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                                                                   EXHIBIT 10.24

                      LIMITED LIABILITY COMPANY AGREEMENT
                                       OF
                   R4 TECHNICAL CENTER - NORTH CAROLINA, LLC

         THIS LIMITED LIABILITY COMPANY AGREEMENT (the "Agreement") of R4
Technical Center - North Carolina, LLC, a Delaware limited liability company
(the "Company") is effective as of April 28, 2000 by and among Blue Rhino
Corporation, a Delaware corporation ("BRC"), Manchester Tank & Equipment Co., a
Delaware corporation ("Manchester") and Platinum Propane, L.L.C., a Delaware
limited liability company ("Platinum"), one of BRC's distributors, and such
other distributors of BRC as shall from time to time become a party hereto in
accordance with the terms hereof.

                                    RECITALS

         WHEREAS, BRC and Manchester entered into a letter of intent dated
October 21, 1999 which was extended by amendment for the formation of a joint
venture to operate an automated propane grill cylinder bottling and
refurbishing plant; and

         WHEREAS, BRC, Manchester and Platinum have agreed to contribute an
aggregate of $7 million to the joint venture; and

         WHEREAS, BRC has from time to time advanced funds on behalf of the
joint venture for construction and other costs associated with the automated
grill cylinder bottling and refurbishing plant; and

         WHEREAS, BRC and Manchester desire to formalize their joint venture by
forming the Company and entering into this Agreement; and

         WHEREAS, the Members hereby desire to set forth the rights and
obligations of the Members and the Managers and operate this limited liability
company in accordance with the terms of, and subject to the conditions set
forth in, this Agreement.

                                   COVENANTS

         In consideration of the mutual covenants and agreements hereinafter
set forth, the parties hereby agree as follows:

                                   ARTICLE I

         Section 1.1       Definitions. When used in this Agreement the
following terms shall have the meanings set forth below:

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         "Act" means the Delaware Limited Liability Company Act, 6
Del.C.ss.18-101, et seq., as amended from time to time.

         "Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with, such Person; for purposes of this definition, "control" of a Person shall
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through
the ownership of voting securities or otherwise.

         "Agreement" means this Limited Liability Company Agreement, as from
time to time amended.

         "Assignee" means a person to whom an interest in the Company has been
transferred in accordance with the provisions of this Agreement but who has not
been admitted as a substitute or additional Member.

         "Available Cash" means, with respect to any fiscal year, the sum of
(i) all cash receipts of the Company during such fiscal year (excluding for
this purpose Capital Contributions and Member Loans), and (ii) all reductions
made by the Board of Managers during such fiscal year for reserves established
as hereinafter provided, less the sum of (i) all cash operating expenditures
and all cash debt service payments (including payments of principal, interest
and penalties, if any), and (ii) all additions to reserves during such fiscal
year deemed reasonably appropriate by the Board of Managers, including reserves
for capital expenditures, working capital and contingent liabilities.

         "Bankruptcy" has the meaning given it in Section 18-101 of the Act.

         "Board of Managers" mean the five (5) Managers of the Company elected
pursuant to Section 8.2. Any action taken by the Board of Managers shall
require the approval of four of the Managers.

         "Capital Account" of a Member means the Capital Account established
for such Member under Section 4.5.

         "Capital Contribution" means, with respect to any Member or Assignee,
the amount of cash and the net fair market value of any property other than
cash contributed by the Member or Assignee (or its predecessor in interest) to
the Company in exchange for Units.

         "Capital Expenditure" means an expenditure by the Company that is over
$1,000 and depreciated for longer than one (1) year.

         "Change in Control" means, with respect to a Member or an Assignee,
(a) any sale or transfer of all or substantially all of the assets of such
Person, (b) any sale or transfer (other than

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to an Affiliate) of over (i) 40.1% of the voting interests of such Person in a
transaction or series of transactions to another Person or its Affiliates or
(ii) 30% of the voting interests of such Person in a transaction or series of
transactions to another Person or its Affiliates that manufacture propane gas
cylinders, (c) except for any transaction, including a reorganization, in which
Manchester remains beneficially owned by McWane, Inc. or its subsidiaries, (i)
any merger, consolidation, recapitalization or other transaction in which the
Member is not the surviving entity or (ii) which will result in more than 49%
of the voting equity interests of the Member being owned of record or
beneficially by Persons other than the holders of such voting equity interests
immediately prior to such transaction, (d) the death of any Member who is an
individual or sole proprietorship, (e) such Member makes an assignment for the
benefit of creditors, (f) such Member files a voluntary petition in bankruptcy,
(g) such Member is adjudged a bankrupt or insolvent, or has entered against him
an order for relief in any bankruptcy or insolvency proceeding, (h) such Member
files a petition or answer seeking for himself any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
statute, law or regulation, or (i) such Member seeks, consents to or acquiesces
in the appointment of a trustee, receiver or liquidator of all or any
substantial part of the properties of a Member, or (j) in the case of BRC, in
the event Bank of America or any successor in interest thereto forecloses upon
or otherwise attempts to exercise its rights as a secured creditor with respect
to the Membership Interest or Units which are pledged to Bank of America by
BRC. Notwithstanding anything to the contrary herein, the issuance of
additional common stock by BRC through a public offering shall not be deemed to
be a Change in Control; provided however, that if through such public offering
the provisions of Section (b)(i) or (ii) of this definition are met, a Change
of Control shall have occurred.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Company" means the limited liability company continued pursuant to
this Agreement and the limited liability company continuing the business of
this Company in the event of dissolution as herein provided.

         "Company Minimum Gain" has the meaning of "partnership minimum gain"
as set forth in Sections 1.704-2(b)(2) and 1.704-2(d) of the Treasury
Regulations.

         "Construction Contract" means that certain contract dated February 26,
1999, as amended, by and between BRC and Landmark Construction, which shall be
assigned by BRC to the Company and assumed by the Company. The Construction
Contract is attached hereto as Exhibit A.

         "Covered Capacities" has the meaning ascribed to it in Section 8.7.

         "Depreciation" means, for each fiscal year or other period, an amount
equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such year or other period, except that
if the Gross Asset Value of an asset differs from its

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adjusted basis for Federal income tax purposes at the beginning of such year or
other period, Depreciation shall be an amount which bears the same ratio to
such beginning Gross Asset Value as the Federal income tax depreciation,
amortization or other cost recovery deduction for such year or other period
bears to such beginning adjusted tax basis.

         "Dissolution" of a Member which is not a natural person means that
such Member has terminated its existence, wound up its affairs and dissolved in
accordance with applicable laws.

         "Distribution" means, with respect to any Member, the amount of cash
and the Gross Asset Value of any property (other than cash) distributed by the
Company to the Member in respect of the Member's Units.

         "Distributor Member" means Platinum and any other party that succeeds
to Platinum's Membership Interest pursuant to and in accordance with the
provisions of this Agreement.

         "Distributors" means Platinum and the other distributors of BRC that
shall from time to time become Members of the Company in accordance with this
Agreement.

         "Equipment Contract" means that certain contract dated February 26,
1999, as amended, by and between BRC and Provencale D' Automation Et De
Mecanique, which shall be assigned by BRC to the Company and assumed by the
Company. The Equipment Contract is attached hereto as Exhibit B.

         "Gross Asset Value" means, with respect to any asset, the adjusted
basis for Federal income tax purposes of such asset, except as follows:

                  (i)      The initial Gross Asset Value of any asset
         contributed by a Member to the Company shall be the gross fair market
         value of such asset, as determined by the Board of Managers.

                  (ii)     The Gross Asset Value of all Company assets shall be
         adjusted to equal their respective gross fair market values, as
         determined by the Board of Managers in a manner that is consistent
         with the provisions of Code Section 7701(g), as of the following
         times: (a) the acquisition of an additional interest in the Company by
         any new or existing Member in exchange for more than a de minimis
         Capital Contribution; (b) the distribution by the Company to a Member
         of more than a de minimis amount of property as consideration for an
         interest in the Company; and (c) the liquidation of the Company within
         the meaning of Section 1.704-1(b)(2)(ii)(g) of the Treasury
         Regulations; provided, however, that adjustments pursuant to clauses
         (a) and (b) above shall be made only if the Board of Managers
         reasonably determines that such adjustments are necessary or
         appropriate to reflect the relative economic interests of the Members;

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                  (iii)    The Gross Asset Value of any Company asset
         distributed to any Member shall be the gross fair market value, as
         determined by taking Code Section 7701(g) into account, of such asset
         on the date of distribution as determined by the Board of Managers;
         and

                  (iv)     The Gross Asset Value of Company assets shall be
         increased (or decreased) to reflect any adjustments to the adjusted
         basis of such assets pursuant to Section 734(b) or Section 743(b) of
         the Code, but only to the extent that such adjustments are taken into
         account in determining Capital Accounts pursuant to Section
         1.704-1(b)(2)(iv)(m) of the Treasury Regulations and Section 5.4(b);
         provided, however, that Gross Asset Value shall not be adjusted
         pursuant to this Subsection (iv) to the extent the Board of Managers
         determines that an adjustment pursuant to Subsection (ii) hereof is
         necessary or appropriate in connection with a transaction that would
         otherwise result in an adjustment pursuant to this Subsection.

If the Gross Asset Value of an asset has been determined or adjusted pursuant
to clauses (i), (ii) or (iv), above, such Gross Asset Value shall thereafter be
adjusted in the same manner as would the asset's basis for federal income tax
purposes except that in lieu of regular depreciation, the Company shall take
deductions for Depreciation.

         "Majority Interest" means, with respect to any group of Members as of
any particular time, Members in such group whose Units at such time exceed
one-half of the outstanding Units of all Members in such group at such time. If
no distinction is made with respect to the group of Units used in the context
so used, the term Majority Interest shall mean as of any particular time,
Members whose Units at such time exceed one-half of the outstanding Units of
all Members owning Units at such time.

         "Managers" means, as of any particular time, the five (5) members of
the Board of Managers.

         "Members" mean BRC, Manchester, Platinum and other parties as shall
from time to time become a Member of the Company in accordance with the terms
of this Agreement.

         "Membership Interest" means a Member's entire right, title and
interest in the Units owned by such Member and may include a Member's right to
share in the Profits and Losses, the right to receive distributions of Company
assets and the right to participate in the management of the business and
affairs of the Company, to the extent permitted by this Agreement, including
the right to vote on, consent to, or otherwise participate in any decision or
action of or by the Members granted pursuant to this Agreement and the Act.

         "Member Nonrecourse Debt" has the meaning set forth in Section
1.704-2(b)(4) of the Treasury Regulations.

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         "Member Nonrecourse Deductions" has the meaning set forth in Section
1.704-2(i)(2) of the Treasury Regulations.

         "Officers" mean the persons selected to offices of the Company by the
Board of Managers pursuant to Section 8.3.

         "Other Business Entity" has the meaning given it in Section 18-209 of
the Act.

         "Person" means an individual, corporation, partnership, limited
liability company, association, trust, joint venture, unincorporated
organization, other entity or group.

         "Profits" or "Losses" means, for each fiscal year or other period, an
amount equal to the Company's taxable income or loss for such year or period,
determined in accordance with Section 703(a) of the Code (for this purpose, all
items of income, gain, loss, or deduction required to be stated separately
pursuant to Section 703(a)(1) of the Code shall be included in taxable income
or loss), with the following adjustments:

                  (i)      any income of the Company that is exempt from federal
         income tax and not otherwise taken into account in computing Profits
         or Losses pursuant to this definition shall be added to such taxable
         income or loss;

                  (ii)     any expenditures of the Company described in Code
         Section 705(a)(2)(B) or treated as Section 705(a)(2)(B) expenditures
         pursuant to Section 1.704-1(b)(2)(iv)(i) of the Treasury Regulations
         and not otherwise taken into account in computing Profits or Losses
         pursuant to this definition shall be subtracted from such taxable
         income or loss;

                  (iii)    in the event the Gross Asset Value of any Company
         asset is adjusted pursuant to (ii) or (iv) of the definition of "Gross
         Asset Value," the amount of such adjustment shall be taken into
         account as gain or loss from the disposition of such asset for
         purposes of computing Profits or Losses;

                  (iv)     gain or loss resulting from any disposition of any
         property of the Company with respect to which gain or loss is
         recognized for Federal income tax purposes shall be computed by
         reference to the Gross Asset Value of the property disposed of,
         notwithstanding that the adjusted tax basis of such property differs
         from its Gross Asset Value; and

                  (v)      in lieu of the depreciation, amortization and other
         cost recovery deductions taken into account in computing such taxable
         income or loss, there shall be taken into account Depreciation for
         such fiscal year or other period, computed in accordance with the
         definition of "Depreciation."

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         "Super Majority Interest" means, as of any particular time, Members
whose Units at such time exceed two thirds of the outstanding Units of all
Members owning Units at such time.

         "Transfer" means any transaction by which a Member assigns all or part
of its Units or any interest therein, voluntarily or involuntarily, by
operation of law or otherwise and whether or not for value, to any other
Person, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange, transfer or other form of disposition.

         "Treasury Regulations" means the Income Tax Regulations, including
Temporary Regulations, promulgated under the Code, as such regulations may be
amended from time to time.

         "Units" or "Membership Units" refers to the interest of a Member or an
Assignee in the Profits, Losses, income, deductions and credits of the Company
and Distributions by the Company. The number of Units held by each person
admitted to the Company as a Member and by each Assignee shall be as set forth
on Schedule 1 hereto, as amended from time to time.

                                   ARTICLE II

         Section 2.1       Formation of Company. The Members hereby have formed
a limited liability company pursuant to the Act and the provisions of this
Agreement and, for that purpose, have caused the Certificate of Formation to be
prepared, executed and filed with the Secretary of State of Delaware on
December 14, 1999. Except as herein otherwise expressly stated, the rights and
liabilities of the Members shall be as provided in the Act.

         Section 2.2       Company Name. The business of the Company shall be
conducted under the name "R4 Technical Center - North Carolina, LLC" or under
such other name as the Board of Managers may from time to time determine.

         Section 2.3       Purposes of Company. The Company is organized for the
purpose of financing, developing, and operating an automated propane grill
cylinder bottling and refurbishing plant and to engage in any other lawful act
for which a limited liability company may be organized under the Act.

         Section 2.4       Company Property. Title to Company property shall be
held in the name of the Company or its nominee.

         Section 2.5       Registered Office; Principal Place of Business. The
name of the Company's registered agent for service of process is The
Corporation Trust Company, and the address of the Company's registered office
in the State of Delaware is 1209 Orange Street, Wilmington, Delaware 19801. The
principal place of business of the Company shall be at 1309 Buck Shoals Road,
Hamptonville, North Carolina. The Board of Managers may change the

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Company's registered agent or the location of the Company's registered office or
principal place of business as the Board of Managers may from time to time
determine.

         Section 2.6       Qualifications in Other Jurisdictions. The Board of
Managers shall cause the Company to be qualified, formed or registered under
assumed or fictitious names statutes or similar laws in any jurisdiction in
which the Company transacts business. The Board of Managers, as an authorized
person, within the meaning of the Act, may execute, deliver and file any
certificates and any amendments and/or restatements thereof necessary for the
Company to do business in a jurisdiction in which the Company may wish to
conduct such business. The Board of Managers shall prepare, execute and cause
to be filed such original or amended certificates evidencing the formation and
operation of the Company whenever the same may be required under the laws of
any states where the Company may do business.

                                  ARTICLE III

         Section 3.1       Term of Company. Subject to the provisions of Article
IX, the term of the Company commenced upon the filing of the Certificate of
Formation in the office of the Secretary of State of the State of Delaware, and
shall continue until dissolved in accordance with this Agreement.

                                   ARTICLE IV

         Section 4.1       Capital Contributions of the Members. The initial
Capital Contribution of BRC shall consist of assets, construction and equipment
costs and start-up costs, the Construction Contract and the Equipment Contract
which shall have an aggregate value of $3,430,000 as shown on the attached
Exhibit C with complete supporting documentation of such value. Manchester's
initial Capital Contribution shall be $3,500,000 in cash. Platinum's initial
Capital Contribution shall be $70,000 in cash. Schedule 1 attached hereto shows
the Capital Contribution and number of Units held by each Member. Any Capital
Contribution made by Members hereinafter admitted shall be added to Schedule 1.

         Section 4.2       Loans by Members.

         (i)      As of the date of this Agreement, BRC has made loans to the
Company in excess of its initial Capital Contribution of $3,430,000 in the
amount of $3,312,822.88 of which $3,312,822.88 shall be paid by the Company to
BRC on the date hereof.

         (ii)     From time to time, at the request of the Board of Managers,
the Members may make loans to the Company ("Member Loans") upon terms and
conditions as approved by the Board of Managers.

         Section 4.3       Withdrawal and Return of Capital. No Member shall
have the right to withdraw or to demand a return of any of its Capital
Contribution, other than upon dissolution

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and winding up of the Company in accordance with the terms of Section 9.3. Any
return of such Capital Contribution shall be made solely from the assets of the
Company (including the Capital Contributions of the Members) and only in
accordance with the terms hereof, and no Member shall have personal or other
liability for the return of any other Member's Capital Contribution. Under
circumstances requiring a return of any Capital Contribution, no Member shall
have the right to receive property other than cash except as may be
specifically provided herein, and to the extent any monies which any Member is
entitled to receive pursuant to Article VI hereof or any other provision of
this Agreement would constitute a return of capital, each of the Members
consents to the withdrawal of such capital.

         Section 4.4       Interest on Capital. No interest shall accrue or be
paid on any Capital Contribution made to the Company.

         Section 4.5       Capital Accounts. The Company shall create upon its
books and records a capital account ("Capital Account") for each Member and
Assignee (and such Assignee will be referred to as a "Member" solely for
purposes of reference with respect to Capital Accounts, allocations of Company
Profits and Losses and Distributions) which shall be maintained in accordance
with the following provisions:

                  (i)      To each Member's Capital Account there shall be
         credited such Member's Capital Contributions, such Member's
         distributive share of Profits and any items in the nature of income or
         gain which are specially allocated pursuant to Section 5.2, 5.3, or
         5.4, the amount of any Company liabilities which are assumed by such
         Member or which are secured by any property distributed to such
         Member, and the Member's share of any increase in Gross Asset Value
         pursuant to its definition.

                  (ii)     To each Member's Capital Account there shall be
         debited the amount of cash and the Gross Asset Value of any property
         distributed to such Member pursuant to any provision of this
         Agreement, such Member's distributive share of Losses and any items in
         the nature of deductions or losses which are specially allocated
         pursuant to Section 5.2, 5.3 or 5.4, and the amount of any liabilities
         of such Member which are assumed by the Company or which are secured
         by any property contributed by such Member to the Company, and the
         Member's share of any decrease in Gross Asset Value pursuant to its
         definition.

                  (iii)    In the event all or a portion of an interest in the
         Company is transferred in accordance with the terms of this Agreement,
         the transferee shall succeed to the Capital Account of the transferor
         to the extent it relates to the transferred interest.

                  (iv)     In determining the amount of any liability for
         purposes of clauses (i) and (ii), above, there shall be taken into
         account Section 752(c) of the Code and any other applicable provisions
         of the Code and Treasury Regulations.

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                  The foregoing provisions of Section 4.5 and the other
         provisions of this Agreement relating to the maintenance of Capital
         Accounts are intended to comply with the Regulations Section
         1.704-1(b) and shall be interpreted and applied in a manner consistent
         with such Regulations. In the event the Board of Managers determines
         that it is prudent to modify the manner in which Capital Accounts, or
         any debits or credits thereto (including, without limitation, debits
         or credits relating to liabilities that are secured by contributed or
         distributed property, or that are assumed by the Company or its
         Members), are computed in order to comply with such Regulations, the
         Board of Managers may make such modification, provided it is not
         likely to have a material effect on the amounts distributable to any
         Member upon the dissolution of the Company, or upon the termination of
         such Member's interest in the Company.

         Section 4.6       Additional Capital.

         (a)      No Member shall be required to contribute any additional
capital to the Company.

          (b)     If the Company proposes to issue any Units or rights to
acquire such Units (the "Offered Units"), the Company will first offer to sell
to each Member holding Units a portion of such Offered Units equal to the
quotient determined by dividing (1) the number of Units held (directly or
indirectly) by such Member by (2) the total number of Units outstanding. Each
Member will be entitled to purchase such Units at the offered price and on the
terms as determined by the Board of Managers.

                  (i)      In order to exercise its purchase rights hereunder, a
         Member must, within 15 days after receipt of written notice from the
         Company describing in reasonable detail the Offered Units, the
         purchase price thereof, the payment terms and such Member's percentage
         allotment, deliver a written notice to the Company describing its
         election hereunder.

                  (ii)     If all of the Offered Units are not fully subscribed
         by the Members, the remaining Offered Units will be reoffered by the
         Company to the Members purchasing their full allotment upon the terms
         set forth in this paragraph, except that such Members must exercise
         their purchase rights within five (5) days after receipt of such
         reoffer.

                   (iii)   Upon the expiration of the offering periods described
         above, the Company will be entitled to sell such Offered Units which
         Members have not elected to purchase at any time or from time to time
         during the 120 days following such expiration on terms and conditions
         no more favorable to the purchasers thereof than those offered to such
         Members. Any Units offered or sold by the Company after such 120-day
         period must be reoffered to the Members pursuant to the terms of this
         paragraph.

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         (c)      The Members hereby consent to the admission as a Member of any
Person acquiring Units pursuant to this Section 4.6 (provided the consent of
the Members pursuant to Section 8.4(b)(ii) has previously been obtained) who
did not previously own Units and who executes this Agreement and any and all
documents deemed necessary by the Board of Managers.

                                   ARTICLE V

         Section 5.1       Allocation of Profits and Losses. After giving effect
to the special allocations in Section 5.2 hereof, Profits and Losses of the
Company for any fiscal year other than the fiscal year ending following the
dissolution of the Company, shall be allocated as follows:

         (a)      Profits for any fiscal year shall be allocated in the
following order of priority:

                  (i)      First, to all Members, in proportion to the deficit
         balances (if any) in their Capital Accounts, in an amount necessary to
         eliminate any deficits in the Members' Capital Accounts and restore
         such Capital Accounts to zero; and

                  (ii)     Thereafter, to the Members owning Units in proportion
         to their Units.

         (b)      Losses for any fiscal year shall be allocated in the following
order of priority:

                  (i)      First, to the Members owning Units in proportion to
         their Units until the Capital Account balances of such Members have
         been reduced to zero; and

                  (ii)     Thereafter, to the Members owning Units in proportion
         to their Units.

         (c)      Notwithstanding (a) and (b) above, profits and losses or any
other items of gross income or deduction from sale or other disposition of all
or substantially all of the assets of the Company which otherwise causes the
dissolution of the Company shall be allocated in a manner designed, to the
extent possible, to cause the Capital Account balances of each Member to be
equal to the amount that would be distributed to such Member if the Company
distributed all of its cash and assets to the Members in accordance with
Section 6.1(c).

         Section 5.2       Special Allocations. Notwithstanding Section 5.1, the
following special allocations shall be made in the following order:

         (a)      Profits and Losses and items thereof will be allocated as
though this Agreement contained (and there is hereby incorporated herein by
reference): (i) a minimum gain chargeback provision that complies with the
requirements of Sections 1.704-2(d) and 1.704-2(f) of the Treasury Regulations;
(ii) a nonrecourse debt minimum gain chargeback provision that complies with
the requirements of Section 1.704-2(i)(4) of the Treasury Regulations; and
(iii) a qualified

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income offset provision that complies with the requirements of Section
1.704-1(b)(2)(ii)(d) of the Treasury Regulations.

         (b)      Any Member Nonrecourse Deductions for any fiscal year or other
period will be specially allocated to the Member(s) who bears the economic risk
of loss with respect to the Member Nonrecourse Debt to which such Member
Nonrecourse Deductions are attributable in accordance with Regulations Section
1.704-2(i)(1) and (2).

         (c)      To the extent an adjustment to the adjusted tax basis of any
Company asset pursuant to Section 734(b) or Section 743(b) of the Code is
required, pursuant to Section 1.704-1(b)(2)(iv)(m) of the Treasury Regulations,
to be taken into account in determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) and such gain or loss shall be specially allocated to the
Members in a manner consistent with the manner in which their Capital Accounts
are required to be adjusted pursuant to such Section of the Regulations.

         (d)      The allocations set forth in this Section 5.2 (the "Regulatory
Allocations") are intended to comply with certain provisions of Sections
1.704-1 and 1.704-2 of the Treasury Regulations. Notwithstanding any other
provisions of this Agreement, the Regulatory Allocations shall be taken into
account in allocating Profits and Losses and other items of income and
deduction among the Members and Assignees so that, to the extent possible, the
net amount of such allocations of Profits and Losses, other items of income,
gain, loss and deduction, and the Regulatory Allocations to each Member or
Assignee shall be equal to the net amount that would have been allocated to
each Member or Assignee if the Regulatory Allocations had not occurred.

         (e)      Notwithstanding the allocations provided for in this Article
V, each of the Members agrees that the Tax Matters Partner is authorized to
make such special allocations of items of income, gain, loss or deduction as
may be necessary to eliminate the effects of any special allocations or
adjustments to the Capital Accounts of the Members pursuant to Section 704(b)
of the Code and any regulations promulgated thereunder, including, without
limitation, any allocation made pursuant to Regulatory Allocations which are
applied to the Company but which Regulatory Allocations would cause the Capital
Account balances of the Members to not properly reflect the distributions which
would be made to the Members if the Company were liquidated.

         Section 5.3       Allocation of Tax Credits. All tax credits allowed in
connection with any depreciable property shall be allocated in the same manner
as deductions for Depreciation of such property, and all tax credits allowed in
connection with other expenditures shall be allocated in the same manner as
deductions arising out of such other expenditures.

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         Section 5.4       Section 704(c) Allocations.

         (a)      In accordance with Section 704(c) of the Code and the Treasury
Regulations thereunder, income, gain, loss, and deduction with respect to any
property contributed to the capital of the Company shall be allocated among the
Members so as to take account of any variation between the adjusted basis of
such property to the Company for federal income tax purposes and its initial
fair market value.

         (b)      In the event the Gross Asset Value of any asset is adjusted
pursuant to the definition of "Gross Asset Value," subsequent allocations of
income, gain, loss, and deduction with respect to such asset shall take account
of any variation between the adjusted basis of such asset for federal income
tax purposes and the value at which such asset is reflected in the Capital
Accounts of the Members, to the extent such variation was not previously taken
into account pursuant to Section 5.4(a), in the same manner as under Section
704(c) of the Code and the Treasury Regulations thereunder.

         (c)      Allocations pursuant to Sections 5.4(a) and (b) shall be
determined by the Board of Managers using any permissible method under Section
704(c) of the Code and the Treasury Regulations thereunder.

         (d)      Allocations pursuant to Sections 5.4(a) and (b) are solely for
purposes of federal, state, and local income taxes and notwithstanding any
other provision of this Agreement, such allocations shall not affect, or in any
way be taken into account in computing, any Member's Capital Account or share
of Profits, Losses, other items, or Distributions pursuant to any provision of
this Agreement.

         Section 5.5       Certain Other Allocation Rules.

         (a)      For purposes of determining the Profits, Losses, or any other
items allocable to any period, Profits, Losses, and any such other items shall
be determined on a daily, monthly or other basis, as determined by the Board of
Managers in its sole discretion using any permissible method under Section 706
of the Code and the Treasury Regulations thereunder.

         (b)      Except as otherwise provided in this Agreement, all items of
Company income, gain, loss, deduction, and credit, for any fiscal year or other
period, and any other allocations not otherwise provided for shall be divided
among the Members in the same proportions as they share Profits or Losses, as
the case may be, for such year or other period.

         Section 5.6       Recapture Responsibility. In making the allocation of
Profit among the Members, the ordinary income portion, if any, of such Profit
caused by the recapture of cost recovery or any other deductions shall be
allocated among those Members who were previously allocated the cost recovery
or any other deductions in proportion to the amount of such deductions
previously allocated to them. It is intended that the Members, as among
themselves,

                                     -13-
<PAGE>   14

shall be allocated the proportionate recapture income as a result of any cost
recovery or other deductions which were previously allocated to them, in
proportion to the amount of such deductions which have been allocated to them,
notwithstanding that a Member's share of profits, losses or liabilities may
increase or decrease from time to time. Nothing in this Section 5.6, however,
shall cause the Members to be allocated more or less gain or profit than would
otherwise be allocated to them pursuant to this Article V.

                                   ARTICLE VI

         Section 6.1       Distributions.

         (a)      Except as otherwise provided in this Section 6.1(a) and
Section 6.2, which Distributions shall be paid when due, Distributions shall be
made at such time or times and in such amounts as may be determined by the
Board of Managers. Notwithstanding anything to the contrary, no Distributions
shall be made until all accrued interest and principal under any outstanding
Member Loans have been paid in full.

         (b)      Except as provided in Section 6.2 regarding Tax Distributions
and Section 9.3 regarding distributions in liquidation of the Company,
Distributions shall be made to the Members holding Units, pro rata, in
proportion to their Unit ownership.

         (c)      Promptly following the receipt thereof, the Company shall
apply the proceeds from any dissolution of the Company, after the establishment
of any reserves and payment of all liabilities of the Company, to the Members
as provided in Section 9.3.

         Section 6.2       Distributions for Tax Purposes.

         (a)      The Board of Managers shall cause the Company to make
Distributions out of Available Cash within 75 days after the end of any fiscal
year of the Company, beginning with the fiscal year ending December 31, to each
of the Members, in an amount equal to (i) the excess of (A) the total amount of
taxable income allocated to such Members for such fiscal year, over (B) the
amount, if any, by which the sum of all items of deduction and loss allocated
to such Members from the Company for all prior fiscal years exceeds the sum of
all items of taxable income allocated to such Members for all prior fiscal
years, multiplied by (ii) a tax rate reasonably selected by the Board of
Managers (the "Tax Distributions"); provided, however, that subsequent
Distributions to the Members made during such fiscal year and subsequent fiscal
years shall be adjusted as necessary to ensure that, over the period of time
since the date of this Agreement, the aggregate cash distributed to a Member
shall be equal to the amount to which such Member would have been entitled had
there been no Tax Distributions. In the event that in any fiscal year Available
Cash is insufficient to permit the payment in full of the Tax Distributions
computed as set forth above, then in any fiscal year in which Available Cash
exceeds required Tax Distributions, the Tax Distributions payable under this
Section 6.2(a) shall be increased (but not in excess of Available Cash) until
such deficiency has been recouped.

                                     -14-
<PAGE>   15

         (b)      The Board of Managers may cause the Company to make periodic
Distributions to the Members during each fiscal year based on its reasonable
estimate of the amount that will be required to be distributed pursuant to
Section 6.2(a) for such fiscal year in order to provide funds to the Members
for the payment of estimated taxes by them. In the event any such periodic
Distributions are made for any fiscal year, the amount of the Distribution made
after the end of the fiscal year shall be appropriately adjusted so that the
total amount distributed to each Member (taking into account periodic
Distributions made pursuant to this Section 6.2(b)) is equal to the amount such
Member would have been entitled to receive pursuant to Section 6.2(a) had no
such periodic Distributions been made.

         Section 6.3       Payment and Withholding of Certain Taxes.
Notwithstanding anything to the contrary herein, to the extent that the Company
is required, pursuant to any applicable law, (i) to pay tax (including
estimated tax) on a Member's allocable share of Company items of income or
gain, whether or not distributed, or (ii) to withhold and pay over to the tax
authorities any portion of a Distribution otherwise distributable to a Member,
the Company may pay over such tax or such withheld amount to the tax
authorities, and such amount shall be treated as a Distribution to such Member
at the time it is paid to the tax authorities. For purposes of this Section
6.3, the Company may assume that any Member who fails to provide to the Company
satisfactory evidence of his tax status for United States federal income tax
purposes is a foreign person. Section 6.4 Right of Offset. Notwithstanding
anything to the contrary contained in the foregoing provisions of this Article
VI or any other provisions of this Agreement, the Members acknowledge and agree
that the Company shall have the right to setoff any and all amounts owing to
the Company by a Member or its Affiliates, including any amounts arising under
any claims for indemnification and all costs and expenses (including attorneys'
fees) incurred by the Company, in connection with any such claims, against any
distributions otherwise payable to such Member under this Agreement.

                                  ARTICLE VII

         Section 7.1       Powers of Members. The Members shall have the power
to exercise any and all rights or powers granted to the Members pursuant to the
express terms of this Agreement. The Members shall also have the power to
authorize the Board of Managers, by vote of a Super Majority Interest of the
Members, to possess and exercise any right or power not already vested in the
Board of Managers pursuant to Section 8.1. No Member, acting alone, shall have
the authority to act for, in the name of, or as a representative of the
Company, or to deal with the Company's assets in any way, or to undertake or
assume any obligation, debt, duty or responsibility on behalf of any other
Member or the Company. Any violation of this Section 7.1 shall be deemed to
constitute willful misconduct.

         Section 7.2       Partition.  Each Member waives, until termination of
the Company, any and all rights that it may have to maintain an action for
partition of the Company's property.

                                     -15-
<PAGE>   16

         Section 7.3       Withdrawal of Members. Except as otherwise provided
for in this Agreement, no Member shall have the right to resign or withdraw
from the Company as a Member.

         Section 7.4       Assignment by Members and Assignees.

         (a)      Except as otherwise provided in Section 7.4(g), a Member or
Assignee may not Transfer (a "Transferring Member") all or any part of its
Units in the Company to any Assignee (and no such Transfer shall be effective)
unless:

                  (i)      such Transferring Member and Assignee shall have
         complied with Section 7.5 and 7.6 of this Agreement;

                  (ii)     such Transfer is consented to by the Board of
         Managers, whose consent may be withheld in its sole discretion and is
         made by means of an assignment in such form as shall be reasonably
         satisfactory to the Board of Managers;

                  (iii)    the Company shall have received advice of counsel
         satisfactory to the Board of Managers to the effect: (a) that the
         proposed Transfer is permissible under the Securities Act of 1933, as
         amended, the rules and regulations of the Securities and Exchange
         Commission thereunder and all applicable state securities laws; (b)
         that the proposed Transfer will not adversely affect the
         classification of the Company as a partnership for federal income tax
         purposes; and (c) that the proposed Transfer will not result in a
         termination of the Company as a partnership under Section 708(b) of
         the Code; and

                  (iv)     the Transferring Member and Assignee, and, if deemed
         necessary by the Board of Managers, all other Members, shall have
         executed all such certificates and other documents and performed all
         such acts as the Board of Managers reasonably deems necessary or
         appropriate to effect a valid transfer of the Units being transferred,
         and to preserve the rights, status and existence of the Company.

         (b)      The Company shall, after the effective date of any Transfer
pursuant to the provisions of this Section 7.4, pay all Distributions on
account of the Units so transferred to the Assignee; provided, however, that if
instructed to do so in writing by the Transferring Member and Assignee, the
Board of Managers shall cause the Company to pay to the assignor a portion of
the Tax Distribution provided for in Section 6.2 that would otherwise have been
payable to the Assignee for the year in which the Transfer occurs, equal to the
amount that would have been payable under Section 6.2 with respect to the Units
transferred if the period beginning on the first day of the fiscal year in
which the Transfer occurred and ending on the effective date of the Transfer
had been a separate fiscal year of the Company. Any such Distribution paid to
the

                                     -16-
<PAGE>   17

Transferring Member shall be treated as if paid to the Assignee for purposes of
determining the Capital Account balance of the Assignee.

         (c)      Any Member who Transfers all of its Units in the Company
shall, upon the effective date of such Transfer, cease to be a Member for all
purposes. Such Transferring Member shall release the Company, the Board of
Managers, the Officers, the other Members, and their Affiliates of all claims
or rights arising out of, or on account of, the Transferring Member's ownership
of Units. No assignment of all or any portion of its Units in the Company shall
relieve the Transferring Member of its obligations under this Agreement,
whether arising prior to or subsequent to such Transfer.

         (d)      An Assignee who has not become a substitute or additional
Member in the manner provided in this Agreement shall have no rights whatsoever
in respect of the Company except the right to receive the distributions,
profits and losses to which the Assignee would be entitled, and such other
rights specifically accorded him by the terms of this Agreement. The provisions
of this Agreement shall be binding on all Assignees.

         (e)      No Assignee of a Member shall have the right to become a
substitute or additional Member unless the conditions set forth in Section
7.4(a)(i) through (iv) have been satisfied and:

                  (i)      the Board of Managers and a Super Majority Interest
         of the Members (other than the Transferring Member or Assignee) shall
         have consented in writing to the substitution or addition of such
         Person as a Member (which consent may be withheld in the sole and
         absolute discretion of each Member); and

                  (ii)     the Assignee shall have paid to the Company the costs
         and expenses (including attorneys' fees and filing costs) incurred in
         effecting the substitution or addition.

         (f)      Notwithstanding anything to the contrary herein, (and except
with respect to any public offering of equity that may be undertaken by the
Company), (i) the Board of Managers shall not cause or permit Units to become
traded on an established securities market and (ii) the Board of Managers shall
withhold its consent to any Transfer that, to the Board of Manager's knowledge
after reasonable inquiry, would otherwise be accomplished by a trade on a
secondary market (or the substantial equivalent thereof). For purposes of this
subsection the terms "traded on an established securities market" and
"secondary market (or the substantial equivalent thereof)" shall have the
meanings set forth in Sections 469(k)(2) and 7704 of the Code, respectively,
and any regulations promulgated thereunder that are in effect at the time of
the proposed Transfer.

         (g)      Any Member may Transfer its Units, or any portion thereof, to
any Permitted Transferee (as hereafter defined) who agrees in a writing in form
and substance satisfactory to the Company delivered to the Company to be bound
by the terms of this Agreement (including,

                                     -17-
<PAGE>   18

but not limited to, the restrictions on Transfers specified in this Section
7.4) for all purposes in the same manner as such Permitted Transferee's
Transferring Member and to assume the obligations of such Transferring Member
hereunder with respect to the transferred Units. Immediately after the receipt
of the Units, the Permitted Transferee shall be an Assignee for all purposes
under this Agreement until such Permitted Transferee becomes a substitute or
additional Member under the conditions listed in 7.4(e). For purposes of this
Agreement, "Permitted Transferees" means (i) with respect to a Member who is a
natural person, the spouse or lineal descendants (but not minor children) of
such Member, or such Member's estate, any corporation or partnership in which
such Member, the spouse or lineal descendants of such Member are the direct and
beneficial owners of all of the equity interests (provided such Member, spouse
and lineal descendants agree in writing to remain the direct and beneficial
owners of all such equity interests), or the personal representatives of such
Member upon such Member's death for the purposes of administration of such
Member's estate or upon such Member's adjudicated incapacity for purposes of
the protection and management of the assets of such Member; and (ii) with
respect to a Member who is not a natural person, its Affiliates, provided the
Transferring Member remains obligated hereunder. Notwithstanding anything to
the contrary contained herein, BRC may assign and pledge its Membership
Interest to Bank of America, N.A.

         Section 7.5       Right of First Refusal.

         (a)      So long as a Member is not in default of its obligations and
undertakings pursuant to this Agreement, and as long as the conditions of
Section 7.4 are met, if a Transferring Member or Assignee desires to Transfer
all or any portion of its Units in the Company to a third-party purchaser,
other than a Permitted Transferee of such Transferring Member or Assignee, the
Transferring Member or Assignee shall obtain from such third-party purchaser a
bona fide written offer to purchase such Units, stating the terms and
conditions upon which the purchase is to be made, free of financial
contingencies, and the consideration offered along with evidence of the
Purchaser's financial ability to close the transaction. The Transferring Member
or Assignee shall give written notification to the Company and the remaining
Members, by certified mail or personal delivery, of his intention to so
Transfer such Units, furnishing to the Company and the remaining Members a copy
of the written offer to purchase such Units with the other documentation as
provided above.

         (b)      The Company by a vote of a Majority Interest of the
non-transferring Members, shall have the right to exercise a right of first
refusal to purchase all (but not less than all) of the Units proposed to be
transferred by the Transferring Member or Assignee upon the same terms and
conditions as stated in the aforesaid written offer to purchase, by giving
written notification to the Transferring Member or Assignee, by certified mail
or personal delivery, of its intention to do so within 30 days after receiving
written notice from the Transferring Member or Assignee. If the Company does
not exercise its right of first refusal, such of the remaining Members who

                                     -18-
<PAGE>   19

choose to purchase, on a basis proportionate to the ratio that their Units bear
to all outstanding Units of those who choose to purchase (other than the Units
of the Transferring Member or Assignee or other Members exercising co-sale
rights pursuant to Section 7.6), shall have the right to purchase all (but not
less than all) of the Units proposed to be transferred by the Transferring
Member or Assignee, upon the same terms and conditions as stated in the
aforesaid written offer to purchase by giving written notification to the
Transferring Member or Assignee, by certified mail or personal delivery, of
their intention to do so within the 30 days following the Company's right of
first refusal period set forth in this Section 7.5(b). The failure of the
Company and the remaining Members to so notify the Transferring Member or
Assignee of their desire to exercise this right of first refusal within the
time limits listed above shall result in the termination of the right of first
refusal and the Member or Assignee shall be entitled to consummate the Transfer
of its Units, to such third-party purchaser, provided that the Transfer shall
be consummated within 60 days following the expiration of the aforesaid 60 day
period and must otherwise comply with this Article VII.

         (c)      In the event the Company or the remaining Members (or any one
or more of the remaining Members) give written notice to the Transferring
Member or Assignee of their desire to exercise this right of first refusal and
to purchase all of the Transferring Member or Assignee's Units which the
Transferring Member or Assignee desires to Transfer upon the same terms and
conditions as are stated in the aforesaid written offer to purchase, the
Company or the remaining Members, as the case may be, shall have the right to
designate the time, date and place of closing, provided that the date of
closing shall be within 60 days after written notification to the Transferring
Member or Assignee by the Company or the remaining Members of their election to
exercise their right of the first refusal.

         (d)      Notwithstanding anything in this Article VII to the contrary,
in the event of a Change in Control in a Distributor Member, a default by the
Distributor Member pursuant to Section 7.12, the Distributor Member desires to
sell or Transfer its Membership Interest, or its Membership Interest would
otherwise be subject to the provisions of this Article VII, BRC shall have the
exclusive right to (1) exercise the right of first refusal and acquire the
Membership Interest of the Distributor Member, (2) permit a successor Person
that distributes product for BRC to acquire the Membership Interest of the
selling Distributor Member (provided however, that in the event such Person is
in the business of manufacturing propane gas cylinders the consent of a
Majority Interest of the Members shall be obtained), (3) purchase the
Distributing Member's Membership Interest, or (4) elect to have the selling
Member's Interest be subject to this Section 7.4 and 7.5.

         Section 7.6       Co-Sale Rights.

         (a)      Each Member who does not exercise its right of first refusal
pursuant to Section 7.5 shall have the right, as a condition to any Transfer
(other than a Transfer to an Affiliate or Permitted Transferee) by the
Transferring Member or Assignee and exercisable upon written notice to the
Transferring Member or Assignee, to participate with respect to a pro rata
portion

                                     -19-
<PAGE>   20

(as described below) of such Members Units in the Transfer at the same
price per unit and on the same terms and conditions as those offered to the
Transferring Member or Assignee. If and to the extent that one or more of the
Members exercises its rights of participation under this Section 7.6 in
accordance with the terms and conditions set forth below, the number of Units
the Transferring Member or Assignee may Transfer shall be correspondingly
reduced and the Units Transferred by such participating Member shall be
included with the Transfer.

         (b)      For purposes of this Section 7.6, the pro rata portion of
Units that a Member may Transfer is the product determined by (i) the number of
Units proposed to be transferred by the Transferring Member divided by the
total number of Units held by all Transferring Members and (ii) the number of
Units held by a specific Member.

         (c)      Each Member electing to exercise its rights under this Section
7.6 to participate in a Transfer shall notify the Transferring Member or
Assignee in writing of such election as soon as practicable after receipt of
the Transferring Member or Assignee's notice pursuant to Section 7.5 and, in
any event, within 30 days following the Company's right of first refusal period
set forth in Section 7.5(b). No Member electing to exercise its participation
rights pursuant to this Section 7.6 with respect to a particular Transfer may
exercise its purchase rights pursuant to Section 7.5 with respect to that
Transfer.

         (d)      To the extent that any prospective transferee refuses to
purchase Units from a Member exercising its participation rights under this
Section 7.6, the Transferring Member or Assignee shall not sell to such
prospective transferee any Units unless and until, simultaneously with such
Transfer, the Transferring Member or Assignee shall purchase the Member's Units
offered pursuant to this Section 7.6.

         Section 1.1       Transfer Rights. The Transferring Member or Assignee
agrees, upon request of the remaining Members or the Board of Managers, to
execute such certificates or other documents and to perform such other acts as
may reasonably be requested by the remaining Members or the Board of Managers
from time to time in connection with such sale, transfer, assignment, or
substitution. The Transferring Member or Assignee hereby agree to indemnify the
Company and the remaining Members against any and all loss, damage, or expense
(including, without limitation, tax liabilities or loss of tax benefits)
arising directly or indirectly as a result of any Transfer or purported
Transfer in violation of this Article VII.

         Section 7.8       Changes of Control in Members. Except as provided in
Section 7.5(d), in the event of a Change in Control of a Member (the "Changing
Member"), the other Members who so elect shall have the right to (a) purchase
all (but not less than all) of the Units owned by the Changing Member, (b) sell
all (but not less than all) of such Members' Units to the Changing Member, or
(c) waive such Members' rights under (a) and (b). Upon the occurrence of a
Change in Control, the Changing Member shall give written notification to the
Company and the other Members, by certified mail or personal delivery, within
30 days of such Change in Control. Such notification shall include in
reasonable detail the circumstances causing the Change in

                                     -20-
<PAGE>   21

Control and indicate the Changing Member's valuation of the Company on a per
Unit basis. If the non-Changing Member elects either (a) or (b) above and
accepts the Changing Member's valuation then the transaction shall proceed to
close at that valuation in accordance with this section. If the non-Changing
Members by a vote of a Majority Interest of the non-Changing Members disagree
with the suggested valuation, the Changing Member, at its expense, shall select
one appraiser (the "First Appraiser") a significant portion of whose business
involves the valuation of closely-held business enterprises to prepare a
written appraisal of the the per Unit value of the Company (the "First
Appraisal") which shall be delivered to the other Members within sixty (60)
days of the Change in Control. The results of the First Appraisal shall be
binding on the Changing Member calling for the First Appraisal. If a Majority
Interest of the non-Changing Members are satisfied with the First Appraisal,
then the per Unit fair market value shall be that set forth in the First
Appraisal. Within thirty (30) days after delivery of the First Appraisal, if a
Majority Interest of the non-Changing Members are not satisfied with the per
Unit fair market value set forth in the First Appraisal, then any of the
non-Changing Members holding a Majority Interest may at their own expense,
select one (1) appraiser (the "Second Appraiser") a significant portion of
whose business involves the valuation of closely-held business enterprises to
prepare a written appraisal of the per Unit basis (the "Second Appraisal").
Within thirty (30) days after notice of intent to employ the Second Appraiser,
a copy of the Second Appraisal shall be delivered to the Company, the Changing
Member, and the other Members. If the per Unit fair market value of the Company
set forth in the Second Appraisal does not differ from the per Unit fair market
value of the Company set forth in the First Appraisal by more than ten per cent
(10%) (the "Difference"), then the per Unit fair market value for the Company
shall be the per Unit fair market value set forth in the First Appraisal. If
the Difference is greater than ten percent (10%), then within thirty (30) days
after delivery of the Second Appraisal, the two Appraisers, at the Company's
expense, shall select one (1) appraiser (the "Third Appraiser") a significant
portion of whose business involves the valuation of closely-held business
enterprises to prepare a written appraisal of the per Unit fair market value of
the Company (the "Third Appraisal"). Within thirty (30) days after the
selection of the Third Appraisal, a copy of the Third Appraisal shall be
delivered to all Members. In the event the Company or a Member is required
hereunder to obtain the Third Appraisal, then the per Unit fair market value of
the Company shall be the average per Unit fair market value of the Company of
the two appraisals out of the First Appraisal, the Second Appraisal, and the
Third Appraisal which are closest in dollar amount ( it being the intention of
the Members to disregard the appraisal which has the greatest difference in
value as compared to the two appraisals which are closest in value.). The
non-Changing Members, acting individually, shall exercise their rights (on a
pro rata basis) under (a), (b) or (c) above at any time within 60 days after
the Members receive notification from the Changing Member by giving the
Changing Member written notification of such Member's election. Should fewer
than all of the other Members elect either (a) or (b) above, the electing
Member(s) shall have the right to elect (a) or (b) to purchase or sell in the
same ratio that its Units bear to the Units of all Members electing (a) or (b)
(other than the Changing Member). In the event any Member fail to exercise its
rights in the time required pursuant to this Section 7.8, such Members shall be
deemed to have elected the rights

                                     -21-
<PAGE>   22

under Section 7.8(c) with respect to the particular Change in Control. Any
purchase or sale under this Section 7.8 shall occur within 120 days after
notification of a Change in Control.

         Section 7.9       Limitation of Liability. For each Member, liability
shall be limited as set forth in this Agreement, the Act, and other applicable
law. A Member will not be personally liable for any debts or losses of the
Company beyond its respective Capital Contribution; provided, however, that any
Member who receives a distribution or the return in whole or in part of its
Capital Contribution is liable to the Company only to the extent provided by
the Act.

         Section 7.10      Meetings of Members. There shall be an annual meeting
of Members on a date during the month of March of each year at a time and place
designated by the Board of Managers in a notice to the Members. The Board of
Managers may also call special meetings of the Members. Meetings of the Members
for any purpose shall be called by the Board of Managers upon receipt of a
request in writing signed by the Members owning at least one-third of the
outstanding Units. Such meeting shall be held in the principal office of the
Company or such other place as the Board of Managers shall reasonably
designate. Written notice of the annual meeting of Members and, in the case of
a special meeting, the purpose or purposes for which the special meeting is
called, shall be delivered not less than ten (10) nor more than 60 days before
the date of the meeting. A notification of any such meeting shall be given
either personally or by mail, to each Member at its record address, or at such
other address which it may have furnished in writing to the Board of Managers.
A Member may elect to attend the meeting via telephone conference and shall be
so accommodated.

         Section 7.11      Consents. Any approval, consent, vote or other action
of the Members required or contemplated by this Agreement may be taken without
a meeting, without prior notice and without a vote, if a consent or consents in
writing, setting forth the approval, consent, vote or other action so taken is
signed by Members holding the requisite number of Units and delivered to the
Board of Managers. Any failure to give notice of any such approval, consent,
vote or other action to the Members not executing a consent shall not effect
the validity of the approval, consent, vote or other actions.

         Section 7.12      Default Repurchase Rights. If a Member commits a
material default (a "Defaulting Member") under the provisions of this Agreement
or any other material agreement or arrangement with another Member, and such
default is not cured within 30 days after written notice of such default, the
remaining Members who choose to purchase, on a basis proportionate to the ratio
that their Units bear to all outstanding Units owned by those Members that
choose to purchase (other than the Units of the Defaulting Member) shall have
the right to purchase all (but not less than all) of the Units of the
Defaulting Member for the lesser of the Defaulting Member's Capital Account or
the value obtained pursuant to the procedures set forth in Section 7.8 (for
purposes of this Section 7.12, the Defaulting Member shall be deemed to have
incurred a "Change in Control"). The non-Defaulting Member shall give the
Defaulting Member notice of its intention to exercise its repurchase right in
this Section 7.12 within thirty (30) days after the Defaulting Member failed to
cure any such default. In determining the purchase price pursuant

                                     -22-

<PAGE>   23
to this Section, the purchasing Members shall have the right to set-off against
the purchase price all amounts owed to them (or the Company) by the Defaulting
Member. Notwithstanding anything to the contrary contained herein, in the event
of a default by the Distributor Member Section 7.5(d) shall control.

         Section 7.13      Right to Sale or Purchase. In the event either BRC or
Manchester determines that it no longer desires to be a Member with the other,
either party may give the other written notice of its intentions (at which point
the party giving written notice shall be deemed to have incurred a Change in
Control) and the procedures set forth in Section 7.8 shall control (provided
however, the right under Section 7.8(c) shall not be an option for the
non-Changing Member, such that an election to provide notice under this Section
7.13 shall result in a sale or purchase of Membership Interests.

                                  ARTICLE VIII

         Section 8.1       Management of the Company.

         (a)      Subject to the limitations set forth in Sections 8.2 and 8.4,
the business and affairs of the Company shall be managed by the Board of
Managers and the Board of Managers shall have full authority to act for and with
the Company in all matters in connection with or relating to the Company's
business. The Board of Managers shall prepare or cause to be prepared an annual
business plan to be approved by the Members. On behalf of the Company and in
furtherance of the business of the Company, the Board of Managers shall have the
authority to perform all acts which the Company is authorized to perform,
without the consent of the Members, except as specifically provided herein,
including the authority to:

                  (i)      purchase or otherwise acquire, outright or by lease,
         at such time or times, for such prices and on such terms as it deems
         desirable, real or personal property, tangible or intangible, of all
         types for use in the Company's business, which property may be owned at
         the time of such purchase by any Member or its Affiliates;

                  (ii)     execute and deliver such documents, instruments or
         agreements as the Board of Managers may deem necessary or desirable for
         the acquisition, operation and disposition of the Company's business
         and the investment, management and maintenance of its assets, or for
         other Company purposes, and amendments, revisions and substitutions to
         any of the foregoing;

                  (iii)    acquire, and make all decisions relating to, any
         interests of the Company in any corporation, partnership, limited
         liability company, joint venture, or other entity, including, without
         limitation, decisions relating to: (A) the execution of subscription,
         shareholders', partnership, operating, limited liability company or
         joint venture agreements, voting agreements, or the like having such
         terms as the Board of Managers, in its sole discretion, shall determine
         or consent to; (B) the operation, financing or

                                      -23-
<PAGE>   24

         acquisition or sale of properties of such entity, and (C) the sale of
         the Company's interest in the entity;

                  (iv)     enter into leases, licenses, sublicenses, franchises
         or other agreements with respect to all or any portion of the Company's
         property, whether or not such leases, licenses or agreements (including
         renewal or option terms) shall extend beyond the date of termination of
         the Company, upon such terms as it deems proper;

                  (v)      enter into a management agreement with BRC regarding
         the administrative, MIS and accounting functions required by the
         Company;

                  (vi)     compromise, submit to arbitration, sue on, or defend
         all claims in favor of or against the Company, except as to claims in
         excess of $250,000 which shall require the approval of a Majority
         Interest of the Members;

                  (vii)    do all acts it deems necessary or appropriate for the
         protection and preservation of the Company's assets, including insuring
         the business and assets of the Company in such amounts and against such
         risks as the Board of Managers deems advisable;

                  (viii)   finance any assets or activities of the Company or
         refinance, increase, modify, consolidate, prepay or extend any debts,
         mortgages or other security obligations of the Company; borrow money
         (including borrowings from any Member or its Affiliates, there being no
         obligation, however, for the Member or any of its Affiliates to make
         any such loan) on a secured or unsecured basis and grant or pledge
         Company assets as security for any such loan and confess a judgment
         against the Company in connection therewith;

                  (ix)     hold the Company assets in the Company name or the
         name of one or more nominees;

                  (x)      open one or more bank accounts in the name of the
         Company or in any other name in which the Company's funds are to be
         held, make deposits therein, draw funds therefrom and deal in or with
         the Company's funds in such manner as it may deem appropriate;

                  (xi)     make distributions of Company funds or assets to the
         Members as provided for by this Agreement; and

                  (xii)    make such income tax elections as it deems
         appropriate or desirable, in its sole discretion exercise all rights,
         powers and duties as Tax Matters Partner, as contemplated by the Code
         and the Regulations, prepare and file tax returns for the Company with
         federal, state and local authorities; file amendments to such returns;

                                      -24-
<PAGE>   25

         participate on behalf of the Company in audits of such returns; consent
         to extensions relating to such returns; execute on behalf of the
         Company documents relating to the settlement of tax proceedings
         involving the Company or its tax returns; participate at the Company's
         expense in administrative and judicial proceedings, including appeals,
         relating to the Company's tax returns or its tax liabilities; and
         settle issues relating to the Company's federal and, to the extent
         required, state and local income tax returns even though the Members
         rather than the Company shall be subject to tax as so determined.

         (b)      With respect to third parties, the signature of the Board of
Managers on any agreement, contract, mortgage, deed of trust, promissory note,
instrument or other document shall be sufficient to bind the Company in respect
thereof and shall conclusively evidence the authority of the Board of Managers
with respect thereto, and no Person need look to any other evidence or require
joinder or consent of any other Person.

         (c)      The Board of Managers may, on behalf of the Company, employ,
engage, retain or deal with any persons, corporations or other entities
(including its Affiliates) to act in such capacities as the Board of Managers
may determine.

         (d)      In the event that the Board of Managers proposes a merger or
consolidation of the Company with or into any Other Business Entity or a sale of
substantially all of the assets of the Company, such merger, consolidation or
sale shall require the approval of a Super Majority Interest of the Members.

         Section 8.2       Members of the Board of Managers.

         (a)      The Members shall elect five (5) persons to serve on the Board
of Managers of the Company. Each Manager shall serve a term of one (1) year. The
five (5) Managers shall be elected as follows: (a) BRC shall be entitled to
elect two (2) Managers until such time as BRC holds no Units; (b) Manchester
shall be entitled to elect two (2) Managers until such time as Manchester holds
no Units; and (c) the Distributors shall be entitled to elect one (1) Manager
until such time as the Distributors hold no Units. The initial BRC Managers
shall be Billy Prim and Joseph Culp. The initial Manchester Managers shall be
Bob Richard and Darrel Reifschneider. The initial Distributor Manager shall be
Darryl McClendon. At such time as a Member or group of Members (i.e. the
Distributors) who is entitled to elect a Manager(s) holds no Units , such Member
or group of Member's right to elect a Manager(s) shall automatically cease and
such vacancy shall be filled by a Majority Interest of the Members. Each Manager
shall be able to resign at any time and can be removed at any time by the
affirmative vote of the Member or group of Members entitled to elect such
Manager or, if no specific Member or group of Members is entitled to elect such
Manager, by a Majority Interest of the Members. Any vacancy in the Board of
Managers shall be filled by the Members or group of Members entitled to elect
such Manager within 15 days of such vacancy or, if no specific Member or group
of Members is entitled to elect such Manager, by a Majority Interest of the
Members. The Board of

                                      -25-
<PAGE>   26

Managers shall not act, attempt to act or call meetings unless all Managers have
been duly appointed. A quorum of the Board of Managers shall consist of all five
(5) duly elected Managers present either in person or by written proxy. No
Manager of the Company may be an officer of the Company.

         (b)      Except as specifically provided in this Agreement, in all
matters to be acted on or approved by the Board of Managers, each Manager shall
be entitled to one (1) vote.

         (c)      The Board of Managers may, in its discretion, create such
committees, including an audit committee and compensation committee, as it may
determine are necessary or proper.

         Section 8.3       Officers.

         The Board of Managers may select such Officers as it deems necessary or
desirable for the effective management of the Company and the pursuit of the
Company's business.

         (a)      The Officers of the Company may be a President, one or more
Vice-Presidents (the number thereof to be determined by the Board of Managers),
a Secretary, and a Treasurer, and such Assistant Secretaries, Assistant
Treasurers or other Officers as may be elected or appointed by the Board of
Managers. No officer of the Company may be a Manager of the Company. Any two or
more offices may be held by the same Person. All Officers are agents of the
Company shall have such express authority and perform such duties in the
management of the property and affairs of the Company as may be provided herein,
or as may be determined by resolution of the Board of Managers not inconsistent
with this Agreement, and such implied authority as is recognized by the common
law from time to time.

         (b)      The Officers of the Company may be elected by the Board of
Managers, by written action taken and/or meetings held for such purpose. The
Board of Managers may create and fill new offices from time to time. An Officer
shall hold office until his successor shall have been duly elected and shall
have qualified, until his death or until he shall resign or shall have been
removed in the manner hereinafter provided. Election or appointment of an
Officer or agent shall not of itself create contract rights.

         (c)      Any Officer elected or appointed by the Board of Managers may
be removed by the Board of Managers whenever in its judgment the best interests
of the Company would be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the Person so removed. In addition,
after the expiration of one year from the date of this Agreement, any two (2)
Managers at any time shall have the right by written notice to the other
Managers to call for a vote as to whether such officer shall continue in office.
Such vote shall occur within 15 days of the notice. Unless such officer receives
the vote of four(4) of the Managers in favor of his continued service such
officer shall be removed.

                                      -26-
<PAGE>   27

         (d)      A vacancy in any office because of death, resignation,
removal, disqualification, or otherwise, or because of the creation of an
office, may be filled by the Board of Managers for the unexpired portion of the
term.

         (e)      The President shall be the principal executive officer of the
Company and, subject to the control of the Board of Managers, shall generally
supervise all of the business and affairs of the Company. He may sign, with the
Secretary or any other Officer of the Company thereunto authorized by the Board
of Managers, contracts or other instruments which the Board of Managers has
authorized to be executed on behalf of the Company, except in cases where the
signing and execution thereof shall be expressly delegated by the Board of
Managers or by this Agreement to some other Officer or agent of the Company or
to the President alone, or shall be required by law to be otherwise signed or
executed; and in general shall perform all duties incident to the office of the
President and such other duties as may be prescribed by the Board of Managers
from time to time. The President shall provide monthly updates regarding the
financial and business results and issues of the Company to the Board of
Managers which information shall be prepared in accordance with generally
accepted accounting principles consistently applied, and shall include an income
statement, a balance sheet, cash flow statement, accounts receivable aging,
sales and gross profit analysis, and such operating data as may be refined and
requested from time to time.

         (f)      In the absence of the President or in the event of his
inability or refusal to act, the Vice-President (or in the event there be more
than one Vice-President, the Vice-Presidents in the order designated, or in the
absence of any designation, then in the order of their election) shall perform
the duties of the President, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the President. Any Vice-President
may perform such other duties as from time to time may be assigned to him by the
President.

         (g)      The Secretary shall: (a) keep, or supervise and be responsible
for the keeping of, the minutes and records of all meetings and official actions
of the Board of Managers in one or more books provided for that purpose; (b) see
that all notices of such meetings are duly given or waivers of notice obtained
in accordance with the provisions of this Agreement or as required by law; (c)
be custodian of the Company records; (d) keep a register of the post office
address of each Member which shall be furnished to the Secretary by such Member;
(e) have the authority to certify this Agreement and other documents of the
Company as true and correct copies thereof; and (f) in general perform all
duties incident to the office of Secretary and such other duties as from time to
time may be assigned to him by the President.

         (h)      If required by the President, the Treasurer shall give a bond
for the faithful discharge of his duties in sum and with such surety or sureties
as the President shall determine. He shall: (a) have charge and custody of and
be responsible for all funds and securities of the Company; (b) receive and give
receipts for moneys due and payable to the Company from any source whatsoever,
and deposit all such moneys in the name of the Company in such banks, trust
companies or other depositories as shall be selected by the President; and (c)
in general perform

                                      -27-
<PAGE>   28

all the duties incident to the office of Treasurer and such other duties as from
time to time may be assigned to him by the President.

         (i)      The Assistant Treasurers shall respectively, if required by
the President, give bonds for the faithful discharge of their duties in such
sums and with such sureties as the President shall determine. The Assistant
Secretaries and Assistant Treasurers, in general, shall perform such duties and
exercise such authority as shall be assigned or granted to them by the Secretary
or the Treasurer, respectively, or by the President.

         (j)      The Officers shall receive compensation from the Company, as
each is determined by the Board of Managers.

         (k)      The initial Officers shall be as follows: (A) David Slone
shall be the President of the Company; and (B) Gary Mendelsohn shall be the
Secretary and the Treasurer of the Company

         Section 8.4       Specific Decisions.

         (a)      Notwithstanding anything to the contrary contained in Section
8.3, no Officer of the Company shall make any decision or take any action with
respect to any of the following matters without the prior written consent of the
Board of Managers:

                  (i)      implementation of a construction and/or operating
         budget;

                  (ii)     any significant changes to the plans for the Company
         or any material cost overruns;

                  (iii)    the incurrence of indebtedness;

                  (iv)     additional capital calls;

                  (vi)     Capital Expenditures; or

                  (vii)    distribution of assets.

         (b)      Notwithstanding anything to the contrary contained in Section
8.1, the Board of Managers shall not take any action with respect to any of the
matters enumerated below ("Major Decisions") without the written consent of a
Majority Interest of the Members .

                  (i)      enter into any sale, exchange or contribution of all
         or substantially all of the assets of the Company;

                  (ii)     issue new Units (or options on such Units) in the
         Company.;

                                      -28-
<PAGE>   29

                  (iii)    enter into any transaction with, contract with, or
         otherwise compensate any Member or an Affiliate (including modification
         of such contract) or enter into any material modification, amendment or
         restructuring of any transaction or contract with any Member or
         Affiliate;

                  (iv)     incur any additional indebtedness, including lease
         commitments in excess of $10,000, except for trade payables incurred in
         the ordinary course of business and borrowings under the Company's
         credit facility;

                  (v)      file for Bankruptcy, or a petition for a receiver, or
         make an assignment for the benefit of creditors;

                  (vi)     cause the Company to consolidate or merge with any
         other entity, acquire any business, acquire stock of any Other Business
         Entity, or enter into any partnership or joint venture;

                  (vii)    adopt an employee option plan;

                  (viii)   adopt, approve or terminate any individual or group
         employee retirement plan or any other welfare benefit plan or any
         modifications thereto;

                  (ix)     approve of any joint venture to conduct business;

                  (x)      approve of the creation of any subsidiaries or any
         other investment in, or the acquisition of stocks or bonds of, any
         entity or any equity interest in any other entity;

                  (xi)     except as otherwise provided in this Agreement,
         approve a dissolution of the Company;

                  (xii)    guaranty the payment of money or the performance of
         any contract or obligation of a third party;

                  (xiii)   approve any act which would make it impossible to
         carry on the ordinary business of the Company; or

                  ( xiv)   agree to do any of the foregoing.

         (c)      The Board of Managers shall give the Members written notice of
any Major Decision which it requests to be made and shall, at the expense of the
Company, furnish to the Members such documents and information as may be
reasonably necessary in order to enable Members to make the Major Decisions set
forth above. The failure of a Member to approve or disapprove any Major Decision
within 30 days after (i) receipt of the notice from the Board of

                                      -29-
<PAGE>   30

Managers requesting approval, and (ii) receipt of all additional information
reasonably necessary to enable the Member to make such Major Decision shall be
deemed an approval by the Member of the Major Decision so requested by the Board
of Managers. The Board of Managers, in its sole discretion, may extend the said
30 day period by written notice to the Members.

         Section 8.5       Certain Obligations of the Board of Managers.  The
Board of Managers shall:

         (a)      arrange for Company records and books of account to be
maintained in which shall be entered fully and accurately all transactions and
other matters relative to the Company business;

         (b)      make available to any Member, at such Member's request, during
normal business hours and at the principal place of business of the Company, all
books and records of the Company required to be maintained by this Section 8.5,
and such other financial information as shall be reasonably requested by any
Member; provided, that the Board of Managers shall not be required to disclose
to any Member information regarding the Company if such information is acquired
by the Company or the Board of Managers under circumstances where the disclosure
thereof to a Member may be in violation of any fiduciary duty of the Company or
the Board of Managers or in violation of a confidentiality agreement to which
the Company or the Board of Managers is subject;

         (c)      use its best efforts to provide, or cause to be provided, to
all Members at least the following reports, within the time period specified
below:

                  (i)      within 45 days after the end of each fiscal quarter,
         a statement of operations for such calendar quarter and a balance sheet
         as of the end of such calendar quarter;

                  (ii)     within 90 days after the end of each fiscal year, a
         statement of operations for such calendar year and a balance sheet as
         of the end of such calendar year, which shall be prepared in accordance
         with generally accepted accounting principles and audited by a firm of
         independent certified public accountants;

                  (iii)    within 120 days after the end of each fiscal year,
         the information necessary for Members to prepare federal and all
         applicable state income tax returns as relates to the Company; and

                  (iv)     as soon as practicable after the end of each quarter
         (as determined for federal estimated tax purposes), such information
         relating to the Company as is reasonably necessary for each Member (or
         its constituent Members or shareholders) to determine its (or their)
         quarterly federal and state estimated tax liability;

                                      -30-
<PAGE>   31

                  (d)      cause the Company to timely file all required Company
         federal, state, tax and information returns; and

                  (e)      cause the Company to be duly qualified in each
         jurisdiction in which it proposes to commence business if such
         qualification is necessary to avoid subjecting Members to additional
         liability.

         Section 8.6       Liability of the Managers; Omissions. The doing of
any act or the failure to do any act by the Managers, the effect of which may
cause or result in loss or damage to the Company, shall not subject any Manager
to any liability to the Members if the Manager acted in good faith and in a
manner the Manager reasonably believed to be in or not opposed to the best
interests of the Company.

         Section 8.7       Indemnification.

         (a)      To the fullest extent permitted under the Act, the Company
shall indemnify any Person who was or is a party, or is threatened to be made a
party, to any threatened, pending or contemplated action, suit, or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Company) by reason of the fact that he is or was a
Manager , or Member or Officer of the Company, or is or was serving at the
request of the Company as a director, or officer (or in any capacity equivalent
to any of the foregoing) of another corporation, company, joint venture, trust
or other enterprise (all of the foregoing being herein collectively referred to
as "Covered Capacities"), against expenses (including attorneys' fees and
costs), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit, or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or pleas of nolo contendere or its equivalent, shall not of itself
create a presumption that the person did not act in good faith or did not act in
a manner which he reasonably believed to be in and not opposed to the best
interests of the Company, and with respect to any criminal action or proceeding,
had reasonable cause to believe that his conduct was unlawful.

         (b)      To the fullest extent permitted under the Act, the Company
shall indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending, or completed action or suit by or in the right
of the Company to procure a judgment in its favor by reason of the fact that he
is or was serving in any of the Covered Capacities, against expenses (including
attorneys' fees and costs), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Company and except that no indemnification shall be made in respect to any
claim, issue or matter as to which such action or suit alleges misconduct in the
performance of his duty to the Company unless, and then only to the extent that,
the court in which such

                                      -31-
<PAGE>   32

action or suit was brought shall determine upon application that, despite the
adjudication of liability, and in view of all the circumstances of the case,
such person is fairly and reasonably entitled to be indemnified for such
expenses which the court shall deem proper.

         (c)      Anything in Sections 8.7(a) or (b) to the contrary
notwithstanding, to the extent that any person referred to therein has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to therein or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.

         (d)      Any indemnification under Sections 8.7(a) or (b) (unless
ordered by a court) shall be made by the Company only as authorized in the
specific case upon a determination that indemnification is proper in the
circumstances because the indemnitee has met the applicable standard of conduct
set forth in Sections 8.7(a) or (b). Such determination shall be made by the
Board of Managers.

         (e)      Expenses incurred in defending a civil or criminal action,
suit or proceeding may be paid by the Company in advance of the final
disposition of such action, suit or proceeding, as authorized by the Board of
Managers in the specific case upon receipt of any undertaking by or on behalf of
the indemnitee to repay such amount unless it shall ultimately be determined
that he is entitled to be indemnified by the Company.

         (f)      The indemnification provided by this Section 8.7 shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under any statute, agreement, or otherwise, and shall continue as to
a person who has ceased to serve in a Covered Capacity and shall inure to the
benefit of his successors in interest, including, but not limited to, his
trustees, heirs, executors, and administrators.

         (g)      The Company shall have the power to purchase and maintain
insurance on behalf of any person who is or was serving in any of the Covered
Capacities to reimburse such person for expenses incurred by him in any such
capacity or arising out of his status as such, whether or not the Company would
have the power to indemnify him against such liability under the provisions of
this Section.

         (h)      Each Person who is or was an employee or agent of the Company,
or who is or was serving at the request of the Company as an employee or agent
of another corporation, company, joint venture, trust or other enterprise may be
indemnified (or covered by insurance), in the manner and to the extent provided
in this Section 8.7 for persons acting in Covered Capacities, at the discretion
of the Board of Managers.

         (i)      The Company shall have the right to assume the defense of any
action, suit or proceeding in connection with which any Person is entitled to
indemnification under this Section 8.7 and to select counsel for such purpose.
No Person entitled to indemnification hereunder shall

                                      -32-
<PAGE>   33

consent to entry of any judgment or enter into any settlement in connection with
any such action, suit or proceeding without the consent of the Company, and the
Company shall not, without the consent of each such Person that is entitled to
indemnification, consent to entry of any judgment or enter into any settlement
in connection with such action, suit or proceeding which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Person of a release from all liability in respect to such claim or litigation.

         (j)      Indemnification under this Section 8.7 shall not be available
to any Person in the case of any action, suit or proceeding brought against the
Company by or on behalf of such Person.

         Section 8.8       Tax Matters Partner.

         (a)      BRC is appointed the "Tax Matters Partner" of the Company for
all purposes pursuant to the Code and the Treasury Regulations. The Tax Matters
Partner will (i) furnish to each Member or Assignee affected by an audit of the
Company income tax returns a copy of each notice or other communication received
from the Internal Revenue Service or applicable state authority, (ii) keep each
such Member and Assignee informed of any administrative or judicial proceeding
for the adjustment at the Company level of any "Company items," and (iii) allow
each such Member and Assignee an opportunity to participate in all such
administrative and judicial proceedings.

         (b)      The party named as Tax Matters Partner shall have the
authority conferred on a Tax Matters Partner by the Code and the Treasury
Regulations.

         (c)      The Company is not obligated to pay any fees or other
compensation to the Tax Matters Partner in his capacity as such. However, the
Company will reimburse the Tax Matters Partner for any and all out-of-pocket
costs and expenses (including reasonable attorneys' and other professional fees)
incurred by it in its capacity as Tax Matters Partner. Each Member who elects to
participate in Company administrative tax proceedings will be responsible for
its own expenses incurred in connection with such participation. In addition,
the cost of any adjustments to a Member and the cost of any resulting audits or
adjustments of a Member's tax return will be borne solely by the affected
Member.

         (d)      The Company will indemnify, defend and hold the Tax Matters
Partner harmless from and against any loss, liability, damage, cost or expense
(including reasonable attorneys' and other professional fees) sustained or
incurred as a result of any act or decision concerning Company tax matters and
within the scope of such Member's responsibilities as Tax Matters Partner, so
long as such act or decision was not made fraudulently or in bad faith and did
not constitute willful or wanton misconduct or gross negligence.

         Section 8.9       Meetings of the Managers. There shall be quarterly
meetings of the Board of Managers. Any two (2) Managers may also call special
meetings of the Board of Managers.

                                      -33-
<PAGE>   34

Such meeting shall be held in the principal office of the Company or such other
place as the Board of Managers shall reasonably designate. Written notice of a
special meeting and the purpose or purposes for which the special meeting is
called shall be delivered not less than five (5) nor more than 15 days before
the date of the meeting. A notification of any such meeting shall be given
either personally or by mail, to each Manager. Managers may attend such meetings
via telephone, and a Manager shall have the right to deliver his proxy to vote
on any matter in writing to another Manager; provided however, the Managers
shall use reasonable efforts to attend quarterly meetings in person.

                                   ARTICLE IX

         Section 9.1       Dissolution of Company. The Company shall be
dissolved upon the happening of either of the following events:

         (a)      the approval of the Board of Managers to dissolve the Company;

         (b)      the entry of a decree of judicial dissolution under ss.18-802
                  of the Act; or

         (c)      the unanimous vote of the Members.

         Section 9.2       Final Accounting. Upon dissolution and termination of
the Company, an accounting shall be made of the accounts of each Member and of
the Company's assets, liabilities and operations, from the date of the last
previous accounting to the date of such termination at the Company's expense.

         Section 9.3       Liquidation; Distribution. In the event of the
Dissolution of the Company, the Board of Managers (or in the event the
dissolution is caused by the Dissolution or Bankruptcy of the Board of Managers,
a person selected by a Majority Interest of the Members) shall act in an orderly
manner as liquidating trustee and, in an orderly manner, shall wind up the
affairs of the Company and, after paying all debts and liabilities of the
Company, including all costs of dissolution, shall distribute the remaining
assets in the following order of priority:

         (a)      first, to the establishment of any reserves which the
liquidating trustee may deem reasonably necessary for any contingent or
unforeseen liabilities or obligations of the Company arising out of or in
connection with the Company, which reserves may, at the option of the
liquidating trustee, be paid over by the liquidating trustee to an escrow agent,
to be held by it for the purpose of disbursing such reserves in payment of any
of the aforementioned contingencies, and, at the expiration of such period as
the liquidating trustee shall deem advisable, for distributing the balance
thereunder remaining in the manner hereinafter provided;

         (b)      thereafter, to the owners of Units in accordance with their
positive Capital Account balances, after taking into account all Capital Account
adjustments for the taxable year

                                      -34-
<PAGE>   35

during which the liquidation occurs, in compliance with Treasury Regulation
Section 1.704-1(b)(2)(ii)(b)(2).

         Section 9.4       Termination. A reasonable time shall be allowed for
the orderly liquidation of the assets of the Company and the discharge of
liabilities to creditors so as to enable the Board of Managers or liquidating
trustee to minimize the normal losses attendant upon a liquidation. Each of the
Members shall be furnished with a statement prepared by the Company's certified
public accountant, which shall set forth the assets and liabilities of the
Company as at the date of complete liquidation. Upon compliance with the
distribution plan set forth in Section 9.3 (including any payment over to any
escrowee if there are sufficient funds therefor), the Members shall cease to be
such, and the Board of Managers or the liquidating trustee shall execute,
acknowledge, and cause to be filed a certificate of cancellation of the Company.
Upon completion of the dissolution, winding up, liquidation and distribution of
the liquidation proceeds the Company shall terminate.

                                    ARTICLE X

         Section 10.1      Notices. Except as otherwise provided herein, all
notices and other written communications required or permitted to be given under
this Agreement shall be in writing and shall be sent by Federal Express or other
reliable courier, personally delivered or mailed by certified or registered
mail, return receipt requested. Any notices to be given to the Members shall be
given or delivered to the addresses set forth on Schedule 1 hereto or such other
address of which a Member may notify the Board of Managers and the other Members
in writing. Any notices to be given to the Company shall be sent or delivered to
the office of the Company as specified herein or at such other address as the
Board of Managers may specify in a notice to all of the Members, with a copy to
Thomas H. Ferguson, Pedersen & Houpt, 161 N. Clark Street, Suite 3100, Chicago,
Illinois 60601. Notices sent for next day delivery by Federal Express or other
reliable courier shall be deemed given the next business day after sending,
notices transmitted by facsimile or personally delivered shall be deemed given
when so transmitted or delivered, respectively, and notices sent by certified or
registered mail shall be deemed given on the third business day after sending.

         Section 10.2      Governing Law.  This Agreement shall be governed by
and construed in accordance with the Act and the law of the State of Delaware.

         Section 10.3      Amendments.

         (a)      Subject to the provisions of this Section 10.3, this Agreement
may be amended only in writing with the written consent of a Super Majority
Interest of the Members.

         (b)      Amendments to this Agreement which are of a clerical or
inconsequential nature or which may be required to comply with the Act or the
terms of this Agreement, and which do not adversely affect the Members in any
material respect or which are required or contemplated

                                      -35-
<PAGE>   36

by this Agreement, including, without limitation, amendments necessary to
reflect the admission, substitution or withdrawal of a Member that is otherwise
permitted by this Agreement or the change in the name of the registered agent,
the address of the registered office or the address of the office at which
Company records are kept, may be made by the Board of Managers.

         (c)      No amendment shall increase the liability of any Member,
decrease the Capital Account of any Member, decrease the number of Units of any
Member or affect the right of any Member to receive Distributions and Profits,
except in each case with the written consent of the Member adversely affected
thereby.

         (d)      No amendment shall alter the rights of Members as a class so
as to affect them adversely without the written consent of a Majority Interest
of the Members in such class; unless the amendment is required by changes in law
(including without limitation changes in any statute, ordinance or regulation or
in judicial or administrative law) or (B) the amendment is of a type permitted
by Section 10.3(b).

         (e)      No amendment shall amend the voting requirements with respect
to the matters described in Section 8.4 without the written consent of a Super
Majority Interest of the Members.

         Section 10.4      Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the Members, the Assignees and their
respective legal representatives, heirs, successors and assigns.

         Section 10.5      Counterparts. This Agreement may be executed in
multiple counterparts, each of which shall be an original, but all of which
shall constitute one instrument. A facsimile copy of a signature page hereto
shall be deemed an original for all purposes.

         Section 10.6      Fiscal Year; Method of Accounting. The fiscal year of
the Company shall be the calendar year. The Company shall use the same method of
accounting for tax and financial reporting purposes.

         Section 10.7      Modifications to be in Writings. This Agreement
constitutes the entire understanding of the parties hereto with respect to the
subject matter hereof and no amendment, modification or alteration of the terms
hereof shall be binding unless the same be in writing and adopted in accordance
with the provisions of Section 10.3.

         Section 10.8      Action for Partition or Distribution in Kind. Each of
the parties hereto irrevocably waives any right which it may have to partition
Company property or maintain an action for distribution of Company property in
kind.

         Section 10.9      Captions.  The captions herein are inserted for
convenience of reference only and shall not affect the construction of this
Agreement.

                                      -36-
<PAGE>   37

         Section 10.10     Pronouns and Plurals. Whenever the context may
require, any pronoun used in this Agreement shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns, pronouns
and verbs shall include the plural and vice versa.

         Section 10.11     Validity and Severability. If any provision herein
shall be held invalid or unenforceable, such decision shall not affect the
validity or enforceability of any other provisions hereof, all of which other
provisions shall, in such case, remain in full force and effect.

         Section 10.12     Statutory References. Each reference in this
Agreement to a particular statute or regulation, or a provision thereof, shall,
at any particular time, be deemed to be a reference to such statute or
regulation, or provision thereof, or to any similar or superseding statute or
regulation, or provision thereof, as at such time in effect.

         Section 10.13     Member Representations.  Each of the Members
represent to the other Members as follows:

         (a)      The Member has all necessary power and authority to execute
and deliver this Agreement.

         (b)      Neither the execution and the delivery of this Agreement, nor
the consummation of the transactions contemplated hereby, will (i) violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which the Member is subject or any provision of the charter or bylaws
of the Member, or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Member is a party or by which it is bound or to which any of its assets is
subject.

                  [Remainder of Page Intentionally Left Blank]

                                      -37-
<PAGE>   38

         IN WITNESS WHEREOF, the undersigned have executed this Limited
Liability Company Agreement of R4 Technical Center - North Carolina, LLC as of
the date first above written.

MEMBERS:

BLUE RHINO CORPORATION                         MANCHESTER TANK & EQUIPMENT CO.

                                               By: /s/ Darrel Reifschneider
By: /s/ Mark Castaneda                         Its:  President
Its: Chief Financial Officer

PLATINUM PROPANE, L.L.C.

By: /s/ Daryl F. McClendon
Its:  President

                 SIGNATURE PAGE TO THE LIMITED LIABILITY COMPANY
             AGREEMENT OF R4 TECHNICAL CENTER - NORTH CAROLINA, LLC

                                      -38-
<PAGE>   39

                                   SCHEDULE 1

<TABLE>
<CAPTION>
                                                               CAPITAL ACCOUNT
MEMBER                                                       BALANCE/CONTRIBUTION       NUMBER UNITS
------                                                       --------------------       ------------
<S>                                                          <C>                        <C>
Blue Rhino Corporation                                            $3,430,000              3,430,000
104 Cambridge Plaza Drive
Winston-Salem, NC 27104
Attn:  Mark Castaneda

Manchester Tank and Equipment Company, Inc.                        3,500,000              3,500,000
1749 Mallory Lane #400
Brentwood, Tennessee 37027
Attn: Joey Harwell

Platinum Propane, L.L.C.                                              70,000                 70,000
1309 Buck Shoals Road
Hamptonville, North Carolina
Attn: Daryl McClendon

TOTAL                                                             $7,000,000              7,000,000
                                                                  ==========              =========
</TABLE><PAGE>   1

                                                                   EXHIBIT 10.25

                                      LEASE

                             1817 NORTH KENOSHA ROAD

                                 ZION, ILLINOIS

                                 BY AND BETWEEN

                           H & M ENTERPRISES, L.L.C.,

                      AN ILLINOIS LIMITED LIABILITY COMPANY

                                    AS LESSOR

                                       AND

                                 UNIFLAME, INC.,

                             AN ILLINOIS CORPORATION

                                    AS LESSEE

<PAGE>   2

                                TABLE OF CONTENTS

                                                                            PAGE

ARTICLE 1     PREMISES AND TERM...............................................1

ARTICLE 2     DEFINITIONS.....................................................1

ARTICLE 3     USE.............................................................3

ARTICLE 4     NET LEASE; RENT ABSOLUTE........................................4

ARTICLE 5     RENT............................................................5

ARTICLE 6     LATE CHARGES....................................................6

ARTICLE 7     IMPOSITIONS.....................................................6

ARTICLE 8     MAINTENANCE, REPAIRS AND COMPLIANCE.............................8

ARTICLE 9     INSURANCE.......................................................9

ARTICLE 10    DAMAGE OR DESTRUCTION..........................................11

ARTICLE 11    CHANGES AND ALTERATIONS........................................12

ARTICLE 12    LIENS..........................................................13

ARTICLE 13    ASSIGNMENTS AND SUBLEASES......................................14

ARTICLE 14    LESSOR'S RIGHTS OF INSPECTION..................................15

ARTICLE 15    OTHER COVENANTS OF LESSEE......................................15

ARTICLE 16    CONDEMNATION...................................................16

ARTICLE 17    DEFAULTS; TERMINATION; RE-ENTRY................................17

ARTICLE 18    LESSOR'S ADDITIONAL RIGHTS AND REMEDIES........................19

ARTICLE 19    HAZARDOUS MATERIAL.............................................21

ARTICLE 20    QUIET ENJOYMENT................................................22

ARTICLE 21    SURRENDER OF POSSESSION........................................22

ARTICLE 22    ESTOPPEL CERTIFICATE...........................................23

ARTICLE 23    SUBORDINATION..................................................23

ARTICLE 24    NOTICES........................................................24

ARTICLE 25    LESSOR'S WORK..................................................24

ARTICLE 26    EARLY ENTRY....................................................25

ARTICLE 27    RIGHT OF FIRST OPPORTUNITY.....................................26

ARTICLE 28    SECURITY DEPOSIT...............................................26

ARTICLE 29    MISCELLANEOUS..................................................26

                                      -i-
<PAGE>   3

                                      LEASE

         THIS LEASE ("Lease") entered into as of the 1st day of March, 1995, by
and between H & M ENTERPRISES, L.L.C., an Illinois limited liability company
("Lessor"), and UNIFLAME, INC., an Illinois corporation ("Lessee"), who covenant
and agree as follows:

                                    ARTICLE 1

                                PREMISES AND TERM

         Section 1.1. Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, for the term and subject to the agreements, conditions and
provisions hereinafter set forth, those certain premises (the "Premises")
comprised of the real property legally described in Exhibit A attached hereto
and by this reference made a part hereof (the "Land"), commonly known as 1817
North Kenosha Road, Zion, Illinois, together with all buildings (including
,without limitation, the "Building" [as hereinafter defined]) and all other
improvements now or hereafter situated thereon (the "Improvements"), subject to
all covenants, agreements and restrictions of record.

         Section 1.2. The term of this Lease ("Term") shall commence on the
"Commencement Date" (as hereinafter defined) and shall end on March 31, 2000,
unless sooner terminated as herein set forth or unless extended in accordance
with the provisions hereof.

                                    ARTICLE 2

                                   DEFINITIONS

         As used in this Lease, the following terms and phrases shall have the
meanings indicated:

         Section 2.1. "Adjacent Facilities" - all sidewalks, grounds, areas,
vaults, chutes, sidewalk hoists, railings, gutters, water and sewer connections,
streets, alleys and curbs, parking areas, malls or passageways in front of,
adjacent to or appurtenant to the Premises.

         Section 2.2. "Bonds" - those certain (a) Variable Rate Demand
Industrial Development Revenue Bonds, Series 1995-A (H&M Enterprises, L.L.C.,
Project) of Issuer in the aggregate amount of $3,050,000.00, and (b) Taxable
Variable Rate Demand Industrial Development Revenue Bonds, Series 1995-B (H&M
Enterprises, L.L.C., Project), of Issuer in the aggregate principal amount of
$85,000.00.

         Section 2.3. "Building" - the building to be constructed by Lessor on
the Land in accordance with the provisions of this Lease, including, without
limitation, Article 25 hereof, which shall contain approximately 119,500 square
feet of space, as the same may be altered, or any replacement thereof in
accordance with the terms of this Lease.

         Section 2.4. "Capital Improvement" - defined in Section 11.1.

<PAGE>   4

         Section 2.5. "Commencement Date" - the first to occur of (a) the Rent
Commencement Date; (b) the date that Lessee takes possession of the Premises; or
(c) the date the Premises are Substantially Completed and Ready for Occupancy.

         Section 2.6. "Default" - any condition or event that constitutes or
would constitute, after notice or lapse of time or both, an Event of Default.

         Section 2.7. "Environmental Laws" - all federal, state and local
environmental health or safety laws, statutes, regulations, codes, ordinances,
orders and rules of common law.

         Section 2.8. "Event of Default" - defined in Section 17.1.

         Section 2.9. "Fixed Rent" - defined in Section 5.1.

         Section 2.10. "Hazardous Materials" - any hazardous, toxic or dangerous
substance, waste or material including, without limitation, asbestos, petroleum
products and any and all substances and materials defined as hazardous, toxic or
dangerous in (or for purposes of) the Comprehensive Environmental Response,
Compensation and Liability Act, any so-called "Superfund" or "Superlien" law or
any other federal, state or local statute, law, ordinance, code, regulation,
order, or other requirement of any governmental authority regulating, relating
to or imposing liability for, or standards of conduct concerning, any hazardous,
toxic or dangerous waste, substance or material as now or any time hereafter in
effect.

         Section 2.11. "Impositions" - defined in Section 7.1.

         Section 2.12. "Improvements" - defined in Section 1.1.

         Section 2.13. "Issuer" - City of Zion, Lake County, Illinois, a
municipality duly organized and validly existing under the Constitution and the
laws of the State of Illinois.

         Section 2.14. "Land" - defined in Section 1.1.

         Section 2.15. "Lessee" - Uniflame, Inc., an Illinois corporation, and
any assignee or transferee of Lessee's interest in this Lease as may be
permitted hereunder.

         Section 2.16. "Lessor" - the owner or owners from time to time during
the Term hereof of fee simple title to the Land and the Improvements, so that in
the event of any sale or transfer of the title to such fee, the seller or
transferor shall be automatically and entirely freed and relieved of all
covenants and obligations of Lessor hereunder accruing from and after such sale
or transfer, and it shall be construed without further agreement between the
parties that the purchaser or transferee in any such sale or transfer has
assumed and agreed to carry out any and all covenants and obligations of Lessor
accruing from and after the date of such sale or transfer.

         Section 2.17. "Lessor's Work" - defined in Section 25.1.

         Section 2.18. "Premises" - defined in Section 1.1.

                                      -2-
<PAGE>   5

         Section 2.19. "Prime" - the interest rate per annum announced from time
to time by Cole Taylor Bank, Wheeling, Illinois (or any successor bank thereto)
to be its base rate and may not necessarily be the most favorable rate charged
by Cole Taylor Bank.

         Section 2.20. "Project" - the Land and the Building and related
property to be acquired and constructed by Lessor and financed with the proceeds
of the Bonds.

         Section 2.21. "Proceedings" - defined in Section 16.1.

         Section 2.22. "Rent" - defined in Section 5.3.

         Section 2.23. "Rent Commencement Date" - January 1, 1996.

         Section 2.24. "Requirements" - all present and future laws, statutes,
rules, orders, ordinances, regulations or other requirements (including without
limitation Environmental Laws) of any governmental, public or quasi-public
authority now existing or hereafter created, and of any and all of their
departments and bureaus, and of any applicable fire rating bureau or other body
exercising similar functions, and all covenants or restrictions applicable to or
affecting the Premises or any Adjacent Facilities.

         Section 2.25. "Security Deposit" - defined in Article 28.

         Section 2.26. "Substantially Completed and Ready for Occupancy" -
defined in Section 25.3.

         Section 2.27. "Term" - defined in Section 1.2.

         Section 2.28. "Trade Fixtures" - defined in Section 21.2.

         Section 2.29. "Trustee" - American National Bank and Trust Company of
Chicago, as trustee, and any successor trustee with respect to the Bonds.

         Section 2.30. The words "herein," "hereof," "hereunder" and words of
similar import refer to this Lease as a whole and not to any particular Article,
Section or Subsection thereof unless the context shall otherwise require.

                                    ARTICLE 3

                                       USE

         Section 3.1. The Premises may be used only for the manufacture,
fabrication, assemblage, warehousing and distribution of fireplace and barbecue
equipment and accessories, for Lessee's general offices, and for related uses
incidental or tangential thereto.

         Section 3.2. Lessee shall not use or suffer or permit any person to use
the Premises or any Improvements at any time situated thereon for any use or
purposes in violation of any Requirements or in any manner that would violate
any certificate of occupancy affecting the Premises, or which would cause the
value or usefulness of the Premises or any part thereof to

                                      -3-
<PAGE>   6

diminish, or that would constitute a public or private nuisance or waste, and
Lessee covenants that it will, promptly upon discovery of any such use, take all
necessary steps to compel the discontinuance of such use and to oust any
sublessees or other occupants guilty of such use.

         Section 3.3. Lessee shall have the right at its own expense to contest,
by appropriate proceedings diligently conducted in good faith, any allegation by
public authorities that Lessee, the Premises or any Improvements are in
violation of any Requirements or any certificate of occupancy affecting the
Premises, but only so long as:

                  (a) neither the Premises nor any part thereof would by reason
of such contest be, in Lessor's sole judgment, in danger of being forfeited or
lost;

                  (b) Lessor shall not in its sole judgment be in danger of
being subject to criminal liability or penalty by reason of such contest; and

                  (c) Lessee shall have indemnified and shall continue to
indemnify Lessor with a surety bond, or other means satisfactory to Lessor in
its sole discretion, in an amount sufficient to pay any fines, penalties or
other charges that may or might be assessed against or become a charge on the
Premises if such contest is unsuccessful.

         Any such contest may be made in the name of Lessor or Lessee or both as
Lessee shall determine; and Lessor agrees to cooperate reasonably with Lessee in
any such contest but without expense to Lessor. Lessee shall pay all costs and
expenses (including, but not limited to, Lessor's attorneys' fees) incurred by
Lessor in connection therewith. If Lessee upon the conclusion of any contests or
proceedings shall fail to pay any fines, penalties or other charges thereby
determined to be due, or if prior thereto Lessor, in the exercise of its sole
judgment, shall determine that either condition (a) or (b) of this Section 3.3
is no longer satisfied, Lessor may apply all or any part of any security
provided under this Section to the payment, removal and discharge of such
amounts and any costs, expenses (including, but not limited to, Lessor's
attorneys' fees) and other liabilities accruing in such proceedings, and shall
refund to Lessee the balance of any security not so applied, if any. Lessee
shall promptly pay to Lessor any deficiency resulting from such application,
with the amount of such deficiency to be due as Additional Rent due on the next
rent day after any such deficiency is determined, with interest thereon at the
rate of Prime plus three percent (3%) per annum from the date of such
determination.

         Section 3.4. Lessee shall not suffer or permit the Premises or any
portion thereof to be used in any manner as might tend to impair Lessor's title
to the Building or Land or any portion thereof, or in such manner as might make
possible a claim or claims of adverse usage or adverse possession or of implied
dedication of the Building or Land or any portion thereof for public use.

                                    ARTICLE 4

                            NET LEASE; RENT ABSOLUTE

         Section 4.1. Lessor and Lessee agree (a) that this is a triple net
lease, (b) that Lessee accordingly shall be responsible for all obligations
which are normally imposed on the owner of real estate with respect to the
Premises which may accrue during the Term including, without

                                      -4-
<PAGE>   7

limitation, responsibility for the payment of all real estate taxes, special
assessments, insurance premiums and repair, replacement and maintenance costs
and expenses in connection therewith (except as otherwise expressly set forth
herein), and (c) that the Rent and all payments to be made to Lessor hereunder
are to be net to Lessor, without deductions or offsets of any kind or nature
whatsoever. In no event shall there be any abatement or reduction in the Rent
except as may be otherwise specifically provided in this Lease.

         Section 4.2. Except as otherwise specifically provided herein, damage
to or destruction of any portion or all of the Building or other Improvements
located upon the Premises, by fire, the elements or any other cause whatsoever,
whether with or without fault on the part of Lessee, shall not terminate this
Lease or entitle Lessee to surrender the Premises or entitle Lessee to any
abatement of or reduction in the Rent payable, or otherwise affect the
respective obligations of the parties hereto, any present or future law to the
contrary notwithstanding. If the use of the Premises for any purpose should, at
any time during the Term, be prohibited by law or ordinance or other
governmental regulation, or prevented by injunction, or if there is any eviction
by title paramount, this Lease shall not, except as otherwise specifically
provided herein, be thereby terminated nor shall Lessee be entitled by reason
thereof to surrender the Premises, or to any abatement or reduction in Rent, nor
shall the respective obligations of the parties hereto be otherwise affected
unless such eviction is due to the act of Lessor or any person or persons
claiming any interest in the demised premises by or under Lessor.

         Section 4.3. This Lease is made upon the foregoing and following
covenants, agreements and conditions, all of which Lessee agrees to perform
irrespective of whether the particular provision is in the form of a covenant,
an agreement, a condition, a direction or any other form.

                                    ARTICLE 5

                                      RENT

         Section 5.1. Lessee covenants and agrees to pay to Lessor as "Fixed
Rent" for the Premises the total sum of One Million Two Hundred Seventy-five
Thousand and No/100 Dollars ($1,275,000.00) for the Term, payable in equal
monthly installments of Twenty-Five Thousand and No/100 Dollars ($25,000.00)
each, due and payable commencing with the first such payment on the Rent
Commencement Date and subsequent monthly payments on the first (1st) day of each
succeeding month during the Term (each such day, sometimes being referred to
herein as a "rent day").

         Section 5.2. Commencing on the Commencement Date, Lessee also covenants
and agrees to pay as "Additional Rent" prior to the respective due dates thereof
all Impositions, insurance premiums, charges, costs, expenses, and payments
required to be paid by Lessee in accordance with any of the provisions of this
Lease.

         Section 5.3. All amounts payable by Lessee under this Article 5 shall
collectively comprise the rent due and payable under this Lease ("Rent"). Lessee
shall make all payments of Rent required hereunder to Lessor in lawful money of
the United States of America c/o Harris

                                      -5-
<PAGE>   8

Systems, 3501 West Howard Street, Skokie, IL 60076 or at such other place as
Lessor may otherwise from time to time designate in writing.

                                    ARTICLE 6

                                  LATE CHARGES

         Section 6.1. Any installment of Rent or any part thereof which is not
made when due shall bear interest at the rate of Prime plus three percent (3%)
per annum from the date when the same is due hereunder until the same shall be
paid ("Late Charge"). In the event of non-payment of any Late Charge, Lessor
shall have, in addition to all other rights and remedies, all rights and
remedies provided for in this Lease and by law in the case of non-payment of
Rent. No failure by Lessor to insist upon strict performance by Lessee of its
obligations to pay Late Charges shall constitute a waiver by Lessor of its
rights to enforce the provisions of this Section in any instance thereafter, nor
shall acceptance of Late Charges be deemed to extend the time for payment of
Rent or any part thereof under this Lease.

         Section 6.2. The provision for Late Charges in Section 6.1 shall not
limit or affect Lessor's other remedies against Lessee under this Lease or under
law, including, but not limited to, Lessor's right to charge Lessee for all
costs and expenses (including, but not limited to, Lessor's attorneys' fees)
incurred in connection with the collection of Rent and Late Charges from Lessee.

                                    ARTICLE 7

                                   IMPOSITIONS

         Section 7.1. Lessee covenants and agrees to pay, before any fine,
penalty, interest or cost may be added thereto for non-payment thereof, all
taxes, assessments, water and sewer rates and charges, excises, levies, license
and permit fees, and other governmental charges, and charges for public and
private utilities and services (and, in the event of any non-payment in
violation of the foregoing covenants, all fines, penalties, interest and costs
with respect to any of the foregoing), general and special, ordinary and
extraordinary, foreseen and unforeseen, of any kind and nature that at any time
during the Term may be assessed, levied, confirmed, imposed upon or grow or
become due and payable out of or in respect of, or charged with respect to or
become a lien on, the Land or the Building or the Premises or any Adjacent
Facility or any personal property, equipment or other facility used in the
operation of the Premises, or the rent or income received therefrom, or any use
or occupancy thereof, or this transaction, or the Rent or other sums payable
hereunder (except as otherwise provided in Section 7.2 hereof) or under any
sublease or license or other similar agreement with respect to use or occupancy
of any part of the Premises, or under any document to which Lessee is a party
creating or transferring an interest or estate in the Premises (all of which
items are herein called "Impositions"). Each Imposition shall be paid not later
than the due date thereof, but if by law any Imposition may, at the option of
the taxpayer, be paid in installments, Lessee may pay such Imposition in
installments as the same becomes due.

                                      -6-
<PAGE>   9

         Lessee shall not be required to pay any Imposition upon or against the
Premises or any part thereof or the Improvements so long as Lessee shall, to the
extent permitted by law, in good faith and with due diligence, contest the same
or the validity thereof by appropriate legal proceedings which shall have the
effect of preventing the collection of the Imposition so contested; provided
that, pending any such legal proceedings Lessee shall give Lessor such security
as may be demanded by Lessor in Lessor's reasonable discretion to insure payment
of the amount of the Imposition, and all interest and penalties thereon. In the
event that Lessee at any time institutes suit to recover any Imposition or
charge paid by Lessee under protest in Lessor's name, Lessee shall have the
right, at its sole expense, to institute and prosecute such suit or suits in
Lessor's name, in which event Lessee covenants and agrees to indemnify Lessor
and save Lessor harmless from and against all costs, expenses (including, but
not limited to, Lessor's attorneys' fees), charges or liabilities in connection
with any such suit.

         Section 7.2. Nothing herein contained shall require Lessee to pay any
inheritance, estate, succession, transfer or gift taxes or state or federal
income taxes of Lessor, except that if at any time during the Term the method of
taxation then prevailing shall be altered so that any new tax, assessment, levy,
imposition or charge or any part thereof shall be imposed upon Lessor in place
of any Imposition as heretofore defined and shall be measured by or be based in
whole or in part upon the Premises or the rents or other income therefrom, then
all such new taxes, assessments, levies, impositions or charges or part thereof,
to the extent that they are so measured or based, shall constitute Impositions
for purposes hereof, and Lessee shall pay and discharge the same as herein
provided with respect to Impositions.

         Section 7.3. Any Imposition that relates in part to a period extending
beyond the Term (including any Imposition that has been converted into
installment payments as provided in Section 7.1, as to which the period over
which such installments are payable shall be deemed to be the period to which
such Imposition relates) shall be apportioned between Lessor and Lessee at the
expiration of the Term, except that Lessee shall not be entitled to receive the
funds representing such apportionment unless and until any then-existing
Defaults are cured. Without limiting the generality of the foregoing, Lessee
shall pay to Lessor prior to the expiration of the Term Lessee's estimated pro
rata share of any general real estate taxes becoming due and payable after the
expiration of the Term, as estimated by Lessor based upon one hundred ten
percent (110%) of the then most recent ascertainable tax bills.

         Section 7.4. If required by Lessor's mortgagee, as security for the
obligations contained in Section 7.1, Lessee shall deposit monthly with Lessor,
or such other entity as Lessor may designate, on the first day of each and every
month of the Term, a sum equal to one-twelfth (1/12th) of (a) one hundred ten
percent (110%) of the then most recent ascertainable amount (or at Lessor's
election, if Lessor's interest hereunder is subject to the lien of a mortgage or
trust deed, a sum equal to one-twelfth (1/12th) of the mortgagee's estimate of
the current amount) of general real estate taxes and annual installments of
special assessments levied with respect to the Premises, and (b) the Lessee's
insurance premiums as required under the terms of Article 9 of this Lease. Said
monthly deposits shall be held by Lessor, or such other entity as Lessor may
designate, in such account or accounts as may be authorized by then current
state or federal banking laws, rules or regulations and which monthly deposits
shall be used as a fund to be applied, to the extent thereof, to the payment of
said general real estate taxes, special assessments and insurance premiums as
the same become due and payable. The existence of said fund shall

                                      -7-
<PAGE>   10

not limit or alter Lessee's obligation to pay the taxes, assessments or premiums
respecting which the fund was created; provided, however, that said fund shall
be fully utilized for the payment of such taxes, assessment or premiums. The
amount of the fund shall be re-adjusted annually, on the first day of June in
each year of the Term, to reflect the actual amount of said taxes, assessments
or premiums for the prior calendar year. Lessee shall not be entitled to
interest on said fund and Lessor may commingle said fund with its other funds.

         Section 7.5. Lessee shall furnish to Lessor within ten (10) days after
the due date of any Imposition payable by Lessee official receipts of the proper
taxing authority or other proof satisfactory to Lessor evidencing payment
thereof.

         Section 7.6. The certificate, advice or bill indicating the non-payment
of any Imposition, issued by the appropriate official designated by law to make
or issue the same or to receive payment of such Imposition, shall be prima facie
evidence that the Imposition is due and unpaid at the time of issuance of such
certificate, advice or bill.

         Section 7.7. Lessor shall, at its option, have the right at all times
during the Term to pay any Impositions not paid by Lessee, and the amounts so
paid, including expenses, shall be so much Additional Rent due at the next rent
day after any such payment, with interest thereon at the rate of Prime, plus
three percent (3%) per annum from the date of payment thereof.

                                    ARTICLE 8

                       MAINTENANCE, REPAIRS AND COMPLIANCE

         Section 8.1. Lessee shall, at its sole expense, keep the Premises in
good repair and in a clean condition and fully comply at all times with all
Requirements and shall keep the Premises and Adjacent Facilities safe and secure
and in full conformance with the Requirements, including, but not limited to,
the lawful and valid requirements of any municipality in which said Premises may
be situated and of all other public authorities, and shall make, at Lessee's own
expense, all additions, improvements, alterations and repairs on the Premises
and on and to the Improvements, interior and exterior, structural and
nonstructural, ordinary and extraordinary, foreseen and unseen, required by any
lawful authorities or to keep the Premises in good repair or which may be made
necessary by the act or neglect of any person or corporation (public or
private), including supporting the streets and alleys adjoining the Premises,
and, to the fullest extent permitted by law, Lessee shall keep Lessor harmless
and indemnified at all times against any loss, damage, cost or expense by reason
of the failure so to do in any respect or by reason of any accident, loss or
damage resulting to persons or property from any use which may be made of said
Premises or of any Improvements or by reason of or growing out of any act or
thing done or omitted to be done upon said Premises or in any Improvements; and
Lessee agrees that it shall save, hold and keep Lessor and the Premises free and
clear of and from any and all claims, demands, penalties, liabilities,
judgments, costs and expenses (including, but not limited to, attorneys' fees),
arising out of any loss or damage which may be sustained by adjoining property
or adjoining owners or other persons or property in connection with the
remodeling, altering, erection, or repairing of the Improvements, except to the
extent occasioned by the acts of Lessor, its agents, employees or contractors.
Lessee shall not commit or suffer, and shall use all reasonable precautions to
prevent, waste, damage or injury to all of the foregoing.

                                      -8-
<PAGE>   11

Notwithstanding anything contained herein to the contrary, Lessor shall keep in
good order and repair the roof, foundation and structural walls of the Premises
and Lessee shall have no repair or maintenance obligations with respect to the
foregoing except to the extent occasioned by the acts of Lessee, its agents,
employees or contractors.

         Section 8.2. Lessee shall also at its own cost and expense keep the
Premises fully and adequately furnished and equipped throughout the Term with
all equipment, fixtures and articles of personal property necessary for the
operation of the Premises for the purposes herein permitted, and shall make all
necessary replacements, renewals, alterations and additions required to maintain
all portions of the Premises in first-class rentable condition.

         Section 8.3. Lessee shall also at its own cost and expense keep the
Premises and (if not so maintained by any other party having legal
responsibility therefor) all Adjacent Facilities clean and reasonably free from
dirt, snow, ice, rubbish, obstructions and encumbrances.

         Section 8.4. Lessee shall also at its own cost and expense promptly
comply (subject to its right to contest under Section 3.3) with any and all
Requirements applicable to or affecting the Premises or the Improvements or any
Adjacent Facilities, irrespective of the nature of the work required to be done,
extraordinary as well as ordinary, whether or not the same involve or require
any structural changes or additions in or to the Premises or the Improvements
and irrespective of whether or not such changes or additions be required on
account of any particular use to which the Premises or the Improvements or any
part thereof may be put.

         Section 8.5. Lessor shall not be required to furnish any services or
facilities whatsoever to the Premises. Lessee hereby assumes full and sole
responsibility for the condition, operation, repair, alteration, improvement,
replacement, maintenance and management of the Premises, except for the roof,
foundation and structural walls of the Premises as aforesaid. Lessor shall not
be responsible for any loss or damage to any property of Lessee.

                                    ARTICLE 9

                                    INSURANCE

         Section 9.1. Lessee, at its sole cost and expense, shall maintain at
all times during the term of this Lease policies of insurance as follows:

                  (a) Insurance against loss or damage to the Building and all
other Improvements by fire and such other hazards as may be covered by the form
of "all-risk" coverage then customarily in use, in such amount as Lessor may
determine to be sufficient to cover one hundred percent (100%) of the full
replacement value from time to time of the Building and all other Improvements,
the proceeds of which shall be payable to Lessor.

                  (b) Comprehensive general public liability insurance against
claims for bodily injury, death, and property damage occurring in or about the
Premises or Adjacent Facilities, to afford protection in such limits as shall be
reasonably requested by Lessor from time to time, but in any event not less than
One Million and No/100 Dollars ($1,000,000.00) in respect to each person, and
not less than Two Million and No/100 Dollars ($2,000,000.00) in respect to any
one

                                      -9-
<PAGE>   12

occurrence causing injury or death, and not less than Two Hundred Fifty Thousand
and No/100 Dollars ($250,000.00) in respect to property damage.

                  (c) Contractual liability endorsement if available, insuring
Lessee's contractual liability to indemnify Lessor and others as provided in
Section 18.2 and Article 19.

                  (d) Boiler and machinery insurance inclusive of coverage for
all steam boilers, pressure vessels, and other such apparatus, including piping,
with such limits as Lessor may require from time to time.

                  (e) Workmen's compensation and employer's liability insurance
to the extent of the minimum required statutory limits.

                  (f) Such other insurance, including business interruption
insurance, in such amounts as may from time to time be reasonably required by
Lessor against other insurable hazards that are at the time commonly insured
against in the case of premises similarly situated.

         Section 9.2. All policies of insurance under Section 9.1 shall be
written by companies reasonably satisfactory to Lessor and any mortgagee of
Lessor and licensed to do business in the State of Illinois, and shall name as
insured Lessor and such other persons or entities as Lessor may designate, as
their interests may appear, and shall provide that losses shall be paid to said
insureds as their interests may appear. At the request of Lessor, a mortgagee
clause shall be included in said policies covering Lessor's mortgagee. The
originals of such policies shall be delivered to Lessor, together with receipts
or other evidence that the premiums thereon have been paid for at least one (1)
year. Each policy of insurance under Section 9.1 shall bear an endorsement that
such policy shall not be cancelled or modified without at least thirty (30)
days' prior written notice to Lessor and mortgagee, if any. Certificates
evidencing renewals of each policy of insurance under Section 9.1 shall be
delivered to Lessor at least twenty (20) days prior to the expiration dates of
the respective policies.

         Section 9.3. Lessee shall perform and satisfy all requirements of the
companies writing any insurance policies referred to in this Lease so that at
all times companies of good standing satisfactory to Lessor shall be willing to
write such insurance.

         Section 9.4. Whenever (a) any loss, cost, damage or expense resulting
from fire or other casualty or occurrence is incurred by either of the parties
to this Lease, or anyone claiming by, through or under it, in connection with
the Premises, and (b) such party is then covered in whole or in part by
insurance with respect to such loss, cost, damage or expense, then the party so
insured hereby releases the other party from any liability it may have on
account of such loss, cost, damage or expense to the extent of any amount
recovered by reason of such insurance and waives any right of subrogation which
might otherwise exist in or accrue to any person on account thereof, provided
that such release of liability and waiver of the right of subrogation shall not
be operative in any case when the effect thereof is to invalidate such insurance
coverage or increase the cost thereof (provided that in the case of increased
cost the other party shall have the right, within thirty (30) days following
written notice, to pay such increased cost, thereupon keeping such release and
waiver in full force and effect).

                                      -10-
<PAGE>   13

         Section 9.5. In case any action or proceeding shall be commenced
against Lessor growing out of any loss, cost, damage or expense under this
Article 9, Lessor may give written notice of the same to Lessee and thereafter
Lessee shall assume and discharge all obligation to defend the same and save and
keep Lessor harmless from all costs, expenses (including, but not limited to,
Lessor's attorneys' fees), liabilities, judgments and executions in any manner
growing out of, pertaining to or connected therewith.

         Section 9.6. In case Lessee shall at any time fail, neglect or refuse
to procure or renew any insurance hereinabove provided, then Lessor shall have
the right, but not the obligation, to procure or renew such insurance and any
amounts paid therefor by Lessor shall be so much Additional Rent due at the next
rent day after any such payment, with interest thereon at the rate of Prime plus
three percent (3%) per annum from the date of payment thereof.

         Section 9.7. During the construction of Lessor's Work, Lessor agrees to
maintain Builder's risk insurance against loss or damage from such causes of
loss as are embraced by insurance policies of the type now known as "builder's
risks" property insurance (written on an "all risks" or "open perils" basis),
including, without limitation, fire and extended coverage, collapse of the
improvements and earthquake coverage to agreed limits. The proceeds of such
insurance in case of loss or damage shall be applied on account of the
obligation to build the Building and repair or rebuild any other of the
Improvements. Upon request from Lessee, Lessor shall furnish Lessee with
certificates for its insurance naming Lessee as a named insured and bearing
endorsements to the effect that the insurer agrees to notify Lessee not less
than thirty (30) days in advance of any material modification or cancellation
thereof. All amounts paid by Lessor for obtaining the insurance required
pursuant to this Section 9.7 shall be due and payable by Lessee as Additional
Rent within thirty (30) business days after receipt of a written invoice
therefor.

                                   ARTICLE 10

                              DAMAGE OR DESTRUCTION

         Section 10.1. If the Premises or any part thereof are damaged or
destroyed by any casualty or any other cause of any kind or nature, ordinary or
extraordinary, foreseen or unforeseen, insured or uninsured, Lessee shall give
Lessor immediate notice thereof, and Lessee shall promptly repair, restore or
rehabilitate the Premises at Lessee's own expense, to an extent that, upon the
completion of such repairs, restoration or rehabilitation, the value and rental
value of the Building and other Improvements shall be substantially equal to the
value and rental value of the Building and other Improvements immediately prior
to the happening of such casualty; provided, however, that if Lessee has met its
obligations to maintain insurance in accordance with Article 9 hereof and such
insurance proceeds are made available by any mortgagee of Lessor for such
repair, restoration or rehabilitation, then Lessor shall provide such funds for
said repair, restoration or rehabilitation. Rent shall not abate during the
period of such repair, restoration or rehabilitation regardless of whether the
Improvements are tenantable because of such damage or destruction.

                                      -11-
<PAGE>   14

                                   ARTICLE 11

                             CHANGES AND ALTERATIONS

         Section 11.1. Lessee shall not replace, alter or repair the Premises or
any part thereof or any equipment or appurtenance thereto if the cost thereof
exceeds in the aggregate Fifty Thousand and No/100 Dollars ($50,000.00) (any
such action being hereinafter referred to as a "Capital Improvement"), unless
Lessee shall comply with the following requirements, which shall be applicable
to all Capital Improvements:

                  (a) Lessee shall, before the commencement of the work, obtain
Lessor's prior consent to the proposed Capital Improvement and shall at least
ten (10) days prior to the commencement of the work furnish the Lessor with the
following:

                           (1) complete plans and specifications for the work
                  prepared by a licensed architect approved by Lessor, which
                  plans and specifications shall also meet with Lessor's
                  approval, together with the approval thereof by any
                  governmental board, bureau or body then exercising
                  jurisdiction over the Premises, which plans and specifications
                  shall be and become Lessor's sole and absolute property in the
                  event that this Lease shall be terminated for any reason;

                           (2) a fixed-sum contract in assignable form made with
                  a reputable and responsible contractor satisfactory to Lessor,
                  providing for the erection, completion and terms of payment
                  for all work, labor and materials necessary to perform the
                  work within the fixed price provided for in said contract;

                           (3) an assignment to Lessor of said contract, duly
                  executed and acknowledged by Lessee, to be effective upon any
                  termination of this Lease or upon Lessor's re-entry upon the
                  Premises following an Event of Default prior to complete
                  performance of such contract, such assignment also to include
                  the benefits of all payments made on account of said contract,
                  including payments made prior to the effective date of such
                  assignment; and

                           (4) a surety company completion bond, in form and
                  from an insurer satisfactory to Lessor, issued by an insurer
                  licensed to do business in the State of Illinois, guaranteeing
                  the full completion of the work and payment therefor within a
                  reasonable time, free and clear of all mechanics' or similar
                  liens, encumbrances, chattel mortgages, conditional bills of
                  sale and other charges, in accordance with the plans and
                  specifications approved by Lessor, or other security
                  satisfactory to Lessor, in Lessor's sole discretion.

                  (b) Lessee shall (1) at its expense carry or cause to be
carried the necessary workmen's compensation insurance and cause the insurance
policies required under Section 9.1 to be endorsed to cover the additional risk
during the course of the work, and (2) procure all necessary permits from all
governmental agencies and departments having jurisdiction in connection with
such work. Lessee shall deliver evidence of compliance with the foregoing
requirements to Lessor prior to the commencement of the work. Whenever requested
by Lessor

                                      -12-
<PAGE>   15

during the period of work, Lessee shall cause the architect in charge of the
work (or if there is no architect in charge, the general contractor performing
the work) to report in writing to Lessor as to whether the work is being done
promptly and in a good and workmanlike manner, and in substantial compliance
with the plans and specifications for the work. Lessee shall also deliver to
Lessor copies of any and all interim or progress certificates or other reports
submitted by Lessee's architect, engineer or contractor.

                  (c) The Capital Improvements shall be made promptly, in a
first-class and workmanlike manner, in compliance with all Requirements and
shall not lessen the value of the Premises.

         Section 11.2. Title to any Building, Improvements, fixtures, (other
than Trade Fixtures as described in Section 21.2), additions, alterations,
restorations, repairs and replacements constructed, made or installed by Lessee,
whether or not resulting from any Capital Improvement and including, but not
limited to, any repairs, restoration and other work required to be done pursuant
to the provisions of other Articles of this Lease, shall be and become Lessor's
sole property at the end of the Term without the necessity of Lessee's execution
and delivery of any instrument transferring title thereto. Notwithstanding the
foregoing, Lessee covenants and agrees upon Lessor's request to execute,
acknowledge and deliver to Lessor any instrument reasonably requested by Lessor
to confirm such title, and if Lessee shall fail or refuse to execute,
acknowledge and deliver any such instrument, Lessor is hereby irrevocably
appointed Lessee's attorney-in-fact to execute, acknowledge and deliver such
instrument in Lessee's name.

                                   ARTICLE 12

                                      LIENS

         Section 12.1. Lessee shall not do any act which shall in any way
encumber the title of Lessor in and to the Premises, nor shall Lessee create or
permit to be created, and shall promptly discharge, any such lien (including,
but not limited to, any mechanic's, contractor's, subcontractor's or
materialman's lien or any lien, encumbrance or charge arising out of any
Imposition, conditional sale, title retention agreement, chattel mortgage,
security agreement, financing statement or otherwise) upon the Premises or any
part thereof or the income therefrom or any personal property used in connection
with the operation of the Premises, and Lessee shall not suffer any other matter
or thing whereby the estate, rights and interest of Lessor in the Premises or
any part thereof might be impaired.

         Section 12.2. If Lessee shall fail to cause any such lien to be
discharged of record, then Lessor, after five (5) days' notice of its intention
to do so, shall have the right, but not the obligation, in addition to any other
right or remedy, to discharge such lien either by paying the amount claimed to
be due or by procuring the discharge of such lien by deposit or bonding
proceedings, and in any such event Lessor shall be entitled if it so elects to
compel the prosecution of an action for foreclosure of such lien by the lienor
and to pay the amount of judgment in favor of the lien owner with interest,
costs and allowances. Any amount so paid by Lessor and all costs and expenses
(including reasonable attorneys' fees) incurred by Lessor in connection
therewith shall constitute Additional Rent payable by Lessee under this Lease,
due

                                      -13-
<PAGE>   16

from Lessee to Lessor at the next rent day after any such payment, with interest
thereon at Prime plus three percent (3%) per annum from the date of payment
thereof.

         Section 12.3. This Lease shall constitute notice that Lessor shall not
be liable for any work performed or to be performed, or any materials furnished
or to be furnished, at the Premises for Lessee upon credit, and that no
mechanic's or other lien for such work or materials shall attach to or affect
the estate or interest of Lessor in and to the Premises, unless specifically
ordered by Lessor in writing.

         Section 12.4. Lessee shall have no power to do any act or make any
contract that may create or be the foundation for any lien, mortgage or other
encumbrance upon the estate of Lessor, or any other interest of Lessor in the
Premises, the Building or the other Improvements or any part thereof.

                                   ARTICLE 13

                            ASSIGNMENTS AND SUBLEASES

         Section 13.1. Lessee shall not assign this Lease or its interest in the
Premises, or make or effect any sublease respecting the Premises, without the
prior written consent of Lessor, which consent shall not be unreasonably
withheld. Lessee shall not allow or permit any transfer of this Lease or any
interest under this Lease by operation of law or convey, mortgage, pledge or
encumber this Lease or any interest under this Lease. Any attempted action by
Lessee in violation of the provisions of this Section 13.1 shall be void.

         Section 13.2. No assignment or transfer of this Lease by Lessee
consented to by Lessor shall be effective, unless the assignee or transferee
shall, at the time of such assignment or transfer, assume all the terms,
covenants and conditions of this Lease thereafter to be performed by Lessee and
shall agree to be bound thereby. Notwithstanding such assignment or transfer or
the acceptance by Lessor from such assignee of any rent or other monies or other
performance of the obligations of Lessee hereunder, Lessee shall remain liable
and obligated as a principal (and not as a surety or guarantor) to perform all
the terms, conditions and covenants, including the payment of rental and other
monies, herein provided to be performed by Lessee.

         Section 13.3. Notwithstanding any provisions of Section 13.1 hereof to
the contrary, Lessee may, without Lessor's prior written consent, assign this
Lease to any corporation resulting from the merger, reorganization or
consolidation of Lessee, provided that (a) the net worth of such assignee after
such merger, reorganization or consolidation shall be no less than that of
Lessee immediately prior to such merger, reorganization or consolidation, (b)
Lessee is not at such time in Default hereunder, and (c) such successor shall
execute an instrument in writing fully assuming all of the obligations and
liabilities imposed upon Lessee hereunder and deliver the same to Lessor;
whereupon Lessee shall be discharged from any further liability hereunder.

                                      -14-
<PAGE>   17

                                   ARTICLE 14

                          LESSOR'S RIGHTS OF INSPECTION

         Section 14.1. During the Term, Lessor, Issuer and Trustee shall have
the right during usual business hours at all reasonable times to enter the
Premises:

                  (a) for purposes of inspection to determine Lessee's
compliance with this Lease;

                  (b) to exhibit the Premises to prospective purchasers,
mortgagees or tenants; and (c) in the event of any Default by Lessee, for
purposes of curing such Default.

Lessor covenants that it shall not, and it shall be a condition precedent to any
inspection by Issuer or Trustee that they shall not, unreasonably interfere with
the operation of Tenant's business at the Premises during any such entry.

         Section 14.2. Lessor's rights under this Article 14 may be exercised on
its behalf by any authorized representatives designated in writing by Lessor.

                                   ARTICLE 15

                            OTHER COVENANTS OF LESSEE

         Section 15.1. If any excavation or other building operation shall be
made upon the Premises or any adjoining property by Lessee, Lessee agrees to
assume all obligations of both the owner and the occupant of the Premises with
respect to shoring and lateral support and to do all things necessary or
desirable to preserve and protect the Premises.

         Section 15.2. Lessee shall not sign any petition, consent or other
instrument in writing whereby any party shall hereafter directly or indirectly
acquire the right to use or occupy any portion of any street, driveway or alley
that abuts the Premises, or the space above or under the surface thereof,
without Lessor joining in such instrument or consenting in writing to the
execution thereof, which consent may be withheld in Lessor's sole discretion.

         Section 15.3. Lessee shall furnish to the Issuer and the Trustee within
ninety (90) days after the close of each fiscal year of the Lessee the annual
financial statements of the Lessee, showing the financial position of Lessee and
its consolidated subsidiaries, if any, at the close of each such fiscal year and
the results of operation of the Lessee and its consolidated subsidiaries, if
any, for each such fiscal year, reviewed by an independent certified public
accountant selected by the Lessee for each such fiscal year. Lessee further
agrees to furnish the Issuer and the Trustee within forty-five (45) days of the
close of each quarter of the Lessee (other than the fourth quarter of each such
fiscal year), with the financial statements of the Lessee, showing the financial
position of the Lessee and its consolidated subsidiaries, if any, at the close
of each such quarter (including year to date information) and the results of
operations of the Lessee and its

                                      -15-
<PAGE>   18

consolidated subsidiaries, if any, for each such quarter, signed by the
President or a Vice President of the Lessee.

         Section 15.4. Lessee covenants that it will not make, and will not
permit any other person to make, any capital expenditures which will cause the
interest on the Bonds to become includible in gross income of the owners thereof
for Federal income tax purposes pursuant to the provisions of Section 144(a) of
the Internal Revenue Code of 1986, as amended (the "Code"). Lessee further
covenants that it will not take any action and shall use best efforts to not
permit any action to be taken which would cause the interest on the Bonds to
become includible in gross income of the owners thereof for federal income tax
purposes; provided, that Lessee shall not have violated this covenant if the
interest on the Bonds becomes taxable to person who is a substantial user of the
Project or a related person pursuant to the provisions of Section 147(a) of the
Code or taxable to any owner for Federal income tax purposes as a preference
item or an adjustment item in computing any minimum tax. In the event that any
capital expenditures are made to the Premises, Lessee hereby covenants to
provide Lessor with all information necessary for Lessor to provide to Issuer
and the Trustee all reports in connection with such capital improvements which
Lessor is required to provide to Issuer and the Trustee pursuant to any document
executed by Lessor in connection with the issuance of the Bonds.

                                   ARTICLE 16

                                  CONDEMNATION

         Section 16.1. If during the Term, as the result of the exercise of the
right of condemnation or eminent domain by any competent authority (hereinafter
called the "Proceedings"), either the entire Premises shall be taken or such
portion of the Premises shall be taken so that, in Lessor's reasonable judgment,
the Premises cannot practicably be rehabilitated to permit normal business
operations by Lessee thereon, then either Lessor or Lessee shall have the option
to terminate this Lease as of the date of such taking by written notice to the
other within sixty (60) days of such taking, and, in the event of such
termination, Lessee shall pay to Lessor all Rent and other sums payable by
Lessee hereunder, justly apportioned to the date of such termination. In such
event the entire award, compensation or damages (the "Award") paid as a
consequence of the Proceedings shall be paid to and be the sole property of
Lessor whether such Award shall be made as compensation for diminution of the
value of the leasehold or the fee of the Building or Land or otherwise and
Lessee hereby assigns to Lessor all of Lessee's right, title and interest in and
to the Award.

         Section 16.2. If during the Term as a result of the Proceedings a
portion of the Premises shall be taken and as a result thereof, in Lessor's
reasonable judgment, the balance of said Premises can practicably be used for
the same purpose as before the Proceedings, then this Lease shall not terminate
and Lessor, at its sole cost and expense, shall repair and restore the Premises
and the Improvements. The Award paid as a consequence of the Proceedings shall
be paid to and shall be the sole property of Lessor. There shall be no abatement
or reduction in Rent because of such taking.

                                      -16-
<PAGE>   19

                                   ARTICLE 17

                         DEFAULTS; TERMINATION; RE-ENTRY

         Section 17.1. Each of the following shall be an "Event of Default":

                  (a) Lessee's failure to pay any installment of Rent when due,
and the continuance of such failure for a period of five (5) days after written
notice from Lessor specifying such failure;

                  (b) Lessee's failure to pay any other payment of money, costs
or expenses to be paid by Lessee under this Lease, when due, and the continuance
of such failure for a period of ten (10) days after written notice from Lessor
specifying such failure;

                  (c) Lessee's failure to observe or perform one or more of the
other terms, conditions, covenants or agreements of this Lease, and the
continuance of such failure for a period of thirty (30) days after written
notice from Lessor specifying such failure (unless such failure required work to
be performed, acts to be done, or conditions to be removed that cannot by their
nature reasonably be performed, done or removed, as the case may be, within such
thirty (30) day period, in which case no Event of Default shall be deemed to
exist so long as Lessee shall have commenced curing the same within such thirty
(30) day period and shall diligently and continuously prosecute the same to
completion);

                  (d) filing or execution or occurrence of:

                           (1) a petition in bankruptcy by or against Lessee;

                           (2) a petition against or answer by Lessee seeking a
                  reorganization, arrangement, composition, readjustment,
                  liquidation, dissolution or other relief of the same or
                  different kind under any provision of any bankruptcy laws;

                           (3) adjudication of Lessee as a bankrupt or
                  insolvent;

                           (4) an assignment by Lessee for the benefit of
                  creditors;

                           (5) a petition against or proceeding by Lessee for,
                  or the appointment of, a trustee, receiver, guardian,
                  conservator or liquidator of Lessee with respect to the
                  Premises or with respect to all or substantially all of
                  Lessee's property; or

                           (6) a petition against or proceeding by or against
                  Lessee for its dissolution or liquidation or the taking of
                  possession of Lessee's property by any governmental authority
                  in connection with dissolution or liquidation;

         where in the case of a petition filed against Lessee under (1), (2),
         (5) or (6), such petition is not dismissed within ninety (90) days
         after the filing thereof;

                  (e) entry of an order, judgment or decree by any court of
competent jurisdiction granting any prayer or demand contained in any petition
under Subsection 17.1(d)

                                      -17-
<PAGE>   20

(1), (2), (5) or (6), which order, judgment or decree is not reversed or vacated
within ninety (90) days after it is entered;

                  (f) vacation or abandonment of the Premises; or

                  (g) taking by any person of Lessee's interest in this Lease
upon execution, attachment or other process of law or equity.

         Section 17.2. In the event of the occurrence of an Event of Default,
Lessor, at its option, without further notice or demand to Lessee, may, in
addition to all other rights and remedies provided in this Lease, at law or in
equity: (a) terminate this Lease and Lessee's right of possession of the
Premises, and recover all damages to which Lessor is entitled at law,
specifically including, without limitation, the excess of the aggregate Fixed
Rent and Additional Rent that would have accrued for the balance of the Term
over the then current fair market rental value of the Premises for the balance
of the Term, together with all of Lessor's expenses of reletting (including
repairs, alterations, improvements, additions, decorations, legal fees and
brokerage commissions) or (b) terminate Lessee's right of possession of the
Premises without terminating this Lease. In all events, Lessor may relet the
Premises, or any part thereof for the account of Lessee, for such rent and term
and upon such terms and conditions as are acceptable to Lessor. If Lessor shall
have elected to pursue its right to terminate Lessee's right of possession of
the Premises without terminating the Lease, then Lessor shall have the further
right and remedy to subsequently rescind such election and terminate the Lease.
For purposes of any such reletting, Lessor is authorized to decorate, repair,
alter and improve the Premises to the extent deemed necessary by Lessor, in its
reasonable discretion, all at Lessee's expense. If Lessor fails to relet the
Premises, or if the Premises are relet and a sufficient sum is not realized
therefrom after payment of all Lessor's expenses of reletting (including without
limitation repairs, alterations, improvements, additions, decorations, legal
fees and brokerage commissions) to satisfy the payment, when due, of Fixed Rent
and Additional Rent reserved under this Lease for any monthly period, then
Lessee shall pay Lessor a sum equal to the amount of Fixed Rent and Additional
Rent due under this Lease for each such monthly period, or if the Premises have
been relet, Lessee shall pay any such deficiency on the rent day applicable to
such month. Nothing in the foregoing sentence, however, shall be deemed to mean
that Lessor can only collect damages from Lessee hereunder in monthly
installments, it being expressly acknowledged by Lessee that Lessor shall always
have the right to collect, in a lump sum, from Lessee, damages equal to the
excess of the aggregate Fixed Rent and Additional Rent that would have accrued
for the balance of the Term over the then current fair market rental value of
the Premises for the balance of the Term. Lessee agrees that Lessor may file
suit to recover any sums due to Lessor hereunder at any time or from time to
time and that such suit or recovery of any amount due Lessor hereunder shall not
be any defense to any subsequent action brought for any amount not theretofore
reduced to judgment in favor of Lessor. In the event Lessor elects to terminate
Lessee's right of possession only, without terminating this Lease, Lessor may,
at Lessor's option, enter into the Premises, remove Lessee's signs, Lessee's
property, and other evidences of tenancy, and take and hold possession thereof;
provided, however, that such entry and possession shall not terminate this Lease
or release Lessee, in whole or in part, from Lessee's obligation to pay the
Fixed Rent and Additional Rent reserved hereunder for the full Term or from any
other obligation of Lessee under this Lease. Any and all property which may be
removed from the Premises by the Lessor pursuant to the authority of the Lease
or of law, to

                                      -18-
<PAGE>   21

which the Lessee is or may be entitled, may be handled, removed or stored by the
Lessor at the risk, cost and expense of the Lessee, and the Lessor shall in no
event be responsible for the value, preservation or safekeeping thereof. Lessee
shall pay to the Lessor, upon demand, any and all reasonable expenses incurred
in such removal and all storage charges against such property so long as the
same shall be in the Lessor's possession or under the Lessor's control.

         Section 17.3. In the event Lessor exercises any remedy provided under
Section 17.2, all deposits theretofore made by Lessee with utility companies or
under this Lease, all unearned insurance premiums and all rights of Lessee under
all insurance policies required under this Lease, any claims for refund of any
Imposition, any pending insurance claims or condemnation awards, and all fuel
and supplies on the Premises shall be deemed to be and are hereby assigned to
and transferred to Lessor, to be applied in payment of Lessee's liability under
this Lease.

                                   ARTICLE 18

                     LESSOR'S ADDITIONAL RIGHTS AND REMEDIES

         Section 18.1. If Lessee shall at any time fail to make any payment or
perform any act to be made or performed by Lessee under this Lease beyond any
applicable notice and cure periods, Lessor may at its option (but shall not be
required to) make any payment or perform any such act, and for such purpose
Lessor may enter upon the Premises and take all such action thereon as may be
necessary therefor and any amounts paid by Lessor in connection therewith shall
be deemed Additional Rent due on the next rent day after such payment together
with interest thereon at Prime plus three percent (3%) per annum from the date
of payment thereof.

         Section 18.2. To the fullest extent permitted by Law, Lessee agrees to
indemnify and save Lessor, Issuer and Trustee and their respective agents and
employees harmless from and against all liabilities, claims, suits, fines,
penalties, damages, losses, fees, costs and expenses (including, but not limited
to, Lessor's attorneys' fees) that may be imposed upon, incurred by or asserted
against Lessor by reason of:

                  (a) any work or thing to be done in, on or about the Premises
or any part thereof other than Lessor's Work;

                  (b) any use, occupation, condition, operation of the Premises
or any part thereof or of any Adjacent Facility or any occurrence on any of the
same;

                  (c) any action or omission on the part of Lessee or any
sublessee or any of its or their agents, contractors, servants, employees,
licensees or invitees;

                  (d) any accident, injury (including death) or damage,
regardless of the cause thereof, to any person or property occurring in, on or
about the Premises or any part thereof or any Adjacent Facility; and/or

                  (e) any failure on Lessee's part to perform or comply with any
of the covenants, agreements, terms or conditions in this Lease or in any
sublease, license, concession or other agreement entered into by Lessee.

                                      -19-
<PAGE>   22

The provisions of this Section shall survive the expiration or earlier
termination of this Lease.

         Section 18.3. Lessee agrees to pay, and to indemnify Lessor against,
all costs and expenses (including, but not limited to, Lessor's reasonable
attorneys' fees) incurred by or imposed upon Lessor by or in connection with any
litigation to which Lessor becomes or is made a party without fault in its part,
whether commenced by or against Lessee, or that may be incurred by Lessor in
enforcing any of the covenants and agreements of this Lease (with or without the
institution of any action or proceeding relating to the Premises or this Lease)
or in obtaining possession of the Premises after an Event of Default or upon
expiration or earlier termination of this Lease.

         Section 18.4. Lessor may, but shall not be obligated to, cure any
Default by Lessee hereunder. All sums expended and all costs and expenses
(including, but not limited to, reasonable attorneys' fees) incurred by Lessor
pursuant to the provisions of this Lease or on account of any Default by Lessee
under this Lease shall bear interest thereon from the respective dates when
expended or incurred by Lessor at Prime plus three per cent (3%) per annum until
repaid by Lessee to Lessor, and all such sums together with such interest shall
become Additional Rent under this Lease, payable by Lessee to Lessor on the next
rent date after such expenditure.

         Section 18.5. All Rent and other amounts payable by Lessee under this
Lease shall be and are hereby declared to be a valid and first lien upon
Lessee's interest in the Premises and upon the rents, issues and profits in any
manner arising or growing out of the same, and upon Lessee's interest in this
Lease.

         Section 18.6. In the event of any breach or threatened breach by Lessee
of any of the covenants, agreements, terms or conditions contained in this
Lease, Lessor shall be entitled to enjoin such breach or threatened breach and
shall have the right to invoke any right and remedy allowed at law or in equity
or by statute or otherwise as though re-entry, summary proceedings and other
remedies were not provided for in this Lease.

         Section 18.7. No receipt of monies by Lessor from Lessee after
termination of this Lease or after the giving of any notice of termination of
this Lease shall reinstate, continue or extend the Term or affect any notice
theretofore given to Lessee, or operate as a waiver of Lessor's right to enforce
the payment of Rent and any other payments or charges herein reserved and agreed
to be paid by Lessee then or thereafter falling due, or operate as a waiver of
Lessor's right to recover possession of the Premises, it being agreed that after
the service of notice to terminate this Lease or the commencement of suit or
summary proceedings, or after final order or judgment for the possession of the
Premises, Lessor may demand, receive and collect any monies due or thereafter
falling due without in any manner affecting such notice, proceeding, order, suit
or judgment, all such monies collected being deemed payments on account of the
use and occupation of the Premises or at Lessor's election on account of
Lessee's liability hereunder.

         Section 18.8. Lessor's granting of any consent under this Lease, or
Lessor's failure to object to any action taken by Lessee without Lessor's
consent required under this Lease, shall not be deemed a waiver by Lessor of its
rights to require such consent for any further similar act by Lessee. No waiver
by Lessor of any other breach of the covenants of this Lease shall be

                                      -20-
<PAGE>   23

construed, taken or held to be a waiver of any other breach or to be a waiver,
acquiescence in or consent to any further or succeeding breach of the same
covenant. None of Lessee's covenants under this Lease, and no breach thereof,
shall be waived, altered or modified except by a written instrument executed by
Lessor.

         Section 18.9. No remedy conferred upon or reserved to Lessor under this
Lease or under law shall be considered exclusive of any other remedy, but such
remedies shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or otherwise, and every power and remedy given by this Lease to Lessor may be
exercised from time to time and as often as occasion may arise or as may be
deemed expedient, without precluding Lessor's simultaneous or later exercise of
any or all other rights or remedies. No delay or omission of Lessor to exercise
any right or power arising from any Default or Event of Default shall impair any
such right to power or shall be construed to be a waiver of any such Default or
Event of Default or an acquiescence therein.

                                   ARTICLE 19

                               HAZARDOUS MATERIAL

         Section 19.1. Lessee hereby indemnifies and holds Lessor and Lessor's
officers, directors, shareholders, managers, members, agents and employees
harmless from and against, and shall reimburse Lessor and Lessor's officers,
directors, shareholders, managers, members, agents and employees for, any and
all "Losses" (as hereinafter defined) arising from, out of or as a consequence,
directly or indirectly, of the release or presence of any Hazardous Materials on
the Premises which first occurs during the Term of this Lease, whether
foreseeable or unforeseeable, and whether or not known to Lessee, it being
understood and agreed that the foregoing indemnity includes, but is not limited
to, all costs of removal, remediation of any kind, detoxification, clean up and
disposal of such Hazardous Materials and the preparation of any closure or other
required plans, all costs of determining whether the Premises is in compliance
and causing the Premises to be in compliance with all applicable Environmental
Laws, all costs and fees associated with claims for damages to persons,
property, or natural resources, and Lessor's reasonable attorneys' fees and
consultants' fees and court costs in respect thereto whether or not litigation
or administrative proceedings shall occur, including all costs and expenses
incurred or suffered by Lessor by reason of any violation of any applicable
Environmental Law which occurs, or has occurred, upon the Premises during the
Term of this Lease, or by reason of the imposition of any governmental lien for
the recovery of environmental clean-up costs expended by reason of such
violation, it being expressly understood and agreed that to the extent Lessor
and Lessor's officers, directors, shareholders, managers, members, agents and
employees, or any of them are strictly liable under any applicable statute or
regulation pertaining to the protection of the environment, this indemnity shall
likewise be without regard to fault on the part of Lessee with respect to the
violation of law which results in such liability. "Losses" shall mean any and
all loss, claim, liability, damages, injuries to person, property or natural
resources, cost, expense, action or cause of action.

         Section 19.2. Lessee hereby covenants and agrees that all obligations
of Lessee under this Article 19 shall survive any termination of the Lease, it
being further understood and agreed

                                      -21-
<PAGE>   24

that the rights of Lessor under this Article 19 shall be in addition to any
other rights and remedies under this Lease or at law or in equity.

         Section 19.3. Any amount due to Lessor under this Article 19 not paid
by Lessee within ten (10) days after written demand therefor from Lessor shall
bear interest at Prime plus three percent (3%) per annum.

         Section 19.4. Lessee shall comply with all Environmental Laws
throughout the Term.

                                   ARTICLE 20

                                 QUIET ENJOYMENT

         Section 20.1. Lessor covenants that if and so long as Lessee shall
faithfully perform the covenants and agreements of this Lease, Lessee shall and
may (subject to the exceptions, reservations, terms and conditions of this
Lease) peaceably and quietly have, hold and enjoy the Premises for the Term free
of any interference by Lessor or anyone claiming through or by Lessor except
those to which this Lease is expressly made subject and subordinate.

                                   ARTICLE 21

                             SURRENDER OF POSSESSION

         Section 21.1. Lessee shall on the last day of the Term or upon any
sooner termination thereof, whether by lapse of time or by reason of Lessee's
Default or otherwise, surrender and deliver to Lessor the Premises and all
Improvements in clean, wholesome, good and safe order and condition and in good
repair, ordinary wear and tear excepted, and if Lessee shall thereafter remain
in possession thereof, it shall be deemed guilty of forcible detainer of the
Premises and shall be subject to all the conditions and provisions contained
herein and to ejection and removal, forcibly and otherwise, with or without
process of law.

         Section 21.2. Upon the termination of this Lease by lapse of time,
Lessee may remove furniture, trade fixtures and other personal property
belonging to Lessee that are incident to the business of Lessee (as
distinguished from personal property used in the operation of the Premises);
such furniture, trade fixtures and other personal property belonging to Lessee
and incident to the business of Lessee are hereinafter referred to as "Trade
Fixtures". Lessee shall repair any injury or damage to the Premises or the
Improvements which may result from such removal. If Lessee does not remove such
Trade Fixtures from the Premises prior to the end of the Term, however ended,
Lessor may, at its option, remove the same and deliver the same to any other
place of business of Lessee or warehouse the same, and Lessee shall pay the cost
of such removal (including the repair of any injury or damage to the Premises or
the Improvements resulting from such removal), delivery and warehousing to
Lessor on demand, or Lessor may treat such Trade Fixtures as having been
conveyed to Lessor with this Lease as a bill of sale, without further payment or
credit by Lessor or Lessee.

         Section 21.3. Any holding over by Lessee of the Premises after the
expiration of this Lease shall operate and be construed to be a tenancy from
month to month only, at one hundred fifty percent (150%) of the monthly
installments of Fixed Rent, plus Additional Rent and other

                                      -22-
<PAGE>   25

sums otherwise payable hereunder for the Term. Nothing contained in this Section
21.3 shall be construed to give Lessee the right to hold over after the
expiration of this Lease, and Lessor may exercise any and all remedies at law or
in equity to recover possession of the Premises and may seek damages in the
event of such a hold over tenancy.

                                   ARTICLE 22

                              ESTOPPEL CERTIFICATE

         Section 22.1. At any time and from time to time but on not less than
ten (10) days prior written request by either party hereto, the other party
shall execute, acknowledge and deliver to the requesting party, promptly upon
request, a certificate certifying (a) that this Lease is unmodified and in full
force and effect (or, if there have been modifications, that this Lease is in
full force and effect, as modified, and stating the date and nature of each
modification), (b) the date, if any, to which Fixed Rent and other sums payable
hereunder have been paid, (c) that no notice has been received by such party of
any Default which has not been cured, except as to Defaults specified in the
certificate, and (d) such other matters as may be reasonably requested by the
requesting party. Any such certificate may be relied upon by any prospective
purchaser, mortgagee or beneficiary under any trust deed of the Premises or any
part thereof and by any collateral assignee of this Lease.

                                   ARTICLE 23

                                  SUBORDINATION

         Section 23.1. This Lease shall be subject and subordinate at all times
to the lien of all mortgages and trust deeds in any amount or amounts whatsoever
now or hereafter placed on or against the Building or the Premises or on or
against Lessor's interest or estate therein, all without the necessity of having
further instruments executed on the part of Lessee to effectuate such
subordination; provided that in the event of a foreclosure of any such mortgage
or trust deed or any other action or proceeding for the enforcement thereof, or
of any sale thereunder, this Lease will not be barred, terminated, cut off or
foreclosed nor will the rights and possession of Lessee hereunder be disturbed
if there shall exist no Event of Default with respect to the payment of Rent or
any other Event of Default hereunder. Lessee shall attorn to the purchaser at
any such foreclosure, sale or other action or proceeding or, if requested, enter
into a new lease for the balance of the Term then remaining upon the same terms
and provisions as are in this Lease contained. Lessee agrees to execute and
deliver upon demand such further instruments evidencing such subordination of
this Lease to the lien of any such mortgages or trust deeds as may be required
by Lessor.

         Section 23.2. Notwithstanding the foregoing, Lessee shall from time to
time on request from Lessor execute and deliver any documents or instruments
that may be required by any lender to effectuate such subordination. If Lessee
fails to execute and deliver any documents or instruments, Lessee irrevocably
constitutes and appoints Lessor as Lessee's attorney in fact to execute and
deliver such documents or instruments.

                                      -23-
<PAGE>   26

                                   ARTICLE 24

                                     NOTICES

         Section 24.1. All notices required or permitted under this Lease shall
be in writing and shall be served upon the parties in person, or by certified or
registered mail (return receipt requested) directed to the addresses set forth
below (or any other or further addresses designated by a party pursuant to
written notice). Any notice so mailed shall be effective as of the date upon
which it is delivered or delivery is refused or the postal authorities designate
the notice non-deliverable, as the case may be.

Lessor:                    H&M Enterprises, L.L.C.
                           c/o James E. Harris
                           3501 West Howard Street
                           Skokie, Illinois  60076

Lessee (prior to           Uniflame, Inc.
Commencement Date)         3555 W. Howard Street
                           Skokie, Illinois  60076
                           Attn:  President

Lessee (after              Uniflame, Inc.
Commencement Date)         1817 North Kenosha Road
                           Zion, Illinois  60099
                           Attn:  President

                                   ARTICLE 25

                                  LESSOR'S WORK

         Section 25.1.

                  (a) Attached hereto as Exhibit "B" are preliminary plans and
specifications for the work to be performed by the Lessor in connection with the
development and construction of the Premises and the Building, which work shall
include, but not be limited to, the construction of the shell of the Building,
including the construction and installation of the foundation, walls, roof,
Building exterior, parking area, heating, ventilating and air conditioning and
utility services to and from the Building, as well as the improvements to the
interior and landscaping (which, subject to revisions, adjustments and changes
and to the preparation of final plans and specifications, are collectively
referred to as "Lessor's Work"). Lessor shall provide Lessee with copies of all
additional working drawings and specifications for the performance of Lessor's
Work as the same are prepared.

                  (b) Lessor shall promptly apply for all building permits
necessary for the performance of Lessor's Work ("Permits"). Lessor shall
promptly commence Lessor's Work after issuance of the Permits and shall use its
best efforts to have the Premises Substantially Completed and Ready for
Occupancy (as hereinafter defined) on or before December 31, 1995,

                                      -24-
<PAGE>   27

subject to force majeure. Notwithstanding anything herein contained to the
contrary, Lessor's Work shall be performed in a first-class manner, with
first-class materials and in strict compliance with all applicable laws, rules,
regulations and ordinances.

         Section 25.2. For purposes hereof, "force majeure" shall mean delays
due to any acts of God, adverse weather conditions, fire or other casualty,
strikes, labor disputes, wars, riots, governmental regulation or restriction,
material and labor shortages, or other cause beyond the reasonable control of
the party affected. If an event of force majeure occurs, the time for
performance or completion of any act required in this Lease shall be extended
one (1) day for each day of delay.

         Section 25.3. Lessor's Work shall be deemed to be Substantially
Completed and Ready for Occupancy when: (a) the Premises have been substantially
constructed and completed in accordance with the final plans and specifications
therefor, and (b) a Certificate of Occupancy has been issued by the City of
Zion, Illinois ("Certificate") or the Premises may otherwise be legally
occupied.

         Section 25.4. Within fifteen (15) days of written notice to Lessee that
the Premises are Substantially Completed and Ready for Occupancy, Lessee shall
have the obligation to conduct an inspection thereof with Lessor or Lessor's
representatives and, within sixty (60) days thereafter, Lessee shall furnish a
final punchlist of all minor mechanical adjustments and minor construction items
to be completed or corrected (the "Punchlist"). Lessor shall correct any item on
the Punchlist, at its sole cost and expense, within thirty (30) days after
Lessor receives the Punchlist. Lessor shall warrant all items within the
Premises constructed by Lessor pursuant to the final plans or which otherwise
constitute Lessor's Work against defects in material and workmanship for a
period of one (1) year from the date the Premises are Substantially Completed
and Ready for Occupancy ("Lessor's Warranty").

         Section 25.5. In the event that the Premises are not Substantially
Completed and Ready for Occupancy on or before December 31, 1995, the Rent
Commencement Date hereunder shall not be affected but the Term shall be extended
by one (1) month for each month or partial month after such date that the
Premises are not Substantially Completed and Ready for Occupancy. The Fixed Rent
during each such extension month shall be Twenty-Five Thousand and No/100
Dollars ($25,000.00).

                                   ARTICLE 26

                                   EARLY ENTRY

         For the purpose of installing its Trade Fixtures and other equipment in
the Premises, Lessee may enter the Premises prior to the Commencement Date on
and subject to the terms and conditions of this Lease; provided, however,
Lessee's obligation to pay Fixed Rent shall not commence until the Rent
Commencement Date and Lessee's obligation to pay other Rent shall not commence
until the Commencement Date. In performing such installation, Lessee shall not
unreasonably interfere with the performance of Lessor's Work.

                                      -25-
<PAGE>   28

                                   ARTICLE 27

                           RIGHT OF FIRST OPPORTUNITY

         Prior to offering the Premises for let to third parties following the
expiration of the Term, Lessor shall first offer to relet the Premises to Lessee
by delivering notice thereof to Lessee not less than one hundred eighty (180)
days prior to the expiration of the Term, with the Fixed Rent during such
renewal term to be equal to the then fair market rental value of the Premises
(the "FMV"), and otherwise on the same terms and conditions set forth herein.
Following the receipt by Lessee of such notice, Lessor and Lessee shall
negotiate in good faith to determine the FMV of the Premises and, for a period
of sixty (60) days following Lessee's receipt of such notice, Lessor shall not
offer the Premises for let to any third party. In the event that Lessor and
Lessee are unable to agree on the FMV within sixty (60) days of Lessee's receipt
of such notice, the right of first offer set forth in this Article 27 shall be
null and void and Lessor shall have the right to let the Premises, following the
expiration of the Term, to third parties.

                                   ARTICLE 28

                                SECURITY DEPOSIT

         Upon execution of this Lease, Lessee shall deposit with Lessor the sum
of Twenty-Five Thousand and No/100 Dollars ($25,000.00) (the "Security Deposit")
which shall be held by Lessor as security for the performance by Lessee of all
terms, covenants and conditions of this Lease. It is expressly understood and
agreed that such Security Deposit is not an advance rental deposit or a measure
of Lessor's damages in case of Lessee's default. If Lessee defaults with respect
to any provision of this Lease beyond any applicable notice and cure periods,
including, but not limited to, the provisions relating to the payment of Rent or
the obligation to repair and maintain the Premises or to perform any other term,
covenant or condition contained herein, Lessor may (but shall not be required
to), without prejudice to any other remedy provided herein or provided by law
and without notice to Lessee, use the Security Deposit, or any portion of it, to
cure the default or to compensate Lessor for all damages sustained by Lessor
resulting from such default. Lessee shall immediately on demand pay to Lessor a
sum equivalent to the portion of the Security Deposit so expended or applied by
Landlord as provided in this Article so as to maintain the Security Deposit in
the sum initially deposited with Lessor. Although the Security Deposit shall be
deemed the property of Lessor, if Lessee is not in default at the expiration or
termination of this Lease Lessor shall return the Security Deposit to Lessee.
Lessor shall not be required to keep the Security Deposit separate from its
general funds and Lessor, not Lessee, shall be entitled to all interest, if any,
accruing on the Security Deposit. Upon any sale or transfer of its interest in
the Premises, Lessor shall transfer the Security Deposit to its successor in
interest and thereupon, Lessor shall be released from any liability or
obligation with respect thereto.

                                   ARTICLE 29

                                  MISCELLANEOUS

         Section 29.1. Time is of the essence with respect to every provision of
this Lease.

                                      -26-
<PAGE>   29

         Section 29.2. This Lease shall be construed and enforced in accordance
with the laws of the State of Illinois.

         Section 29.3. All covenants, agreements, conditions and undertakings
contained in this Lease shall extend and inure to and be binding upon Lessor's
successors and assigns and Lessee's permitted successors and assigns as if such
successors and assigns were in each case specifically named, and shall be
construed as covenants running with the land. Wherever reference is made in this
Lease to either party, it shall be held to include and apply to such successors
and assigns. The provisions of this Section shall not be construed to grant or
to confer any greater rights of assignment upon Lessee than are provided in
Article 13.

         Section 29.4. This Lease contains the entire agreement between the
parties and shall not be modified in any manner except by a writing signed by
Lessor and Lessee. Neither Lessor nor Lessee shall amend this Lease without the
prior written consent of Trustee, which consent shall not be unreasonably
withheld.

         Section 29.5. The table of contents and captions of this Lease are for
convenience of reference only and in no way define, limit or describe the scope
or intent of this Lease nor in any way affect this Lease.

         Section 29.6. If any term or provision of this Lease or its application
to any person or circumstance shall to any extent be invalid or unenforceable,
the remainder of this Lease or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable shall not be affected thereby, and each term and provision of this
Lease shall be valid and be enforced to the fullest extent permitted by law.

         Section 29.7. Lessee agrees that, in the event Lessee shall have any
claim against Lessor under this Lease arising out of the subject matter of this
Lease, Lessee's sole recourse shall be against Lessor's interest in the
Premises, for the satisfaction of any claim, judgment or decree requiring the
payment of money by Lessor as a result of a breach hereof or otherwise in
connection with this Lease, and no other property or assets of Lessor, its
successor or assigns, shall be subject to the levy, execution or other
enforcement procedure for the satisfaction of any such claim, judgment,
injunction or decree.

         Section 29.8. Unless expressly waived in writing, Lessor shall have the
right, exercisable without notice, without any liability to Lessee for damage or
injury to person, property or business, without being deemed an eviction or
disturbance in any manner of Lessee's use or possession of the Premises and
without relieving Lessee from its obligation to pay Rent when due or from any
other obligation under this Lease, during the last six (6) months of the Term to
install, affix and maintain "for rent" or "for sale" signs on the exterior of
the Premises.

                                      -27-
<PAGE>   30

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

                                     LESSOR:

                                     H & M ENTERPRISES, L.L.C.

                                     By: /s/ James E. Harris
                                         ---------------------------------------
                                         James E. Harris
                                         Manager

                                     LESSEE:

                                     UNIFLAME, INC.

                                     By: /s/ Malcolm McQuilkin
                                         ---------------------------------------
                                         Malcolm McQuilkin
                                         President

                                      -28-
<PAGE>   31

                                    EXHIBIT A

                                LEGAL DESCRIPTION

                  ALL THAT PART OF THE SOUTH EAST QUARTER OF SECTION 18,
                  TOWNSHIP 46 NORTH, RANGE 12, EAST OF THE THIRD PRINCIPAL
                  MERIDIAN, LYING EAST OF THE CENTER LINE OF THE ROADWAY KNOWN
                  AS KENOSHA BRANCH OF THE MILWAUKEE ROAD (EXCEPTING THEREFROM
                  THE EAST 61.02 FEET THEREOF; ALSO EXCEPT THE SOUTH 1275 FEET
                  THEREOF; ALSO EXCEPT THAT PART LYING NORTH OF A LINE 27.51
                  CHAINS SOUTH OF, AND PARALLEL TO THE NORTH LINE OF THE SOUTH
                  HALF OF THE NORTH EAST QUARTER OF SAID SECTION 18), IN LAKE
                  COUNTY, ILLINOIS.

                                      -29-
<PAGE>   32

                                    EXHIBIT B

                            PLANS AND SPECIFICATIONS

                                      -30-
<PAGE>   33

                      ACTION BY UNANIMOUS WRITTEN CONSENT
                          OF THE BOARD OF DIRECTORS OF
                                 UNIFLAME, INC.

          The undersigned, being all of the Directors of UNIFLAME, INC., an
Illinois corporation (the "Corporation"), pursuant to Section 8.45 of the
Illinois Business Corporation Act, do hereby consent in writing, in lieu of
meeting, to the adoption of the following resolutions:

          RESOLVED, that the Amendment dated February 8, 2000 to that certain
     Lease dated March 11, 1995, by and between the H & M Enterprises, L.L.C.,
     an Illinois limited liability company, as lessor, and the Corporation, as
     lessee, for the property commonly known as 1817 Kenosha Road, Zion,
     Illinois 60099-5106, be, and hereby is, approved, and that the Lease, as
     amended, is hereby ratified;

          FURTHER RESOLVED, that the appropriate officers of the Corporation
     be, and hereby are, authorized and directed to execute any and all
     documents and to take any other actions which they deem necessary to
     effectuate the foregoing resolution.

Dated: February 2, 2000

                                                  /s/ Malcolm McQuilkin
                                                  ----------------------------
                                                  Malcolm McQuilkin

                                                  /s/ Sheri C. McQuilkin
                                                  ----------------------------
                                                  Sheri C. McQuilkin

                                                  /s/ James E. Harris
                                                  ----------------------------
                                                  James E. Harris

                                                  Being all of the Directors of
                                                  UNIFLAME, INC.
<PAGE>   34

                               NOTICE TO MEMBERS

                                       OF

                            H & M ENTERPRISES, L.L.C.

                                       OF

          ACTION TAKEN BY A MAJORITY OF THE MEMBERS WITHOUT A MEETING

<TABLE>
<CAPTION>
<S>                                         <C>
James E. Harris                             Leo E. Harris and Steve Haramaras,
                                            not individually, but solely as Co-Trustees
Leo E. Harris and Steve Haramaras, not      of the Elefteria H & M Trust
individually, but solely as Co-Trustees
of the Edward H & M Trust                   Leo E. Harris and Steve Haramaras,
                                            not individually, but solely as Co-Trustees
Steve Haramaras                             of the Dimitrios H & M Trust

Gus Haramaras                               Sheri C. McQuilkin and Malcolm McQuilkin,
                                            not individually, but solely as Co-Trustees
                                            of the Sheri C. McQuilkin Living Trust
</TABLE>

     On a date at least five days from the date of this notice, holders of a
majority of units of membership in H & M Enterprises, L.L.C. (the "Company"),
intend to approve an amendment to that certain lease dated March 11, 1995,
extending the term of the lease five years to March 31, 2005. A copy of such
action is attached hereto as Exhibit A.

     Such member action without a meeting by holders of a majority of the units
of the outstanding units of the Company is taken to effectuate Section 9.2(g)
of the Operating Agreement of the Company.

Dated: January 27, 2000

                                               Very truly yours,

                                               /s/ James E. Harris
                                               --------------------------------
                                               James E. Harris, Manager
<PAGE>   35
                                   EXHIBIT A

                           ACTION BY WRITTEN CONSENT
                        OF A MAJORITY OF THE MEMBERS OF
                           H & M ENTERPRISES, L.L.C.

     The undersigned, being a majority of the Members of H & M ENTERPRISES,
L.L.C., an Illinois limited liability company (the "Company"), acting pursuant
to the provisions of the Illinois Limited Liability Company Act, do hereby
consent, in lieu of meeting, to the adoption of the following resolutions:

          RESOLVED, that the Amendment dated February 8, 2000 to that
     certain Lease dated March 11, 1995, by and between the Company, as
     lessor, and Uniflame, Inc., an Illinois corporation, as lessee, for
     the property commonly known as 1817 Kenosha Road, Zion, Illinois
     60099-5106, for the purposes of extending the lease to March 31, 2005,
     be, and hereby is, approved, and that the Lease, as amended, is hereby
     ratified;

          FURTHER RESOLVED, that the Manager of the Company be, and hereby
     is, authorized and directed to execute any and all documents and to
     take any other actions which he deems necessary to effectuate the
     foregoing resolution which extends the Lease.

DATED: February 7, 2000

/s/ James E. Harris                    /s/ Steve Haramaras
--------------------------             ----------------------------
James E. Harris                        Steve Haramaras

/s/ Gus Haramaras
--------------------------
Gus Haramaras

SHERI C. MCQUILKIN LIVING TRUST        SHERI C. MCQUILKIN LIVING TRUST

By: /s/ Sheri C. McQuilkin             By: /s/ Malcolm McQuilkin
    ------------------------------         -----------------------------
    Sheri C. McQuilkin, Co-Trustee         Malcolm McQuilkin, Co-Trustee

ELEFTERIA H & M TRUST                  ELEFTERIA H & M TRUST

By: /s/ Leo E. Harris                  By: /s/ Steve Haramaras
    ------------------------------         -----------------------------
    Leo E. Harris, Co-Trustee          Steve Haramaras, Co-Trustee

<PAGE>   36

EDWARD H & M TRUST                        EDWARD H & M TRUST

By: /s/ Leo E. Harris                     By: /s/ Steve Haramaras
    -----------------------------             -------------------------------
    Leo E. Harris, Co-Trustee                 Steve Haramaras, Co-Trustee

DIMITRIOS H & M TRUST                     DIMITRIOS H & M TRUST

By: /s/ Leo E. Harris                     By: /s/ Steve Haramaras
    -----------------------------             -------------------------------
    Leo E. Harris, Co-Trustee                 Steve Haramaras, Co-Trustee

                       Being a majority of the Members of
                           H & M ENTERPRISES, L.L.C.

                                       2

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