SHAREHOLDER AGREEMENT OF COUSIN VINNIE'S FRANCHISE CORPORATION DBA COUSIN VINNIE'S ITALIAN DINER

 

                                                                      Exhibit 10

 

                              SHAREHOLDER AGREEMENT

                                       OF

                      COUSIN VINNIE'S FRANCHISE CORPORATION

                        DBA COUSIN VINNIE'S ITALIAN DINER

 

 

     THIS SHAREHOLDER  AGREEMENT (this  "Agreement") is made and entered into as

of April ___, 2004, by and between BRIAN  RUGGIERO,  an Individual  ("RUGGIERO")

with address being 3309 Drinkwater Blvd, Suite 303, Scottsdale,  Arizona 8585251

and BGR  CORPORATION,  a Nevada  corporation  ("BGR") with address being 5080 N.

40th Street, Suite 103, Phoenix, Arizona 85018.

 

                                    ARTICLE I

                     FORMATION, NAME, PURPOSES, DEFINITIONS

 

     1.1  FORMATION.  Pursuant to the Nevada  Corporation  Act (the "Act"),  the

parties  have  formed a Nevada  corporation  effective  upon the  filing  of the

Articles of Corporation of this Company with the Nevada Corporation  Commission.

The  parties  shall  immediately,  and from  time to time  hereafter,  as may be

required by law,  execute all amendments of the Articles of Corporation,  and do

all  filing,  recording  and other acts as may be  appropriate  to  operate  the

Company in compliance with the Act.

 

     1.2 INTENT.  It is the intent of the Initial  Shareholders that the Company

shall  always be operated in a manner  consistent  with its  treatment  as a "C"

Corporation  for federal and state income tax purposes.  No Initial  Shareholder

shall take any action inconsistent with the express intent of the parties.

 

     1.3 NAME. The name of this Company shall be:

 

             COUSIN VINNIE'S FRANCHISE CORPORATION (COUSIN VINNIE'S)

 

     1.4 PLACE OF BUSINESS. The principal place of business of the Company shall

be at 5080 N. 40th Street,  Suite 103,  Phoenix,  Arizona  85018,  or such other

place as the majority consent of all the Board of Directors shall determine.

 

     1.5 PURPOSE.

 

          (a) The  purpose  of this  Company  shall be to  operate a  restaurant

     franchise  company,  and in  connection  therewith  to transact any and all

     lawful  business for which a "C"  Corporation may be organized under Nevada

     law.  Subject to the terms hereof,  the Company shall have the authority to

     do any act or thing  necessary or  appropriate  to accomplish the foregoing

     purpose.

 

          (b)  Except as  otherwise  provided  in this  Agreement,  without  the

     majority  consent  of all the Board of  Directors,  the  Company  shall not

     engage in any other activity or business, and no Initial Shareholder acting

     in its  capacity  as an Initial  Shareholder  shall have any  authority  to

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     obligate the Company or any other  Initial  Shareholder,  or to hold itself

     out  as  a  Initial  Shareholder  of  the  Company,  with  respect  to  any

     transaction or activity whatsoever other than those entered into or carried

     out within the scope and  business  purpose of the  Company as  provided in

     Section 1.5(a) above.

 

     1.6 TERM.  This Company  shall  commence upon the filing of its Articles of

Corporation  and shall continue until such time as it shall be terminated  under

the provisions of Article XI hereof.

 

     1.7  INITIAL  SHAREHOLDERS.  The name and  address  of each of the  Initial

Shareholders of this Company are set forth on Schedule 1 hereto.

 

     1.8 AGENT FOR  SERVICE OF  PROCESS.  The name and  business  address of the

agent for service of process for the Company is James Rossie, with address being

301 East  Virginia  Avenue,  Suite 3330,  Phoenix,  Arizona  85004 or such other

person or address, as the Company shall appoint from time to time.

 

     1.9 DEFINITIONS. Whenever used in this Agreement, the following terms shall

have the following meanings:

 

          (a) "ACT" shall mean the Nevada Corporation Act, as amended.

 

          (b)  "ADDITIONAL  CAPITAL   CONTRIBUTIONS"   shall  mean  any  Capital

     Contribution to the Company pursuant to Article II below.

 

          (c)  "ADDITIONAL  INITIAL  SHAREHOLDER"  shall  mean any person who is

     admitted to the Company as an Additional  Initial  Shareholder  pursuant to

     this Operating Agreement.

 

          (d)  "AFFILIATE"  means,  with  respect to any Person,  (i) any Person

     directly or indirectly controlling,  controlled by, or under common control

     with such Person,  (ii) any Person owning or controlling  ten percent (10%)

     or more of the  outstanding  voting  interest  of such  Person,  (iii)  any

     officer,  director,  or general partner of such Person,  or (iv) any Person

     who is an officer,  director,  general partner,  trustee,  or holder of ten

     percent  (10%) or more of the voting  interest of any Person  described  in

     clauses (i) through (ii) of this sentence. For purposes of this definition,

     the term  "controls," "is controlled by," or "is under common control with"

     shall mean the possession, direct or of indirect, of the power to direct or

     cause the direction of the  management  and policies of a person or entity,

     whether  through  the  ownership  of  voting  securities,  by  contract  or

     otherwise.

 

          (e)  "AGREEMENT"  shall mean this written  Shareholder  Agreement.  No

     other document or oral agreement  among the Initial  Shareholders  shall be

     treated as part of or superseding  this  Agreement  unless it is reduced to

     writing and it has been signed by all of the Initial Shareholders.

 

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          (g) "CAPITAL  CONTRIBUTION" shall mean any contribution to the capital

     of the Company in cash,  property  or  services by an Initial  Shareholder,

     whenever made.

 

          (h) "CODE"  shall mean the Internal  Revenue Code of 1986,  as amended

     from time to time.

 

          (i) "COMPANY" shall refer to COUSIN VINNIE'S FRANCHISE CORPORATION.

 

          (j)  "CONTRIBUTING   INITIAL   SHAREHOLDER"  shall  mean  any  Initial

     Shareholder  who  desires  to pay an  amount  due to  cure a  default  of a

     Defaulting Initial Shareholder.

 

          (k)   "DEFAULTING   INITIAL   SHAREHOLDER"   shall  mean  any  Initial

     Shareholder  who has caused a Monetary  Default or a Non-Monetary  Default,

     which remains uncured under this Agreement.  All other Initial Shareholders

     are Non-Defaulting Initial Shareholders.

 

          (l) "DISTRIBUTABLE CASH" means all cash, revenues,  receipts and funds

     generated by, or received from,  Company  operations,  from the sale of the

     Company's assets or business,  and from all other sources,  less the sum of

     the following to the extent paid or set aside by a majority  consent of all

     the Board of Directors:

 

               (i) all principal and interest  payments on  indebtedness  of the

          Company  and  all  other  sums  paid  to  lenders,  including  Initial

          Shareholders when acting in the capacity as lenders;

 

               (ii)  all  cash  expenditures  incurred  incident  to the  normal

          operation of the Company's business; and

 

               (iii) such  Reserves as the Board of Directors  deems  reasonably

          necessary to the proper operation of the Company's business.

 

          (m)  "EXERCISE  DATE"  shall  mean the date on which  the  Company  or

     Contributing  Initial  Shareholder  provides  notice to Defaulting  Initial

     Shareholder  that the Company or a  Contributing  Initial  Shareholder  has

     elected  to   exercise   the  option  to  acquire  a   Defaulting   Initial

     Shareholder's interest.

 

          (n) "FAIR  MARKET  VALUE"  shall  mean,  with  respect to any asset or

     property,  the fair market value  thereof as  determined in good faith by a

     Majority-In-Interest. If a Majority-In-Interest of the Initial Shareholders

     cannot agree upon a "Fair  Market  Value" the  Majority-In-Interest  of the

     Initial  Shareholders shall select a qualified  independent  third-party to

     appraise the assets and property to determine the Fair Market Value,  which

     determination shall be binding on the Initial Shareholders.

 

          (o) "FISCAL  YEAR" means the  Company's  fiscal  year,  which shall be

     December 31.

 

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          (p) "INITIAL CAPITAL CONTRIBUTION" shall mean the amount (exclusive of

     Additional Capital  Contributions) which the Initial Shareholders  actually

     pay as  Capital  Contributions  to the  Company,  whether  in cash,  by the

     transfer of assets to the Company or by services rendered.

 

          (q)  "SHARES"  shall  mean the  ownership  interest,  which an Initial

     Shareholder owns in the Company from time to time.

 

          (r)  "MAJORITY-IN-INTEREST"  shall mean Initial  Shareholders owning a

     simple majority of the Percentage Interests in the Company.

 

          (s) "PRESIDENT"  shall mean Bradford Miller as President or any Person

     that  becomes the  President  under the terms of this  Agreement.  Bradford

     Miller shall be the initial President of the Company, and shall serve until

     he resigns or is removed from office.

 

          (t) "CHIEF FINANCIAL  OFFICER" shall mean BGR Corporation's  appointee

     or any Person  appointed  by BGR that becomes the Chief  Financial  Officer

     under the terms of this Agreement. BGR Corporation's appointee shall be the

     initial Chief  Financial  Officer of the Company,  and shall serve until he

     resigns or is removed from office.

 

          (u) "INITIAL SHAREHOLDER" shall mean each of the parties who execute a

     counterpart of this  Shareholder  Agreement as an Initial  Shareholder  and

     each of the parties who may  hereafter  become  Additional  or  Substituted

     Initial  Shareholders.  To the extent the President or the Chief  Financial

     Officer has  purchased  Interests  in the  Company,  they will have all the

     rights of an Initial Shareholder with respect to such Interests.

 

          (v)  "MONETARY   DEFAULT"   shall  mean  the  failure  of  an  Initial

     Shareholder to pay when due any Additional  Capital  Contribution  or other

     sum required to be paid under this Agreement.

 

          (w)  "NON-MONETARY  DEFAULT"  shall  mean the  failure  of an  Initial

     Shareholder to cure any default under this Agreement (other than a Monetary

     Default,  for which there is no curative  period)  within  thirty (30) days

     after  delivery  of a  written  notice  of  default  from  another  Initial

     Shareholder,  Chief Financial Officer or the President,  which notice shall

     set forth in detail the nature of the  alleged  default;  provided  that if

     curative performance cannot reasonably be completed within such thirty (30)

     day  period,   said  period  will  be  extended,   provided  that  curative

     performance  was begun  within a  reasonable  time,  not to exceed ten (10)

     days,  after the  delivery  of the  notice of  default,  and is  diligently

     pursued  thereafter.  Without  intending  to limit  the  generality  of the

     foregoing,   the  following  are  included   within  the  definition  of  a

     Non-Monetary Default:

 

               (i)  Attempted   dissolution   of  the  Company  by  any  Initial

          Shareholder other than pursuant to the provisions of this Agreement;

 

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               (ii) Attempted partitioning of the assets of the Company;

 

               (iii)Withdrawal as an Initial  Shareholder without the consent of

          all other Initial Shareholders;

 

               (iv)  Attempted or actual  assignment  or transfer of an Interest

          other than pursuant to the provisions of this Agreement.

 

          (x)  "ORGANIZATIONAL  EXPENSES" shall mean those expenses  incurred in

     connection with the formation of the Company.

 

          (y)  "PERCENTAGE  INTEREST"  shall be the percentage  interest of each

     Initial Shareholder in the capital of this Company as set forth in Schedule

     1, which shall be the basis for  allocating all  requirements  for contract

     payments, property taxes and other operating cash expenses and needs of the

     Company.

 

          (z) "PERSON" shall mean any individual or any legal entity,  and their

     respective  heirs,   executors,   administrators,   legal  representatives,

     successors, and assigns.

 

          (aa)  "PRIME  RATE" shall mean the rate of  interest,  as of the first

     business day of each month,  designated  in the Wall Street  Journal as the

     "prime rate," the rate of interest charged by banks in the United States to

     their  largest and most  credit-worthy  commercial  borrowers for unsecured

     loans  maturing  in  ninety  (90)  days,  but in no event in  excess of the

     highest legal rate in Arizona.

 

          (bb) "PROFITS"  shall mean, for each Fiscal Year, the income and gains

     of  the  Company  determined  in  accordance  with  accounting   principles

     consistently  applied  from  year to year  under the  method of  accounting

     selected for the Company and as reported,  separately or in the  aggregate,

     as appropriate, on the Company's informational tax return filed for federal

     income tax purposes.

 

          (cc) "RESERVES"  shall mean, with respect to any fiscal period,  funds

     set aside or amounts  allocated  during such period to reserves which shall

     be maintained in amounts deemed  sufficient by the majority  consent of the

     Board of Directors for fixed and contingent obligations and working capital

     needs  and to pay  taxes,  insurance,  debt  service  and  other  costs and

     expenses incident to the ownership or operation of the Company's business.

 

          (dd) "TRANSFER" shall mean to sell, assign, exchange,  transfer, give,

     donate, pledge, deposit, alienate, bequeath, devise or otherwise dispose of

     or encumber to any Person other than the Company.

 

          (ee) "TREASURY  REGULATIONS"  shall mean the Regulations issued by the

     Department of the Treasury under the Code.

 

          (ff)  "WITHDRAWAL  EVENT"  shall mean those  events and  circumstances

     listed in Act Section 29-733.

 

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                                   ARTICLE II

                      CAPITALIZATION OF THE COMPANY; LOANS

 

     2.1 INITIAL CAPITAL CONTRIBUTIONS. The Initial Capital Contribution of each

Initial  Shareholder  is set forth opposite each Initial  Shareholder's  name on

Schedule 1 attached hereto.  Each Initial  Shareholder is required to contribute

to the Company its Initial Capital Contribution  promptly upon execution of this

Operating Agreement.

 

     2.2 INITIAL  SHAREHOLDER LOANS AND ADDITIONAL  CAPITAL  CONTRIBUTIONS.  The

Initial  Shareholders  acknowledge  that,  to conduct  its  business  authorized

herein,  the Company will require funds to cover expenses of management,  day to

day  operations,   ordinary  business   expenses,   losses  and/or  pay  Company

obligations as set forth in COUSIN VINNIE'S Italian Diner Franchise  Corporation

Financial  Projections  to be completed and agreed to by a majority of the Board

of  Directors.  To the extent  that the  Company  determines  that  payments  in

addition to scheduled Capital Contributions are required, and if such additional

amounts  cannot be obtained by the Company from one or more lenders  (other than

the  Initial   Shareholders)   under  terms  and  conditions   acceptable  to  a

Majority-In-Interest of the Initial Shareholders, then the Initial Shareholders,

by a majority vote, shall decide whether or not such additional amounts shall be

provided to the Company by the Initial  Shareholders  and, if so,  whether  such

additional  amounts  shall be  provided  by way of loans to the  Company  by the

Initial  Shareholders  or by way of Additional  Capital  Contributions  from the

Initial Shareholders. Loans to the Company by Initial Shareholders shall be made

in cash and shall be evidenced by promissory notes in a form satisfactory to the

Chief Financial Officer. Such loans shall earn interest at the Prime Rate and be

repayable on such terms as shall be approved by the Chief Financial Officer with

consent from the  majority of the Board of  Directors  of the  Company.  Initial

Shareholder  loans shall be fully repaid  (principal and interest)  prior to any

dividends  pursuant  to  Article  IV  hereof.  Notwithstanding  anything  to the

contrary set forth herein, no Initial  Shareholder shall be required to take any

action or perform any act, including,  without limitation, the payment of money,

on behalf of or for the benefit of any third party creditor.

 

     2.3  CAPITAL  CONTRIBUTIONS  IN  GENERAL.  Except  as  otherwise  expressly

provided for in this Agreement:  (a) no part of the Capital Contributions of any

Initial  Shareholder may be withdrawn except as otherwise approved in writing by

all Non-Defaulting Initial Shareholders, and (b) no Initial Shareholder shall be

entitled  to demand or to  receive  property  other  than cash in return for its

Capital Contributions to the Company.

 

                                   ARTICLE III

                            REDEMPTIONS AND DIVIDENDS

 

     3.1 REDEMPTIONS.  As a general rule,  Initial  Shareholders are expected to

hold  their  Interest  in the  Company  for  investment  during  the term of the

Company. Although bound by Article III of this Agreement, an Initial Shareholder

may apply to redeem part or all of his  Interest,  and a  redemption  may occur,

 

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upon the  unanimous  approval  of all Initial  Shareholders  of the Company at a

price agreed upon by all Initial Shareholders.

 

     3.2 DIVIDENDS.

 

          (a) CASH DIVIDENDS. Any Company Dividends shall be paid to the Initial

     Shareholders  from  time to  time  (and at  such  intervals,  but not  less

     frequently than quarterly) as the Chief Financial  Officer with the consent

     of the majority of the Board of Directors deems proper. Such proceeds shall

     be paid pro rata to the  Initial  Shareholders  in  accordance  with  their

     Percentage Interests.

 

          (b)  EFFECT OF  DEFAULTS.  If any  Initial  Shareholder  has  caused a

     Non-Monetary  Default to occur,  no amount shall be paid to such Defaulting

     Initial  Shareholder until the Non-Monetary  Default has been cured. If any

     Initial Shareholder has caused a Monetary Default to occur, any dividend to

     such Defaulting Initial Shareholder shall be subject to the right of offset

     in favor of the  Company,  subject  to the rights of  Contributing  Initial

     Shareholders under any other provisions of this Agreement.

 

          (c) EXCESS DIVIDENDS. If for any reason during a given Fiscal Year any

     Initial  Shareholder  receives  dividends  in excess of the amount to which

     such Initial Shareholder should have been entitled pursuant to the terms of

     this Agreement, then such excess dividends shall be returned to the Company

     and paid to the Initial  Shareholder  entitled to such excess  amount.  The

     amounts of dividends  pursuant to paragraph 3.2 hereof are to be determined

     on a Fiscal Year basis and any amounts  paid on a more  frequent  basis are

     for convenience  only and are not controlling as to the total amounts to be

     paid to an Initial Shareholder for any Fiscal Year.

 

          (d) RECORD  DATE.  The Record Date for the purpose of  receiving  cash

     dividends from the Company shall be as set forth in Section 5.6.

 

     3.3 LIMITATION ON DIVIDENDS.  The power of the Chief  Financial  Officer to

pay dividends may not be used by the Chief Financial  Officer in its position as

an Initial  Shareholder to satisfy its personal needs or those of its creditors,

nor  shall  its  powers  be used to  satisfy  the  needs  of any  other  Initial

Shareholder if making a payment of dividends  would be contrary to the interests

of the Company and the other Initial Shareholders. No dividend shall be declared

and paid unless,  after the  dividend is paid,  the assets of the Company are in

excess  of all  liabilities  of  the  Company,  except  liabilities  to  Initial

Shareholders on account of their contributions.

 

                                   ARTICLE IV

                 RIGHTS AND OBLIGATIONS OF INITIAL SHAREHOLDERS

 

     4.1 APPROVAL OF SALE OF ALL ASSETS. The Initial Shareholders shall have the

right,  by  the  affirmative  vote  of a  Majority-In-Interest  of  the  Initial

Shareholders,  to approve  the sale,  exchange or other  disposition  of all, or

substantially all, of the Company's assets which is to occur as part of a single

transaction or plan.

 

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     4.2  PRIORITY  AND RETURN OF  CAPITAL.  No Initial  Shareholder  shall have

priority over any other Initial Shareholder,  either as to the return of Capital

Contributions or as to Profits, Losses or dividends;  provided that this Section

shall not apply to loans (as distinguished from capital contributions), which an

Initial Shareholder has made to the Company.

 

     4.3  LIMITATION  OF  AUTHORITY.  Except  as  otherwise  permitted  by  this

Agreement,  no  Initial  Shareholder  (except  one who may  also be a  Corporate

Officer,  and then only in his capacity as a Corporate  Officer within the scope

of his authority hereunder) shall transact any business for the Company or shall

have any authority or right to act for or bind the Company.

 

     4.4  REMOVAL  OF  INITIAL   SHAREHOLDERS.   Upon  the  redemption,   either

involuntary or voluntary,  of the entire Interest of a Initial  Shareholder,  or

upon the transfer of the entire Interest of a Initial  Shareholder,  he shall no

longer be considered an Initial Shareholder or included in the definition of the

word  "Initial  Shareholder"  as that term may appear  herein,  for any  purpose

whatsoever  including,  but not limited to, the right to notice, vote or consent

as Initial  Shareholder,  to participate  in or receive any  subsequent  income,

Profits or Losses of the Company,  make any further  contribution to the capital

of the Company, or receive any cash dividends from the Company.

 

     4.5 NO RIGHT TO DEMAND  DIVIDEND.  No Initial  Shareholder  has a right, to

demand a dividend.  No Initial  Shareholder has a right to receive any return of

his or her Capital  Contribution in property other than cash.  Specifically,  no

Initial Shareholder may demand a dividend of any portion of any real or personal

property.

 

     4.6 NO RIGHT TO PARTITION. Each Initial Shareholder waives his or her right

to maintain any action for partition  with respect to any of the property of the

Company.  No Initial  Shareholder  may call upon a court to divide or distribute

the Property of the Company.

 

     4.7 AUDIT. The books of the Company shall be audited unless an audit is not

required  for the  business of the Company,  and a  Majority-In-Interest  of the

Initial Shareholders vote not to conduct an audit.

 

                                    ARTICLE V

                        MEETINGS OF INITIAL SHAREHOLDERS

 

     5.1 ANNUAL MEETING. An annual meeting of the Initial  Shareholders shall be

held on the second Friday in April, or at such other time as shall be determined

by the  President  or by a  Majority-In-Interest  of the  Initial  Shareholders,

commencing  with the year  2005,  for the  purpose  of the  transaction  of such

business as may come before the meeting.

 

     5.2 SPECIAL MEETINGS. Special meetings of the Initial Shareholders, for any

purpose or purposes,  unless otherwise  prescribed by statute,  may be called by

the President or by a Majority-In-Interest of the Initial Shareholders.

 

     5.3 PLACE OF  MEETINGS.  The party  calling the meeting may  designate  any

place,  either  within or outside the State of Arizona,  as the place of meeting

for any meeting of the Initial Shareholders.  If no designation is made, or if a

 

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special meeting be otherwise  called,  the place of meeting shall be held at the

place of business designated in Section 1.4 above.

 

     5.4 NOTICE OF MEETINGS.  Except as provided in Section 5.5,  written notice

stating  the  place,  day and hour for which  the  meeting  is  called  shall be

delivered  not less than three nor more than  fifty days  before the date of the

meeting,  either  personally  or by mail,  by or at the  direction  of the party

calling  the  meeting,  to each  Initial  Shareholder  entitled  to vote at such

meeting.  If mailed,  such notice shall be deemed to be  delivered  two calendar

days after being  deposited in the United States mail,  addressed to the Initial

Shareholder at the Initial  Shareholder's  address as it appears on the books of

the Company,  with postage thereon prepaid.  If transmitted by way of facsimile,

such  notice  shall be  deemed  to be  delivered  on the date of such  facsimile

transmission to the telephone number for the Initial Shareholder, which has been

supplied by such  Initial  Shareholder  to the Company  and  identified  as such

Initial Shareholder's facsimile number.

 

     5.5 MEETING OF ALL INITIAL SHAREHOLDERS. If all of the Initial Shareholders

shall  meet at any time and  place,  either  within or  outside  of the State of

Arizona,  and consent to the  holding of a meeting at such time and place,  such

meeting shall be valid without call or notice, and at such meeting lawful action

may be taken.

 

     5.6 RECORD DATE FOR MEETINGS AND DIVIDENDS.  For the purpose of determining

Initial Shareholders  entitled to notice of or to vote at any meeting of Initial

Shareholders or any adjournment  thereof,  or Initial  Shareholders  entitled to

receive payment of any dividends, or in order to make a determination of Initial

Shareholders  for any other purpose,  the date on which notice of the meeting is

mailed or the date on which the  resolution  declaring such dividend is adopted,

as the case may be, shall be the record date for such  determination  of Initial

Shareholders.  When a determination of Initial Shareholders  entitled to vote at

any meeting of Initial  Shareholders  has been made as provided in this Section,

such determination shall apply to any adjournment thereof.

 

     5.7 QUORUM. A Majority-In-Interest of the Initial Shareholders, represented

in person or by proxy,  shall  constitute  a quorum at any  meeting  of  Initial

Shareholders.  In the absence of a quorum at any such meeting, a majority of the

Interests so represented  may adjourn the meeting from time to time for a period

not to exceed 60 days without further notice. However, if the adjournment is for

more than 60 days,  or if after the  adjournment  a new record date is fixed for

the adjourned  meeting, a notice of the adjourned meeting shall be given to each

Initial Shareholder of record entitled to vote at a meeting.

 

     5.8 MANNER OF ACTING.  If a quorum is present,  the  affirmative  vote of a

Majority-In-Interest of the Initial Shareholders shall be the act of the Initial

Shareholders,  unless  the vote of a greater or lesser  proportion  or number is

otherwise  required by the Act,  by the  Articles  of  Organization,  or by this

Operating Agreement.

 

     5.9  PROXIES.  At  all  meetings  of  Initial   Shareholders,   an  Initial

Shareholder  may vote in person or by proxy  executed  in writing by the Initial

Shareholder or by a duly authorized attorney-in-fact.  Such proxy shall be filed

with the President of the Company before or at the time of the meeting. No proxy

 

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shall be valid  after  eleven  months  from  the date of its  execution,  unless

otherwise provided in the proxy.

 

     5.10 ACTION BY INITIAL SHAREHOLDERS  WITHOUT A MEETING.  Action required or

permitted to be taken at a meeting of Initial  Shareholders may be taken without

a meeting if the action is evidenced by one or more written consents  describing

the action  taken,  delivered  to each  Initial  Shareholder  entitled  to vote,

executed by the unanimous consent of all Initial Shareholders  entitled to vote,

a Majority-In-Interest or such other number of Initial Shareholders required for

such action,  and delivered to the President of the Company for inclusion in the

minutes or for filing with the Company records.  Action taken under this Section

is effective when Initial Shareholders holding the requisite number of Interests

entitled  to vote have  signed  the  consents,  unless  the  consents  specify a

different effective date. The record date for determining  Initial  Shareholders

entitled to take action  without a meeting  shall be the date the first  Initial

Shareholder signs a written consent.

 

     5.11  WAIVER OF  NOTICE.  When any  notice is  required  to be given to any

Initial  Shareholder,  a waiver thereof in writing signed by any Person entitled

to act on behalf of the Initial  Shareholder  which is entitled to such  notice,

whether before, at, or after the time stated therein, shall be equivalent to the

giving of such notice.

 

     5.12 LOST INITIAL SHAREHOLDERS.  In circumstances where a unanimous vote of

the Initial Shareholders is required and one or more Initial Shareholders cannot

be located  after legal  notice  under this  Agreement  is sent and a good faith

effort to find the Initial  Shareholder(s) based on all information available to

the President is made, the President may vote for the Initial  Shareholder(s) or

appoint  another  Person  to  vote  for  the  Initial  Shareholder(s)  with  the

understanding   that  the  Person  casting  the  vote  for  the  absent  Initial

Shareholder(s)  shall act  prudently  and in the best  interests  of the Initial

Shareholder(s) in light of the information available at the time.

 

                                   ARTICLE VI

                         RIGHTS AND DUTIES OF PRESIDENT,

                CHIEF FINANCIAL OFFICER AND INITIAL SHAREHOLDERS

 

     6.1 PRESIDENT.  Bradford  Miller the shall be the initial  President of the

Company,  and shall serve as the  President of the Company  until April 30, 2009

provided  that,  and as long as, the Company meets the business  objectives  set

forth in COUSIN  VINNIE'S  Franchise  Corporation  Financial  Projections  to be

completed and agreed to by a majority of the Board of Directors (the  "Financial

Projections").  The  day-to-day  business  and affairs of the  Company  shall be

managed by its  designated  President.  The President  shall direct,  manage and

control  the  business  of the Company to the best of its ability and shall have

full and complete authority,  power and discretion to make any and all decisions

and to do any and all things  which the  President  shall deem to be  reasonably

required to accomplish  the business and  objectives of the Company.  No Initial

Shareholder,  or the  President  shall have the authority to act for or bind the

Company without the vote of a Majority-In-Interest of the Initial Shareholders.

 

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     6.2 CHIEF  FINANCIAL  OFFICER.  BGR  Corporation's  appointee  shall be the

initial  Chief  Financial  Officer of the Company,  and shall serve as the Chief

Financial Officer of the Company until April 30, 2009 provided that, and as long

as, the Company meets the financial  business  objectives set forth from time to

time by the Board of the Directors of the Company (the  "Business  Objectives"),

the  day-to-day  financial  business  affairs  of the  Company  shall be managed

exclusively by its  designated  Chief  Financial  Officer.  The Chief  Financial

Officer shall direct,  manage and control the financial  business of the Company

to the best of its ability and shall have full and complete authority, power and

discretion  to make any and all decisions and to do any and all things which the

Chief Financial  Officer shall deem to be reasonably  required to accomplish the

business  and  objectives  of the  Company  subject to  overview of the Board of

Directors  of the  Company.  The  Chief  Financial  Officer  shall  not have the

authority to act for or bind the Company  without the consent of the majority of

the Board of Directors of the Company.

 

     6.3 NUMBER,  TENURE AND  QUALIFICATIONS.  The President and Chief Financial

Officer of the Company and its respective  term shall be fixed from time to time

by the  affirmative  vote  from a  majority  of the  Board of  Directors  of the

Company.  The  President and Chief  Financial  Officer shall hold office for the

term for which it is elected and until its successor shall have been elected and

qualified,  unless  earlier  removed under Section 6.10. The President and Chief

Financial  Officer  need not be a resident of the State of Arizona or an Initial

Shareholder  of the  Company.  If the  President  fails  to  meet  the  Business

Objectives,  then Bradford Miller shall, upon the request of the Company, resign

as  President,  and the  Company  shall  elect  a new  President.  If the  Chief

Financial Officer fails to meet the Business Objectives,  then BGR Corporation's

appointee  shall,  upon the request of the  Company,  resign as Chief  Financial

Officer, and the Company shall elect a new Chief Financial Officer.

 

     6.4 CERTAIN  POWERS OF THE  PRESIDENT.  Without  limiting the generality of

Section  6.1, the  President  shall have power and  authority,  on behalf of the

Company subject to the affirmative  vote of a majority of the Board of Directors

of the Company:

 

          (a)  To  acquire  property  from  any  Person  as  the  President  may

     determine.  The fact that an Initial  Shareholder is directly or indirectly

     affiliated  or  connected  with any such  Person  shall  not  prohibit  the

     President from dealing with that Person;

 

          (b) To purchase  liability