BGR CORP
SHAREHOLDER AGREEMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>ex10.txt
<DESCRIPTION>SHAREHOLDER AGREEMENT
<TEXT>
                                                                      Exhibit 10

                              SHAREHOLDER AGREEMENT
                                       OF
                          PAULI'S FRANCHISE CORPORATION


     THIS SHAREHOLDER  AGREEMENT (this  "Agreement") is made and entered into as
of April ___,  2004,  by and between  ALEXIS  GROUP,  LLC.,  an Arizona  limited
liability   company   ("ALEXIS")  with  address  being  10845  E.  Karen  Drive,
Scottsdale, Arizona 85255 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:

                  PAULI'S FRANCHISE CORPORATION (THE "COMPANY")

     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
     obligate the Company or any other  Initial  Shareholder,  or to hold itself
<PAGE>
     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.

          (g) "CAPITAL  CONTRIBUTION" shall mean any contribution to the capital
     of the Company in cash,  property  or  services by an Initial  Shareholder,
     whenever made.

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<PAGE>
          (h) "CODE"  shall mean the Internal  Revenue Code of 1986,  as amended
     from time to time.

          (i) "COMPANY" shall refer to PAULI'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.

          (p) "INITIAL CAPITAL CONTRIBUTION" shall mean the amount (exclusive of
     Additional Capital  Contributions) which the Initial Shareholders  actually

                                       3
<PAGE>
     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;

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

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<PAGE>
               (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.

                                       5
<PAGE>
                                   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 Pauli's 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,
upon the  unanimous  approval  of all Initial  Shareholders  of the Company at a
price agreed upon by all Initial Shareholders.

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<PAGE>
     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.

     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

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<PAGE>
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
special meeting be otherwise  called,  the place of meeting shall be held at the
place of business designated in Section 1.4 above.

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<PAGE>
     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
shall be valid  after  eleven  months  from  the date of its  execution,  unless
otherwise provided in the proxy.

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<PAGE>
     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 Pauli'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.

     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

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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  and other  insurance,  including,  without
     limitation,  life  insurance on the  President  and key  employees,  and to
     protect the Company's property and business;

          (c) To hold and own any Company real and/or personal properties in the
     name of the Company;

          (d) To borrow such amounts (not to exceed  $100,000 in the  aggregate)
     as the President may deem  appropriate for the business of the Company,  to
     make all  investment  decisions  and to invest any Company funds (by way of
     example but not  limitation)  in time deposits,  governmental  obligations,
     various  securities  including shares in mutual funds,  various  derivative
     securities including options or other investments;

          (e) To execute on behalf of the Company all instruments and documents,
     including,  without limitation,  checks; drafts; promissory notes; security

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     instruments; partnership agreements; and any other instruments or documents
     necessary to the business of the Company;

          (f)  To  employ  accountants,   legal  counsel,  investment  advisers,
     managing agents or other experts to perform services for the Company and to
     compensate them from Company funds;

          (g) To act as "tax  matters  partner"  pursuant to Section 6221 of the
     Code;

          (h) To enter  into  any and all  other  agreements  on  behalf  of the
     Company, with any other Person or entity for any purpose;

          (i) Employ,  supervise and  coordinate  on behalf of the Company,  all
     personnel, except that the compensation paid to any Affiliate of an Initial
     Shareholder or President must be approved by at least 80% of the Percentage
     Interests;

          (j) Pay all bills,  invoices and expenses  properly incurred by and on
     behalf of the Company;

          (k) Except as  otherwise  restricted  in this  Agreement,  to make all
     decisions regarding dividends including,  but not limited to, deciding when
     and if dividends shall be paid, determining the amounts and record date and
     authorizing the payments thereof to Initial Shareholders of record;

          (l) Any matter relating to the purchase or  acquisition,  or the sale,
     transfer, conveyance,  exchange, or grant of option relating to any real or
     personal property;

          (m)  Obligate  the Company as a  guarantor,  endorser,  accommodations
     endorser or surety for the obligation of any other Person;

          (n)  Institute   any   proceeding  at  law  or  in  equity  or  before
     administrative  agencies or compromise or settle claims against the Company
     in any civil or administrative action or proceeding;

          (o)  Acquire by lease,  purchase  or  otherwise  any real or  personal
     property;

          (p) Loan money to any Person;

          (q) To  substitute  in its stead as President any entity which has, by
     merger,  consolidation  or  otherwise,  acquired  substantially  all of the
     President's  assets or equity interests and continued its business,  except
     that, as a Initial Shareholder, the President shall be subject to the terms
     and conditions of Article VIII of this Agreement; and

          (r)  To do  and  perform  all  other  acts  as  may  be  necessary  or
     appropriate to the conduct of the Company's business.

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     The  President  may  act  by a  duly  authorized  attorney-in-fact.  Unless
authorized  to do so by  this  Agreement  or by a  Majority-In-Interest  of  the
Initial Shareholders, no Initial Shareholder,  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 for any purpose.

     6.5  RESTRICTIONS AND LIMITATIONS ON PRESIDENT'S  AUTHORITY.  Except as may
otherwise be specifically  permitted  elsewhere in this  Agreement,  neither the
President  nor any  other  Initial  Shareholder  shall  do, or cause to be done,
individually,  on behalf of or in the name of the Company,  any of the following
without the approval of not less than an 80% vote of Percentage Interests of the
Initial  Shareholders  (unless some other percentage of the Percentage Interests
is specifically stated to be required):

          (a) Do any act in  contravention  of the Articles of  Organization  or
     this Agreement;

          (b) Confess a judgment against the Company;

          (c) Possess  Company  property,  or assign rights in specific  Company
     property, for other than a Company purpose;

          (d)  Knowingly   perform  any  act  that  would  subject  any  Initial
     Shareholder  to  liability  similar  to that of a  general  partner  in any
     jurisdiction;

          (e) Encumber, sell, exchange,  transfer or otherwise dispose of all or
     substantially all of the Company's property;

          (f) Elect to dissolve the Company;

          (g) File a  petition  for  relief  in  bankruptcy  under  any  federal
     bankruptcy laws or under debtor relief laws of any jurisdiction;

          (h) Make any decision or take any action which,  under the  provisions
     of this Agreement, is required to be approved by the Initial Shareholders;

          (i) Admit any Person as an Initial Shareholder of the Company.

     6.6 PRESIDENT,  CHIEF FINANCIAL  OFFICER AND INITIAL  SHAREHOLDERS  HAVE NO
EXCLUSIVE DUTY TO COMPANY.  The President and Chief Financial  Officer shall not
be required to manage the Company as his sole and  exclusive  function,  and the
Chief Executive  Officer,  Chief Financial Officer and the Initial  Shareholders
may have other business interests and may engage in other activities in addition
to  those  relating  to  the  Company.  Neither  the  Company  nor  any  Initial
Shareholder  shall  have any  right,  by virtue of this  Agreement,  to share or
participate  in such other  investments  or activities of the  President,  Chief
Financial  Officer or any other  Initial  Shareholder  to the income or proceeds
derived  therefrom.  Neither  the  President,  Chief  Financial  Officer nor any
Initial  Shareholder  shall be  obligated to present any  particular  investment
opportunity to the Company even if such  opportunity is of a character which, if
presented to the Company, could be taken by the Company and the President, Chief

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Financial  Officer and any Initial  Shareholder shall have the right to take for
his own account  (individually  or as a trustee) or to  recommend  to others any
such particular investment opportunity. Nothing herein shall prevent the Company
from employing any entity in which the  President,  Chief  Financial  Officer or
Initial  Shareholder  may have an  interest as a partner,  Initial  Shareholder,
officer, director or otherwise.

     6.7 BANK ACCOUNTS AND INVESTMENT ACCOUNTS. The President or Chief Financial
Officer may from time to time open bank accounts in the name of the Company, and
the  President,  Chief  Financial  Officer  and one  designee  shall be the sole
signatory thereon,  unless the Initial  Shareholders  determine  otherwise.  All
checks over the amount(s) of one thousand  ($1000.00)  dollars shall require two
signatures.  The Chief  Financial  Officer may from time to time open investment
accounts with NASD  broker-dealers,  mutual funds and other investment companies
or financial  institutions  in the name of the Company,  and the Chief Financial
Officer shall be the sole signatory thereon,  unless the consent of the majority
of the Board of Directors determine otherwise.  The Chief Financial Officer may,
for the  protection  of the Company,  deposit some or all of the Company  assets
with an independent custodian of sufficient financial strength and/or covered by
insurance to provide a reasonable  expectation of security, and require that all
investments of the Company be processed on a  deposit-versus-payment  basis with
the custodian.

     6.8 LIABILITY AND INDEMNITY OF THE MANAGER.  No Officer of the Company will
have any  liability to the Company for a mistake or error of judgment or for any
act or omission believed to be within the scope of authority conferred on him by
the  Operating  Agreement  unless  such  mistake,  error of  judgment  or act or
omission  was  made,  performed  or  omitted  by such  Officer  fraudulently  or
constituted  gross  negligence or breach of fiduciary duty. The Officer shall be
indemnified by the Company to the fullest extent permitted by Arizona law.

     6.9 RESIGNATION. Any Officer of the Company may resign as an Officer of the
Company at any time by giving  written  notice to the Board of  Directors of the
Company. The resignation of any Officer shall take effect upon receipt of notice
thereof or at such later time as shall be specified in such notice;  and, unless
otherwise  specified  therein,  the acceptance of such resignation  shall not be
necessary to make it effective. Such resignation shall not affect such Officer's
rights and liabilities as an Initial Shareholder, if any.

     6.10 REMOVAL.

          (a) REPLACEMENT BY INITIAL  SHAREHOLDER VOTE. Consent of a majority of
     the Board of Directors  may at any time  replace any Officer and  designate
     another  Person to take over the duties of an  Officer.  The  removal of an
     Officer  hereby shall have no effect on or alter any Interest  owned by the
     Officer.

          (b)  OFFICER  BANKRUPTCY.  In the event of  bankruptcy  by an Officer,
     consent of a majority of the Board of Directors may elect another Person to
     serve as a new Officer.

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<PAGE>
          (c) DEATH,  INCAPACITY OR RESIGNATION OF OFFICER.  In the event of the
     death or mental incapacity of an Officer or if an Officer resigns,  consent
     of a majority  of the Board of  Directors  may elect a new  Officer for the
     Company.

     6.11 VACANCIES.  Any vacancy  occurring for any reason of an Officer of the
Company  which is filled by the consent of a majority of the Board of  Directors
shall cause the Officer so elected to serve until his successor shall be elected
and shall qualify or until his earlier death, resignation or removal.

     6.12  AUTHORITY.  No person  dealing with the Officers shall be required to
determine his authority to make any undertaking on behalf of the Company,  or to
determine any fact or circumstance  bearing upon the existence of its authority,
other than to rely upon a statement signed by an Officer,  thereunto authorized,
as to:

          (a) the identity of any Officer or Initial Shareholder hereof;

          (b)  the  existence  or  non-existence  of any  fact or  facts,  which
     constitute a condition precedent to, acts by an Officer or which are in any
     other manner germane to the affairs of the Company;

          (c)  the  Persons  who are  authorized  to  execute  and  deliver  any
     instrument or document of the Company; or

          (d) any act or failure to act by the Company or as to any other matter
     whatsoever involving the Company or any Initial Shareholder.

     6.13 OFFICER'S COMPENSATION.

          (a) The Officer's  may enter into annual  employment  agreements  that
     must be ratified by a consent of a majority  of the Board of  Directors  of
     the Company.

          (b) The  Officer's  will  receive  reimbursement  for the actual costs
     incurred by the Officer for goods,  materials and services of third parties
     used for or by the Company in connection with Company  operations,  Company
     legal and accounting  fees and expenses,  report  preparation and printing,
     and other expenses of the business of the Company. Specific expenses may or
     may not be eligible for  reimbursement as may be specified in the Officer's
     Employment Agreement.

          (c) Any other  compensation  of the  Officer's of the Company shall be
     fixed from time to time by consent of a majority of the Board of  Directors
     of the  Company  and no Officer  shall be  prevented  from  receiving  such
     compensation  by reason of the fact that he is also an Initial  Shareholder
     of the Company.

     6.14 RECORDS,  AUDITS AND REPORTS. At the expense of the Company, the Chief
Financial  Officer shall  maintain  records and accounts of all  operations  and
expenditures of the Company.  Upon reasonable request,  each Initial Shareholder

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<PAGE>
shall have the right,  during  ordinary  business hours, to inspect and copy the
documents,  required to be kept by this  Section,  at the Initial  Shareholder's
expense.  At a minimum the Company shall keep at its principal place of business
the following records:

          (a) A  current  list  of  the  full  name  and  last  known  business,
     residence, or mailing address of each Initial Shareholder and Officer, both
     past and present;

          (b) A copy of the  Articles  of  Incorporation  of the Company and all
     amendments thereto, together with executed copies of any powers of attorney
     pursuant to which any amendment has been executed;

          (c)  Copies of the  Company's  federal,  state,  and local  income tax
     returns and reports, if any, for the three most recent years;

          (d) Copies of the  Company's  currently  effective  written  Operating
     Agreement and all amendments thereto, copies of any prior written Operating
     Agreement no longer in effect,  copies of any prior  writings  permitted or
     required with respect to an Initial Shareholder's  obligation to contribute
     cash,  property or services and copies of any  financial  statements of the
     Company for the three most recent years;

          (e) Minutes of every annual, special, and court-ordered meeting; and

          (f) Any  written  consents  obtained  from  Initial  Shareholders  for
     actions taken by Initial Shareholders without a meeting.

          (g) Any written  consents  obtained  from the Board of  Directors  for
     actions taken.

                                   ARTICLE VII
                 DELINQUENT AND DEFAULTING INITIAL SHAREHOLDERS

     7.1 FAILURE TO PAY AMOUNTS DUE. If any Initial  Shareholder  fails to pay a
Capital  Contribution  or any other  assessment  within ten (10) days of the due
date   specified  on  a  capital  call   billing,   he  shall  be  considered  a
"Non-Contributing  Initial  Shareholder".  Another Initial  Shareholder or other
Initial Shareholders shall have the right to advance directly to the Company the
funds required from the  Non-Contributing  Initial  Shareholder (a "Contribution
Loan").

     7.2 DEFAULT.  If no Contributing  Initial Shareholder elects to advance the
amount  of the  additional  funds  required  from the  Non-Contributing  Initial
Shareholder,  then the failure of the  Non-Contributing  Initial  Shareholder to
make the  Additional  Capital  Contribution  or  assessment  shall  constitute a
default  and the  Non-Contributing  Initial  Shareholder  shall be a  Defaulting
Initial Shareholder.

     7.3  CONTRIBUTION  LOAN. In the event a  Contributing  Initial  Shareholder
elects to make a  Contribution  Loan,  then the  Contribution  Loan  shall  bear
interest  at a rate  equal to the Prime Rate in effect  from time to time,  plus

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<PAGE>
three (3) percentage  points,  from the date the Contribution Loan is made until
paid in full (adjusted monthly on the 1st day of each month).

          (a) Repayment of the Contributing Initial  Shareholder's  Contribution
     Loan  shall  be  secured  by  the  Non-Contributing  Initial  Shareholder's
     Interest.

          (b) The Non-Contributing  Initial Shareholder hereby grants a security
     interest  in his  Interest  in the  Company  to  the  Contributing  Initial
     Shareholder  who has advanced a  Contribution  Loan and hereby  irrevocably
     appoints the Contributing Initial Shareholder as his attorney-in-fact  with
     full power to prepare and execute any reasonable documents, instruments and
     agreements,  including but not limited to,  reasonable  Uniform  Commercial
     Code Financing and Continuation  Statements,  and other reasonable security
     instruments  as may be  appropriate  to perfect and continue  such security
     interest in favor of the Contributing  Initial  Shareholder.  Copies of any
     such documents shall be mailed to the Non-Contributing Initial Shareholder.

     7.4 DEFAULTING INITIAL  SHAREHOLDER.  If any Contribution Loan (which shall
include all attorney  fees,  interest,  and costs  incurred by the  Contributing
Initial  Shareholder)  has not been repaid in full within sixty (60) days of the
date the  Contribution  Loan is made,  then without  further  notice,  demand or
advertisement (all of which are hereby expressly waived),  the  Non-Contributing
Initial Shareholder shall be considered a Defaulting Initial Shareholder and his
full and complete Capital Account and Percentage Interest shall be automatically
transferred  to the  Contributing  Initial  Shareholder.  Such transfer shall be
deemed to be given for  adequate  consideration  and deemed  effective as of the
date the Defaulting Initial Shareholder failed to make the Capital  Contribution
or other assessment.

     7.5 LOSS OF RIGHT TO VOTE. A Defaulting  Initial  Shareholder  shall not be
entitled to attend  Company  meetings  nor receive  information  relating to the
Company  business  and shall  have no  further  voice in the  management  of the
Company business and no right to vote on Company matters.  A Defaulting  Initial
Shareholder  shall not be considered in determining a  Majority-In-Interest  for
action by the Initial Shareholders.

     7.6 ADDITIONAL  RIGHTS AND REMEDIES.  If an Initial  Shareholder  becomes a
Defaulting Initial  Shareholder,  and if no other Initial  Shareholder elects to
make  a  Contribution  Loan  or  elects  to  purchase  the  Defaulting   Initial
Shareholder's  interest, such Defaulting Initial Shareholder will be immediately
expelled from the Company. An expelled Initial Shareholder shall not be entitled
to withdraw any capital from the Company and shall have no right to  participate
in the affairs of the Company or to make any further Capital Contributions.  The
Defaulting  Initial  Shareholder's  Capital  Account  shall  be  proportionately
divided among the remaining  Non-Defaulting  Initial Shareholders based on their
Percentage  Interest or  transferred  to a new incoming  Initial  Shareholder in
accordance with the terms hereof.  The expulsion of a Initial  Shareholder shall
not  dissolve or terminate  the Company.  In lieu of, but not in addition to the
rights and remedies  provided for in this Article VIII,  the Company  and/or any
Non-Defaulting  Initial Shareholder(s) may elect to evoke and pursue any and all
other remedies against any such Defaulting Initial Shareholder, whether provided
at law or in equity,  including,  but not limited to, bringing suit for damages,

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<PAGE>
for  specific  performances,  or for the  appointment  of a receiver  or special
master,  in the  discretion of the Company  and/or such  Non-Defaulting  Initial
Shareholder(s).

                                  ARTICLE VIII
                         RESTRICTIONS ON TRANSFERABILITY

     8.1  RESTRICTIONS ON TRANSFER OF INTERESTS.  No Initial  Shareholder  shall
have any right to retire or  withdraw  voluntarily  from the Company or to sell,
transfer or assign an Interest or to voluntarily  commit an act that constitutes
a Withdrawal  Event.  With  certain  exceptions  noted in Section 8.2 below,  no
Initial  Shareholder may transfer,  assign,  or otherwise  dispose of his or her
Interest  in the  Company  without  first  having a bona fide offer from a third
party to purchase  the  Interest  (an  "Offer")  and then giving the Company the
opportunity  to purchase the Interest for the price  offered by the third party.
Further,  there  must  be  approval  by a  Majority-In-Interest  of the  Initial
Shareholders  of the Company,  and the assignee of the Interest must agree to be
bound by the  provisions of this  Operating  Agreement.  Any voluntary act of an
Initial  Shareholder  that  constitutes  a  withdrawal  from the  Company  shall
constitute a material breach of this Agreement and the Company shall be entitled
to collect  damages for such  breaches.  Such  damages  shall offset any cash or
other  property  otherwise  distributable  to such  Initial  Shareholder  by the
Company.  The admission of a transferee of an Interest as an Initial Shareholder
shall not effect the dissolution of the Company.

     8.2 PERMITTED TRANSFERS.  A Transfer of any Interest or any portion thereof
may be made only under any of the following circumstances:

          (a) A  Majority-In-Interest  of the Initial Shareholders has consented
     to such Transfer;

          (b)  The  Transfer  is made to the  estate,  personal  representative,
     executor, heirs, or devisees of a deceased Initial Shareholder;

          (c) The Transfer is made to an Initial Shareholder's living trust;

          (d) Any  Initial  Shareholder  may,  without  the consent of the other
     Initial  Shareholders,  transfer its Interest in the Company to or from any
     entity  controlled  by,  controlling  or under  common  control  with  such
     transferring Initial Shareholder. For purposes of this Section 8.2, control
     shall mean the power to direct at least eighty  percent (80%) of the voting
     power within a transferring Initial Shareholder;

          (e) Any  Initial  Shareholder  may gift any of his or her Units of the
     Company to  children or other  descendants,  but not  spouses,  without the
     consent of all of the Initial Shareholders; or

          (f) Upon dissolution of an Initial Shareholder's  marriage,  the named
     Initial  Shareholder has the option to purchase any interest,  which his or
     her spouse may be deemed to hold in the Company  pursuant  to the  purchase
     price and payout set forth in Sections 8.4 and 8.6 below.

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<PAGE>
     8.3  STATUS  OF   UNAPPROVED   TRANSFEREES.   Without   the  consent  of  a
Majority-In-Interest  of the Initial  Shareholders in accord with Section 8.2(a)
above,  no  transferee of an Interest in the Company,  including any  transferee
pursuant to Section  8.2(b)-(f),  may succeed to all of the rights of an Initial
Shareholder. Any such transferee would be only an assignee in adverse possession
entitled to only receive the dividends to which the assignor Initial Shareholder
would have been  entitled,  and  entitled to any tax benefits and liable for any
tax payments, which would have accrued to the assignor Initial Shareholder. Such
an assignee has no right to vote or exercise any discretion  with respect to the
affairs of the Company.

     8.4 SPECIAL PROVISION RESPECTING TRANSFER OF AN INTEREST.

          (a) Upon the death or dissolution of an Initial Shareholder,  if it is
     determined   that  a  successor,   heir  and/or  devisee  of  that  Initial
     Shareholder  has a legal right to an interest  in the  Company,  and if the
     remaining  Initial  Shareholders do not agree by a unanimous vote to permit
     the successor,  heirs and/or devisees of a Initial  Shareholder to become a
     substituted  Initial  Shareholder  hereunder,   the  Company  and  all  the
     remaining Initial  Shareholders  shall have the right and option for thirty
     (30) days from receiving  written notice of such event to purchase all, but
     not less than all, of the Interest of the successor, heir and/or devisee of
     such dissolved or deceased  Initial  Shareholder.  The total purchase price
     for the interest in the Company of the  successor,  heir or devisee of such
     dissolved or deceased Initial  Shareholder shall be computed by taking: (i)
     the sum of the Fair  Market  Value of the  assets of the  Company  less the
     total  liabilities of the Company as of the valuation date, (ii) multiplied
     times the  Percentage  Interest  of the  successor,  heir or devisee of the
     deceased  Initial  Shareholder,  and (iii)  subtracting  the  amount of any
     obligations  owed by the dissolved or deceased  Initial  Shareholder to the
     Company from the product of (i) and (ii).

          (b) Upon bankruptcy of a Initial Shareholder, if the remaining Initial
     Shareholders  do not agree by a  unanimous  vote to permit the  trustee (or
     other legal representative) of the bankrupt Initial Shareholder to become a
     substituted  Initial  Shareholder  hereunder,   the  Company  and  all  the
     remaining Initial  Shareholders  shall have the right and option for thirty
     (30) days from receiving  written notice of such event to purchase all, but
     not less than all, of the Interest of such  bankrupt  Initial  Shareholder.
     The total purchase  price for such bankrupt  Initial  Shareholder's  entire
     interest  in the Company  shall be  computed by taking:  (i) the sum of the
     Fair Market Value of the assets of the Company  less the total  liabilities
     of  the  Company  as of the  valuation  date,  (ii)  multiplied  times  the
     Percentage  Interest  of  the  bankrupt  Initial  Shareholder,   and  (iii)
     subtracting  the amount of any  obligations  owed by the  bankrupt  Initial
     Shareholder to the Company from the product of (i) and (ii).

     8.5 REQUIREMENTS FOR TRANSFEREE BECOMING A SUBSTITUTED INITIAL SHAREHOLDER.
No transferee  shall become a "Substituted  Initial  Shareholder" in the Company
unless all of the following conditions are satisfied:

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<PAGE>
          (a) A  Majority-In-Interest  of the  Initial  Shareholders  shall have
     consented  to  such  substitution  or such  substitution  is  otherwise  in
     accordance with Section 8.2 hereof;

          (b) The person to whom the  Transfer is to be made shall have  assumed
     any and all of the  obligations  and  will  execute  any and all  necessary
     documents to effect the Transfer  under this  Agreement with respect to the
     Interest to which the Transfer relates;

          (c) All expenses  (including  legal fees) incurred in connection  with
     the  Transfer  shall have been paid by or for the  account of the Person to
     whom the Transfer is to be made; the Company will bear no expenses; and

          (d) All  agreements,  certificates  and all other documents shall have
     been executed and filed and all other acts shall have been performed  which
     the  Initial  Shareholders  deem  necessary  to make the Person to whom the
     Transfer is to be made a substituted Initial Shareholder in the Company, to
     preserve  the  status of the  Company,  and to comply  with all  applicable
     governmental statutes,  rules and regulations and requirements,  if any, of
     Company creditors.

     8.6 SETTLEMENT AND PURCHASE  PRICE.  The settlement for the purchase of the
Interest  pursuant to Sections  8.1 or 8.4 hereof shall be held thirty (30) days
from the  exercise  of any  option  relating  to such  settlement  at 10:00 a.m.
Phoenix time at the principal  office of the Company or at such other date, time
and place as shall be agreed upon by the parties to the settlement.

          (a) In the case of a purchase  pursuant  to Section  8.1  hereof,  the
     purchase  price  shall be paid in  accordance  with the terms of the Offer;
     provided,  however, that notwithstanding any of the terms of the Offer, the
     closing  shall not occur any sooner than the  settlement  date provided for
     herein.  If the closing date of the Offer is later than the settlement date
     provided for herein,  the  settlement  shall take place upon the settlement
     date provided for herein or the closing date set forth in the Offer, as may
     be elected by the purchasing Initial Shareholders.

          (b) In the case of a purchase  pursuant  to Section  8.4  hereof,  the
     purchase price of the dissolved, deceased or bankrupt Initial Shareholder's
     Interest may, at the purchaser's  option, be payable either in cash or on a
     deferred basis, as follows:

               (i) A down  payment of ten percent  (10%) of the  purchase  price
          shall be payable at the settlement;

               (ii) The balance of the  purchase  price shall be paid in six (6)
          equal annual principal  installments,  the first installment to be due
          one (1) year  following  the  settlement  date and  subsequent  annual
          principal  payments  shall be due on the  same day of each  successive
          year thereafter.

               (iii)  Interest on the  deferred  balance of the  purchase  price
          shall bear interest at the Prime Rate from the  settlement  date until
          paid in full (adjusted monthly on the 1st day of each month).  Accrued

                                       20
<PAGE>
          interest  shall  be  payable  at the  same  time  as  installments  of
          principal.

               (iv) If not  sooner  paid in  full,  the  unpaid  principal  plus
          accrued  interest  shall be paid in full  upon the  winding  up of the
          Company's business and affairs. In the event of default in the payment
          of principal or interest pursuant to the provisions  hereof, the party
          entitled to payment, at its option shall have the right to declare the
          unpaid balance of principal and accrued  interest  immediately due and
          payable.

               (v) The deferred balance of such purchase price plus such accrued
          interest shall be secured by a security  interest in the  transferring
          Initial Shareholder's Interest.

     8.7 COMPULSORY BUY-SELL.

          (a) Any Initial Shareholder (the "Initiating Initial Shareholder") may
     offer to sell all (but not less than all) of its Percentage Interest to the
     remaining  Initial  Shareholders   ("Remaining  Initial  Shareholders")  by
     submitting  to the  Remaining  Initial  Shareholders  a written  offer (the
     "Offering  Notice"),  setting forth the  Initiating  Initial  Shareholders'
     intent to rely on this Section 8.7(a) and setting forth the sales price for
     the  Percentage  Interest  (indicating  the price  for each one  Percentage
     Interest).

          (b) The  Remaining  Initial  Shareholders  shall have thirty (30) days
     following the date of receipt of the Offering Notice to either:

               (i) purchase in the aggregate all of the  Percentage  Interest of
          the  Initiating  Initial  Shareholder  for the price and price per one
          Percentage Interest basis set forth in the Offering Notice; or

               (ii) sell all of the Remaining Initial  Shareholders'  Percentage
          Interest to the Initiating Initial  Shareholder for the same price per
          one  Percentage  Interest  basis set forth in the  Initiating  Initial
          Shareholder's  Offering Notice, and the Initiating Initial Shareholder
          shall be  obligated to purchase the  Remaining  Initial  Shareholders'
          Percentage Interest at such price per one Percentage Interest basis.

          (c) The Remaining Initial  Shareholders shall make the election called
     for in  Section  8.7(b)(i)  by  unanimous  vote  of the  Remaining  Initial
     Shareholders.  If one Remaining  Initial  Shareholder  votes to acquire the
     Initiating  Initial  Shareholder's   Percentage  Interest  (the  "Acquiring
     Remaining  Initial  Shareholder")  and the  others  to sell his  Percentage
     Interest to the  Initiating  Initial  Shareholder  (the "Selling  Remaining
     Initial  Shareholder"),  then the Acquiring  Remaining Initial  Shareholder
     shall  have the  option,  for ten (10)  days  after the  Selling  Remaining
     Initial  Shareholder's  election,  to acquire all of the Selling  Remaining
     Initial  Shareholder's  Percentage  Interest  at the  same  price  per  one
     Percentage  Interest  basis and on the same  terms as he is  acquiring  the
     Initiating  Initial  Shareholder's  Percentage  Interest.  If the Remaining

                                       21
<PAGE>
     Initial Shareholders do not exercise their rights under Section 8.7(b) in a
     timely manner,  then the Remaining Initial  Shareholders shall be deemed to
     have  unanimously  elected  to  purchase  all  of  the  Initiating  Initial
     Shareholders' Percentage Interest in accordance with Section 8.7(b)(i).

          (d) The purchase price for the Percentage  Interest purchased pursuant
     to this Section 8.7 shall be paid by payment in cash of 20% of the purchase
     price  upon the date of  Closing  and the  balance  in  twelve  (12)  equal
     quarterly  installments  of  principal  and  interest,  with such  payments
     commencing  on the first day of the third  month from the date of  Closing.
     The  outstanding  balance of the  purchase  price shall be  evidenced  by a
     promissory note, which note shall bear interest at the Prime Rate. The note
     shall be secured by a security  interest in the  Percentage  Interest to be
     purchased.  Notwithstanding  any contrary  provisions  herein,  the selling
     Initial Shareholder and the purchasing Initial Shareholder may agree to any
     other  mutually  acceptable  terms and  provisions  for the  payment of the
     purchase price.

          (e) If  any  Initial  Shareholder  fails  to  complete  the  mandatory
     purchase or sale,  as  applicable,  once  initiated  by an Offering  Notice
     according to the terms of this Section 8.7, such Initial  Shareholder shall
     be deemed a  Defaulting  Initial  Shareholder  within  the  meaning of this
     Agreement,  and such  Defaulting  Initial  Shareholder's  full and complete
     Capital Account and Percentage Interest shall be automatically  transferred
     to the non-defaulting  Initial Shareholders.  Such transfer shall be deemed
     to be given for adequate  consideration and deemed effective as of the date
     the  Defaulting  Initial  Shareholder  failed  to  complete  the  mandatory
     purchase or sale, as applicable.

          (f)  In   connection   with  the  purchase  and  sale  of  an  Initial
     Shareholder's  Percentage Interest pursuant to this Section, the purchasing
     Initial  Shareholders  and their spouses,  if any, shall, as a condition to
     such  purchase,  jointly and  severally  indemnify  and hold  harmless  the
     selling Initial  Shareholder  from any and all  liabilities  theretofore or
     thereafter arising from the activities of the Company,  provided,  however,
     the purchasing Initial  Shareholder shall not be obligated to indemnify the
     selling  Initial  Shareholder  from  any  liability  arising  out  of or in
     connection  with any act or omission of the  selling  Initial  Shareholders
     which was fraudulent,  wanton, grossly negligent, in bad faith, contrary to
     the policies of the Company,  contrary to the selling Initial Shareholder's
     fiduciary duty to the Company and its Initial  Shareholders.  In connection
     with the purchase and sale of an Initial Shareholder's  interest,  pursuant
     to this Section 8.7, the purchasing Initial  Shareholder shall use its best
     efforts to obtain the release of the selling Initial  Shareholders from all
     personal  liability for the debts and other liabilities of the Company,  if
     any.

     In connection with the sales transaction  contemplated by this Section, the
     selling Initial  Shareholder  shall represent and warrant to the purchasing
     Initial Shareholder, as of the closing date, that they are not aware of any
     material liability of the Company,  other than the liabilities disclosed on
     the books and  records of the  Company  and other  than  those  liabilities
     otherwise disclosed to or known by the purchasing Initial Shareholder.  The
     selling  Initial   Shareholders  shall  indemnify  and  hold  harmless  the
     purchasing  Initial  Shareholders  from any and all loss, cost,  damages or

                                       22
<PAGE>
     expenses,  including  attorneys' fees,  incurred by the purchasing  Initial
     Shareholders  arising  out of the  inaccuracy  of said  representation  and
     warranty.

          No Initial Shareholder shall be permitted to make an offer pursuant to
     this Section at any time while such Initial Shareholder is in default under
     this Agreement.

     8.8 TERMINATION OF THE COMPANY FOR TAX PURPOSES.  Notwithstanding  anything
to the contrary contained in any other provision of this Agreement,  the sale or
exchange of all or any part of an interest in the Capital  and/or the Profits of
the Company may not be made (and will be null and void) if the  interest  sought
to be sold or  exchanged,  when added to all other  interests  in the  Company's
Capital  and/or Profits  transferred  within the twelve (12)  consecutive  month
period  ending on the date of such  proposed  sale or exchange,  would cause the
termination of the Company for federal income tax purposes.

     8.9  RESTRAINING  ORDER.  If any  Initial  Shareholder  shall  at any  time
transfer or attempt to transfer  all or any part of its Interest in violation of
the  provisions  of this  Agreement,  then any  other  Initial  Shareholder,  in
addition  to all other  available  rights and  remedies,  shall be entitled to a
decree or order restraining and enjoining such transfer.

                                   ARTICLE IX
                         ADDITIONAL INITIAL SHAREHOLDERS

     After the  formation of the Company,  any Person  acceptable  to all of the
Initial  Shareholders may become an Initial Shareholder of this Company for such
consideration  as  the  Initial  Shareholders  by  their  unanimous  vote  shall
determine.

                                    ARTICLE X
                           DISSOLUTION AND TERMINATION

     10.1 DISSOLUTION. The Company shall be dissolved upon the first to occur of
any of the following events:

          (a) upon the entry of a decree of dissolution under A.R.S. ss.29-785;

          (b) upon any Withdrawal  Event,  unless the business of the Company is
     continued  by the  specific  unanimous  consent  of the  remaining  Initial
     Shareholders  given within 90 days after such event, and there are at least
     two remaining Initial Shareholders;

          (c) a vote of a Majority-In-Interest to dissolve;

          (d) The appointment of a receiver, trustee or liquidator of the assets
     of the Company,  or the attachment,  execution or other judicial seizure of
     all or a portion  of the  assets of the  Company,  unless  such  seizure is
     discharged within thirty (30) days thereafter; or

                                       23
<PAGE>
          (e)   The   inability   of   the   Initial   Shareholders   owning   a
     Majority-In-Interest  of all Non-Defaulting  Initial  Shareholders to agree
     upon any matter which makes it  impossible  for the Company  business to be
     continued in a normal business-like manner.

     10.2 EFFECT OF FILING OF DISSOLVING STATEMENT.  Upon the dissolution of the
Company, the Company shall cease to carry on its business, except insofar as may
be necessary  for the winding up of its  business,  but its  separate  existence
shall continue  until  Articles of  Termination  have been filed with the Nevada
Corporation Commission or until a decree dissolving the Company has been entered
by a court of competent jurisdiction.

     10.3 WINDING UP, LIQUIDATION AND DISTRIBUTION OF ASSETS.

          (a)  Upon  dissolution,  an  accounting  shall  be made  by the  Chief
     Financial  Officer of the  accounts  of the  Company  and of the  Company's
     assets,  liabilities  and  operations,  from the date of the last  previous
     accounting until the date of dissolution.  The President shall  immediately
     proceed  to  wind  up the  affairs  of  the  Company.  Notwithstanding  the
     foregoing,  if the  majority of the Board of Directors  determines  that an
     immediate  sale of part or all of the  investments or assets of the Company
     would  cause undue loss to the Initial  Shareholders,  the  majority of the
     Board of  Directors,  in order to avoid such loss,  may,  to the extent not
     then prohibited by the governing law applicable in the circumstances, defer
     liquidation  of and withhold from  distribution  for a reasonable  time any
     assets of the Company except those necessary to satisfy the immediately due
     debts and obligations of the Company.

          (b) If the  Company is  dissolved  and its affairs are to be wound up,
     the President,  with the consent to the majority of the Board of Directors,
     shall  (1) sell or  otherwise  liquidate  all of the  Company's  assets  as
     promptly  as  practicable  (except to the extent  the  President,  with the
     consent  to the  majority  of the  Board of  Directors,  may  determine  to
     distribute any assets to the Initial  Shareholders  in kind),  (2) allocate
     any profit or loss resulting  from such sales to the Initial  Shareholders'
     Capital  Accounts in accordance  with Article II hereof,  (3) discharge all
     liabilities   of  the   Company   (other   than   liabilities   to  Initial
     Shareholders), including all costs relating to the dissolution, winding up,
     and liquidation and distribution of assets,  (4) establish such Reserves as
     may be reasonably  necessary to provide for  contingent  liabilities of the
     Company (for purposes of  determining  the Capital  Accounts of the Initial
     Shareholders, the amounts of such reserves shall be deemed to be an expense
     of the  Company),  (5)  discharge  any  liabilities  of the  Company to the
     Initial  Shareholders  other than on account of their  interests in Company
     capital  or  profits,  and  (6)  distribute  the  remaining  assets  in the
     following order:

               (i) If any assets of the Company are to be  distributed  in kind,
          the net fair market value of such assets as of the date of dissolution
          shall be  determined by  independent  appraisal or by agreement of the
          Initial Shareholders. Such assets shall be deemed to have been sold as
          of the date of  dissolution  for  their  Fair  Market  Value,  and the
          Capital  Accounts  of  the  Initial  Shareholders  shall  be  adjusted
          pursuant to the  provisions of Article II of this Agreement to reflect
          such deemed sale.

                                       24
<PAGE>
          (c) Upon completion of the winding up, liquidation and distribution of
     the assets, the Company shall be deemed terminated.

          (d) The President  shall comply with any  applicable  requirements  of
     applicable  law  pertaining to the winding up of the affairs of the Company
     and the final distribution of its assets.

     10.4 ARTICLES OF TERMINATION.  When all debts,  liabilities and obligations
have been paid and discharged,  or adequate  provisions have been made therefor,
and all of the  remaining  property  and  assets  have been  distributed  to the
Initial  Shareholders,  Articles of Termination shall be executed and filed with
the Nevada Corporation Commission.

     10.5 COMPENSATION AND REIMBURSEMENT. The President, Chief Financial Officer
or other Initial Shareholders acting as liquidator of the Company's assets shall
be entitled to reimbursement for out-of-pocket  expenses incurred and reasonable
compensation  for  services  rendered  in  connection  with the  winding  up and
liquidation of the Company.  Such  reimbursement  shall be paid as an expense of
the Company  after all debts to third  parties  have been  repaid or  adequately
provided  for but before  any  repayment  of loans or  advances  by the  Initial
Shareholders.

     10.6 RETURN OF  CONTRIBUTION  NON-RECOURSE  TO OTHER INITIAL  SHAREHOLDERS.
Except as provided by law, upon dissolution, each Initial Shareholder 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 cash or other
property  contribution  of  one  or  more  Initial  Shareholders,  such  Initial
Shareholder  or Initial  Shareholders  shall have no recourse  against any other
Initial Shareholder.

                                   ARTICLE XI
                                  NO PARTITION

     Each Initial  Shareholder hereby waives any right to partition or the right
to take any other  action  which might  otherwise  be  available to such Initial
Shareholder for the purpose of severing its relationship with the Company or its
Interest in the assets and  properties  held by the Company from the Interest of
the other  Initial  Shareholders  until the  dissolution  of the  Company.  Each
Initial Shareholder specifically agrees not to institute any action therefor and
each  Initial  Shareholder  agrees that this section may be pled as a bar to the
maintenance of any such action.  A violation of this provision shall entitle the
non-violating  Initial  Shareholders  to collect,  from the Initial  Shareholder
violating this provision,  the actual  attorney's  fees, costs and other damages
those  non-violating  Initial  Shareholders  and the Company incur in connection
therewith.

                                       25
<PAGE>
                                   ARTICLE XII
                                 INDEMNIFICATION

     12.1 INDEMNIFICATION OF OFFICERS.  Except as provided in this Agreement and
subject to the  provisions of this  Section,  any Officer shall not be liable to
the Company or to any other  Initial  Shareholder(s)  for any  liability,  loss,
cost, damage,  attorney's fees, or other expenses which shall or may be incurred
as a result of or in  connection  with any act or actions  performed or taken by
the Officer or by virtue of any  omission  of the Officer in the  capacity as an
Officer on behalf of the Company,  and the Company shall  defend,  indemnify and
hold the Officer harmless as a condition  precedent to recovery.  Such indemnity
shall not extend to gross negligence,  fraudulent acts or willful  misconduct on
the  part of the  Officer.  Any  amounts  paid by the  Company  pursuant  to the
provisions of this paragraph  shall be deemed to be a Company  expense and shall
be paid before determining profit participation.

     12.2 INITIAL  SHAREHOLDER  INDEMNIFICATION.  Each Initial Shareholder shall
indemnify  the other Initial  Shareholders  from and against any and all claims,
demands, losses, damages,  liabilities,  suits and other proceedings,  judgments
and  awards,  costs  and  expenses  (including  but not  limited  to  reasonable
attorney's  fees)  arising  directly  or  indirectly  out of any  breach  of the
covenants  contained  herein,  by  such  Initial  Shareholder,  its  Affiliates,
officers, agents or employees.

     12.3 NO LIABILITY FOR  INVESTMENT  TAX CREDITS OR CAPITAL  GAINS.  Anything
herein to the contrary  notwithstanding,  no Initial  Shareholder shall have any
liability to the Company or any other Initial  Shareholder  by reason of failure
to qualify for investment tax credits or long term capital gains.

                                  ARTICLE XIII
                                     GENERAL

     13.1 NOTICES. All notices and other communications required or permitted to
be given pursuant to this  Agreement  shall be in writing and shall be deemed to
have been duly given,  made and received only when personally  delivered against
receipt or five (5) days after being (i) sent by telegram or (ii)  deposited  in
the United  States  mails,  certified or  registered,  postage  prepaid,  return
receipt requested,  addressed to the addressee at its address set forth below on
the  attached  Schedule  1 or as shown  from time to time in the  records of the
Company.  Any Initial Shareholder may alter the address to which  communications
are to be sent by giving  notice of such change of address to the other  Initial
Shareholders in conformity with the provisions of this Section.

     13.2 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure
to the  benefit  of the  parties  hereto  and their  respective  successors  and
assigns.

     13.3 CONTROLLING LAW. This Agreement shall be governed by,  interpreted and
construed in accordance with the laws of the State of Arizona.

                                       26
<PAGE>
     13.4 RIGHTS AND REMEDIES  CUMULATIVE.  The rights and remedies  provided by
this  Operating  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. Such rights and remedies are given in addition to any other rights the
parties may have by law, statute, ordinance or otherwise.

     13.5  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 application thereof shall
not be affected and shall be enforceable to the fullest extent permitted by law.

     13.6 INDULGENCES NOT WAIVERS. Neither the failure nor any delay on the part
of any party to  exercise  any  right,  remedy,  power or  privilege  under this
Agreement  shall  operate as a waiver  thereof,  nor shall any single or partial
exercise of any right,  remedy, power or privilege preclude any other or further
exercise of any other  right,  remedy,  power or  privilege  with respect to any
occurrence or be construed as a waiver of such right, remedy, power or privilege
with respect to any subsequent occurrence.

     13.7  EXECUTION  IN  COUNTERPARTS.  This  Agreement  may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same  instrument,  and any  persons  to be  signatory  hereto may  execute  this
Agreement by signing any such counterpart.

     13.8  AMENDMENT.  This  Agreement  may be amended  only by an  agreement in
writing executed by all Initial Shareholders.

     13.9 ATTORNEY'S  FEES. If any party  institutes a suit or other  proceeding
against  any  other  party  in any way  connected  with  this  Agreement  or its
enforcement,  the  prevailing  party to any such  action  shall be  entitled  to
recover  from the other  party  reasonable  attorney's  fees (not to exceed  the
actual  attorney's fees incurred),  witness fees and expenses and court costs in
connection  with said suit or  proceeding  at both trial and  appellate  levels,
regardless of whether any such action or proceeding is prosecuted to judgment.

     13.10 NUMBER OF DAYS.  In computing the number of days for purposes of this
Agreement,  all  days  shall  be  counted,  including  Saturdays,  Sundays,  and
holidays;  provided however, that if the final day of any time period falls on a
Saturday,  Sunday or recognized United States holiday,  then the final day shall
be deemed to be the next date which is not a Saturday, Sunday, or holiday.

     13.11  CAPTIONS.  Captions  are not  intended to convey any meaning or be a
part of this  agreement  but are  merely  used  for  assistance  in  identifying
paragraphs.

     13.12 EXECUTION OF ADDITIONAL INSTRUMENTS.  Each Initial Shareholder hereby
agrees to execute such other and further  statements  of interest and  holdings,
designations,  powers of attorney and other instruments necessary to comply with
any laws, rules or regulations.

     13.13 CONSTRUCTION.  Whenever the singular number is used in this Operating
Agreement and when  required by the context,  the same shall include the plural,

                                       27
<PAGE>
and the masculine  gender shall include the feminine and neuter genders and vice
versa;  and the work  "person" or "party"  shall  include a  corporation,  firm,
partnership, proprietorship or other form of association.

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

     13.15  AGREEMENT  OF SPOUSES OF INITIAL  SHAREHOLDERS.  By  executing  this
Agreement,  the spouse of each Initial Shareholder  acknowledges and consents to
the terms and  conditions of this  Agreement and agrees,  for himself or herself
and for the community of himself and herself and the Initial Shareholder,  to be
bound hereby. Each spouse of an Initial Shareholder,  for himself or herself and
the community of which he or she is an Initial  Shareholder,  hereby irrevocably
appoints the Initial Shareholder as  attorney-in-fact  with an irrevocable proxy
coupled  with an  Interest  to vote on any  matter to come  before  the  Initial
Shareholders or to agree to and execute any amendments of this Agreement without
further  consent  or  acknowledgment  of  the  spouse  and to  execute  proxies,
instruments,  or documents in the spouse's name as may be required to effect the
same. This power of attorney is intended to be durable and shall not be affected
by disability of the spouse.

     IN WITNESS WHEREOF,  the parties have executed this Agreement  effective as
of the day and year first above written.

ALEXIS GROUP, LLC.


By:                                               Date:
  ----------------------------------------             ------------------------
  Jane Brown, President


BGR CORPORATION

By:                                               Date:
  ----------------------------------------             ------------------------
  James Medieros, Executive Vice-President
  Secretary

                                       28
<PAGE>
                                   SCHEDULE 1
                             As of April _____, 2004

                                  PERCENTAGE
INITIAL SHAREHOLDER/ADDRESS        INTEREST       INITIAL CONTRIBUTIONS
---------------------------        --------       ---------------------
BGR Corporation                      50%      Services as set forth on
5080 N. 40th Street, Suite 103                Exhibit A.
Phoenix, Arizona 85018

ALEXIS GROUP, LLC.                   25%      The Concept, License of concept,
10845 E. Karen Drive                          design, service marks, menus,
Scottsdale, Arizona 85255                     trade dress, recipes, as set forth
                                              in Exhibit B.

Investors                            25%      $500,000.00

                                       29
<PAGE>
                                    EXHIBIT A

     1. CASH CONTRIBUTIONS.  BGR shall contribute cash as needed as provided for
in  Section  2.2 of the  Operating  Agreement  and  further  defined  in Company
obligations  as  set  forth  in  The  Pauli's  Franchise  Corporation  Financial
Projections  to be  completed  and  agreed  to by a  majority  of the  Board  of
Directors.

     2.  SERVICES.  BGR or Assignee  shall market and sell  Qualified  Franchise
Units (as defined  below),  and will make such  personnel  available,  as BGR or
Assignee deems necessary for that purpose.  The term "Qualified  Franchise Unit"
includes:  (1) every Franchise Unit for which the Company's then-current form of
Franchise  Agreement  ("Franchise  Agreement")  has been  fully  executed  and a
non-refundable  initial franchise fee ("Franchise Fee") has been paid; (2) every
Franchise  Unit  for  which  the  Company's  then-current  form  of  development
agreement  pursuant  to  which  multiple  Franchise  Units  are to be  developed
("Development  Agreement") has been fully executed and a non-refundable  initial
deposit fee  ("Deposit  Fee") has been paid;  and (3) every  existing  Franchise
Unit, the ownership of which has  transferred and for which a Franchise Fee or a
transfer fee has been paid.

     BGR or Assignee shall not have the right to execute any document (including
the Franchise Agreement,  Uniform Franchise Offering Circular ("UFOC"), or other
related  documents)  on  behalf  of the  Company,  but  will  provide  potential
Franchisees with the UFOC, Franchise Agreement and other related documents.  BGR
or Assignee shall negotiate with potential Franchisees on behalf of the Company.

     BGR or Assignee shall  determine the states in which  Franchise Units shall
be marketed and the Company shall file  effective  franchise  registrations  and
maintain  such  registrations  in all such states that require  registration  of
franchises,  shall amend all  registrations as required,  shall timely renew all
registrations, and shall make any and all applications, filings, or otherwise as
required by law.

     BGR or Assignee shall:

*    UNIFORM FRANCHISE  OFFERING CIRCULAR (UFOC) -Oversee the development of the
     circular,  franchise agreements and area development  agreements.  Complete
     the registration process in pertinent states.

*    WEB SITE REDEVELOPMENT -Oversee the redevelopment of a corporate website to
     improve online presence for franchise sales and marketing.

*    MARKETING  COLLATERAL  -Develop a  marketing  brochure to  incorporate  the
     concept  branding  messages  and  the  franchise  information  to  send  to
     prospects.  This  brochure will be used along with the website in marketing
     the concept to prospective franchisees.

*    REAL ESTATE -Develop and implement a rigorous Pauli's Franchise Corporation
     -centric  real estate  market  analysis and site  analysis  process for all
     future  Company  locations.  Complete  all real  estate  set-up to  include
     individual market analysis, as well as establishing local real estate firms
     in each market that the Company enters.

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<PAGE>
*    FRANCHISE  SALES -Begin  prospecting  for  franchise  sales,  initial pubic
     relations campaign,  initial advertising  campaign and preliminary prospect
     meetings.

*    PROTOTYPE DEVELOPMENT -Develop a standard set of prototypes for traditional
     and  non-traditional  locations,  as well as, set up national suppliers for
     all FF&E, small wares, design and construction management.

*    PURCHASING -Set up national purchasing program for all food, beverage,  and
     paper  purchases.   This  will  include  setting  up  product  distribution
     throughout the country.

*    SALES BUILDING  MARKETING  -Develop a tool set for every  restaurant to use
     while  marketing to their  immediate 2-3 mile radius.  This complete system
     will  include  a  marketing  program  to be used  as part of the  franchise
     operating system.

*    BRANDING/POSITIONING/DIFFERENTIATION  -Analyze current  business  practices
     against  several  other  companies   competing  for  similar  customers  to
     determine the most strategic positioning.

*    MENU  DEVELOPMENT AND FOOD COST -Develop a menu costing program to cost out
     individual menu items, implement an inventory management program to be used
     by all  franchisees,  and complete a thorough  analysis of check  averages,
     product  mix,  and day part sales to  further  improve  the site  selection
     criteria.  Develop new menu items and refine existing menu items to improve
     sales and product mix.

*    BRAND AWARENESS MARKETING -Set up a national marketing fund, national-level
     marketing strategies, securing national and industry public relations.

*    OPERATIONS  AND TRAINING  -Redevelop all manuals and systems to be suitable
     for a national  franchise roll out. This will include all of the operations
     manuals,   job   responsibilities  by  positions,   training  programs  for
     management and  employees,  human  resources,  marketing,  site  selection,
     financial tools, forms, and checklists.

*    INTRANET SERVICES -All manuals,  financial tools, systems and programs will
     be posted on a secure intranet and maintained and updated.

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<PAGE>
                                    EXHIBIT B


License of concept,  design,  service marks, menus, trade dress,  recipes, to be
set forth within 90 days from signing of this Agreement.

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</TEXT>
</DOCUMENT>
