company Minimum Gain (as
     defined in Regulations Section 1.704-2(d)) during any Fiscal Year, then
     each Member shall be allocated such amount of income and gain for such year
     (and subsequent years, if necessary) determined under and in the manner
     required by Regulations Section 1.704-2(f) as is necessary to meet the
     requirements for a minimum gain chargeback as provided in that Regulation.

          b. Member Nonrecourse Debt Minimum Gain Chargeback. Notwithstanding
     any other provision of this Appendix, if there is a net decrease in Member
     Nonrecourse Debt Minimum Gain (as defined in accordance with Regulations
     Section 1.704-2(i)(3)) attributable to a Member Nonrecourse Debt (as
     defined in Regulations Section 1.704-2(b)(4)) during any Fiscal Year, any
     Member who has a share of the Member Nonrecourse Debt Minimum Gain
     attributable to such Member Nonrecourse Debt determined in accordance with
     Regulations Section 1.704-2(i)(5) shall be allocated such amount of income
     and gain for such year (and subsequent years, if necessary) determined
     under and in the manner required by Regulations Section 1.704-2(i)(4) as is
     necessary to meet the requirements for a chargeback of Member Nonrecourse
     Debt Minimum Gain as is provided in that Regulation.

          c. Qualified Income Offset. If a Member unexpectedly receives any
     adjustment, allocation or distribution described in Regulations Section
     1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain shall
     be specifically allocated to such Member in an amount and manner sufficient
     to eliminate, to the extent required by the Regulations, the Adjusted
     Capital Account Deficit of such Member as quickly as possible, provided
     that an allocation pursuant to this Subsection shall be made only if and to
     the extent that such Member would have an Adjusted Capital Account Deficit
     after all other allocations provided for in Sections 6.1, 6.2, and 6.3 of
     the Agreement and this Section 1.2 have been made without giving effect to
     this Subsection (c).

          d. Gross Income Allocation. In the event any Member has a deficit
     Capital Account at the end of Fiscal Year which is in excess of the sum of
     (i) the amount such Member is obligated to restore pursuant to this
     Agreement, and (ii) the amount such Member is deemed to be obligated to
     restore pursuant to Regulations 1.704-2(g)(1) and 1.704-2(i)(5), each such
     Member shall be specially allocated items of Company income and gain in the
     amount of such excess as quickly as possible, provided that an allocation
     pursuant to this Subsection shall be made only if and to the extent that
     such Member would have a deficit Capital Account after all other
     allocations provided for in Sections 6.1, 6.2 and 6.3 of the Agreement and
     this Section 1.2 have been made without giving effect to Subsection 1.2(c)
     and this Subsection 1.2(d).

          e. Nonrecourse Deductions. Nonrecourse Deductions (as defined and
     determined in Regulations Sections 1.704-2(b) and 1.704-2(c)) for any
     Fiscal Year shall be allocated among the Members in proportion to their
     Units.

          f. Member Nonrecourse Deductions. Any Member Nonrecourse Deductions
     (as defined under Regulations Section 1.704-2(i)(2)) shall be allocated
     pursuant to Regulations Section 1.704-2(i)(1) to the Member who bears the
     economic risk of loss with respect to the "Member Nonrecourse Debt" to
     which it is attributable.

          g. Code Section 754 Adjustment. To the extent that an adjustment to
     the Basis of any asset pursuant to Code Section 734(b) or Code Section
     743(b) is required to be taken into account in determining Capital Accounts
     as provided in Regulations Section 1.704-1(b)(2)(iv)(m), the adjustment
     shall be treated (if an increase) as an item of gain or (if a decrease) as
     an item of loss, and such gain or loss shall be allocated to the Members
     consistent with the allocation of the adjustment pursuant to such
     Regulation.

          h. Allocations Relating to Taxable Issuance of Interests. Any income,
     gain, loss or deduction realized by the Company as a direct or indirect
     result of the issuance of Units by the Company (the "Issuance Items") shall
     be allocated among the Members, so that, to the extent possible, the net
     amount of such Issuance Items, together with all other allocations under
     this Agreement to each Member, shall be equal to the net amount that would
     have been allocated to each such Member if the Issuance Items had not been
     realized.

          i. Purpose and Application. The purpose and the intent of the special
     allocations provided for in Section 6.3 of the Agreement and Sections
     1.2(a) through (g) of this Appendix are to comply with the provisions of
     Regulations Sections 1.704-1(b) and 1.704-2, and such special allocations
     are to be made so as to accomplish that result. However, to the extent
     possible, the Managers, in allocating items of income, gain, loss, or
     deduction among the Members, shall take into account the special
     allocations in such a manner that the net amount of allocations to each
     Member shall be the same as such Member's distributive share of Profits and
     Losses would have been had the events requiring the special allocations not
     taken place. The Managers shall apply the provisions of this Section in
     whatever order the Managers reasonably believe will minimize the effect of
     the special allocations.

     1.3. General Provisions.

          a. Except as otherwise provided in this Agreement, the Members'
     distributive shares of all items of Company income, gain, loss, and
     deduction are the same as their distributive shares of Profits and Losses.

          b. The Company shall allocate Profits, Losses, and other items
     properly allocable to any period using any method permitted by Code Section
     706 and the Regulations thereunder.

          c. To the extent permitted by Regulations Section 1.704-2(h) and
     Section 1.704-2(i)(6), the Company shall endeavor to avoid treating
     distributions as being from the proceeds of a Nonrecourse Liability (as
     defined in Regulations Section 1.752-1(a)(2)) or a Member Nonrecourse Debt.

          d. If there is an increase or decrease in one or more Member's Units
     in the Company during a Fiscal Year, each Member's distributive share of
     Profits or Losses or any item thereof for such Fiscal Year shall be
     determined by any method prescribed by Code Section 706(d) or the
     Regulations thereunder that takes into account the varying Members'
     Interests in the Company during such Fiscal Year.

          e. The Members agree to report their shares of income and loss for
     federal income tax purposes in accordance with the provisions of this
     Appendix.

     1.4. Code Section 704(c) Allocations. Solely for federal income tax
purposes and not with respect to determining any Member's Capital Account,
distributive shares of Profits, Losses, other items, or distributions, a
Member's distributive share of income, gain, loss, or deduction with respect to
any Property (other than money) contributed to the Company, or with respect to
any Property the Asset Value of which was determined as provided in this
Agreement upon the acquisition of Membership Interest in the Company by a new
Member or existing Member in exchange for a Capital Contribution, shall be
determined in accordance with Code Section 704(c) and the Regulations thereunder
or with the principles of such provisions.

     In the event the Asset Value of any Company asset is adjusted pursuant to
Section 1.1(b)(iii) hereof, subsequent allocations of income, gain, loss, and
deduction with respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes and its Asset
Value in the same manner as under Code Section 704(c) and the Regulations
thereunder.

     1.5. Curative Reallocations Regarding Payments to Members. To the extent
that compensation paid to any Member by the Company ultimately is not determined
to be a guaranteed payment under Code Section 707(c) or a payment other than in
his capacity as a Member pursuant to Code Section 707(a), the Member shall be
specially allocated gross income of the Company in an amount equal to the amount
of such compensation, and the Member's Capital Account shall be adjusted to
reflect the payment of such compensation. If the Company's gross income for a
Fiscal Year is less than the amount of such compensation paid in such year, the
Member shall be specially allocated gross income of the Company in the
succeeding year or years until the total amount so allocated equals the total
amount of such compensation.

     1.6. Special Basis Adjustment. At the request of either the transferor or
transferee in connection with a transfer of a Membership Interest in the
Company, the Managers may, in their sole discretion, cause the Company to make
the election provided for in Code Section 754 and maintain a record of the
adjustments to Basis of Property resulting from that election. Any such
transferee shall pay all costs incurred by the Company in connection with such
election and the maintenance of such records.

     1.7. Tax Matters Member.

          a. Kelley Communications is hereby designated the initial Tax Matters
     Member (as defined in Section 6231(a)(7) of the Code) on behalf of the
     Company. MCS shall replace Kelley Communications as Tax Matters Member when
     and if Members holding a majority of the Units agree that MCS is providing
     a greater amount of management support to the Company.

          b. The Tax Matters Member shall from time to time cause the Company to
     make such tax elections as the Tax Matters Member deems to be in the best
     interest of the Company; provided, however, the Tax Matters Member shall
     have no right to extend the statute of limitations for assessing or
     computing any tax liability against the Company or the amount of any
     Company tax item without the unanimous consent of the Members.

          c. If the Tax Matters Member elects to file a petition for
     readjustment of any Company tax item (in accordance with Code Section
     6226(a)) such petition shall be filed in the United States Tax Court unless
     the Members unanimously agree otherwise.

          d. The Tax Matters Member shall, within ten (10) business days after
     receipt thereof, forward to each Member a photocopy of any correspondence
     relating to the Company received from the Internal Revenue Service. The Tax
     Matters Member shall, within ten (10) business days thereof, advise each
     Member in writing of the substance of any conversation held with any
     representative of the Internal Revenue Service.

          e. Any reasonable costs incurred by the Tax Matters Member for
     retaining accountants and/or lawyers on behalf of the Company in connection
     with any Internal Revenue Service audit of the Company shall be expenses of
     the Company. Any accountants and/or lawyers retained by the Company in
     connection with any Internal Revenue Service audit of the Company shall be
     selected by the Tax Matters Member and the fees therefor shall be expenses
     of the Company.

     1.8. Deemed Liquidation. If no Dissolution Event has occurred, but the
Company is deemed liquidated for federal income tax purposes within the meaning
of Regulations Section 1.704-1 (b)(2)(ii)(g), the Company shall not be wound up
and dissolved but, except as otherwise provided by Regulations Section
1.708-1(b)(4), its assets and liabilities shall be deemed to have been
contributed to a new limited liability company, which shall operate and be
governed by the terms of this Agreement, and interests in the new limited
liability company shall be deemed distributed to the Members as liquidating
distributions by the Company.EXHIBIT 4.4  

IAMGOLD CORPORATION

SHARE INCENTIVE PLAN

ARTICLE ONE

DEFINITIONS AND INTERPRETATION

Section 1.01     Definitions: For purposes of the Plan, unless such word or term is otherwise defined herein or the context in which such word or term is used herein otherwise requires, the following words and terms with the initial letter or letters thereof capitalized shall have the following meanings:

	
             
  	
            (a)
 	
            "Act" means the Canada Business Corporations Act or its successor, as amended from time to time;
 

	
             
  	
            (b)
 	
            "Aggregate Contribution" means the aggregate of a Participant’s Contribution and the related Corporation’s Contribution;
 

	
             
  	
            (c)
 	
            "Basic Annual Salary" means the basic annual remuneration of a participant from the Corporation and its Designated Affiliates exclusive of any overtime pay, bonuses or allowances of any kind whatsoever;
 

	
             
  	
            (d)
 	
            "Committee" shall mean the Directors or, if the Directors so determine in accordance with section 2.03 of the Plan, the committee of the Directors authorized to administer the Plan;
 

	
             
  	
            (e)
 	
            "Common Shares" shall mean the common shares of the Corporation, as adjusted in accordance with the provisions of Article Seven of the Plan;
 

	
             
  	
            (f)
 	
            "Corporation" means IAMGold Corporation, a corporation incorporated under the Act;
 

	
             
  	
            (g)
 	
            "Corporation’s Contribution" means the amount the Corporation credits a Participant under section 3.04 of the Plan;
 

	
             
  	
            (h)
 	
            "Designated Affiliate" means the affiliates of the Corporation designated by the Committee for purposes of the Plan from time to time;
 

	
             
  	
            (i)
 	
            "Directors" shall mean the board of directors of the Corporation from time to time;
 

	
             
  	
            (j)
 	
            "Eligible Directors" shall mean the Directors or the directors of any Designated Affiliate from time to time;
 

	
             
  	
            (k)
 	
            "Eligible Employees" shall mean employees and officers, whether Directors or not, and including both full-time and part-time employees, of the Corporation or any Designated Affiliate;
 

 

IAMGold - Annual Matters 2005- Share Incentive Plan - (Final) (2).htm

 

2.

 

 

	
             
  	
            (l)
 	
            "Employment Contract" means any contract between the Corporation or any Designated Affiliate and any Eligible Employee, Eligible Director or Other Participant relating to, or entered into in connection with, the employment of the Eligible Employee, the appointment or election of the Eligible Director or the engagement of the Other Participant or any other agreement to which the Corporation or a Designated Affiliate is a party with respect to the rights of such Participant in respect of a change in control of the Corporation or the termination of employment, appointment, election or engagement of such Participant;
 

	
             
  	
            (m)
 	
            "Holding Period" means a period of 12 months or such longer period as may be required by law or the Stock Exchange or any regulatory authority having jurisdiction over the securities of the Corporation;
 

	
             
  	
            (n)
 	
            "Issue Price" means the weighted average price of the Common Shares on the Stock Exchange for the calendar quarter in respect of which Common Shares are being issued under the Share Purchase Plan;
 

	
             
  	
            (o)
 	
            "Option" shall mean an option to purchase Common Shares granted pursuant to, or governed by, the Plan;
 

	
             
  	
            (p)
 	
            "Optionee" shall mean a Participant to whom an Option has been granted pursuant to the Share Option Plan;
 

	
             
  	
            (q)
 	
            "Option Period" shall mean the period of time during which the particular Option may be exercised;
 

	
             
  	
            (r)
 	
            "Other Participants" shall mean any person or corporation engaged to provide ongoing management or consulting services for the Corporation or a Designated Affiliate, or any employee of such person or corporation, other than an Eligible Director or an Eligible Employee;
 

	
             
  	
            (s)
 	
            "Participant" with respect to the Share Purchase Plan shall mean each Eligible Employee and Other Participant and with respect to the Share Option Plan and Share Bonus Plan shall mean each Eligible Director, Eligible Employee and Other Participant;
 

	
             
  	
            (t)
 	
            "Participant’s Contribution" means the amount a Participant elects to contribute to the Share Purchase Plan under paragraphs 3.03(a) or (b) of the Plan;
 

	
             
  	
            (u)
 	
            "Plan" means this share incentive plan which includes the Share Purchase Plan, the Share Option Plan and the Share Bonus Plan;
 

	
             
  	
            (v)
 	
            "Service Provider" means an employee or insider of the Corporation or any of its subsidiaries and any other person or corporation engaged to provide ongoing management or consulting services for the Corporation or any entity controlled by the Corporation;
 

	
             
  	
            (w)
 	
            "Share Bonus Plan" means the share bonus plan described in Article Five hereof;
 

 

 

3.

 

 

	
             
  	
            (x)
 	
            "Share Compensation Arrangement" means a stock option, stock option plan, employee stock purchase plan or any other compensation or incentive mechanism involving the issuance or potential issuance of securities of the Corporation to one or more Service Providers, including a share purchase from treasury which is financially assisted by the Corporation by way of a loan, guaranty or otherwise;
 

	
             
  	
            (y)
 	
            "Share Option Plan" means the share option plan described in Article Four hereof;
 

	
             
  	
            (z)
 	
            "Share Purchase Plan" means the share purchase plan described in Article Three hereof; and
 

	
             
  	
            (aa)
 	
            "Stock Exchange" means The Toronto Stock Exchange, or, if the Common Shares are not listed on The Toronto Stock Exchange, such other principal market upon which the Common Shares are traded as designated by the Committee from time to time.
 

Section 1.02     Securities Definitions: In the Plan, the terms "affiliate", "associate", "subsidiary" and "insider" shall have the meaning given to such terms in the Securities Act (Ontario).

Section 1.03     Headings: The headings of all articles, sections, and paragraphs in the Plan are inserted for convenience of reference only and shall not affect the construction or interpretation of the Plan.

Section 1.04     Context, Construction: Whenever the singular or masculine are used in the Plan, the same shall be construed as being the plural or feminine or neuter or vice versa where the context so requires.

Section 1.05     References to this Plan: The words "hereto", "herein", "hereby", "hereunder", "hereof" and similar expressions mean or refer to the Plan as a whole and not to any particular article, section, paragraph or other part hereof.

Section 1.06     Canadian Funds: Unless otherwise specifically provided, all references to dollar amounts in the Plan are references to lawful money of Canada.

ARTICLE TWO

PURPOSE AND ADMINISTRATION OF THE PLAN

Section 2.01     Purpose of the Plan: The Plan provides for the acquisition of Common Shares by Participants for the purpose of advancing the interests of the Corporation through the motivation, attraction and retention of key employees and directors of the Corporation and the Designated Affiliates of the Corporation and to secure for the Corporation and the shareholders of the Corporation the benefits inherent in the ownership of Common Shares by key employees and directors of the Corporation and its Designated Affiliates, it being generally recognized that share incentive plans aid in attracting, retaining and encouraging employees and directors due to the opportunity offered to them to acquire a proprietary interest in the Corporation.

 

 

4.

 

 

Section 2.02     Administration of the Plan: The Plan shall be administered by the Committee and the Committee shall have full authority to administer the Plan including the authority to interpret and construe any provision of the Plan and to adopt, amend and rescind such rules and regulations for administering the Plan as the Committee may deem necessary or desirable in order to comply with the requirements of the Plan. All actions taken and all interpretations and determinations made by the Committee in good faith shall be final and conclusive and shall be binding on the Participants and the Corporation. No member of the Committee shall be personally liable for any action taken or determination or interpretation made in good faith in connection with the Plan and all members of the Committee shall, in
addition to their rights as Directors, be fully protected, indemnified and held harmless by the Corporation with respect to any such action taken or determination or interpretation made. The appropriate officers of the Corporation are hereby authorized and empowered to do all things and execute and deliver all instruments, undertakings and applications and writings as they, in their absolute discretion, consider necessary or desirable for the implementation of the Plan and of the rules and regulations established for administering the Plan. All costs incurred in connection with the Plan shall be for the account of the Corporation.

Section 2.03    Delegation to Committee: All of the powers exercisable hereunder by the Directors may, to the extent permitted by applicable law and as determined by resolution of the Directors, be exercised by a committee of the Directors comprised of not less than three Directors.

Section 2.04     Record Keeping: The Corporation shall maintain a register in which shall be recorded:

	
             
  	
            (a)
 	
            the name and address of each Optionee;
 

	
             
  	
            (b)
 	
            the number of Common Shares subject to Options granted to each Optionee;
 

	
             
  	
            (c)
 	
            the aggregate number of Common Shares subject to Options;
 

	
             
  	
            (d)
 	
            the name and address of each Participant in the Share Purchase Plan;
 

	
             
  	
            (e)
 	
            the Participants’ Contributions and the Corporation’s Contributions in respect of each Participant; and
 

	
             
  	
            (f)
 	
            the number of Common Shares held in safekeeping for the account of each Participant.
 

Section 2.05    Determination of Participants: The Committee shall from time to time determine the Participants who may participate in the Share Purchase Plan, the Share Option Plan and the Share Bonus Plan. The Committee shall from time to time determine the number of Common Shares to be issued to any Participant under the Share Bonus Plan, the Participants to whom Options shall be granted, the number of Common Shares to be made subject to and the expiry date of each Option granted to each Participant and the other terms of each Option granted to each Participant, all such determinations to be made in accordance with the terms and conditions of the Plan, and the Committee may take into consideration the present and potential contributions of and the services rendered by the particular Participant to the success of the 

 

5.

 

Corporation and any other factors which the Committee deems appropriate and relevant. Notwithstanding the foregoing, an Eligible Director who is not also an officer of the Corporation or of an affiliate of the Corporation, may only be granted Options upon his or her initial appointment or election, as the case may be, as a director of the Corporation or of an affiliate of the Corporation and such Eligible Director shall not be eligible to be granted Options on an annual basis or otherwise other than upon his or her initial appointment or election, as the case may be, as a director of the Corporation or of an affiliate of the Corporation, with "initial appointment or election" referring to the appointment or election of such individual as a director of the Corporation or of an affiliate of the Corporation in circumstances where, immediately prior to such appointment or election, the individual was not a
director of the Corporation or of an affiliate of the Corporation. 

	
            Section 2.06
 	
            Maximum Number of Shares:
 

	
             
  	
            (a)
 	
            Share Purchase Plan: The maximum number of Common Shares made available for the Share Purchase Plan shall be determined from time to time by the Committee but, in any case, shall not exceed 750,000 Common Shares in the aggregate and in no event shall the aggregate number of Common Shares reserved for issue pursuant to the provisions of the Share Purchase Plan exceed 750,000 Common Shares.
 

	
             
  	
            (b)
 	
            Share Option Plan: The maximum number of Common Shares made available for the Share Option Plan shall be determined from time to time by the Committee but, in any case, shall not exceed 13,250,000 Common Shares in the aggregate and in no event shall the aggregate number of Common Shares reserved for issue pursuant to the provisions of the Share Option Plan exceed 13,250,000 Common Shares. In addition, the aggregate number of Common Shares reserved for issuance to any one Participant upon the exercise of Options shall not exceed 5% of the number of Common Shares then outstanding.
 

	
             
  	
            (c)
 	
            Share Bonus Plan: The maximum number of Common Shares made available for the Share Bonus Plan shall be determined from time to time by the Committee but, in any case, shall not exceed 600,000 Common Shares in the aggregate and in no event shall the aggregate number of Common Shares reserved for issue pursuant to the provisions of the Share Bonus Plan exceed the lesser of 600,000 Common Shares and 1% of the number of Common Shares then outstanding.
 

For purposes of this section 2.06, the number of Common Shares then outstanding shall mean the number of Common Shares outstanding on a non-diluted basis immediately prior to the proposed grant of the applicable Option or issue of Common Shares, as the case may be, excluding Common Shares issued pursuant to Share Compensation Arrangements over the preceding one-year period.

 

 

6.

 

 

ARTICLE THREE

SHARE PURCHASE PLAN

Section 3.01    The Share Purchase Plan: A Share Purchase Plan is hereby established for Eligible Employees and Other Participants.

Section 3.02     Participants: Participants entitled to participate in the Share Purchase Plan shall be Eligible Employees or Other Participants who have been providing services to the Corporation or any Designated Affiliate for at least the immediately preceding 12 months. The Committee, shall have the right, in its absolute discretion, to waive such 12 month period or to determine that the Share Purchase Plan does not apply to any Eligible Employee or Other Participant.

Section 3.03   Election to Participate in Share Purchase Plan and Participant’s Contribution:

	
             
  	
            (a)
 	
            Any Participant may elect to contribute money to the Share Purchase Plan in any calendar year if the Participant, prior to the end of the immediately preceding calendar year, delivers to the Corporation a written direction in form and substance satisfactory to the Corporation authorizing the Corporation to deduct from the remuneration of the Participant the Participant’s Contribution in equal instalments.
 

	
             
  	
            (b)
 	
            If, on December 31 of any year, a Participant has not been continuously providing service to the Corporation or any of its Designated Affiliates for at least the immediately preceding 12 months (unless such 12-month requirement is waived by the Committee), then, in the calendar quarter during which such Participant reaches six consecutive months of service, such Participant may elect to make a Participant’s Contribution with respect to the balance of that calendar year, commencing at the beginning of the next calendar quarter, by delivering to the Corporation the written direction referred to in paragraph 3.03(a) above.
 

	
             
  	
            (c)
 	
            The Participant’s Contribution shall not exceed 10% (unless changed by the Committee), before deductions, of the Basic Annual Salary of the Participant; provided that, in the event of any employee electing to make a Participant’s’ Contribution for less than a full year in accordance with paragraph 3.03(b) above, his or her Basic Annual Salary shall be pro-rated for the balance of that calendar year.
 

	
             
  	
            (d)
 	
            No adjustment shall he made to the Participant’s Contribution until the next succeeding calendar year, and then only if a new written direction shall have been delivered to the Corporation for such calendar year. The Participant’s Contribution shall be held by the Corporation in trust for the benefit of the Participant for the purposes of the Share Purchase Plan.
 

Section 3.04     Corporation’s Contribution: Immediately prior to the date any Common Shares are issued to a Participant in accordance with section 3.06 of the Plan, the Corporation will credit 

 

7.

 

the Participant with and thereafter hold in trust for the Participant an amount equal to the Participant’s Contribution then held in trust by the Corporation.

Section 3.05     Aggregate Contribution: The Corporation shall not be required to segregate the Aggregate Contribution from its own corporate funds or to pay interest thereon.

	
            Section 3.06
 	
            Issue of Shares:
 

	
             
  	
            (a)
 	
            As soon as practicable following March 31, June 30, September 30 and December 31 in each calendar year the Corporation shall issue for the account of each Participant fully paid and non-assessable Common Shares equal in value to the Aggregate Contribution held in trust as of such date by the Corporation and the Aggregate Contribution shall be converted into Common Shares at the applicable Issue Price. If such conversion would result in the issue for the account of a Participant of a fraction of a Common Share, the Corporation will issue only such whole Common Shares as are issuable.
 

	
             
  	
            (b)
 	
            The Corporation shall bold any unused balance of the Aggregate Contribution in trust for the Participant until used in accordance with the Share Purchase Plan.
 

	
            Section 3.07
 	
            Safekeeping and Delivery of Shares:
 

	
             
  	
            (a)
 	
            All Common Shares issued for the account of a Participant in accordance with section 3.06 of the Plan will be held in safekeeping by the Corporation and will be delivered, subject as provided in the Share Purchase Plan, to such Participant upon the expiry of the Holding Period from the date of issue of such Common Shares. If the Corporation receives on behalf of a Participant in respect of any Common Shares so held:
 

	
             
  	
            (i)
 	
            cash dividends;
 

	
             
  	
            (ii)
 	
            options or rights to purchase additional securities of the Corporation or any other corporation;
 

	
             
  	
            (iii)
 	
            any notice of meeting, proxy statement and proxy for any meeting of holders of Common Shares; or
 

	
             
  	
            (iv)
 	
            other or additional Common Shares or other securities (by way of dividend or otherwise);
 

then the Corporation shall forward to such Participant, at his or her last address according to the register maintained under section 2.04 of the Plan, any of the items listed in subparagraph 3.07 (a)(i), (ii) and (iii) above; and shall hold in safekeeping any additional securities referred to in subparagraph 3.07(a)(iv) above and shall deliver such securities to the Participant with delivery of the Common Shares in respect of which such additional securities were issued.

 

 

8.

 

 

	
             
  	
            (b)
 	
            Any Common Shares held for the account of an Eligible Employee in safekeeping by the Corporation will be distributed to the Eligible Employee or the estate of the Eligible Employee, prior to the expiry of the applicable Holding Period only upon:
 

	
             
  	
            (i)
 	
            the date of the commencement of the Eligible Employee’s retirement in accordance with the Corporation’s normal retirement policy;
 

	
             
  	
            (ii)
 	
            the date of the commencement of the total disability of the Eligible Employee determined in accordance with the Corporation’s normal disability policy; or
 

	
             
  	
            (iii)
 	
            the date of death of the Eligible Employee.
 

	
             
  	
            (c)
 	
            Any Common Shares held for the account of an Other Participant in safekeeping by the Corporation will be distributed to the Other Participant or the estate of the Other Participant, prior to the expiry of the applicable Holding Period only upon:
 

	
             
  	
            (i)
 	
            the date of the commencement of the Other Participant’s retirement in accordance with the Corporation’s normal retirement policy, or in the case of an Other Participant that is not an individual, the date of the commencement of the retirement of the primary individual providing services to the Corporation on behalf of the Other Participant;
 

	
             
  	
            (ii)
 	
            the date of the commencement of the total disability of the Other Participant, or in the case of an Other Participant that is not an individual, the date of the commencement of the total disability of the primary individual providing the services to the Corporation or Designated Affiliate on behalf of the Other Participant, determined in accordance with the Corporation’s normal disability policy; or
 

	
             
  	
            (iii)
 	
            the date of death of the Other Participant or, in the case of an Other Participant that is not an individual, the date of death of the primary individual providing the services to the Corporation or Designated Affiliate on behalf of the Other Participant.
 

	
             
  	
            (d)
 	
            If there is a take-over bid (within the meaning of the Securities Act (Ontario)) made for all or a portion of the issued and outstanding Common Shares, then the Committee may, by resolution, make any Common Shares held in trust for a Participant immediately deliverable in order to permit such Common Shares to be tendered to such bid. In addition, the Committee may, by resolution, permit the Corporation’s Contribution to be made and Common Shares to be issued for the then Aggregate Contribution prior to expiry of any such take-over bid in order to permit such Common Shares to be tendered to such bid.
 

Section 3.08     Termination of Employment: If a Participant shall cease to be employed by, or provide services to, the Corporation or any Designated Affiliate for any reason or shall receive notice from the Corporation of the termination of his or her contract of service or employment:

 

 

9.

 

 

	
             
  	
            (a)
 	
            the Participant shall automatically cease to be entitled to participate in the Share Purchase Plan;
 

	
             
  	
            (b)
 	
            any portion of the Participant’s Contribution then held in trust for the Participant shall be paid to the Participant or the estate of the Participant;
 

	
             
  	
            (c)
 	
            any portion of the Corporation’s Contribution then held in trust for the Participant shall be paid to the Corporation; and
 

	
             
  	
            (d)
 	
            any Common Shares then held in safekeeping for the Participant shall, subject to section 3.07 of the Plan in the case of retirement, disability or death, and subject to the provisions of the Act, remain in safekeeping until the expiry of the Hold Period.
 

Section 3.09     Election to Withdraw from Share Purchase Plan: Any Participant may at any time elect to withdraw from the Share Purchase Plan. In order to withdraw the Participant must give at least two weeks’ notice to the Corporation in writing in form and substance satisfactory to the Corporation directing the Corporation to cease deducting from the Participant’s remuneration the Participant’s Contribution. Deductions will cease to be made commencing with the first pay date following expiry of the two week notice. The Participant’s Contribution will continue to be held in trust. On the next following date for making the Corporation’s Contribution the Corporation will credit the Participant with the pro rata amount of the Corporation’s Contribution, calculated in accordance
with section 3.04 of the Plan. The issuance and delivery of Common Shares will not be accelerated by such withdrawal but will occur on the date on which such Common Shares would otherwise have been issued in accordance with section 3.06 of the Plan and delivered to the Participant in accordance with section 3.07 of the Plan had the Participant not elected to withdraw from the Share Purchase Plan.

Section 3.10     Necessary Approvals: The obligation of the Corporation to issue and deliver any Common Shares in accordance with the Share Purchase Plan shall be subject to any necessary approval of any stock exchange or regulatory authority having jurisdiction over the securities of the Corporation. If any Common Shares cannot be issued to any Participant under the Share Purchase Plan for whatever reason, the obligation of the Corporation to issue such Common Shares shall terminate and any Participant’s Contribution held in trust for a Participant shall be returned to the Participant without interest.

ARTICLE FOUR

SHARE OPTION PLAN

Section 4.01    The Share Option Plan and Participants: A Share Option Plan is hereby established for Eligible Directors (subject to section 2.05 hereof), Eligible Employees and Other Participants.

Section 4.02    Option Notice or Agreement: Each Option granted to a Participant shall be evidenced by a stock option notice or stock option agreement setting out terms and conditions consistent with the provisions of the Plan, which terms and conditions need not be the same in each case and which terms and conditions may be changed from time to time.

 

 

10.

 

 

Section 4.03     Exercise Price: The price per share at which any Common Share which is the subject of an Option may be purchased shall be determined by the Committee at the time the Option is granted, provided that prior to the date that the Common Shares are first traded on the Stock Exchange, such price shall be not less than the fair market value of the Common Shares as determined by the Committee, and thereafter such price shall be not less than the closing price of the Common Shares on the Stock Exchange on the last trading day immediately preceding the date of the grant of such Option.

Section 4.04     Term of Option: The Option Period for each Option shall be such period of time as shall be determined by the Committee, subject to amendment by an Employment Contract, provided that in no event shall an Option Period exceed 10 years.

Section 4.05     Lapsed Options: If Options granted under the Share Option Plan are surrendered, terminate or expire without being exercised in whole or in part, new Options may be granted covering the Common Shares not purchased under such lapsed Options.

Section 4.06     Limit on Options to be Exercised: Except as otherwise specifically provided in any Employment Contract or in section 4.09 of the Plan, Options may be exercised (in each case to the nearest full share) during the Option Period as follows:

	
             
  	
            (a)
 	
            At any time during the Option Period after the end of the first year thereof, the Participant may purchase up to one third of the aggregate number of Common Shares subject to such Option;
 

	
             
  	
            (b)
 	
            At any time during the Option Period after the end of the second year thereof, the Participant may purchase an additional one third of the aggregate number of Common Shares subject to such Option plus any Common Shares not purchased in accordance with subparagraph 4.06(a) above; and
 

	
             
  	
            (c)
 	
            At any time during the Option Period after the expiration of the third year thereof, the Participant may purchase any Common Shares subject to such Option not purchased in accordance with subparagraphs 4.06(a) and (b) above.
 

Section 4.07     Eligible Participants on Exercise: Subject to section 4.06 of the Plan an Option may be exercised by the Optionee in whole at any time, or in part from time to time, during the Option Period, provided however that, except as otherwise specifically provided in section 4.10 or section 4.11 hereof or in any Employment Contract, no Option may be exercised unless the Optionee at the time of exercise thereof is:

	
             
  	
            (a)
 	
            in the case of an Eligible Employee, an officer of the Corporation or a Designated Affiliate or in the employment of the Corporation or a Designated Affiliate and has been continuously an officer or so employed since the date of the grant of such Option, provided however that a leave of absence with the approval of the Corporation or such Designated Affiliate shall not be considered an interruption of employment for purposes of the Share Option Plan;
 

 

 

11.

 

 

	
             
  	
            (b)
 	
            in the case of an Eligible Director who is not also an Eligible Employee, a director of the Corporation or a Designated Affiliate and has been such a director continuously since the date of the grant of such Option; and
 

	
             
  	
            (c)
 	
            in the case of an Other Participant, engaged, directly or indirectly, in providing ongoing management or consulting services for the Corporation or a Designated Affiliate and has been so engaged since the date of the grant of such Option.
 

Section 4.08     Payment of Exercise Price: The issue of Common Shares on exercise of any Option shall be contingent upon receipt by the Corporation of payment of the aggregate purchase price for the Common Shares in respect of which the Option has been exercised by cash or certified cheque delivered to the registered office of the Corporation together with a validly completed notice of exercise. No Optionee or legal representative, legatee or distributee of any Optionee will be, or will be deemed to be, a holder of any Common Shares with respect to which such Optionee was granted an Option, unless and until certificates for such Common Shares are issued to such Optionee, or them, under the terms of the Share Option Plan, Subject to section 4.12 hereof, upon an Optionee exercising an Option and paying the
Corporation the aggregate purchase price for the Common Shares in respect of which the Option has been exercised, the Corporation shall as soon as practicable issue and deliver a certificate representing the Common Shares so purchased.

Section 4.09     Acceleration on Take-over Bid: If there is a take-over bid (within the meaning of the Securities Act (Ontario)) made for all or a portion of the issued and outstanding Common Shares, then the Committee may, by resolution, permit all Options outstanding to become immediately exercisable, notwithstanding section 4.06 hereof, in order to permit Common Shares issuable under such Options to be tendered to such bid.

Section 4.10     Effect of Death: If a Participant or, in the case of an Other Participant which is not an individual, the primary individual providing services to the Corporation or Designated Affiliate on behalf of the Other Participant, shall die, any Option held by such Participant or Other Participant at the date of such death shall become immediately exercisable notwithstanding section 4.06 hereof, and shall be exercisable in whole or in part only by the person or persons to whom the rights of the Optionee under the Option shall pass by the will of the Optionee or the laws of descent and distribution for a period of nine months (or such other period of time as is otherwise provided in an Employment Contract) after the date of death of the Optionee or prior to the expiration of the Option Period in
respect of the Option, whichever is sooner, and then only to the extent that such Optionee was entitled to exercise the Option at the date of the death of such Optionee in accordance with sections 4.07 and 4.11 of the Plan.

	
            Section 4.11
 	
            Effect of Termination of Employment: If a Participant shall:
 

	
             
  	
            (a)
 	
            cease to be a director of the Corporation and of the Designated Affiliates (and is not or does not continue to be an employee thereof) for any reason (other than death); or
 

	
             
  	
            (b)
 	
            cease to be employed by, or provide services to, the Corporation or the Designated Affiliates (and is not or does not continue to be a director or officer 
 

 

 

12.

 

thereof), or any corporation engaged to provide services to the Corporation or the Designated Affiliates, for any reason (other than death) or shall receive notice from the Corporation or any Designated Affiliate of the termination of his Employment Contract;

(collectively a "Termination"), except as otherwise provided in any Employment Contract, such Participant may, but only within 60 days next succeeding such Termination, exercise his Options to the extent that such Participant was entitled to exercise such options at the date of such Termination. Notwithstanding the foregoing or any Employment Contract, in no event shall such right extend beyond the Option Period.

Section 4.12     Necessary Approvals: The obligation of the Corporation to issue and deliver any Common Shares in accordance with the Share Option Plan shall be subject to any necessary approval of any stock exchange or regulatory authority having jurisdiction over the securities of the Corporation. If any Common Shares cannot be issued to any Participant upon the exercise of an Option for whatever reason, the obligation of the Corporation to issue such Common Shares shall terminate and any exercise price paid to the Corporation in respect of the exercise of such Option shall be returned to the Participant.

ARTICLE FIVE

SHARE BONUS PLAN

Section 5.01     The Share Bonus Plan: A Share Bonus Plan is hereby established for Eligible Directors, Eligible Employees and Other Participants.

Section 5.02     Participants: The Committee shall have the right to determine, in its sole and absolute discretion, to issue for no cash consideration to such Participant any number of Common Shares as a discretionary bonus subject to such provisions and restrictions as the Committee may determine.

Section 5.03     Necessary Approvals: The obligation of the corporation to issue and deliver any Common Shares in accordance with the Share Bonus Plan shall be subject to any necessary approvals of any stock exchange or regulatory authority having jurisdiction over the securities of the Corporation. If any Common Shares cannot be issued to any Participant under the Share Bonus Plan for whatever reason, the obligation of the Corporation to issue such Common Shares shall terminate.

ARTICLE SIX

WITHHOLDING TAXES AND SECURITIES LAWS

OF THE UNITED STATES OF AMERICA

Section 6.01     Withholding Taxes: The Corporation or any Designated Affiliate may take such steps as are considered necessary or appropriate for the withholding of any taxes which the Corporation or any Designated Affiliate is required by any law or regulation of any governmental authority whatsoever to withhold in connection with any Option or Common Share including, without limiting the generality of the foregoing, the withholding of all or any portion of any payment or the withholding of the issue of Common Shares to be issued upon the exercise 

 

13.

 

of any Option, until such time as the Participant has paid the Corporation or any Designated Affiliate for any amount which the Corporation or the Designated Affiliate is required to withhold with respect to such taxes.

Section 6.02     Securities Laws of the United States of America: Neither the Options which may be granted pursuant to the provisions of the Share Option Plan nor the Common Shares which may be issued pursuant to the exercise of Options or participation in the Share Purchase Plan or Share Bonus Plan have been registered under the United States Securities Act of 1933, as amended (the "U.S. Act"), or under any securities law of any state of the United States of America. Accordingly, any Participant who is issued Common Shares or granted an Option in a transaction which is subject to the U.S. Act or the securities laws of any state of the United States of America may be required to represent, warrant, acknowledge and agree that:

	
             
  	
            (a)
 	
            the Participant is acquiring the Option and/or any Common Shares as principal and for the account of the Participant;
 

	
             
  	
            (b)
 	
            in granting the Option and/or issuing the Common Shares to the Participant, the Corporation is relying on the representations and warranties of the Participant to support the conclusion of the Corporation that the granting of the Option and/or the issue of Common Shares do not require registration under the U.S. Act or to be qualified under the securities laws of any state of the United States of America;
 

	
             
  	
            (c)
 	
            each certificate representing Common Shares so issued may be required to have the following legends:
 

"THE COMMON SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT"), AND MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE CORPORATION, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (C) WITH THE PRIOR WRITTEN CONSENT OF THE CORPORATION, PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS."

"THE PRESENCE OP THIS LEGEND MAY IMPAIR THE ABILITY OF THE HOLDER HEREOF TO EFFECT GOOD DELIVERY OF THE COMMON SHARES REPRESENTED HEREBY ON A CANADIAN STOCK EXCHANGE. A CERTIFICATE WITHOUT A LEGEND MAY BE OBTAINED FROM THE REGISTRAR AND TRANSFER AGENT FOR THE COMMON SHARES OF THE CORPORATION IN CONNECTION WITH A SALE OF THE COMMON SHARES REPRESENTED HEREBY UPON DELIVERY OF THIS CERTIFICATE AND AN EXECUTED DECLARATION BY THE SELLER, IN A FORM SATISFACTORY TO THE REGISTRAR AND TRANSFER AGENT AND THE CORPORATION, TO THE EFFECT THAT 

 

 

14.

 

SUCH SALE IS BEING MADE IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT.";

provided that if such Common Shares are being sold outside the United States of America in compliance with the requirements of Rule 904 of Regulation S under the U.S. Act the foregoing legends may be removed by providing a written declaration by the holder to the registrar and transfer agent for the Common Shares to the following effect:

"The undersigned (a) represents and warrants that the sale of the securities of IAMGold Corporation (the "Corporation") to which this declaration relates is being made in compliance with Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), and (b) certifies that (1) the undersigned is not an affiliate of the Corporation as that term is defined in the U.S. Securities Act, (2) the offer of such securities was not made to a person in the United States and either (a) at the time the buy order was originated, the buyer was outside the United States, or the undersigned and any person acting on behalf of the undersigned reasonably believe that the buyer was outside the United States, or (b) the transaction was executed on or through the facilities of The Toronto Stock Exchange and neither the undersigned nor any person acting on behalf
of the undersigned knows that the transaction has been prearranged with a buyer in the United States, and (3) neither the undersigned nor any affiliate of the undersigned nor any person acting on any of their behalf has engaged or will engage in any directed selling efforts in the United States in connection with the offer and sale of such securities. Terms used herein have the meanings given to them by Regulation S under the U.S. Securities Act."

	
             
  	
            (d)
 	
            other than as contemplated by subsection 6.02(c) hereof, prior to making any disposition of any Common Shares acquired pursuant to the Plan which might be subject to the requirements of the U.S. Act, the Participant shall give written notice to the Corporation describing the manner of the proposed disposition and containing such other information as is necessary to enable counsel for the Corporation to determine whether registration under the U.S. Act or qualification under any securities laws of any state of the United States of America is required in connection with the proposed disposition and whether the proposed disposition is otherwise in compliance with such legislation and the regulations thereto;
 

	
             
  	
            (e)
 	
            other than as contemplated by subsection 6.02(c) hereof, the Participant will not attempt to effect any disposition of the Common Shares owned by the Participant and acquired pursuant to the Plan or of any interest therein which might be subject to the requirements of the U.S. Act in the absence of an effective registration statement relating thereto under the U.S. Act or an opinion of counsel satisfactory in form and substance to counsel for the Corporation that such disposition would not constitute a violation of the U.S. Act and then will only dispose of such Common Shares in the manner so proposed;
 

	
             
  	
            (f)
 	
            the Corporation may place a notation on the records of the Corporation to the effect that none of the Common Shares acquired by the Participant pursuant to the 
 

 

 

15.

 

Plan shall be transferred unless the provisions of the Plan have been complied with; and

	
             
  	
            (g)
 	
            the effect of these restrictions on the disposition of the Common Shares acquired by the Participant pursuant to the Plan is such that the Participant may not be able to sell or otherwise dispose of such Common Shares for a considerable length of time in a transaction which is subject to the provisions of the U.S. Act other than as contemplated by subsection 6.02(c) hereof.
 

ARTICLE SEVEN

GENERAL

Section 7.01    Effective Time of Plan: The Plan shall become effective upon a date to be determined by the Directors.

Section 7.02    Amendment of Plan: The Committee may from time to time in the absolute discretion of the Committee amend, modify and change the provisions of the Plan or any Options granted pursuant to the Plan, provided that any amendment, modification or change to the provisions of the Plan or any Options granted pursuant to the Plan which would:

	
             
  	
            (a)
 	
            materially increase the benefits under the Plan or any Options granted pursuant to the Plan;
 

	
             
  	
            (b)
 	
            increase the number of Common Shares, other than by virtue of sections 7.06 and 7.07 of the Plan, which may be issued pursuant to the Plan; or
 

	
             
  	
            (c)
 	
            materially modify the requirements as to eligibility for participation in the Plan;
 

shall only be effective upon such amendment, modification or change being approved by the shareholders of the Corporation if required by the Stock Exchange or any other regulatory authority having jurisdiction over the securities of the Corporation. Any amendment, modification or change of any provision of the Plan or any Options granted pursuant to the Plan shall be subject to approval, if required, by the Stock Exchange or any regulatory authority having jurisdiction over the securities of the Corporation.

Section 7.03      Non-Assignable: No rights under the Plan and no Option awarded pursuant to the provisions of the Plan are assignable or transferable by any Participant other than pursuant to a will or by the laws of descent and distribution.

Section 7.04     Rights as a Shareholder: No Optionee shall have any rights as a shareholder of the Corporation with respect to any Common Shares which are the subject of an Option. No Optionee shall be entitled to receive any dividends, distributions or other rights declared for shareholders of the Corporation for which the record date is prior to the date of issue of certificates representing Common Shares.

Section 7.05     No Contract of Employment: Nothing contained in the Plan shall confer or be deemed to confer upon any Participant the right to continue in the employment of, or to provide 

 

16.

 

services to, the Corporation or any Designated Affiliate nor interfere or be deemed to interfere in any way with any right of the Corporation or any Designated Affiliate to discharge any Participant at any time for any reason whatsoever, with or without cause. Participation in any of the Plan by a Participant shall be voluntary.

Section 7.06    Consolidation, Merger, etc.: If there is a consolidation, merger or statutory amalgamation or arrangement of the Corporation with or into another corporation, a separation of the business of the Corporation into two or more entities or a transfer of all or substantially all of the assets of the Corporation to another entity:

	
             
  	
            (a)
 	
            each Participant for whom Common Shares are held in safekeeping under the Share Purchase Plan shall receive on the date that Common Shares would otherwise be delivered to the Participant the securities, property or cash which the Participant would have received upon such consolidation, merger, amalgamation, arrangement, separation or transfer if the Participant had held the Common Shares immediately prior to such event; and
 

	
             
  	
            (b)
 	
            upon the, exercise of an Option under the Share Option Plan, the holder thereof shall be entitled to receive the securities, property or cash which the holder would have received upon such consolidation, merger, amalgamation, arrangement, separation or transfer if the holder had exercised the Option immediately prior to the effective time of such event, unless the directors of the Corporation otherwise determine the basis upon which such Option shall be exercisable.
 

Section 7.07     Adjustment in Number of Shares Subject to the Plan: In the event there is any change in the Common Shares, whether by reason of a stock dividend, consolidation, subdivision, reclassification or otherwise, an appropriate adjustment shall be made by the Committee in:

	
             
  	
            (a)
 	
            the number of Common Shares available under the Plan;
 

	
             
  	
            (b)
 	
            the number of Common Shares subject to any Option; and
 

	
             
  	
            (c)
 	
            the exercise price of the Common Shares subject to Options.
 

If the foregoing adjustment shall result in a fractional Common Share, the fraction shall be disregarded. All such adjustments shall be conclusive, final and binding for all purposes of the Plan.

Section 7.08     Securities Exchange Take-over Bid: In the event that the Corporation becomes The subject of a take-over bid (within the meaning of the Securities Act (Ontario)) pursuant to which 100% of the issued and outstanding Common Shares are acquired by the offeror either directly or as a result of the compulsory acquisition provisions of the incorporating statute, and where consideration is paid in whole or in part in equity securities of the offeror, the Committee may send notice to all Optionees requiring them to surrender their Options within 10 days of the mailing of such notice, and the Optionees shall be deemed to have surrendered such Options on the tenth day after the mailing of such notice without further formality, provided that:

 

 

17.

 

 

	
             
  	
            (a)
 	
            the Committee delivers with such notice an irrevocable and unconditional offer by the offeror to grant replacement options to the Optionees on the equity securities offered as consideration;
 

	
             
  	
            (b)
 	
            the Committee has determined, in good faith, that such replacement options have substantially the same economic value as the Options being surrendered; and
 

	
             
  	
            (c)
 	
            the surrender of Options and the granting of replacement options can be effected on a tax free rollover basis under the Income Tax Act (Canada).
 

Section 7.09     No Representation or Warranty: The Corporation makes no representation or warranty as to the future market value of any Common Snares issued in accordance with the provisions of the Plan.

Section 7.10    Participation through RRSP’s and Holding Companies: Subject to the approval of the Committee, an Eligible Employee or Eligible Director may elect, at the time rights or Options are granted under the Plan, to participate in the Plan by holding any rights or Options granted under the Plan in a registered retirement savings plan established by such Eligible Employee or Eligible Director for the sole benefit of such Eligible Employee or Eligible Director or in a personal holding corporation controlled by such Eligible Employee or Eligible Director. For the purposes of this section 7.10, a personal holding corporation shall be deemed to be controlled by an Eligible Employee or Eligible Director if (i) voting securities carrying more than 50% of the votes for the election of directors of such
corporation are held, otherwise than by way of security only, by or for the benefit of such Eligible Employee or Eligible Director and the votes carried by such voting securities are entitled, if exercised, to elect a majority of the board of directors of such corporation, and (ii) all of the voting and equity securities of such corporation are directly or indirectly held, otherwise than by way of security only, by or for the benefit of such Eligible Employee or Eligible Director and/or his or her spouse, children or grandchildren. In the event that an Eligible Employee or Eligible Director elects to hold the rights or Options granted under the Plan in a registered retirement savings plan or personal holding corporation, the previsions of the Plan shall continue to apply as if the Eligible Employee or Eligible Director held such rights or Options directly.

Section 7.11     Compliance with Applicable Law: If any provision of the Plan or any Option contravenes any law or any order, policy, by-law or regulation of any regulatory body having jurisdiction over the securities of the Corporation, then such provision shall be deemed to be amended to the extent necessary to bring such provision into compliance therewith.

Section 7.12     Interpretation: This Plan shall be governed by and construed in accordance with the laws of the Province of Ontario.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00121-of-00352.parquet"}]]