CEC ENTERTAINMENT, INC.
                               FRANCHISE AGREEMENT



                                  [CITY, STATE]



                            4441 West Airport Freeway
                                Irving, TX 75062







                                TABLE OF CONTENTS


RECITALS.......................................................................1

1.   DEFINITIONS...............................................................1

2.   GRANT OF RIGHTS...........................................................5
     2.1      Grant............................................................5
     2.2      Exclusivity......................................................5
     2.3      Limitation of Rights.............................................6

3.   FEES AND CONTRIBUTIONS....................................................7
     3.1      Franchise Fee....................................................7
     3.2      Royalty Fees.....................................................7
     3.3      System Fund......................................................7
     3.4      Payments and Taxes...............................................7
     3.5      Overdue Payments.................................................8
     3.6      Franchisor's Lien................................................8
     3.7      Contribution Increases...........................................8

4.   SITE SELECTION............................................................8
     4.1      Criteria for Site Approval.......................................8
     4.2      Approval by Franchisor...........................................9
     4.3      Costs of On-Site Evaluation......................................9
     4.4      Executed Lease or Purchase Agreement.............................9
     4.5      Extensions.......................................................9
     4.6      Relocation.......................................................9

5.   CONSTRUCTION AND REFURBISHMENT...........................................10
     5.1      Pre-Construction/Refurbishment Approval Criteria................10
     5.2      Pre-Construction/Refurbishment Approval.........................11
     5.3      Commencement of Construction/Refurbishment and Extensions.......11
     5.4      Construction/Refurbishment......................................11
     5.5      Opening Assistance..............................................12
     5.6      Inspection......................................................12
     5.7      Continuing Statements...........................................12
     5.8      Installation of Animated Entertainment..........................12
     5.9      Approval for Opening............................................12





6.   TRAINING.................................................................13
     6.1      Minimum Training................................................13
     6.2      Location and Expenses...........................................13
     6.3      Additional Training.............................................13

7.   OPERATION................................................................13
     7.1      General Manager and Technician..................................13
     7.2      Operational Policies............................................13
     7.3      Suppliers.......................................................15
     7.4      General Maintenance.............................................15
     7.5      Maintenance of Animated Entertainment...........................15
     7.6      Scheduled Refurbishment.........................................16
     7.7      Inspection......................................................16
              7.7.1    Testing................................................16
              7.7.2    Recommendations........................................16
              7.7.3    Failure to Correct Deficiencies........................17
     7.8      Accounting and Records..........................................17
              7.8.1    General Accounting Principles..........................17
              7.8.2    Accounting Statements..................................17
              7.8.3    Inspection of Accounting and Records...................17
              7.8.4    Records of Ownership Interests in Franchisee...........18
              7.8.5    Sales Records..........................................18
     7.9      Internet........................................................18
     7.10     Intranet........................................................19

8.   ADVERTISING..............................................................20
     8.1      General Requirements............................................20
     8.2      Pre-Approved Advertising........................................20
     8.3      New Advertising.................................................20
     8.4      Minimum Advertising Expenditures................................20
     8.5      System Fund.....................................................21
     8.6      Advertising Cooperative.........................................22

9.   REPRESENTATIONS AND WARRANTIES...........................................23
     9.1      Representations, Warranties and Covenants of Franchisee.........23
              9.1.1    Due Incorporation......................................23
              9.1.2    Authorization..........................................23
              9.1.3    Exclusivity............................................23
              9.1.4    Execution and Performance..............................23
              9.1.5    Corporate Documents....................................23
              9.1.6    Ownership Interests....................................23
              9.1.7    Stop Transfer Instructions.............................24
     9.2      Financial Statements............................................24



     9.3      Franchisee's Principals.........................................24
     9.4      Guarantee.......................................................24
     9.5      Non-Competition During Term of Agreement........................25
     9.6      Non-Competition after Termination or Non-Renewal of Agreement...25
     9.7      Independent Covenants...........................................25
     9.8      Additional Covenants............................................26
     9.9      Guaranty........................................................26
     9.10     Rights and Limitations to use Animated Entertainment............26
     9.11     Non-Liability...................................................27
     9.12     Performance by Franchisor.......................................27
     9.13     Licensing of Musical Compositions...............................27

10.  PROPRIETARY RIGHTS AND INFORMATION.......................................27
     10.1     Confidential Information........................................27
              10.1.1   Confidentiality Agreements.............................28
              10.1.2   Improvements...........................................28
     10.2     Proprietary Marks...............................................28
     10.3     Copyrights......................................................29

11.  TRANSFER OF INTEREST.....................................................30
     11.1     Transfer by Franchisor..........................................30
     11.2     Transfer by Franchisee..........................................30
              11.2.1   General Requisites.....................................30
              11.2.2   Right of First Refusal.................................31
              11.2.3   Death or Disability....................................33
              11.2.4   Public Offerings.......................................33

12.  INSURANCE AND INDEMNITY..................................................34
     12.1     Insurance.......................................................34
     12.2     Indemnities.....................................................35
              12.2.1   Indemnification........................................35
              12.2.2   Notice and Counsel.....................................35
              12.2.3   Settlement and Remedial Actions........................36
              12.2.4   Expenses...............................................36
              12.2.5   Third Party Recovery...................................36
              12.2.6   Survival...............................................36

13.  TERM, RENEWAL AND TERMINATION............................................36
     13.1     Term............................................................36
     13.2     Renewal.........................................................36
     13.3     Termination.....................................................37




              13.3.1   Automatic Termination..................................37
              13.3.2   Termination upon Notice................................38
              13.3.3   Termination with Ten Day Notice........................40
              13.3.4   Termination with Thirty Day Notice.....................40
     13.4     Obligations upon Termination or Expiration......................40

14.  REMEDIES.................................................................44
     14.1    Remedies.........................................................44
              14.1.1   Cure...................................................44
              14.1.2   Specific Enforcement...................................44

15.  DISPUTE RESOLUTION.......................................................44
     15.1     Mediation.......................................................44
     15.2     Applicable Law..................................................44
     15.3     Jurisdiction and Venue..........................................45
     15.4     Mutual Benefit..................................................45

16.  MISCELLANEOUS............................................................45
     16.1     Independent Contractors.........................................45
     16.2     Entire Agreement................................................45
     16.3     Judgment; Discretion............................................46
     16.4     No Waiver.......................................................46
     16.5     Severability....................................................46
     16.6     Notice..........................................................47
     16.7     Counterparts....................................................47
     16.8     Headings........................................................47
     16.9     Further Assurances..............................................47
     16.10    Compliance with Laws............................................47

17.  ACKNOWLEDGMENTS..........................................................48
     17.1     Independent Investigation.......................................48
     17.2     Opportunity to Assess Risks.....................................48
     17.3     Receipt of Disclosure Document..................................48
     17.4     No Extraneous Promises..........................................48
     17.5     No Extraneous Inducements.......................................48
     17.6     Commercial Relationship.........................................49
     17.7     Compliance with Anti-Corruption and Anti-Money Laundering Laws..49
     17.8     No Claims.......................................................49


SCHEDULE 1.14    STATEMENT OF OWNERSHIP INTERESTSAND FRANCHISEE'S PRINCIPALS..52

ATTACHMENT A     AGREEMENT AND GUARANTY OFFRANCHISEE'S PRINCIPALS............A-1



ATTACHMENT B     GENERAL RELEASE.............................................B-1

ATTACHMENT C     LEASE RIDER.................................................C-1

ATTACHMENT D     ADVERTISING COOPERATIVE AGREEMENT...........................D-1

ATTACHMENT E     EMPLOYEE'S CONFIDENTIALITY AND NON-COMPETITION AGREEMENT....E-1

ATTACHMENT F     RENEWAL AMENDMENT TO FRANCHISE AGREEMENT....................F-1






                             CEC ENTERTAINMENT, INC.
                               FRANCHISE AGREEMENT

     This  Franchise  Agreement  is  executed  and  entered  into  this  ___  of
_________,  20__, by and between CEC  Entertainment,  Inc., a Kansas corporation
(as Franchisor), and ____________, a ________ corporation (as Franchisee).

                                    RECITALS

     1. Franchisor has developed and is the owner of the System;

     2. Franchisor has developed and is the owner of, or licensee with rights to
sublicense,  certain  Animated  Entertainment  and  Proprietary  Marks which are
utilized in connection with and identify the System; and

     3. Franchisee  desires to obtain from Franchisor and Franchisor  desires to
grant to Franchisee certain rights to use the System, the Animated Entertainment
and the Proprietary Marks to develop and establish the Franchised  Restaurant at
the Site.

     NOW  THEREFORE,   Franchisor  and  Franchisee  in   consideration   of  the
undertakings and commitments set forth herein, agree as follows:

1.   DEFINITIONS

     As used in this Agreement and the above Recitals, the following capitalized
terms shall have the meanings attributed to them in this Section:

     1.1 "Action" means any cause of action,  suit,  proceeding,  claim, demand,
investigation or inquiry (whether a formal proceeding or otherwise) with respect
to which Franchisee's indemnity applies.

     1.2  "Advertising  Cooperative"  means  a  group  of  two  or  more  System
Restaurants,   as  determined  by  Franchisor,   for  the  purpose  of  funding,
administering and developing regional advertising and promotion. programs.

     1.3 "Agreement" means this franchise agreement and all attachments.

     1.4  "Animated  Entertainment"  means the computer  hardware and  software,
artistic designs,  scripts and musical scores,  staging and lighting  techniques
and configurations,  plans, manuals and specifications,  manufacturing  know-how
and  other  intellectual  property  relating  to video  display,  audio or other
entertainment and to computer controlled three dimensional  animated characters,
including present and future improvements,  patents, trademarks,  copyrights and
other intellectual and artistic property.





     1.5 "Association" means the International Association of CEC Entertainment,
Inc. which, as of the date of this Agreement, serves as Franchisor's designee to
administer the System Fund, in accordance with the Association's bylaws and this
Agreement and to which  Franchisee will have the right to be a member so long as
Franchisee is in compliance with this Agreement and the Association's bylaws.

     1.6  "Change  in  Control"  means  a  Transfer  of an  Equity  Interest  in
Franchisee which, directly, indirectly, or combined with prior Transfers, causes
a change in the number of Persons  which can vote more than fifty  percent (50%)
of the total Equity Interest in Franchisee.

     1.7  "Competing  Business"  means a business which operates a restaurant or
food service outlet in combination with family entertainment,  including without
limitation,  live  entertainment  and  entertainment in the form of video games,
video displays or computer controlled animated characters.

     1.8  "Confidential  Information"  means  the  terms of this  Agreement  and
Attachments  and any  amendments  hereto,  the  components  of the  System,  the
Animated Entertainment,  the Operational Policies,  manuals,  written directives
and all  drawings,  equipment,  recipes,  and all  other  information  know-how,
techniques,  materials  and data  imparted or made  available by  Franchisor  to
Franchisee which is (I) designated as confidential,  (ii) known by Franchisee to
be considered  confidential by Franchisor,  or (iii) by its nature inherently or
reasonably to be considered confidential.

     1.9  "Designated  Market Area" means the geographic area which includes the
Protected  Territory as defined by Nielson Media  Research,  Inc. or a successor
organization designated by Franchisor.

     1.10 "Equity Interest" means a direct or indirect ownership interest in the
capital  stock of,  partnership  or  membership  interest in, or other equity or
ownership interest in (including the right to vote) any type of legal entity.

     1.11 "Execution  Date"  means the date upon which the  Agreement  is deemed
duly executed and entered into by Franchisee and Franchisor, as indicated on the
first page of the Agreement.

     1.12 "Force  Majeure"  means acts of  God (such as  tornadoes,  hurricanes,
floods,  fire  or  other  natural  catastrophe);   strikes,  lockouts  or  other
industrial disturbances; war, riot, or other civil disturbance;  epidemics; acts
of governments,  such as the exercise of eminent domain rights and  condemnation
(if caused by reasons  beyond  Franchisee's  control);  or other  forces  beyond
Franchisee's reasonable control.

     1.13 "Franchisee" means ____________.








     1.14 "Franchisee's  Principals" means Franchisee's spouse, if Franchisee is
an  individual,  all officers and directors of Franchisee  and all holders of an
Equity  Interest  in  Franchisee  and  of  any  entity  directly  or  indirectly
controlling Franchisee, all as listed on Schedule 1.14 attached hereto.

     1.15 "Franchised  Restaurant"  means the  family-oriented  pizza restaurant
that is  established  and  operated by  Franchisee  utilizing  the  System,  the
Proprietary  Marks and the Animated  Entertainment  in accordance with the terms
and conditions of this Agreement.

     1.16  "Franchisor"  means CEC  Entertainment,  Inc.  or any person or legal
entity to which CEC  Entertainment,  Inc.  assigns or  otherwise  transfers  its
rights and obligations contained in this Agreement.

     1.17 "Gross  Sales" means the total of all sales related to or arising from
the operation of the Franchised  Restaurant including,  without limitation,  all
monies and receipts from the sale of all beverages,  food,  merchandise  and the
operation of rides,  amusement  games and other  attractions  in the  Franchised
Restaurant,  as well as all revenue from the sale of tokens, whether for cash or
credit and  regardless of collection,  less  applicable  sales taxes  Franchisee
collects and remits,  and valid coupon credits and employee  discounts  deducted
from revenues  initially  recorded as Gross Sales, but without  deduction of any
other costs or expenses whatsoever.

     1.18 "Indemnitees" means any designee(s) of Franchisor which administer the
System Fund, Franchisor and its subsidiaries and affiliates and their respective
directors,  officers,  employees,   shareholders,   affiliates,  successors  and
assigns.

     1.19   "Internet"   means   collectively   the  myriad  of   computer   and
telecommunications facilities,  including equipment and software, which comprise
the  interconnected  worldwide  network  of  networks  that  employ  the  TCP/IP
(Transmission  Control  Protocol/Internet   Protocol),  or  any  predecessor  or
successor protocols to such protocol, to communicate information of all kinds by
fiber optics, wire, radio, or other methods of electronic transmission.

     1.20 "Intranet" means an intranet, extranet or other communications network
between and among Franchisor and Franchisee that its accessed by the Internet.

     1.21 "Losses and  Expenses"  means all losses,  compensatory,  exemplary or
punitive damages,  fines,  penalties,  charges,  costs, expenses,  lost profits,
assessments and fees (including reasonable  attorneys',  experts',  accountants'
and consultants' fees); interest,  court costs,  settlement or judgment amounts,
compensation  for damages to Franchisor's  reputation and goodwill,  costs of or
resulting from delays,  financing costs, costs of advertising material and media
time/space,  and costs of changing,  substituting or replacing the same, and any
and all  expenses of recall,  refunds,  compensation,  public  notices and other
similar  amounts  incurred,  charged  against or suffered by the  Indemnitees in
connection with any Action.







     1.22 "Minority Interest" means an Equity Interest of less than five percent
(5%) of the capital stock of, partnership  interest in, or other Equity Interest
in (including the right to vote) any type of legal entity.

     1.23 "Operational," used in reference to the Franchised  Restaurant,  means
that the Franchised Restaurant is fully constructed and finished out as approved
by  Franchisor  and is legally  permitted to render its services to, and is open
to, the general public pursuant to this Agreement.

     1.24 "Operational Policies" means the written standards, procedures, rules,
regulations,  and policies for the operation of a Franchised Restaurant pursuant
to the System,  as issued from time to time by Franchisor,  a copy of which will
be provided upon the execution of this Agreement.

     1.25 "Person" means an individual,  corporation, limited liability company,
partnership,  association, joint stock company, trust or trustee thereof, estate
or executor  thereof,  unincorporated  organization  or joint venture,  court or
governmental  unit or any agency or  subdivision  thereof,  or any other legally
recognizable entity.

     1.26 "Proprietary Marks" means the trademarks,  trade names, service marks,
logos,  emblems and other indicia of origin as  designated  from time to time by
Franchisor,  which may be owned by  Franchisor  or licensed to  Franchisor  with
sublicensing rights,  including, but not limited to, the marks "Chuck E. Cheese"
and "Chuck E. Cheese's."

     1.27 "Protected Territory" means the area within a ____ (__) mile radius of
the Franchised Restaurant.

     1.28 "Site" means the location for the  establishment  and operation of the
Franchised Restaurant which is approved as per Section 4.2 of this Agreement.

     1.29 "Site Selection Territory" means ________, ________.

     1.30  "Sky  Tubes"  means  components  configured  to create  sequences  of
group/social  and  independent  play,  using tubes,  windows,  entries,  climbs,
crawls, play stations, passageways, and slides.






     1.31  "System"  means  the  distinctive   system  developed  and  owned  by
Franchisor for the establishment,  development, and operation of family-oriented
pizza restaurants,  the distinguishing  characteristics of which include without
limitation, Animated Entertainment,  Sky Tubes, separate areas with a variety of
rides,  amusement  games  and  other  attractions,  characteristic  decorations,
furnishings and materials,  specially-designed  equipment and equipment layouts,
trade  secret  food  products  and  other  special  recipes,  menus and food and
beverage designations,  food and beverage preparation and service procedures and
techniques,  operating  procedures for sanitation and  maintenance,  methods and
techniques  for  inventory  and cost  controls,  record  keeping and  reporting,
personnel training and management, and advertising and promotional programs, and
Operational Policies, all of which may be changed, improved or further developed
by Franchisor from time to time.

     1.32  "System  Fund"  means  collectively,  the three  (3) funds  currently
identified as follows:

          (a) the  "Advertising  Fund"  (for  the  maintenance,  administration,
     direction,  preparation,  purchasing and placement of  advertising  for the
     System, Proprietary Marks and Animated Entertainment),

          (b) the "Entertainment  Fund" (for the purchase,  lease,  shipping and
     installation  of  software  programs  and  for  the  costs  related  to the
     production  of show  tapes,  videos  and other  audio,  video and  software
     components of the Animated  Entertainment,  including  licensing  rights to
     certain music, and video, and the design, testing and implementation of new
     entertainment  concepts  which may or may not be  directly  related  to the
     Animated  Entertainment,  as more fully described in Sections 3.3 and 8.5),
     and

          (c) the  "Media  Fund" (for  purchasing  national  network  television
     advertising),  established for the purposes described above, as well as any
     other objective which  Franchisor  designates in writing for the purpose of
     furthering the System, the Proprietary Marks, the Animated Entertainment or
     the  sales  of  System  Restaurants  generally,  to which  Franchisee  will
     contribute a stated percentage of Gross Sales on a monthly basis.

     1.33 "System  Restaurant" means a family-oriented  pizza restaurant that is
established and operated  utilizing the System,  the  Proprietary  Marks and the
Animated  Entertainment  either in accordance with the terms and conditions of a
franchise agreement or by Franchisor.

     1.34  "Transfer"  means the sale,  assignment,  conveyance,  pledge,  gift,
mortgage or other encumbrance,  whether direct or indirect, in whole or in part,
or in one or a  series  of  related  transactions  or  occurrences,  of (i) this
Agreement  or of any or all rights or  obligations  of  herein,  (ii) any Equity
Interest  in  Franchisee,  or (iii) any assets of  Franchisee  beyond  transfers
necessary in the ordinary course of business.

2.   GRANT OF RIGHTS

     2.1  Grant.  Subject  to the  terms,  conditions  and  limitations  of this
Agreement,  Franchisor  hereby grants to Franchisee  the right,  and  Franchisee
undertakes the obligation, to establish and operate the Franchised Restaurant at
a  duly  approved  Site  in the  Protected  Territory.  Franchisee's  use of the
Proprietary Marks or any element of the System in the operation of a business at
any other location or in any other channel of distribution  without Franchisor's
express  written   authorization   will  constitute   willful   infringement  of
Franchisor's rights in the Proprietary Marks and System.






     2.2 Exclusivity.  For so long as Franchisee is in full compliance with this
Agreement,  Franchisor will not,  without  Franchisee's  prior written  consent,
establish or operate,  or license  anyone other than  Franchisee to establish or
operate,  a System  Restaurant  which is  physically  located  in the  Protected
Territory during the term of this Agreement.

     2.3  Limitation  of Rights.  Franchisor  retains  all rights not  expressly
granted hereunder.  Franchisor, its affiliates, and their respective franchisees
and licensees may, among other things, operate other types of facilities besides
System  Restaurants in the Protected  Territory,  including  facilities that are
identified by some or all of the Proprietary  Marks. The license granted by this
Agreement  is only  for the  operation  of a  single  System  Restaurant  at the
approved  Site.  Franchisor  therefore  may (or may  authorize a third party to)
conduct, among other things, the following activities:

          (a) Advertise and promote  sales of or by System  Restaurants,  at any
     location, including within the Protected Territory;

          (b) Offer and sell  collateral  and  ancillary  products and services,
     such as pre-packaged food products, toys, games, clothing, and memorabilia,
     in the Protected  Territory under the Proprietary  Marks, even though those
     products  and services  may be similar to items  offered by the  Franchised
     Restaurant;

          (c) Offer and sell any products and services (regardless of similarity
     to products and services sold in the Franchised Restaurant) under any names
     and marks other than the  Proprietary  Marks,  at any  location,  including
     within the Protected Territory;

          (d) Establish and operate a System Restaurant  anywhere outside of the
     Protected  Territory,  regardless  of proximity or financial  impact to the
     Franchised Restaurant;

          (e) Establish and operate a non-System  Restaurant  anywhere inside or
     outside of the  Protected  Territory,  regardless of proximity or financial
     impact to the Franchised Restaurant; and

          (f)  Operate  one or more sites on the World  Wide Web  portion of the
     Internet that advertise System  Restaurants,  allow customers and potential
     customers  to  make  reservations  at  System  Restaurants  (including  the
     Franchised Restaurant),  sell any product or service including pre-packaged
     food  products,  games,  toys,  clothing or  memorabilia,  or permit  other
     activities (whether or not similar), even though the Web site is accessible
     to or viewable by persons in the Protected Territory.

     Franchisee  shall have no right under this Agreement to sub-license  others
to use or grant any rights in the Proprietary Marks, the Animated  Entertainment
or the System.









3.   FEES AND CONTRIBUTIONS

     3.1  Franchise  Fee.  Prior to or upon  the  execution  of this  Agreement,
Franchisee  shall deliver to  Franchisor a franchise  fee of Fifty  Thousand and
no/100 Dollars  ($50,000.00) in readily available funds  ("Franchise  Fee"). The
Franchise  Fee  will be fully  earned  by  Franchisor  and  non-refundable  upon
receipt, in consideration for, among other things,  Franchisor's  administrative
expenses and lost or deferred opportunities in entering into this Agreement.

     3.2 Royalty  Fees.  Beginning  the calendar  month in which the  Franchised
Restaurant  is  Operational,  on or  before  the  fifteenth  (15th)  day of each
calendar month thereafter, Franchisee agrees to pay a continuing monthly royalty
fee equal to 3.8% of the  Gross  Sales for the  immediately  preceding  calendar
month,  subject to the immediately  following sentence.  During the term of this
Agreement,  Franchisor  shall have the right,  at its  option,  upon ninety (90)
days' prior notice to  Franchisee,  to increase the royalty fee to an amount not
to exceed five percent (5%) of the Gross Sales of the Franchised Restaurant.  In
such event,  Franchisee shall commence  payment of the increased  royalty fee in
the month immediately following the expiration on the ninety (90) day period.

     3.3 System  Fund.  Beginning  the  calendar  month in which the  Franchised
Restaurant  is  Operational,  on or  before  the  fifteenth  (15th)  day of each
calendar  month  thereafter,  Franchisee  agrees  to pay to  the  System  Fund a
continuing  monthly amount  designated by Franchisor,  but in no event more than
three and  one-tenth  percent  (3.1%) of Gross  Sales,  except as  described  in
Section 3.7 and 8.5(f)  (amounting to .2% of Gross Sales currently  allocated to
the  Entertainment   Fund,  .4%  of  Gross  Sales  currently  allocated  to  the
Advertising Fund and 2.5% of Gross Sales currently allocated to the Media Fund).
The  portion  of the  System  Fund  payment  allocated  to the Media Fund may be
withdrawn  upon (1) the  unilateral  election of  Franchisor  or (2) the vote of
System franchisees in good standing under their respective franchise agreements,
with  thirty  (30) days  advance  notice of such vote,  one vote per  franchised
restaurant  location  and a simple  majority of  restaurants  voting in favor of
withdrawal; provided however, that if such vote or election shall be taken on or
before  March 1 of any  calendar  year,  it  shall  first  become  effective  on
September 1 of the same year, and if such vote or election shall have been taken
after March 1 of any calendar year, it shall first become effective  September 1
of the following  calendar year. Not less than six (6) months following any such
withdrawal,  such payment may be  reinstated,  upon the  unilateral  election by
Franchisor or by vote in favor of reinstatement in accordance with the procedure
described in this Section.






     3.4  Payments  and Taxes.  All  franchise  and  royalty  fees shall be paid
directly to Franchisor or its designee.  All payments and contributions shall be
in United States dollars and will be made free and clear of any tax,  deduction,
offset or  withholding  of any kind. All taxes and penalties on any payment made
by  Franchisee  pursuant  to this  Agreement  now or in the future will be fully
borne by  Franchisee.  In the event of any bona fide dispute as to liability for
taxes assessed or other indebtedness, Franchisee may contest the validity or the
amount of the tax or  indebtedness  in accordance  with procedures of the taxing
authority or applicable law; however,  in no event shall Franchisee permit a tax
sale or seizure by levy of execution or similar writ or warrant,  or  attachment
by a creditor, to occur against the premises of the Franchised Restaurant or any
improvements thereon.

     3.5 Overdue  Payments.  Any payment not actually  received by Franchisor or
its  designee  when due shall  accrue  late  charges  equal to one and  one-half
percent  (1.5%) per month or the maximum  rate  permitted  by law,  whichever is
less,  from the date it was due until paid.  Such  interest  charges  will be in
addition to any other remedies that may be available to Franchisor.

     3.6 Franchisor's Lien. The obligations to make monthly payments required in
this  Section 3 shall give rise to and  remain,  until  paid in full,  a lien in
favor of  Franchisor  against any and all of the personal  property,  machinery,
fixtures,  equipment  and  inventory  owned  by  Franchisee  at  the  Franchised
Restaurant, and against the proceeds and replacements thereof. Franchisee hereby
irrevocably   appoints  Franchisor  as  its   attorney-in-fact   (surviving  any
termination or expiration  hereof) to execute and file in the name of Franchisee
as  debtor  such  instruments,   including  Uniform  Commercial  Code  financing
statements,  as may be required by Franchisor from time to time to evidence such
lien.  Franchisee  shall,  immediately upon Franchisor's  request,  execute such
documents as Franchisor may, from time to time, deem necessary to effectuate the
above.

     3.7  Contribution  Increases.  The monthly  contribution to the System Fund
shall be subject at any time to increase upon a majority vote cast by all System
franchisees in good standing under their franchise agreements (e.g., not subject
to a pending default notice from Franchisor).  Each franchisee shall be provided
thirty (30) days advance notice and opportunity to vote on the proposed increase
and shall be entitled to one (1) vote per System Restaurant in operation,  and a
majority vote required for any increase  shall be a majority of all  restaurants
represented  by the votes  cast.  Franchisor  shall  provide  written  notice to
Franchisee at least sixty (60) days prior to the effective  date of any increase
so approved by such majority vote.

4.   SITE SELECTION

     4.1 Criteria for Site Approval.  Franchisee  agrees that prior to or within
one hundred and twenty (120) days after the execution of this Agreement, it will
locate  and  obtain  the  approval  of  Franchisor  for a Site  within  the Site
Selection  Territory  for the  establishment  and  operation  of the  Franchised
Restaurant.

     Franchisee must submit to Franchisor:

          (a) a completed site review form designated by Franchisor,  which will
     include,  among other things,  demographic  information,  a site plan,  and
     traffic-related information;

          (b)  if  the  premises  for  the  proposed  Site  are  to  be  leased,
     satisfactory   evidence   that  the  lessor   will  agree  to  the  minimum
     requirements   contained  in  the  Lease  Rider  to  be  executed   between
     Franchisor, Franchisee and the lessor attached hereto as Attachment C; and






          (c) any  other  information  or  materials  as  Franchisor  reasonably
     requires,  such as a letter  of  intent or other  document  which  confirms
     Franchisee's favorable prospects for obtaining the proposed Site.

     4.2 Approval by Franchisor.  Upon receipt of all requested documentation as
required in Section 4.1,  Franchisor  will notify  Franchisee of its approval or
disapproval in writing within a period of thirty (30) days. Franchisor shall act
in a commercially  reasonable manner when approving or disapproving any proposed
Site.  However,  Franchisee agrees that Franchisor will have absolute discretion
in  approving  any  proposed  Site  and  Franchisee  agrees  to  accept  any  of
Franchisor's decisions as final.  Franchisee hereby acknowledges and agrees that
Franchisor's approval of a site does not constitute an assurance, representation
or warranty of any kind,  express or implied,  as to the suitability of the Site
for the  Franchised  Restaurant  or for any other  purpose  or of the  financial
success of operating the Franchised Restaurant at such Site.

     4.3 Costs of On-Site Evaluation. If Franchisor deems necessary,  Franchisor
will undertake one (1) on-site evaluation of a proposed Site free of charge. For
all  subsequent  on-site  evaluations  requested  by  Franchisee  or required by
Franchisor,  Franchisee  agrees  to  reimburse  Franchisor  for  its  reasonable
expenses,  including, without limitation, travel expenses, and a per diem charge
for room and board.

     4.4 Executed Lease or Purchase Agreement.  Franchisee shall execute a lease
for the  premises,  or shall enter into a binding  commitment  to purchase  such
premises, within sixty (60) days after receipt of site approval from Franchisor.
Franchisee  will provide  Franchisor  with a fully executed copy of the lease or
purchase  agreement with respect to the approved Site within ten (10) days after
execution thereof.

     4.5 Extensions. Upon Franchisee's written request,  Franchisor, at its sole
discretion and without  obligation,  may grant a written extension or extensions
to the period for approval of a proposed  Site. In the event  Franchisor  grants
such  extension,  Franchisee  agrees  to pay  the  Franchisor  a  non-refundable
extension fee of  Two-thousand  Five Hundred and no/100 Dollars  ($2,500.00) for
every thirty (30) day period of the agreed extension.






     4.6  Relocation.  Once the  Franchised  Restaurant  is  established  at the
proposed Site in accordance with this Agreement,  Franchisee  shall not relocate
the  Franchise  Restaurant  without  the prior  written  consent of  Franchisor.
Franchisor will not unreasonably withhold its consent of such relocation and may
require,  among other things,  that: (i) Franchisee has provided Franchisor with
at least ninety (90) days prior written  notice of its intent to relocate;  (ii)
Franchisee  is not in  default  under  this  Agreement  and all of  Franchisee's
accrued monetary obligations to Franchisor have been satisfied; (iii) Franchisee
has paid a relocation fee in an amount equal to fifty (50%) of the  then-current
initial Franchise Fee for a new franchisee;  (iv) the new location is within the
Protected  Territory;  (v) Franchisee agrees to execute the then-current form of
franchise agreement, which agreement may contain materially different terms from
this   Agreement,   including,   without   limitation,   higher   royalty  fees,
contributions,  System assessments and a different  Protected  Territory,  for a
term equal to the  unexpired  portion of the  initial  term,  and all  unexpired
renewal terms  hereunder and any other  ancillary  agreements as Franchisor  may
require;  provided,  however,  that Franchisee  shall not be required to pay the
initial  franchise fee contained in Franchisor's  then-current form of franchise
agreement;  and (vi) Franchisee has made provisions acceptable to Franchisor for
the removal of all signs and other materials  containing  Proprietary Marks from
the existing site.  Franchisee will receive written notification of Franchisor's
decision  regarding  relocation of the Franchised  Restaurant.  Upon approval by
Franchisor,  Franchisee  must  relocate  the  Franchised  Restaurant  within one
hundred and eighty (180) days.

5.   CONSTRUCTION AND REFURBISHMENT

     5.1  Pre-Construction/Refurbishment  Approval Criteria. Prior to commencing
any  construction/refurbishment  on the Site, Franchisee, at its own cost, shall
submit to Franchisor for its prior written approval:

          (a) Complete plans and specifications for the Franchised Restaurant in
     accordance with local or state laws,  regulations or ordinances,  and which
     conform to Franchisor's general design and specifications. Once approved by
     Franchisor  pursuant  to Section 5.2 below,  such plans and  specifications
     shall not be modified without the prior written consent of Franchisor;

          (b) A statement in the form  prescribed  by  Franchisor  and signed by
     Franchisee, certifying that Franchisee has:

               i.  complied  with  all  local  or  state  laws,  regulations  or
          ordinances in preparing its plans and specifications;

               ii.  employed a  qualified  architect  or  engineer,  approved by
          Franchisor,  to  prepare   construction/refurbishment   documents  and
          supervise the  construction/refurbishment of the Franchised Restaurant
          and completion of all improvements (such statement shall also identify
          the  architect or engineer and describe his or her  qualifications  in
          detail);

               iii.  obtained all such permits and  certifications  required for
          lawful  construction/refurbishment  and  operation  of the  Franchised
          Restaurant,  including,  without limitation,  zoning, access, sign and
          fire requirements; and

               iv. obtained  required  licenses to sell beer and/or wine, unless
          otherwise prohibited by law, and to operate rides, amusement games and
          other attractions as required herein.

          (c) A construction/refurbishment schedule acceptable to Franchisor.






     5.2  Pre-Construction/Refurbishment  Approval.  Upon  receipt  of the above
documents,  Franchisor will notify  Franchisee of its approval or disapproval in
writing   within  a  period   of   twenty-one   (21)   days.   Given   that  the
construction/refurbishment  and  appearance  of  the  Franchised  Restaurant  is
critical to the continued success and viability of the System, Franchisee agrees
that  Franchisor  will have  absolute  discretion  in making such  decision  and
Franchisee agrees to accept any of Franchisor's decisions as final.

     5.3  Commencement of  Construction/Refurbishment  and Extensions.  Once the
pre-construction/refurbishment approval has been obtained and, for construction;
within six (6) months after the date of execution of this Agreement,  Franchisee
will commence  construction  and provide  Franchisor with written notice of such
commencement    within    ten    (10)    days    of   such    commencement    of
construction/refurbishment.

     Upon Franchisee's written request,  Franchisor,  at its sole discretion and
without  obligation,  may grant to  Franchisee  written  extensions  of this six
(6)-month period for construction and not refurbishment,  with the understanding
that, if granted,  Franchisee shall pay to Franchisor a non-refundable extension
fee of Two-Thousand Five Hundred and no/100 Dollars  ($2,500.00) for each thirty
(30) day period of extension.

     5.4      Construction/Refurbishment.      Franchisee     shall     complete
construction/refurbishment,  including, as applicable, all exterior and interior
carpentry,  electrical,  painting and finishing  work, and  installation  of all
fixtures,  equipment and signs, in accordance with the plans and  specifications
for the approved Site within:

          (a) six (6) months after  commencement of  construction/refurbishment,
     for refurbishment  and construction,  if construction is a space conversion
     of existing premises, or

          (b)  nine  (9)  months  after  commencement  of  construction,  if the
     construction is the erection of a free-standing building.

     Franchisor  may,  at its sole  discretion,  provide  up to two (2)  on-site
construction/  refurbishment  visits to verify  compliance  with its  standards.
Franchisee shall fully cooperate with Franchisor and provide  Franchisor and its
representatives with full access to the Site in connection therewith.

     Upon Franchisee's written request,  Franchisor,  at its sole discretion and
without   obligation,   may  grant  to  Franchisee  written  extensions  of  the
above-described  periods  for  construction  and  not  refurbishment,  with  the
understanding   that,  if  granted,   Franchisee   shall  pay  to  Franchisor  a
non-refundable  extension fee of  Two-Thousand  Five Hundred and no/100  Dollars
($2,500.00) for each thirty (30) day period of extension.







     5.5 Opening Assistance.  Franchisor shall provide one (1) representative to
provide such on-site  opening  assistance and  supervision  as Franchisor  deems
necessary  for a  period  of  seven  (7) to  ten  (10)  days,  at no  charge  to
Franchisee.  If Franchisor determines,  in its sole discretion,  that Franchisee
requires any  additional  opening  assistance  or if  Franchisee  requests  such
assistance,  Franchisor  reserves the right to charge an additional fee for such
assistance, in addition to obtaining reimbursement for related travel, meals and
lodging expenses.

     5.6 Inspection. Franchisee agrees that Franchisor and its agents shall
have the right to inspect the construction/refurbishment at all reasonable
times. Franchisee shall cooperate fully with Franchisor and provide Franchisor
and its representatives with full access to the Site in connection therewith.

     5.7  Continuing  Statements.  Beginning  with the calendar  month after the
pre-construction/refurbishment  approval  issued by Franchisor and each calendar
month     thereafter    until    one    (1)    calendar    month    after    the
construction/refurbishment is completed, Franchisee shall provide Franchisor, on
or before the first  Monday of each such  month,  with a  statement  in the form
prescribed  by  Franchisor  and signed by  Franchisee,  certifying  Franchisee's
continued  compliance  with and  maintenance of the  requirements of Section 5.1
(b).

     5.8 Installation of Animated Entertainment. No later than one hundred fifty
(150)    days   prior   to   the    anticipated    date   of    completion    of
construction/refurbishment  of the Franchised  Restaurant,  Franchisee shall, if
applicable, order the Animated Entertainment and related components specified by
Franchisor  from the supplier or suppliers  designated by  Franchisor  and shall
provide to Franchisor such evidence thereof as Franchisor requests.  All payment
terms for the Animated  Entertainment  shall be agreed to between Franchisee and
respective suppliers.

     Franchisor  shall not have any liability to Franchisee  for delivery or the
condition of the Animated  Entertainment  ordered from the supplier or suppliers
designated by Franchisor.

     After  delivery  of  the  Animated   Entertainment   and   preparation  for
installation  of the  Animated  Entertainment  by  Franchisee,  Franchisor  will
provide a technician to install the Animated Entertainment. If the technician is
required  for more  than five (5)  working  days,  then for such time  period in
excess of five (5) working days  (excluding  travel),  the  Franchisee  will pay
Franchisor a fee of Three Hundred and no/100 Dollars ($300.00) per day and shall
reimburse  Franchisor for additional  actual air travel  expenses and a per diem
charge for room and board.  Franchisor and Franchisee shall agree upon the dates
for installation;  provided,  however,  Franchisee shall request the services of
the technician in writing, to Franchisor, at least sixty (60) days in advance of
the requested installation dates.

     5.9 Approval for Opening. Once  construction/refurbishment is completed and
within  five  (5)  days  after  obtaining   Franchisor's  written  approval  for
opening/reopening, Franchisee shall open/reopen the Franchised Restaurant to the
public. Franchisee shall not open/reopen the Franchised Restaurant to the public
unless Franchisor has granted its written approval to do so.





6.   TRAINING

     6.1 Minimum  Training.  Prior to rendering their services to the Franchised
Restaurant, both the general manager and technician described in Section 7.1 and
any   replacements  or  successors   thereto  shall  attend  and  complete,   to
Franchisor's satisfaction,  initial training conducted by Franchisor. As part of
this initial  training,  Franchisor shall provide  Franchisee with a copy of the
Operational  Policies,  which must be returned to Franchisor upon termination of
this Agreement.

     6.2 Location and Expenses.  Franchisor  will not charge  Franchisee any fee
for  the  training  of  Franchisee's   first  general  manager  and  technician.
Franchisor  reserves the right to charge a reasonable  fee to Franchisee for any
additional  required or optional  training and training for  subsequent  general
managers,  managers  and  technicians.  All  training  shall be provided at such
location as Franchisor  may designate and Franchisee  shall be  responsible  for
Franchisee's  employees'  travel expenses and room,  board and wages during such
training.

     6.3 Additional  Training.  Franchisor may periodically make other mandatory
or  optional  training  available  to  Franchisee's  employees  as well as other
programs,   seminars  and  materials,  and  Franchisee  shall  ensure  that  all
employees,  as  Franchisor  may direct,  satisfactorily  complete  any  required
training within the time specified.

7.   OPERATION

     7.1 General Manager and Technician. Franchisee shall at all times employ at
least one fully-trained general manager and one fully-trained technician for the
maintenance of the Animated  Entertainment  for the Franchised  Restaurant,  who
shall devote their full time to the Franchised Restaurant.

     7.2 Operational  Policies.  The Operational Policies shall at all times (i)
be kept in a secure place on the premises of the Franchised Restaurant, and (ii)
remain the sole property of Franchisor.  Franchisee and Franchisee's  Principals
shall at all times ensure that Franchisee's copy of the Operational  Policies is
kept current and up-to-date,  and in the event of any dispute as to the contents
of the  Operational  Policies,  the  terms  of the  version  of the  Operational
Policies   maintained  by  Franchisor  at  Franchisor's  home  office  shall  be
controlling.  Franchisee  acknowledges  that  every  detail  of  the  Franchised
Restaurant is important to Franchisee, Franchisor and other franchisees in order
to develop and maintain the high  standards  and public image of the System,  to
increase  the  demand  for  the  products  and  services   sold  by  all  System
Restaurants,  and to protect  Franchisor's  reputation  and  goodwill.  As such,
Franchisee agrees to:

          (a)  Operate  the  Franchised   Restaurant  in  accordance   with  the
     Operational  Policies  to ensure  that the  highest  degree of quality  and
     service is  uniformly  maintained.  If amended or modified  by  Franchisor,
     Franchisee  agrees  that  it  will  fully  implement  Franchisor's  amended
     Operational Policies, within a period of time prescribed by Franchisor, but
     in no event to exceed  three (3)  months  after  receipt  of notice of such
     amendment or modification;





          (b)  Devote  the  requisite  time,  energy  and  best  efforts  to the
     management and operation of the Franchised Restaurant;

          (c) Use, prepare, maintain in sufficient supply and offer for sale all
     and only such products, materials, ingredients, supplies and paper goods as
     conform with Franchisor's standards and specifications;

          (d) Sell or offer for sale all and only such  services,  products  and
     menu items as meet Franchisor's  uniform standards of quality and quantity,
     as have been expressly  approved for sale in writing by Franchisor,  and as
     have been prepared in accordance with Franchisor's  methods and techniques.
     You must refrain from any deviation  from our standards and  specifications
     for serving or selling the above without our prior written consent and must
     discontinue  selling and  offering for sale any such items as we may in our
     sole discretion, disapprove at any time;

          (e) Use at the  Franchised  Restaurant  only such  menus and  animated
     character  costumes  which  comply  with  the  style,  pattern  and  design
     prescribed by Franchisor;

          (f) Purchase and  install,  at  Franchisee's  expense,  all  fixtures,
     furnishings,  signs, and equipment  (including,  without limitation,  video
     display  software  which must be updated  from time to time,  point-of-sale
     computer  hardware and software control systems,  and a telephone modem) as
     Franchisor  may  reasonably  direct  from  time to time in the  Operational
     Policies or otherwise in writing;

          (g) Employ security  officers,  if necessary,  for secure operation of
     the Franchised Restaurant;

          (h) Employ at least the minimum  number of other  employees  as may be
     prescribed by Franchisor and to comply with all applicable  federal,  state
     and local laws, rules and regulations with respect to such employees;

          (i) Cause all  employees  to wear  uniforms  of the  color,  style and
     design prescribed by Franchisor;

          (j)  Make  daily  and  regular  use of a Chuck E.  Cheese  walk-around
     character costume and all other animated character  costumes  designated by
     Franchisor and to maintain such costumes in good condition,  as provided in
     the Operational Policies;

          (k) Use the Site only for the operation of the  Franchised  Restaurant
     as well as keep and maintain the Franchised Restaurant open and Operational
     for the  minimum  number  of  hours  and  days as  reasonably  required  by
     Franchisor;







          (l) Meet and maintain the highest  governmental  standards and ratings
     applicable to the operation of the Franchised Restaurant (including health,
     alcohol and gaming) and  immediately  advise  Franchisor  in writing of any
     operational  license  (including  health,   alcohol  and  gaming)  standard
     violations applicable to the operation of the Franchised Restaurant; and

          (m)  Purchase or lease and  maintain  the  minimum  number and type of
     rides,  amusement games and other attractions required by Franchisor,  with
     the  understanding  that  Franchisee is prohibited  from leasing any of the
     foregoing on a "shared  revenue" or "coin sharing" basis.  Franchisee shall
     obtain Franchisor's  written approval prior to installing any ride, game or
     other attraction at the Franchised Restaurant which has not been previously
     approved in writing by Franchisor. If any of the rides, amusement games and
     other attractions to be installed at the Franchised  Restaurant are leased,
     the lease shall permit Franchisee to substitute rides,  amusement games and
     other  attractions  subject to the lease, and will provide for Franchisee's
     control over the  maintenance  and operation  and the  collection of monies
     from the rides,  amusement games and other  attractions that are subject to
     the proposed lease.

     7.3 Suppliers.  Franchisee shall purchase all equipment, supplies and other
products and  materials  (including  animated  character  costumes)  used in the
operation of the Franchised Restaurant solely from suppliers approved in writing
by Franchisor.  To qualify for approval, such suppliers must (i) demonstrate the
ability to meet Franchisor's  reasonable  standards and  specifications for such
items,  and (ii)  possess  adequate  quality  controls  and  capacity  to supply
Franchisee's  needs promptly and reliably.  Franchisor  shall not be responsible
for the delivery or the condition of goods  ordered from any vendor.  Franchisor
shall have the right to require that its representatives be permitted to inspect
the supplier's  facilities  and that samples from the supplier be delivered,  at
Franchisor's  option,  either  to  Franchisor  or to an  independent,  certified
laboratory  designated  by  Franchisor  for testing.  A charge not to exceed the
reasonable  cost of the inspection and the actual cost of the test shall be paid
by Franchisee or the supplier to Franchisor.  Franchisor  reserves the right, at
its option,  to  re-inspect  the  facilities  and products of any such  approved
supplier and to revoke its approval upon the  supplier's  failure to continue to
meet, in Franchisor's discretion, any of Franchisor's criteria.

     7.4  General  Maintenance.  Franchisee  shall  at all  times  maintain  the
Franchised Restaurant in the highest degree of sanitation, repair and condition.
Within  three (3) months  after  receipt of notice from  Franchisor,  Franchisee
agrees  to  make  any  additions,  alterations  repairs  and  replacements  that
Franchisor  reasonably requires,  including,  without limitation,  such periodic
repainting,  equipment repairs and replacement of obsolete signs,  games, rides,
equipment and floor  coverings  (including  carpet and tile) as  Franchisor  may
reasonably direct.






     7.5 Maintenance of Animated  Entertainment.  Franchisee  shall at all times
maintain the Animated  Entertainment  and its components in good repair and full
working order.  Franchisee shall immediately,  at its own expense,  also install
all retrofits and  replacements to the Animated  Entertainment  components which
are required by Franchisor from time-to-time.  Franchisee shall, at Franchisor's
option,  either  destroy or relinquish and deliver to Franchisor or its designee
title and  possession of any existing  trademarked  or  proprietary  elements or
components of the Animated Entertainment,  immediately upon their replacement or
obsolescence  and all such elements or  components  shall become the property of
Franchisor.

     7.6 Scheduled Refurbishment. Commencing on January 1 of the second calendar
year  following  the opening of the  Franchised  Restaurant  and each  January 1
thereafter during the term hereof, Franchisee, at its own expense, shall upgrade
and refurbish the Franchised  Restaurant,  in conformity  with Section 5 hereof.
Such upgrades and refurbishment include, without limitation,  those necessary to
conform to the building decor,  floor plan,  trade dress,  exterior  signage and
decor, color schemes,  rides,  amusement games and other  attractions,  food and
beverage  service,  and  presentation of trademarks and service marks consistent
with  the  public  image  then  prevailing  in the  latest  of  upgraded  System
restaurants  operated by Franchisor.  The amount  expended for each such upgrade
and/or refurbishment shall be at least the lesser of:

          (a) Fifty Thousand and no/100 Dollars ($50,000.00); or

          (b) Four percent (4%) of the Gross Sales of the Franchised  Restaurant
     during the prior calendar year.

     Each such upgrade and refurbishment  shall be completed by Franchisee on or
before June 30 of each respective year.  Franchisee shall provide to Franchisor,
on or before June 30 of each such year,  such  reports,  records,  receipts  and
other information as Franchisor may request evidencing  Franchisee's  compliance
with this requirement.

     7.7  Inspection.   Franchisor   will  provide  such   continuing   advisory
assistance,   as  it  deems  advisable,  in  the  operation  of  the  Franchised
Restaurant.  Franchisee  agrees  to  permit  Franchisor  or its  agents,  at any
reasonable time, access to the Franchised  Restaurant to conduct  inspections to
ensure compliance with Franchisor's then-current standards and specifications.

          7.7.1 Testing. In conducting its inspections, Franchisor will have the
right to obtain  samples of any inventory  items without  payment  therefor,  in
amounts  reasonably  necessary  for  testing  by  Franchisor  or an  independent
certified  laboratory  to  determine  whether  said  samples  meet  Franchisor's
then-current standards and specifications.  Franchisor may require Franchisee to
bear  the  cost of such  testing  if the  item or  supplier  of the item has not
previously  been  approved by  Franchisor  or if the sample  fails to conform to
Franchisor's specifications.

          7.7.2  Recommendations. Franchisee acknowledges that Franchisor or its
agents will have the authority to make immediate recommendations and resolutions
to correct any deficiencies detected during such inspections  (including ceasing
of the use of the non-conforming equipment,  advertising materials,  products or
supplies).






          7.7.3 Failure to Correct Deficiencies.  In the event  Franchisee fails
or refuses to implement recommendations  or resolutions,  Franchisor shall  have
the right,  but not the obligation,  to  enter upon  the  Franchised  Restaurant
premises for the purpose of making or causing to be made such corrections as may
be required, with all costs to be paid by Franchisee. The failure to correct any
such deficiencies shall be a material default under Section 13.3.4.

     7.8 Accounting and Records.

          7.8.1 General Accounting Principles.  Franchisee shall maintain for at
least five (5) years from the dates of preparation, full,  complete and accurate
books, records and  accounts in  accordance with  generally-accepted  accounting
principles  in the  United  States  and in  the form and  manner  prescribed  by
Franchisor  from  time  to  time  in  the  Operational  Policies or otherwise in
writing.

          7.8.2  Accounting  Statements.   In addition to the general accounting
requirements, at Franchisee's cost, Franchisee shall submit to Franchisor:

               (a) Unaudited  quarterly  profit and loss statements (in the form
          prescribed by Franchisor and showing the sources of all income and the
          amount expended each month during the period on local advertising) and
          balance  sheet within  forty-five  (45) days of the end of each fiscal
          quarter during the term hereof;

               (b) Unaudited annual statements, as well as a schedule of capital
          expenditures and a schedule of advertising expenditures, within ninety
          (90) days of the end of each fiscal year during the term hereof;

               (c) Copies of Franchisee's quarterly state sales tax returns; and

               (d) Such  other  financial  statements,  reports  and  records as
          Franchisor prescribes.

          7.8.3   Inspection  of  Accounting  and  Records.   Franchisor or  its
representatives (including independent auditors, attorneys or agents) shall have
the right at all reasonable times to examine, copy (and to remove and return the
materials  to be  copied  from the  premises  on which  they  are  located),  at
Franchisor's expense, the books, records and tax returns of Franchisee.

          If an inspection should reveal that payments have been  understated in
any report to Franchisor,  then Franchisee  shall  immediately pay to Franchisor
the amount understated upon demand, in addition  to interest  from the date such
amount was due until paid, at one and one-half  percent  (1.5%) per month or the
maximum rate permitted by law, whichever is less.






          Notwithstanding  the  foregoing,   if   an  inspection   discloses  an
understatement  in any  report of  two  percent (2%) or  more,  Franchisee shall
reimburse  Franchisor  for  any and  all costs and expenses  connected  with the
inspection (including, without limitation, reasonable  accounting and attorneys'
fees).  The  foregoing  remedies  shall be in  addition  to any  other  remedies
Franchisor may have, including, without limitation, the remedies for default.

          7.8.4  Records  of Ownership  Interests in Franchisee.  In addition to
the terms  and  conditions  of  Section  11  hereof,  if there  is a  change  in
the Franchisee's Principal's listed  in Schedule 1.14  during  the  term of this
Agreement, Franchisee shall immediately provide Franchisor a list of all Persons
owning an Equity Interest in Franchisee; provided, however, that if Franchisee's
shares are publicly traded on a nationally  recognized stock exchange,  the list
of  shareholders  required  shall include only those owning five percent (5%) or
more of the shares outstanding.

          7.8.5 Sales Records.  Franchisee shall record all food,   beverage and
token  sales  and  all  other  sales by,  at,  from or  through  the  Franchised
Restaurant (excluding only sales from  pay telephones and vending  machines,  if
approved by the  Franchisor)  on cash  registers or other  machines  approved by
Franchisor, which shall contain  devices or systems that will record accumulated
sales  and  provide  such  other  information  and  reports  as  Franchisor  may
prescribe.  Franchisee  must report  Gross  Sales  for  royalty  and  assessment
reporting requirements on the same accounting calendar used by the Franchisor.

          Within  six (6) months after  receipt  of  written  notification  from
Franchisor,  Franchisee shall install at the Franchised Restaurant as designated
by Franchisor, such point-of-sale computer hardware and software control systems
and telephone  modems as reasonably  prescribed by Franchisor.  Franchisee  will
enter into software  license  agreements  as  designated by Franchisor  for such
purposes.

          Franchisee  shall   permit  Franchisor  to   access  such  systems  by
telephone, modem, or such other means designated by Franchisor at all reasonable
times for  the  purpose  of inspecting,  monitoring  and retrieving  information
concerning the operation of the  Franchised  Restaurant.  Franchisor  shall have
access as provided herein at such times,  and in such manner as Franchisor shall
from time to time specify.

     7.9 Internet.  During the term of this Agreement,  Franchisor may establish
and maintain an Internet Web site that provides information about the System and
the products and services that System  Restaurants  offer. The Web site may also
offer  reservations  or similar  services at System  Restaurants  (including the
Franchised  Restaurant) or sales of items  identified by the Proprietary  Marks,
including clothing, memorabilia, and pre-packaged food items.






          (a)  Franchisor  will have sole  discretion  and control  over the Web
     site's design and contents.  Franchisor will have no obligation to maintain
     the Web site  indefinitely,  but may  discontinue  it at any  time  without
     liability to  Franchisee.  Furthermore,  Franchisor has no control over the
     stability or  maintenance  of the  Internet  generally,  Franchisor  is not
     responsible  for  damage or loss  caused by  errors  of the  Internet.  The
     Franchisor  is not liable for any direct,  indirect,  special,  incidental,
     exemplary or  consequential  damages arising out of the use of the Internet
     or the inability to use the Internet including loss of profits, goodwill or
     savings,  downtime,  damage to or replacement of programs and data, whether
     based in contract or tort, product liability or otherwise.

          (b)  Franchisor  may  use  part  of  the  System  Fund   contributions
     designated for advertising to maintain and further develop the Web site.

          (c) If  Franchisee  fails to pay  when  due any fees or other  amounts
     payable to Franchisor  under this  Agreement,  Franchisor  may  temporarily
     remove or disable  information  or  functionality  relating to  Franchisee,
     until Franchisee pays its outstanding obligations in full.

          (d)  Franchisee  may  not use any of the  Proprietary  Marks  on or in
     connection with the Internet, except as permitted by this Section 7.9.

     7.10 Intranet. Franchisor may, at its option, establish and maintain either
a series of "private" pages on the Internet Web site,  described in Section 7.9,
or a so-called  Intranet,  through either of which Franchisor,  its franchisees,
and their respective employees may communicate with each other and through which
Franchisor  may  disseminate  updates  to the  Operational  Policies  and  other
confidential information.

          (a)  Franchisor  will have no  obligation  to  maintain  the  Intranet
     indefinitely,  but may  discontinue  it at any time  without  liability  to
     Franchisee.

          (b)  Franchisor  will  establish   policies  and  procedures  for  the
     Intranet's  use.  These  policies,  procedures  and other terms of use will
     address issues such as (i) restrictions on the use of abusive,  slanderous,
     or  otherwise  offensive  language  in  electronic   communications;   (ii)
     restrictions on communications between or among franchisees that endorse or
     encourage breach of any franchisee's  franchise  agreement with Franchisor;
     (iii) confidential treatment of materials that Franchisor transmits via the
     Intranet;  (iv) password  protocols  and other  security  precautions;  (v)
     grounds and procedures for Franchisor's  suspension or revocation of access
     to the  Intranet  by  Franchisee  and  others;  and (vi) a  privacy  policy
     governing Franchisor's access to and use of electronic  communications that
     franchisees and others post on the Intranet.  Notwithstanding  clause (vi),
     above,  Franchisee  acknowledges  that, as  administrator  of the Intranet,
     Franchisor  can  technically  access  and view any  communication  that any
     person posts on the  Intranet.  Franchisee  further  acknowledges  that the
     Intranet facility and all communications  that are posted to it will become
     Franchisor's  property,  free of any claims of privacy  or  privilege  that
     Franchisee or any other person may assert.






          (c) Upon  receipt of notice  from  Franchisor  that the  Intranet  has
     become functional,  Franchisee agrees to purchase and install all necessary
     additions to the Franchised  Restaurant's  computer  system at Franchisee's
     cost and to establish and continually  maintain electronic  connection with
     the  Intranet  that  allows  Franchisor  to send  messages  to and  receive
     messages from Franchisee.  Franchisee's  obligation to maintain  connection
     with the  Intranet  will  continue  until this  Agreement's  expiration  or
     termination (or, if earlier,  until Franchisor  discontinues the Intranet).
     Franchisee's  failure to comply with this  Section  7.10 will  constitute a
     material  breach of this  Agreement  on  account  of which  Franchisor  may
     terminate  this  Agreement  in  accordance  with  Section  13.3.3,   unless
     Franchisee cures the breach within 10 days after notice from Franchisor.

          (d) If  Franchisee  fails to  comply  with  any  policy  or  procedure
     governing the Intranet,  Franchisor may  temporarily  suspend  Franchisee's
     access to all or any aspect of the Intranet (such as a chat room,  bulletin
     board,  list serve, or similar  feature) until  Franchisee  fully cures the
     breach.

8.   ADVERTISING

     8.1 General Requirements. Recognizing the importance of the standardization
of advertising  programs to the  furtherance of the goodwill and public image of
the System,  Franchisor and Franchisee  agree that all advertising by Franchisee
shall be conducted in a commercially acceptable manner and shall conform to such
standards  and  requirements  as  Franchisor  may  specify  from time to time in
writing.

     8.2  Pre-Approved  Advertising.  Franchisor  may offer from time to time to
provide, upon Franchisee's request and at Franchisee's  expense,  approved local
advertising and promotional plans and materials,  including, without limitation,
newspaper slicks,  promotional  leaflets and coupons. All such advertising shall
be placed in or distributed  through such media or channel of  communication  as
approved by Franchisor.

     8.3 New  Advertising.  Samples of all planned  advertising,  not previously
approved by  Franchisor,  must be  submitted  to  Franchisor  (through the mail,
return receipt requested), for Franchisor's prior approval. Upon receipt of such
planned  advertising,  Franchisor  will notify  Franchisee no later than fifteen
(15) days after receipt of the proposed advertising whether such advertising has
been approved,  with no response being understood as approval.  Franchisee shall
not utilize any advertising which has not been approved by Franchisor,  or which
has been subsequently  disapproved by Franchisor.  All such advertising shall be
placed in or  distributed  through  such media or channel  of  communication  as
approved by Franchisor.

     8.4 Minimum  Advertising  Expenditures.  Franchisee shall spend during each
calendar  quarter  a minimum  of three  percent  (3%) of the Gross  Sales of the
Franchised  Restaurant  for local  advertising  and  promotion  in  Franchisee's
Designated  Market Area at least two-thirds (2/3) of which amount shall be spent
for  television  advertising or advertising in some other form of media approved
by Franchisor.  Franchisee shall attempt to spend such amount equally throughout
each month of the calendar quarter.







     During the term of this  Agreement,  Franchisor  may, upon ninety (90) days
prior notice to Franchisee, increase the minimum expenditure amount to an amount
not to exceed five percent (5%) of the Gross Sales of the Franchised Restaurant.

     The  minimum  expenditure  amount  will be  reduced  by an amount  equal to
Franchisee's  contributions  to: (i) an  Advertising  Cooperative,  and (ii) the
System Fund while the System Fund remains in effect.

     8.5  System  Fund.  Franchisor  may,  at any time  during  the term of this
Agreement,   establish   and/or   administer  the  System  Fund.  If  Franchisor
establishes or has  established  the System Fund,  Franchisee will contribute an
amount  described in Section 3.3.  Contributions to the System Fund will be paid
at the time and in the manner as  described  in Section  3.3, and subject to the
late payment charges  described in Section 3.5.  Franchisor will give Franchisee
at least  thirty  (30)  days'  written  notice  of the  establishment  of new or
modified System Fund.

     Once  established,  the System Fund will be maintained and  administered by
Franchisor or its designee as follows:

          (a) The System Fund is intended to maximize general public recognition
     and acceptance of the Proprietary  Marks, to enhance the collective success
     of all System  Restaurants and to further develop and maintain the Animated
     Entertainment.  Franchisor and/or its designees will direct all advertising
     and other  programs  produced  using the  System  Fund,  and will have sole
     discretion to approve or disapprove the creative concepts,  materials,  and
     media used in those  programs,  the  placement of  advertisements,  and the
     allocation  of the money in the System Fund to  production,  placement,  or
     other costs. In administering the System Fund, Franchisor and its designees
     undertake no  obligation  to make  expenditures  for  Franchisee  which are
     equivalent or proportionate to Franchisee's contribution, or to ensure that
     Franchisee or any particular  System  Restaurant  benefits  directly or pro
     rata from the placement of  advertising  of the  expenditure of System Fund
     monies.






          (b) The  System  Fund  may be used to  satisfy  any and all  costs  of
     maintaining,  administering,  directing,  preparing  purchasing and placing
     advertising  (including  the cost of preparing and  conducting  television,
     radio,  magazine,  and  newspaper  advertising  campaigns;  direct mail and
     outdoor billboard advertising;  public relations activities;  and employing
     advertising  agencies  to  assist  in those  activities),  for  purchasing,
     leasing shipping and installing software programs, for the costs related to
     producing show tapes, videos and other audio, video and software components
     of the  Animated  Entertainment,  including  licensing  rights to music and
     videos,  and for  designing,  testing and  implementing  new  entertainment
     concepts which may not be directly related to Animated  Entertainment.  All
     sums paid by Franchisee to the System Fund will be maintained in a separate
     account or accounts by  Franchisor  and/or its designees and may be used to
     defray any of  Franchisor's  reasonable  operating  costs and overhead that
     Franchisor incurs in activities reasonably related to the administration or
     direction of the System Fund and  advertising  programs for franchisees and
     the System.  The System Fund and its earnings will not  otherwise  inure to
     the benefit of Franchisor.  The System Fund is operated solely as a conduit
     for  collecting  and  expending  the System  Fund fees as  outlined  above.
     Franchisor and its designees  have no fiduciary duty to Franchisee,  or any
     other franchisees,  or their respective principals,  including Franchisee's
     Principals  with regard to the  operation or  administration  of the System
     Fund.

          (c) Franchisor  will, with respect to System  Restaurants  operated by
     Franchisor or any affiliate, contribute to the System Fund generally on the
     same basis as Franchisee.

          (d) A statement of the  operations of the System Fund will be prepared
     annually and will be made available to Franchisee upon written request.

          (e) Although the System Fund is intended to be of perpetual  duration,
     Franchisor  may  terminate  the System  Fund.  The System  Fund will not be
     terminated, however, until all monies in the System Fund have been expended
     or returned to  contributing  System  Restaurants  (whether  franchised  or
     operated by Franchisor or its affiliates),  without interest,  on the basis
     of their respective contributions.

          (f)  Franchisor  reserves  the right to  structure  the System  Fund's
     organization  and  administration  in ways that, in Franchisor's  judgment,
     most effectively and efficiently  accomplish the System Fund's  objectives.
     Franchisor  may  therefore  organize  or  reorganize  the System  Fund as a
     separate  non-profit  corporation or other appropriate  entity and transfer
     the System  Fund's  assets to the  entity to  administer  the System  Fund.
     Franchisee  agrees to become a member of the entity and, in that regard, to
     sign a  participation  agreement  and take such other  steps as  Franchisor
     reasonably specifies.

          (g) In the event  Franchisor's  designee  maintains or administers the
     System Fund, neither Franchisor nor its officers, directors,  employees, or
     agents  shall  be  liable  to  Franchisee  for any act,  error or  omission
     committed by such designee or in connection  with the  designation  of such
     designee(s).

     8.6  Advertising  Cooperative.  Franchisor  shall  have the  right,  in its
discretion, to designate any geographic area (e.g., a Designated Market Area) as
a region for  purposes  of  establishing  an  Advertising  Cooperative  to which
Franchisee shall be a member.  Such Cooperative will be established and operated
in accordance with an advertising cooperative agreement which is attached hereto
as Attachment D. If, on the date of this  Agreement an  Advertising  Cooperative
has  already  been  established  for a  geographic  area  that  encompasses  the
Franchised  Restaurant,  or if any  Advertising  Cooperative for that geographic
area  is  established  during  the  term  of  this  Agreement,  Franchisee  will
(immediately  upon request of  Franchisor)  execute  Attachment D hereof and any
other  documents  required by Franchisor  to become a member of the  Advertising
Cooperative.  If the Franchised Restaurant is within the geographic area of more
than one (1)  Advertising  Cooperative,  Franchisee must be a member of only one
(1) Advertising Cooperative as Franchisor designates.






9.   REPRESENTATIONS AND WARRANTIES

     9.1 Representations,  Warranties and Covenants of Franchisee. If Franchisee
is not an  individual,  then  Franchisee  and  each of  Franchisee's  Principals
represent, warrant and covenant to Franchisor that:

          9.1.1 Due Incorporation.  If  Franchisee  is  a  corporation,  limited
liability  company,  general  or  limited  partnership or other form of business
entity,  it is duly formed and organized,  validly existing and in good standing
under the laws of the jurisdiction of its organization  with all requisite power
and authority to enter into this Agreement and perform the obligations contained
herein.

          9.1.2 Authorization.   The  execution,  delivery  and  performance  by
Franchisee of this Agreement and all other  agreements  contemplated  herein has
been duly authorized  by all requisite actions on the part of Franchisee  and no
further  actions are  necessary to make this Agreement or such other  agreements
valid and binding upon  it and enforceable  against it  in accordance with their
respective terms.

          9.1.3 Exclusivity.     Franchisee's    corporate    charter,   written
partnership, limited liability company agreement, membership  agreement or other
governing documents will at all times provide that  Franchisee's  activities are
confined  exclusively  to  the  operation of the  Franchised  Restaurant  unless
otherwise consented to in writing by Franchisor.

          9.1.4  Execution  and  Performance.  Neither the  execution,  delivery
nor  performance  by   Franchisee of  this  Agreement or  any  other  agreements
contemplated hereby will  conflict  with,  or result  in a breach of any term or
provision of Franchisee's  charter,  by-laws,   articles  of  organization,   or
partnership  agreement  and/or  other  governing  documents  and any  amendments
thereto, any indenture,  mortgage,  deed of trust or other material  contract or
agreement to which Franchisee is a party or by which it or any of its assets are
bound,  or  breach  any  order,  writ,   injunction  or  decree  of  any  court,
administrative agency or governmental body.

          9.1.5  Corporate   Documents.   Certified   copies   of   Franchisee's
charter by-laws, articles  of organization,  partnership  agreement,  membership
agreement and/or other governing documents and any amendments thereto, including
board of director's or partner's resolutions  authorizing  this  Agreement  have
been delivered  to Franchisor.  Any amendments  or changes  to such governing or
charter  documents  subsequent  to  the  date of  this  Agreement  shall  not be
undertaken without Franchisor's prior written consent.

          9.1.6  Ownership   Interests.   All Equity Interests in Franchisee are
accurately and completely  described in Schedule 1.13.  Franchisee will maintain
at all times a current list of all owners of record and all beneficial owners of
Equity  Interests in Franchisee.  Franchisee will make such list of available to
Franchisor upon request;






          9.1.7  Stop Transfer Instructions.   If Franchisee is  a  corporation,
Franchisee  will  maintain  stop-transfer  instructions  against the transfer on
Franchisee's  records of any of its equity securities and each stock certificate
will have  conspicuously  endorsed upon it a statement in a form satisfactory to
Franchisor that it is held subject to all restrictions  imposed upon assignments
by this Agreement;  but the requirements of this Section 9.1.7 will not apply to
the transfer of equity securities of a publicly-held corporation.  If Franchisee
is a  partnership  or limited  liability  company,  its written  partnership  or
limited  liability  company agreement will provide that ownership of an interest
in  the  partnership  or  limited  liability  company  is  held  subject  to all
restrictions imposed upon assignments by this Agreement.

          If Franchisee  is an  individual, then Franchisee represents, warrants
and covenants that neither the execution, delivery nor performance by Franchisee
of this Agreement or any other agreements contemplated hereby conflicts with, or
results in a breach of any contract or agreement to which  Franchisee is a party
or  a  breach  of  any  order,   writ,   injunction  or  decree  of  any  court,
administrative agency or governmental body.

     9.2 Financial Statements.  Franchisee and, at Franchisor's request, each of
Franchisee's   Principals  have  provided  Franchisor  with  their  most  recent
financial  statements  in the  form  and  for  the  time  periods  specified  by
Franchisor.  The financial statements (i) present fairly Franchisee's  financial
position  and the  financial  position of each of  Franchisee's  Principals,  as
applicable, at the dates indicated therein and, with respect to Franchisee,  the
results of its  operations  and cash flow for the periods  then ended;  (ii) are
certified as true and correct by the  Franchisee's  Chief  Financial  Officer or
President,  as  applicable;  and (iii) have been  prepared  in  conformity  with
generally  accepted  accounting  principles in the United  States,  applied on a
consistent  basis.  No material  liabilities,  adverse  claims,  commitments  or
obligations of any nature, whether accrued,  unliquidated,  absolute, contingent
or otherwise,  exist as of the date of this Agreement which are not reflected as
liabilities  on  Franchisee's  financial  statements  or those  of  Franchisee's
Principals.

     9.3 Franchisee's  Principals.  Franchisee will notify Franchisor within ten
(10)  days  following  the  date  that  any  person  previously   identified  as
Franchisee's Principal ceases to qualify as such or that any new person succeeds
to or otherwise  comes to occupy a position  which would  qualify such person as
one of  Franchisee's  Principals.  That  person  will  immediately  execute  all
documents and instruments (including, as applicable, this Agreement) required by
Franchisor  to be executed by others in a comparable  position;  but if there is
any conflict  between this provision and the transfer  provisions of Section 11,
the provisions of Section 11 will control.

     9.4  Guarantee.   Franchisee's  Principals  will,  jointly  and  severally,
guarantee the performance of Franchisee's obligations,  covenants and agreements
under  this  Agreement  pursuant  to the terms and  conditions  of the  guaranty
attached to this  Agreement,  and will otherwise bind themselves to the terms of
this Agreement as stated herein.






     9.5  Non-Competition  During Term of  Agreement.  In  consideration  of the
training  described  herein and  disclosure  to Franchisee of the System and the
Confidential  Information,  during the term of this  Agreement,  Franchisee  and
Franchisee's Principals shall not, directly or indirectly:

          (a) Divert or attempt to divert  business of any System  Restaurant to
     any competitor,  or do or perform any other act injurious or prejudicial to
     the goodwill  associated with Franchisor's  Proprietary Marks, the Animated
     Entertainment or the System;

          (b) Employ or seek to employ any person who is employed by  Franchisor
     or by any other  franchisee of  Franchisor,  or induce such person to leave
     such employment; and

          (c) Except as provided for herein,  own, maintain,  engage in, or have
     an Equity  Interest in a Competing  Business;  provided that this provision
     shall not apply to any Minority Interest collectively held by Franchisee or
     Franchisee's  Principals  in  any  publicly-held  corporation  listed  on a
     national stock exchange.

     9.6  Non-Competition  after  Termination or  Non-Renewal  of Agreement.  In
consideration  of the training  described herein and disclosure to Franchisee of
the System  and the  Confidential  Information,  for a period of three (3) years
after the expiration  and  non-renewal or termination of this Agreement or after
the approved Transfer by Franchisee and/or Franchisee's  Principals,  Franchisee
and Franchisee's Principals (as applicable) shall not, directly or indirectly:

          (a) Divert or attempt to divert  business of any System  Restaurant to
     any competitor,  or do or perform any other act injurious or prejudicial to
     the goodwill  associated with Franchisor's  Proprietary Marks, the Animated
     Entertainment or the System;

          (b) Employ or seek to employ any person who is employed by  Franchisor
     or by any other  franchisee of  Franchisor,  or induce such person to leave
     such employment; and

          (c) Except as provided for herein,  own, maintain,  engage in, or have
     any interest in a Competing  Business which is located within the Protected
     Territory  or  within a  twenty-five  (25)  mile  radius  of the  Protected
     Territory;  provided  that this  provision  shall not apply to any Minority
     Interest collectively held by Franchisee or Franchisee's  Principals in any
     publicly-held corporation listed on a national stock exchange.

     9.7  Independent  Covenants.  Each of the covenants in Sections 9.5 and 9.6
will be  construed  as  independent  of any other  covenant or provision of this
Agreement.






          (a)  Franchisee  and each of  Franchisee's  Principals  understand and
     acknowledge that Franchisor will have the right, in its sole discretion, to
     reduce the scope of any  covenant set forth in Sections 9.5 and 9.6, or any
     portion thereof,  without their consent,  effective immediately upon notice
     to Franchisee;  and Franchisee and Franchisee's  Principals agree that they
     will  comply  with  any  covenant  as so  modified,  which  will  be  fully
     enforceable notwithstanding the provisions of Section 17.5 hereof.

          (b) Franchisee and each of  Franchisee's  Principals  expressly  agree
     that the existence of any claims they may have against Franchisor,  whether
     or not arising from this  Agreement,  will not  constitute a defense to the
     enforcement by Franchisor of the covenants in Sections 9.5 and 9.6.

          (c) Franchisee and each of Franchisee's  Principals  acknowledge  that
     the  covenants  not to  compete  contained  in  Sections  9.5  and  9.6 are
     reasonable and necessary to protect the business and goodwill of the System
     and to avoid  misappropriation  or other unauthorized use of the System and
     Franchisor's other trade secrets.

          (d) Franchisee and each of  Franchisee's  Principals  acknowledge  and
     confirms that Franchisee and Franchisee's Principals possess the education,
     training and  experience  necessary to earn a reasonable  livelihood  apart
     from operating a Competing Business.

     9.8  Additional  Covenants.  Franchisee  shall  require  and obtain for the
benefit  of  Franchisor  execution  of  covenants  similar to those set forth in
Sections  9.5  and  9.6  from  any and all of its  employees  having  access  to
materials or  information  furnished or disclosed to Franchisee  by  Franchisor,
including, without limitation, all managers, assistant managers and directors of
operations.

     9.9 Guaranty. As an inducement and as a condition to Franchisor's execution
and acceptance of this Agreement,  all of Franchisee's  Principals shall execute
the Agreement and Guaranty of Franchisee's Principals attached hereto.

     9.10 Rights and Limitations to use Animated  Entertainment.  Franchisee and
Franchisee's  Principals  acknowledge  and  agree  that the  rights  granted  to
Franchisee  under  this  Agreement  to use  Animated  Entertainment,  including,
without  limitation,  computer-controlled  animated  characters,  video displays
(regardless of the format of the display,  e.g., video tape, video disk,  etc.),
computer hardware and software,  artistic  designs,  scripts and musical scores,
staging  and  lighting   techniques   and   configurations,   and  any  and  all
improvements,  additions, replacements, patents, copyrights, trademarks, service
marks, technology, and know-how and all other intellectual and artistic property
relating thereto, are limited solely to using the Animated  Entertainment during
the term of this Agreement in the Franchised  Restaurant at the site approved by
Franchisor.  Franchisee  shall not use the  Animated  Entertainment,  including,
without limitation,  (i) toy versions,  games, or anything of play value related
to the Animated Entertainment or (ii) records,  cassettes, audio and video tapes
or other  recordings  or  embodiments  of music or musical  scores  included  in
Animated  Entertainment,  except  on terms,  if any,  set  forth in  writing  by
Franchisor.  Franchisee's  right to use the  Animated  Entertainment  shall  not
survive  termination or expiration  hereof, nor shall such right be transferable
by  Franchisee  except as part of, and in connection  with,  the transfer of the
franchise granted  hereunder,  which transfer is permitted by and subject to the
terms and conditions set forth in Section 11 hereof.





     Franchisee and  Franchisee's  Principals  acknowledge  superior  rights and
interest of Franchisor in and to the Animated  Entertainment.  Neither Franchise
nor Franchisee's Principals shall copy or reproduce in any manner and Franchisee
and Franchisee's  Principals shall use their best efforts to prevent others from
copying or  reproducing  in any manner the computer  software,  video  displays,
artistic   designs,   scripts   and   musical   scores  and  all  other   plans,
specifications,   documentation   and   programming   related  to  the  Animated
Entertainment and they agree that any duplication or unauthorized use thereof is
and shall be deemed an infringement of the rights of Franchisor.

     9.11  Non-Liability.  Franchisee  acknowledges  and agrees that  Franchisor
shall  not,  by  virtue  of  any  approvals,  advice  or  services  provided  to
Franchisee,  assume  responsibility  or  liability  to  Franchisee  or any third
parties to which it would not otherwise be subject.

     9.12 Performance by Franchisor. Franchisee acknowledges and agrees that any
duty or obligation  imposed on Franchisor by this  Agreement may be performed by
any designee, employee, or agent of Franchisor, as Franchisor may direct.

     9.13  Licensing  of  Musical  Compositions.   Franchisee  and  Franchisee's
Principals  understand  that  Franchisee's  right to use  certain of the musical
compositions  contained in the Animated  Entertainment  programs is  conditioned
upon  obtaining  licenses  from and the  payment  of fees to  performing  rights
societies  such as the American  Society of Composers,  Authors and  Publishers,
Broadcast Music, Inc. and SESAC, Inc.  ("Societies").  Franchisor shall have the
right to obtain and maintain on Franchisee's  behalf  performing rights licenses
from the Societies as may be required to authorize  Franchisee to use such music
at the  Franchised  Restaurant,  and to forward  payment on behalf of Franchisee
(for which  Franchisee  shall reimburse  Franchisor as described  below) for the
music performance fees due to the Societies under the licenses. Franchisee shall
submit to Franchisor all  information  necessary to enable  Franchisor to submit
any required  reports to the Societies and shall promptly  reimburse  Franchisor
upon demand for all payments which are made on Franchisee's behalf by Franchisor
to the Societies and for which reimbursement is requested by Franchisor. Failure
by  Franchisee  to comply with the terms of this  Paragraph  will  constitute  a
material default pursuant to Section 13.3.4 and will result in Franchisee's loss
of rights to use the musical compositions in Animated Entertainment programs.

10.  PROPRIETARY RIGHTS AND INFORMATION

     10.1  Confidential  Information.   Except  as  expressly  provided  herein,
Franchisee  shall  have  no  right,   title  or  interest  in  the  Confidential
Information.  Franchisee and the Franchisee's Principals shall only communicate,
disclose or use the Confidential Information as expressly permitted herein or as
required by law.  Franchisee  and  Franchisee's  Principals  shall  disclose the
Confidential  Information  only to such of Franchisee's  employees,  agents,  or
independent  contractors  who must have  access to it in  connection  with their
employment.   The  covenant  in  this  Section  will  survive  the   expiration,
termination, or transfer of this Agreement or any interest in this Agreement and
will be perpetually binding upon Franchisee and each of Franchisee's Principals.





          10.1.1 Confidentiality Agreements. Franchisee shall cause Franchisee's
employees   having   access  to  the   Confidential   Information   to   execute
confidentiality  agreements  substantially  in the form of Attachment E, stating
that they will  preserve in confidence  all  Confidential  Information.  Neither
Franchisee,  Franchisee's  Principal's nor their respective employees may at any
time, without  Franchisor's prior written consent,  copy,  duplicate,  record or
otherwise  reproduce  the  Confidential  Information,  in whole or in part,  nor
otherwise make the same available to any unauthorized person.

          10.1.2 Improvements.   If    Franchisee    makes    any   improvements
(as determined by Franchisor)  to  the  Confidential  Information or the System,
Franchisee and the Franchisee's Principals shall each execute  an  amendment  to
this Agreement reflecting such improvements and Franchisor's exclusive ownership
thereof.  All such improvements shall be considered Confidential Information.

     10.2 Proprietary  Marks.  Franchisee  acknowledges  Franchisor's  exclusive
ownership of, or right to sublicense,  the  Proprietary  Marks and shall neither
directly or  indirectly,  infringe,  contest or  otherwise  impair  Franchisor's
exclusive  ownership of, and/or license,  with respect to the Proprietary  Marks
either  during  or  after  the  termination  or  expiration  of this  Agreement.
Franchisee also expressly acknowledges and agrees that:

          (a)  The  Proprietary  Marks  will  only  be  used  by  Franchisee  in
     connection with the operation of the Franchised Restaurant under the System
     and only in the manner authorized and prescribed by Franchisor herein or by
     written notification.

          (b)  Except  for the  non-exclusive  license  to use  granted  herein,
     Franchisee and Franchisee's  Principals acquire no right, title or interest
     in (or any goodwill  associated with) the System, the Proprietary Marks and
     the Animated Entertainment.

          (c) Upon the expiration or termination of this Agreement,  no monetary
     amount shall be assigned as  attributable  to any goodwill  associated with
     Franchisee's  use of the  System,  the  Proprietary  Marks or the  Animated
     Entertainment  and all goodwill  associated  with  Franchisees'  use of the
     System, the Proprietary Marks and the Animated  Entertainment will inure to
     the benefit of Franchisor or Franchisor's licensors, as the case may be.

          (d)  Franchisee and  Franchisee's  Principals  shall  promptly  notify
     Franchisor of any use by any third party of the Proprietary  Marks of which
     the Franchisee and  Franchisee's  Principals know or have reason to know is
     unauthorized.

          (e)  Franchisee and  Franchisee's  Principals  shall  promptly  notify
     Franchisor of any  litigation  action or claim  instituted by any person or
     legal entity  against  Franchisor,  Franchisee or  Franchisee's  Principals
     involving the  Proprietary  Marks and, if necessary,  shall execute any and
     all  documents,  and to render  such  assistance  as may, in the opinion of
     Franchisor's  counsel, be reasonably requested to carry out such defense or
     prosecution.






          (f)  Franchisee  shall  operate,  advertise and promote the Franchised
     Restaurant under the Proprietary  Marks  designated by Franchisor,  without
     prefix or  suffix,  and shall use no other  name or mark and shall  refrain
     from using any of the  Proprietary  Marks in  conjunction  with any word or
     symbol without Franchisor's prior written consent. Franchisee shall not use
     the  Proprietary  Marks as part of its  corporate or other legal name,  and
     will  obtain  Franchisor's  approval of its  corporate  or other legal name
     before applying for or filing it with the applicable government authority.

          (g) This license to use the Proprietary  Marks is  non-exclusive,  and
     Franchisor has the right: (i) to grant other franchises for the Proprietary
     Marks,  in  addition  to  those  franchises  already  granted  to  existing
     franchisees,  (ii) to use the Proprietary Marks in connection with the sale
     of food and other  products  through the  Internet or at  wholesale  and/or
     retail  outlets  in the  Protected  Territory,  and  (iii) to  develop  and
     establish  other  systems  for the same or similar  products  and  services
     utilizing the same Proprietary  Marks, or any similar or other  proprietary
     marks, and to grant licenses thereto without providing Franchisee any right
     therein.

          (h)  Franchisee  will  use,  promote  and  offer  for sale  under  the
     Proprietary  Marks only those products and services which meet Franchisor's
     prescribed  standards  and  specifications,  as  they  may  be  revised  by
     Franchisor from time to time.

          (i) Franchisee  will execute all documents  requested by Franchisor or
     its counsel that are  necessary to obtain  protection  for the  Proprietary
     Marks or to maintain their continued validity or enforceability and to take
     no action that would jeopardize the validity or enforceability thereof.

     10.3 Copyrights.  Franchisee and Franchisee's  Principals  acknowledge that
Franchisor  owns the  worldwide  copyright  and  other  ownership  rights to all
materials  provided by Franchisor (in all forms or media now or hereafter known)
including,   without   limitation  the   Operational   Policies,   the  Animated
Entertainment, promotional materials and software. Franchisee also agrees:

          (a) If registration of the copyright of any of the materials mentioned
     above is  required by law or deemed  advisable  by  Franchisor,  Franchisee
     agrees  to  cooperate   with  and  assist   Franchisor   in  obtaining  the
     registration  in the name of Franchisor and will not register or attempt to
     register or assist or be involved in any way with the registration  (either
     directly or indirectly) of such materials;

          (b) Franchisee  agrees to use proper  copyright and other  proprietary
     notices  in  connection  with all  copyright  materials  and  conform  with
     Franchisor's standards for protecting its rights; and






          (c)  Franchisee   agrees  to  promptly  cause  the  execution  of  any
     assignments,  waivers of rights,  or other documents,  and take any further
     actions  needed or advisable to ensure that  Franchisor  has such copyright
     and other rights described in this Section 10.

11.  TRANSFER OF INTEREST

     11.1 Transfer by Franchisor. Franchisor shall have the right to transfer or
assign this Agreement,  its rights to the Proprietary Marks, and all or any part
of its rights or  obligations  herein to any person or legal entity  without the
consent  of  Franchisee  or  Franchisee's  Principals.  Upon  such  transfer  by
Franchisor,  any  transferee  or  assignee of  Franchisor  shall  become  solely
responsible for all such obligations of Franchisor under this Agreement from the
date of transfer or  assignment.  Without  limiting  the  foregoing,  Franchisee
acknowledges  that  Franchisor may sell its assets  (including its rights in the
Proprietary  Marks and the System) to a third  party;  may offer its  securities
privately or publicly; may merge, acquire other legal entities or be acquired by
another  legal  entity;  and  may  undertake  a  refinancing,  recapitalization,
leveraged buy out or other economic or financial  restructuring.  With regard to
any  or all  of  the  above  sales,  assignments  and  dispositions,  Franchisee
expressly  and  specifically  waives any  claims,  demands,  or damages  against
Franchisor or its affiliates arising from or related to Franchisor's transfer of
its rights in this Agreement,  the Proprietary  Marks or the System to any other
party.  Nothing contained in this Agreement will require Franchisor to remain in
the business of operating or licensing the  operation of the System  Restaurants
or other businesses or to offer any services or products to Franchisee,  whether
or not bearing or not bearing the Proprietary Marks, if Franchisor  transfers or
assigns its rights in or obligations under this Agreement.

     11.2  Transfer  by  Franchisee.   Franchisee  and  Franchisee's  Principals
understand  and  acknowledge  that  the  rights  and  duties  set  forth in this
Agreement are personal to Franchisee and are granted,  in part, in reliance upon
the  skill,  aptitude,   business  and  financial  capacity  of  Franchisee  and
Franchisee's  Principals  and their  intention of  complying  with its terms and
conditions.  Therefore,  if the Franchisee and/or Franchisee's Principals desire
to Transfer any interest to any individual or entity  (including a trust),  they
must first obtain the prior written  approval of Franchisor.  Any such attempted
Transfer not approved by  Franchisor  shall be null and void from its  purported
inception.

          11.2.1 General  Requisites.   Prior  to  authorizing   a  Transfer  by
Franchisee  of  any  interest,  Franchisor  may  require,  among  other  things,
satisfaction of any or all of the following:

               (a) Franchisee  shall be in full compliance with all of the terms
          and conditions of this Agreement;

               (b) Franchisee and/or any of Franchisee's Principals shall remain
          liable  for  the  performance  of its  obligations  contained  in this
          Agreement   through  the  date  of  Transfer  and  shall  execute  all
          instruments  reasonably  requested  by  Franchisor  to  evidence  such
          liability;






               (c) The transferee  shall  satisfy,  in  Franchisor's  reasonable
          judgment,   Franchisor's  then  existing  criteria  for  a  franchisee
          including,  without  limitation:  (i) education;  (ii) business skill,
          experience  and aptitude;  (iii)  character and  reputation;  and (iv)
          financial resources;

               (d) The  transferee  and all owners of any  record or  beneficial
          interest in the capital stock (or other interest) of transferee  shall
          execute all  instruments  (including  a new  franchise  agreement  and
          guaranty)  reasonably  requested by Franchisor to evidence  acceptance
          and assumption of all of the terms and  conditions of this  Agreement.
          Such new franchise  agreement may contain terms  materially  different
          from this  Agreement,  including  higher  fees and shall be for a term
          equal to the then unexpired term hereof; and

               (e) Franchisee and  Franchisee's  Principals (if applicable) must
          have executed a general release, in a form satisfactory to Franchisor,
          of any and all claims  against  Franchisor,  its  affiliates,  and the
          officers,   directors,   members,   shareholders,   partners,  agents,
          representatives,  independent  contractors,  servants and employees of
          each of them, in their corporate and individual capacities, including,
          without limitation,  claims arising under this Agreement and any other
          agreement  between  Franchisee or any of  Franchisee's  affiliates and
          Franchisor or any of its affiliates or under  federal,  state or local
          laws,  rules,  regulations  or orders.  Franchisor's  current  form of
          general release is attached hereto as Attachment B.

               (f) Franchisee pays a transfer fee equal to (i) one half (1/2) of
          the then current initial Franchise Fee for franchise agreements if the
          Franchisee does not have a Controlling Interest in the transferee (who
          is not one of Franchisee's Principals); or (ii) an amount equal to the
          reasonable  costs  incurred  by  Franchisor  in  connection  with  the
          Transfer among Franchisee's Principals only, but in no event less than
          One Thousand and no/100 Dollars ($1,000.00);

               (g) At the  transferee's  expense,  the transferee and any of the
          transferee's employees responsible for the operation of the Franchised
          Restaurant have  satisfactorily  completed such training as Franchisor
          may then require; and

               (h) The  transferee has complied with  Franchisor's  then-current
          application requirements for a new franchise.

          11.2.2 Right of First Refusal. In the event that Franchisee and/or any
of Franchisee's  Principals or any  holder of an  Equity Interest  in Franchisee
desire to effectuate a Transfer, Franchisor shall have  the  right  and  option,
exercisable within thirty (30) days after Franchisor's  receipt of all materials
and  information  described  in Section  11.2.2(a),  (b) and (c) to purchase the
interest proposed to be transferred in accordance with the following:






               (a) Franchisee or the proposed transferee shall notify Franchisor
          in writing of any bona fide proposed Transfer and set forth a complete
          description  of all terms  and fees of the  proposed  Transfer  in the
          manner  prescribed  by  the  Franchisor,   including  the  prospective
          transferee's name, address, financial qualifications and previous five
          years business experience;

               (b) Franchisee  shall provide the Franchisor  with any additional
          information,   agreements,   certifications  or  documents  Franchisor
          requests  for use in its  evaluation  of whether to exercise its first
          refusal right.

               (c) Upon receipt of the Franchisor's  request,  Franchisee or the
          proposed  transferee shall promptly provide  Franchisor with access to
          any real or personal  property,  documents or records  relevant to the
          transaction  and to the interest which is the subject of the Transfer.
          Once Franchisor has received all materials  submitted by Franchisee or
          the proposed  transferee  and has reviewed all  property,  records and
          documents it has requested,  Franchisor shall notify Franchisee or the
          proposed  transferee of its decision to exercise its option to acquire
          the interest  being  transferred,  and the  conditions,  if any, under
          which it will approve the proposed Transfer.

               (d) If the  Franchisor  exercises  its first refusal  right,  the
          transferor  shall  transfer  the  interest  to  Franchisor  or to  its
          assignee  pursuant to an  agreement  to purchase  which  contains  the
          material terms to which the transferor and the proposed transferee had
          agreed.  If the offer or proposed  purchase contract omitted any terms
          customarily  addressed  in a transfer of an interest of the type which
          is the subject of the  transaction,  Franchisor may supply those terms
          in the purchase agreement and related documents.

               (e) If the  proposed  transferor  wishes to make a Transfer,  the
          transferor  shall  provide  Franchisor  with a copy  of any  offer  or
          agreement to purchase,  signed by the  proposed  transferee,  together
          with copies of any documents referenced in the offer or agreement.  If
          all material terms of the proposed sale are not described in the offer
          or agreement,  Franchisee  shall provide  details of all such terms in
          its  submission  to  the  Franchisor,   accompanied  by  the  proposed
          transferee's written agreement to the terms.






               (f) In the  event the  consideration,  terms,  and/or  conditions
          offered by the third party are such that Franchisor or its nominee may
          not  reasonably  be able to  furnish  the same  consideration,  terms,
          and/or conditions, then Franchisor or its nominee, as appropriate, may
          purchase the interest  proposed to be  transferred  for the reasonable
          equivalent in cash. If the parties  cannot agree,  within a reasonable
          time,  on the  reasonable  equivalent  in cash  of the  consideration,
          terms,  and/or  conditions  offered by the third party, an independent
          appraiser  shall be designated  by  Franchisor,  and such  appraiser's
          determination shall be binding.

          11.2.3  Death or  Disability. Within fifteen (15) days after the death
or  permanent  disability  of  Franchisee  or  any  of  Franchisee's Principals,
Franchisee or a  representative of Franchisee must notify Franchisor in writing.
Any transfer  upon  death or permanent  disability will  be subject  to the same
terms and conditions as described in this Section for any inter vivos transfer.

          Upon the death of Franchisee (if a natural person) or any Franchisee's
Principal who is a natural person and who has an interest in this Agreement,  in
the Franchised Restaurant,  or in Franchisee,  the executor,  administrator,  or
other person  representative  of the deceased  will transfer the interest of the
deceased to a third party approved by Franchisor within twelve (12) months after
the date of death. If no personal  representative is designated or appointed and
no  probate  proceedings  are  instituted  with  respect  to the  estate  of the
deceased,  then the distributee of the interest of the deceased must be approved
by  Franchisor.  If the  distributee  is not  approved by  Franchisor,  then the
distributee will transfer the interest of the deceased to a third party approved
by Franchisor within twelve (12) months after the date of death of the deceased.

          Upon the permanent disability  of Franchisee  (if a natural person) or
any of Franchisee's  Principals who is a natural  person and who has an interest
in this Agreement, in the Franchised Restaurant or in Franchisee, Franchisor may
require the interest to be transferred to a third party in accordance  with  the
conditions  described  in this  Section 11 within six (6) months after notice to
Franchisee.  For purposes of this Section 11.2.3,  "permanent  disability" means
any physical,  emotional,  or mental injury,  illness,  or incapacity that would
prevent a person from  performing the obligations set forth in this Agreement or
in the Guaranty made part of this Agreement for at least ninety (90) consecutive
days, and from which condition recovery within ninety (90) days from the date of
determination of disability is unlikely. If the parties disagree as to whether a
person is permanently  disabled,  the existence of permanent  disability will be
determined  by a licensed  practicing  physician  selected by  Franchisor,  upon
examination of the person; or if the person refuses to submit to an examination,
then (for the purpose of this Section 11.2.3) the person  automatically  will be
considered  permanently  disabled  as of the date of  refusal.  The costs of any
examination required by this Section 11.2.3 will be paid by Franchisor.

          If an interest is not  transferred  upon death or permanent disability
as required in this Section 11.2.3 then the failure  will constitute  a material
event of default under this Agreement.

          11.2.4  Public   Offerings.   Equity   Interests  in   Franchisee  and
Franchisee's Principals  may be offered,  only with the prior written consent of
Franchisor, which consent shall not be unreasonably withheld. Such approval will
be subject to the following:

               (a) All  registration  materials  required  for such  offering by
          federal or state law shall be submitted to Franchisor for review prior
          to their being filed with any government agency;






               (b)  No  offering  material  (for  either  a  public  or  private
          offering) shall express or imply (by use of the  Proprietary  Marks or
          otherwise)  that  Franchisor  is  participating  in  an  underwriting,
          issuance or public offering of Franchisee, Franchisee's Principals, or
          Franchisor  securities.  Franchisor  may, at its option,  require such
          offering  materials  to  contain a  written  statement  prescribed  by
          Franchisor  concerning  the  limitations  described  in the  preceding
          sentence;

               (c)   Franchisee,   Franchisee's   Principals   and   the   other
          participants  in the  registration  and offering must fully  indemnify
          Franchisor in connection with the offering;

               (d) For each proposed public offering, other than offerings which
          are exempt from  registration,  Franchisee  shall pay to  Franchisor a
          non-refundable fee of Ten Thousand and no/100 Dollars  ($10,000.00) or
          such greater  amount as is necessary to reimburse  Franchisor  for its
          reasonable  costs and expenses  associated with reviewing the proposed
          offering, including, without. limitation, legal and accounting fees;

               (e)  Franchisor's   receipt  of  a  legal  opinion  from  counsel
          satisfactory to Franchisor stating (a) that the offering materials and
          the conduct of the securities offering comply in all material respects
          with the laws of the applicable  Territory Segment from which an offer
          of  securities  originates  or into  which an offer of  securities  is
          directed,  and (b) that  neither the conduct nor  consummation  of the
          securities  offering will result in a violation of any  anti-terrorism
          or anti- money laundering laws.

               (f) Franchisee and Franchisee's  Principals shall give Franchisor
          at least sixty (60) days' prior  written  notice  before the effective
          date of any  offering  or other  transaction  covered by this  Section
          11.2.4.


12.  INSURANCE AND INDEMNITY


     12.1 Insurance. Prior to the commencement of construction of the Franchised
Restaurant and for the entire term of this  Agreement,  Franchisee  shall obtain
and maintain insurance  protecting  Franchisee and the Indemnitiees  against any
demand or claim arising or occurring in  connection  with the  construction  and
operation of the Franchised Restaurant. Such policies shall: (i) be of the types
and for the minimum amounts of coverage  indicated in the Operational  Policies;
(ii)  contain a waiver of  subrogation  in favor of  Franchisor;  (iii) name the
Indemnitees as additional  insureds;  (iv) contain no provision  which limits or
reduces  coverage  in the  event  of a  claim  by any  one  (1) or  more  of the
Indemnitees;  (v) provide  that  policy  limits  shall not be reduced,  coverage
restricted,  canceled, allowed to lapse or otherwise altered or such policy(ies)
amended  without  Franchisor's  consent;  and (vi) be  obtained  from  reputable
insurance  companies approved by Franchisor and authorized to do business in all
jurisdictions  in which the Franchised  Restaurant is located.  Franchisee  also
acknowledges and agrees to:

          (a) furnish  Franchisor with evidence that Franchisee has obtained the
     required  insurance at least fifteen (15) days prior to the commencement of
     construction,  and each year afterwards, and at any other time a carrier or
     coverage is changed;

          (b) increase the insurance  coverage amounts in the amounts  indicated
     by Franchisor  upon thirty (30) days prior written notice from  Franchisor;
     and

          (c)  reimburse  Franchisor  for any  insurance  policies  obtained  by
     Franchisor  on behalf  of  Franchisee  if  Franchisee  fails to obtain  the
     insurance required by this Section.

     12.2 Indemnities.

          12.2.1 Indemnification. Franchisee  and Franchisee's  Principals agree
to and hereby,  jointly  and  severally, indemnify, defend (by counsel chosen by
Franchisor)  and agree to hold  harmless  each  Indemnitee  from all  Losses and
Expenses alleged, incurred or assessed in connection with:

               (a)   Franchisee's  or  any  Franchisee's   Principal's   alleged
          infringement   or  alleged   violation  of  any   trademark  or  other
          proprietary  name,  mark, or right  allegedly owned or controlled by a
          third party;

               (b) The  violation,  breach or asserted  violation or breach,  by
          Franchisee or any of Franchisee's Principals, of any federal, state or
          local law, regulation,  ruling,  standard or directive or any industry
          standard;

               (c) Libel, slander or any other form of defamation of Franchisor,
          the System or any franchisee operating under the System, by Franchisee
          or by any of Franchisee's Principals;

               (d) The violation or breach by Franchisee or any of  Franchisee's
          Principals, of any warranty,  representation,  agreement or obligation
          in this Agreement or in any other agreement,  between Franchisee,  its
          subsidiaries  and  affiliates and  Franchisor,  its  subsidiaries  and
          affiliates or the officers, directors, shareholders, partners, agents,
          representatives, independent contractors and employees thereof; and






               (e) Acts, errors or omissions of Franchisee,  any of Franchisee's
          subsidiaries or affiliates or any of  Franchisee's  Principals and the
          officers, directors, shareholders,  partners, agents, representatives,
          independent   contractors   and  employees  of   Franchisee   and  its
          subsidiaries   and  affiliates  in  connection   with  the  activities
          contemplated  under this  Agreement,  including  the  operation of the
          Franchised Restaurant.

          12.2.2  Notice  and  Counsel.  Franchisee  and  each  of  Franchisee's
Principals agree to give Franchisor immediate notice  of any Action.  Franchisor
may engage, at its expense,  separate  counsel to represent the  Indemnitees  in
such Action and/or  elect to assume (but under  no circumstance  is obligated to
undertake) the defense and/or reasonable settlement of any Action.  Franchisor's
election to settle  shall  not diminish  Franchisee's  and each of  Franchisee's
Principal's obligation  to defend, indemnify  and hold the Indemnitees  harmless
from all Losses and Expenses.

          12.2.3  Settlement and Remedial Actions.  In order to protect  persons
or property, or its reputation or  goodwill,  or the  reputation  or goodwill of
others,  Franchisor may, at any time and without notice,  as it, in its judgment
deems  appropriate,  consent or agree to settlements or take such other remedial
or  corrective  actions  it deems  expedient  with  respect to any Action if, in
Franchisor's sole judgment, there are reasonable grounds to believe that:

               (a) any of the acts or circumstances enumerated in Section 12.2.1
          ((a) through (d)) above have occurred; and

               (b) any act,  error,  or omission as described in Section  12.2.1
          (e) may result  directly or indirectly in damage,  injury,  or harm to
          any person or any property.

          12.2.4   Expenses.   All  Losses  and  Expenses  incurred  under  this
Section 12 shall be chargeable to and paid by  Franchisee or any of Franchisee's
Principals  pursuant  to  Franchisee's  obligations   of  indemnity  under  this
Section 12  regardless  of  any  actions,  activity  or  defense  undertaken  by
Franchisor or the  subsequent success or  failure  of such actions, activity, or
defense.

          12.2.5  Third  Party  Recovery.   Under  no  circumstances  shall  the
Indemnitees be  required or obligated  to seek  recovery  from third  parties or
otherwise mitigate their losses in order to maintain a claim against  Franchisee
or  any  of  Franchisee's  Principals.  Franchisee  and  each  of   Franchisee's
Principals agree that the failure to pursue such  recovery or mitigate loss will
in no way reduce the amounts  recoverable from Franchisee or any of Franchisee's
Principals by the Indemnitees.

          12.2.6  Survival.  Franchisee  and Franchisee's  Principals  expressly
agree  that  the  terms  of  this  Section 12  shall  survive  the  termination,
expiration or transfer of this Agreement or any interest herein.

13.  TERM, RENEWAL AND TERMINATION

     13.1 Term.  Unless  terminated  as provided  for  herein,  the term of this
Agreement  shall  commence upon the Execution Date and shall expire fifteen (15)
years thereafter.






     13.2 Renewal.  Franchisee may, at Franchisee's option, renew this Agreement
for one (1) additional period of ten (10) years, provided that at the end of the
initial term:

          (a)  Franchisee  has given  Franchisor  written  notice of election to
     renew not less than nine (9) months nor more than twelve (12) months  prior
     to the end of the initial term;

          (b) Franchisee  shall have completed to Franchisor's  satisfaction all
     maintenance,  refurnishing,  renovating  and remodeling of the premises and
     equipment  as  Franchisor  shall  require  in  order  to meet  Franchisor's
     then-current standards for System Restaurants;

          (c)  Franchisee  is in  compliance  with  all of  the  terms  of  this
     Agreement and any other agreement between Franchisee and Franchisor;

          (d) Franchisee shall have executed upon renewal hereunder Franchisor's
     then  current  form  of  franchise  agreement,  which  agreement  may  have
     different  terms from this Agreement  including,  without  limitation,  the
     royalty fee, contributions and System assessments,  for a term equal to the
     renewal terms hereof (unless  otherwise  agreed to by Franchisor),  and any
     other  ancillary  agreements  as  Franchisor  may then  require;  provided,
     however,  Franchisee  shall be required to pay, in lieu of the then-current
     initial  Franchise Fee, a renewal fee which shall be fifty percent (50%) of
     the then-current initial Franchise Fee as then charged by Franchisor; and

          (e) Franchisee  and  Franchisee's  Principals  shall execute a general
     release,  in a form  prescribed  by  Franchisor,  of any and all claims the
     against the  Indemnitees.  Franchisor's  current form of general release is
     attached hereto as Attachment B.

     13.3 Termination.

          13.3.1  Automatic  Termination.  Franchisee  will be in default  under
this Agreement,  and all rights  granted by  this  Agreement will  automatically
terminate without notice to Franchisee:

               (a) If Franchisee becomes insolvent or makes a general assignment
          for the benefit of creditors;

               (b) If Franchisee files a voluntary petition under any section or
          chapter of the  federal  bankruptcy  law or under any  similar  law or
          statute of the United  States or any state,  or admits in writing  its
          inability to pay its debts when due;






               (c)  If  Franchisee  is  adjudicated  bankrupt  or  insolvent  in
          proceedings  filed against  Franchisee under any section or chapter of
          the federal bankruptcy laws or under any similar law or statute of the
          United States or any state; or if a bill in equity or other proceeding
          for the appointment of a receiver of Franchisee or other custodian for
          Franchisee's   business  or  assets  is  filed  and  consented  to  by
          Franchisee;  or  if  a  receiver  or  other  custodian  (permanent  or
          temporary) of Franchisee's assets or property, or any part thereof, is
          appointed by any court of competent jurisdiction;

               (d) If proceedings  for a composition  with  creditors  under any
          state or federal law is instituted by or against Franchisee;

               (e)  If  a  final  judgment  against  Franchisee  in  any  amount
          Franchisor  deems  material  (but in no event  more  than  $25,000.00)
          remains  unsatisfied  or of  record  for  thirty  (30)  days or longer
          (unless a supersedeas bond is filed);

               (f) If Franchisee is dissolved;

               (g) If Franchisee,  or any of Franchisee's Principals,  makes any
          offer,  attempts to offer,  solicits an offer, or takes steps to offer
          publicly any interest in Franchisee in violation of Section 11 of this
          Agreement;

               (h) If  execution  is levied  against  Franchisee's  business  or
          property in any amount Franchisor deems material (but in no event more
          than $25,000.00);

               (i) If  suit  to  foreclose  any  lien or  mortgage  against  the
          Franchised  Restaurant  premises or equipment in any amount Franchisor
          deems  material (but in no event more than  $25,000.00)  is instituted
          against Franchisee and not dismissed within thirty (30) days; or

               (j) If the real or  personal  property of  Franchised  Restaurant
          will  be  sold  after  levy  thereupon  by any  sheriff,  marshal,  or
          constable.

          13.3.2  Termination  upon  Notice.   This  Agreement  shall  terminate
immediately upon  notice from  Franchisor to  Franchisee and  without  providing
Franchisee the right to cure such default, if Franchisee:

               (a) Ceases to do business at the Franchised Restaurant;

               (b) Or any of Franchisee's Principals cause a threat or danger to
          the public  health or safety in the  construction  or operation of the
          Franchised Restaurant;

               (c) Or any of Franchisee's  Principals is convicted of, or pleads
          nolo  conendere  to a felony or any  other  crime or  offense  that is
          reasonably  likely, in the opinion of Franchisor,  to adversely affect
          the System,  the Proprietary  Marks, the Animated  Entertainment,  the
          goodwill associated therewith, or Franchisor's interest therein;






               (d) Or any of  Franchisee's  Principals  copies or duplicates any
          Animated  Entertainment  programs or materials or purports to transfer
          ownership or  possession of any Animated  Entertainment  components or
          materials without the prior written consent of Franchisor;

               (e) Or any of  Franchisee's  Principals,  except as  described in
          Section 13.3.1(g),  violates the requirements for Transfers  contained
          in Section 11;

               (f) Or any of Franchisee's  Principals,  as applicable,  fails to
          comply with the  representations  and  warranties in Sections 9 and 17
          hereof;

               (g) Or any of Franchisee's  Principals  discloses or divulges the
          contents  of  the  Operational  Policies  or  other  trade  secret  or
          confidential information provided Franchisee by Franchisor contrary to
          the provisions of this Agreement;

               (h) Fails to maintain the insurance(s) required by Section 12;

               (i) Knowingly  maintains  false books or records,  or submits any
          false reports to Franchisor;

               (j)  Operates  the  Franchised  Restaurant  or sells  products or
          services   authorized  by  Franchisor   for  sale  at  the  Franchised
          Restaurant from a location which has not been approved by Franchisor;

               (k) Fails to construct or refurbish the Franchised  Restaurant in
          accordance with Section 5 hereof;

               (l) Fails to open the  Franchised  Restaurant  for  business as a
          System Restaurant by the date described in Section 5.9;

               (m) At any time  ceases to  operate  or  otherwise  abandons  the
          Franchised  Restaurant,  or  loses  the  right  to  possession  of the
          premises,  or otherwise  forfeits the right to do or transact business
          in the jurisdiction where the Franchised  Restaurant is located.  This
          provision  will not  apply if  through  no  fault of  Franchisee,  the
          premises  are  damaged  or  destroyed  by an event  of Force  Majeure,
          provided that Franchisee applies for Franchisor's approval to relocate
          or  reconstruct  the premises  within thirty (30) days after the event
          and Franchisee  diligently  pursues the  reconstruction  or relocation
          after Franchisor's approval. Franchisor will not unreasonably withhold
          its approval to relocate or reconstruct the premises after an event of
          Force  Majeure,   but  Franchisor  may  condition  its  approval  upon
          Franchisee's payment of an agreed minimum fee to Franchisor during the
          period in which the Franchised Restaurant is not in operation;






               (n) Or any of  Franchisee's  Principals  fails to comply with the
          in-term  covenants  in Section  9.5 or if  Franchisee  fails to obtain
          execution  of the  covenants  and related  agreements  required  under
          Section 9.8 within thirty (30) days after being  requested to do so by
          Franchisor;

               (o)  Misuses  or makes any  unauthorized  use of the  Proprietary
          Marks  or  otherwise   materially  impairs  the  goodwill   associated
          therewith or Franchisor's  rights therein and Franchisee fails to cure
          that  default  within   twenty-four   (24)  hours  after  notice  from
          Franchisor;


               (p) Or Franchisee's  Principals  engage in any act,  conduct,  or
          practice  which  Franchisor,   in  its  sole  judgment,  deems  to  be
          deceptive,  misleading,  unethical  or  otherwise  contrary  to  or in
          conflict with the reputation and image of the System; or

               (q) Fails to cure any  default of which it has been  given  prior
          notices on two (2) occasions.

          13.3.3 Termination with Ten Day Notice. Franchisee shall have ten (10)
days  after  its  receipt  from  Franchisor  of  a  written   notice  to  remedy
Franchisee's failure, refusal, or  neglect to pay promptly  any monies due under
this Agreement or to submit the financial  information or other reports required
by Franchisor under this  Agreement.  If such default is not cured  within  that
time, this Agreement  shall  terminate  without  further  notice  to  Franchisee
effective immediately upon the expiration of the ten (10) day period.

          13.3.4 Termination  with  Thirty  Day  Notice.   Except  as  otherwise
provided in this Section 13,  Franchisee   shall have thirty (30) days after its
receipt from Franchisor  of a written  notice within which to remedy any default
of  the terms  of this  Agreement and  the  attachments  hereunder  and  provide
evidence thereof to Franchisor.  If  any such default  is not cured  within that
time,  this  Agreement  shall  terminate  without  further  notice to Franchisee
effective immediately upon the expiration of the thirty (30) day period.

     13.4  Obligations  upon  Termination  or  Expiration.  Upon  termination or
expiration of this Agreement for any reason, all rights of Franchisee under this
Agreement  will  immediately  terminate and  Franchisee  will have the following
duties which will survive termination of this Agreement:

          (a) Amounts Due.  Franchisee  will promptly pay to Franchisor  and its
     affiliates  all sums due under  this  Agreement  and any other  agreements,
     including, without limitation, all damages, costs, expenses, and reasonable
     attorneys'  fees incurred by Franchisor by reason of default on the part of
     Franchisee,  whether  or  not  the  expenses  occur  before  or  after  the
     termination or expiration of this Agreement;






          (b)  Franchised  Restaurant.  Franchisee  will  immediately  cease  to
     operate the Franchised  Restaurant and cease to use the Proprietary  Marks,
     the Animated Entertainment, the System, and the Operational Policies in any
     manner including any advertising,  equipment, format, confidential methods,
     procedures and techniques  associated with the Franchised  Restaurant,  the
     Proprietary  Marks,  the  Animated  Entertainment,   the  System,  and  the
     Operational Policies,  and shall not thereafter hold itself out as a former
     franchisee of Franchisor;

          (c) Operational  Policies.  Franchisee  shall  immediately  return all
     manuals, including the Operational Policies,  records, files, instructions,
     correspondence,   all  materials   related  to  operating  the   Franchised
     Restaurant,  and shall  retain  no copy or record of any of the  foregoing,
     excepting   only   Franchisee's   copy  of  this   Agreement   and  of  any
     correspondence   between  the  parties,   and  any  other  documents  which
     Franchisee and Franchisee's  Principals reasonably need for compliance with
     any provision of law;

          (d) Proprietary Marks. Franchisee will immediately cease to use in any
     manner  whatsoever,  any  Proprietary  Marks and  distinctive  trade dress,
     forms,  slogans,  signs,  symbols,  devices, or animated character costumes
     associated with the System;

          (e)  Assumed  Name.  Franchisee  shall  take  such  action  as  may be
     necessary  to cancel any  assumed  name or  equivalent  registration  which
     contains any of the  Proprietary  Marks,  and Franchisee  and  Franchisee's
     Principals   shall  furnish   Franchisor  with  evidence   satisfactory  to
     Franchisor of compliance with this obligation within thirty (30) days after
     termination or expiration of this Agreement; and

          (f) Payments. Franchisee and Franchisee's Principals will promptly pay
     all sums owing to  Franchisor  and its  affiliates,  including all damages,
     costs, and expenses,  including  reasonable  attorneys'  fees,  incurred by
     Franchisor  as a result of any default by  Franchisee.  Until those amounts
     are paid in full, the obligation to pay them will give rise to and remain a
     lien  in  favor  of  Franchisor  against  all  of  the  personal  property,
     furnishings,  equipment, signs, fixtures, and inventory owned by Franchisee
     and on the premises of the Franchised Restaurant at the time of default.

               In  addition, Franchisee and Franchisee's Principals will  pay to
     Franchisor  all  damages,   costs,  and  expenses,   including   reasonable
     attorneys'  fees,  incurred by Franchisor in connection  with obtaining any
     remedy  available to  Franchisor  for any  violation of this  Agreement and
     subsequent to the  termination or expiration of this Agreement in obtaining
     injunctive or other relief for the  enforcement  of any  provisions of this
     Section13.4.

          (g) Confidentiality and  Non-Competition.  Franchisee and Franchisee's
     Principals  will  comply  with  the   non-competition   covenants  and  the
     restrictions on confidential  information contained in Sections9.6 and 10.1
     of this Agreement.  Any other person required to execute similar  covenants
     pursuant to Sections9.8 and 10.1 will also comply with those covenants.






          (h) Leases. If Franchisee leases the Franchised Restaurant premises or
     leases any  equipment  used in the operation of the  Franchised  Restaurant
     from a third party, then Franchisee will, at Franchisor's option, assign to
     Franchisor  any  interest  that  Franchisee  has in the lease or  sublease.
     Franchisor  may  exercise  this option at any time within  thirty (30) days
     from and  including  either  the date of  termination  or  (subject  to any
     existing right to renew) expiration of this Agreement. The time for closing
     on the assignment of the lease described in this  Section13.4(h) will be on
     the date of or no later than ten (10) days after  Franchisor's  exercise of
     its option  hereunder  unless  Franchisor is also  exercising  its purchase
     options under Section13.4(i), in which case the date of the closing will be
     on the same closing date prescribed for the purchase option.  In any event,
     closing will take place at Franchisor's  corporate offices or at such other
     location Franchisor may designate.

          (i)  Purchase  Options.  Except as  provided in  Section13.4(h)  (with
     respect  to  leased  equipment),  Franchisor  will have the  option,  to be
     exercised  within  thirty (30) days from and  including  either the date of
     termination or expiration of this Agreement  (unless  appraisals are needed
     as described  below,  in which case such option  shall be exercised  within
     thirty (30) days after such  appraisals  are  provided),  to purchase  from
     Franchisee any or all of the furnishings, equipment, signs, fixtures, motor
     vehicles, supplies, and inventory of Franchisee related to the operation of
     the  Franchised  Restaurant,  at  Franchisee's  cost or fair market  value,
     whichever is less.  Franchisor will purchase  Franchisee's  assets only and
     will  assume  no  liabilities  whatsoever,  unless  otherwise  agreed to in
     writing by the  parties.  If the  parties  cannot  agree on the fair market
     value within  thirty (30) days after  Franchisor's  exercise of its option,
     fair market value will be  determined  by two  appraisers,  with each party
     selecting one appraiser,  and the average of their  determinations  will be
     binding. In the event of such appraisal, each party will bear its own legal
     and other costs and will split the appraisal  fees  equally.  Within thirty
     (30)  days  after  Franchisor's  receipt  of such  appraisal,  the  parties
     agreement  as  to  fair  market  value  or  Franchisor's  receipt  of  such
     information  and materials  from  Franchisee  as  Franchisor  may prescribe
     evidencing  Franchisee's  cost, as  applicable,  Franchisor  shall have the
     right to rescind  its  exercise of such  option.  If  Franchisor  elects to
     exercise any option to purchase herein provided,  it will have the right to
     set off  all  amounts  due  from  Franchisee  to  Franchisor  or any of its
     affiliates  (including  any costs for the appraisal) and any costs incurred
     in connection with any escrow arrangement (including reasonable legal fees)
     against any payment therefor and will pay the remaining amount in cash.

               With  respect  to the  option  described  in this  Section13.4(i)
     Franchisee   will  deliver  to  Franchisor,   in  a  form  satisfactory  to
     Franchisor,  such  warranties,  deeds,  releases  of  lien,  bills of sale,
     assignments, and any other documents and instruments  necessary in order to
     perfect Franchisor's title and  possession in  and to the properties  being
     purchased  or  assigned  and  to  meet  the  requirements  of  all  tax and
     government  authorities.  If,  at the time of closing,  Franchisee  has not
     obtained all of these certificates and other documents, Franchisor  may, in
     its sole discretion, place the purchase price  or rent  in  escrow  pending
     issuance of any required certificates or documents.





               The time for closing of the purchase and  sale of the  properties
     described in this  Section13.4(i)  will be a date not later than sixty (60)
     days  after  the  purchase  price  is  determined  by  the  parties  or the
     determination  of the  appraisers,  or such date  Franchisor  receives  and
     obtains all necessary permits and approvals, whichever is later, unless the
     parties mutually agree to designate  another date.  Closing will take place
     at Franchisor's  corporate  offices or at such other location as Franchisor
     may designate.

          (j) Modification of Premises. If Franchisor does not elect to exercise
     the options under Sections13.4(h) or 13.4(i) as applicable,  to acquire the
     lease or sublease for the Franchised  Restaurant premises,  then Franchisee
     will make all  modifications  or alterations  to the Franchised  Restaurant
     premises that are necessary to distinguish the appearance of the Franchised
     Restaurant from that of other System Restaurants and will make any specific
     additional changes that Franchisor reasonably requests. If Franchisee fails
     or refuses to comply with the  requirements  of this  Section13.4(j),  then
     Franchisor  may  enter  upon the  premises  of the  Franchised  Restaurant,
     without  being  guilty of trespass  or any other crime or tort,  to make or
     cause to be made the changes required, at the expense of Franchisee,  which
     expense Franchisee agrees to pay upon demand.

          (k)  Assignments.  If requested  by  Franchisor,  Franchisee  will (at
     Franchisee's expense) assign to Franchisor all rights to the: (i) telephone
     numbers of the Franchised  Restaurant and any related Yellow Pages or other
     business  listings;  and (ii) all e-mail  addresses,  URLs,  domain  names,
     Internet  listings,   and  Internet  accounts  related  to  the  Franchised
     Restaurant.  Franchisee  will execute all forms and  documents  required by
     Franchisor,  by any telephone company,  or by any Internet service provider
     at any time to  transfer  those  services  and  numbers to  Franchisor.  In
     addition  to any  forms and  documents  which  may have  been  executed  by
     Franchisee  hereunder,  Franchisee hereby appoints  Franchisor its true and
     lawful agent and  attorney-in-fact  with full power and  authority  for the
     sole  purpose of taking  such  action as is  necessary  to  complete  these
     assignments.  This  power  of  attorney  will  survive  the  expiration  or
     termination of this  Agreement.  Franchisee  will  thereafter use different
     telephone numbers and e-mail addresses or listings at or in connection with
     any subsequent business conducted by Franchisee.






          (l) Cease to Use and Cease to  Operate.  For  purposes  of the Section
     13.4,  "cease  to use" as  referring  to the  Proprietary  Marks,  Animated
     Entertainment,  System,  Operational Policies, and distinctive trade dress,
     forms,  slogans,  signs, symbols and devices or animated character costumes
     associated with the System,  shall include without  limitation,  refraining
     from  deriving any economic  benefit  therefrom or displaying to the public
     and, at Franchisor's option and as applicable,  destroying or relinquishing
     and  delivering to Franchisor or its designee  title and  possession of the
     Animated  Entertainment,  all items  bearing  the  Proprietary  Marks,  the
     Operational Policies and all embodiments thereof, and any distinctive trade
     dress,  forms,  slogans,  signs,  symbols,  devices,  or animated character
     costumes associated with the System. "Cease to Operate" as referring to the
     Franchised  Restaurant shall include,  without limitation,  refraining from
     offering or selling any goods or services therefrom.

14.  REMEDIES

     14.1  Remedies.  Upon the occurrence of an uncured  breach,  Franchisor may
exercise one or more of the following  remedies or such other remedies as may be
available at law or in equity:

          14.1.1  Cure.  Franchisor,  at  Franchisor's  discretion  and  without
obligation, may cure such  breach at  Franchisee's  expense  and, in  connection
therewith,  Franchisee  (i) hereby  grants to Franchisor  all rights  and powers
necessary or appropriate to accomplish such cure; (ii) shall indemnify and  hold
the  Indemnitees  harmless  from  and  against  all  costs,  expenses (including
reasonable  fees  of  counsel  and  other engaged  professionals),  liabilities,
claims, demands  and  causes  of  action  (including  actions  of third parties)
incurred by or alleged against any  Indemnitee in connection  with  Franchisor's
cure; and (iii) shall reimburse  or pay such  costs or damages  within  ten (10)
days of receipt of Franchisor's invoice therefor; or

          14.1.2  Specific Enforcement.  Franchisor may, in addition to pursuing
any   other   remedies,  specifically   enforce  Franchisee's  and  Franchisee's
Principal's obligations, covenants and agreements or obtain  injunctive or other
equitable relief  in  connection  with the violation  or  anticipated  violation
of such obligations, covenants and agreements without the  necessity  of showing
(i) actual or threatened harm;  (ii) the inadequacy  of damages as a remedy;  or
(iii) likelihood of success on the merits, and without being required to furnish
bond or  other security.  Nothing in  this  Agreement shall  impair Franchisor's
right to obtain equitable relief.





15.  DISPUTE RESOLUTION


     15.1  Mediation.  Except for  infringement of Proprietary  Marks,  Animated
Entertainment or other violation of Franchisor's  intellectual  property rights,
regarding  which  Franchisor  may apply for  emergency,  special,  or injunctive
relief,  both Franchisor and Franchisee will attempt in good faith to settle any
dispute related to the execution of or performance  under this Agreement and the
operation of the Franchised Restaurant.  If Franchisor and Franchisee are unable
to do so, they hereby agree to submit to non-binding mediation prior to bringing
such claim,  controversy or dispute in a court. The mediation shall be conducted
through  either an  individual  mediator or a mediator  appointed by a mediation
services  organization  or body,  experienced  in the  mediation of food service
business  disputes,  as agreed upon by Franchisor and Franchisee.  The costs and
expenses of mediation, including compensation of the mediator, shall be borne by
the parties equally. If the parties are unable to resolve the claim, controversy
or dispute within ninety (90) days after the mediator has been appointed, unless
such time period is extended by written  agreement of the  parties,  then either
party may bring a legal  proceeding under the following  Sections,  15.2 through
15.4, to resolve such claim.

     15.2  Applicable Law.  Franchisor and Franchisee  agree that this Agreement
shall be governed by,  construed and enforced in accordance with the laws of the
State of Texas without regard to its conflicts of laws provisions.

     15.3 Jurisdiction and Venue.  FRANCHISOR AND FRANCHISEE HEREBY  IRREVOCABLY
SUBMIT  THEMSELVES  TO THE  JURISDICTION  OF THE STATE COURTS OF DALLAS  COUNTY,
TEXAS AND THE FEDERAL DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS,  DALLAS
DIVISION.  FRANCHISEE AND FRANCHISEE'S  PRINCIPALS  FURTHER AGREE THAT VENUE FOR
ANY  PROCEEDING  RELATING  TO OR ARISING  OUT OF THIS  AGREEMENT  WILL BE DALLAS
COUNTY, TEXAS; PROVIDED,  HOWEVER THAT WITH RESPECT TO ANY ACTION (I) FOR MONIES
OWED,  (II)  FOR  INJUNCTIVE  OR OTHER  EXTRAORDINARY  RELIEF,  (III)  INVOLVING
OWNERSHIP OR USE OF THE PROPRIETARY MARKS OR THE ANIMATED ENTERTAINMENT, OR (IV)
INVOLVING POSSESSION OR DISPOSITION OF, OR OTHER RELIEF RELATING TO THE PREMISES
OF THE FRANCHISED  RESTAURANT,  FRANCHISOR MAY BRING SUCH ACTION IN ANY STATE OR
FEDERAL DISTRICT COURT WHICH HAS JURISDICTION.

     15.4 Mutual  Benefit.  FRANCHISEE,  FRANCHISEE'S  PRINCIPALS AND FRANCHISOR
ACKNOWLEDGE THAT THE PARTIES' AGREEMENT REGARDING APPLICABLE STATE LAW AND FORUM
IN  SECTIONS  15.2 AND 15.3  PROVIDES  THE  PARTIES  WITH THE MUTUAL  BENEFIT OF
UNIFORM  INTERPRETATION  OF THIS  AGREEMENT AND ANY DISPUTE  ARISING OUT OF THIS
AGREEMENT OR THE PARTIES'  RELATIONSHIP  CREATED BY THIS AGREEMENT.  FRANCHISEE,
FRANCHISEE'S  PRINCIPALS  AND  FRANCHISOR  FURTHER  ACKNOWLEDGE  THE RECEIPT AND
SUFFICIENCY OF MUTUAL CONSIDERATION FOR THAT BENEFIT.

16.  MISCELLANEOUS

     16.1  Independent  Contractors.  In performing this Agreement,  the parties
specifically  agree that Franchisor and Franchisee's  relationship is and always
will be solely that of independent contractors. Neither Franchisor or Franchisee
shall not represent itself or permit any of its employees,  agents, servants, or
representatives  to represent itself as an employee,  agent,  servant,  or joint
venturer  of the  other.  Neither  party  shall  have no right to and  shall not
attempt to enter into  contracts or  commitments  in the name of or on behalf of
the other in any respect whatsoever.






     16.2 Entire Agreement. This Agreement and the attachments hereto constitute
the entire agreement between Franchisor,  Franchisee and Franchisee's Principals
concerning  the  subject  matter  hereof.  All  prior  agreements,  discussions,
representations,  warranties  and  covenants  are  merged  herein.  THERE ARE NO
WARRANTIES,  REPRESENTATIONS,  COVENANTS  OR  AGREEMENTS,  EXPRESS  OR  IMPLIED,
BETWEEN THE PARTIES EXCEPT THOSE EXPRESSLY SET FORTH IN THIS  AGREEMENT.  Except
those  permitted  to be made  unilaterally  by  Franchisor,  any  amendments  or
modifications  of this Agreement  shall be in writing and executed by Franchisor
and Franchisee.

     16.3  Judgment;  Discretion.  FRANCHISEE AND  FRANCHISOR  ACKNOWLEDGE  THAT
VARIOUS PROVISIONS OF THIS AGREEMENT SPECIFY CERTAIN MATTERS THAT ARE WITHIN THE
DISCRETION  OR  JUDGMENT  OF  FRANCHISOR  OR  ARE  OTHERWISE  TO  BE  DETERMINED
UNILATERALLY  BY  FRANCHISOR.  IF THE  EXERCISE OF  FRANCHISOR'S  DISCRETION  OR
JUDGMENT AS TO ANY SUCH MATTER IS SUBSEQUENTLY  CHALLENGED,  THE PARTIES TO THIS
AGREEMENT  EXPRESSLY  DIRECT THE TRIER OF FACT THAT  FRANCHISOR'S  RELIANCE ON A
BUSINESS REASON IN THE EXERCISE OF ITS DISCRETION OR JUDGMENT IS TO BE VIEWED AS
A REASONABLE AND PROPER EXERCISE OF SUCH DISCRETION OR JUDGMENT,  WITHOUT REGARD
TO WHETHER OTHER REASONS FOR ITS DECISION MAY EXIST,  WITHOUT  REGARD TO WHETHER
THE TRIER OF FACT WOULD  INDEPENDENTLY  ACCORD THE SAME  WEIGHT TO THE  BUSINESS
REASONS,  AND WITHOUT REGARD TO WHETHER SUCH DISCRETION OR JUDGMENT IS EXERCISED
IN THE BEST INTERESTS OF FRANCHISEE.

     16.4 No Waiver.  Either party's  failure to exercise any right or remedy or
to enforce any obligation,  covenant or agreement  herein shall not constitute a
waiver by, or estoppel of, such party's right to enforce strict  compliance with
any such obligation,  covenant or agreement.  No custom or practice shall modify
or amend this  Agreement.  Either  party's waiver of, or failure or inability to
enforce,  any right or remedy shall not impair such  party's  rights or remedies
with respect to  subsequent  default of the same,  similar or different  nature.
Acceptance of any payment shall not waive any default.






     16.5  Severability.  If all or any portion of any covenant contained herein
are held  unreasonable  or  unenforceable  by a court  or  agency  having  valid
jurisdiction  in an unappealed  final  decision to which  Franchisor is a party,
Franchisee and Franchisee's Principals expressly agree to be bound by any lesser
covenant subsumed within the terms of the covenant that imposes the maximum duty
permitted by law, as if the  resulting  covenant were  separately  stated in and
made a part of this  Agreement.  Notwithstanding  the  above,  should  any term,
covenant or provision  hereof,  or the application  thereof,  be determined by a
valid, final, non-appealable order to be invalid or unenforceable, the remaining
terms,  covenants or provisions  hereof shall  continue in full force and effect
without  regard to the invalid or  unenforceable  provision.  In such event such
term,  covenant or provision shall be deemed modified to impose the maximum duty
permitted  by law and such  term,  covenant  or  provision  shall  be valid  and
enforceable in such modified form as if separately  stated in and made a part of
this  Agreement.  Notwithstanding  the  foregoing,  if  any  term  hereof  is so
determined  to be  invalid or  unenforceable  and such  determination  adversely
affects, in Franchisor's  reasonable judgment,  Franchisor's ability to preserve
its rights in, or the goodwill  underlying,  the Proprietary Marks, the Animated
Entertainment,  the System and/or the  Confidential  Information,  or materially
effects  Franchisor's  other rights  hereunder,  Franchisor  may terminate  this
Agreement upon notice to Franchisee.

     16.6 Notice. All notices required or desired to be given hereunder shall be
in writing and shall be sent by personal  delivery,  expedited delivery service,
return receipt  requested or facsimile to the following  addresses or such other
addresses as designated by Franchisor or Franchisee in writing  pursuant to this
Section:

         Notices to Franchisor:     Director of Franchise
                                    CEC Entertainment, Inc.
                                    4441 W. Airport Freeway
                                    Irving, Texas 75062
                                    Tel. (972) 258-8507
                                    Fax.(972) 258-5528

         Notices to Franchisee:     ______________________
                                    ______________________
                                    ______________________
                                    ______________________
                                    Tel. (___) ___________
                                    Fax. (___) ___________

     Notices posted by personal  delivery or given by facsimile  shall be deemed
given upon receipt. Notice to Franchisee shall constitute notice to Franchisee's
Principals.

     16.7  Counterparts.  This  Agreement  may  be  executed  in any  number  of
counterparts  each of which when so executed  shall be an  original,  but all of
which together shall constitute one (1) and the same instrument.

     16.8  Headings.  The section  headings in this Agreement are for convenient
reference only and shall be given no substantive or interpretive effect.

     16.9  Further  Assurances.  Franchisor  and  Franchisee  shall  execute and
deliver any and all additional papers, documents, and other assurances and shall
do any and all acts and  things  reasonably  necessary  in  connection  with the
performance  of their  obligations  hereunder and to carry out the intent of the
parties hereto.






     16.10 Compliance with Laws. Franchisee agrees to comply at its sole expense
with all laws and regulations  applicable to this Agreement and the operation of
the  Franchised  Restaurant.   Copies  of  all  inspection  reports,   warnings,
certificates and ratings,  issued by any governmental  entity during the term of
this Agreement in connection with the conduct of the Franchised Restaurant which
indicate  Franchisee's  failure to meet or  maintain  the  highest  governmental
standards  (such as,  without  limitation,  a Grade A  sanitation  rating or its
equivalent) or less than full  compliance by Franchisee with any applicable law,
rule or regulation,  shall be forwarded to Franchisor by Franchisee  within five
(5) days of Franchisee's receipt thereof.

17.  ACKNOWLEDGMENTS

     17.1  Independent  Investigation.   Franchisee  acknowledges  that  it  has
conducted an independent  investigation of the business venture  contemplated by
this Agreement and recognizes that the success of this business venture involves
substantial  business  risks  and  will  largely  depend  upon  the  ability  of
Franchisee.  Franchisor expressly disclaims making, and Franchisee  acknowledges
that it has not  received  or relied on, any  warranty or  guaranty,  express or
implied, as to the potential volume,  profits or success of the business venture
contemplated by this Agreement.

                                  Franchisee's Principals Initials _____________

     17.2 Opportunity to Assess Risks.  Franchisee  acknowledges that Franchisee
has received,  read, and understands this Agreement and the related  Attachments
and agreements and that Franchisor has afforded  Franchisee  sufficient time and
opportunity to consult with advisors  selected by Franchisee about the potential
benefits and risks entering into this Agreement.

                                  Franchisee's Principals Initials _____________

     17.3  Receipt  of  Disclosure  Document.  Franchisee  acknowledges  that it
received a complete  copy of this  Agreement  and all  related  attachments  and
agreements at least five  business days before the date on which this  Agreement
was  executed.   Franchisee  further  acknowledges  that  it  has  received  the
disclosure  document  required by the Trade Regulation Rule of the Federal Trade
Commission  entitled  "Disclosure   Requirements  and  Prohibitions   Concerning
Franchising and Business  Opportunity  Ventures" at least ten (10) business days
before the date of on which this Agreement was executed.

                                  Franchisee's Principals Initials _____________

     17.4 No Extraneous  Promises.  Franchisee confirms and acknowledges that no
written   or   oral   agreements,   promises,   commitments,   undertakings   or
understandings  were made to or with Franchisee that are not expressly set forth
in this Agreement and any duly executed  amendment or addendum  attached to this
Agreement.

                                  Franchisee's Principals Initials _____________






     17.5 No Extraneous  Inducements.  Franchisee confirms and acknowledges that
no representation,  warranty, guaranty or promise other than those expressly set
forth in this Agreement and in the disclosure document described in Section 17.3
was made by  Franchisor  or any other person to induce  Franchisee  to sign this
Agreement. Franchisee recognizes that neither Franchisor nor any other party can
guarantee  Franchisee's business success or state the exact costs of opening and
operating the Franchised Restaurant, and that such success and costs will depend
primarily upon  Franchisee's own efforts and business  ability.  Franchisee also
recognizes that any new business venture is speculative.

                                  Franchisee's Principals Initials _____________

     17.6 Commercial  Relationship.  Franchisee acknowledges that this Agreement
creates an arm's  length  commercial  relationship  that  cannot and will not be
transformed  into a  fiduciary  or other  "special"  relationship  by  course of
dealing,  by any special  indulgences  or benefits  that  Franchisor  bestows on
Franchisee, or by inference from a party's conduct.

                                  Franchisee's Principals Initials _____________


     17.7  Compliance  with  Anti-Corruption  and  Anti-Money  Laundering  Laws.
Franchisee represents, covenants and warrants to Franchisor that, to the best of
its  knowledge,  neither  it nor any owner or  managerial  employee  thereof  is
identified,  either by name or an alias,  pseudonym or nickname, on the lists of
"Specially  Designated  Nationals" or "Blocked  Persons"  maintained by the U.S.
Treasury   Department's  Office  of  Foreign  Assets  Control  (texts  currently
available  at   www.treas.gov/offices/enforcement/ofac/).   Further,  Franchisee
represents,  covenants and warrants that, to the best of its  knowledge,  it has
not violated and agrees that it will not violate any law (in effect now or which
may become  effective in the future)  prohibiting  corrupt  business  practices,
money  laundering  or the aid or support of persons or entities  who conspire to
commit  acts  of  terror  against  any  person  or  government,  including  acts
prohibited  by the U.S.  Patriot  Act,  Public Law No.  107-56  (text  currently
available at http://www.epic.org/privacy/terrorism/hr3162.html),  U.S. Executive
Order         13244         (text         currently         available         at
http://treas.gov/offices/enforcement/ofac/ sanctions/terrorism.html), or similar
law. The foregoing  constitute  continuing  representations and warranties,  and
Franchisee shall notify  Franchisor  immediately in writing of the occurrence of
any event or the development of any circumstance that might render the foregoing
representation and warranty false, inaccurate or misleading.

                                  Franchisee's Principals Initials _____________






     17.8 No Claims. Franchisee and Franchisee's Principals represent,  covenant
and warrant to Franchisor that, to the best of their knowledge, neither they nor
an  affiliate  of either hold or are due,  as  applicable,  any  claims,  debts,
liabilities, demands, obligations, expenses, actions, or causes of action of any
nature,  character or description  related to this Agreement against Franchisor,
and its affiliates  and each of their  respective  successors,  partners and the
partners, shareholders,  representatives,  assigns, agents, servants, employees,
independent  contractors,  officers  and  directors  of each of  them,  in their
corporate and individual capacities.

                                  Franchisee's Principals Initials _____________



                     [Signatures appear on following pages]





     IN WITNESS  WHEREOF,  the parties  hereto have fully  executed,  sealed and
delivered this Agreement in duplicate on the day and year first above written.


FRANCHISOR:
CEC ENTERTAINMENT, INC.


By:      ____________________
Name:    ____________________
Title:   ____________________


STATE OF TEXAS

COUNTY OF DALLAS

     Before me personally  appeared  ____________________  who, after being duly
sworn, says that he is the  ____________________  of CEC Entertainment,  Inc., a
corporation,  organized and existing  under the laws of Kansas,  and that he has
authority to execute under oath and has so executed the above  Agreement for and
on behalf of such corporation for such purposes therein contained.

     WITNESS my hand and official seal this _____ day of ________, 20__.


                                       ____________________________
(SEAL)                                 Notary Public







FRANCHISEE:
________________________


By:      ____________________
Name:    ____________________
Title:   ____________________

STATE OF ________________

COUNTY OF ______________

     Before me personally appeared ________________ who, after being duly sworn,
says that he is the ________ of ________________, a (corporation) (partnership),
organized and existing under the laws of ________,  and that he has authority to
execute under oath and has so executed the above  Agreement for and on behalf of
such corporation for the purposes therein contained.

     WITNESS my hand and official seal this ___ day of  __________________,20__.


                                       ____________________________
(SEAL)                                 Notary Public





                                  SCHEDULE 1.14

                        STATEMENT OF OWNERSHIP INTERESTS
                           AND FRANCHISEE'S PRINCIPALS

     A. The following is a list of stockholders,  partners or other investors in
Franchisee,  including  all  investors  who own or  hold a  direct  or  indirect
interest in Franchisee,  and a description of the nature of their interest.  All
such  individuals and entities shall be deemed to be  "Franchisee's  Principals"
described in and designated  pursuant to the Franchise  Agreement,  each of whom
will execute the Agreement and Guaranty of Franchiser's Principals:

Name                                  Percentage of Ownership/Nature of Interest

______________________                __________________________________________
______________________                __________________________________________








     B. The following is a list of all other of  "Franchisee's  Principals"  not
described in "A", above,  described in and designated  pursuant to the Franchise
Agreement,  each of whom will execute the Agreement and Guaranty of Franchisee's
Principals.






                                  ATTACHMENT A

                            AGREEMENT AND GUARANTY OF
                             FRANCHISEE'S PRINCIPALS

Each of the undersigned acknowledges and agrees as follows:

     (1) Each has read the terms and  conditions of the Franchise  Agreement and
acknowledges  that the  execution of this Guaranty and the  undertakings  of the
Franchisee's  Principals in the Franchise Agreement are in partial consideration
for, and a condition  to, the  granting of the  franchise,  and that  Franchisor
would not have granted the franchise  without the execution of this Guaranty and
the other undertakings by each of the undersigned;

     (2) Each is included in the term "Franchisee's Principals";

     (3) Each individually,  jointly, and severally, makes all of the covenants,
representations,  warranties and agreements of Franchisee's Principals set forth
in the Franchise Agreement and is obligated to perform thereunder; and

     (4)  Each  individually,  jointly  and  severally,   unconditionally,   and
irrevocably  guarantees to Franchisor and its successors and assigns that all of
Franchisee's  obligations under the Franchise  Agreement will be punctually paid
and performed.  Upon default by Franchisee or upon notice from Franchisor,  each
will  immediately  make each  payment and perform  each  obligation  required of
Franchisee under the Franchise Agreement.

     (5) Without  affecting the  obligations of any of  Franchisee's  Principals
under  this  Guaranty,  Franchisor  may,  without  notice  to  the  Franchisee's
Principals,  waive, renew, extend, modify, amend, or release any indebtedness or
obligation  of  Franchisee  or settle,  adjust,  or  compromise  any claims that
Franchisor may have against Franchisee.

     (6) Each of the Franchisee's  Principals  waives all demands and notices of
every kind with respect to the enforcement of this Guaranty,  including  notices
of presentment,  demand for payment or performance by Franchisee, any default by
Franchisee or any guarantor,  and any release of any guarantor or other security
for this Guaranty or the obligations of Franchisee.

     (7) Franchisor may pursue its rights against any of Franchisee's Principals
without first exhausting its remedies against Franchisee and without joining any
other  guarantor  and no delay on the part of  Franchisor in the exercise of any
right or remedy will  operate as a waiver of the right or remedy,  and no single
or partial  exercise  by  Franchisor  of any right or remedy will  preclude  the
further exercise of that or any other right or remedy.








     (8)  Upon  receipt  by  Franchisor  of  notice  of  the  death  of  any  of
Franchisee's  Principals,  the  estate  of the  deceased  will be  bound  by the
foregoing  Guaranty,  but only for defaults and obligations  under the Franchise
Agreement  existing at the time of death,  and in that event, the obligations of
the remaining Franchisee's Principals will continue in full force and effect.


ATTEST:  FRANCHISEE'S PRINCIPALS


                                    Name:   ____________________
                                            ____________________


                                    Name:   ____________________
                                            ____________________


                                    Name:   ____________________
                                            ____________________


STATE OF ________________

COUNTY OF ______________

     Before me personally appeared the following persons: ________, ________ and
________  who are  known to me to be the  persons  who  executed  the  foregoing
Agreement and Guaranty of Franchisee's Principals and each acknowledged the same
to be his or her free act and deed for the purpose s therein contained.

     WITNESS my hand and official seal this ___ day of ___________________,20__.


                                            ____________________________
(SEAL)                                      Notary Public





                                  ATTACHMENT B

                                 GENERAL RELEASE
                      (UPON RENEWAL OF FRANCHISE AGREEMENT)

     THIS GENERAL RELEASE (this "Release") is made and entered into this ___ day
of ________,  20__, by ________  ("Franchisee"),  and ________ and ________ (the
"Franchisee's Principals").

                                    RECITALS

     WHEREAS, CEC Entertainment, Inc. ("Franchisor") and Franchisee entered into
that certain Franchise Agreement dated ________ (the "Franchise Agreement"), for
the establishment of a Chuck E. Cheese's located at ________________;

     WHEREAS,  the  Franchisee's  Principals  are  described  in  the  Franchise
Agreement as  "Franchisee's  Principals"  and as such,  have among other things,
agreed to be bound by  certain of the  obligations  contained  in the  Franchise
Agreement; and

     WHEREAS,  Franchisee  desires to renew or otherwise  extend the term of the
Franchise  Agreement and the Franchise Agreement provides that as a condition to
such renewal,  Franchisee and the  Franchisee's  Principals  shall,  among other
things, execute a general release as contained herein.

     NOW, THEREFORE,  for good and valuable  consideration,  receipt of which is
hereby  acknowledged  by  each  of  the  parties  hereto,   Franchisee  and  the
Franchisee's Principals agree as follows:





                                    AGREEMENT


     1.  RELEASE.   Franchisee,   and  each  of  the  Franchisee's   Principals,
individually  and  collectively,  jointly and  severally,  do hereby release and
forever  discharge  Franchisor and its affiliates,  and each of their respective
successors, partners, and the shareholders, partners, representatives,  assigns,
agents, servants, employees, independent contractors, officers, and directors of
each of them, in their corporate and individual capacities ("Designees"), of and
from any claims, debts,  liabilities,  demands,  obligations,  costs,  expenses,
actions, and causes of action of every nature, character, and description, known
or unknown,  vested or contingent,  which the  Franchisee  and the  Franchisee's
Principals now own or hold, or have at any time heretofore owned or held, or may
at any  time  own or hold  against  the  Franchisor,  or each of the  respective
Designees of the Franchisor,  arising under or in connection with any agreement,
law, rule,  regulation  ordinance,  or any other context whatsoever,  including,
without  limitation,  the  Franchise  Agreement or the operation of the Chuck E.
Cheese's store  established  thereunder,  and any state or federal  franchise or
business opportunity law; provided,  however,  that this release shall not serve
to terminate any agreement  currently effective by an among Franchisee or any or
all of the Franchisee's Principals and Franchisor.

     [The parties  intend this  paragraph 1 to cover,  encompass,  release,  and
extinguish all claims and matters that might otherwise be reserved by California
Civil Code section 1542, which provides as follows:

     "A general  release does not extend to claims  which the creditor  does not
     know or suspect to exist in his favor at the time of executing the release,
     which if known by him must have materially affected the settlement with the
     debtor."]

     2. AUTHORITY. By executing this Release, the parties represent and warrants
that each have the right and authority to enter into and to accept the terms and
covenants of this Release,  and that no third party has or claims an interest in
any claim released hereby.

     3. NO CONFLICTS.  Each of the  undersigned  hereby  represents and warrants
that its execution of this Release does not violate any other agreement to which
it is a party.

     4. MISCELLANEOUS.

        4.1  Counterparts. This Release may be executed simultaneously in two or
more  counterparts,  each of which shall be deemed an original  and all of which
together shall constitute but one and the same instrument.

        4.2  Opportunity to Review. Franchisee and the  Franchisee's  Principals
represent  and warrant  that they:  (i) have had an  opportunity  to review this
Release;  (ii) have had an  opportunity  to consult with an attorney;  and (iii)
fully understand the content and legal effect of this Release; and

        4.3  Governing Law.  This Release  shall be governed  by the laws of the
State of ________, which laws shall be controlling in the  event of any conflict
of law.

        4.4  Section  Headings. The section headings of this Release are for the
convenience of the parties only shall have no force or effect.

        4.5 Severability. The provisions of this  release are severable, and, in
the event that  any of them is held void and  unenforceable  as a matter of law,
the remainder shall continue in full force and effect.


                     [Signatures appear on following pages]





     IN  WITNESS  WHEREOF,  Franchisee  and  the  Franchisee's  Principals  have
executed and delivered this Release.


FRANCHISEE:


By:      ____________________
Name:    ____________________
Title:   ____________________


FRANCHISEE'S PRINCIPALS:



_________________________________      ______________________________________
Name:    ____________________          Name:    ____________________
Date:    ____________________          Date:    ____________________




_________________________________      ______________________________________
Name:    ____________________          Name:    ____________________
Date:    ____________________          Date:    ____________________




_________________________________      ______________________________________
Name:    ____________________          Name:    ____________________
Date:    ____________________          Date:    ____________________






                                 GENERAL RELEASE
                                 (UPON TRANSFER)

     THIS GENERAL RELEASE (this "Release") is made and entered into this ___ day
of ________,  20__,  by ________  ("Franchisee"),  ________  and  ________  (the
"Franchisee's Principals").

                                    RECITALS

     WHEREAS, CEC Entertainment, Inc. ("Franchisor") and Franchisee entered into
that  certain   Franchise   Agreement  (the   "Franchise   Agreement")  for  the
establishment  and  operation  of a Chuck  E.  Cheese's  restaurant  located  at
________________;

     WHEREAS,  the  Franchisee  and/or  one or more of  Franchisee's  Principals
desire to effect a Transfer, as such term is defined in the Franchise Agreement;
and

     WHEREAS,  the Franchise Agreement provides,  as a condition to Franchisor's
approval of such Transfer,  Franchisee and Franchisee's Principals shall execute
a release of certain claims.

     NOW, THEREFORE,  for good and valuable  consideration,  receipt of which is
hereby  acknowledged  by  each  of  the  parties  hereto,   Franchisee  and  the
Franchisee's Principals agree as follows:

                                    AGREEMENT

     1. RELEASE.  Franchisee, each of the Franchisee's Principals,  individually
and collectively, jointly and severally, do hereby release and forever discharge
Franchisor  and  its  affiliates,  and  each  of  their  respective  successors,
partners,  and the shareholders,  partners,  representatives,  assigns,  agents,
servants, employees, independent contractors, officers, and directors of each of
them, in their corporate and individual  capacities  ("Designees"),  of and from
any claims, debts, liabilities,  demands, obligations, costs, expenses, actions,
and  causes of action of every  nature,  character,  and  description,  known or
unknown,  vested  or  contingent  ("Claims"),   which  the  Franchisee  and  the
Franchisee's Principals now own or hold, or have at any time heretofore owned or
held,  or may at any time own or hold  against  the  Franchisor,  or each of the
respective Designees of the Franchisor,  arising under or in connection with any
agreement,  law, rule,  regulation  ordinance,  or any other context whatsoever,
including,  without limitation,  the Franchise Agreement and any other franchise
agreement  or the  operation  of the Chuck E.  Cheese's  restaurant  established
thereunder,  and any state or federal  franchise  or business  opportunity  law;
provided,  however, that this release shall not serve to terminate any agreement
currently  effective by an among  Franchisee  or any or all of the  Franchisee's
Principals and Franchisor.






     [The parties  intend this  paragraph 1 to cover,  encompass,  release,  and
extinguish all claims and matters that might otherwise be reserved by California
Civil Code section 1542, which provides as follows:

     "A general  release does not extend to claims  which the creditor  does not
     know or suspect to exist in his favor at the time of executing the release,
     which if known by him must have materially affected the settlement with the
     debtor."]

     2. AUTHORITY. By executing this Release, the parties represent and warrants
that each have the right and authority to enter into and to accept the terms and
covenants of this Release,  and that no third party has or claims an interest in
any claim released hereby.

     3. NO CONFLICTS.  Each of the  undersigned  hereby  represents and warrants
that its execution of this Release does not violate any other agreement to which
it is a party.

     4. MISCELLANEOUS.

        4.1  Counterparts. This Release may be executed simultaneously in two or
more  counterparts,  each of which shall be deemed an original  and all of which
together shall constitute but one and the same instrument.

        4.2  Opportunity  to Review.  Franchisee and the Franchisee's Principals
represent  and warrant  that they:  (i) have had an  opportunity  to review this
Release;  (ii) have had an  opportunity  to consult with an attorney;  and (iii)
fully understand the content and legal effect of this Release; and

        4.3  Governing Law.  This Release  shall be governed  by the laws of the
State of  ________, which laws shall be controlling in the event of any conflict
of law.

        4.4  Section Headings.  The section headings of this Release are for the
convenience of the parties only shall have no force or effect.

        4.5 Severability. The provisions of  this release are severable, and, in
the event that  any of them is held void and  unenforceable  as a matter of law,
the remainder shall continue in full force and effect.

     IN  WITNESS  WHEREOF,  Franchisee,  the  Franchisee's  Principals  and  the
Affiliates have executed and delivered this Release.


FRANCHISEE:


By:      ____________________
Name:    ____________________
Title:   ____________________





FRANCHISEE'S PRINCIPALS:



_________________________________      ______________________________________
Name:    ____________________          Name:    ____________________
Date:    ____________________          Date:    ____________________




_________________________________      ______________________________________
Name:    ____________________          Name:    ____________________
Date:    ____________________          Date:    ____________________




_________________________________      ______________________________________
Name:    ____________________          Name:    ____________________
Date:    ____________________          Date:    ____________________








                                  ATTACHMENT C

                                   LEASE RIDER

     This Lease Rider is made and entered into  ________,  20__,  by and between
CEC  Entertainment,  Inc.,  a Kansas  corporation  ("Franchisor"),  ________,  a
________ corporation ("Franchisee") and ____________________ ("Landlord").

     WHEREAS,  Franchisor and  Franchisee are parties to that certain  Franchise
Agreement dated ________, 20__ ("Franchise Agreement");

     WHEREAS, Franchisee and Landlord desire to enter into a lease (the "Lease")
pursuant   to  which   Franchisee   will   occupy   the   premises   located  at
________________   (the  "Premises")  for  a  family-oriented  pizza  restaurant
(hereinafter "Restaurant") licensed under the Franchise Agreement; and

     WHEREAS,  as a condition  to entering  into the Lease,  the  Franchisee  is
required  under the  Franchise  Agreement to execute this Lease Rider along with
the Landlord and Franchisor;

     NOW, THEREFORE, the parties in consideration of the mutual undertakings and
commitments  of each  party to the  other  party  set  forth  herein  and in the
Franchise Agreement, mutually agree as follows:

     1. During the term of the Franchise  Agreement,  the Premises shall be used
only for the operation of the Restaurant.

     2. Landlord  consents to  Franchisee's  use of such marks and signs,  decor
items,  color  schemes and related  components  of the Chuck E. Cheese system as
Franchisor may prescribe for the Restaurant.

     3. Landlord agrees to furnish Franchisor with copies of any and all letters
and notices sent to Franchisee  pertaining to the Lease and the Premises, at the
same time that such letters and notices are sent to Franchisee.

     4.  Franchisor  shall  have the  right to enter  the  Premises  to make any
modification  or alteration  necessary to protect the Chuck E. Cheese system and
marks or to cure any default  under the Franchise  Agreement or any  development
agreement  entered into between  Franchisor  and  Franchisee or under the Lease,
without being guilty of trespass or any other crime or tort,  and Landlord shall
not be responsible for any expenses or damages arising from Franchisor's  action
in connection therewith.

     5.  Franchisee  shall not  assign  the  Lease or renew or  extend  the term
thereof without the prior written consent of Franchisor.





     6. Landlord and Franchisee shall not amend or otherwise modify the Lease in
any  manner  that could  materially  affect  any of the  foregoing  requirements
without the prior written consent of Franchisor.

     7. In the event of  Franchisee's  default  under  the  terms of the  Lease,
Franchisor  may,  but is not  required,  to cure the  default and may assume the
Lease in Franchisor's  name.  Within thirty (30) days after Franchisor  receives
notice of the default,  Franchisor will have the option, in its sole discretion,
to cure the  default  and  assume the Lease.  If  Franchisor  elects to cure the
default and assume the Lease,  Franchisor  will notify Landlord of its intent to
cure such  default  and to assume the Lease.  Franchisor  will cure the  default
within thirty (30) days of such election or, if the default cannot be reasonably
cured  within such thirty (30) day period,  then  Franchisor  will  commence and
proceed to cure the default within such time as is reasonably  necessary to cure
the  default.  If  Franchisor  elects to assume  the Lease,  Landlord  agrees to
recognize Franchisor as the tenant under the Lease and Franchisee will no longer
have any rights  thereunder.  Landlord  shall  provide to Franchisor an estoppel
certificate  confirming  that  no  additional  defaults  exist  and no  acts  or
omissions  have  occurred  which,  with the  passage  of time,  would  result in
default.

     8.  Franchisee  will be permitted to assign the Lease to  Franchisor or its
affiliates upon the expiration or earlier termination of the Franchise Agreement
and the Landlord  hereby consents to such assignment and agrees not to impose or
assess any assignment  fee or similar charge or accelerate  rent under the Lease
in connection with such  assignment,  or require  Franchisor to pay any past due
rent  or  other  financial  obligation  of  Franchisee  to  Landlord,  it  being
understood  that  Landlord will look solely to the  Franchisee  for any rents or
other financial obligations owed to Landlord prior to such assignment.  Landlord
and Franchisee  acknowledge that Franchisor is not a party to the Lease and will
have no liability under the Lease, unless and until the Lease is assigned to, or
assumed by, Franchisor.

     9. Except for the Franchisee's  obligations to Landlord for rents and other
financial obligations accrued prior to the assignment of the Lease, in the event
of such  assignment,  Franchisor or any affiliate  designated by Franchisor will
agree to  assume  from the date of  assignment  all  obligations  of  Franchisee
remaining  under the Lease,  and in such event  Franchisor or any affiliate will
assume  Franchisee's  occupancy rights,  and the right to sublease the Premises,
for the remainder of the term of the Lease.

     10.  Notwithstanding  anything  contained  in  this  Lease,  Franchisor  is
expressly  authorized,  without  the  consent  of the  Landlord,  to sublet  the
Premises to an unauthorized franchisee, provided such subletting is specifically
subject  to the terms of this  Lease and  further  provided  Franchisor  remains
liable  for  the  performance  of the  terms  of this  Lease  and  provided  the
franchisee expressly assumes all obligations of the Lease.  Franchisor agrees to
notify Landlord as to the name of the franchisee within ten (10) days after such
subletting.

     11. The terms of this Lease Rider will supersede any  conflicting  terms of
the Lease.






     IN WITNESS  WHEREOF,  the parties  hereto have duly  executed and delivered
this Lease Rider as of the date first above written.


FRANCHISOR:
CEC ENTERTAINMENT, INC.
a Kansas corporation


By:      ____________________
Name:    ____________________
Title:   ____________________


FRANCHISEE:
_____________________________
a ________ (corporation) (partnership)


By:      ____________________
Name:    ____________________
Title:   ____________________


LANDLORD:

_____________________________
a _________ corporation


By:      ____________________
Name:    ____________________
Title:   ____________________







                                  ATTACHMENT D

                        ADVERTISING COOPERATIVE AGREEMENT

     THIS ________ DMA ADVERTISING  COOPERATIVE AGREEMENT  (hereinafter referred
to as "Agreement")  is made and entered into this ___ day of ________,  20__, by
and between the  undersigned  franchisees  ("Members"),  and CEC  Entertainment,
Inc., a Kansas corporation ("Franchisor") or any of its affiliates to the extent
they are operating a Chuck E. Cheese's restaurant  ("Franchised  Restaurant") as
such term is defined in the Franchise Agreement ("Franchise  Agreement") located
in the ________  Designated  Marketing  Area, or DMA (as such term is defined in
the Franchise Agreement), then Franchisor shall be included in the term "Member"
and shall execute this  Agreement as a Member,  with  reference to the following
facts:

     WHEREAS,  each of the Members is engaged in the  operation  of a Franchised
Restaurant,  pursuant to the terms of a Franchise  Agreement entered into by and
between the Member and the Franchisor;

     WHEREAS,  the  Franchised  Restaurants  operated by the Members are located
within the ________ DMA ("DMA");

     WHEREAS,  the  Franchisor  is requiring  the Members to form a  cooperative
advertising  association (the  "Cooperative") for the purpose of advertising and
promoting  the   Franchised   Restaurants  in  the  DMA  pursuant  to  specified
advertising  and  promotional  activities,   and  each  Member  is  required  to
contribute  a portion of the Member's  Gross Sales (as defined in the  Franchise
Agreement) to the Cooperative for this purpose;

     WHEREAS,  the  Members  acknowledge  and agree  that the  formation  of the
Cooperative is in the best interest of the Members and the System (as defined in
the  Franchise  Agreement),  and that the  formation of the  Cooperative  by the
Members will provide each Member with greater and more effective exposure of the
products and services  marketed by each Member to the general  public than would
otherwise be available; and

     THEREFORE,   in  consideration  of  the  mutual  covenants  and  agreements
contained herein, Members have agreed as follows:

SECTION 1. ORGANIZATION.

     1.1  Formation.   The  Members  agree  that  they  shall  hereby  form  and
participate  in the  Cooperative  for the  exclusive  purposes  of  funding  and
administering  regional  advertising  and promotion  programs,  and  developing,
subject to Franchisor's approval,  standardized advertising materials for use by
the Members in regional advertising.







     1.2 Use of Funds. The Cooperative shall be operated solely as a conduit for
funds  contributed for the purpose  referenced  above and as otherwise set forth
herein.

SECTION 2. MEMBERSHIP.

     2.1  Establishing  Cooperative.  Franchisor  shall have the  right,  in its
discretion,  to  designate  any  geographic  area  (i.e.,  DMA) as a region  for
purposes of establishing a Cooperative and to determine whether a Cooperative is
applicable to the Members. Throughout the term of this Agreement, the geographic
area  encompassed  by the DMA shall be subject to change in accordance  with the
boundaries as established by Nielsen Media Research, Inc. A Cooperative shall be
composed of any two or more  restaurants,  whether such restaurants are operated
by Franchisor or  franchisees.  If a Cooperative  has been  established  for the
geographic  area in which the  Franchised  Restaurant  is  located at the time a
System  Restaurant (as defined in the Franchise  Agreement)  commences  business
hereunder,  the operator of such System Restaurant  (franchisee,  Franchisor (or
any of its affiliates) shall immediately become a member of such Cooperative not
later than  thirty (30) days after the date on which the  Cooperative  commences
operation,  as provided below. If the System Restaurant is within the geographic
area of more than one  Cooperative,  the  franchisee  shall be  required to be a
member of only one such Cooperative as designated by Franchisor.

     2.2  Termination  of  Membership.  The  membership  of  any  Member  in the
Cooperative shall terminate upon the termination, expiration, or transfer of the
Franchise Agreement applicable to the Member's Franchised  Restaurant located in
the DMA, or in the event the Member's Franchised Restaurant ceases to be located
in the DMA due to a change in the geographic area  constituting  the DMA, at the
time of such  change.  In the event the  Member  operates  more than one  System
Restaurant located in the DMA, the Member's  membership shall terminate upon the
termination,  expiration,  or  transfer  of  all  of  the  Franchise  Agreements
applicable  to such  System  Restaurants  or upon  all such  System  Restaurants
ceasing to be located within the DMA; provided, however, that a Member shall not
be required to pay a cooperative fee and shall not have any voting rights in the
Cooperative  with  respect  to any  System  Restaurant  for which the  Franchise
Agreement has  terminated,  expired,  or been  transferred or which is no longer
located in the DMA.  Any Member whose  membership  in the  Cooperative  has been
terminated as provided  herein shall have no further rights of membership in the
Cooperative.

SECTION 3. CONTRIBUTIONS.

     3.1 Amount of Contributions. Commencing upon the date of this Agreement (or
upon  the  effective  date of  membership  with  respect  to a new  Member)  and
continuing  until the dissolution of the Cooperative or the earlier  termination
of a Member's  membership in the Cooperative,  each Member shall pay directly to
the  Cooperative  contributions  in  such  amounts  as  are  determined  by  the
Cooperative;  provided,  however, that Member shall be required to contribute to
the  Cooperative  at least three  percent  (3.0%) of the Member's  monthly gross
sales of each System Restaurant located in the DMA.






     3.2 Payment  Date.  Each Member shall submit to the  Cooperative,  no later
that the fifteenth (15th) day of each month,  for the preceding  calendar month,
its  contribution  as provided  herein,  together with such other  statements or
reports as may be required by Franchisor or by the Cooperative with Franchisor's
prior approval.

     3.3 Overdue Contributions. Any cooperative fee which is not received by the
Cooperative on or before the date on which it is due shall be deemed overdue. In
addition to the overdue amount, the Member shall pay to the Cooperative interest
on such amount from the date it was due until paid at the rate of twelve percent
(12%) per annum, provided that in no event shall such interest rate be more than
the maximum rate allowed by the applicable law. In addition,  each Member agrees
to pay all costs and expenses (including reasonable attorneys' fees) incurred by
the  Cooperative  and/or the  Franchisor in connection  with the recovery of any
cooperative  fee due  hereunder.  Except as described  below with respect to the
dissolution of the Cooperative,  no cooperative fee paid by any Member hereunder
shall be  refundable in whole or in part upon  termination  of membership in the
Cooperative or otherwise.

     3.4  Default.  The  failure  to pay any  cooperative  fee  for  any  System
Restaurant when due hereunder shall constitute a default by the Member and shall
result in the  suspension of the right of the Member to receive any  advertising
and  promotional  materials  and  services  provided  by  the  Cooperative,  the
suspension  of the  right  to  participate  in  any  advertising  and  marketing
activities  conducted by the  Cooperative and in the suspension of voting rights
with respect to the Cooperative.

SECTION 4. GOVERNMENT AND MANAGEMENT.

     4.1  Membership  Meetings.  The Members  shall have at least one  regularly
scheduled meeting (which may be conducted through a telephonic  conference call)
during every fiscal year and shall hold additional meetings from time to time as
the  Members or  Franchisor  deems  necessary  to conduct  the  business  of the
Cooperative.  Such meetings shall be necessary for all matters to be acted on by
the Cooperative,  including,  but not limited to, the funding and administration
of regional  advertising  and  promotion  programs  and  developing,  subject to
Franchisor's approval, standardized advertising materials for use by the Members
in regional  advertising.  Notice of any  meeting  shall be given to each Member
entitled to vote at the meeting.

     The  holders  of a  majority  of  those  votes  entitled  to be cast  shall
constitute a quorum at a meeting of Members.  Any and all matters to be acted on
by the Cooperative  shall be determined by the affirmative  vote of the majority
of votes entitled to be cast at a meeting at which a quorum is present.  Any CEC
Entertainment,  Inc. franchisee who has executed a Franchise Agreement but whose
System  Restaurant  is not yet open for  business  may  attend  any  meeting  of
Members, notwithstanding that such franchisee's membership in the Cooperative is
not yet effective and the franchisee has no voting privileges.






     4.2 Voting.  Each Member shall be entitled to one (1) vote,  in person,  by
written consent,  or by proxy, for each System Restaurant operated by the Member
that  is  located  in the  DMA.  The  voting  rights  of  any  Member  shall  be
automatically  suspended  upon the failure to pay any  cooperative  fee when due
hereunder  and such  suspension  shall  continue  until such time as all overdue
amounts  (including  interest,  attorneys' fees and other costs and expenses due
hereunder) are paid in full. In addition,  the voting rights of any Member shall
be  automatically  suspended  upon the  occurrence of an event of default by the
Member under any applicable Franchise Agreement to which such Member is a party.
Such  suspension  shall continue until such default is cured within the time and
in the manner  specified in the applicable  Franchise  Agreement.  Each Member's
obligation to pay cooperative fees hereunder shall continue  notwithstanding any
suspension of voting rights.

     4.3 General  Manager.  If Franchisor is a member of the Cooperative it will
be the General Manager;  otherwise,  the Cooperative will elect an individual to
serve as General Manager. The Cooperative hereby appoints the General Manager as
its true and lawful agent to collect all sums due the Cooperative,  maintain and
make disbursements from an account established for such sums collected,  prepare
an operating budget, including an advertising and marketing plan for each fiscal
year,  expend  funds  from the  Cooperative's  account as  necessary  to conduct
advertising  and marketing  activities for the  Cooperative  in accordance  with
standards  and  specifications   set  forth  by  the  Franchisor,   engage  such
advertising and marketing personnel (on an independent  contractor basis) as the
General Manager deems necessary, and conduct the meetings of the Members.

SECTION 5. BOOKS AND RECORDS; REPORTS.

     General  Manager  shall  maintain a  comprehensive  system of just and true
books of account in which shall be entered fully and  accurately  each and every
transaction  with respect to the operation of the Fund. Such records,  accounts,
and books shall be maintained  either at the office of the General Manager or at
some other location, as the General Manager shall decide, or at such other place
as Cooperative and Franchisor shall mutually determine,  and each party shall at
all  reasonable  times have access to such records,  accounts,  and books.  Such
records,  accounts, and books shall be kept on a calendar year basis and on such
method of accounting as  Cooperative  may direct.  The books may be audited by a
certified  public  accountant  selected by Cooperative at the close of each such
year and/or at such other times as Cooperative may direct.  The cost of any such
audit shall be borne by Cooperative.

SECTION 6. ACT OF COOPERATIVE.

     All matters to be acted on by the  Cooperative  shall be  determined by the
General Manager or vote of the Members as described  herein.  Except as provided
herein,  no  individual  Member  shall be an agent  of the  Cooperative  for any
purpose and no action  taken by any  individual  Member,  of whatever  nature or
kind,   shall  bind  the  Cooperative  in  any  manner  unless  such  action  is
specifically authorized by the Members as described below.









SECTION 7. DISSOLUTION.

     The  Cooperative  shall exist and operate  hereunder until dissolved by the
Franchisor.  Upon  dissolution  and  after  payment  of all  liabilities  of the
Cooperative,  all funds  remaining in the  Cooperative's  bank account  shall be
disbursed  by the  General  Manager  to  the  Members  on a pro  rata  basis  in
accordance with  cooperative fees  respectively  paid by the Members at the time
the last cooperative fee was required to be paid hereunder.

SECTION 8. INDEMNIFICATION.

     The  Cooperative  shall,  at all times,  indemnify  and hold  harmless  the
Franchisor,  its designee(s) which administer the System Fund (as defined in the
Franchise Agreement), and their respective subsidiaries, affiliates, successors,
and assigns, and their respective directors, officers,  shareholders,  partners,
servants,  employees,  agents, and representatives  from and against any and all
causes of  action,  suits,  debts,  costs,  expenses,  liabilities,  claims,  or
demands,  of whatever nature or kind, in law or in equity,  arising out of or in
connection with the existence and operation of the Cooperative. In addition, the
Cooperative  shall,  at all times,  indemnify  and hold  harmless any current or
former General Manager of the Cooperative from and against any and all causes of
action,  suits,  debts,  costs,  expenses,  liabilities,  claims, or demands, of
whatever nature or kind, whether known or unknown, in law or in equity,  arising
because such person is or was an officer of the Cooperative. The Cooperative may
additionally  indemnify any person  covered by the foregoing  grant of mandatory
indemnification  to such further extent as is permitted by law and may indemnify
any other person to the fullest extent permitted by law.

SECTION 9. NOTICES.

     Any and all notices  required or permitted under this Agreement shall be in
writing  and shall be  personally  delivered  or mailed  by  expedited  delivery
service or certified or registered mail, return receipt  requested,  first class
postage prepaid, or sent by prepaid facsimile or telex to the respective parties
at the  following  addresses  unless  and  until a  different  address  has been
designated      by      written      notice     to     the     other      party:


If to Franchisor:           If to Cooperative:

Director of  Franchise      International Association of CEC Entertainment, Inc.
CEC Entertainment, Inc.     c/o CEC Entertainment, Inc.
4441 West Airport Freeway   4441 West Airport Freeway
Irving, Texas  75062        Irving, Texas  75062
(214) 258-8507              (214) 258-8507
(214) 258-5528 (Fax)        (214) 258-8845 (Fax)


If to any Member:

The address set forth in the applicable Franchise Agreement







     Any  notice  shall be  deemed to have  been  given at the time of  personal
delivery or, in the case of facsimile or telex,  upon receipt or, in the case of
expedited  delivery  service or registered or certified mail, three (3) business
days after the date and time of mailing.

SECTION 10. MISCELLANEOUS PROVISIONS

     10.1  Relationship  with  Franchisor.  It is  understood  and agreed by the
parties  hereto that this  Agreement  does not  constitute  the  Franchisor as a
member  of  the  Cooperative  or as a  partner,  joint  venturer,  principal  or
affiliate of the Cooperative for any purpose;  provided that the foregoing shall
not apply in the event the Franchisor is a Member of the Cooperative as provided
in Section 2 above.

     10.2 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the parties  hereto,  subject to
the restrictions on assignment contained herein.

     10.3  Assignment.  The rights and  obligations of each of the Members under
this  Agreement are personal and may not be  transferred  or assigned;  provided
that the  Franchisor,  in its capacity as a Member or otherwise,  shall have the
right to  transfer  or  assign  all or any  part of its  rights  or  obligations
hereunder to any person or legal entity.

     10.4 Waiver and Delay.  The failure of the Cooperative or the Franchisor to
exercise any right,  power, or option of it hereunder,  or to insist upon strict
compliance  with the  terms  hereof  shall not  constitute  a waiver of any term
and/or  condition  of this  Agreement  with  respect to any other or  subsequent
breach  thereof,  nor a waiver of rights at any time thereafter to require exact
and strict  compliance  with the terms and/or  conditions set forth herein.  The
remedies  hereunder are  cumulative to any other rights or remedies which may be
granted by law.

     10.5  Arbitration.  Any  controversy or claim arising out of or relating to
this Agreement, or any breach thereof, including,  without limitation, any claim
that  any of said  Agreement,  or any  part  thereof,  is  invalid,  illegal  or
otherwise voidable or void, shall be submitted to arbitration in accordance with
the Commercial Rules of the American Arbitration Association; provided, however,
this clause  shall not be  construed  to limit or to preclude  either party from
bringing any action in any court of competent  jurisdiction  for  injunctive  or
other provisional  relief as is necessary or appropriate.  The arbitration shall
be conducted in Dallas,  Dallas County,  Texas, in the United States of America.
Any  award  or  determination  of  the  arbitration  tribunal  shall  be  final,
non-appealable,  and conclusive  upon the parties,  and judgment  thereon may be
entered by any court of competent jurisdiction.

     10.6 Attorneys' Fees. If any arbitration or other legal action is initiated
by either of the  parties  hereto,  the  prevailing  party  shall be entitled to
recover from the other party reasonable attorneys' fees in addition to any other
relief that may be awarded.






     10.7  Titles  for  Convenience.  Titles  used  in  this  Agreement  are for
convenience  only and shall not be deemed to affect the meaning or  construction
of any of the terms, provisions, covenants, or conditions of this Agreement.

     10.8  Choice  of Law and  Forum.  All  disputes  concerning  the  validity,
interpretation,  or  performance  of  this  Agreement  and any of its  terms  or
provisions,  or any  rights  or  obligations  of the  parties  hereto,  shall be
governed by and resolved in accordance with the laws of the State of Texas,  and
be resolved in the courts located within Dallas, Dallas County, Texas.

     10.9  Severability.  Nothing contained in this Agreement shall be construed
as requiring the  commission of any act contrary to law.  Whenever  there is any
conflict  between  any  provision  of this  Agreement  and any present or future
statute,  law,  ordinance  or  regulation  contrary to which the parties have no
legal  right to  contract,  the  latter  shall  prevail,  but in such  event the
provision(s) of this Agreement thus affected shall be curtailed and limited only
to the extent  necessary to bring it within the  requirements of the law. In the
event that any part,  article,  paragraph,  sentence or clause of this Agreement
shall  be  held  to be  indefinite,  invalid  or  otherwise  unenforceable,  the
indefinite,  invalid or unenforceable  provision(s) shall be deemed deleted, and
the remaining part of the Agreement shall continue in full force and effect.  If
any tribunal or court of competent  jurisdiction  deems any provision(s)  hereof
unenforceable,  such provision(s) shall be modified only to the extent necessary
to render it enforceable  and this Agreement  shall be valid and enforceable and
the parties hereto agree to be bound by and perform same as thus modified.

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

     10.11 Entire Agreement.  With the exception of each Franchise  Agreement to
which the various Members are a party, this Agreement  contains all of the terms
and  conditions  agreed upon by the parties hereto with reference to the subject
matter hereof. No other agreements,  oral or otherwise, shall be deemed to exist
or to  bind  either  of  the  parties  hereto,  and  all  prior  agreements  and
understandings   are  suspended   hereby.   Except  for  those   amendments  and
modifications  permitted to be made  unilaterally  by the Franchisor  under this
Agreement,  this  Agreement  may only be amended  or  modified  pursuant  to the
written  agreement  of all  Members  of the  Cooperative,  subject  to the prior
approval of the Franchisor.


                     [Signatures appear on following pages]





MEMBER:
_____________________________
a ________ (corporation) (partnership)

By:      ____________________
Name:    ____________________
Title:   ____________________
Restaurant(s): ______________
Date:    ____________________


APPROVED AND AGREED TO :

FRANCHISOR:
CEC ENTERTAINMENT, INC.

By:      ____________________
Name:    ____________________
Title:   ____________________
Date:    ____________________






                                  ATTACHMENT E

            EMPLOYEE'S CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
           (For Managers, Assistant Managers, Directors of Operations,
                          District Managers and others)

     This  Confidentiality and Non-Competition  Agreement  ("Agreement") is made
and  entered  into  this  ___  day  of  ________,   20__,  by  and  between  CEC
Entertainment,    Inc.,   a   Kansas   corporation   ("Franchisor"),    ________
("Franchisee"), and ________ ("Covenantor").

                                    RECITALS

     WHEREAS,  Franchisor and Franchisee have entered into a Franchise Agreement
dated ________ (the  "Franchise  Agreement"),  pursuant to which  Franchisor has
granted  Franchisee the right to establish and operate a  family-oriented  pizza
restaurant (the "Franchised  Restaurant")  and to use the Proprietary  Marks and
System solely in connection therewith; and

     WHEREAS,  Franchisor  has  provided,  or  will  provide  to  Franchisee,  a
confidential  operations  manual and such other  written or printed  material to
explain the operation of the System and aid in its use (the "Documentation") and
certain  confidential  information,   knowledge,  and  know-how  concerning  the
construction and methods of operation of the Franchised  Restaurant  relating to
the  System,  including  the  Documentation,   drawing,  materials,   equipment,
techniques,  products,  recipes, and other data of Franchisor ("Trade Secrets");
and

     WHEREAS,   the  Proprietary   Marks  and  Trade  Secrets  provide  economic
advantages to Franchisor  and the Trade Secrets are not generally  known to, and
are not readily  ascertainable by proper means by, Franchisor's  competitors who
could obtain economic value from knowledge and use of the Trade Secrets; and

     WHEREAS,  Covenantor or  acknowledges  that receipt of and the right to use
the  Trade  Secrets  constitutes  independent  valuable  consideration  for  the
representations, promises and covenants made by Covenantor or herein;

     NOW,  THEREFORE,  in  consideration of the mutual covenants and obligations
contained herein, the parties agree as follows:

                            Confidentiality Agreement

     1.  Franchisor and Franchisee  shall disclose to Covenantor  some or all of
the Trade Secrets. All information and materials, including, without limitation,
the  Documentation,  which Franchisor  provides to Franchisee  and/or Covenantor
shall be deemed confidential Trade Secrets for purposes of this Agreement.







     2. Covenantor  shall at all times treat as  confidential,  and shall not at
any time disclose,  distribute, copy, duplicate, record, or otherwise reproduce,
in whole or in part,  or  otherwise  make  available  to any person or source or
otherwise  use in  any  manner  except  for  the  operation  of  the  Franchised
Restaurant,  the contents of the Trade Secrets without the prior written consent
of Franchisor.

     3. Covenantor agrees that any goodwill that may arise from Covenantor's use
of the Trade Secrets  shall at all times remain the sole and exclusive  property
of Franchisor and shall inure to the sole benefit of Franchisor.

     4.  Covenantor  agrees to notify  Franchisor  and  Franchisee  promptly  in
writing of any loss,  theft,  or  unauthorized  disclosure  or use of any of the
Trade Secrets of which Covenantor has knowledge.

     5. Covenantor  shall  surrender any material  containing some or all of the
Trade Secrets,  including the Documentation,  to Franchisee or Franchisor,  upon
request, or upon termination of employment by Franchisee,  or upon conclusion of
the use for which  such  information  or  material  may have been  furnished  to
Covenantor.

                            Covenants Not to Compete

     1.  Covenantor  specifically  acknowledges  that,  pursuant to Covenantor's
employment or association  with  Franchisee,  Covenantor will receive  valuable,
specialized training and/or confidential  information.  In consideration for the
disclosure of the Trade Secrets,  Covenantor  covenants that during Covenantor's
employment or association  with  Franchisee,  and for one (1) year following the
earlier  of the  expiration,  termination  or  transfer  of all of  Franchisee's
interest  in  the  Franchise   Agreement  or  the  termination  of  Covenantor's
association  with or employment by Franchisee,  except as otherwise  approved in
writing by Franchisor,  Covenantor shall not, either directly or indirectly, for
itself,  or through,  on behalf of, or in conjunction  with, any person or legal
entity:

          (a)  Divert or  attempt  to divert any  business  or  customer  of the
     Franchised  Restaurant to any competitor,  by direct or indirect inducement
     or  otherwise,  or do or  perform,  directly or  indirectly,  any other act
     injurious or prejudicial to the goodwill  associated  with the  Proprietary
     Marks, the Animated Entertainment or the System;

          (b) Employ or seek to employ  any person who is at that time  employed
     by Franchisor, or by any Licensee of Franchisor (other than Franchisee), or
     otherwise  directly  or  indirectly  induce such person to leave his or her
     employment; or






          (c) Own,  maintain,  operate,  engage in, be employed by,  provide any
     assistance  to,  or have  any  interest  in (as  owner  or  otherwise)  any
     business, which operates a restaurant or food service outlet in combination
     with family entertainment, including without limitation, live entertainment
     and  entertainment  in the form or video tapes,  video displays or computer
     controlled  animated  characters;  provided,  however,  that this provision
     shall not apply to the  operation by Covenantor of any license which may be
     granted by  Franchisor to  Covenantor;  and  provided,  further,  that this
     provision shall not apply to any ownership by Covenantor, of less than five
     percent (5%) of the  outstanding  equity  securities  in any  publicly-held
     corporation, and which business is located within the United States and any
     foreign  jurisdiction where Franchisor or its licensees do business (during
     the term of  Covenantor's  employment)  or within a  twenty-five  (25)-mile
     radius from the Franchised Restaurant.

          (d) Covenantor  understands and acknowledges that Franchisor will have
     the  right,   in  its  sole   discretion,   to  reduce  the  scope  of  any
     non-competition  covenant set forth above, or any portion thereof,  without
     its  consent,   effective  immediately  upon  notice  to  Covenantor;   and
     Covenantor  agrees  that he or she  will  comply  with any  covenant  as so
     modified, which will be fully enforceable notwithstanding the provisions of
     Section 4 under the heading entitled "Miscellaneous."

                                  Miscellaneous

     1.  Franchisee and  Covenantor  agree that in the event of a breach of this
Agreement,  Franchisor  and/or  Franchisee  shall be  entitled  to  enforce  the
provisions  of this  Agreement  and shall be entitled,  in addition to any other
remedies  which are made  available  to it at law or in equity,  to a  temporary
and/or  permanent  injunction  and a decree for the specific  performance of the
terms of this  Agreement,  without the necessity of showing actual or threatened
harm and without being required to furnish a bond or other security.

     2.  Covenantor  agrees  to pay all  expenses  (including  court  costs  and
reasonable  attorneys'  fees) incurred by Franchisor and Franchisee in enforcing
this Agreement.

     3. THIS  AGREEMENT  SHALL BE  INTERPRETED  BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE  WITH THE LAWS OF ________,  WITHOUT  REFERENCE TO ________ CHOICE OF
LAW PRINCIPLES.

     4. This Agreement  contains the entire  agreement of the parties  regarding
the  subject  matter  hereof.  This  Agreement  may be  modified  only by a duly
authorized writing executed by all parties.

     5. Any and all notices  required or permitted under this Agreement shall be
in writing and shall be personally delivered or mailed by certified mail, return
receipt requested,  to the respective parties at the following  addresses unless
and until a different address has been designated by written notice to the other
party:








Notices to Franchisor:                              Notices to Franchisee:

Director of  Franchise                              ____________________
CEC Entertainment, Inc.                             ____________________
4441 West Airport Freeway                           ____________________
Irving, Texas  75062                                ____________________
(214) 258-8507                                      (___) ______________
(214) 258-5528 (Fax)                                (___) ______________ (Fax)


Notices to Covenantor:

_________________________
_________________________
_________________________

     Any notice by certified mail shall be deemed to have been given at the date
and time of mailing.


     IN WITNESS  WHEREOF,  the  undersigned  have entered into this Agreement as
witnessed by their signatures below.


FRANCHISOR:                               FRANCHISEE:
CEC ENTERTAINMENT, INC.,                  __________________________,
a Kansas corporation                      a ________ (corporation) (partnership)

By:      ____________________             By:      ____________________
Name:    ____________________             Name:    ____________________
Title:   ____________________             Title:   ____________________


COVENANTOR:

By:      ____________________
Name:    ____________________







                                  ATTACHMENT F

                                RENEWAL AMENDMENT
                                       TO
                               FRANCHISE AGREEMENT

     This Renewal Amendment to Franchise Agreement ("Amendment") is executed and
entered into this ___ day of ________,  20__, by and between CEC  Entertainment,
Inc. a Kansas corporation (as "Franchisor"),  and  ________________,  a ________
corporation (as "Franchisee").

                                    RECITALS

     1. On  ________,  Franchisor  and  Franchisee  entered  into  that  certain
franchise  agreement (the  "Expiring  Franchise  Agreement"),  pursuant to which
Franchisee  established  and operates  Chuck E. Cheese's  restaurant  located at
________________ (the "Franchised Restaurant");

     2. The  Expiring  Franchise  Agreement  provides for an initial term of ___
years  and  grants  Franchisee  the  conditional  right  to renew  the  Expiring
Franchise Agreement for ___ consecutive renewal term(s) of ___ years each.

     3. Such  renewal  is  conditioned  on,  among  other  things,  Franchisee's
execution of Franchisor's then-current form of franchise agreement;

     4.  Franchisee  desires  to renew  the  Expiring  Franchise  Agreement  and
Franchisor  and  Franchisee  have,  contemporaneous  with the  execution of this
Amendment,  executed Franchisor's  then-current form of franchise agreement (the
"Franchise Agreement"), which supercedes the Expiring Franchise Agreement; and

     5.  Franchisor  and  Franchisee  desire to amend the terms of the Franchise
Agreement to reflect the renewal conditions  contained in the Expiring Franchise
Agreement and Franchisee's continued operation of the Franchised Restaurant.

     NOW,  THEREFORE,   Franchisor  and  Franchisee,  in  consideration  of  the
undertakings  and commitments  set forth herein and in the Franchise  Agreement,
agree as follows:

     1. Section 1.28 of the Franchise Agreement shall be deleted in its entirety
and shall have no force effect and the following  shall be  substituted  in lieu
thereof:

          1.28 "Site" means the existing  location of the Franchised  Restaurant
     as of the date first above written.





     2. Section 3.1 of the Franchise  Agreement shall be deleted in its entirety
and shall have no force or effect and the following shall be substituted in lieu
thereof:

          3.1  Renewal  Fee.  Prior  to or  upon  execution  of  this  Agreement
     Franchisee shall deliver to Franchisor a renewal fee of ________ and no/100
     Dollars  ($________) in readily  available funds (the "Renewal  Fee").  The
     Renewal Fee will be fully  earned by  Franchisor  and  non-refundable  upon
     receipt,   in   consideration   for,   among  other  things,   Franchisor's
     administrative expenses and lost or deferred opportunities in entering into
     this Agreement.

     3. Section 4 of the Franchise Agreement, entitled "Site Selection" shall be
amended by the  addition of the  following  Section  4.7,  which shall deemed an
integral part thereof:

          4.7  Franchisor  hereby  approves  the site  described in Section 1.28
     hereof as the Site for the Franchised Restaurant,  and acknowledges receipt
     of a fully executed copy of the lease or purchase agreement as described in
     Section 4.4 hereof.

     4.  Section 6 of the  Franchise  Agreement,  entitled  "Training"  shall be
amended by the addition of the following  Section 6.4,  which shall be deemed an
integral part thereof:

          6.4 Franchisor and Franchisee  acknowledge  and agree that  Franchisor
     has provided,  and Franchisee's current general manager and technician have
     attended  and  completed to  Franchisor's  satisfaction,  initial  training
     conducted by Franchisor  and that  Franchisor  has provided to Franchisee a
     copy  of  the  Operational  Policies.   Franchisor  shall  not  charge  any
     additional fee for such training previously provided by Franchisor.

     5. Section 12.1 of the Franchise Agreement shall be deleted in its entirety
and shall have no force or effect and the following shall be substituted in lieu
thereof:

          12.1  Insurance.  For the entire  term of this  Agreement,  Franchisee
     shall  obtain  and  maintain  insurance   protecting   Franchisee  and  the
     Indemnitees  against any demand or claim arising or occurring in connection
     with the operation of the Franchised  Restaurant.  Such policies shall: (i)
     be of the types and for the minimum  amounts of coverage  indicated  in the
     Operational  Policies;  (ii)  contain a waiver of  subrogation  in favor of
     Franchisor; (iii) name the Indemnitees as additional insureds; (iv) contain
     no provision  which  limits or reduces  coverage in the event of a claim by
     any one (1) or more of the  Indemnitees;  (v) provide  that  policy  limits
     shall not be reduced,  coverage restricted,  canceled,  allowed to lapse or
     otherwise altered or such policy(ies) amended without  Franchisor's cosent;
     and  (vi) be  obtained  from  reputable  insurance  companeis  approved  by
     Franchisor and authorized to do business in all  jurisdictions in which the
     Franchised  Restaurant is located.  Franchiseealso  acknowledges and agrees
     to:

               (a) furnish Franchisor with evidence that Franchisee has obtained
          the required  insurance each year afterwards,  and at any other time a
          carrier or coverage is changed;







               (b)  increase  the  insurance  coverage  amounts  in the  amounts
          indicated by  Franchisor  upon thirty (30) days prior  written  notice
          from Franchisor; and

               (c) reimburse  Franchisor for any insurance  policies obtained by
          Franchisor on behalf of  Franchisee if Franchisee  fails to obtain the
          insurance required by this Section.

     6. Section 13.1 of the Franchise Agreement shall be deleted in its entirety
and shall have no force or effect and the following shall be substituted in lieu
thereof:

          13.1 Term. Unless terminated as provided for herein,  the term of this
     Agreement shall expire ________ (___) years thereafter.

     7. That portion of Section 13.2 of the Franchise Agreement prior to Section
13.2(a)  shall be deleted in its  entirety and shall have no force or effect and
the following shall be substituted in lieu thereof:

          13.2  Renewal.  Franchisee  may, at  Franchisee's  option,  renew this
     Agreement for ________ (___)  additional  period(s) of ________ (___) years
     [each], provided that at the end of the initial term:

     8. All other provisions of the Franchise  Agreement are hereby verified and
confirmed.


     IN WITNESS  WHEREOF,  the parties  hereto have fully  executed,  sealed and
delivered this Agreement in duplicate on the day and year first above written.

                     [Signatures appear on following pages]





FRANCHISOR:
CEC ENTERTAINMENT, INC.

By:      ____________________
Name:    ____________________
Title:   ____________________

STATE OF TEXAS

COUNTY OF DALLAS

     Before me personally appeared  ____________________,  who, after being duly
sworn, says that he is the  ____________________  of CEC Entertainment,  Inc., a
corporation,  organized and existing  under the laws of Kansas,  and that he has
authority to execute under oath and has so executed the above  Agreement for and
on behalf of such corporation for such purposes therein contained.

     WITNESS my hand and official seal this _____ day of _____________, 20__.

                                       ______________________________
(SEAL)                                 Notary Public

FRANCHISEE:
_____________________________

By:      ____________________
Name:    ____________________
Title:   ____________________

STATE OF ____________________

COUNTY OF ___________________

     Before me personally appeared  ____________________,  who, after being duly
sworn,  says  that  he  is  the  ____________________  of  ________________,   a
(corporation)   (partnership),   organized  and  existing   under  the  laws  of
____________________, and that he has authority to execute under oath and has so
executed  the  above   Agreement  for  and  on  behalf  of  such   (corporation)
(partnership) for the purposes therein contained.

     WITNESS my hand and official seal this ___ day of __________________, 20__.

                                       ______________________________
(SEAL)                                 Notary Public