Class B Units
The Class B Units are junior equity securities which are divided into two
identical subclasses, Class B-1 Units and Class B-2 Units. There are currently
64,696 Class B-1 Units outstanding, all which were issued to Avalon New England
Holdings on November 6, 1998, in exchange for its contribution to the capital
of Avalon Holdings of its 100% membership interest in Avalon New England. There
are currently 510,994 Class B-2 Units outstanding, all of which were issued to
Avalon Michigan Inc. in exchange for the contribution of substantially all of
its assets to the capital of Avalon Holdings as part of the Reorganization.
After the payment in full of the Avalon Holdings Priority Distributions, each
Class B Unit is entitled to participate in distributions ("Common
Distributions") pro rata according to the percentage such unit represents of
the aggregate number of Avalon Holdings Units then outstanding.