<PAGE>

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-K
                       THE SECURITIES EXCHANGE ACT OF 1934

/X/  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
                   For the fiscal year ended December 31, 1999

                                       OR

/ /  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

            For the transition period from _______________ to ______

                         Commission file number 0-21423

                          CHICAGO PIZZA & BREWERY, INC.
             (Exact name of registrant as specified in its charter)

                  CALIFORNIA                             33-0485615
        (State or other jurisdiction of            (I.R.S. Employer
         incorporation or organization)            Identification Number)

                            26131 Marguerite Parkway
                                     Suite A
                         Mission Viejo, California 92692
                                 (949) 367-8616
          (Address, including zip code, and telephone number, including
             area code, of registrant's principal executive offices)

Securities registered under Section 12(b) of the Exchange Act:   None

Securities registered under Section 12(g) of the Exchange Act:

     TITLE OF EACH CLASS             NAME OF EACH EXCHANGE ON WHICH REGISTERED
 --------------------------          -----------------------------------------
 Common Stock, No Par Value                            NASDAQ

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES X  NO 
                                       --    --

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-X is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
           --
The aggregate market value of the common stock of the Registrant ("Common
Stock") held by non-affiliates as of December 31, 1999 based on the market price
at March 15, 2000 was $9,474,911. As of March 15, 2000, there were 7,658,321
shares of Common Stock of the Registrant outstanding and 7,964,584 Redeemable
Warrants of the Registrant outstanding.

DOCUMENTS INCORPORATED BY REFERENCE
Certain portions of the following documents are incorporated by reference into

Part III of this Form 10-K: The Registrant's Proxy Statement for the Annual
Meeting of Shareholders.


<PAGE>


                                                      INDEX

                                                      PART I


<TABLE>
<CAPTION>

<S>       <C>                                                                                                     <C>
ITEM 1.   DESCRIPTION OF BUSINESS.................................................................................1
ITEM 2.   PROPERTIES..............................................................................................2
ITEM 3.   LEGAL PROCEEDINGS.......................................................................................5
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.....................................................6

                                                      PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS...................................6
ITEM 6.   SELECTED FINANCIAL DATA.................................................................................8
ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS...................9
ITEM 8.   FINANCIAL STATEMENTS....................................................................................14
ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE....................14

                                                     PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT......................................................14
ITEM 11. EXECUTIVE COMPENSATION..................................................................................14
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..........................................14
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..........................................................14

                                                      PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.........................................15
</TABLE>



<PAGE>

                                           CHICAGO PIZZA & BREWERY, INC.


                                                      PART I


ITEM 1.   DESCRIPTION OF BUSINESS

GENERAL

Chicago Pizza & Brewery, Inc. (the "Company" or "BJ's") owns and operates 26 
restaurants located in Southern California, Oregon, Washington and Colorado 
and an interest in one restaurant in Lahaina, Maui. Each of these restaurants 
is operated as either a BJ's Pizza, Grill & Brewery, a BJ's Pizza & Grill, a 
BJ's Pizza & Grill - OTC or a Pietro's Pizza restaurant. The menu at the BJ's 
restaurants feature BJ's award-winning, signature deep-dish pizza, BJ's own 
hand-crafted beers as well as a great selection of appetizers, entrees, 
pastas, sandwiches, specialty salads and desserts. The five BJ's Pizza, Grill 
& Brewery restaurants feature in-house brewing facilities where BJ's 
hand-crafted beers are produced. The eight Pietro's Pizza restaurants serve 
primarily Pietro's thin-crust pizza in a very casual, counter-service 
environment.

The Company was incorporated in California on October 1, 1991 originally to 
assume the operation of the then existing five BJ's restaurants. In January 
1995, the Company purchased the BJ's restaurants and concept from its 
founders. Since that time, the Company has completed the (i) expansion of the 
BJ's menu to include high-quality sandwiches, pastas, entrees, specialty 
salads and desserts; (ii) enhancement of the BJ's concept through a 
comprehensive new logo and identity program, new uniforms, a new interior 
design concept and redesigned signage; (iii) addition of BJ's restaurants and 
microbreweries to the concept to produce BJ's own hand-crafted beers; (iv) 
purchase of the Pietro's Pizza chain in the Northwest in March 1996, 
converting seven of the Pietro's restaurants to BJ's.

The enhancement of the BJ's concept and the menu expansion have contributed 
to same store sales increases at the BJ's restaurants open the entire 
comparable periods of 6.5%, 15.7% and 8.7% for the years 1999, 1998 and 1997 
respectively.

The opening of the Company's first microbrewery in Brea, California in August 
1996 marked the beginning of the Company's production of award-winning 
hand-crafted specialty beers which are distributed to all of the Company's 
restaurants. The breweries have added an exciting dimension to the BJ's 
concept which further distinguishes BJ's from many other restaurant 
operations.

The acquisition of the Pietro's restaurants and the conversion of several of 
those restaurants to BJ's has given the Company a significant presence in the 
Oregon market. Due to the relative success of the Company's larger 
restaurants, management has determined that the Company's resources will be 
best utilized in the development of additional larger restaurants in prime 
locations. Consequently, there are currently no plans to convert additional 
Pietro's units to BJ's.

The Company's current focus is on the development of the larger footprint 
BJ's restaurants in high profile locations with favorable demographics. The 
Company opened BJ's Pizza & Grills in Arcadia, California in January 1999 and 
in La Mesa, California in November 1999, and a BJ's Pizza Grill & Brewery in 
Woodland Hills, California in April 1999. The Company anticipates opening 
BJ's Pizza & Grills in Valencia, California, Burbank, California and 
Huntington Beach, California in early spring 2000, early summer 2000 and mid 
summer, respectively, and a BJ's Pizza, Grill & Brewery in late spring 2000. 
The Company is currently in negotiations for additional sites in California, 
Arizona and Washington.

The Company's fundamental business strategy is to grow through the additional 
development and expansion of the BJ's brand. The BJ's brand represents 
exceptional food and specialty beers accompanied by great value, in a fun, 
casual environment.

In addition to developing new BJ's restaurant and brewery operations, the 
Company plans to pursue acquisition opportunities which may involve 
conversion to the BJ's concept or the operation of additional complementary 
concepts.

There can be no assurance that future events, including problems, delays, 
additional expenses and difficulties encountered in expansion and conversion 
of restaurants, will not adversely impact the Company's ability to meet its 
operational objectives or require additional financing, or that such 
financing will be available if necessary.


                                       1

<PAGE>



RESTAURANT CONCEPT AND MENU

The Company believes it is positioned for competitive advantage by offering 
customers moderate prices, and excellent food from a menu that features 
award-winning pizza, bountiful salads, soups, pastas, sandwiches, entrees and 
desserts. The popularity of BJ's restaurants, management believes, is due to 
the broadness of their appeal, with menu items ranging from pizza to steaks 
and ribs.

The BJ's menu has been developed on a foundation of excellence. BJ's core 
product, its deep-dish, Chicago-style pizza, has been highly acclaimed since 
it was originally developed in 1978. This unique version of Chicago-style 
pizza is unusually light, with a crispy, flavorful crust. Management believes 
BJ's lighter crust helps give it a broader appeal than some other versions of 
deep-dish pizza. The pizza is topped with high-quality meats, fresh 
vegetables and whole-milk mozzarella cheese. BJ's pizza consistently has been 
awarded "best pizza" honors by restaurant critics and public opinion polls in 
Orange County, California. In addition, BJ's recently won the award for "best 
pizza on Maui" in a poll conducted by the Maui News.

Management's objective in developing BJ's expanded menu was to ensure that 
all items on the menu maintained and enhanced BJ's reputation for quality. 
BJ's offers large portions of high quality food, creating a real value 
orientation. Because of the relatively low food cost associated with pizza, 
BJ's highest volume item, the restaurants are able to maintain favorable 
gross profit margins while providing a value to the customer.

BJ's restaurants provide a variety of beers for every taste, offering a 
constantly evolving selection of domestic, imported and micro-brewed beers. 
BJ's own hand-crafted beers are the focus of the beer selection and feature 
five standard beers along with a rotating selection of seasonal specialties. 
While the BJ's beers are produced at the Company's central brewery locations, 
they are distributed to, and offered at all of the BJ's and Pietro's 
restaurants. Management believes that internally produced beer provides a 
variety of benefits, including:

         1.   The quality and freshness of the BJ's brewed beers, which is under
              the constant supervision of the Company's Vice President of
              Brewing Operations, is superior to beer purchased from external
              sources.

         2.   The production costs of internally brewed beer can be
              significantly less than purchased beer. The relatively low
              production costs and premium pricing often associated with
              micro-brewed beers has a positive impact on gross profit margins.
              The cost savings are maximized when the brewery is operating at or
              near capacity. This is the basis for the Company's "central
              brewery" structure.


RESTAURANT LOCATIONS AND EXPANSION PLANS

The following table sets forth data regarding the Company's existing and future
restaurant locations:


<TABLE>
<CAPTION>
                                                                 Year Opened/
                                                                   Acquired        Square Feet
                                                                   --------        -----------
<S>                                                              <C>               <C>
CALIFORNIA                                                         
Balboa Island .......................................................1995           2,600
La Jolla Village.....................................................1995           3,000
Laguna Beach.........................................................1995           2,150
Belmont Shore........................................................1995           2,910
Seal Beach...........................................................1994           2,369
Huntington Beach.....................................................1994           3,430
Westwood Village, Los Angeles........................................1996           2,450
Brea (Microbrewery)..................................................1996          10,000
Arcadia..............................................................1999           7,371
Woodland Hills (Microbrewery)........................................1999          13,000
La Mesa..............................................................1999           7,200
Valencia* ...........................................................1999           7,000
West Covina* (Microbrewery)..........................................2000          12,000
Huntington Beach II**................................................2000           8,031
Burbank**............................................................2000          11,000

COLORADO
Boulder (Microbrewery)...............................................1997           5,500

HAWAII
Lahaina, Maui........................................................1994           3,430

                                       2

<PAGE>

OREGON

Hood River (Pietro's)................................................1996           7,000
Gresham .............................................................1996           5,016
Milwaukie (Pietro's).................................................1996           8,064
Salem I (Pietro's)...................................................1996           6,875
Jantzen Beach (Microbrewery).........................................1996           7,932
Eugene II (Pietro's).................................................1996           4,443
Eugene IV............................................................1996           4,345
Salem II (Pietro's)..................................................1996           5,000
Portland (Stark).....................................................1996           6,405
Portland (Lloyd Center) (Microbrewery)...............................1996           4,341
Portland (Burnside) .................................................1996           3,483
Portland (Lombard) (Pietro's)........................................1996           5,700
McMinnville (Pietro's)...............................................1996           2,900

WASHINGTON
Longview (Pietro's)..................................................1996           5,300

</TABLE>


*   Expected to open in spring 2000.
** Expected to open in summer 2000.

In addition to the above locations, the Company is evaluating potential
locations in California, Arizona and Washington. The Company's ability to open
additional restaurants will depend upon a number of factors, including, but not
limited to , the availability of qualified management, restaurant staff and
other personnel, the cost and availability of suitable locations, regulatory
limitations regarding common ownership of breweries and restaurants in certain
states, cost effective and timely construction of restaurants (which can be
delayed by a variety of controllable and non-controllable factors), securing of
required governmental permits and approvals and the Company's ability to
generate funds from existing operations or external financing. There can be no
assurance that the Company will be able to open its planned restaurants in a
timely or cost effective manner, if at all.

MARKETING

To date, the majority of marketing has been accomplished through community-based
promotions and customer referrals. Management's philosophy relating to the BJ's
restaurants has been to "spend its marketing dollars on the plate," or use funds
that would typically be allocated to marketing to provide a better product and
value to its existing guests. Management believes this will result in increased
frequency of visits and greater customer referrals. BJ's expenditures on
advertising and marketing are typically 1.0% to 2.0% of sales.

BJ's is very much involved in the local community and charitable causes,
providing food and resources for many worthwhile events. Management feels very
strongly about its commitment to helping others, and this philosophy has
benefited the Company in its relations with its surrounding communities. BJ's
commitment to supporting worthwhile causes is exemplified by its "Cookies for
Kids" program, which provides a donation to the Cystic Fibrosis Foundation for
each Pizookie sold. The Pizookie, BJ's extremely popular dessert, is a cookie,
freshly baked in a mini pizza pan, and topped with vanilla bean ice cream.

Pietro's marketing strategy relies much more on the distribution of discount
coupons. Expenditures for marketing relating to the Pietro's restaurants are
typically 5.0% of sales (excluding discounts).

OPERATIONS

The Company's policy is to staff the restaurants with enthusiastic people, who
can be an integral part of BJ's fun, casual atmosphere. Prior experience in the
industry is only one of the qualities management looks for in its employees.
Enthusiasm, motivation and the ability to interact well with the Company's
clientele are the most important qualities for BJ's management and staff.

Both management and staff undergo thorough formal training prior to assuming
their positions at the restaurants. Management has designated certain managers,
servers and cooks as "trainers," who are responsible for properly training and
monitoring all new employees. In addition, the Company's Director of Food and
Beverage and regional managers supervise the training functions in their
particular areas.

The Company purchases its food product from several wholesale distributors. The
majority of food and operating supplies for the California restaurants is
currently purchased from Jacmar Sales, with which the Company has had a
long-term relationship. The Company has recently started purchasing a majority
of food and operating supplies for the Northwest Restaurants from Alliant Food
Services, a vendor which has supplied the Company's Boulder, Colorado store for
several years. Product specifications are very strict because the Company
insists on using fresh, high-quality ingredients.


                                       3

<PAGE>

COMPETITION

The restaurant industry is highly competitive. A great number of restaurants and
other food and beverage service operations compete both directly and indirectly
with the Company in many areas, including food quality and service, the
price-value relationship, beer quality and selection, and atmosphere, among
other factors. Many competitors who use concepts similar to that of the Company
are well-established, and often have substantially greater resources.

Because the restaurant industry can be significantly affected by changes in
consumer tastes, national, regional or local economic conditions, demographic
trends, traffic patterns, weather and the type and number of competing
restaurants, any changes in these factors could adversely affect the Company. In
addition, factors such as inflation and increased food, liquor, labor and other
employee compensation costs could also adversely affect the Company. The Company
believes, however, that its ability to offer high-quality food at moderate
prices with superior service in a distinctive dining environment will be the key
to overcoming these obstacles.

GOVERNMENT REGULATIONS

The Company is subject to various federal, state and local laws, rules and
regulations that affect its business. Each of the Company's restaurants is
subject to licensing and regulation by a number of governmental authorities,
which may include alcoholic beverage control, building, land use, health, safety
and fire agencies in the state or municipality in which the restaurant is
located. Difficulties obtaining the required licenses or approvals could delay
or prevent the development of a new restaurant in a particular area or could
adversely affect the operation of an existing restaurant. Similar difficulties,
such as the inability to obtain a liquor, restaurant license or a given
restaurant's products and services could also limit restaurant development
and/or profitability. Management believes, however, that the Company is in
compliance in all material respects with all relevant laws, rules, and
regulations. Furthermore, the Company has never experienced abnormal
difficulties or delays in obtaining the licenses or approvals required to open a
new restaurant or continue the operation of its existing restaurants.
Additionally, management is not aware of any environmental regulations that have
had or that it believes will have a materially adverse effect upon the
operations of the Company.

Alcoholic beverage control regulations require each of the Company's restaurants
to apply to a federal and state authority and, in certain locations, municipal
authorities for a license and permit to sell alcoholic beverages on the
premises. Typically, licenses must be renewed annually and may be revoked or
suspended for cause by such authority at any time. Alcoholic beverage control
regulations relate to numerous aspects of the daily operations of the Company's
restaurants, including minimum age of patrons and employees, hours of operation,
advertising, wholesale purchasing, inventory control and handling, and storage
and dispensing of alcoholic beverages. The Company has not encountered any
material problems relating to alcoholic beverage licenses or permits to date and
does not expect to encounter any material problems going forward. The failure to
receive or retain, or a delay in obtaining, a liquor license in a particular
location could adversely affect the Company's ability to obtain such a license
elsewhere.

The Company is subject to "dram-shop" statutes in California and other states in
which it operates. Those statutes generally provide a person who has been
injured by an intoxicated person the right to recover damages from an
establishment that has wrongfully served alcoholic beverages to such person. The
Company carries liquor liability coverage as part of its existing comprehensive
general liability insurance which it believes is consistent with coverage
carried by other entities in the restaurant industry and will help protect the
Company from possible claims. Even though the Company carries liquor liability
insurance, a judgment against the Company under a dram-shop statute in excess of
the Company's liability coverage could have a materially adverse effect on the
Company. To date, the Company has never been the subject of a "dram-shop" claim.

Various federal and state labor laws, rules and regulations govern the Company's
relationship with its employees, including such matters as minimum wage
requirements, overtime and working conditions. Significant additional
governmental mandates such as an increased minimum wage, an increase in paid
leaves of absence, extensions in health benefits or increased tax reporting and
payment requirements for employees who receive gratuities, could negatively
impact the Company's restaurants.


                                       4

<PAGE>


EMPLOYEES

As of March 1, 2000, the Company employed 1,180 employees at its eleven
California Restaurants, one Hawaii restaurant, and one Boulder, Colorado
restaurant. Additionally, 445 are employed at the restaurants in Washington and
Oregon. The Company also employs 30 administrative and field supervisory
personnel at its corporate offices. Historically, the Company has experienced
relatively little turnover of restaurant management employees. The Company
believes that it maintains favorable relations with its employees, and currently
no unions or collective bargaining arrangements exist.

INSURANCE

The Company maintains worker's compensation insurance and general liability
insurance coverage which it believes will be adequate to protect the Company,
its business, assets and operations. There is no assurance that any insurance
coverage maintained by the Company will be adequate, that it can continue to
obtain and maintain such insurance at all or that the premium costs will not
rise to an extent that they adversely affect the Company or the Company's
ability to economically obtain or maintain such insurance.

TRADEMARKS AND COPYRIGHTS

The Company has not secured any rights in connection with its trademarks,
servicemarks or any other proprietary rights related to the use of the BJ'S
PIZZA, GRILL & BREWERY, the BJ'S PIZZA & GRILL and the BJ'S PIZZA & GRILL OTC
names. There are other restaurants using the BJ's name throughout the United
States, thus, no assurance can be given that the Company will be able to secure
any such rights in the future or that the use of the BJ's name may not be
subject to claims by third parties.


I
TEM 2.   PROPERTIES

All of the Company's restaurants are on leased premises and are subject to
varying lease-specific arrangements. For example, some of the leases require a
flat rent, subject to regional cost-of-living increases, while others
additionally include a percentage of gross sales. In addition, certain of these
leases expire in the near future, and there is no automatic renewal or option to
renew. No assurance can be given that leases can be renewed, or, if renewed,
that rents will not increase substantially, both of which would adversely affect
the Company. Other leases are subject to renewal at fair market value, which
could involve substantial increases. Total restaurant lease expense in 1999 was
approximately $2,404,000.

With respect to future restaurant sites, the Company believes the locations of
its restaurants are important to its long-term success and will devote
significant time and resources to analyzing prospective sites. The Company's
strategy is to open its restaurants in high-profile locations with strong
customer traffic during day, evening and weekend hours. The Company has
developed specific criteria for evaluating prospective sites, including
demographic information, visibility and traffic patterns.

The Company's corporate headquarters in California are located in a 2,219
square-foot leased facility in Mission Viejo, California. The lease expires on
December 31, 2001 and currently provides for approximately $42,600 in annual
rent, which is subject to certain adjustments and annual increases. Chicago
Pizza Northwest, Inc., the Company's subsidiary in Washington, has offices in a
2,711 square-foot leased facility in Lynnwood, Washington. The Northwest office
also maintains the Company's business processes and data services, and provides
all management and financial reporting for the Company. This lease expires on
March 13, 2002 and currently provides for approximately $51,000 in annual rent,
which is subject to certain adjustments and annual increases, including, without
limitation, annual Consumer Price Index escalations.


ITEM 3.   LEGAL PROCEEDINGS

Restaurants such as those operated by the Company are subject to a continuous
stream of litigation in the ordinary course of business, most of which the
Company expects to be covered by its general liability insurance. Punitive
damages awards, however, are not covered by the Company's general liability
insurance. To date, the Company has not paid punitive damages with respect to
any claims, but there can be no assurance that punitive damages will not be
awarded with respect to any future claims or any other actions.


                                       5

<PAGE>

The Company is a defendant in a lawsuit brought by the owner and landlord of
property in Aloha, Oregon where the Company formerly operated a Pietro's
restaurant. This restaurant was heavily damaged by fire in February 1997, and
the Company received insurance proceeds for its assets that were lost in the
fire. The property owner contends that it was the Company's obligation to
rebuild a restaurant at this location with the insurance proceeds. The Company
has continued to pay rent since the fire, but is of the opinion that the
insurance payments were made to compensate the Company for the loss of its
personal property, and the obligation to repair the fire damage rests with the
landlord. The Company has filed a counterclaim for breach of its lease, and to
recover damages it has suffered due to the landlord's failure to rebuild.

A settlement agreement is being considered by both the Company and the landlord,
which contemplates a sublease of the property by the Company to a third party
and no payment of damages by either the Company or the landlord. If the sublease
is not completed, the case may proceed to trial. The Company does not believe
the lawsuit will have a material adverse effect on its consolidated financial
position or consolidated results of operations.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders in the fourth quarter of
1999.


                                     PART II


ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS

On October 8, 1996, the Company's Common Stock and Redeemable Warrants became
listed on the NASDAQ Small Cap Market ("NASDAQ") (Symbols: CHGO and CHGOW) in
connection with the Initial Public Offering. On March 15, 2000, the closing
prices of the Common Stock and Redeemable Warrants were $1.50 per share and
$0.13 per Redeemable Warrant, respectively. The table below shows the high and
low sales prices as reported by NASDAQ. The sales prices represent inter-dealer
quotations without adjustments for retail mark-ups, mark-downs or commissions.



<TABLE>
<CAPTION>

  CALENDAR YEAR ENDED 
      DECEMBER 31,                            COMMON STOCK                  REDEEMABLE WARRANTS
                                         HIGH               LOW             HIGH           LOW
<S>                                      <C>               <C>              <C>            <C>
1998
----
First Quarter                            $2.09             $1.34            $0.22         $0.12
Second Quarter                           $2.47             $1.53            $0.22         $0.09
Third Quarter                            $2.06             $1.28            $0.12         $0.03
Fourth Quarter                           $1.81             $1.25            $0.09         $0.02

1999
----
First Quarter                            $1.81             $1.25            $0.13         $0.02
Second Quarter                           $2.00             $1.22            $0.13         $0.06
Third Quarter                            $2.06             $1.56            $0.13         $0.06
Fourth Quarter                           $1.88             $1.25            $0.09         $0.06

</TABLE>


As of March 7, 2000, the Company had 137 shareholders of record and 121 holders
of Redeemable Warrants of record.


                                       6

<PAGE>



                                PRIVATE PLACEMENT

In March 1999, the Company sold, through a private placement, 1,250,000 shares
of its common stock to ASSI, Inc. in exchange for a cash payment of $1,000,000,
the termination of two consulting agreements, cancellation of 3.2 million of the
Company's redeemable warrants held by ASSI, Inc. and the agreement by ASSI, Inc.
and its sole stockholder to finance future Company development projects subject
to pre-commitment approval.

                                 DIVIDEND POLICY

The Company has not paid any dividends since its inception and has currently not
allocated any funds for the payment of dividends. Rather, it is the current
policy of the Company to retain earnings, if any, for expansion of its
operations, remodeling of existing restaurants and other general corporate
purposes. The Company has no plans to pay any cash dividends in the foreseeable
future. Should the Company decide to pay dividends in the future, such payments
would be at the discretion of the Board of Directors.


                                       7

<PAGE>


ITEM 6.   SELECTED FINANCIAL DATA

The selected consolidated financial data should be read in conjunction with the
Consolidated Financial Statements and related notes thereto as well as with the
discussion below.


<TABLE>
<CAPTION>

                                                                             Year Ended December 31,
                                                       -------------------------------------------------------------------
                                                       1999           1998           1997           1996            1995
                                                       --------       --------      --------        --------        -------
                                                                      (in thousands, except per share data)
<S>                                                    <C>            <C>           <C>             <C>             <C>
Statement of Operations Data:
Revenues                                               $37,393        $30,051       $26,191         $19,865          $6,586
Cost of sales                                           10,491          8,458         7,732           6,182           1,848
                                                       --------       --------      --------        --------        -------
Gross profit                                            26,902         21,593        18,459          13,683           4,738
                                                       --------       --------      --------        --------        -------
Costs and Expenses:
Labor and benefits                                      13,542         10,831         9,086           6,933           2,647
Occupancy                                                2,998          2,563         2,363           1,877             654
Operating expenses                                       4,161          3,520         3,385           2,998           1,250
Costs to open/close restaurants                            665
General and administrative                               3,218          2,583         2,636           2,258             879
Depreciation and amortization                            1,517          1,737         1,389           1,037             359
                                                       --------       --------      --------        --------        -------
Total costs and expenses                                26,101         21,234        18,859          15,103           5,789
                                                       --------       --------      --------        --------        -------
Income (loss) from operations                              801            359         (400)         (1,420)         (1,051)
Other Income (expense):                                --------       --------      --------        --------        -------
Gain on involuntary conversion of assets                                                202
Interest expense, net                                    (251)          (212)         (125)           (507)           (472)
Other income (expense), net                                 16            (5)            20           (380)           (104)
                                                       --------       --------      --------        --------        -------
Total other income (expense)                             (235)          (217)            97           (887)           (576)
                                                       --------       --------      --------        --------        -------
Income (loss) before minority interest, taxes
    and change in accounting                               566            142         (303)         (2,307)         (1,627)
Minority interest in partnership                          (44)           (56)          (11)              27              27
                                                       --------       --------      --------        --------        -------
Income before taxes and change in accounting               522             86         (314)         (2,280)         (1,600)
Income tax expense                                        (26)            (1)           (1)             (9)             (6)
                                                       --------       --------      --------        --------        -------
Net income(loss) before change in accounting               496             85         (315)         (2,289)         (1,606)
Cumulative effect of change in accounting                  106
                                                       --------       --------      --------        --------        -------
Net income (loss)                                         $390            $85        ($315)        ($2,289)        ($1,606)
                                                       ========       ========      ========        ========        =======
Net income (loss) per share:
      Basic and diluted                                  $0.05          $0.01        ($0.05)        ($0.52)         ($0.55)
                                                       ========       ========      ========        ========        =======
Weighted average shares outstanding:
      Basic                                              7,401          6,408         6,408           4,392           2,936
                                                       ========       ========      ========        ========        =======
      Diluted                                            7,411          6,420         6,408           4,392           2,936
                                                       ========       ========      ========        ========        =======
Balance Sheet Data (end of period):
Working capital (deficit)                             ($2,549)         ($796)          $232          $3,329             $22
Intangible assets, net                                   5,202          5,367         5,452           5,676           5,558
Total assets                                            19,144         17,595        17,842          18,914           9,943
Total long-term debt (including current portion)         2,861          2,927         3,543           3,964           4,127
Minority interest                                          249            235           211             215             253
Shareholders' equity                                    13,099         11,893        11,808          12,123           4,023

</TABLE>



                                       8

<PAGE>




ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

FORWARD LOOKING STATEMENTS

The following discussion and analysis should be read in conjunction with the 
Company's Consolidated Financial Statements and notes thereto included 
elsewhere in this Form 10-K. Except for the historical information contained 
herein, the discussion in this Form 10-K contains certain forward looking 
statements that involve risks and uncertainties, such as statements of the 
Company's plans, objectives, expectations and intentions. The cautionary 
statements made in this Form 10-K should be read as being applicable to all 
related forward-looking statements wherever they appear in this Form 10-K. 
The Company's actual results could differ materially from those discussed 
here. Factors that could cause or contribute to such differences include, 
without limitation, those factors discussed herein including: (i) the 
Company's ability to manage growth and conversions, (ii) construction delays, 
(iii) marketing and other limitations as a result of the Company's historic 
concentration in Southern California and current concentration in the 
Northwest, (iv) restaurant and brewery industry competition, (v) impact of 
certain brewery business considerations, including without limitation, 
dependence upon suppliers and related hazards, (vi) increase in food costs 
and wages, including without limitation the recent increase in minimum wage, 
(vii) consumer trends, (viii) potential uninsured losses and liabilities, 
(ix) trademark and servicemark risks, and (x) other general economic and 
regulatory conditions and requirements.

GENERAL

Chicago Pizza & Brewery, Inc. (the "Company" or "BJ's") owns and operates 26 
restaurants located in Southern California, Oregon, Washington and Colorado 
and an interest in one restaurant in Lahaina, Maui. Each of these restaurants 
is operated as either a BJ's Pizza, Grill & Brewery, a BJ's Pizza & Grill, a 
BJ's Pizza & Grill - OTC or a Pietro's Pizza restaurant. The menu at the BJ's 
restaurants feature BJ's award-winning, signature deep-dish pizza, BJ's own 
hand-crafted beers as well as a great selection of appetizers, entrees, 
pastas, sandwiches, specialty salads and desserts. The five BJ's Pizza, Grill 
& Brewery restaurants feature in-house brewing facilities where BJ's 
hand-crafted beers are produced. The eight Pietro's Pizza restaurants serve 
primarily Pietro's thin-crust pizza in a very casual, counter-service 
environment.

The Company's revenues are derived primarily from food and beverage sales at 
its restaurants. The Company's expenses consist primarily of food and 
beverage costs, labor costs (consisting of wages and benefits), operating 
expenses (consisting of marketing costs, repairs and maintenance, supplies, 
utilities and other operating expenses), occupancy costs, general and 
administrative expenses and depreciation and amortization expenses.

RESULTS OF OPERATIONS

FISCAL YEAR 1999 COMPARED TO FISCAL YEAR 1998

REVENUES. Total revenues for the year ended December 31, 1999 increased to
$37,393,000 from $30,052,000 for the comparable period in 1998, an increase of
$7,341,000 or 24.4%. The increase is primarily the result of:

          The opening of restaurants in Arcadia and La Mesa, California in
          January 1999 and November 1999, respectively, and a restaurant &
          brewery in Woodland Hills, California in April 1999. These new
          locations provided $6,862,000 in revenues during the periods of 1999
          in which they were operating.

         An increase in the BJ's restaurants same store sales for comparable
         periods, of $1,524,000 or 6.5%. Management believes this increase was
         due to (i) an increase in customer counts in the California and
         Colorado restaurants, and (ii) an increase in check averages produced
         by a price increase implemented in January 1999.

The increase in revenues resulting from the above factors was partially 
offset by the closing during the year of two restaurants in Oregon, a BJ's in 
The Dalles in May 1999 and a Pietro's in Eugene in June 1999. The closures in 
mid-year of these locations reduced revenues by $927,000 when compared with 
1998, during which they were open the entire year.


                                       9

<PAGE>

COST OF SALES. Cost of food, beverages and paper (cost of sales) for the
restaurants increased to $10,490,000 for the year ended December 31, 1999 from
$8,459,000 for the comparable period of 1998, an increase of $2,031,000 or
24.0%. This increase was in line with the 24.4% increase in revenues discussed
above. As a percentage of sales, cost of sales was stable at 28.1% for both 1999
and 1998.

The Company's same-store cost of sales, as a percentage of sales, improved to
28.0% during the year ended December 31, 1999 from 28.9% for the comparable
period of 1998. A continued emphasis during 1999 on efficiencies as well as menu
price increases for the California stores in January 1999 and for the Northwest
stores in January 1999 was necessary for the Company to keep pace with continued
high prices for cheese and other selected food items during 1999.

The improvement in same store cost of sales was partially offset by the higher
food costs associated with the opening of the new California restaurants. As a
percentage of their revenues, these stores collectively incurred food costs of
30.2% for the periods of 1999 during which they were operational. A higher cost
of sales percentage in the early months of operations is in line with the
Company's experience when opening new restaurants. Also partially offsetting the
improvement in same-store cost of sales were the food costs at the two
restaurants closed during 1999. For the periods of 1999 during which they were
open, these restaurants, as a percentage of their sales, incurred food costs of
29.5%.

LABOR. Labor costs for the restaurants increased to $13,542,000 in the year
ended December 31, 1999 from $10,830,000 for the comparable period in 1998, an
increase of $2,712,000 or 25.0%. As a percentage of revenues, labor costs
increased to 36.2% in the1999 period from 36.0% in the 1998 period. The overall
increase, as well as the percentage increase, is attributable to the opening of
the new California restaurants. Labor costs at these three restaurants totaled
$2,769,000, or 40.4%, of their collective sales. The Company intentionally
overstaffs new restaurants during the startup phase of operations to ensure a
good dining experience by its customers. As a result of gradually reducing
staffing towards the level of a mature restaurant, the new stores showed a
reduction in labor costs by December 1999, as a percentage of sales.

Same-store labor costs increased $372,000, or 3.8%, to $10,232,000 for the 
year ended December 31, 1999 from $9,860,000 for the comparable period of 
1998. As a percentage of revenues, however, same-store labor costs for the 
twelve months of 1999 declined to 34.3% from 34.9% for the comparable period 
of 1998. Management feels the improvement in same-store labor costs is the 
result of planned labor controls.

OCCUPANCY. Occupancy costs increased to $2,998,000 during the year ended 
December 31, 1999 from $2,563,000 during the comparable period in 1998, an 
increase of $435,000, or 17.0%. As a percentage of revenues, occupancy costs 
decreased to 8.0% in the 1999 period from 8.5% in the 1998 period. The 
primary reason for the decrease in occupancy costs relative to revenues was 
the increase in comparable store sales. Additionally, the two Northwest 
stores closed during 1999 experienced a combined occupancy cost percentage of 
12.4% for the twelve-month period ended December 31, 1998.

OPERATING EXPENSES. Operating expenses increased to $4,160,000 during the 
year ended December 31, 1999 from $3,520,000 during the comparable period in 
1998, an increase of $640,000 or 18.2%. However, as a percentage of revenues, 
operating expenses decreased to 11.1% in the 1999 period from 11.7% in the 
1998 period. Operating expenses include restaurant-level operating costs, the 
major components of which include marketing, repairs and maintenance, 
supplies and utilities. Management believes the primary reasons for the 
decrease in operating expenses as a percentage of revenues were (i) the 
increase in same store sales, and (ii) a focus on more efficient restaurant 
operations.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses 
increased to $3,218,000 during the year ended December 31, 1999 from 
$2,583,000 during the comparable period in 1998, an increase of $635,000 or 
24.6%. As a percentage of revenues, however, general and administrative 
expenses remained unchanged at 8.6% in 1999, the percentage experienced in 
the comparable period of 1998. The increase in general and administrative 
expenses was primarily due to acquiring resources to plan and implement the 
Company's growth strategy, incurring costs in locating and evaluating sites 
for future restaurants and developing staff and systems to manage anticipated 
future expansion.


                                       10

<PAGE>

PREOPENING COSTS. During the first quarter of 1999, the company adopted 
Statement of Position 98-5 (SOP 98-5), Accounting for the Costs of Start-Up 
Activities, which requires all costs of start-up activities that are not 
otherwise capitalizable as long-lived assets to be expensed as incurred. The 
Company previously deferred its restaurant preopening costs and amortized 
them over the twelve-month period following the opening of each new 
restaurant. This new accounting standard accelerates the Company's 
recognition of costs associated with the opening of new restaurants.

During the twelve month period ended December 31, 1999, the Company incurred 
costs of $517,000 due to preparations for the opening of its new restaurants 
in Arcadia, Woodland Hills and La Mesa, California that, under previous 
accounting standards, would have been capitalized and amortized over a 
12-month period. These costs will fluctuate from year to year, possibly 
significantly, depending upon, but not limited to, the number of restaurants 
under development, the size and concept of the restaurants being developed 
and the complexity of the staff hiring and training process.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization decreased to 
$1,517,000 during the year ended December 31, 1999 from $1,737,000 during the 
comparable period in 1998, a decrease of $220,000 or 12.7%. The decrease was 
primarily due to the implementation of SOP 98-5, noted in the previous 
section. During the twelve months ended December 31, 1998, the Company's 
amortization and depreciation costs included $384,000 amortization of 
previously capitalized preopening costs. The Company expensed the remaining 
capitalized preopening costs of $106,000 as a cumulative effect of change in 
accounting principle in the first quarter of 1999.

Excluding the amortization of preopening costs, amortization and depreciation 
for 1998 was $1,353,000. On a comparable cost basis, depreciation and 
amortization for the year of 1999 increased $164,000, or 12.1%. This increase 
was primarily due to the addition of restaurant equipment and furniture, 
improvements and brewery equipment utilized in the development of the three 
new California restaurants.

INTEREST EXPENSE. Interest expense, net of interest income, increased to 
$250,000 during the year ended December 31, 1999 from $211,000 during the 
comparable period in 1998, an increase of $39,000 or 18.5%. This increase was 
primarily due to the additional debt incurred by the Company to finance 
equipment for the new restaurants in Arcadia, California and Woodland Hills, 
California. Interest expense related to this financing was $67,000 during 
1999; this amount was partially offset by reduced interest expense on older 
debt due to normal principal amortization.

FISCAL YEAR 1998 COMPARED TO FISCAL YEAR 1997

REVENUES. Total revenues for the year ended December 31, 1998 increased to 
$30,052,000 from $26,191,000 for the comparable period in 1997, an increase 
of $3,861,000 or 14.7%. The increase is primarily the result of:

         The opening of the Boulder, Colorado restaurant in February 1997.

         An increase in same store sales at the BJ's restaurants, which were
         open in both periods, of $1,986,000 or 15.7%. Management believes this
         increase was due to (i) an increase in customer counts, and (ii) an
         increase in check averages produced by a price increase implemented in
         late May 1998 and the implementation of more effective suggestive
         selling techniques at the restaurants.

         An increase in same store sales at the former Pietro's restaurants
         converted and operated as BJ's restaurants for a part or all of the
         year ended December 31, 1998 and operated as Pietro's for a part or all
         of the comparable period in 1997 of $2,012,000 or 39.3%.

The increase in revenues resulting from the above-mentioned factors was 
partially offset by (i) a decrease in sales at the restaurants operated as 
Pietro's for the entire comparable periods of $395,000 or 6.4%; (ii) the sale 
of the Pietro's restaurant in North Bend, Oregon in June 1997 and (iii) a 
fire which caused the closing of a Pietro's restaurant in February 1997.

COST OF SALES. Cost of food, beverages and paper for the restaurants 
increased to $8,459,000 for the year ended December 31, 1998 from $7,732,000 
for the comparable period in 1997, an increase of $727,000 or 9.4%. 


                                       11

<PAGE>
However, as a percentage of revenues, cost of sales decreased to 28.1% during 
the 1998 period from 29.5% in the 1997 period. The decrease in cost of sales 
as a percentage of revenues was primarily due to efficiencies achieved at the 
BJ's restaurants in Southern California, Hawaii and Colorado as well as a 
menu price increase implemented in late May 1998. Cost of sales at those 
restaurants decreased to 26.4% of sales during the year ended December 31, 
1998 from 28.0% of sales during the comparable period in 1997. This decrease 
was also due to a decrease in cost of sales at the Northwest BJ's and 
Pietro's restaurants to 30.4% in 1998 from 31.4% in 1997. The decrease in 
cost of sales was achieved despite the substantial increase in cheese prices, 
which occurred during the last half of 1998.

LABOR. Labor costs for the restaurants increased to $10,831,000 in the year 
ended December 31, 1998 from $9,086,000 for the comparable period in 1997, an 
increase of $1,745,000 or 19.2%. As a percentage of revenues, labor costs 
increased to 36.0% in the 1998 period from 34.7% in the1997 period. 
Management believes the increase in labor costs as a percentage of revenue 
were primarily due to substantial increases in the Federal, California and 
Oregon minimum wages between 1997 and 1998.

OCCUPANCY. Occupancy costs increased to $2,563,000 during the year ended 
December 31, 1998 from $2,363,000 during the comparable period in 1997, an 
increase of $200,000 or 8.5%. As a percentage of revenues, occupancy costs 
decreased to 8.5% in the 1998 period from 9.0% in the1997 period. The primary 
reason for the decrease in occupancy costs relative to revenues was the 
increase in comparable store sales.

OPERATING EXPENSES. Operating expenses increased to $3,520,000 during the 
year ended December 31, 1998 from $3,385,000 during the comparable period in 
1997, an increase of $135,000 or 4.0%. However, as a percentage of revenues, 
operating expenses decreased to 11.7% in the 1998 period from 12.9% in the 
1997 period. The primary reasons for the decrease in operating expenses as a 
percentage of revenues were (i) the increase in same store sales, and (ii) an 
increased focus on more efficient restaurant operations as well as the 
implementation of improved expense monitoring systems at the BJ's restaurants 
in Southern California. Operating expenses include restaurant-level operating 
costs, the major components of which include marketing, repairs and 
maintenance, supplies and utilities.

GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses 
decreased to $2,583,000 during the year ended December 31, 1998 from 
$2,636,000 during the comparable period in 1997, a decrease of $53,000 or 
2.0%. The decrease in general and administrative expenses was primarily due 
to additional legal and accounting fees incurred during 1997 associated with 
the Company's first year of being a public company.

DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased to 
$1,737,000 during the year ended December 31, 1998 from $1,389,000 during the 
comparable period in 1997, an increase of $348,000 or 25.1%. The increase was 
primarily due to (i) the opening of the Boulder, Colorado restaurant in 
February 1997, and (ii) the depreciation associated with the renovation costs 
of the Pietro's converted to BJ's.

INTEREST EXPENSE. Interest expense, net of interest income, increased to 
$211,000 during the year ended December 31, 1998 from $125,000 during the 
comparable period in 1997, an increase of $86,000 or 69.0%. The increase was 
primarily due to a reduction of interest income experienced as the Company's 
invested cash was utilized in the renovation and conversion of the Pietro's 
units. During 1998, the Company also arranged a number of equipment leases to 
finance the acquisition of point-of-sale systems for its Northwest 
restaurants. The implicit interest in these lease agreements, capitalized for 
balance sheet disclosure in accordance with the requirements of FASB 13, also 
contributed to the increase of interest expense.

LIQUIDITY AND CAPITAL RESOURCES

The Company's operating activities, as detailed in the Consolidated Statement 
of Cash Flows, provided $2,274,000 net cash during the year ended December 
31,1999, a $204,000, or 9.9%, increase over the $2,070,000 generated in the 
prior year ended December 31, 1998. Since the completion of the Company's 
initial public offering in October of 1996, the Company has invested in 
restaurant development and reduced its debt. Capital expenditures for the 
acquisition of restaurant and brewery equipment and leasehold improvements to 
develop or convert restaurants totaled $4,470,000 and $2,039,000 for the 
years ended December 31, 1999 and 1998, respectively. Debt reduction, 
including the principal portion of capitalized lease payments, for the years 
ended December 31, 1999 and 1998 totaled $770,000 and $728,000, respectively.

                                       12

<PAGE>

On January 15, 1999, the Company completed a financing agreement with a lender
to provide equipment financing up to $1,000,000 for equipment and furnishings
required in the Arcadia, Woodland Hills and other restaurant developments. The
notes have a term of eighty-four months, and the interest rate is fixed at the
time of funding; to date funds provided for equipment financing under this
facility have been at effective interest rates ranging from 11.63% to 13.68%. At
December 31, 1999 $637,000 was outstanding under this financing agreement. The
unused portion of the commitment is no longer available to the Company.

On March 1, 1999, the Company completed a private placement of Company Common 
Stock to ASSI, Inc. The Company issued 1,250,000 common shares to the 
shareholder in exchange for a cash payment of $1,000,000, the cancellation of 
3,200,000 of the Company's Redeemable Warrants and other consideration. See 
Notes to Consolidated Financial Statements.

The Company used $4,470,000 to acquire equipment and facilities during the 
year ended December 31, 1999, compared to the $2,039,000 used for this 
purpose during the prior year ended December 31, 1998, an increase of 
$2,431,000, or 119.2%. These expenditures were required to develop the three 
new California restaurants, as well as to partially fund the development of 
the four restaurants currently planned for 2000. As a result of the above 
expenditures on capital equipment and construction, cash and cash equivalents 
during the year ended December 31, 1999 decreased to $189,000, a decrease of 
$1,302,000 from the $1,491,000 balance at December 31, 1998.

The Company intends to continue the development of additional restaurants. In 
February 2000, the Company entered into an agreement with a bank for a 
collateralized term loan for $4,000,000. There is an initial twelve month 
draw down period and a subsequent thirty-six month term out period. Interest 
accrued on outstanding borrowings shall be Wall Street Journal Prime plus 
2.0% or LIBOR plus 3.5%, and Wall Street Journal Prime plus 3.0%, floating or 
fixed during the term out period. Payment shall be interest only during the 
draw down period and an even amortization during the term out period, with a 
final maturity on February 15, 2004. The Company paid a one percent loan fee. 
This loan agreement contains, among other things, certain financial covenants 
and restrictions.

Management believes that the funds available under the existing credit 
facilities and future operating cash flow will be sufficient for the Company 
to fund its operations and continue to meet its business plan over the next 
year. However, no assurance can be given that management can successfully 
implement such objectives. Further, there can be no assurance that future 
events, including problems, delays, additional expenses and difficulties 
encountered in expansion and conversion of restaurants, will not require 
additional financing, or that such financing will be available if necessary.

IMPACT OF INFLATION

Impact of inflation on food, labor and occupancy costs can significantly 
affect the Company's operations. Many of the Company's employees are paid 
hourly rates related to the federal minimum wage, which has been increased 
numerous times and remains subject to future increases.

SEASONALITY AND ADVERSE WEATHER

The Company's results of operations have historically been impacted by 
seasonality, which directly impacts tourism at the Company's coastal 
locations. The summer months (June through August) have traditionally been 
higher volume periods than other periods of the year.

YEAR 2000 COMPLIANCE

The Company used internal and external resources to upgrade and test its 
systems. Costs incurred in addressing the Y2K issue were incurred primarily 
for the purchase of new LAN computer equipment and software upgrades 
warranted by the developer as Y2K compliant. Most of these upgrades and 
replacements would have occurred in the normal course of information systems 
maintenance, and were not material to the Company's financial results.

The Company did not experience any significant malfunctions or errors in its 
operating or business systems when the date changed from 1999 to 2000. Based 
on operations since January 1, 2000, the Company does not expect any 


                                       13

<PAGE>

significant impact or costs to its ongoing business as a result of the Y2K 
issue. However, it is possible that the full impact of the date change has 
not been fully recognized. The Company currently is not aware of any 
significant Y2K or similar problems that have arisen for its customers and 
suppliers.

IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

As had been the practice of many restaurant entities, the Company previously 
deferred its restaurant preopening costs and amortized them over the 
twelve-month period following the opening of each new restaurant. In April 
1998, the Accounting Standards Executive Committee of the American Institute 
of Certified Public Accounts issued Statement of Position 98-5 (SOP 98-5), 
Accounting for the Costs of Start-Up Activities. SOP 98-5 requires all costs 
of start-up activities that are not otherwise capitalizable as long-lived 
assets to be expensed as incurred. The Company adopted SOP 98-5 during the 
first quarter of 1999. This new accounting standard accelerates the Company's 
recognition of costs associated with the opening of new restaurants but will 
benefit the post-opening results of new restaurants. Initial application is 
required as of the beginning of the fiscal year in which SOP 89-5 is first 
adopted. The Company had no deferred preopening costs at December 31, 1999 
and $106,175 at January 1, 1999.

Other recently issued standards of the FASB are not expected to affect the
Company, as conditions to which those standards apply are absent from the
Company's operations.


I
TEM 8.  FINANCIAL STATEMENTS

 See the Index to Financial Statements attached hereto.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

 None.


                                    PART III


ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information required by this Item is incorporated herein by reference to 
the information contained in the Proxy Statement relating to the Annual 
Meeting of Shareholders, which will be filed with the Securities and Exchange 
Commission no later than 120 days after the close of the year ended December 
31, 1999.


ITEM 11.  EXECUTIVE COMPENSATION

The information required by this Item is incorporated herein by reference to 
the information contained in the Proxy Statement relating to the Annual 
Meeting of Shareholders, which will be filed with the Securities and Exchange 
Commission no later than 120 days after the close of the year ended December 
31, 1999.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required by this Item is incorporated herein by reference to 
the information contained in the Proxy Statement relating to the Annual 
Meeting of Shareholders, which will be filed with the Securities and Exchange 
Commission no later than 120 days after the close of the year ended December 
31, 1999.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by this Item is incorporated herein by reference to 
the information contained in the Proxy Statement relating to the Annual 
Meeting of Shareholders, which will be filed with the Securities and Exchange 
Commission no later than 120 days after the close of the year ended December 
31, 1999.


                                       14


<PAGE>


                                     PART IV


ITEM 14.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  (1) CONSOLIDATED FINANCIAL STATEMENTS

        The following documents are contained in Part II, Item 8 of this Annual
        Report on Form 10-K:

        Consolidated Balance Sheets at December 31, 1999 and 1998.

        Consolidated Statements of Operations for each of the three years in the
        period ended December 31, 1999.

        Consolidated Statement of Shareholders' Equity for each of the three
        years in the period ended December 31, 1999.

        Consolidated Statements of Cash Flows for each of the three years in the
        period ended December 31, 1999.

        Notes to the Consolidated Financial Statements.

        Report of Independent Accounts.

     (2) FINANCIAL STATEMENT SCHEDULES

        All schedules are omitted because they are not applicable or the
        required information is shown in the consolidated financial statements
        or notes thereto.

     (3) EXHIBITS


<TABLE>
<CAPTION>

       Exhibit
       Number                        Description
       -------                       -----------
       <S>        <C>
         2.1      Asset Purchase Agreement by and between the Company and Roman
                  Systems, Inc. incorporated by reference to Exhibit 2.2 of the
                  Registration Statement.

         2.2      Secured Promissory Note by and between the Company and Roman
                  Systems, Inc. filed as Exhibit 2.3 of the Registration
                  Statement.

         3.1      Amended and Restated Articles of Incorporation of the Company,
                  as amended, incorporated by reference to Exhibit1 of the
                  Registration Statement.

         3.2      Bylaws of the Company, incorporated by reference to Exhibit
                  3.2 of the Registration Statement.

         4.1      Specimen Common Stock Certificate of the Company, incorporated
                  by reference to Exhibit 4.1 of the Registration Statement.

         4.2      Warrant Agreement, incorporated by reference to Exhibit 4.2 of
                  the Registration Statement.

         4.3      Specimen Common Stock Purchase Warrant, incorporated by
                  reference to Exhibit 4.3 of the Registration Statement.

         4.4      Form of Representative's Warrant, incorporated by reference to
                  Exhibit of the Registration Statement.

         10.1     Form of Employment Agreement of Jeremiah J. Hennessy,
                  incorporated by reference to Exhibit 10.1 of the Registration
                  Statement.


                                       15

<PAGE>


       Exhibit
       Number                        Description
       -------                       -----------
       <S>        <C>

         10.2     Form of Employment Agreement of Paul Motenko, incorporated by
                  reference to Exhibit 10.2 of the Registration Statement.

         10.3     Form of Indemnification Agreement with Officers and Directors,
                  incorporated by reference to Exhibit 10.6 of the Registration
                  Statement.

         10.4     Chicago Pizza & Brewery, Inc. Stock Option Plan, incorporated
                  by reference to Exhibit 10.7 of the Registration Statement.

         10.5     Lease Agreement - Corporate Headquarters, Mission Viejo,
                  incorporated by reference to Exhibit 10.9 of the Registration
                  Statement.

         10.6     Lease Agreement - Corporate Headquarters, Chicago Pizza
                  Northwest, incorporated by reference to Exhibit 10.10 of the
                  Registration Statement.

         10.7     Consulting Agreement between the Company and ASSI, Inc. --
                  Pietro's, incorporated by reference to Exhibit 10.11 of the
                  Registration Statement.

         10.8     Consulting Agreement between the Company and ASSI, Inc. --
                  Nevada, incorporated by reference to Exhibit 10.12 of the
                  Registration Statement.

         10.9     BJ's Lahaina, L.P. Partnership Agreement, incorporated by
                  reference to Exhibit 10.16 of the Registration Statement.

         10.10    Pepsi Supplier Agreement, incorporated by reference to Exhibit
                  10.17 of the Registration Statement.

         10.11    Underwriting Agreement between the Company and The Boston
                  Group, L.P., as Representative of the Several Underwriters
                  named therein, incorporated by reference to Exhibit 1.1 of the
                  Registration Statement.

         10.12    Stock Purchase Agreement by and between the Company, ASSI,
                  Inc. and Louis Habash, incorporated by reference to Exhibit
                  10.15 of the Company's Form 10-KSB for the fiscal year ended
                  December 31, 1998.

         10.13    Real Estate Lease, dated November 1, 1999, between Chicago
                  Pizza & Brewery, Inc. and Huntington Executive Park, a
                  California Limited Partnership, for a BJ's Pizza & Grill
                  restaurant.

         10.14    Real Estate, dated February 16, 2000, between Chicago Pizza &
                  Brewery, Inc. and Eastland Shopping Center LLC for a BJ's
                  Pizza, Grill & Brewery restaurant.

         10.15    Employment Agreement dated June 21, 1999 between the Company
                  and Ernest T. Klinger, employed as President and Co-Chairman
                  of the Board of Directors incorporated by reference to Exhibit
                  10.1 of the Form 10-Q filed August 16, 1999.

         21       List of Subsidiaries, incorporated by reference to Exhibit 
                  21.1 of the Registration Statement.

         27.1     Financial Data Schedule.

         (b)      The Company filed no Reports on Form 8-K during the
                  fiscal year ended December 31, 1999.
</TABLE>


                                       16

<PAGE>


                                   SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                    CHICAGO PIZZA & BREWERY, INC.

                                    By: /s/ PAUL A. MOTENKO
                                    Paul A. Motenko, Co-Chief Executive Officer
                                    and Secretary

Pursuant to the requirements of the Securities and Exchange Act of 1934, this 
Report has been signed below by the following persons on behalf of the 
Registrant and in the capacities and on the dates indicated.


<TABLE>
<CAPTION>

SIGNATURE                      CAPACITY                                            DATE 
---------                      --------                                            ---- 
<S>                            <C>                                                 <C>
By: /s/PAUL A. MOTENKO         Director, Co-Chief Executive Officer,               March 28, 2000
----------------------         Co-Chairman of the Board and Vice-
Paul A. Motenko                President and Secretary

By: /s/JEREMIAH J. HENNESSY    Co-Chief Executive Officer and                      March 28, 2000
---------------------------    Co-Chairman of the Board of Directors
Jeremiah J. Hennessy

By: /s/ERNEST T. KLINGER       President, Chief Financial Officer and              March 28, 2000
------------------------       Co-Chairman of the Board of Directors
Ernest T. Klinger

By: /s/BARRY J. GRUMMAN        Director                                            March 28, 2000
-----------------------
Barry J. Grumman

By: /s/STANLEY B. SCHNEIDER    Director                                            March 28, 2000
---------------------------
Stanley B. Schneider

By: /s/ALLYN R. BURROUGHS      Director                                            March 28, 2000
-------------------------
Allyn R. Burroughs
</TABLE>



                                       17

<PAGE>

                          CHICAGO PIZZA & BREWERY, INC.

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


<TABLE>
<CAPTION>

                                                                          Page   
                                                                          ----
<S>                                                                       <C>
Report Of Independent Accountants                                          19

Consolidated Balance Sheets At December 31, 1999 and 1998                  20

Consolidated Statements Of Operations For Each Of The Three Years
In The Period Ended December 31, 1999                                      21

Consolidated Statements Of Shareholders' Equity For Each Of The Three
Years In The Period Ended December 31, 1999                                22

Consolidated Statements Of Cash Flows For Each Of The Three
Years In The Period Ended December 31, 1999                                23

Notes To Consolidated Financial Statements                                 24
</TABLE>



                                       18

<PAGE>


                        REPORT OF INDEPENDENT ACCOUNTANTS
                                   ----------

To the Shareholders
Chicago Pizza & Brewery, Inc.

In our opinion, the accompanying consolidated balance sheets and the related 
statements of operations, of shareholders' equity, and of cash flows present 
fairly, in all material respects, the financial position of Chicago Pizza & 
Brewery, Inc. and its subsidiaries at December 31, 1999 and 1998, and the 
results of their operations and their cash flows for each of the three years 
in the period ended December 31, 1999 in conformity with accounting 
principles generally accepted in the United States. These financial 
statements are the responsibility of the Company's management; our 
responsibility is to express an opinion on these financial statements based 
on our audits. We conducted our audits of these statements in accordance with 
auditing standards generally accepted in the United States, which require 
that we plan and perform the audit to obtain reasonable assurance about 
whether the financial statements are free of material misstatement. An audit 
includes examining, on a test basis, evidence supporting the amounts and 
disclosures in the financial statements, assessing the accounting principles 
used and significant estimates made by management, and evaluating the overall 
financial statement presentation. We believe that our audits provide a 
reasonable basis for the opinion expressed above.

As discussed in Note 1 of the consolidated financial statements, the Company 
changed its method of accounting for preopening costs in 1999.



PricewaterhouseCoopers LLP

Los Angeles, California
March 12, 2000



                                       19

<PAGE>

                          CHICAGO PIZZA & BREWERY, INC.
                           CONSOLIDATED BALANCE SHEETS
                                  DECEMBER 31,


<TABLE>
<CAPTION>
                                                                    1999                1998
                                                                 -----------         -----------
<S>                                                              <C>                 <C>
                                               ASSETS:
Current assets:
Cash and cash equivalents                                           $188,811          $1,490,705
Accounts receivable                                                  141,968             175,712
Inventory                                                            455,880             345,874
Prepaids and other current assets                                    271,854             295,176
                                                                 -----------         -----------
Total current assets                                               1,058,513           2,307,467

Property and equipment, net                                       12,529,913           9,567,604

Other assets                                                         353,595             352,916
Intangible assets, net                                             5,202,085           5,366,722
                                                                 -----------         -----------
Total assets                                                     $19,144,106         $17,594,709
                                                                 ===========         ===========

                               LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable                                                  $1,114,757          $1,130,691
Accrued expenses                                                   1,710,984           1,286,539
Current portion of notes payable to related parties                  350,341             339,727
Current portion of long-term debt                                    284,919             210,367
Current portion of obligations under capital lease                   146,942             135,809
                                                                 -----------         -----------

Total current liabilities                                          3,607,943           3,103,133

Notes payable to related parties                                   1,368,807           1,718,954

Long-term debt                                                       687,331             355,313
Obligations under capital lease                                       22,574             167,219
Other liabilities                                                    109,131             122,099
                                                                 -----------         -----------

Total liabilities                                                  5,795,786           5,466,718
                                                                 -----------         -----------
Commitments and contingencies (Note 8)

Minority interest in partnership                                     249,159             235,040

Shareholders' equity:
Preferred stock, 5,000,000 shares authorized, none issued
    or outstanding
Common stock, no par value, 60,000,000 shares authorized as
   of December 31, 1999 and 1998, 7,658,321 and 6,408,321
   shares issued and outstanding as of December 31, 1999 and 
   1998, respectively                                             16,076,132          15,039,646
Capital surplus                                                      975,280           1,196,029
Accumulated deficit                                               (3,952,251)         (4,342,724)
                                                                 -----------         -----------

Total shareholders' equity                                        13,099,161          11,892,951
                                                                 -----------         -----------

Total liabilities and shareholders' equity                       $19,144,106         $17,594,709
                                                                 ===========         ===========
</TABLE>



              The accompanying notes are an integral part of these consolidated
financial statements.


                                       20

<PAGE>

                          CHICAGO PIZZA & BREWERY, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                        FOR THE YEARS ENDED DECEMBER 31,


<TABLE>
<CAPTION>

                                                                        1999                 1998                 1997
                                                                     -----------          -----------          -----------
<S>                                                                  <C>                  <C>                  <C>
Revenues                                                             $37,392,793          $30,051,503          $26,191,472
Cost of sales                                                         10,490,329            8,458,829            7,732,193
                                                                     -----------          -----------          -----------

       Gross profit                                                   26,902,464           21,592,674           18,459,279
                                                                     -----------          -----------          -----------
Costs and expenses:
Labor and benefits                                                    13,542,002           10,830,181            9,085,853
Occupancy                                                              2,998,346            2,562,825            2,363,002
Operating expenses                                                     4,160,479            3,520,221            3,384,616
General and administrative                                             3,217,921            2,583,384            2,636,904
Depreciation and amortization                                          1,517,428            1,737,430            1,388,551
Restaurant opening expenses                                              516,953
Restaurant closing expense                                               148,464
                                                                     -----------          -----------          -----------

Total cost and expenses                                               26,101,593           21,234,041           18,858,926
                                                                     -----------          -----------          -----------

      Income (loss) from operations                                      800,871              358,633             (399,647)
                                                                     -----------          -----------          -----------
Other income (expense):
Gain on involuntary conversion of assets                                                                           202,082
Interest income                                                           64,839               95,153              216,333
Interest expense                                                        (315,086)            (306,259)            (341,283)
Other income (expense), net                                               15,852               (5,090)              19,438
                                                                     -----------          -----------          -----------

Total other income (expense)                                            (234,395)            (216,196)              96,570
                                                                     -----------          -----------          -----------
      Income (loss) before minority interest, income taxes and
          change in accounting                                           566,476              142,437             (303,077)

Income applicable to minority interest in partnership                    (44,227)             (56,254)             (11,052)
                                                                     -----------          -----------          -----------

      Income (loss) before income taxes and change in accounting         522,249               86,183             (314,129)

Income tax expense                                                       (25,601)              (1,600)                (800)
                                                                     -----------          -----------          -----------

      Income (loss) before change in accounting                          496,648               84,583             (314,929)
Cumulative effect of change in accounting                                106,175
                                                                     -----------          -----------          -----------

Net income (loss)                                                       $390,473              $84,583            ($314,929)
                                                                     ===========          ===========          ===========
Net income (loss) per share:
      Basic and diluted:
Net income (loss) before cumulative effect of change in                    $0.07            $0.01                   ($0.05)
   accounting
      Cumulative effect of change in accounting                            (0.02)
                                                                     -----------          -----------          -----------
Net income (loss)                                                          $0.05            $0.01                   ($0.05)
                                                                     ===========          ===========          ===========

Basic weighted average number of common shares outstanding             7,401,472            6,408,321            6,408,321
                                                                     ===========          ===========          ===========

Diluted weighted average number of common shares outstanding           7,410,722            6,419,851            6,408,321
                                                                     ===========          ===========          ===========
</TABLE>



              The accompanying notes are an integral part of these consolidated
financial statements.

                                       21

<PAGE>

                          CHICAGO PIZZA & BREWERY, INC.
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


<TABLE>
<CAPTION>

                                                                               Capital          Accumulated 
                                               Shares       Amount             Surplus            Deficit            Total
                                            -----------  -------------       ------------      -------------     -------------
<S>                                         <C>          <C>                 <C>               <C>               <C>
Balance, December 31, 1996                   6,408,321    $15,039,646         $1,196,029        ($4,112,378)      $12,123,297

Net loss                                                                                           (314,929)        (314,929)
                                            -----------  -------------       ------------      -------------     -------------
Balance, December 31, 1997                   6,408,321    15,039,646           1,196,029         (4,427,307)       11,808,368

Net income                                                                                            84,583           84,583
                                            -----------  -------------       ------------      -------------     -------------
Balance, December 31, 1998                   6,408,321    15,039,646           1,196,029         (4,342,724)       11,892,951

Private placement of common stock, net       1,250,000       876,486                                                  876,486
Reallocation of  value of 3,200,000
    warrants cancelled under terms
    of private placement                                     160,000           (160,000)                               -
Purchase of redeemable warrants                                                 (60,749)                             (60,749)
Net income                                                                                           390,473          390,473
                                            -----------  -------------       ------------      -------------     -------------
Balance, December 31, 1999                   7,658,321    $16,076,132           $975,280        ($3,952,251)      $13,099,161
                                            ===========  =============       ============      =============     =============

</TABLE>


              The accompanying notes are an integral part of these consolidated
                                  financial statements.


                                       22

<PAGE>

                          CHICAGO PIZZA & BREWERY, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                        FOR THE YEARS ENDED DECEMBER 31,


<TABLE>
<CAPTION>

                                                                           1999                1998                1997
                                                                     -------------        ------------        ------------
<S>                                                                  <C>                 <C>                <C>
Cash flows from operating activities:
Net income (loss)                                                        $390,473             $84,583           ($314,929)
Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
Depreciation and amortization                                           1,517,428           1,737,430           1,388,551
Change in accounting principle                                            106,175
Gain on involuntary conversion of assets                                                                         (202,082)
(Gain) loss on sale of restaurant                                         116,318                                 (16,678)
Minority interest in partnership                                           44,227              56,254              11,052
Changes in assets and liabilities:
    Accounts receivable                                                    33,744             (14,063)             (4,227)
    Inventory                                                            (110,006)             15,425            (104,631)
    Prepaids and other current assets                                    (210,453)            (32,852)           (555,451)
    Other assets                                                           (9,397)            (36,584)            (16,020)
    Accounts payable                                                      (15,935)             87,836            (221,943)
    Accrued expenses                                                      424,445             185,362             (97,915)
    Other liabilities                                                     (12,968)            (12,968)            (12,704)
                                                                     -------------        ------------        ------------
             Net cash provided by (used in) operating activities        2,274,051           2,070,423            (146,977)
                                                                     -------------        ------------        ------------
Cash flows from investing activities:
Purchases of equipment                                                 (4,470,283)         (2,038,596)         (3,303,414)
Purchase of  liquor licenses                                                                  (53,545)
Proceeds from involuntary conversion of asset                                                                     260,691
Proceeds from sale of restaurants, net of expenses                         55,270               7,000              40,900
                                                                     -------------        ------------        ------------
             Net cash used in investing activities                     (4,415,013)         (2,085,141)         (3,001,823)
                                                                     -------------        ------------        ------------
Cash flows from financing activities:
Proceeds from sale of common stock                                      1,000,000
Equipment loan proceeds                                                   699,604
Release of cash pledged as collateral                                                         560,830
Repurchase of redeemable warrants                                         (60,749)
Payments on related party debt                                           (339,533)           (336,306)           (320,241)
Payments on debt                                                         (293,034)           (285,150)           (220,993)
Principal payments on capital lease obligations                          (137,112)           (106,877)            (75,603)
Distributions to minority interest partners                               (30,108)            (32,423)            (14,822)
                                                                     -------------        ------------        ------------
             Net cash provided by (used in) financing activities          839,068            (199,926)           (631,659)
                                                                     -------------        ------------        ------------

             Net decrease in cash and cash equivalents                 (1,301,894)           (214,644)         (3,780,459)
Cash and cash equivalents, beginning of period                          1,490,705           1,705,349           5,485,808
                                                                     -------------        ------------        ------------
Cash and cash equivalents, end of period                                 $188,811          $1,490,705          $1,705,349
                                                                     =============        ============        ============
</TABLE>


              The accompanying notes are an integral part of these consolidated
                                  financial statements.


                                       23

<PAGE>


                          CHICAGO PIZZA & BREWERY, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   The Company And Summary Of Significant Accounting Policies:

OPERATIONS

      Chicago Pizza & Brewery, Inc. (the "Company" or "BJ's") was incorporated
      in California on October 1, 1991. The Company owns and operates 26
      restaurants located in Southern California, Oregon, Washington and
      Colorado and a controlling interest in one restaurant in Lahaina, Maui.
      Each of the restaurants is currently operated as either a BJ's Pizza,
      Grill & Brewery, a BJ's Pizza & Grill, a BJ's Pizza & Grill OTC or,
      located exclusively in the Northwest, a Pietro's Pizza. During 1999, the
      Company opened three restaurants in southern California, BJ's Pizza &
      Grills in Arcadia, California and La Mesa, California in January and
      November, respectively, and a BJ's Pizza, Grill & Brewery in Woodland
      Hills, California in April.

BASIS OF  PRESENTATION

      The accompanying financial statements of the Company as of the years ended
      December 31, 1999, 1998 and 1997 are presented on a consolidated basis,
      and include the accounts of the Company, its wholly owned subsidiary,
      Chicago Pizza Northwest, Inc. and BJ's Lahaina, L.P. The Company operates
      in the restaurant industry exclusively in the United States. All
      significant intercompany transactions and balances have been eliminated.

CASH AND CASH EQUIVALENTS

       Cash and cash equivalents consist of highly liquid investments with an
       original maturity of three months or less when purchased. Cash and cash
       equivalents are stated at cost, which approximates market value.

INVENTORY

       Inventory is stated at the lower of cost (first-in, first-out) or market
       and is comprised primarily of food and beverages for the restaurant
       operations.

PROPERTY AND EQUIPMENT

       Property and equipment are recorded at cost. Renewals and betterments
       that materially extend the life of an asset are capitalized while
       maintenance and repair costs are charged to operations as incurred. When
       property and equipment are sold or otherwise disposed of, the asset
       account and related accumulated depreciation and amortization accounts
       are relieved, and any gain or loss is included in operations.
       Depreciation and amortization is computed using the straight-line method
       over the estimated useful lives of the related assets or, for leasehold
       improvements, over the term of the lease, if less. The following are the
       estimated useful lives:


<TABLE>

               <S>                                       <C>
               Furniture and fixtures                        7 years
               Equipment                                  5-10 years
               Leasehold improvements                     7-25 years

</TABLE>


       The Company periodically evaluates the carrying value of its property and
       equipment, including related useful lives. Impairment losses to long
       lived assets are recognized when the carrying value of an asset exceeds
       the estimated fair value of the asset. Management believes there is no
       impairment of the net book value of its property and equipment at
       December 31, 1999.


                                       24

<PAGE>

       1.     The Company And Summary Of Significant Accounting Policies
              (continued):

       LEASES

       Leases that meet certain criteria are capitalized and included with
       property and equipment. The resulting assets and liabilities are recorded
       at the lesser of cost or amounts equal to the present value of the future
       minimum lease payment at the beginning of the lease term. Such assets are
       amortized evenly over the related life of the lease or the useful lives
       of the assets, whichever is less. Interest expense relating to these
       liabilities is recorded to effect constant rates over the terms of the
       leases. Leases that do not meet the criteria for capitalization are
       classified as operating leases and rental payments are charged to expense
       as incurred.

       PREPAIDS AND OTHER CURRENT ASSETS

       As had been the practice of many restaurant entities, the Company
       previously deferred its restaurant preopening costs and amortized them
       over the twelve-month period following the opening of each new
       restaurant. In April 1998, the Accounting Standards Executive Committee
       of the American Institute of Certified Public Accountants issued
       Statement of Position 98-5 (SOP 98-5), Accounting for the Costs of
       Start-Up Activities. SOP 98-5 requires all costs of start-up activities
       that are not otherwise capitalizable as long-lived assets to be expensed
       as incurred. The Company adopted SOP 98-5 during the first quarter of
       1999. This new accounting standard accelerates the Company's recognition
       of costs associated with the opening of new restaurants but will benefit
       the post-opening results of new restaurants. The Company's total deferred
       preopening costs were $106,175 at January 1, 1999. As provided by SOP
       98-5, the Company wrote off the balance of deferred preopening costs
       during the first quarter of 1999.

INTANGIBLE ASSETS

       Goodwill from the acquisition of the net assets of Roman Systems, the
       acquisition of the limited partnership interests of BJ's Belmont Shore,
       L.P. and BJ's La Jolla, L.P., and the acquisition of Pietro's represent
       the excess of cost over fair value of net assets acquired. Goodwill is
       amortized over 40 years using the straight-line method beginning on the
       date of acquisition. Also included in intangible assets are trademarks,
       which are amortized over 10 years and the covenant not to compete, which
       is amortized over 8.5 years.

       The Company periodically evaluates the carrying value of goodwill
       including the related amortization periods. The Company determines
       whether there has been impairment by comparing the anticipated
       undiscounted future cash flows from operations of the acquired
       restaurants with the carrying value of the goodwill. Management does not
       believe there is any impairment of goodwill valuation at December 31,
       1999.

REVENUE RECOGNITION

       Revenue from restaurant sales is recognized when food and beverage is
       sold.

ADVERTISING COSTS

       Advertising costs are expensed as incurred. Advertising expense for the
       years ended December 31, 1999, 1998 and 1997 were $657,808, $558,291 and
       $761,780, respectively.

INCOME TAXES

     Deferred income taxes are recognized based on the tax consequences in
     future years of differences between the tax bases of assets and liabilities
     and their financial reporting amounts at each year-end based on enacted tax
     laws and statutory tax rates applicable to the periods in which differences
     are expected to affect taxable income. Valuation allowances are
     established, when necessary, to reduce deferred tax assets to the amount
     expected to be realized. The provision for income taxes represents the tax
     payable for the period and the change during the period in deferred tax
     assets and liabilities.

                                       25

<PAGE>

1.   The Company And Summary Of Significant Accounting Policies (continued):

MINORITY INTEREST

       For the consolidated financial statements as of December 31, 1999 and
       1998, minority interest represents the limited partners' interests
       totaling 46.32% for BJ's Lahaina, L.P.

USE OF ESTIMATES

        The preparation of financial statements in accordance with generally
        accepted accounting principles requires management to make estimates and
        assumptions for the reporting period and as of the financial statement
        date. These estimates and assumptions affect the reported amounts of
        assets and liabilities, the disclosure of contingent assets and
        liabilities, and the reported amounts of revenues and expenses.
        Actual results could differ from those estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

        Statement of Financial Accounting Standards ("SFAS") Opinion No. 107,
        "Disclosure About Fair Value of Financial Instruments", requires
        disclosure of fair value information about most financial instruments
        both on and off the balance sheet, if it is practicable to estimate.
        Disclosures regarding the fair value of financial instruments have been
        derived using external market sources, estimates using present value or
        other valuation techniques. Cash, accounts payable, accrued liabilities
        and short-term debt are reflected in the financial statements at fair
        value because of the short-term maturity of these instruments. The fair
        value of long-term debt closely approximates its carrying value.

NET INCOME PER SHARE

        Basic net income per share is computed by dividing the net income
        attributable to common stockholders by the weighted average number of
        common shares outstanding during the period. Dilutive net income per
        share reflects the potential dilution that could occur if stock options
        issued by the Company to sell common stock at set prices were exercised.
        The financial statements present basic and dilutive net income per
        share. Common share equivalents included in the diluted computation
        represent shares issuable upon assumed exercises of outstanding stock
        options using the treasury stock method.

STOCK-BASED COMPENSATION

        The Company accounts for its stock-based compensation plan using the
        intrinsic value method prescribed in APB Opinion No. 25, "Accounting for
        Stock Issued to Employees". SFAS No. 123, "Accounting for Stock-based
        Compensation", encourages, but does not require companies to record
        stock-based compensation plans at fair value. The Company has elected to
        continue accounting for stock-based compensation in accordance with APB
        No. 25, but will comply with the required disclosures under SFAS No.
        123.

BUSINESS OPERATIONS

         The Company incurred net losses during its organization and acquisition
         of restaurants. While many of these costs were created by the
         ramping-up of the organization and restaurant concept development,
         including a more expansive menu, food testing, and micro-brewing
         concepts, management believes that the controlling of these costs has
         been a factor in achieving its recent profitability. Management
         believes the Company can continue to improve its profitability through
         increased sales relating to its extended menu and the continuing
         development of additional restaurant sites.

         While there can be no assurance that management's plans, if executed,
         will continue to improve the Company's profitability, management
         believes their plans provide the Company with a strong base to
         accomplish their goals.


                                       26

<PAGE>

2.   Concentration Of Credit Risk:

        Financial instruments which potentially subject the Company to a
        concentration of credit risk principally consist of cash, cash
        equivalents and accounts receivable. The Company maintains its cash
        accounts at various banking institutions. At times, cash and cash
        equivalent balances may be in excess of the FDIC

2.   Concentration of Credit Risk (continued):

       insurance limit. Cash equivalents represent money market funds and
       certificates of deposits.

3.   Property and Equipment:

        Property and equipment consisted of the following as of:


<TABLE>
<CAPTION>

                                                                                    DECEMBER 31,
                                                                        ----------------------------------
                                                                             1999                  1998
                                                                        -----------           ------------
       <S>                                                              <C>                   <C>
       Furniture and fixtures                                            $1,181,972              $715,098
       Equipment                                                          5,534,479             4,101,864
       Leasehold improvements                                             9,545,323             6,545,352
                                                                        -----------           ------------
                                                                         16,261,774            11,362,314
       Less, accumulated depreciation and amortization                  (4,204,880)           (2,990,505)
                                                                        -----------           ------------
                                                                         12,056,894             8,371,809
       Construction in progress                                             473,019             1,195,795
                                                                        -----------           ------------
                                                                        $12,529,913            $9,567,604
                                                                        ===========           ============

</TABLE>


4.   Intangible Assets:

        Intangible assets consisted of the following as of:


<TABLE>
<CAPTION>

                                                                                    DECEMBER 31,
                                                                       ------------------------------------
                                                                           1999                      1998
                                                                       ----------                ----------
       <S>                                                             <C>                       <C>
       Goodwill                                                        $5,867,358                $5,867,357
       Trademarks                                                          59,000                    58,563
       Covenant not to compete                                             50,000                    50,000
       Lease right for Lahaina lease                                       25,000                    25,000
                                                                       ----------                ----------
                                                                        6,001,358                 6,000,920
       Less, accumulated amortization                                     799,273                   634,198
                                                                       ----------                ----------
                                                                       $5,202,085                $5,366,722
                                                                       ==========                ==========

</TABLE>


5.   Accrued Expenses:

         Accrued expenses consisted of the following as of:


<TABLE>
<CAPTION>

                                                                                 DECEMBER 31,
                                                                   ---------------------------------------
                                                                       1999                        1998
                                                                   -----------                  ----------
       <S>                                                         <C>                          <C>
       Accrued professional fees                                       $87,681                     $89,251
       Accrued rent                                                    232,515                     244,163
       Payroll related liabilities                                   1,007,506                     729,298
       Accrued interest                                                  6,294                     -
       Other                                                           376,988                     223,827
                                                                   -----------                  ----------
                                                                    $1,710,984                  $1,286,539
                                                                   ===========                  ==========

</TABLE>



                                       27

<PAGE>



6.   Debt:

RELATED PARTY DEBT

         Related party debt consisted of the following as of:


<TABLE>
<CAPTION>

                                                                                                   DECEMBER 31,
                                                                                      --------------------------------------
                                                                                          1999                      1998
                                                                                      -------------             ------------
       <S>                                                                            <C>                       <C>
       Note payable to Roman Systems, with fixed interest rate of 7%, due in
       monthly installments of $38,195, maturing April 1, 2004, collateralized
       by the BJ's Laguna, BJ's La Jolla and BJ's Balboa restaurants                   $1,719,148                $2,041,181

       Note payable to Roman Systems, with interest rate of 2.25%plus the bank's
       reference rate (7.75% at December 31, 1998 and 8.50% at December 31, 1997),
       due in monthly installments of $3,500,
       Maturing June 1, 1999                                                                -                        17,500
                                                                                      -------------             ------------
                Total related party debt                                                1,719,148                 2,058,681

       Less, current portion                                                              350,341                   339,727
                                                                                      -------------             ------------
                                                                                       $1,368,807                $1,718,954
                                                                                      =============             ============

</TABLE>


         Future maturities of related party debt for each of the five years
         subsequent to December 31, 1999 and thereafter are as follows:


<TABLE>
                             <S>                                          <C>
                             2000                                           $350,341
                             2001                                            378,068
                             2002                                            405,989
                             2003                                            433,909
                             2004                                            150,841
                             Thereafter                                       -
                                                                          -----------
                                                                          $1,719,148
                                                                          ===========
</TABLE>


         Total interest expense on related party debt for the years ended
         December 31, 1999, 1998 and 1997 was approximately $136,000,
         $164,000and $194,000, respectively.


                                       28

<PAGE>


6.   Debt (continued):

OTHER LONG-TERM DEBT

        Other long-term debt consisted of the following as of :


<TABLE>
<CAPTION>

                                                                                                        DECEMBER 31,
                                                                                            ------------------------------------
                                                                                               1999                     1998
                                                                                            ----------               -----------
       <S>                                                                                  <C>                      <C>
       Notes payable to a financial institution with an implicit Interest rates
       of 11.63% to 13.68% due in monthly Installments of $12,176, maturing
       February 15, 2006, Collateralized by improvements and restaurant
       equipment And furniture at the BJ's Arcadia and BJ's Woodland Hills
       restaurants.                                                                          $637,007

       Note payable to a financial institution with interest rate of 2%plus the
       bank's reference rate (8.50% at December 31, 1999 and 7.75% at December 31,
       1998), due in monthly installments of
       $12,513, maturing March 1, 2001                                                        180,695                  $330,849

       Notes payable to taxing authorities for Pietro's outstanding
       tax claims as part of the Debtor's Plan of Reorganization, due
       in quarterly installments of  $32,670 from July 1, 1996
       through April 1, 1997 and $20,071 from July 1, 1997 through
       June 30, 2001 and varying payments totaling an aggregate of
       $34,122 from October 1, 2001 until April 1, 2002.  Interest
       accrues at 8.25%                                                                       154,548                   234,831
                                                                                            ----------               -----------
                                                                                              972,250                   565,680
       Less, current portion                                                                  284,919                   210,367
                                                                                            ----------               -----------

                                                                                             $687,331                  $355,313
                                                                                            ==========               ===========

</TABLE>


        Future maturities of other long-term debt for years subsequent to
December 31, 1999 are as follows:


<TABLE>

                                   <S>                                       <C>
                                   2000                                        $284,919
                                   2001                                         192,035
                                   2002                                         111,108
                                   2003                                         106,203
                                   2004                                         119,506
                                   Thereafter                                   158,478
                                                                             ------------
                                                                               $972,249
                                                                             ============

</TABLE>


         Total interest expense on other long-term debt for the years ended
         December 31, 1999, 1998 and 1997 was approximately $120,000, $76,000and
         $125,000, respectively.

         On January 15, 1999 the Company completed a financing agreement with a
         lender to provide equipment financing totaling $1,000,000 for the
         equipment and furnishings required by the two additional California
         locations. A commitment fee was paid by the Company in January 1999,
         and initial funding, as provided by the proposal, took place in March
         1999. The maturities of the several notes are approximately seven years
         from the date of loan funding.


                                       29


<PAGE>


7.   Capital Leases:

         The Company leases point-of-sale and other equipment under capital
         lease arrangements. The equipment financed by the capital leases has an
         original cost of $469,187 and $488,732 at December 31, 1999 and 1998,
         respectively. Accumulated amortization related to these leases is
         $165,735 and $209,546 as of December 31, 1999 and 1998, respectively.
         The obligations under capital leases have a weighted average interest
         rate of 18.46% and mature at various dates through 2002. Annual future
         minimum lease payments for years subsequent to December 31, 1999 are as
         follows:


<TABLE>
               <S>                                        <C>
               2000                                            166,091
               2001                                             23,170
               2002                                                354
                                                              --------
               Total minimum payments                          189,615
               Less, amount representing interest               20,099
                                                              --------
               Obligations under capital leases                169,516
               Less, current portion                           146,942
                                                              --------
               Long-term portion                               $22,574
                                                              ========
</TABLE>


         Imputed interest expense on capital leases for the years ended December
         31, 1999, 1998 and 1997 was approximately $59,000, $66,000and $22,000,
         respectively.

8. Commitments and contingencies:

LEASES

         The Company leases its restaurant and office facilities under
         noncancelable operating leases with remaining terms ranging from
         approximately 1 month to 16 years with renewal options ranging from 5
         to 15 years. Rent expense for the years ended December 31, 1999, 1998
         and 1997 was $2,490,252, $2,184,223 and $2,023,738, respectively.

         The Company has certain operating leases which contain fixed escalation
         clauses. Rent expense for these leases has been calculated on a
         straight-line basis over the term of the leases. A deferred credit in
         the amount of $217,445 and $228,914 has been established and included
         in accrued expenses at December 31, 1999 and December 31, 1998,
         respectively, for the difference between the amount charged to expense
         and the amount paid. The deferred credit will be amortized over the
         life of the leases.

         A number of the leases also provide for contingent rentals based on a
         percentage of sales above a specified minimum. Total contingent
         rentals, included in rent expense, above, for the years ended December
         31, 1999, 1998 and 1997 were $289,054, $189,572 and $71,702,
         respectively.

         The following are the future minimum rental payments under
         noncancelable operating leases for each of the five years subsequent
         to December 31, 1999 and in total thereafter:


<TABLE>
                    <C>                             <C>
                    2000                             $2,725,557
                    2001                              2,803,863
                    2002                              2,449,531
                    2003                              2,102,152
                    2004                              1,656,918
                    Thereafter                        7,669,108
                                                    -----------
                                                    $19,407,129
                                                    ===========
</TABLE>


                                      30



<PAGE>


8.   Commitments and contingencies (continued):

         With respect to the lease for the Richland, Washington restaurant,
         which was closed and sold by the Company, the Company remains liable in
         the event of default by the current lessee. The Company may also be
         liable for additional expenses, such as insurance, real estate taxes,
         utilities and maintenance and repairs. Management currently has no
         reason to believe that such expenses, if incurred, will be significant.

LEGAL PROCEEDINGS

         The Company is a defendant in a lawsuit brought by the owner and
         landlord of property in Aloha, Oregon where the Company formerly
         operated a Pietro's restaurant. This restaurant was heavily damaged by
         fire in February 1997, and the Company received insurance proceeds for
         its assets that were lost in the fire. The property owner contends that
         it was the Company's obligation to rebuild a restaurant at this
         location with the insurance proceeds. The Company has continued to pay
         rent since the fire, but is of the opinion that the insurance payments
         were made to compensate the Company for the loss of its personal
         property, and the obligation to repair the fire damage rests with the
         landlord. The Company has filed a counterclaim for breach of its lease,
         and to recover damages it has suffered due to the landlord's failure to
         rebuild.

         A settlement agreement is being considered by both the Company and the
         landlord, which contemplates a sublease of the property by the Company
         to a third party and no payment of damages by either the Company or the
         landlord. If the sublease is not completed, the case may proceed to
         trial. The Company does not believe the lawsuit will have a material
         adverse effect on its consolidated financial position, consolidated
         results of operations, or cashflows.

EMPLOYMENT AGREEMENTS

          Effective March 26, 1996, the Company entered into employment
          agreements with Paul Motenko and Jeremiah J. Hennessy, currently
          Co-chief Executive Officers. The agreements provide for a minimum
          annual salary of $135,000, subject to escalation annually in
          accordance with the Consumer Price Index, and certain benefits through
          2004. The agreements may be terminated by either party. The agreements
          also contain provisions for additional cash compensation based on
          earnings or income of the Company. The agreements contain provisions
          which grant the employees the right to receive salary and benefits, as
          individually defined, if such employee is terminated by the Company
          without cause.

          Effective June 21, 1999 the Company entered into an employment
          agreement with Ernest T. Klinger, President. The agreement provides
          for a minimum salary of $145,000, subject to escalation annually in
          accordance to the Consumer Price Index, and certain other benefits
          through March 2004. The agreement may be terminated by either party.
          The agreement also contains provisions for additional cash
          compensation based on earnings or income of the Company. The agreement
          contains provisions which grant the employee the right to receive
          salary and benefits, as defined, if the employee is terminated by the
          Company without cause.

 9.   Shareholders' Equity:

PREFERRED STOCK

          The Company is authorized to issue 5,000,000 shares in one or more
          series of preferred stock and to determine the rights, preferences,
          privileges and restrictions to be granted to, or imposed upon, any
          such series, including the voting rights, redemption provisions
          (including sinking fund provisions), dividend rights, dividend rates,
          liquidation rates, liquidation preferences, conversion rights and the
          description and number of shares constituting any wholly unissued
          series of preferred stock. No shares of preferred stock were
          outstanding at December 31, 1999 or 1998. The Company currently has no
          plans to issue shares of preferred stock. :


                                      31



<PAGE>


9.   Shareholders' Equity (continued):

COMMON STOCK

          Shareholders of the Company's outstanding common stock are entitled to
          receive dividends if and when declared by the Board of Directors.
          Shareholders are entitled to one vote for each share of common stock
          held of record. Pursuant to the requirements of California law,
          shareholders are entitled to cumulate votes in connection with the
          election of directors.

          In March 1999, the Company sold, through a private placement,
          1,250,000 shares of its common stock to ASSI, Inc. in exchange for a
          cash payment of $1,000,000, the termination of two consulting
          agreements, cancellation of 3.2 million of the Company's redeemable
          warrants held by ASSI, Inc. and the agreement by ASSI, Inc. and its
          sole stockholder to finance future Company development projects
          subject to pre-commitment approval.


CAPITAL SURPLUS

          In May 1995, the Company issued warrants to purchase up to 300,000
          shares of common stock at a price of $5.00 per share to each of Barry
          Grumman, a director of the Company, and Lexington Ventures, Inc. Mr.
          Grumman and Lexington Ventures, Inc. were issued their respective
          warrants at a price of $0.07 per warrant or a total price to each of
          $21,000. Mr. Grumman's liability for payment of the warrants was
          extinguished in exchange for past services to the Company as a
          Director which had not been compensated. Proceeds from the valuation
          or sale of warrants issued in conjunction with the private placement
          offerings totaled $236,750. The warrants were automatically converted
          into warrants included in the Company's initial public offering (IPO).

          The Company issued Redeemable Warrants with the Company's IPO on
          October 15, 1996. At December 31, 1999, the Company had 7,964,584
          Redeemable Warrants outstanding. Each redeemable warrant entitles the
          holder thereof to purchase, at any time during the 54-month period
          commencing one year after the date of the Company's IPO, one share of
          Common Stock at a price of 110% of the initial public offering price
          per share ($5.50), subject to adjustment in accordance with the
          anti-dilution and other provisions referred to below.

          In conjunction with the private placement discussed in the preceding
          section, 3.2 million of the Company's redeemable warrants held by
          ASSI, Inc. were cancelled.

          The Redeemable Warrants are subject to redemption by the Company at
          any time, at a price of $.25 per Redeemable Warrant if the average
          closing bid price of the Common Stock equals or exceeds 140% of the
          IPO price per share ($7.00) for any 20 trading days within a period of
          30 consecutive trading days ending on the fifth trading day prior to
          the date of notice of redemption. Redemption of the Redeemable
          Warrants can be made only after 30 days notice, during which period
          the holders of the Redeemable Warrants may exercise the Redeemable
          Warrants.


                                      32



<PAGE>


10. Income Taxes:

         The provision for income tax consists of the following for the years
ended December 31:


<TABLE>
<CAPTION>
                                                          1999              1998                 1997
                                                       ----------         ---------           ---------
<S>                                                    <C>                <C>                 <C>
                  Current:
                    Federal                              $23,101
                    State                                  2,500             $1,600               $800
                                                       ----------         ---------           ---------
                                                         $25,601              1,600                800

                  Deferred:
                    Federal
                    State
                                                       ----------         ---------           ---------
                     Provision for income taxes          $25,601             $1,600               $800
                                                       ==========         =========           =========
</TABLE>


       The temporary differences which give rise to deferred tax provision
       (benefit) consist of the following for the years ended December 31:


<TABLE>
<CAPTION>
                                                               1999               1998               1997
                                                           ------------        -----------      ------------
       <S>                                                 <C>                 <C>              <C>
       Property and equipment                                  $151,850            $20,457         ($83,530)
       Goodwill                                                $108,812            116,762            40,835
       Accrued liabilities                                    ($12,117)            (6,123)             5,052
       Investment in partnerships                             ($12,045)           (44,896)           (5,965)
       Net operating losses                                    $176,161             32,854          (59,042)
       Income tax credits                                    ($231,391)           (99,655)         (103,657)
       Other                                                  ($70,698)             58,197             (233)
       Change in valuation allowance                         ($110,572)           (77,596)           206,540
                                                           ------------        -----------      ------------
                                                                $0                $0                  $0
                                                           ============        ===========      ============
</TABLE>


       The provision (benefit) for income taxes differs from the amount that
       would result from applying the federal statutory rate as follows for
       the years ended December 31:


<TABLE>
<CAPTION>
                                                               1999                1998               1997
                                                           ------------        -----------      ------------
       <S>                                                 <C>                 <C>              <C>
       Statutory regular federal income tax benefit               34.0%              34.0%           (34.0)%
       Non-deductible expenses                                     6.5%                                     
       State income taxes, net of federal benefit                  0.4%               1.2%              0.3%
       Change in valuation allowance                             (0.4)%              65.6%             54.2%
       Change in credits                                        (55.0)%           (150.8)%           (32.9)%
       Employer tax credit disallowance                           17.6%              46.9%             10.8%
       Other, net                                                  0.2%               5.0%              1.8%
                                                           ------------        -----------      ------------
                                                                   3.5%               1.9%              0.2%
                                                           ============        ===========      ============
</TABLE>



                                      33



<PAGE>


       10. Income Taxes (continued):

       The components of the deferred income tax asset and (liability) consist
       of the following at December 31:


<TABLE>
<CAPTION>
                                                          1999                  1998                    1997
                                                     -------------         --------------          -------------
       <S>                                           <C>                   <C>                     <C>
       Property and equipment                              $20,107               $171,957               $192,414
       Goodwill                                           (398,597)              (289,785)              (173,023)
       Accrued liabilities                                  50,179                 38,062                 31,939
       Investment in partnerships                           83,050                 71,005                 26,110
       Net operating losses                              1,421,129              1,597,290              1,630,144
       Income tax credits                                  528,111                284,375                184,720
       Other                                                18,785               (39,568)                 18,628
                                                     -------------         --------------          -------------
                                                         1,722,764              1,833,336              1,910,932
       Valuation allowance                              (1,722,764)            (1,833,336)            (1,910,932)
                                                     -------------         --------------          -------------
       Net deferred income taxes                           $-                   $-                     $-
                                                     =============         ==============          =============
</TABLE>


         As of December 31, 1999, the Company had net operating loss
         carryforwards for federal and state purposes of approximately
         $3,880,000 and $1,140,000, respectively. At December 31, 1998, the
         respective tax carryforwards were approximately $4,225,000 and
         $2,194,000. The net operating loss carryforwards begin expiring in 2008
         for federal purposes and 1997 for state purposes.

         The Company has a federal credit for FICA taxes paid on employees' tip
         income of approximately $520,000. The credit will begin to expire in
         2011.

         The utilization of net operating loss ("NOL") and credit carryforwards
         may be limited under the provisions of Internal Revenue Code Section
         382 and similar state provisions due to the Initial Public Offering in
         1996. The Company has not previously generated taxable income, and
         there is no opportunity to carryback losses to prior periods. The
         Company has therefore not recognized a deferred tax asset as of
         December 31, 1999 and 1998.

11. Supplemental Cash Flow Information :

         Supplemental cash flow items consisted of the following for the years
ended December 31:


<TABLE>
<CAPTION>
                                                      1999                  1998                 1997
                                                 -------------         -------------       --------------
       <S>                                       <C>                   <C>                 <C>
       Cash paid for:
         Interest                                     $308,792              $306,523             $381,109
         Taxes                                         $25,601                $1,600                 $800
</TABLE>


         Supplemental information on noncash investing and financing activities
         consisted of the following for the years ended December 31:


<TABLE>
<CAPTION>
                                                                     1999                      1998
                                                                ---------------            --------------
       <S>                                                      <C>                        <C>
       Equipment purchases under a capital lease                         $3,600                  $112,796
</TABLE>


12.  1996 Stock Option Plan:

         The Company adopted the 1996 Stock Option Plan as of August 7, 1996
         under which options may be granted to purchase up to 600,000 shares of
         common stock, and was amended on September 28, 1999, increasing the
         total number of shares under the plan to 1,200,000. The 1996 Stock
         Option Plan provides for the options issued to be either incentive
         stock options or non-statutory stock options as defined under Section
         422A of the Internal Revenue Code. The exercise price of the shares
         under the option shall be equal to or exceed 100% of the fair market
         value of the shares at the date of option grant. The 1996 Stock


                                      34



<PAGE>


12.  1996 Stock Option Plan (continued):

         Option Plan expires on June 30, 2005 unless terminated earlier. The
         options generally vest over a three-year period.

         The following is a summary of changes in options outstanding pursuant
         to the plan for the years ended December 31, 1999, 1998 and 1997:


<TABLE>
<CAPTION>
                                                                                          Weighted Average
                                                                      Shares               Exercise Price
                                                                  ----------------       ------------------
         <S>                                                      <C>                    <C>
         Outstanding options at December 31, 1996                          487,500              $5.00
         Granted                                                            25,000              $1.00
         Exercised                                                       -                        -
         Terminated                                                      (159,591)              $5.00
                                                                  ----------------       ------------------
         Outstanding options at December 31, 1997                          352,909              $4.14
         Granted                                                           176,500              $1.88
         Exercised                                                       -                        -
         Terminated                                                       (79,409)              $4.94
                                                                  ----------------       ------------------
         Outstanding options at December 31, 1998                          450,000              $3.11
         Granted                                                           528,000              $1.26
         Exercised                                                       -                        -
         Terminated                                                       (51,500)              $3.53
                                                                  ================       ==================
         Outstanding options at December 31, 1999                          926,500              $2.38

         Options exercisable at end of year                                570,833              $2.70
                                                                  ================       ==================
</TABLE>


         The per share weighted average fair value for options granted in 1999,
         1998 and 1997 was $1.26, $0.93 and $0.51, respectively. Information
         relating to significant option groups outstanding at December 31, 1999
         are as follows:


<TABLE>
<CAPTION>
                                                    Life of
         Exercise Price       Outstanding         Outstanding         Options
                                Shares            Shares(Yr.)       Exercisable
         ---------------     --------------      -------------     -------------
         <S>                 <C>                 <C>               <C>
                   $5.00            125,000          6.77                125,000
                   $3.00             92,000          6.77                 92,000
                   $1.88            611,500          8.99                328,833
                   $1.81             53,000          9.56
                   $1.69             20,000          9.74
                   $1.00             25,000          7.31                 25,000
                             --------------      -------------     -------------
                   Total            926,500          8.40                570,833
                             ==============      =============     =============
</TABLE>



           The Company has adopted the disclosure-only provisions of SFAS
           Statement No. 123, "Accounting for Stock-Based Compensation" and will
           continue to use the intrinsic value based method of accounting
           prescribed by APB Opinion No. 25, "Accounting for Stock Issued to
           Employees." Accordingly, since options were granted with an option
           price equal to the grant date market value of the Company's common
           stock, no compensation cost has been recognized for the stock option
           plan. Had compensation


                                      35



<PAGE>


           cost for the Company's stock option plan been determined based on 
           the fair value of the option at the





                                      36



<PAGE>


12.  1996 Stock Option Plan (continued):

            grant date for awards in 1999 and 1998 consistent with the
           provisions of SFAS No. 123, the Company's net income and basic income
           per share would have been decreased to the pro forma amounts
           indicated below as of December 31,


<TABLE>
<CAPTION>
                                                           1999                 1998                 1997
                                                       ------------         ------------         ------------
       <S>                                             <C>                  <C>                  <C>
       Net income, as reported                           $390,473             $84,583             ($314,929)
       Net loss, pro forma                              ($155,878)           ($155,515)           ($542,062)
       Basic and diluted income (lose) per share,
            as reported                                   $0.05                $0.01               ($0.05)
       Basic and dilutive loss per share, pro forma       $0.00               ($0.02)              ($0.08)
</TABLE>


           The fair value of each option grant issued is estimated at the date
           of grant using the Black-Scholes option-pricing model with the
           following weighted average assumptions: (a) no dividend yield on the
           Company's stock, (b) expected volatility of the Company's stock
           ranging from 49.0% to 78.9%, (c) a risk-free interest rate ranging
           from 4.88% to 6.74% and (d) expected option life of five years.

13.  Acquisitions And Transfers:

LA MESA, CALIFORNIA

          In August 1999, the Company entered into a sublease for its La Mesa,
          California restaurant location. The site was renovated and opened on
          November 8, 1999.


SALE OF RESTAURANTS

          In May 1999, the lease on the BJ's Pizza & Grill - OTC in The Dalles,
          Oregon terminated. The Company and the landlord could not reach an
          agreement on the terms of a lease extension. A portion of the
          restaurant equipment was sold to the landlord, and additional
          equipment was removed for use at other BJ's locations. The Company
          incurred a non-cash charge of $112,300 for a loss on the sale of
          assets to the landlord, primarily leasehold improvements, at this
          location and an additional $28,700 for the settlement of claims made
          by the landlord

          In June 1999, a Pietro's restaurant located in Eugene, Oregon was
          closed. The Company and the landlord could not reach an agreement on
          the terms of a new lease. This restaurant did not figure significantly
          in the Company's future plans, and the Company chose to close it
          rather than meet the landlord's request for an extensive remodel. The
          Company incurred a non-cash charge of $4,000 on the closure of this
          restaurant.


                                      37



<PAGE>


14.  Selected Quarterly Financial Data (Unaudited):

         Summarized unaudited quarterly financial data for the Company is as
follows:


<TABLE>
<CAPTION>
                                        March 31,           June 30,        September 30,        December 31,
                                          1999                1999                1999                 1999
                                      ------------       ------------      --------------       --------------
<S>                                   <C>                <C>               <C>                  <C>
Total revenues                          $8,092,403         $9,947,282         $10,039,105           $9,314,003
Gross profit                            $5,868,007         $7,157,045          $7,177,145           $6,700,267
Income (loss) from operations              $60,290           $420,865            $444,215            ($124,499)
Net income (loss) before effect
     of accounting change                  ($7,545)          $343,909            $330,876            ($170,592)
Effect of accounting change              ($106,175)
Net income (loss)                        ($113,720)          $343,909            $330,876            ($170,592)
Basic and diluted net income
    (loss) per share before
accounting change                            $0.00              $0.04               $0.04               ($0.01)
Basic and diluted net income
    (loss) per share                        ($0.02)             $0.04               $0.04               ($0.01)


                                        March 31,           June 30,        September 30,        December 31,
                                          1998               1998               1998                 1998
                                      ------------       ------------      --------------       --------------
Total revenues                          $6,888,256         $7,825,198          $8,157,975           $7,180,073
Gross profit                            $4,875,930         $5,666,523           5,926,040           $5,124,181
Income (loss) from operations           ($136,361)           $284,025            $355,680           ($144,711)
Net income (loss)                       ($179,501)           $178,360            $285,151           ($199,427)
Basic and dilutive net income
    (loss) per share                       ($0.03)              $0.03               $0.04              ($0.03)
</TABLE>


15. Subsequent event:

In February 2000, the Company entered into an agreement with a bank for a
collateralized term loan for $4,000,000. There is an initial twelve-month draw
down period and a subsequent thirty-six month term-out period. Interest accrued
on outstanding borrowings shall be Wall Street Journal Prime plus 2.0% or LIBOR
plus 3.5%, and Wall Street Journal Prime plus 3.0%, floating or fixed during the
term out period. Payment shall be interest only during the draw down period and
an even amortization during the term out period, with a final maturity on
February 15, 2004. The Company paid a one percent loan fee. This loan agreement
contains, among other things, certain financial covenants and restrictions.




                                      38







<PAGE>

                                                                   Exhibit 10.13

         THIS LEASE ("Lease") is made November 1, 1999 , by and between
HUNTINGTON EXECUTIVE PARK, a California Limited Partnership ("Landlord"), and
CHICAGO PIZZA & BREWERY, INC., a corporation incorporated under the laws of the
State of California (Tenant").

         In consideration of the mutual covenants and agreements herein
contained, and intending to be legally bound, the parties hereby covenant and
agree as follows:

                                    Article I

                                     Demise

         1.01     Leased Premises. Landlord hereby leases to Tenant and Tenant
hereby takes from Landlord, the Leased Premises for the Term (as defined in
Section 1.04) and at the Rent (as defined in Section 2.01) and upon the
provisions and conditions hereinafter set forth. "Leased Premises" and/or
"Premises" mean Landlord's Building, outlined in red on Exhibit A, and described
as follows: a freestanding building containing approximately 8,031 square feet
having a street address of 16060 Beach Boulevard, Huntington Beach, California.
The Leased Premises shall not include the land lying under the Leased Premises.

         1.02     Common Areas. Tenant shall have the right to use, in common
with other tenants of the Shopping Center, the Common Areas and Facilities;
subject, however, to the terms and conditions of this
 Lease, to the right of
Landlord to alter such areas from time to time and to establish from time to
time uniform rules and regulations for the use thereof.

         1.03     "Shopping Center" Defined. "Shopping Center" means certain
parcels of land commonly referred to as Huntington Executive Park, situated in
the City of Huntington Beach, State of California, and more particularly
described in Exhibit A attached hereto (as the same may be altered or reduced
from time to time) and any other parcel(s) of land at any time designated by
Landlord to be added thereto (but only so long as such designation remains
unrevoked), which are or are to be used for shopping center and office related
purposes, including but not limited to, expansion area, employee parking, or the
furnishing to the Shopping Center of any utility or other service, for any
office and/or professional building or for any other improvement appropriate or
related to the operation or functioning of the Shopping Center, together with
all buildings on and improvements to any such parcel(s) of land. Landlord shall
have the right to exclude in its discretion, any of the foregoing parcels,
whether or not such parcels shall be used for shopping center and office or
related purposes.

         1.04     Term and Commencement Date. The Term shall commence on the
Commencement Date and, unless sooner terminated or extended in accordance with
the terms of this Lease, shall expire on the last day of the last month of the
fifteenth (15th) Lease Year.

         The "Commencement Date" means the earlier of two hundred seventy (270)
days from the date that this Lease is signed by both Tenant and Landlord or the
date Tenant opens for business in the Leased Premises. Possession of the Leased
Premises shall be delivered to Tenant within five (5) days following lease
execution. Tenant shall not make any modifications or cause any damage to the
Leased Premises without Landlord's permission until Tenant has waived its
cancellation rights specified in Section 1.06 of this Lease. Promptly after the
occurrence of the Commencement Date, Landlord and Tenant shall execute and
deliver an amendment to this Lease in the form attached hereto as Exhibit C
documenting the Commencement Date, term and expiration date of the Lease. The
term "Lease Year" shall mean a period of twelve (12) consecutive full calendar
months. The first Lease Year shall begin on the Commencement Date, if the
Commencement Date occurs on the first day of a calendar month, otherwise, the
first Lease Year shall begin on the first day of the first full calendar month
after the Commencement Date. Each succeeding Lease Year shall begin on the
anniversary of the first lease Year. The first Lease Year shall include the
period of time, if any, between the Commencement Date and the first day of the
first Lease Year.

         1.05     Option to Renew. Tenant may, at its option, renew this Lease
for one (1) renewal term 


<PAGE>

of five (5) years. The renewal period shall commence immediately upon the 
conclusion of the original term of this Lease. This option to renew may be 
exercised only by written notice in the manner provided in Section 22.05 
hereof no later than one (1) year prior to the expiration date of the 
original term of this Lease. This shall be the exclusive and only method of 
exercising this renewal option and any other method shall not constitute an 
exercise thereof. The renewal term, granted pursuant to this option to renew, 
shall be on the same terms and conditions as are to be in effect during the 
original terms of this Lease except that: (i) Tenant shall have no further 
option to renew this Lease beyond the expiration of the renewal period 
created by this Section; (ii) the Minimum Rent for the renewal period shall 
be $193,000 per Lease Year.

         Tenant's Option to Renew is personal to the original Tenant and may
only be exercised by the original Tenant while occupying the Leased Premises.

         If:      (i) Tenant shall fail to exercise this renewal option(s)
during the period(s) in which it is available and in the manner required hereby,
or (ii) this Lease is no longer in full force and effect for any reason, or
(iii) Tenant is in default and has not cured said default within the required
cure period, under this Lease, at the time of such exercise, this renewal
option(s) shall terminate, be void and of no further force or effect.

         Unless otherwise herein expressly provided, any reference in this Lease
to the "term of this Lease" shall mean the original term hereof and such renewal
period(s), if validly exercised by Tenant pursuant to its option(s) to renew set
forth in this Section, except to the extent that the original term or any
renewal period may be sooner terminated or canceled under any provisions of this
Lease.

         1.06     Cancellation Options. The obligations of both Tenant and
Landlord under this Lease are expressly conditioned upon Tenant's procurement of
a liquor license, and the City of Huntington Beach (the "City") approval of
Tenant's use of the Leased Premises and Tenant's procurement of a building
permit for the mutually agreed upon modifications to the Leased Premises. In the
event Tenant is unable to procure the liquor license or approval for either its
intended use of the Leased Premises, as specified in Article 5 of the Lease, or
a building permit, Tenant shall have the Option to Cancel the Lease by giving
Landlord written notice, along with reasonable evidence of City rejection, not
later than ninety (90) days from the date this Lease is signed by both Landlord
and Tenant. Tenant agrees to apply for the liquor license, City approval of
Tenant's use, and submit its plans to the City for plan check not later than
forty-five (45) days from the date the Lease is signed by the parties. In the
event Tenant fails to apply for the liquor license, City approval of use, or
fails to submit its plans to the City within said forty-five (45) day period,
Landlord shall have the Option to Cancel the Lease by giving Tenant written
notice to cancel within ten (10) days following the forty-five (45) day period.

         In the event that the Tenant fails to take possession and to open the
Leased Premises for business fixtured, stocked and staffed within two hundred
seventy (270) days from the date both Tenant and Landlord have signed this
Lease, then the Landlord shall have the option, but not the obligation, to
cancel this Lease, in which event, both parties shall be released of any further
liability under this Lease. In such event, Landlord shall be entitled to retain
the Advance Rent specified in Section 2.01A below. All obligations of Tenant set
forth in this section shall be subject to and extended during any period of
force majeure but in no event shall the period of time Tenant has to perform its
obligations be later than twelve (12) months from the date both Tenant and
Landlord have signed the Lease.

                                   Article II

                                      Rent

         2.01     Rent Payable. Tenant shall pay to Landlord as rent (sometimes
collectively referred to as "Rent") for the Leased Premises, the following:

         A.       "Advance Rent," as defined in Section 2.08, means the sum of
$11,250.00;

         B.       "Minimum Rent," as defined in Section 2.02;

         C.       "Annual Percentage Rent" means the applicable percent (the
"Annual Percentage"), as 

                                       2


<PAGE>


set forth in Section 2.03, of all Gross Sales (as defined in Section 2.04) in 
excess of the applicable Percentage Base as set forth in Section 2.03;

         D.       Tenant's proportionate share of Operating Costs as defined in
Section 6.04 and as the same may be from time to time adjusted. The first
month's charge shall be due and payable in advance on the Commencement Date and
monthly on the first day of each month thereafter;

         E.       Tenant's proportionate share of Taxes, as defined in Section
3.01, and Insurance Premiums, as defined in Section 9.02, as the same may be
from time to time adjusted, the first installment of which shall be due and
payable in advance on the Commencement Date and monthly on the first day of each
to be paid each month thereafter;

         F.       "Security Deposit" means $____-0-______ to be paid pursuant to
Section 2.09 hereof;

         G.       In addition to Minimum Rent and Annual Percentage Rent, all
additional sums, charges or amounts of whatever nature to be paid by Tenant to
Landlord in accordance with the provisions of this Lease, shall be considered
"Additional Rent" whether or not such sums, charges or amounts are referred to
as such.

         2.02     Minimum Rent. Pursuant to the rent schedule listed below,
Tenant hereby covenants and agrees to pay to Landlord, at its office or at such
other place as Landlord may from time to time designate, "Minimum Rent" for the
Leased Premises during the original Term of this Lease, without deduction or
setoff, in equal monthly installments, in advance on the first day of each and
every calendar month during the Term. Set out below is the schedule for Minimum
Rent to be paid by Tenant during the initial lease term (not including the
renewal term specified in Section 1.05.


<TABLE>
<CAPTION>
                              MINIMUM RENT SCHEDULE

                  LEASE YEARS               MINIMUM RENT (YEARLY)               MONTHLY
                  <S>                       <C>                                <C>
                     1 - 5                          $135,000                   $11,250.00
                     6 - 10                         $145,000                   $12,083.00
                    11 - 15                         $167,000                   $13,917.00
</TABLE>



         2.03     Annual Percentage Rent. Tenant shall pay, as Annual Percentage
Rent, for each of the Lease Years, the dollar amount by which six percent (6%)
(the "Annual Percent") of Tenant's Gross Sales (as defined in Section 2.04)
exceeds the Minimum Rent for each Lease Year (the "Percentage Base"). Annual
Percentage Rent shall be due and payable on the fifteenth (15th) day of the
month immediately following the month in which the Annual Percent of Tenant's
Gross Sales (as defined in Section 2.04) for the Lease Year exceeds the Minimum
Rent for the Lease Year. Thereafter, Annual Percentage Rent shall be due and
payable monthly on or before the fifteenth (15th) day of each month on all
additional Gross Sales during the remainder of the Lease Year. Within ninety
(90) days after the end of each Lease Year, the Annual Percentage Rent paid or
payable for such Lease Year shall be adjusted between Landlord and Tenant so as
to reflect the actual Annual Percentage Rent due for such Lease Year, and Tenant
shall promptly pay Landlord or Landlord shall promptly credit to Tenant's
account as the case may be, the amount necessary to effect such adjustment. If
the Minimum Rent is prorated, reduced or abated for any reason, then the
Percentage Base shall be proportionately prorated, reduced or abated for the
same period.

         2.04     "Gross Sales" Defined.

         (a)      "Gross Sales" means the actual sales price of all goods, 
wares and merchandise sold, leased, licensed or delivered, and the actual 
charges for all services performed by Tenant or by any person, firm or 
corporation on its behalf, or by any subtenant, licensee, or concessionaire 
in, at, from, or arising out of the use of the Leased Premises, whether for 
wholesale or retail, and whether for cash or credit, including the value of 
all consideration other than money received, without reserve or deduction for 
inability or failure to collect. Gross Sales shall include, without 
limitation, sales and services: (i) where the orders therefor originate in, 
at, from, or arising out of the use of the Leased Premises, whether delivery 
or performance is made from the Lease Premises or from some other place; (ii) 
made or performed by mail, telephone or telegraph orders; (iii) made or 
performed by 

                                       3


<PAGE>

means of mechanical or other vending devices in the Leased Premises; and (iv) 
which Tenant or any subtenant, licensee, concessionaire or other person in 
the normal and customary course of its business would credit or attribute to 
its operations at the Leased Premises or any part thereof. Any deposit not 
refunded shall be included in Gross Sales. Each installment or credit sale 
shall be treated as a sale for the full price in the month during which such 
sale is made, regardless of the time, if ever, that Tenant receives payment 
therefor. No franchise or capital stock tax and no income or similar tax 
based on income or profits shall be deducted from Gross Sales. Nothing 
contained herein shall imply any consent by Landlord to any sublease, license 
or concession in violation of any other term of this Lease.

         (b)      The following shall not be included in Gross Sales: (i) any
exchange of merchandise between stores of Tenant where such exchange is made
solely for the convenient operation of Tenant's business and not for the purpose
of consummating a sale made in, at or from the Leased Premises, or for the
purpose of depriving Landlord of the benefit of a sale which would otherwise be
made in or at the Lease Premises; (ii) returns to shippers or manufacturers;
(iii) cash or credit refunds to customers on transactions (not to exceed the
actual selling price of the item returned) previously included in Gross Sales;
(iv) sales of trade fixtures, machinery and equipment after use thereof in the
conduct of Tenant's business; (v) amounts collected and paid by Tenant to any
governmental authority for any sales, sales based or excise tax; (vi) amounts
collected from vending machines and pool tables; and (vii) bad debts not
exceeding one percent (1%) of Gross Sales written off by Tenant for income tax
purposes may be deducted from Gross Sales in the Lease Year in which they are
written off, however, if any account receivable previously written off as a bad
debt is later collected, that amount shall be included in the amount of Gross
Sales in the Lease Year in which collected.

         (c)      Radius Clause: Excepting Tenant's existing B.J.'s Pizza
Restaurant on Main Street, in Huntington Beach, during the Term of this Lease,
neither Landlord nor Tenant, nor any parent, subsidiary, affiliate, franchisee,
officer, director or shareholder of Landlord or Tenant, will within a radius of
five (5) miles of the perimeter of the Shopping Center, either directly or
indirectly, own, operate or be financially interested in, with or without
others, a business like or similar to the business permitted to be conducted
pursuant to this Lease, nor will Landlord or Tenant permit any pizza, brewery,
brewhouse type restaurant within such radius to be operated under a name which
shall be the same or similar to the Tenant's trade name. Without limiting
Landlord's remedies, if this Section is not complied with, in addition to any
other rights or remedies available to Landlord, Landlord shall have the right to
include the gross sales of such other business in the Gross Sales from the
Leased Premises for the purpose of computing Annual Percentage rent due under
this Lease. The provisions of this Section shall survive re-entry into the
Leased Premises by Landlord resulting from a breach of this Lease by Tenant.

         2.05     Statements of Gross Sales. Tenant shall deliver to Landlord:
(a) within fifteen (15) days after the end of each calendar month of the Term a
written report signed by Tenant's accountant or by an authorized executive
officer or authorized agent of Tenant and certified by such person to be
complete and accurate, setting forth the Gross Sales made in the preceding
calendar month; and (b) within ninety (90) days after the end of each Lease Year
and within ninety (90) days after the expiration or earlier termination of this
Lease, a statement of Gross Sales for the preceding Lease Year or other period
preceding the termination of this Lease. The annual statement shall be
accompanied by a signed certificate of an authorized executive officer stating
specifically that: (i) he or she has examined the report of Gross Sales for the
preceding Lease Year; (ii) such report presents fairly the Gross Sales of the
preceding Lease Year; and (iii) such Gross Sales conform with and are computed
in compliance with the definition of Gross Sales contained in Section 2.04
hereof. If Tenant shall fail to deliver the monthly report or the annual
statement and certificate to Landlord within the time required, then, in
addition to any other rights of Landlord, Landlord shall have the right
thereafter to employ, at Tenant's reasonable expense, an independent certified
public accountant to examine such books and records as may be necessary to
determine the amount of Tenant's Gross Sales for such month or Lease Year, as
the case may be. Both the monthly report and the annual statement shall be in
the form and style and contain such detail as set forth in Exhibit B.

         2.06     Tenant's Records. For the purpose of permitting verification
by Landlord of any amounts due as Annual Percentage Rent, Tenant will keep and
preserve for at least two (2) years, and during the Term shall keep at the
Tenant's general accounting office address, original or duplicate books and
records which shall disclose all information required to determine Gross Sales,
including: (i) settlement report sheets of transactions with subtenants,
concessionaires and licensees; 

                                       4



<PAGE>


(ii) daily and/or weekly transaction reports; and (iii) such other records, 
if any, which would normally be examined by an independent accountant 
pursuant to generally accepted auditing standards in performing an audit of 
Tenant's sales. At any time or from time to time but not more than three (3) 
times every twenty-four (24) months, unless Tenant is in default, after at 
least ten (10) business days' advance notice to Tenant, Landlord and any 
mortgagee and/or their respective agents and accountants, shall have the 
right to make any examination or audit of Tenant's books and records which 
Landlord or such mortgagee may desire to verify or ascertain Gross Sales. If 
such audit shall disclose a liability in any Lease Year for Annual Percentage 
Rent in excess of the Annual Percentage Rent therefore paid by Tenant for 
such period, then Tenant shall promptly pay such excess. Should any such 
liability for Annual Percentage Rent equal or exceed two and one half percent 
(2-1/2%) of the Annual Percentage Rent previously paid for such Lease Year, 
Tenant shall, in addition promptly pay the cost of the audit and interest at 
the Default Rate on all additional Annual Percentage Rent then payable, from 
the date such additional Annual Percentage Rent should have been paid. Should 
any such liability for Annual Percentage Rent equal or exceed five percent 
(5%) of the Annual Percentage Rent previously paid for such Lease Year, 
Landlord may, in addition to any right or remedy available to Landlord, 
terminate this Lease by notifying Tenant in writing within ninety (90) days 
after Landlord discovers such liability, and the Term of this Lease shall 
expire on the last day of the second full calendar month after the date of 
such notice and both parties' obligations shall cease as of that date.

         2.07     Payment of Rent. Tenant shall pay all Rent when due and
payable, without any setoff, deduction or prior demand therefor whatsoever. If
Tenant fails to make any payment of rent, including without limitation, Annual
Percentage Rent and Additional Rent when due and payable under this Lease, and
said payment remains unpaid after three (3) business days of written notice by
Landlord, Tenant shall pay to Landlord as a late charge and in consideration of
the additional costs incurred by Landlord and the additional record keeping
required to be performed by Landlord, an additional sum equal to five percent
(5%) of the amount of rent due and owing from Tenant. In addition, any Rent
which is not paid when due shall bear interest from the original due date at the
Default Rate, which is hereby defined as being ten percent (10%) per annum or
the maximum rate of interest for which Tenant may lawfully contract in the State
of California, whichever is less. Any Additional Rent which shall become due
shall be payable, unless otherwise provided herein, on the first day of each
month during the Term. Rent and statements required of Tenant shall be paid and
delivered to Landlord at 16168 Beach Blvd., Suite 200, City of Huntington Beach,
State of California. Any payment by Tenant or acceptance by Landlord of a lesser
amount than shall be due from Tenant to Landlord shall be treated as payment on
account. The acceptance by Landlord of a check for a lesser amount with an
endorsement or statement thereon, or upon any letter accompanying such check,
that such lesser amount is payment in full, shall be given no effect, and
Landlord may accept such check without prejudice to any other rights or remedies
which Landlord may have against Tenant.

         2.08     Advance Rent. Concurrently with the execution of this Lease,
Tenant shall deposit with the Landlord the Advance Rent as described in Section
2.01 hereof. The Advance Rent shall be applied by Landlord against the first
installment of Rent due hereunder. No interest shall be payable to Tenant on
account of the Advance Rent.

                                   Article III

                                      Taxes

         3.01     Tenant to Pay Taxes. Tenant shall pay for each calendar year
(or portion thereof) during the Term, as Additional Rent, all real estate taxes,
ad valorem taxes and assessments, general and special assessments, or any other
tax imposed upon or levied against real estate and/or improvements or upon
owners of real estate and/or improvements as such, rather than levied upon
persons generally, payable with respect to or allocable to Landlord's Building
and parcel, together with the reasonable cost (including fees of attorneys,
consultants, accountants and appraisers) of any negotiation, contest or appeal
pursued by Landlord in an effort to reduce or lower the amount of any increase
in any such tax, assessment or charge, the same being collectively referred to
herein as "Taxes." For the calendar year in which the Term commences or
terminates, Tenant's liability for any Taxes for such year shall be subject to a
pro rata adjustment based upon the number of days of such calendar year falling
within the Term.

                                       5


<PAGE>

         3.02     Payment of Taxes. Taxes shall be paid by Tenant in equal
monthly installments in such amounts as are estimated and billed for each year
by Landlord in its sole discretion at the commencement of the Term or as a
result of revised assessments during the Term and at the beginning of each
successive year during the Term, each such installment being due and payable on
the first day of each calendar month. The first monthly payment shall include a
prorated portion of Tenant's proportionate share of Taxes for the period from
the Commencement Date to the first day of the first full calendar month of the
Term. Within a reasonable time after Landlord's receipt of tax bills for a
particular year, Landlord will notify Tenant of the amount of Taxes for the year
in question and the amount of Tenant's proportionate share thereof. The
proportionate share paid or payable for each year shall be adjusted between
Landlord and Tenant, and Tenant shall pay Landlord or Landlord shall credit to
Tenant's account (or, if such adjustment is at the end of the Term, pay Tenant),
as the case may be, within ten (10) days of the aforesaid notice, the amount
necessary to effect such adjustment. Landlord shall provide the aforesaid notice
to Tenant within sixty (60) days of receipt by Landlord.

         3.03     Taxes on Rent. In addition to Taxes, Tenant shall pay to the
appropriate agency any and all sales, income and excise taxes (not including,
however, Landlord's income personal or estate taxes) levied, imposed or assessed
by the State of California or any political subdivision thereof or other taxing
authority upon any Rent payable hereunder.

         3.04     Tenant's Municipal, County, State or Federal Taxes. Tenant
shall be responsible for and shall pay, before delinquency, all municipal,
county, state or federal taxes assessed against: (i) the income or gross
receipts of Tenant; and/or (ii) any leasehold interest or any fixtures,
furnishings, equipment, stock-in-trade or other personal property of any kind
owned, installed or used in or on the Premises.

                                   Article IV

                                  Improvements

         4.01     Improvements.

         (a)      Landlord has no obligation to alter, remodel or improve the
Premises in any way. Tenant agrees to accept the Premises in an "as is"
condition. Tenant further agrees to fully and promptly pay for all improvements
and to indemnify and hold Landlord harmless from and against any loss, cost,
expense or lien in connection therewith.

         (b)      Tenant shall submit to Landlord, on or before thirty (30) days
after the date of this Lease, drawings for the renovation of the Premises.

         (c)      Within ten (10) days after the receipt of the Tenant's
drawings, Landlord, by notice in writing addressed to Tenant, shall indicate
Landlord's approval of them or clearly specify any objections to them, the
objections in all events to be reasonable. Failure by Landlord to provide notice
to Tenant within ten (10) days shall be construed as Landlord's acceptance of
said drawings. Tenant will, within ten (10) days after receipt of a notice of
disapproval, as aforesaid, appropriately amend and modify the drawings so as to
reflect all changes, modifications and corrections that Landlord reasonably
requests. The revisions and resubmissions shall continue until Landlord approves
in writing the drawings. The work to be performed by Tenant as described in the
drawings therefore, approved by Landlord as provided above, are herein referred
to as "Tenant's Work."

         (d)      The drawings for Tenant's Work shall be prepared by licensed
architects hired by Tenant. Tenant shall bear all costs of preparing the
drawings. Landlord's approval of the drawings shall not constitute an opinion or
agreement that they are in compliance with law (it being agreed that such
compliance is solely Tenant's responsibility) nor shall such approval impose any
present or future liability on Landlord or waive any of Landlord's rights under
this Lease, except as set forth in 4.01(c). Tenant shall provide Landlord with
two (2) sets of the drawings.

         (e)      Tenant shall commence, construct, perform and complete all
Tenant's Work in a good and workmanlike manner, in complete accordance with the
drawings approved by Landlord.

         (f)      At all times prior to the Commencement Date, all the
provisions, covenants and 

                                       6


<PAGE>


conditions of the Lease shall be applicable to the Premises other than 
Sections II, III, IV, V, VI, VIII and XIV.

         (g)      Prior to the commencement of construction of Tenant's Work,
Tenant shall obtain, at its sole cost and expense, all permits and licenses and
other consents and approvals of all governmental authorities as may be required
in connection with Tenant's Work and shall deliver copies thereof to Landlord.
Tenant shall, at its sole cost and expense, furnish to Landlord all certificates
and approvals with respect to work done by Tenant or on Tenant's behalf that may
be required from any governmental authority for the issuance of a certificate of
occupancy for the Premises and shall obtain such certificate and furnish
Landlord with a copy of such certificate prior to the Commencement Date.

         (h)      Tenant's Work and all of Tenant's trade fixtures and equipment
shall be performed, constructed and installed in accordance and in full
compliance with all applicable governmental requirements, including without
limitation all applicable laws, statutes, codes, ordinances and governmental
rules, regulations and orders, as well as reasonable rules and regulations
established by Landlord. Tenant's Work shall be performed without interference
and disruption to Landlord or other tenants.

         (i)      Prior to commencement of work, any contractor used by Tenant
to perform Tenant's Work (of, any kind whether improvements or alterations),
shall provide Landlord with proof of insurance reasonably acceptable to Landlord
and naming Landlord as additionally insured. In connection with the performance
of Tenant's Work or the use and occupancy of the Premises, Tenant shall not
permit anything to occur which directly or indirectly interferes in any way with
the use and occupancy of any tenant or the normal operations of the Shopping
Center.

         (j)      As part of its Improvements, Tenant shall install a grease
trap on the Leased Premises' sewer line before connection with the main sewer
line servicing the Shopping Center. Tenant shall install the grease trap in a
location mutually acceptable to Landlord and Tenant.

         4.02     Alterations. Tenant covenants and agrees that it will not make
or permit any structural or nonstructural alterations of the Leased Premises in
excess of Fifty Thousand ($50,000.00) Dollars except by and with the prior
written consent of the plans and specification therefor by Landlord. All
alterations and other improvements made by Tenant shall be made in a good and
workmanlike manner in accordance with all applicable laws, shall become the
immediate property of Landlord and shall remain for the benefit of Landlord
unless otherwise provided in the written consent mentioned above. Tenant shall
obtain and furnish Landlord with all permits that may be required for and prior
to the commencement of such work. Tenant further agrees in the event of making
such alterations as herein provided, fully and promptly to pay for same and to
indemnify and save Landlord and the Shopping Center harmless from and against
any loss, cost, expense or lien in connection therewith. In the event any such
alterations are removed by Tenant (without hereby implying Landlord's consent to
such removal), Tenant shall, at its sole cost and expense, repair any damage to
the Leased Premises occasioned by such removal.

         4.03     Changes and Additions to Buildings. The Landlord hereby
reserves the right at any time and from time to time to make additions or
alterations to any buildings in the Shopping Center. The Landlord also reserves
the right to construct other buildings or improvements in the Shopping Center
from time to time and to make alterations thereof or additions thereto and to
build additional stories on any building or buildings or to build adjoining same
or to construct double-deck or elevated parking facilities. Notwithstanding
anything contrary herein, this section shall not be applicable to the Premises
and Landlord shall use reasonable care not to interfere or disrupt Tenant's
business or its customers. Further, excepting parking spaces lost due to the
Dedication (pursuant to paragraph 3 of Addendum #1), Landlord shall not reduce
the number of parking spaces currently existing on the Restaurant Parcel of the
Shopping Center (shaded in blue on Exhibit A) by more than three (3) spaces
without Tenant's approval, which approval shall not be unreasonably delayed or
withheld.

         4.04     Mechanic's Liens. The interest of Landlord in the Shopping
Center and the Premises shall not be subject to liens for improvements made by
Tenant.

         Notwithstanding anything to the contrary contained in the statutes of
the State of California or 


                                      7



<PAGE>


in this Lease, Tenant shall not be deemed to be a partner, joint venturer or 
agent of Landlord; and in no event shall any lien resulting from Tenant's 
improvements to the Premises encumber Landlord's underlying fee simple 
estate. Tenant agrees that it shall not enter into any contract for 
improvements to the Premises unless the following language is included in 
such contract:

         "Notwithstanding anything herein contained to the contrary, the
         contractor acknowledges that CHICAGO PIZZA & BREWERY, INC. holds only a
         leasehold interest in the property which is the subject of this
         contract. CHICAGO PIZZA & BREWERY, INC. is not the agent of the owner
         of the property, and no lien resulting from work performed under this
         contract shall attach to the interest of such owner."

Tenant shall not permit any work to be commenced until such time as Tenant has
provided Landlord with a fully executed copy of the construction contract
evidencing incorporation of the aforesaid language. In addition, prior to the
commencement of the work, Tenant shall post the following notice in a
conspicuous place on the Premises, and shall assure that such notice is
maintained throughout the entire course of construction:

               "NOTICE TO CONTRACTORS, SUBCONTRACTORS, MATERIALMEN
                                  AND LABORERS

                  Notice is hereby given that work on B.J.'S CHICAGO PIZZA,
GRILL & BREWERY, located at 16060 Beach Boulevard, City of Huntington Beach,
State of California, is being performed for CHICAGO PIZZA & BREWERY, INC..
CHICAGO PIZZA & BREWERY, INC. is not the agent of the owner of this property,
and any lien rights shall be limited to the Leasehold estate of CHICAGO PIZZA &
BREWERY, INC. and shall in no event attach to the interest of the owner."

                  If, for whatever reason, any mechanic's or other lien shall be
filed against the Premises, or the Shopping Center, purporting to be for labor
or material furnished or to be furnished at the request of Tenant, then Tenant
shall, at its expense, cause such lien to be discharged of record by payment,
bond or otherwise as allowed by law, within ten (10) days after the filing
thereof. If Tenant shall fail to cause such lien to be discharged of record
within such ten (10) day period, Landlord, in addition to any other rights and
remedies, may, but shall not be obligated to, cause such lien to be discharged
by payment, bond or otherwise, without investigation as to the validity thereof
or as to any offsets or defenses thereto, and Tenant shall, upon demand,
promptly within ten (10) days, reimburse Landlord for all amounts paid and costs
incurred, including attorneys' fees and interest thereon at the maximum legal
rate from the respective dates of Landlord's payments therefor, in having such
lien discharged of record, and, further, Tenant also shall otherwise indemnify,
protect, defend and save Landlord harmless from any claim or damage resulting
therefrom.

                                    Article V

                          Conduct of Business by Tenant

         5.01     Use of Premises. Tenant shall use the Leased Premises solely
to operate a B.J.'S CHICAGO PIZZA, GRILL & BREWERY restaurant serving liquor,
beer, wine and food, and such other items for sale as Tenant shall offer in any
of its other restaurants, (the "Permitted Use") and for no other purpose
whatsoever. Tenant's right to use the Premises for the Permitted Use is
expressly conditioned upon Tenant obtaining all required liquor permits from the
Department of Liquor Control of the State of California and maintaining such
liquor permits in full force and effect throughout the Term of this Lease in
full compliance with all laws, rules and regulations in connection therewith.
From and after the Commencement Date, Tenant shall occupy the Leased Premises
and shall conduct continuously in the Leased Premises the business above stated.
Tenant will not use or permit, or suffer the use of, the Leased Premises for any
other business or purpose or any purpose contrary to law or the rules and
regulations of any public authority or in any manner deemed extra hazardous on
account of fire or otherwise nor in any manner so as to increase the cost of
fire and extended coverage insurance of the Leased Premises.

         5.02     Operation of Business. Tenant shall operate continuously one
hundred percent (100%) of the Leased Premises for the Permitted Use (and such
other use as necessary to comply with this section) during the entire term under
the trade name B.J.'S CHICAGO PIZZA, GRILL & BREWERY, with due diligence and
efficiency so as to produce the maximum amount of Gross Sales which may 


                                       8


<PAGE>

be produced by such manner of operation. Tenant shall carry at all times in 
the Leased Premises a stock of merchandise of such size, character and 
quality as shall be reasonably designed to produce the maximum amount of 
Gross Sales. Tenant agrees to keep the Premises open for business from at 
least 12:00 noon to 11:00 p.m., seven days per week; provided, however, (i) 
Tenant may open for business with the public as early as 11:00 a.m. and may 
remain open past 2:30 a.m. (however, Tenant shall not serve liquor, beer or 
wine past 2:30 a.m.); (ii) the above hours are not in conflict with any law, 
ordinance or union contract provisions; (iii) Tenant shall be relieved of 
such obligation to operate during such hours to the extent it may be 
necessary that the Premises be closed on account of the order of any duly 
constituted authority, or for the purpose of making repairs or improvements, 
or during the period of any strikes, lockouts, emergencies or other causes 
beyond Tenant's control, so long as Tenant shall make all reasonable efforts 
to shorten such periods; and (iv) Tenant is permitted to close on the 
following holidays: New Year's Day, Easter Sunday, Fourth of July, 
Thanksgiving and Christmas Day, and as may be mutually agreed to by both 
parties. Tenant shall keep the display windows and signs, if any, in the 
Leased Premises well lighted during the hours from sundown to 11:00 p.m., 
unless prevented by causes beyond the control of Tenant.

                  5.03     Storage, Office Space. Tenant shall warehouse, store
and/or stock in the Leased Premises only such goods, wares and merchandise as
Tenant intends to offer for sale at retail at, in, from or upon the Leased
Premises. This shall not preclude occasional emergency transfers of merchandise
to the other stores of Tenant, if any, not located in the Shopping Center.
Tenant shall use for office, clerical or other non-selling purposes only such
space in the Leased Premises as is from time to time reasonably required for
Tenant's business in the Leased Premises.

                  5.04     Deliveries. All deliveries to the Leased Premises
shall be made through the rear entrance to the Leased Premises.

                                   Article VI

                     Parking and Common Areas and Facilities
                (see Section 3 and 4 of Addendum #1 to the Lease)

         6.01     Common Areas and Facilities. "Common Areas and Facilities"
means the portions of the Shopping Center, whether owned or ground leased by
Landlord or made available for use by other owners or ground lessors of parcels
within the Shopping Center, which have, at the time in question, been designated
and improved for common use by or for the benefit of more than one occupant of
the Shopping Center; including, without limitation (if and to the extent
facilities therefor are provided by the Landlord at the time in question), the
land and facilities utilized as: parking lots; access and perimeter roads;
landscaped areas; exterior walks, lakes, arcades, stairways and ramps;
underground storm and sanitary sewers, utility lines and the like installed at
the cost of Landlord; but excluding all portions of the Shopping Center which
are (i) used or intended for use by one occupant only; or (ii) designated by
Landlord for the exclusive use of office tenants, including without limitation
all interior corridors and public lavatories. Any portion of the Shopping Center
so 'included within Common Areas and Facilities shall be excluded therefrom when
designated by Landlord for a non-common use, and any portion thereof not
theretofore included within Common Areas and Facilities shall be included when
so designated and improved for common use.

         6.02     Control of Common Areas and Facilities by Landlord. All Common
Areas and Facilities shall at all times be subject to the exclusive control and
management of the Landlord, and the Landlord shall have the right from time to
time to establish, modify and enforce reasonable rules and regulations with
respect to all facilities and areas mentioned in this Article. The Landlord
shall have the right to construct, maintain and operate lighting facilities on
all such areas and improvements; to police the same; from time to time to change
the size area, level, location and arrangement of parking areas and other
facilities referred to above; to restrict parking by tenants, their officers,
agents and employees to employee parking areas; to close all or any portion of
such areas or facilities to such extent as may, in the opinion of Landlord's
counsel, be legally sufficient to prevent a dedication thereof or the accrual of
any rights to any rights to any person or the public therein; to close
temporarily all or any portion of the parking areas or facilities; to discourage
non-customer parking; and to do and perform such other acts in and to such areas
and improvements as, in the use of good business judgment, the Landlord shall
determine to be advisable with a view to the improvement of the convenience and
use thereof by Tenant, other tenants and their officers, agents, employees and
customers. The Landlord will operate and maintain the Common Areas and
Facilities 


                                      9



<PAGE>


in such manner as the Landlord, in its sole discretion, shall determine from 
time to time. Without limiting the scope of such discretion, the Landlord 
shall have the full right and authority to employ all personnel and to make 
all rules and regulations pertaining to and necessary for the operation and 
maintenance of the Common Areas and Facilities.

         Notwithstanding the above, Landlord shall not reduce the Leased
Premises. Any physical changes to the Shopping Center, or any changes to or new
rules or regulations of the Landlord that materially limit, or reduce, Tenant's
capability to reasonably conduct its business, as set forth in section V, shall
reduce Tenant's rent on a prorata basis based on a verifiable reduction of
Tenant's Gross Sales of twenty percent (20%) or greater for the twelve (12)
months following a change compared to the twelve (12) months preceding the
change. As the result of any material physical changes to the Shopping Center or
Shopping Center rules and regulations changes by the Landlord, if Tenant can no
longer reasonably operate as a restaurant, Tenant shall have the option to
terminate the Lease. For purposes of this paragraph, the changes to the parking
area and signage caused by the Dedication specified in paragraph 3 of Addendum
#1 to the Lease shall be excluded.

         6.03     License. All Common Areas and Facilities, which the Tenant may
be permitted to use and occupy, are to be used and occupied under a revocable
license, and if the amount of such areas be diminished, the Landlord shall not
be subject to any liability however the Tenant shall be entitled to diminution
or abatement of Rent subject to verification of loss of revenue by Tenant, as
specified in Section 6.02 above, however, such diminution of such areas shall
not be deemed constructive or actual eviction.

         6.04     Tenant to Share Expense of Common Areas and Facilities.

         (a)      Tenant shall pay during the Term as Additional Rent its
proportionate share of Landlord's Operating Costs. Tenant's proportionate share
(which share shall not be more than eleven percent (11%) during the term of the
Lease) of Landlord's Operating Costs shall be computed by multiplying the
operating costs for the period then being billed by a fraction, the numerator of
which is the Land Area of the Restaurant Parcel (as shown on Exhibit A) and the
denominator of which is the total Land Area of Huntington Executive Park. Such
proportionate share shall be paid by Tenant in equal monthly installments in
such amounts as are estimated and billed by Landlord at the commencement of the
Term and at the beginning of each successive calendar year, each such
installment being due on the first day of each calendar month. The first monthly
payment shall include a prorated portion of Landlord's Operating Costs for the
period from the Commencement Date to the first day of the first full calendar
month of the Term. For the calendar year in which the Term commences or
terminates, Tenant's liability for its proportionate share of Landlord's
Operating Costs shall be subject to a pro rata adjustment based upon the number
of days of such calendar year falling within the Term. Within a reasonable time,
not to exceed six (6) months, after the end of each calendar year, Landlord
shall deliver to Tenant a statement of Landlord's Operating Costs for such
calendar year, and the monthly installments paid or payable shall be adjusted
between Landlord and Tenant, and Tenant shall pay Landlord or Landlord shall
credit to Tenant's account (or, if such adjustment is at the end of the Term,
pay Tenant), as the case may be, within fifteen (15) days of receipt of such
statement, such amounts as may be necessary to effect such adjustment for such
calendar year. Upon reasonable notice, Landlord shall make available for
Tenant's inspection at Landlord's office, during normal business hours,
Landlord's records relating to Landlord's Operating Costs for the preceding
calendar year. Failure of Landlord to provide the statement called for hereunder
within the time prescribed shall not relieve Tenant of its obligations
hereunder, however, for every thirty (30) day period said statement is delayed,
Landlord's administrative fee (under Section 6.05) shall be reduced by five
percent (5%) for that year.

         (b)      Tenant's proportionate share of any increase in Operating
Costs for Lease Years two (2) through five (5) shall not exceed one hundred five
percent (105%) of Tenant's proportionate share of those expenses for the
preceding Lease Year (the "Cap"), unless Tenant's proportionate share percentage
increase of those expenses for any preceding Lease Year was less than the Cap,
in which event the difference between the Cap and the lesser percentage increase
shall be carried forward and added to the Cap for the current Lease Year and
future Lease Years.

         6.05     "Landlord's Operating Costs" Defined. "Landlord's Operating
Costs" means the costs and expenses of every kind and nature paid or incurred in
operating, maintaining and preserving Landlord's Building, and the Common Areas
and Facilities, including, without limitation, all costs and 


                                      10


<PAGE>

expenses of: (i) installation, maintenance, repair, replacement, improvement, 
operation, lighting, signing, cleaning, painting, striping, policing and 
security (including cost of uniforms, equipment and employment taxes); (ii) 
alarm systems, provided the costs are incurred in connection with the Common 
Areas and Facilities as defined in section 6.01; (iii) insurance, including 
liability insurance for personal injury, death and property damage, insurance 
against fire, extended coverage, flood, theft or other casualties, worker's 
compensation insurance covering personnel, fidelity bonds for personnel, 
insurance against liability for defamation and claims of false arrest, and 
plate glass insurance for glass exclusively serving the Common Areas and 
Facilities, provided the costs are incurred in connection with the Common 
Areas and Facilities as defined in section 6.01; (iv) maintenance of 
sprinkler systems serving the Leased Premises, and the Common Areas or 
Facilities; (v) removal of snow, ice, trash and debris, provided it is 
removal from the parking areas and not general rubbish removal; (vi) 
regulation of traffic; (vii) inspection and depreciation of machinery and 
equipment used in the operation and maintenance of the Shopping Center, 
together with personal property taxes, rent and other charges incurred in 
connection with such equipment, provided the costs are incurred in connection 
with the Common Areas and Facilities as defined in section 6.01; (viii) fire 
protection and fire hydrant charges; (ix) paving, curbs, walkways, 
landscaping, guardrails, bumpers, fences, screens, flagpoles, bicycle racks, 
traffic signals, markers and signs, drainage, pipes, ducts, conduits and 
similar items, and lighting facilities; (x) planting, replanting and 
replacing flowers, shrubbery and planters; (xi) costs associated with 
maintenance of the lake including pumps and related equipment; (xii) 
reasonable capital cost reserves for Landlord's parking lots; (xiii) water; 
(xiv) sewage charges; (xv) services, if any, furnished by Landlord for 
nonexclusive use of all tenants; (xvi) all license and permit fees, and all 
parking surcharges that may result from any environmental or other laws, 
rules, regulations guidelines or orders; (xvii) obtaining and operating 
public transportation or shuttle bus systems used in connection with bringing 
customers to Landlord's Building or if required by any environmental or other 
laws, rules, regulations, guidelines or orders; (xviii) rent or other costs 
or charges payable by Landlord with respect to any rights, privileges and 
easements now or hereafter benefiting the Shopping Center; (xix) personnel, 
including, without limitation, security and maintenance people working on the 
common areas or providing services to all buildings; and (xx) an allowance 
for administrative costs equal to fifteen percent (15%) of the total of the 
foregoing costs and expenses. Such costs and expenses shall not include 
depreciation (other than depreciation as above specified). The costs and 
expenses referred to above are for definition only and are not to be 
construed so as to impose any obligation or obligations on Landlord or to 
indicate that any particular service or item is required to be furnished by 
Landlord. Tenant shall be solely responsible for the cost of any parking lot 
replacements on the Restaurant Parcel (Parcel 3B on Exhibit A) and any 
landscape replacements in the planters adjacent to Landlord's Building marked 
in yellow on Exhibit A.

                                   Article VII

                                      Signs

         7.01     Signs. Tenant shall at its sole cost erect and maintain a
sign, advertising Tenant's business, on the exterior front and on the freeway
side of the Leased Premises and on the monument sign for the Landlord's Building
on Beach Boulevard. Due to Landlord's dedication of land to the City of
Huntington Beach for a right hand turn lane on Beach Boulevard, the monument
sign may be relocated from its current location at the time of Lease execution.

         Tenant's sign(s) shall conform to Landlord's standard sign criteria.
Tenant shall not install any sign(s) facing on the parking areas or elsewhere on
the Leased Premises or in the Shopping Center, or place on the roof or any
exterior wall (including both the interior and exterior surfaces of windows and
doors) of the Leased Premises any sign, symbol, advertisement, neon or other
light, shade, or any other object or thing visible to public view outside of the
Leased Premises, without first obtaining Landlord's approval as to whether the
same shall be so installed or placed and, if so, as to the location, number,
type and appearance of each thereof. In addition, prior to installation of any
exterior signage Tenant shall first obtain the necessary approvals and permits
from the City of Huntington Beach.

         Landlord and Tenant agree to use best efforts to submit a design
package to City of Huntington Beach to replace the existing project monument
sign at the corner of Edinger and Beach Boulevard. Landlord shall allow Tenant
to participate in the new project sign provided, however, that Tenant's
participation does not prevent Landlord from replacing the existing project
sign. Tenant's 


                                      11


<PAGE>

participation in the new project sign is limited to having its name on the 
new project sign and sharing the cost of the new project sign. Without any 
obligation to Tenant, Landlord shall control the design, location, 
construction, cost and all other characteristics of the new project sign. In 
the event that the City of Huntington Beach will not allow a new project sign 
at the corner of Edinger and Beach, or the City will allow a new project sign 
with conditions unacceptable to Landlord, Landlord agrees to allow Tenant, 
subject to City approval, to add its logo to the existing project sign 
provided, however, that such addition be installed under conditions 
acceptable to Landlord and Tenant shall be responsible for all costs 
associated with said addition. In no event shall Landlord be obligated to 
replace the existing project sign or add Tenant to the existing project sign 
if either action will limit, prevent or have any other unacceptable impact 
(to Landlord) on signage at the Shopping Center.

                                  Article VIII

                  Condition and Maintenance of Leased Premises

         8.01     Condition of Leased Premises. Tenant acknowledges that neither
Landlord nor its agents have made any representations as to the condition or
repair of the Leased Premises except those specified in this Lease.

         8.02     Maintenance by Tenant. The Tenant shall, at all times, keep
the Leased Premises (including maintenance of exterior entrances, all glass,
show window moldings and frames, delivery doors and loading docks) and all
partitions, doors, fixtures, equipment and appurtenances thereof (including
lighting, heating and plumbing fixtures and equipment, sewer systems and any
air-conditioning system exclusively serving the Leased Premises whether located
inside or outside the Leased Premises) in good order, condition and repair
(including reasonable periodic painting as determined by the Landlord), damage
by unavoidable casualty excepted, except for structural portions of the Leased
Premises, which shall be maintained by the Landlord. The Tenant further agrees
to keep the inside and outside of all glass in doors and windows of the Leased
Premises cleaned; to replace promptly at its own expense with glass of a like
kind and quality any plate glass or window glass of the Leased Premises which
may become cracked or broken; not to place or maintain any merchandise or other
articles on the foot walk adjacent thereto or elsewhere on the exterior thereof;
to maintain the Leased Premises in a clean, orderly and sanitary condition and
free of insects, rodents, vermin and other pests; not to permit accumulations of
garbage, trash, rubbish, litter and other refuse in the Leased Premises and the
immediately adjacent portion of the Shopping Center, to remove the same at its
own expense, and to keep such refuse in proper containers (or in trash room
maintained by Tenant) on the exterior of the Leased Premises until called for it
to be removed; to keep all mechanical apparatus free of vibration and noise
which may be transmitted beyond the confines of the Leased Premises; not to
cause or permit objectionable odors to emanate or be dispelled from the Leased
Premises; to comply with all laws and ordinances and all valid rules and
regulations of any Federal, state, municipal or public authority having
jurisdiction with respect to the Leased Premises, and to conduct its business in
the Leased Premises in all respects in a dignified manner in accordance with
high standards of store operation. In the event the Landlord is required to make
repairs: (i) to structural portions of the Leased Premises by reason of Tenant's
negligent acts or negligent omissions to act, or (ii) to the Common Areas and
Facilities of the Shopping Center by reason of the acts of Tenant, its employees
or agents, the Landlord may add the cost of such repairs to the Rent.

         8.03     Snow and Ice. Tenant shall provide for the removal of all snow
and ice from the Leased Premises, the sidewalk in front of the Leased Premises
if any, and the customer exits and delivery entrances at the rear of the Leased
Premises, if any. Landlord shall provide for the removal of snow and ice from
the parking areas and driveways of the Shopping Center.

         8.04     Landlord's Maintenance and Repairs. Subject to the provisions
of Articles XV and XVI hereof, and except for repairs, maintenance or
replacements made necessary by the acts of Tenant, its employees, agents,
customers or persons making deliveries to the Leased Premises (which repairs,
maintenance or replacements shall be the responsibility of Tenant), Landlord
covenants and agrees:

         (a)      to maintain in good order, condition replacement and repair
the foundation, roof and exterior walls of the Leased Premises; and

                                       12


<PAGE>


         (b)      to maintain in good order, condition, replacement and repair,
the conduits providing utility services for gas, electricity, sewer and water up
to the Leased Premises.

         8.05     Surrender of Premises. At the expiration of the tenancy hereby
created, the Tenant shall surrender the Leased Premises in the same condition as
the Leased Premises were upon delivery of possession thereto under this Lease
and as thereafter improved, reasonable wear and tear excepted, and damage by
unavoidable casualty excepted, and shall surrender all keys for the Leased
Premises to the Landlord at the place then fixed for the payment of Rent and
shall inform the Landlord of all combinations on locks and vaults, if any, in
the Leased Premises. The Tenant shall, if requested by the Landlord, remove all
of its trade fixtures and other improvements before surrendering the Leased
Premises as aforesaid, shall repair any damage to the Leased Premises caused
thereby, and shall restore the Leased Premises to their original condition,
normal wear and tear excepted. The Tenant's obligation to observe or perform
this covenant shall survive the expiration or earlier termination of the Term of
this Lease.

                                   Article IX

                             Insurance and Indemnity

         9.01     Liability Insurance. The Tenant shall, during the entire Term
hereof, keep in full force and effect a policy of public liability and property
damage insurance with respect to the Leased Premises, and the business operated
by Tenant and any subtenants, concessionaires and licensees of the Tenant in the
Leased Premises in which the limits of public liability shall be not less than
$1,000,000 per occurrence and $3,000,000 aggregate. The policies shall name the
Landlord, any person, firms or corporations designated by the Landlord, and the
Tenant as insured, and shall contain a clause that the insurer will not cancel
or change the insurance without first giving the Landlord thirty (30) days prior
written notice. The policies shall be written to provide that such coverage
shall be primary and that any insurance maintained by Landlord shall be excess
insurance only. All such insurance shall provide for severability of interests;
shall provide that an act or omission of one of the named insureds shall not
reduce or avoid coverage to the other named insureds; and shall afford coverage
for all claims based on acts, omissions, injury and damage, which claims
occurred or arose (or the onset of which occurred or arose) in whole or in part
during the policy period. Any deductible amounts under any insurance policies
required hereunder shall be subject to Landlord's prior written approval. Such
insurance shall be in an insurance company with a Best rating of not less than
A- and a copy of the policy or a certificate of insurance shall be delivered to
the Landlord prior to the Commencement Date.

         9.02     Landlord's Insurance.

         (a)      Tenant will pay Landlord, as Additional Rent, a proportionate
share of the cost of all insurance as Landlord may from time to time maintain
with respect to the Leased Premises (including, but without limitation,
comprehensive general liability insurance, fire, extended coverage, vandalism
and malicious mischief and all-risk insurance, flood insurance, loss of rent
insurance, and boiler and sprinkler insurance), provided such coverage is with
respect to the Premises and the Common Areas and Facilities. Such insurance may
include Landlord's interest in the improvements and betterments installed in the
Premises by Tenant (except inventory, trade fixtures, wall and floor coverings,
furniture and other personal property of Tenant removable by Tenant under the
provisions of this Lease), whether the same have been paid for entirely or
partially by Tenant.

         (b)      Tenant will pay in twelve (12) consecutive equal monthly
installments in such amounts as are estimated and billed by Landlord at the
commencement of the Term and at the beginning of each successive billing period,
each installment being due on the first day of each calendar month. The first
monthly payment shall include a prorated portion of Insurance Premiums for the
period from the Commencement Date to the first day of the first full calendar
month of the Term of this Lease. Within a reasonable time after the end of each
calendar year, Landlord shall deliver to Tenant a statement of Insurance
Premiums for the previous year, and the monthly installments paid or payable
shall be adjusted between Landlord and Tenant, and Tenant shall pay Landlord or
Landlord shall credit Tenant's account (or, if such adjustment is at the end of
the Term, pay Tenant), as the case may be, within fifteen (15) days of receipt
of such statement, such amounts as may be necessary to effect such adjustment
for such year.


                                      13


<PAGE>


         (c)      Tenant shall have no rights in any policy or policies
maintained by Landlord and shall not, by reason of the reimbursement required by
this section, be entitled to be a named insured thereunder.

         (d)      Tenant shall furnish Landlord, within thirty (30) days after
the Commencement Date, a written statement, certified by Tenant or an executive
officer of Tenant, of the actual cost incurred by Tenant in making all
improvements and betterments to the Leased Premises, in order to assist Landlord
in providing adequate insurance coverage.

         9.03     Mutual Waiver of Subrogation. Landlord and Tenant hereby
release each other to the extent of their respective insurance coverage, from
any and all liability to the other or anyone claiming through or under it by way
of subrogation or otherwise, for any loss or damage to property covered by the
fire or extended coverage insurance policies carried by Landlord and Tenant,
respectively, even if such damage shall have been caused by the fault or
negligence of the other party, or anyone claiming through or under it, provided
however, that this release shall be applicable and in force and effect only with
respect to loss or damage occurring during such time as such policies shall
contain a clause or endorsement to the effect that any such release shall not
adversely affect nor impair such policies or prejudice the right to recover
thereunder. Each party agrees that its policies of insurance will include such a
clause or endorsement so long as the same shall be obtainable.

         9.04     Indemnification. The Tenant will indemnify the Landlord and
save it harmless from and against any and all claims, actions, damages,
liability, suits and expense in connection with the loss of life, personal
injury and damage to property arising from or out of any occurrence in, upon, or
at the Leased Premises, or the occupancy or use by the Tenant of the Leased
Premises or any part thereof, or the conduct by Tenant of its business therein,
thereon and therefrom, or occasioned wholly or in part by any act or omission of
the Tenant, its agents, contractors, employees, servants, lessees or
concessionaires or the sale of merchandise by Tenant in, on or from the Leased
Premises. In case the Landlord shall be made a party to any litigation commenced
by or against the Tenant, then the Tenant shall protect and hold the Landlord
harmless and shall pay all costs, expenses and reasonable attorneys' fees
incurred or paid by Landlord in connection with such litigation. The Tenant
shall also pay all costs, expenses and reasonable attorneys' fees that may be
incurred or paid by the Landlord in the enforcing of the covenants and
agreements of this Lease.

         The Landlord will indemnify the Tenant and save it harmless from and
against any and all claims, actions, damages, liability, suits and expenses in
connection with the loss of life, personal injury and damage to property arising
from or out of any occurrence in, upon, or at the Shopping Center, or the
occupancy or use by the Landlord of the Shopping Center, or any part thereof,
caused by the negligent or wrongful conduct of the Landlord of its business
therein, thereon and therefrom, or occasioned by the negligent or wrongful act
or omission of Landlord, its agents, employees, or the sale of merchandise by it
on or from the Shopping Center. In case the Tenant shall be made a party to any
litigation commenced against Landlord, Landlord shall protect and hold Tenant
harmless therefrom and pay all costs, expenses and reasonable attorneys fees
incurred by Tenant therein.

         9.05     Increases in Fire Insurance Premiums Attributable to Tenant.
Tenant shall not keep, use, sell or offer for sale in or upon the Premises any
article which may be prohibited by the standard form of fire insurance policy.
Tenant agrees to pay one hundred percent (100%) of any increase in premiums for
fire and extended coverage insurance that may be charged during the Term on the
amount of such insurance which may be carried by Landlord on Landlord's
Building, resulting from the type of merchandise sold by Tenant in the Premises,
whether or not Landlord has consented to the same. In determining whether
increased premiums are the sole result of Tenant's use of the Premises, a
schedule, issued by the organization making the insurance rate on the Premises,
showing the various components of such rate, shall be evidence of the several
items and charges which make up the fire insurance rate on the premises. If said
amount results in an increase of ten percent (10%) or more in Tenant's insurance
charge, said rates shall be subject to arbitration.

         In the event Tenant's occupancy causes any increase of premium for the
fire, and/or casualty rates on Landlord's Building, Tenant shall pay the
additional premium on the fire and/or casualty insurance policies by reason
thereof. The Tenant also shall pay, in such event, any additional premium on the
rent insurance policy that may be carried by the Landlord for its protection
against rent loss through fire. Bills for such additional premiums shall be
rendered by Landlord to Tenant, within sixty (60) days of receipt by Landlord,
and shall be due from, and payable by, Tenant within 


                                      14


<PAGE>

thirty (30) days of receipt by Tenant, and the amount thereof shall be deemed 
to be, and be paid as, Additional Rent.

                                    Article X

                                    Utilities

         10.01    Utility Charges. The Tenant shall be solely responsible for
and promptly pay all charges for heat, water, sewer, gas, oil, electricity and
any other utility used or consumed in the Leased Premises. In no event shall the
Landlord be liable for an interruption of or failure in the supply of, or for
the quantity or quality of, any of such utilities to the Leased Premises (unless
due to the willful negligence or misconduct of Landlord) and no such
interruption or failure shall ever be deemed to be an actual or constructive
eviction.

                                   Article XI

                       Subordination, Estoppel Certificate

         11.01    Mortgage Subordination. Tenant agrees that, within ten (10)
days after written request of Landlord, it will subordinate this Lease to the
lien of any present or future mortgage to a bank, savings and loan association,
insurance company, real estate investment trust or similar institution,
irrespective of the time of execution or time of recording of any such mortgage.
Tenant agrees that if the mortgagee or any person claiming under the mortgage
shall succeed to the interest of Landlord in this Lease, it will recognize such
mortgagee or person as its landlord under the terms of this Lease. The word
"mortgage" as used herein includes mortgages, deeds of trust or other similar
instruments and modifications, consolidations, extensions, renewals,
replacements and substitutes thereof. Nothing contained herein shall take away
any of Tenant's rights or benefits as set forth in this Lease.

         11.02    Estoppel Certificates. At any time and from time to time
Landlord and Tenant each agree, within ten (10) days after request in writing
from the other, to execute, acknowledge and deliver to the other or to any
person designated by the other a statement in writing certifying that the Lease
is unmodified and in full force and effect (or if there have been modifications,
that the same is in full force and effect as modified and stating the
modifications), that the other party is not in default in the performance of its
covenants hereunder (or if there are such defaults, specifying the same), and
the dates to which the rent and other charges have been paid.

                                   Article XII

                           Assignments and Subletting

         12.01    Landlord's Consent Required. Tenant will not mortgage, pledge,
encumber, assign or in any manner transfer this Lease, in whole or in part, nor
sublet all or any part of the Leased Premises, nor license concessions or lease
departments therein, without, in each instance, first obtaining the written
consent of Landlord. The within prohibition against transfer without the
Landlord's prior written consent includes any subletting or assignment which
would otherwise occur by operation of law, merger, consolidation,
reorganization, transfer or other change of Tenant's corporate or proprietary
structure, or an assignment, subletting to or by a receiver or trustee in any
federal or state bankruptcy, insolvency, or other proceedings. The consent by
Landlord to any assignment, subletting or other transfer shall not constitute a
waiver of the requirement for such consent to any subsequent assignment,
subletting or other transfer. Any assignment, subletting or other transfer, even
with the consent of Landlord, shall not relieve Tenant from primary liability
for the payment of Rent or from the primary obligation to keep and be bound by
the terms, conditions and covenants of this Lease. If, at any time, Tenant shall
request Landlord's consent to assign or otherwise transfer this Lease or to
sublet all or any portion of the Leased Premises, then Landlord shall have the
right, by notifying Tenant in writing within thirty (30) days after receipt of
such request, to terminate this Lease as of the date specified in such notice
from Landlord to Tenant, which effective date shall be not more than ninety (90)
nor less than thirty (30) days from the date of such notice. In the event of
such termination, all Rent (other than any Rent or Additional Rent due Landlord
resulting from Tenant's failure to perform any of its obligations under this
Lease) shall be adjusted as of the date of such termination. Landlord's failure
or refusal to so terminate this Lease shall not constitute a consent to the
proposed assignment, subletting or other transfer. In the event Tenant shall
assign or sublet the Leased Premises or request the consent of Landlord for any
act 


                                      15


<PAGE>

that Tenant proposes to do, then Tenant shall pay Landlord's reasonable 
attorneys' fees incurred in connection therewith. Should Tenant assign, 
sublet or otherwise dispose of the Leased Premises, whether with or without 
Landlord's consent, any and all sums payable by virtue of such assignment, 
sublease or other demise excluding any amounts received for Tenant's 
Furniture, Fixtures, Equipment and Goodwill, shall be due and payable solely 
to Landlord. Tenant does hereby appoint Landlord as its attorney-in-fact to 
bill and collect any and all such sums for the use and benefit of Landlord 
without liability whatsoever to Tenant.

         12.02    Excluded Assignment. Notwithstanding anything to the contrary
contained in this Article XII, and so long as Tenant is not in default under
this Lease beyond any applicable period, Tenant shall have the right, without
the prior written consent of Landlord, to assign the Lease to a corporation or
other entity which: (a) is Tenant's parent organization; or (b) is a
wholly-owned subsidiary of Tenant; or (c) is a corporation of which Tenant or
Tenant's parent organization owns in excess of fifty percent (50%) of the
outstanding capital stock, or other majority ownership equity interest; or (d)
as a result of a consolidation or merger with Tenant's parent corporation shall
own substantially all the capital stock of Tenant of Tenant's parent
corporation; or (e) is an entity which purchases or otherwise acquires all or
substantially all of Tenant's assets or stock. Any assignment of the Lease
pursuant to (a), (b), (c), (d), or (e) above shall be subject to the following
conditions: [1] Tenant shall remain fully liable during the unexpired Lease
Term, including any option terms; [2] any such assignment shall be subject to
all of the terms, covenants and conditions of the Lease and any such transferee
shall expressly assume for the benefit of Landlord the obligations of Tenant
under this Lease document prepared by Landlord; [3] the resulting entity
pursuant to (d) or (e) above shall have net assets equal to or greater than the
net assets of Tenant as of the Effective Date; and [4] Tenant shall give
Landlord notice of such assignment at least thirty (30) days prior to its
effective date (which shall include all documentation necessary to verify the
conditions contained in this paragraph). Anything to the contrary
notwithstanding, transfers of stock between or among the present stockholders of
Tenant, or partnership interests between the current partners of Tenant, the
issuance of additional capital stock of Tenant, a public offering of Tenant's
capital stock on a recognized national securities exchange, or a transfer or
series of transfers of less than a majority of Tenant's capital stock (except in
the event that Tenant is publicly-traded corporation on a recognized national
securities exchange, than a transfer or series of transfers of a majority of
Tenant's capital stock) shall not be deemed a change of control for purposes of
this Article XII.

         12.03    Acceptance of Rent from Transferee. The acceptance by Landlord
of the payment of Rent following any assignment, subletting or other transfer
restricted or prohibited by this Article shall not be deemed to be a consent by
Landlord to any such assignment or other transfer nor shall the same be deemed
to be a waiver of any right or remedy of Landlord hereunder.

                                  Article XIII

                         Waste, Governmental Regulations

         13.01    Waste or Nuisance. The Tenant shall not commit or suffer to be
committed any waste upon the Leased Premises or any nuisance or other act or
thing which may disturb the quiet enjoyment of any other tenant in Landlord's
Building or in the Shopping Center.

         13.02    Governmental Regulations. The Tenant shall, at Tenant's sole
cost and expense, comply with all of the requirements of all county, municipal,
state, federal and other applicable governmental authorities, now in force, or
which may hereafter be in force, pertaining to the Leased Premises, and shall
faithfully observe in the use of the Leased Premises and the Shopping Center all
municipal and county ordinances and state and federal statutes now in force or
which may hereinafter be in force.

                                   Article XIV

                                   Advertising

         14.01    Solicitation of Business. The Tenant and Tenant's employees
and agents shall not solicit business or place any signs or advertising devices
in the Common Areas and Facilities, nor 


                                      16


<PAGE>

shall the Tenant distribute any handbills or other advertising matter to 
automobiles parked in the parking areas or in other Common Areas and 
Facilities without permission from the Landlord.

         14.02    Advertised Name. Tenant agrees not to change its trade name or
the advertised name of the business operated in the Leased Premises without
Landlord's prior written consent unless such change is outside Tenant's control
or due to a change of ownership as permitted by the terms of this Lease.

         14.03    Promotional Activities. Tenant shall not use any portion of
the Common Areas and Facilities of the Shopping Center for promotional or
advertising activities without the prior written approval of the Landlord.

         14.04    Special Sales, Conduct of Business. No auction, fire removal,
closing, going-out-of-business or bankruptcy sales may be conducted in or from
the Leased Premises without the prior written consent of Landlord. Tenant will
not use the sidewalk or mall area adjacent to the Leased Premises for sale or
display of merchandise or wares, nor will it use any loudspeaker, phonograph,
radio or television for advertising in the Shopping Center in such manner that
it may be heard or seen outside the Leased Premises without first securing
Landlord's written consent.

                                   Article XV

                              Damage or Destruction

         15.01    Damage to Leased Premises Repairable Quickly. If the Leased
Premises shall be damaged or destroyed by any cause so as to be unfit for
occupancy and such damage or destruction could reasonably be repaired or rebuilt
within one hundred eighty (180) days from the happening of such damage or
destruction, then Tenant shall not be entitled to terminate this Lease nor shall
Tenant's liability to pay Rent under this Lease cease, but in the case of any
such damage or destruction Landlord shall repair or rebuild the same with all
reasonable speed, and substantially complete such repairs or rebuilding within
one hundred eighty (180) days from the happening of such damage or destruction,
subject to delays beyond its control. If Tenant shall be deprived of the
occupancy of any portion of the Leased Premises because of any such damage or
destruction, but can nevertheless reasonably continue to engage in its business,
a proportionate allowance shall be made to Tenant from the Minimum Rent and
Additional Rent corresponding to the time during which and to the portion of the
Leased Premises of which Tenant shall be deprived on account of such damage or
destruction and the making of such repairs. No Minimum Rent or Additional Rent
shall be payable during such period as Tenant shall be deprived of the occupancy
of the Leased Premises because of such damage or destruction or the effecting of
such rebuilding.

         15.02    Non Repairable Quickly. If such damage or destruction cannot
reasonably be repaired or rebuilt within one hundred eighty (180) days from the
happening thereof, Landlord shall notify Tenant within sixty (60) days after the
happening of such damage or destruction whether or not Landlord will repair or
rebuild. If Landlord elects not to repair or rebuild, and the estimated cost to
repair or rebuild is not greater than Five Hundred Thousand Dollars
($500,000.00), and provided Tenant's Gross Sales for the twelve (12) months
prior to the damage or destruction were not less than $3,5000,000, then Tenant
shall have the option to; (a) make such repair, or rebuild and amortize said
costs over the remaining life of the Lease as a reduction to percentage rent due
hereunder, but in no case reduce the percentage rent more than fifty percent
(50%) of the amount due or, (b) elect to terminate this Lease, in which event
the parties shall be relieved from their respective obligations which would
otherwise thereafter accrue. If Landlord shall elect to repair or rebuild,
Landlord shall specify the time within which such repairs or rebuilding will be
completed, and Tenant shall have the option within thirty (30) days after
receipt of such notice, to elect either to terminate this Lease or to extend the
term of the Lease by a period of time equivalent to the time from the happening
of such damage or destruction until the Leased Premises are restored to their
former condition. In the event Tenant elects to extend the Term of the Lease, or
shall fail to terminate this Lease within the time specified, Landlord shall
repair or rebuild the Leased Premises to their former condition within the time
specified in the notice (excluding Tenant's personal property or leasehold
improvements, changes or betterments to the Leased Premises made by or for
Tenant) subject to delays beyond its control, and Tenant shall be entitled to an
abatement of Minimum Rent and Additional Rent in the manner hereinbefore set
forth and this Lease shall continue in full force and effect.


                                       17


<PAGE>

         15.03    Damage to Leased Premises. If more than forty percent (40%) of
the rentable square footage of the Premises is destroyed or damaged by any
cause, and cannot be repaired in the time period set forth in Section 15.01,
Landlord shall have the option, upon giving notice to Tenant within sixty (60)
days after the happening of such damage or destruction to cancel this Lease as
of a date sixty (60) days after the giving of such notice.

         15.04    Uninsured Damage; Loss Near End of Term. Notwithstanding the
foregoing, in the event that damage or destruction of the Leased Premises shall
not result from any of the causes covered by Landlord's policies of fire and
extended coverage insurance as now or hereafter constituted, or if Landlord's
mortgagee does not make the applicable insurance proceeds available to Landlord,
or if such damage or destruction shall occur during the last two (2) years of
the original term or any extended term of this Lease, Landlord shall have the
election of repairing or rebuilding, in which event Tenant shall remain liable
under the Lease, or of terminating this Lease, in which event the parties shall
be relieved from their respective obligations which would otherwise thereafter
accrue. Landlord shall give Tenant notice within thirty (30) days after such
damage or destruction of its election.

                                   Article XVI

                                 Eminent Domain

         16.01    Taking. If, as a result of the taking by way of appropriation
or right of eminent domain (a "Taking") of any part of the Leased Premises,
Tenant's use of the Leased Premises for the conduct of its business therein is
materially adversely impaired, either party may terminate this Lease, in which
event the parties shall be relieved of all obligations hereunder thereafter
accruing. Tenant's use of the Leased Premises for the conduct of its business
shall be deemed to be "materially adversely impaired" if more than twenty
percent (20%) of the parking spaces on the Restaurant Parcel are taken. This
section (including Sections 16.02 and 16.03) shall not apply to the parking
spaces identified in paragraph 3 of Addendum #1 of this Lease.

         16.02    Award. All compensation awarded for any Taking, whether for
the whole or a portion of the Leased Premises or the Shopping Center, shall be
the sole property of Landlord, whether such compensation shall be awarded for
diminution in the value of, or loss of, the leasehold or for diminution in the
value of, or loss of, the fee in the premises, or otherwise, and Tenant hereby
assigns to Landlord all of Tenant's right, title and interest in any and to any
and all such compensation. This section shall not be applicable to an award for
Tenant's Furniture, Fixtures, Equipment, Improvements or Goodwill.

         16.03    Non-Termination. If there is a Taking of the Leased Premises
and the Lease does not terminate, the Minimum Rent and Additional Rent will be
reduced by that proportion which the number of square feet of the Leased
Premises of which Tenant is thereby deprived bears to the total square feet
encompassed within the entire Leased Premises immediately prior to such Taking.

                                  Article XVII

                                     Default

         17.01    Events of Default and Remedies. In the event that any
installment of Minimum Rent or Additional Rent shall be and remain unpaid for a
period of five (5) days after written notice by Landlord to Tenant; or in the
event Tenant shall at any time be in default in the observance or performance of
any of the other covenants, obligations, terms, or conditions assumed by or
imposed upon Tenant hereunder and such default continues for a period of fifteen
(15) days after written notice to Tenant of such default provided said default
is non monitory and Tenant can reasonably cure said default within said fifteen
(15) days; or if any waste be committed or unnecessary damage done upon or to
the Leased Premises; or if Tenant shall fail to remain open for business for
five (5) consecutive business days except for remodeling, approved by Landlord
or due to events beyond Tenant's control; or if any audit of Tenant's books and
records shall disclose a liability for annual Percentage Rent to the extent of
five percent (5%) or more in excess of the rentals theretofore computed and paid
by Tenant for any period (whether or not Tenant thereafter reimburses Landlord
for such deficiency); or if a temporary or permanent receiver or trustee of
Tenant's property or the 


                                      18


<PAGE>

property of any guarantor of this Lease ("Guarantor") be appointed by any 
court; or if Tenant or any Guarantor shall make any assignment for the 
benefit of creditors; or if any execution or attachment shall be issued 
against Tenant or any Guarantor or Tenant's leasehold interest hereunder and 
shall not be discharged within forty-five (45) days; or if Tenant shall 
commence proceedings in a court of bankruptcy or insolvency; or if Tenant or 
any Guarantor shall be declared or adjudicated bankrupt or insolvent 
according to law; or if any proceedings are commenced against Tenant or 
Guarantor in a court of bankruptcy or insolvency, which shall not be 
discharged within forty-five (45) days; then, and in any one or more of such 
events, Landlord shall be entitled, at its election, to exercise concurrently 
or successively, any one or more or all of the following rights and remedies:

         (a)      Without waiving such default, Landlord may pay any sum
required to be paid by Tenant to third parties other than Landlord and which
Tenant has failed to pay, and may perform any obligation required to be
performed by Tenant for the account of Tenant, and any amount so paid by
landlord shall bear interest thereon at the Default Rate. Any amount or amounts
paid by Landlord for the account of Tenant for the performance of any
obligations required to be performed by Tenant shall be treated as Additional
Rent due hereunder and Landlord may exercise concurrently or successively any
one or more of the rights and remedies contained in this Lease for the
enforcement of the payment of Rent;

         (b)      Landlord may enjoin any breach or threatened breach by Tenant
of the covenants hereof;

         (c)      Landlord may bring suit for the collection of the Rent or
other amounts for which Tenant may be in default, or for the performance of
any other covenant devolving upon Tenant for performance, or damages therefor,
all without entering into possession or terminating this Lease;

         (d)      Landlord may re-enter the Leased Premises by summary
proceedings or otherwise, and take possession thereof, without terminating this
Lease, and thereupon, to expel all persons and remove all property therefrom,
either peaceably or by force, without becoming liable to prosecution therefor,
and relet the Leased Premises making reasonable efforts therefor, for such
periods and upon such terms according to Landlord's sole discretion, and receive
the rent therefrom. Such rent shall be applied first to the payment of the
reasonable expenses of such re-entry and the cost of such reletting, including
but not limited to the expense of such decorations, alterations and remodeling
as shall be incident to such reletting, and then to the payment of the Rent and
other sums accruint hereunder, the balance, if any, to be retained by Landlord
as a security deposit against Tenant's defaults during the remainder of the Term
of this Lease. Tenant, whether or not the Leased Premises are relet, shall
remain liable for any deficiency, which deficiency shall be paid by Tenant to
Landlord, periodically, upon the successive days upon which the Rent hereunder
is payable.

         It is agreed that the commencement and prosecution of any action by
Landlord in forcible entry and detainer, ejectment or otherwise, or the
appointment of a receiver, or any execution of any decree obtained in any action
to recover possession of the Leased Premises, or any re-entry, shall not be
construed as an election to terminate this Lease unless Landlord shall, in
writing, expressly exercise its election to declare the term hereunder ended and
to terminate this Lease, and such re-entry or entry by Landlord, whether taken
under summary proceedings, or otherwise, shall not be deemed to have absolved or
discharged Tenant from any of its obligations and liabilities for the remainder
of the term of this Lease.

         (e)      Landlord may terminate this Lease, re-enter the Leased
Premises and take possession thereof, wholly discharged from this Lease. In the
event Landlord shall elect to terminate this Lease, as aforesaid, all rights and
obligations of Tenant shall cease, except that Landlord shall have and retain
full right to sue for and collect all Rent and other amounts for the payment of
which Tenant shall then be in default and all damages to Landlord by reason of
such breach, and Tenant shall surrender and deliver up the Leased Premises to
Landlord, together with all improvements and additions thereto, and upon any
default by Tenant in so doing, Landlord shall have the right to recover
possession by summary proceedings or otherwise, and to obtain a receiver and
other ancillary relief in such action, and again to have and enjoy the Leased
Premises, fully and completely, as if this Lease had never been made. Tenant
hereby expressly waives any and all rights of redemption granted by or under any
present or future laws in the event of Tenant being evicted or dispossessed for
any cause, or in the event Landlord obtains possession of the Leased Premises by
reason of the breach or violation by Tenant of any of the covenants and
conditions in 


                                     19


<PAGE>

this Lease contained or otherwise. No such expiration or termination of this 
Lease, or summary proceedings, abandonment or vacancy, shall relieve Tenant 
of its liability and obligation under this Lease, whether or not the Leased 
Premises shall be relet. In any such event Tenant shall pay Landlord the Rent 
and all other charges required to be paid by Tenant up to the time of such 
event. Thereafter:

                  (1)      Tenant, until the end of the term of this Lease, or
         what would have been such term in the absence of any such event, shall
         be liable to Landlord as damages for Tenant's default, the equivalent
         of the amount of the Rent, and the other charges which would be payable
         under this Lease by Tenant if this Lease were still in effect, less the
         net proceeds of any reletting, effected pursuant to the provisions of
         this Section, after deducting all Landlord's expenses in collection
         with such reletting, including, without limitation, all repossession
         costs, brokerage and management commissions, operating expenses, legal
         expenses, reasonably attorneys' fees, alterations, costs and expenses
         of preparation for such reletting.

                  (2)      Tenant shall pay such current damages (herein called
         "deficiency") to Landlord monthly on the days on which the Rent would
         have been payable under this Lease if this Lease were still in effect,
         and Landlord shall be entitled to recover from Tenant each monthly
         deficiency as the same shall arise.

         (f)      If Tenant shall at any time during the term hereof be adjudged
bankrupt, then this Lease, at the option of Landlord, shall terminate. Landlord,
in the event it exercises such option to terminate, shall be entitled to
receive, as liquidated damages, the difference between the Rent provided for
hereunder and the then rental value of the Leased Premises, which liquidated
damages shall, however, in no event be less than any sums or allowances to which
Landlord may be entitled at that time under any then existing statutes of the
State of California or the United States of America.

         (g)      All rights and remedies granted Landlord herein and any other
rights or remedies which Landlord may have at law or in equity are cumulative
and not exclusive, and the fact that Landlord may have exercised any remedy
without terminating this Lease shall not impair Landlord's rights thereafter to
terminate or to exercise any other remedy herein granted or to which it may be
otherwise entitled.

         (h)      For purposes of this Article, the Annual Percentage Rent for
any period when Tenant is out of possession following any event to which the
provisions of this Article are applicable shall be deemed, for each Lease year
during such period, to be at the rate equal to the greatest amount of Gross
Sales for any one Lease year prior to such time multiplied by the Annual Percent
that would be applicable under this Lease if Tenant was still in possession. If
this Article becomes applicable prior to the expiration of the first Lease Year,
then Tenant's average Gross Sales for the months prior to the invocation of this
Article shall be annualized for the purpose of determining "the greatest amount
of Gross Sales for any one Lease Year."

         17.02    Laches. No waiver of any covenant or condition or the breach
of any covenant or condition of this Lease shall be taken to constitute a waiver
of any subsequent breach of such covenant or condition, nor to justify or
authorize the non-observance on any other occasion of the same, or any other
covenant or condition hereof, nor shall the acceptance of Rent by Landlord at
any time when Tenant is in default under any covenant or condition hereof be
construed as a waiver of such default, nor shall any waiver or indulgence
granted by Landlord to Tenant be taken as an estoppel against Landlord. It is
expressly understood that if at any time Tenant shall be in default in any of
the covenants or conditions hereunder, an acceptance by Landlord of Rent during
the continuance of such default, or of the failure on the part of Landlord
promptly to avail itself of such other rights or remedies as Landlord may have,
shall not be construed as a waiver of such default; but Landlord may at any time
thereafter, if such default continues, take action it deems necessary on account
of such default, in the manner provided in this Article XVII. Every demand for
rent due wherever and whenever made, or demand for the performance or observance
of any of the other obligations devolving upon Tenant hereunder, shall have the
same effect as if made at the time it falls due and at the place of payment; and
after the service of any notice of commencement of any suit or final judgment
therein, Landlord may receive and collect any rent due, and such collection or
receipt shall not operate as a waiver of nor affect such notice, suit or
judgment.

         17.03    Self-help. If Tenant shall default in the performance or
observance of any agreement 


                                      20


<PAGE>

or condition in this Lease contained on its part to be performed or observed 
and shall not cure such default within fifteen (15) days after notice from 
Landlord specifying the default, or if such default shall reasonably take 
more than fifteen (15) days to cure, shall not have commenced the same within 
the fifteen (15) days and diligently prosecuted the same to completion, 
Landlord may, at its option, in addition to any other remedy specified 
herein, without waiving any claim for damages for breach of agreement, at any 
time thereafter cure such default for the account of Tenant and any amount 
paid or any contractual liability incurred by Landlord in so doing shall be 
deemed paid or incurred for the account of Tenant and Tenant agrees to 
reimburse promptly Landlord therefor and save Landlord harmless therefrom; 
provided that Landlord may, however, cure any such default as aforesaid prior 
to the expiration of such waiting period, if the curing of such default prior 
to the expiration of such waiting period is reasonably necessary to protect 
the Leased Premises or the Shopping Center or to prevent injury or damage to 
persons or property. If Tenant shall fail promptly to reimburse Landlord for 
any amount paid for the account of Tenant hereunder, such failure shall 
constitute an additional default by Tenant under this Lease and such amount 
shall be added to and become due as a part of the next payment of Rent due 
hereunder. If Landlord shall default in the performance or observance of any 
agreement or condition in this Lease on its part to be performed or observed 
and shall not cure such default within a reasonable period of time after 
receiving written notice thereof, and if the immediate curing of such default 
is necessary to protect the Leased Premises and to prevent injury to persons 
or to prevent substantial damage to property, Tenant may take reasonable 
action to cure Landlord's default, and Landlord shall reimburse Tenant 
therefor.

         17.04    Bankruptcy. If Landlord shall not be permitted to terminate
this Lease as provided above because of the provisions of Title II of the United
States Code relating to Bankruptcy, as amended ("Bankruptcy Code"), then Tenant
as a debtor-in-possession or any trustee for Tenant agrees promptly, within no
more than fifteen (15) days upon request by Landlord to the Bankruptcy court, to
assume or reject this Lease and Tenant on behalf of itself, and any trustee
agrees not to seek or request any extension or adjournment of any application to
assume or reject this Lease by Landlord with such Court. In such event, Tenant
or any trustee for Tenant may only assume this Lease if (a) it cures or provides
adequate assurance that the trustees will promptly cure any default hereunder,
(b) compensates or provides adequate assurance that Tenant will promptly
compensate Landlord for any actual pecuniary loss to Landlord resulting from
Tenant's defaults, and (c) provides adequate assurance of performance during the
fully stated term hereof of all of the terms, covenants, and provisions of this
Lease to be performed by Tenant. In no event after the assumption of this Lease
shall any then-existing default remain uncured for a period in excess of the
earlier of ten (10) days or the time period set forth therein. Adequate
assurance of performance of this Lease, as set forth above, shall include,
without limitation, adequate assurance [1] of the source of rent reserved
hereunder, [2] that any Annual Percentage Rent due hereunder will not decline
from the levels anticipated, and [3] the assumption of this Lease will not
breach any provision hereunder. In the event of a filing of a petition under the
Bankruptcy Code, Landlord shall have no obligation to provide Tenant with any
services or utilities as herein required, unless Tenant shall have paid and be
current in all payments of Landlord's Operating Costs, utilities or other
charges therefor.

                                  Article XVIII

                               Access by Landlord

         18.01    Right of Entry; For Lease Signs. The Landlord or the
Landlord's agents shall have the right to enter the Leased Premises upon
reasonable notice (except in the case of an emergency where no prior notice will
be required), to examine the same, and to show them to prospective purchasers or
lessees of the Leased Premises or the Shopping Center, to make such repairs,
alterations, improvements or additions as set forth elsewhere in this Lease; and
the Landlord shall be allowed to take all material into and upon such Leased
Premises that may be required therefor without the same constituting an eviction
of the Tenant in whole or in part and the Rent reserved shall be in no wise
abated while such repairs, alterations, improvements or additions are being
made, by reason of loss or interruption of business of the Tenant or otherwise.
Landlord or Landlord's agents shall use reasonable care not to interfere with
Tenant's business or Tenant's customers. During the six (6) months prior to the
expiration of the Term of this Lease or any renewal term, or at any time during
which Tenant has ceased to conduct its business with the public, the Landlord
may place upon the Leased Premises the usual notices "For Rent" or "For Sale,"
which Tenant shall permit to remain thereon without molestation. If the Tenant
shall not be personally present to open and permit an entry into the Premises,
at any time, when for any reason an entry therein shall be necessary or


                                      21


<PAGE>

permissible, the Landlord or the Landlord's agents may enter the same peaceable
or by force, without rendering the Landlord or such agents liable therefor, and
without in any manner affecting the obligations and covenants of this Lease.
Nothing herein contained, however, shall be deemed to impose upon the Landlord
any responsibility or liability whatsoever, for the care, maintenance or repair
of the Leased Premises, Landlord's Building or any part thereof, except as
otherwise herein specifically provided.

         18.02    Excavation. If an excavation shall be made upon land adjacent
to the Leased Premises, or shall be authorized to be made, the Tenant shall
afford to the person causing or authorized to cause such excavation, license to
enter upon the Leased Premises for the purpose of doing such work as the
Landlord shall deem necessary to preserve the wall or walls of Landlord's
Building from injury or damage and to support the same by proper foundations,
without any claim for damages or indemnification against the Landlord or
diminution or abatement of Rent. Such excavation shall be performed, as
reasonably possible, during times Tenant is not open for business, but in any
case except emergencies or other situations beyond Landlord's control shall not
interfere with Tenant's business or hinder Tenant's customers from entering
Tenant's parking area or entering the Leased Premises. Excepting work performed
by governmental authorities or other circumstances unavoidable if Tenant owned
the Leased Premises, any reduction in Tenant's ability to operate its business
for more than twenty-four (24) hours shall result in a corresponding reduction
in Rent and Additional Rent in proportion to the amount of verifiable sales
lost. Landlord shall indemnify and hold Tenant harmless for any claims and costs
incurred by Tenant as a result of such excavation by Landlord, or Landlord's
other Tenants if approved by Landlord.

                                   Article XIX

                                Tenant's Property

         19.01    Loss and Damage. The Landlord shall not be responsible for any
damage to the property of the Tenant or of others located on the Leased
Premises, nor for the loss of or damage to any property of the Tenant or of
others by theft or otherwise excepting Landlord's willful misconduct or
negligent acts. The Landlord shall not be liable for any injury or damage to
persons or property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water, rain or snow, or leaks from any part of the Leased Premises,
or from the pipes, appliances or plumbing works, or from the roof, street or
sub-surface, or from any other place, or by any other cause whatsoever of any
nature excepting Landlord's willful misconduct or negligent acts. The Landlord
shall not be liable for any such damage caused by other tenants or persons who
are occupants of adjacent property, or of the Shopping Center, or the public, or
caused by operations in construction of any private, public or quasipublic work
excepting Landlord's willful misconduct or negligent acts. The Landlord shall
not be liable for any latent defects in the Leased Premises or in Landlord's
Building. All property of the Tenant kept or stored on the Leased Premises shall
be so kept or stored at the risk of the Tenant only, and the Tenant shall hold
the Landlord harmless from any claims arising out of damage to the same.

         19.02    Notice by Tenant. The Tenant shall give immediate notice to
the Landlord in case of fire or accidents in the Leased Premises and of defects
therein.

                                   Article XX

                            Holding Over, Successors

         20.01    Holding Over. Should Tenant, with Landlord's written consent,
hold over at the end of the Term of this Lease, Tenant shall become a Tenant at
will and any such holding over shall not constitute an extension of this Lease.
During such holding over, Tenant shall pay Rent (including Percentage Rent) and
other charges at the highest monthly rate provided for herein. If Tenant holds
over at the end of the Term without Landlord's written consent, Tenant shall pay
Landlord as liquidated damages, a sum equal to twice the Rent (including
Percentage Rent) to be paid by Tenant to Landlord for all the time Tenant shall
so retain possession of the Premises; provided that the exercise of the
Landlord's rights under this clause shall not be interpreted as a grant of
permission to Tenant to continue in possession.

         20.02    Successors. All rights, duties and liabilities herein given
to, or imposed upon, the 

                                       22


<PAGE>

respective parties hereto, shall extend to and bind the several respective 
heirs, executors, administrators, successors, and assigns of the said 
parties; and if there shall be more than one tenant, they shall all be bound 
jointly and severally by the terms, covenants and agreements herein. No 
rights, however, shall inure to the benefit of any assignee of the Tenant 
unless the assignment to such assignee has been approved by the Landlord in 
writing as provided in Section 12.01 hereof.

                                   Article XXI

                                 Quiet Enjoyment

         21.01    Landlord's Covenant. Landlord covenants and agrees that if
Tenant shall perform all of the covenants and agreements herein stipulated to be
performed on Tenant's part, Tenant shall at all times during the Term hereof
have the peaceable and quiet enjoyment and possession of the Leased Premises and
the appurtenances thereto without any manner of hindrance from Landlord or any
persons lawfully claiming through Landlord, and it is understood and agreed that
this covenant and all other covenants of Landlord contained in this Lease shall
be binding solely upon Landlord and not any partner thereof and its successors
in interest only with respect to breach occurring during its and their
respective ownership of the Landlord's interest hereunder.

         21.02    Landlord's Liability. Notwithstanding anything to the contrary
in this Lease, it is specifically agreed that the monetary liability of any
Landlord hereunder in the event of a breach by the Landlord of any of the terms,
covenants and conditions of this Lease to be performed by Landlord or in the
event of any other claim by Tenant against Landlord, whether under this Lease,
imposed by statute, or existing at common law, in respect of any matter related
to, arising out of or occurring in connection with this Lease, the Leased
Premises, the Shopping Center or their relationship to each other as landlord
and tenant, shall be limited to and enforceable solely against the Landlord's
interest in the Shopping Center and that no personal or other money judgment
shall be sought or obtained against Landlord or any partners or shareholders
thereof.

                                  Article XXII

                                  Miscellaneous

         22.01    Entire Agreement. This Lease and the Exhibits attached hereto
and forming a part hereof, set forth all the covenants, promises, agreements,
conditions and understandings between the Landlord and Tenant, concerning the
Leased Premises and there are no covenants, promises, agreements, conditions or
understandings, either oral or written, between them other than are herein set
forth. Except as herein otherwise provided, no subsequent alteration, amendment,
change or addition to this Lease shall be binding upon the Landlord or Tenant
unless reduced to writing and signed by them.

         22.02    No Partnership. The Landlord does not by virtue of this Lease,
in any way or for any purpose, become a partner of the Tenant in the conduct of
its business, or otherwise, or joint venturer or a member of a joint enterprise
with the Tenant. The provisions of this Lease relating to the Annual Percentage
Rent payable hereunder are included solely for the purpose of providing a method
whereby rent is to be measured and ascertained.

         22.03    Cost and Expense. Whenever this Lease provides for the doing
of any act by any party, such act shall be done by such party at its sole cost
and expense unless a contrary intent is expressed.

         22.04    Force Majeure. In the event that Landlord shall be delayed or
hindered in or prevented from the performance of any act required hereunder by
reason of strikes, lock-outs, labor troubles, inability to procure materials,
failure of power, restrictive governmental laws or regulations, riots,
insurrection, war or other reason of a like nature not the fault of the Landlord
in performing work or doing acts required under the terms of this Lease, then
performance of such act shall be excused for the period of delay and the period
for the performance of any such act shall be extended for a period equivalent to
the period of such delay. In the event that Tenant shall be delayed or hindered
in or prevented from the performance of any act required hereunder by reason of
failure of power, restrictive governmental laws or regulations, riots,
insurrection, war or other reason of a like nature 


                                      23


<PAGE>


not the fault of the Tenant in performing work or doing acts required under 
the terms of this Lease, then performance of such act shall be excused for 
the period of delay and the period for the performance of any such act shall 
be extended for a period equivalent to the period of such delay.

         22.05    Notices. Any notice, demand, request or other instrument which
may be or are required to be given under this Lease shall be in writing and
delivered in person or sent by United States certified mail, return receipt
requested, postage prepaid, and shall be addressed to the Landlord at 16168
Beach Blvd., Suite 200, City of Huntington Beach, State of California, or at
such other address as the Landlord may designate by written notice, and if to
Tenant, at 3780 Kilroy Airport Way, Suite 200, Long Beach, California 90806
(Attention: Ernest T. Klinger), with a copy to: 26131 Marguerite Pkwy., Suite A,
Mission Viejo, California 92692 (Attention: Paul Motenko) or at such other
address as the tenant shall designate by written notice (the "Tenant Notice
Address"). Notices shall be effective upon delivery unless delivery is refused
or cannot be made in which event notice shall be effective upon mailing.

         22.06    Captions and Section Numbers. The captions, section numbers,
article numbers, and table of contents appearing in this Lease are inserted only
as a matter of convenience and in no way define, limit construe, or describe the
scope or intent of such sections or articles or this Lease nor in any way affect
this Lease.

         22.07    Tenant Defined, Use of Pronoun. The word "Tenant" shall be
deemed and taken to mean each and every person or party mentioned as a Tenant
hereunder, be the same one or more, and if there be more than on Tenant, any
notice required or permitted by the terms of this Lease may be given by or to
any one thereof, and shall have the same force and effect as if given by or to
all thereof. The use of the neuter, singular pronoun to refer to the Landlord or
to the Tenant shall be deemed a proper reference even though the Landlord or the
Tenant may be an individual, a partnership, a corporation, or a group of two or
more individuals or corporations. The necessary grammatical changes required to
make the provisions of this Lease apply to the plural sense where there is more
than one Landlord or Tenant and to either corporations, associations,
partnerships, or individuals, males or females, shall, in all instances, be
assumed as though in each case fully expressed.

         22.08    Broker's Commission. Each of the parties represents and
warrants that there are no claims for brokerage commissions or finder's fees in
connection with this Lease, except a commission payable to CB Richard Ellis and
Ira Spilky & Associates which fee shall be paid by the Landlord pursuant to a
separate agreement between Landlord and CB Richard Ellis; and each of the
parties agrees to indemnify the other against and hold it harmless from all
liabilities arising from any breach of its respective warranty (including,
without limitation, the cost of counsel fees in connection therewith).

         22.09    Partial Invalidity. If any term, covenant or condition of this
Lease or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term, covenant or condition to persons or circumstances
other than those to which it is held invalid or unenforceable, shall not be
affected thereby, and each term, covenant and condition of this Lease shall be
valid, and be enforced, to the fullest extent permitted by law.

         22.10    No Option. The submission of this Lease for examination does
not constitute a reservation of or option for the Leased Premises and this Lease
becomes effective as a lease only upon the execution and delivery thereof by
both the Landlord and the Tenant.

         22.11    Recording. The Tenant shall not record this Lease without the
written consent of the Landlord. However, upon the request of either party
hereto, the other party shall join in the execution of a memorandum or so-called
"short form" of this Lease to the purpose of recordation. Such memorandum or
short form of this Lease shall describe the parties, the Leased Premises and the
Term of this Lease and shall incorporate this Lease by reference. The party
requesting such short form lease shall pay all recording fees.

         22.12    Joint and Several Liability. If Tenant is a partnership or
other business organization the members of which are subject to personal
liability, the liability for each such member shall be deemed to be joint and
several. If Tenant is individual persons, then the individual persons 


                                      24


<PAGE>

comprising Tenant shall be liable for all obligations of Tenant under this 
Lease.

         22.13    Confidentiality. Tenant shall keep the contents of this Lease
confidential and shall not disclose the contents of this Lease in any manner
whatsoever, except that (i) Tenant may make any disclosure of information
contained in this Lease to which Landlord gives its prior written consent, and
(ii) any information contained in this Lease may be disclosed to Tenant's
Representatives who need to know that information for the purpose of assisting
Tenant in connection with its business at the Premises and who agree in writing
to keep that information confidential. Tenant shall be responsible for any
breach of the provisions of this Section by any of its Representatives. The term
"Representatives" as used in this Section of the Lease means Tenant's directors,
officers, partners, employees, attorneys, accountants and bankers.

         If Tenant or its Representatives receive a request to disclose all or
any part of the contents of this Lease under the terms of a subpoena or other
order issued by a court of competent jurisdiction or by a government agency,
Tenant shall: (i) promptly notify Landlord of the existence, terms and
circumstances surrounding such request; (ii) consult with Landlord on the
advisability of taking steps to resist or narrow that request; (iii) if
disclosure of any portion of this Lease is required, furnish only such portion
of this Lease as Tenant is advised by counsel is legally required to be
disclosed; and (iv) cooperate with Landlord in its efforts to obtain an order or
other reliable assurance that confidential treatment will be accorded to that
portion of the Lease that is required to be disclosed.

         The parties hereto agree to protect, indemnify, defend and hold
harmless each other from any damages or other adverse consequences that the
injured party may incur or suffer as a result of a breach of the covenants
contained in this Section of the Lease. In addition, both parties understand,
acknowledge and agree that any breach of the provisions of this Section on the
part of either party or its Representatives shall constitute a default under
this Lease. The provisions of this Section shall survive the expiration or
earlier termination of the Term of this Lease.

         22.14    Exhibits. The exhibits enumerated in this Section and attached
hereto are incorporated herein by reference and made a part hereof.

         Exhibit A.   Drawing depicting location and configuration of the Leased
                      Premises and the Shopping Center

         Exhibit B.   Gross Sales Report

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

TENANT:                                 LANDLORD:

CHICAGO PIZZA & BREWERY, INC.,          HUNTINGTON EXECUTIVE PARK,
a California Corporation                a California Limited Partnership

                                        BY:    HUNTINGTON CAPITAL CORP.,
                                               a California Corporation
BY:                                            General Partner
   ---------------------------------
                                        BY:
                                           ------------------------------------
DATE:                                         Everett J. Dodge, President
     -------------------------------
                                        DATE:
                                             ----------------------------------
                                       25




<PAGE>

                                      LEASE

               THIS AGREEMENT ("Lease") is made as of ____________________,
2000, by and between EASTLAND SHOPPING CENTER LLC, a Delaware limited liability
company, having its principal office at 11601 Wilshire Boulevard, 12th Floor,
Los Angeles, 90025-1748 ("Landlord") and Chicago Pizza & Brewery, Inc., a
California corporation, having its principal office at 26131 Marguerite Pkwy.,
Suite A, Mission Viejo, California, 92692 ("Tenant").

                              PRELIMINARY STATEMENT

                  In consideration of the rents and covenants hereinafter set
forth, Landlord hereby leases to Tenant, and Tenant hereby rents from Landlord,
a portion of the land located in a shopping center development (the "Center")
known as Westfield Shoppingtown Eastland, located in West Covina, California
(which shopping center is legally described in Exhibit A, attached hereto and
made a part hereof and shown on the site plan attached hereto as Exhibit B and
made a part hereof), designated as "Tenant's Site" on Exhibit B ("Tenant's
Site"), for remodeling thereof of an existing building consisting of
approximately 12,000 square feet of Floor Area (collectively "Tenant's
Building") and all rights, privileges, benefits, rights of way, easements and
appurtenances which are herein or hereafter granted to Tenant or which
 are
otherwise appurtenant thereto (all collectively hereinafter referred to as the
"Premises").

                                    ARTICLE I

                               CERTAIN DEFINITIONS

As used in this Lease, the following terms have the following respective
meanings:

         SECTION 1.01.     INTENTIONALLY DELETED

         SECTION 1.02. COMMON AREA. The term "Common Area" means all areas
within the boundaries of the Center that presently are or will be made available
from time to time for the non-exclusive use, convenience and benefit of all
"Occupants", as defined in Section 1.09, and their respective "Permittees", as
defined in Section 1.12.

         Among other things, Common Area shall include: (i) the "Parking Area",
as defined in Section 1.11; (ii) sidewalks and walkways; (iv) landscaped and
planted areas; (v) all curbs and lighting standards, traffic and directional
signs and traffic striping and markings located within the Center; and (vi) all
utility and sewer lines and systems and other facilities serving the Center,
excluding those which specifically serve the Premises.

         SECTION 1.03. FLOOR AREA. The term "Floor Area" as used in this Lease
means with respect to the Premises 12,000 square feet, and with respect to any
other leasable area in the Center the aggregate number of square feet of floor
space of all floor levels therein, including any mezzanine space, measured from
(i) the outside faces of all perimeter walls thereof other than any party wall
separating such premises from other leasable premises, (ii) the center lines of
any such party wall, (iii) the outside face of any interior wall, and (iv) the
building and/or leaseline adjacent to any entrance to such premises.

         SECTION 1.04. INSURANCE REQUIREMENTS. The term "Insurance Requirements"
means all orders, rules, regulations and requirements of the applicable board of
fire underwriters, if any, or of any other board exercising similar functions,
and the requirements of all policies of insurance required to be carried by
Tenant or Landlord under this Lease, now or hereafter applicable to the Premises
or the Center, as the case may be.

         SECTION 1.05. LANDLORD'S FISCAL YEAR. The term "Landlord's Fiscal Year"
shall mean a period of twelve (12) full consecutive calendar months, presently a
period from January 1 - December 31, a so-called "calendar year", which period
Landlord may modify from time to time.


                                       1


<PAGE>


         SECTION 1.06. LEASE TERM. The term "Lease Term" shall mean the period
from the Opening Date to the expiration of the "Initial Term", as defined in
Section 3.01. "Lease Term" shall also be deemed to include any "Option
Period(s)", as defined in Section 3.02, as to which Tenant's option to extend
the term hereof has been properly exercised.

         SECTION 1.07. LEASE YEAR. The term "Lease Year" shall mean each
successive period of twelve (12) consecutive calendar months, commencing on the
first day of each January during the Lease Term. Any portion of the Lease Term
which is less than a full Lease Year, including, without limitation, the period
from the Opening Date through December 31st occurring thereafter, shall
constitute a "Partial Lease Year."

         SECTION 1.08. LEGAL REQUIREMENTS. The term "Legal Requirements" means
all laws, ordinances, requirements, orders, directions, certificates of
occupancy, rules and regulations of federal, state, county and local
governments, and of all other governmental authorities having jurisdiction
thereof, now or hereafter applicable to the Premises, the Center or both, as the
case may be.

         SECTION 1.09. OCCUPANT. The term "Occupant" or "Occupants" means
Landlord and any other Person entitled by lease or other instrument or
arrangement to use and occupy Floor Area within the Center, or one or some of
them, as the context may require.

         SECTION 1.10. OPENING DATE. The "Opening Date" shall be deemed to be
March 1, 2000.

         SECTION 1.11. PARKING AREA. The term "Parking Area" means all areas in
the Center which are set apart or used for the passage and parking of motor
vehicles and for pedestrian traffic incidental thereto, whether on grade or by
way of parking decks, including without limitation, traffic lanes, aisles, and
roadways, vehicle parking stalls, walkways, curbs, gutters and landscaping
within or adjacent to any such areas, grade separations, including beams and
retaining walls, within or adjacent to said areas, lighting standards, traffic
and directional signs, traffic striping and markings, and all other improvements
which at any time are erected on such areas for the purpose of accommodating the
foregoing uses.

         SECTION 1.12. PERMITTEES. The term "Permittees" means all Occupants and
their respective officers, directors, employees, agents, partners, contractors,
customers, visitors, invitees, licensees and concessionaires.

         SECTION 1.13. PERSON. The term "Person" and the term "Persons" mean
individuals, partnerships, firms, associations, corporations and any other form
of business organization, or one or more of them, as the context may require.

         SECTION 1.14. POSSESSION DATE. The "Possession Date" shall be the date
upon which Landlord shall deliver actual and exclusive possession of the
Premises to Tenant with Landlord's Work (as defined in Section 6.01)
substantially completed.

         SECTION 1.15. TANGIBLE NET WORTH. The term "tangible net worth" means
the excess of total consolidated assets over total consolidated liabilities,
total consolidated assets and total consolidated liabilities each to be
determined in accordance with generally accepted accounting principles
excluding, however, from the determination of total consolidated assets, all
assets which would be classified as excess of cost over the less of equity or
investment in subsidiaries or at the parent company level and any premium paid
in excess of assets acquired, all as determined under generally accepted
accounting principles.

         SECTION 1.16. TENANT'S FAULT. The term "Tenant's Fault" shall mean
Tenant's or its agent's, contractor's or employee's negligence or willful
misconduct or failure to comply with Legal Requirements or Tenant's breach of
this Lease (including but not limited to Tenant's failure to timely submit plans
and specifications for Landlord's approval as required herein).

                                   ARTICLE II

                                       2


<PAGE>



                               DEMISE OF PREMISES

         SECTION 2.01. DEMISE. Landlord, subject to the terms and conditions
hereof and for the Term herein set forth and for and in consideration of the
rents and covenants herein to be paid, kept and performed by Tenant, hereby
leases to Tenant and Tenant hereby takes and hires from Landlord the Premises.

         SECTION 2.02. RIGHTS TO USE COMMON AREAS. Landlord hereby grants to
Tenant, its Permittees and their successors and assigns, for the benefit of the
Premises, an easement during the entire Term hereof to use all portions of the
Common Areas of the Center (including without limitation the Parking Areas), for
the purpose, consistent with the permitted uses herein, of (a) unobstructed
ingress to and egress from the Premises to and from other portions of the
Center; (b) for the passage and parking of vehicles; (c) for the passage and
accommodation of pedestrians; and (d) for the purpose of performing any work
permitted under this Lease or exercising any other rights of Tenant which are
granted under this Lease, such easements to be in common with Landlord, its
Permittees and those Occupants of the Center from time to time authorized by
Landlord to use the Common Areas for such purposes. The nature of the use of the
respective portions of the Common Areas shall be limited to the uses intended
for such portions from time to time. The foregoing easement:

               (i) Shall be irrevocable unless otherwise specified during the
               term hereof; (ii) Shall be non-exclusive unless otherwise
               specified; (iii) Shall be appurtenant and not easements in gross;
               and (iv) Shall expire upon the expiration or the earlier
               termination hereof, or as otherwise specified in this Lease.


                                   ARTICLE III

                                      TERM

         SECTION 3.01. TERM. This Lease shall commence on the date hereof and
extend through January 31, 2010 (the "Initial Term"). Following the Opening Date
the parties shall enter into an agreement in recordable form setting forth such
date.

         SECTION 3.02. OPTIONS TO EXTEND. Provided Tenant is not in default of
this Lease beyond any applicable cure period and Tenant is open for business to
the public in accordance with Article VII of this Lease, Tenant shall have the
option to extend the Lease Term for one ( 1) successive period of five (5) years
(the "Option Period"). The option to extend as to the Option Period shall be
exercisable by written notice given to Landlord no later than one hundred eighty
(180) days prior to the expiration of the Initial Term Tenant shall have no
right to extend or renew this Lease other than for the aforesaid Option Period.
Any cancellation or termination of this Lease shall terminate Tenant's right to
the Option Period. Time is of the essence with respect to any exercise of the
Option Period by Tenant. If Tenant timely exercises the option to extend as to
an Option Period, the Lease Term shall be automatically extended upon all of the
same terms and conditions except Fixed Rent and Percentage Rent shall be as set
forth in Section 4.02 and Section 4.03 hereof. Notwithstanding the foregoing,
Landlord may reject as invalid any notice attempting to exercise the foregoing
option as to the Option Period or may cancel the Option Period within 30 days of
its inception if Tenant is in default of the provisions of this Lease (i) on the
date the notice exercising such option is received or (ii) on the date the
Option Period commences, unless Tenant has cured such default or commenced such
cure and is diligently prosecuting it to completion, within said thirty (30) day
period.


                                   ARTICLE IV

                                      RENT

                                       3


<PAGE>


         SECTION 4.01. RENT PAYMENT OBLIGATION. From and after the Opening Date
and throughout the Lease Term, Tenant shall pay to Landlord the sums set forth
in this Article as Rent, in lawful money of the United States, without any
notice, demand, offset, deduction or counterclaim whatsoever. The term "Rent"
shall be deemed to include "Fixed Rent" (as described in Section 4.02 hereof),
"Percentage Rent" (as described in Section 4.03 hereof) and all additional sums
payable by Tenant to Landlord pursuant to this Lease ("Additional Rent"). All
payments of Rent shall be payable to Landlord as follows: Payee: EASTLAND
SHOPPING CENTER LLC: Eastland File #54738 7, Los Angeles, California 90074-4738,
or such other place as Landlord may designate from time to time, in writing.

         SECTION 4.02. FIXED RENT 
(a) Tenant shall pay Landlord as "Fixed Rent" the following:

         1) from Opening Date through February 28, 2001 Two Hundred Thirty Three
Thousand and Sixty and 00/100 Dollars ($233,060.00), payable in equal
consecutive monthly installments of Nineteen Thousand Four Hundred Twenty One
and 67/100 Dollars ($19,421.67) ("Period 1");

         2) from March 1, 2001 through August 31, 2002 Two Hundred Seventy
Thousand and Sixty and 00/100 Dollars ($270,060.00), payable in equal
consecutive monthly installments of Twenty Two Thousand Five Hundred and Five
and 00/100 Dollars ($22,505.00) (hereinafter "Period 2");

         3) from September 1, 2002 through September 30, 2007 Two Hundred Ninety
Five Thousand and Sixty and 00/100 Dollars ($295,060.00), payable in equal
consecutive monthly installments of Twenty Four Thousand Five Hundred and Eighty
Eight and 33/100 Dollars ($24,588.33)(hereinafter "Period 3"); and

         4) from October 1, 2007 through January 31, 2010 Three Hundred Twelve
Thousand and Sixty and 00/100 Dollars ($312,060.00), payable in equal
consecutive monthly installments of Twenty Six Thousand and Five and 00/100
Dollars ($26,005.00) (hereinafter "Period 4"); and

         5) for the Option Period Three Hundred Forty One Thousand Four Hundred
and Thirty Five and 00/100 Dollars ($341,435.00), payable in equal consecutive
monthly installments of Twenty Eight Thousand Four Hundred and Fifty Two and
92/100 Dollars ($28,452.92) (hereinafter "Period 5").

         Fixed Rent shall be paid monthly in advance on or before the first day
of each month during the Lease Term, except that if the Opening Date is not the
first day of a calendar month, Fixed Rent for the period from the Opening Date
to the last day of the month in which the Opening Date occurs shall be
apportioned on the basis of a 365-day year and paid on the first day of the
following month.


         SECTION 4.03.  PERCENTAGE RENT.

         (a) Tenant shall pay to Landlord, as "Percentage Rent", a sum equal to
6.00% of "Gross Sales", as defined in Section 4.04 herein, in excess of the
following "Annual Breakpoint(s)":

         1) $1,883,334.00 during each Lease Year of Period 1;
         2) $2,500,000.00 during each Lease Year of Period 2;
         3) $2,916,666.00 during each Lease Year of Period 3;
         4) $3,200,000.00 during each Lease Year of Period 4; and
         5) $3,689,583.00 during each Lease Year of Period 5.


                                       4


<PAGE>



         (b) Percentage Rent shall be payable to Landlord within sixty (60) days
after the end of each Lease Year.

         (c) In the event the payment of Percentage Rental shall be applicable
for less than a full consecutive twelve (12) month period (such partial lease
year hereinafter to be referred to as the "portion period"), payment of
Percentage Rental for such portion period(s) shall be determined as follows. In
the event a given Lease Year contains less than a full consecutive twelve (12)
month period (such partial lease year hereinafter to be referred to as the
"portion period"), Percentage Rent for such portion period(s) shall be
determined as follows. The Annual Breakpoint shall be applied to the full twelve
(12) month period succeeding the commencement of the portion period or the
twelve (12) month period preceding the last day of the portion period if there
is not a twelve (12) month period succeeding the commencement of the portion
period, such Annual Breakpoint, shall hereinafter be referred to as the "Special
Annual Breakpoint". Percentage Rental due for such portion period shall be
calculated by determining the amount by which 6.00% of Gross Sales during such
twelve (12) month period exceeds the applicable Special Annual Breakpoint and
multiplying such amount by a fraction, the numerator of which shall be the
number of days in the portion period and the denominator of which shall be 365.
Percentage Rental for such portion period shall be payable within the sixty (60)
days after the expiration of the applicable twelve (12) month period, along with
the Tenant's statement of Gross Sales for such period as provided in Section
4.03 of this Lease.

                  SECTION 4.04.  GROSS SALES.

         (a) The term "Gross Sales" as used herein shall be construed to include
the entire amount of the actual sales price, whether for cash or otherwise, of
all sales of food, beverages, merchandise or services and other receipts
whatsoever of the business conducted in or from the Premises by Tenant, any
subtenant, licensee or concessionaire of Tenant or otherwise, including, without
limitation: mail, catalogue, closed circuit television, computer, other
electronic or telephone orders received or filled at the Premises; all deposits
not refunded to purchasers; and the entire amount of the actual sales price and
all other receipts for sales and services by Tenant, any subtenant, licensee or
concessionaire of Tenant or otherwise, in or from the Premises. A "sale" shall
be deemed to have been consummated for the purposes of this Lease, and the
entire amount of the sales price shall be included in Gross Sales, at such time
as (i) the transaction is initially reflected in the books or records of Tenant
or any subtenant, licensee or concessionaire of Tenant, or (ii) Tenant or any
subtenant, licensee or concessionaire of Tenant receives all or any portion of
the sales price, or (iii) the applicable goods or services are delivered to the
customer, whichever first occurs, irrespective of whether payment is made in
installments, the sale is for cash or for credit, or all or any portion of the
sales price has actually been paid at the time of inclusion in Gross Sales or at
any other time.

         (b) Notwithstanding anything to the contrary contained in subsection
(a) hereinabove, Gross Sales as defined herein shall be adjusted by excluding
the following:

                  (1) The selling price of all merchandise sold in or from the
Premises returned by customers and accepted for full credit or the amount of
discounts and allowance thereon, or the price allowed on all merchandise traded
in by customers for credit or the amount of credit for discounts and allowances
made in lieu of acceptance thereof;

                  (2) Goods returned to sources, including shippers or
manufacturers, or transferred to another store or warehouse owned by or
affiliated with Tenant (where such exchange of goods or merchandise is made
solely for the convenient operation of the business of Tenant and not for
purposes of consummating a sale which has theretofore been made in or from the
Premises and/or for the purposes of depriving Landlord of the benefit of a sale
which otherwise would be made in or from the Premises);

                  (3)      Alteration workroom charges and delivery charges;

                  (4) Interest, service or sales carrying charges or other
charges, however denominated, paid by customers for the extension of credit on
sales and where not included in the merchandise sales price;


                                       5


<PAGE>


                  (5) Receipts from public telephones, stamp machines, public
toilet locks, or vending machines installed solely for use by Tenant's
employees;

                  (6) Sales taxes, so-called luxury taxes, consumers' excise
taxes, gross receipts taxes and other similar taxes now or hereafter imposed
upon the sale of merchandise or services, but only if collected separately from
the selling price of goods, merchandise or services and collected from
customers;

                  (7) Sales of trade fixtures or equipment which are not stock
in trade, or the proceeds from a bulk sale (made out of the ordinary course of
Tenant's business at the Premises);

                  (8) Gift certificates, or like vouchers, until such time as
the same shall have been converted into a sale by redemption;

                  (9) Uncollected accounts in an amount not to exceed two
percent (2%) of Gross Sales per annum as written off by Tenant as bad debts for
income tax purposes, provided, however, that such bad debt amounts shall be
deducted or excluded from Gross Sales in the Lease Year in which they are
written off; if any amount previously written off as a bad debt is later
collected, in whole or in part, the amount collected shall be included in Gross
Sales in the Lease Year in which collected;

                  (10) Sales to employees at discounted or reduced prices,
provided said exclusion for discounted merchandise shall not exceed two percent
(2%) of Gross Sales per annum; and

                  (11) The sums and credits received in settlement of claims for
loss or damaged merchandise.

         SECTION 4.05. TENANT'S RECORDS.

         (a) Tenant shall prepare and keep full, complete and proper books and
source documents, in accordance with Generally Accepted Accounting Principles,
of the Gross Sales, whether for cash, credit or otherwise, of each separate
department at any time operated within the Premises and of the operations of
each subtenant, concessionaire, licensee and/or assignee, and shall require and
cause all such parties to prepare and keep books, source documents, records and
accounts sufficient to substantiate those kept by Tenant. All of such books and
source documents shall be open to inspection of, and may be copied or extracted
from, in whole or in part, by Landlord or Landlord's authorized representative
or agent at any time within three (3) years after the expiration of the subject
Lease Year at Tenant's accounting officeupon ten (10) days written notice.

         (b) Tenant shall furnish to Landlord, within fifteen (15) days after
the end of each month of each Lease Year, a statement of the amount of Gross
Sales made from the Premises during the applicable period. Tenant shall also
furnish to Landlord, within sixty (60) days after the expiration of each Lease
Year, a complete statement, certified by the chief financial officer or chief
executive officer or outside accountant employed by Tenant, showing in all
reasonable detail the amount of such Gross Sales made by Tenant from the
Premises during the preceding Lease Year or Partial Lease Year. Tenant shall
require all of its subtenants, concessionaires, licensees and/or assignees, if
any, to furnish a similar statement.

          (c) Notwithstanding the acceptance by Landlord of payments of Rent,
Landlord shall have the right to audit all Rent and other charges actually due
hereunder. Landlord may at any time upon ten (10) days' prior written notice to
Tenant, but not more than frequent than once per year cause a complete audit ()
to be made by an auditor selected by Landlord of the entire records and
operations of Tenant and/or any subtenants, concessionaires, licensees and/or
assignees relating to the Premises for the period covered by any statement
issued or required to be issued by Tenant or a concessionaire.. Tenant shall
make available to Landlord's auditor at the Premises or at Tenant's principal
accounting office in the United States, within ten (10) days following
Landlord's notice requiring such audit, all of the books, source documents,
accounts, records and 


                                       6


<PAGE>


sales tax reports of Tenant and any of its concessionaires which such auditor 
deems necessary or desirable for the purpose of making such audit. If such 
audit discloses that Premises' Gross Sales as previously reported for the 
period audited were understated, Tenant shall immediately pay to Landlord the 
additional percentage rental due for the period audited. Further, if such 
understatement was in excess of two percent (2%) of the Premises' actual 
Gross Sales as disclosed by such audit, Tenant shall immediately pay to 
Landlord the cost of such audit, and if such understatement was in excess of 
ten percent (10%) of Premises' Gross Sales as disclosed by such audit, 
Landlord may declare this Lease terminated, in which event this Lease shall 
cease and terminate on the date specified in such notice with the same force 
and effect as though the date set forth in such notice were the date set 
forth in this Lease for expiration of the Lease Term, and Tenant shall vacate 
and surrender the Premises on or before such date in the condition required 
by this Lease for surrender upon the expiration of the Lease Term.

         SECTION 4.06.  REAL ESTATE TAXES.

         (a) Landlord shall be responsible for the payment of all Taxes that may
be imposed or become a lien on any portion of the Center (including the
Premises). As used herein, the term "Taxes" shall mean any and all taxes,
surcharges, assessments, levies, fees and other governmental charges and
impositions of every kind or nature, regular or special, direct or indirect,
presently foreseen or unforeseen or known or unknown, levied or assessed by
municipal, county, state, federal or other governmental taxing or assessing
authority (i) upon, against or with respect to the real estate upon which the
Center, or any part of it, is located and to any improvements located in the
Center, and (ii) any other taxes which Landlord becomes obligated to pay with
respect to the Center, irrespective of whether the same are assessed as real or
personal property; expressly excluding however, any taxes, surcharges,
assessments, levies, fees and other governmental charges and impositions which
are used by the taxing authority to construct capital improvements to the Center
or surrounding areas as a condition of constructing, or as a means of financing,
any improvements other than the Premises. Nothing contained in this Lease shall
be deemed or construed to require Tenant to pay or discharge any tax which may
be levied upon the net income or profits of the Landlord or any franchise,
inheritance, gift, succession or estate taxes which may be levied against the
estate or interest of the Landlord, or any personal property taxes which may be
levied against the personal property of Landlord, as distinguished from items
used in the operation and maintenance of the Center.

         (b) Taxes shall not include any estate, inheritance, succession,
corporate franchise, personal property taxes, taxes on any fixtures or
inventory, transfer, income or excess profit tax, which is in fact personal to
Tenant, or any personal property taxes which may be levied against the personal
property of Landlord, as distinguished from items used in the operation and
maintenance of the Center.


                      [THIS SECTION DELETED INTENTIONALLY]


                                       7


<PAGE>



                        [THIS PAGE DELETED INTENTIONALLY]

                                    ARTICLE V

                                       8


<PAGE>

                                      SIGNS

         SECTION 5.01.  SIGNS.

         Tenant, at Tenant's sole cost and expense, shall have the right to
place, maintain or replace any professionally prepared signs on the interior of
the Premises without notice or approval of Landlord. Subject to approval by all
governmental authorities and further subject to Landlord's approval of design,
exact location, color scheme, style, content (other than any registered
trademark or trade name), materials, and lighting, Tenant, at Tenant's sole cost
and expense, shall have the right to place, maintain or replace signs upon the
exterior elevations of the Premises. "Signs", for the purpose of this Article V
shall not include banners, balloons or other similar advertising medium. Tenant
shall not install, erect or maintain any sign in violation of any Legal
Requirements. Tenant shall pay all costs of fabricating, constructing, operating
and maintaining such signs including, without limitation, all charges for
electricity. Tenant shall keep said signs well lighted and shall maintain said
sign in good condition and repair during the entire Term. Tenant shall remove
all of its signs upon the expiration or sooner termination of this Lease within
ten (10) days after such expiration or termination, and Tenant at its own
expense shall repair any damage caused by the removal thereof by Tenant.

                                   ARTICLE VI

                                  CONSTRUCTION

         SECTION 6.01.     AS-IS CONDITION.

         (a) Tenant will take possession of the Premises in an "as-is",
"where-located" condition, on the Possession Date, as defined hereinbelow Tenant
acknowledges that neither Landlord, nor any agent, employee or servant of
Landlord, has made any representation or warranty, expressed or implied, with
respect to the Premises and Common Areas or the Center, or with respect to the
suitability of them to the conduct of Tenant's business, nor has Landlord agreed
to undertake any modifications, alterations, or improvements of the Premises or
Common Areas except as specifically provided in this Lease.

         SECTION 6.02. PREPARATION OF PLANS. Within thirty (30) days after the
Execution Date, Tenant, at its expense, shall submit to Landlord, preliminary
plans and specifications prepared by Tenant's architect or engineer, with
respect to the remodeling of the Existing Building and addition to Tenant's
Building and any applicable common area improvements such as sidewalks and
landscaping ("Preliminary Plans"). Landlord shall approve or disapprove the
Preliminary Plans fifteen (15) within days, specifying with particularity the
exact reason for any such disapproval ("Landlord's Notice"). In the event of
disapproval Landlord and Tenant shall immediately start working together in good
faith to reach agreement and within twenty (20) days of Tenant's receipt of
Landlord's Notice Tenant shall, at its expense, prepare working drawings and
specifications ("Building Plans") and submit same for approval by Landlord which
approval shall not be unreasonably withheld. The Building Plans shall be
prepared substantially in accordance with the approved Preliminary Plans.
Landlord shall give Tenant written notice within fifteen (15) days after receipt
of the Building Plans, of its approval or disapproval thereof (stating with
reasonable particularly the exact reason for any such disapproval). Disapproval
shall be based upon any reasonable objections thereto arising from
non-compliance with the Preliminary Plans. In the event of disapproval, Tenant
shall revise the Building Plans and shall re-submit them to Landlord, with
Landlord's approval or disapproval to be subject to the manner and time set
forth above for the submission of the Preliminary Plans. Tenant shall perform
the work set forth in the final approved Building Plans ("Tenant's Work") within
the time period as set forth in Section 6.04 of this Lease. During the
construction Tenant may from time to time make minor variations to the approved
Building Plans provided same (i) do not materially reduce the structural
soundness of Tenant's Building, (ii) are in all respects in compliance with all
Legal Requirements, and (iii) otherwise conform to the terms and conditions set
forth in the approved Building Plans. Notwithstanding the above, any changes to
the approved Building Plans which will affect the structural integrity or alter
the exterior of Tenant's Building, shall require Landlord's prior written
consent thereto, which consent shall not be unreasonably withheld or delayed. In
the event (i) Tenant fails to submit the Preliminary Plans or Building Plans or


                                      9


<PAGE>


revision thereof, at the times required herein (or as same may have been
extended by written agreement of Landlord and Tenant) or (ii) Landlord and
Tenant, acting in good faith, cannot agree on the Preliminary Plans or Building
Plans within the time periods provided (as same may have been extended by
written agreement of Landlord and Tenant) then either party shall have the right
to terminate this Lease, by written notice to the other party, which termination
shall be effective thirty (30) days after receipt of such written notice,
provided that within such thirty (30) day period, Landlord and/or Tenant shall
have the right to cure such failure in which event, the Lease termination shall
be null and void, and this Lease shall continue in full force and effect.

         SECTION 6.03.     PERMITS.

         (a) Promptly after receipt of Landlord's approval of the Building
Plans, Tenant shall apply for and diligently pursue, at Tenant's expense, any
"Permits" (hereinafter defined) necessary to perform Tenant's Work.

         (b) As used in this Lease, the term "Permits" shall mean any and all
permits, approvals, consents, certificates or licenses necessary to commence and
complete Tenant's Work, (or, as the case may be, any "Alterations", as defined
in Section 12.01 hereof), including, but not limited to, construction,
development and building permits. Landlord shall cooperate in Tenant's efforts
to obtain licenses and permits and shall sign such reasonable documents as shall
be reasonably required by or convenient for the applicable governmental
authority.

         SECTION 6.04.     PERFORMANCE OF TENANT'S WORK.

         (a) Tenant, promptly after satisfaction or all Legal Requirements, the
obtaining of the Permits, and furnishing Landlord with evidence of the insurance
required by Article XIII, shall commence, and proceed with due diligence, to
perform Tenant's Work in accordance with the final approved Building Plans and
complete Tenant's Work and open for business to the public fixturized and
adequately staffed. Without limitation on the foregoing, in the event Tenant is
unable to open for business within one hundred twenty (120) days after receipt
of Permits (subject to force majeure), Tenant shall provide written notice to
Landlord on or before said date, explaining the reason for the delay in opening
for business, the actions which Tenant is proceeding with towards opening for
business and the date Tenant expects to open for business in the Premises.

         (b) Tenant shall perform Tenant's Work in a good and workmanlike manner
under the supervision of a licensed architect or engineer and in all respects in
accordance with applicable Legal Requirements and the Permits.

         (c) Representatives of Landlord and Tenant, which representatives shall
be designated in writing by each party to the other, shall establish and attend
on-site progress meetings with such periods of frequency during the period of
construction, as may be mutually agreed between Landlord and Tenant.

         (d) Tenant shall perform Tenant's Work so as not to (i) unreasonably
interfere with any other construction being performed at the Center or, (ii)
unreasonably impair the use, occupancy or enjoyment at the Center by any
Occupant and/or its Permittees. Landlord shall perform Landlord's Work so as not
to (i) unreasonably interfere with Tenant's Work or, (ii) unreasonably impair
the use, occupancy or enjoyment of the Premises by Tenant and/or its Permittees.

          (e) Tenant shall take all safety measures reasonably required to
protect Landlord and its Permittees and the Center from injury or damage caused
by or resulting from the performance of Tenant's Work, including, if requested
by Landlord, erecting, at its sole cost and expense, a temporary security fence
surrounding the Premises and the Tenant's staging area (if one is shown on
Exhibit B) during the period of Tenant's Work.

         (f) Tenant shall defend, protect, indemnify and hold harmless Landlord
and the Occupants and Permittees of the Center from any and all Claims (as
defined in Section 14.05 of this Lease) arising from or in connection with the
death of or accident, injury, loss or damage 


                                      10


<PAGE>

whatsoever caused to any natural person or to the property of any Person 
arising out of, or in connection with, or as a result of such Tenant's Work.

         (g) Tenant shall repair any damage to the Parking Areas, Common Areas
and/or other portions of the Center as a result of Tenant's Work, unless
otherwise expressly agreed herein to be undertaken by Landlord.

         SECTION 6.05.     UTILITIES.

         Tenant shall be responsible for providing and for paying for charges
for temporary utilities required by Tenant during the course of Tenant's Work.
Landlord shall cooperate with Tenant in arranging for such temporary utilities.

         SECTION 6.06. NO LIENS. Tenant shall keep Premises and the Center free
from any and all liens arising out of any work performed, materials furnished,
or obligations incurred by or for Tenant and/or its sublessees. Tenant shall,
within thirty (30) days following the imposition of any such lien, cause the
same to be released of record by payment or posting of a bond or by causing a
reputable national title insurance company to "insure over" any and all such
liens. Tenant shall defend, protect, indemnify and hold Landlord harmless from
and against all mechanics', materialmen's, and laborers' liens and all Claims
arising from or in connection with Tenant's Work. Upon Tenant's failure to take
action as above provided, the Landlord shall have the right (at its sole
option), after the giving of notice and the expiration of the applicable grace
period (or a reasonably shorter period in the case of an imminent threat of
foreclosure), at the cost and expense of Tenant (plus interest at the Interest
Rate defined in Section 26.08), to take any action above provided. Tenant shall
reimburse Landlord for such costs, expenses and accrued interest within fifteen
(15) days after demand therefor.


                                   ARTICLE VII

                                       USE

         SECTION 7.01.     USE.

         (a) Permitted Use. Tenant shall occupy and use the Premises only for
the purpose of conducting therein the following business: may only be used and
occupied as a full table service, sit-down, brew pub style restaurant featuring
pizza and items consistent with the menu attached hereto as Exhibit E, serving
liquor, beer and wine for on-premises consumption, and for no other use
whatsoever (the "Permitted Use"); and Tenant may sell clothing and novelty-type
merchandise related to its business, provided that such sales are incidental to
the operation of the restaurant and limited to 500 square feet of Floor Area.
Tenant may prepare package or sell any food item or beer at the Demised Premises
for on-premises, or if desired by Tenant, off-premises, consumption.

         (b) Tenant shall do business on the Demised Premises under the trade
name: "BJ's Pizza, Grill & Brewery" and under no other trade name without
Landlord's consent which shall not be unreasonably withheld.

         SECTION 7.02.  OPERATION OF BUSINESS.

         (a) Tenant agrees to be open for business and to operate in the
Premises during the entire Term within 120 days following receipt of the Permits
and subject to Articles XIV, XV, Force Majuere and closure for remodeling and
alterations, and to actively and diligently conduct its business at all times in
a first class and reputable manner. Tenant shall not use or allow the Premises
to be used for any improper, immoral or objectionable purposes or do any act
tending to injure the reputation of the Center. No auction, liquidation, going
out of business, fire or bankruptcy sale may be conducted or advertised by sign
or otherwise in the Premises. Tenant 

                                       11


<PAGE>


shall not use the Common Areas adjacent to the Premises for sales or 
advertising purposes. All major receiving and delivery of goods and 
merchandise for the Premises, and all removal of merchandise, supplies, 
equipment, trash, garbage and debris and all storage of trash, garbage and 
debris from the Premises shall be made only from the loading dock area 
serving the Premises. Tenant shall not use or permit the use of any portion 
of the Premises as sleeping quarters, or lodging rooms.

         (b) In connection with the sale of alcoholic beverages by Tenant, (i)
Tenant shall at all times maintain, at its sole cost, all licenses, permits,
governmental authorizations and approvals in connection therewith, Landlord
making no representation or warranty hereunder with respect to Tenant's ability
to obtain the same; and (ii) Tenant's liability insurance under Section 14.04
shall specifically include dram shop and liquor liability insurance covering
consumption of alcoholic beverages by customers of Tenant.

         SECTION 7.03 COMMUNICATION EQUIPMENT. Tenant has the right to install a
satellite dish and/or other electronic transmitter on the roof of Tenant's
Building provided same is in compliance with all Legal Requirements and screened
in a manner so as not to be visible from the Common Areas. The cost of
installation and maintenance thereof, and the cost of any repairs to the roof
which are necessitated by the installation and/or repair of the satellite dish
transmitter shall be borne solely by Tenant. Tenant agrees to coordinate such
installments or repair with Landlord's roofing contractor. Upon the termination
of this Lease, Tenant has the right to remove any satellite dish or electronic
transmitter (and shall remove same at Landlord's request) but Tenant shall
repair any damage to the roof occasioned by such removal.


                                  ARTICLE VIII

                              ASSIGNMENT/SUBLETTING

         SECTION 8.01.     PROHIBITED TRANSFERS.

         (a) Except as specifically provided below and subject to Landlord's
right to terminate also set forth below, notwithstanding any provision contained
herein to the contrary or reference herein to concessionaires, licensees,
subtenants, assignees or otherwise, except as provided herein, Tenant agrees not
to assign, encumber or in any manner transfer this Lease or any estate or
interest therein, and not to lease or sublet the Premises or any part or parts
thereof or any right or privilege appurtenant thereto, and not to allow anyone
to conduct business upon or from the Premises (whether as concessionaire,
franchisee, assignees, licensee, permittee, subtenant, department operator,
manager or otherwise), or to come in, by, through or under it, in all cases
either by voluntary or involuntary act of Tenant or by operation of law
(including by merger or reorganization) or otherwise. Any such prohibited act by
Tenant (or any attempt at same), either voluntarily or involuntarily or by
operation of law or otherwise, shall at Landlord's option (as set forth in this
section)terminate this Lease, and any such purported act shall be null and void.
The voluntary or other surrender of this Lease by Tenant, or mutual cancellation
thereof, shall not work a merger and shall, at the option of Landlord, terminate
all or any existing franchises, concessions, licenses, permits, subleases,
subtenancies, departmental operating arrangements, management agreements or the
like, or may, at the option of Landlord, operate as an assignment to Landlord of
the same. Nothing contained elsewhere in this Lease shall authorize Tenant to
enter into any franchise, concession, license, permit, subtenancy, departmental
operating arrangement, management agreement or the like except pursuant to the
provisions of this Section. Landlord has entered into this Lease with Tenant in
order to obtain for the benefit of the Center the unique attraction of Tenant's
trade name and the unique merchandising mix and product line associated with
Tenant's business and the foregoing prohibition on assignment or subletting or
the like is expressly agreed to by Tenant as an inducement to Landlord to rent
the Premises to Tenant.

         (b) Subject to all of Landlord's rights set forth in this Section 8.01
including Landlord's unrestricted right to terminate if it rejects a proposed
assignee, transferee or sublessee for any reason, Tenant shall have the right,
with the prior written consent of Landlord to assign or transfer this Lease or
sublet the Premises provided all the following conditions are met: (i) Tenant
shall not be in default under this Lease; (ii) any assignment or subletting
shall remain fully subject to all of 


                                      12


<PAGE>


the terms, covenants and conditions of this Lease, including without 
limitation this Section 8.01 and the use of the Premises described pursuant 
to Section 7.01; (iii) any assignee or subtenant shall have a net worth 
reasonably acceptable to Landlord; (iv) any assignment or subletting shall be 
for not less than the entire Premises; and (v) any assignee or subtenant 
shall have experience in operating and managing a business of the type it 
intends to operate and shall have a good reputation in the retail commercial 
community for the same. Tenant shall provide Landlord with a copy of any 
document providing for such assignment or sublease, together with all related 
documents pertaining to the terms of such assignment or subletting. 
Regardless of whether such assignment or sublease provides for the assignee 
or subtenant to make rental and other payments directly to Landlord, and 
regardless of Landlord's consent, no assignment or subletting shall release 
Tenant from any of Tenant's obligations under this Lease, nor alter the 
primary liability of Tenant to make rental payments and to perform all other 
obligations of Tenant under this Lease. The acceptance of rent by Landlord 
from any person other than Tenant shall not be deemed to be a waiver by 
Landlord of any provisions of this Section 8.01. In the event of any default 
by any assignee, transferee or subtenant, direct or indirect, of Tenant, 
Landlord shall have the right to proceed directly against Tenant without the 
necessity of joining or exhausting its remedies against such assignee, 
transferee or subtenant. Landlord, at its option, may likewise proceed 
directly against such assignee, transferee or subtenant, either in its own 
name or (as regards recovery of the Premises) in the name and right of 
Tenant, without the necessity of joining or exhausting its remedies against 
Tenant.

         (c) In the event Landlord shall consent to an assignment or subletting,
the Fixed Rent specified in Section 4.02 of this Lease shall be increased on the
effective date of such assignment or subletting to a rate consistent with the
then current rental rate for a new lease for similar premises. . All Fixed Rent,
and Percentage Rent and other payments paid or payable to be made by any
assignee, transferee or subtenant shall be made to Landlord for the sole benefit
of Landlord. In the event of any attempted assignment or subletting of the
Premises undertaken without the prior written consent of Landlord, Landlord
shall, in addition to other remedies provided at law and in this Lease, be
entitled to the entire amount of rent and/or other payments or consideration
payable by such assignee, transferee or subtenant, including all amounts in
excess of the Rent provided for in this Lease. Tenant shall pay all of
Landlord's reasonable costs, expenses and reasonable fees of its attorney(s) in
connection with any assignment or transfer of this Lease or subletting of the
Premises.

       (d) Notwithstanding any other provision of this Section 8.01, Landlord
may reasonablyreject Tenant's proposed assignee, subtenant or transferee, by
written notice to Tenant. Landlord shall be obligated to set forth any reasons
for its rejection. As the result of Landlord's rejection, Landlord shall have
the right to terminate this Lease by sending written notice of such termination
to Tenant, which notice must be sent within ninety (90) days following the date
of Landlord's notice of rejection of the proposed assignee, subtenant or
transferee. Tenant shall have the right within ten (10) days of receipt of any
termination notice from Landlord sent in accordance with the provisions of this
subsection (d) to void Landlord's notice of termination by sending written
notice to Landlord that it withdraws its request for transfer, assignment or
subletting and stating that Tenant intends to continue to operate the Premises
in accordance with the terms and conditions of this Lease.. Tenant acknowledges
and agrees that each of the rights of Landlord set forth herein in the event of
a proposed transfer, assignment or subletting is a reasonable restriction for
purposes of applicable laws. Landlord and Tenant agree that Tenant shall have
the burden of proving that Landlord's consent to a proposed transfer, assignment
or subletting was withheld unreasonably. Landlord shall have no liability to
Tenant or to any proposed transferee, assignee or sublessee in damages if it is
adjudicated that Landlord's consent shall have been unreasonably withheld and/or
that such unreasonable withholding of consent shall have constituted a breach of
this Lease or other duty to Tenant, the proposed transferee, assignee or
sublessee or any other Person. In such event, Tenant's sole remedy shall be to
have the proposed transfer, assignment or subletting declared valid, as if
Landlord's consent had been duly and timely given.

         SECTION 8.02. AFFILIATE TRANSFERS. Notwithstanding anything to the
contrary contained herein, Tenant may assign this Lease or sublet the Premises
without Landlord's consent and without otherwise affecting this Lease to an
affiliate of Tenant or to a successor to Tenant. As used herein, the term
"affiliate" shall include any individual, corporation, partnership, association
or other business entity that directly, or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with
Tenant. As used herein a "successor" shall include any successor by merger,
consolidation, corporate reorganization or operation of law, or the 


                                      13


<PAGE>


purchaser of all or substantially all of the corporate stock or assets of 
Tenant. The sale or transfer of Tenant's stock or assets shall not be deemed 
an assignment hereunder.

         Notwithstanding anything to the contrary contained herein, Tenant may
also assign this Lease or sublet the Premises without Landlord's consent to
Franchisor, as defined hereinbelow.



                                   ARTICLE IX

                  REPAIRS AND MAINTENANCE OF TENANT'S BUILDING

         Subject to all other terms and provisions of this Lease, Tenant shall,
at its sole cost and expense, keep and maintain the Premises and Tenant's
Building, including without limitation, the roof, foundation, HVAC systems,
utility lines and systems within and exclusively serving the Premises, and
building equipment, together with any and all alterations, additions and
improvements therein or thereto permissible under this Lease, in first-class
order, appearance, condition and repair consistent with the prevailing practices
in first-class regional shopping centers in the proximate geographical area as
the Center, except for ordinary wear and tear, and shall, at Tenant's expense,
make all repairs and replacements as may be necessary in order to keep and
maintain said improvements in such order, condition and repair, including
structural and non-structural and interior and exterior repairs and
replacements, foreseen and unforeseen, ordinary and extraordinary, and
regardless of the time remaining to the expiration of the term hereby granted.
All such repairs and replacements shall be of good quality sufficient for the
proper maintenance and operation of Tenant's Building and shall be constructed
and installed in compliance with all Legal Requirements and Insurance
Requirements. Tenant shall provide to Landlord, within fifteen (15) days of
written demand, proof reasonably satisfactory to Landlord that the cleaning and
maintenance of grease traps, pans and hood ventilators located in or serving
Tenant's Building is being responsibly performed. Tenant agrees to reimburse
Landlord the cost of maintenance and repair to utility lines and systems which
exclusively serve the Premises, located outside the Premises' leaseline to the
extent such maintenance and repair are required as a result of Tenant's
negligence or willful misconduct.



                                    ARTICLE X

                              COMPLIANCE WITH LAWS

         Tenant shall at all times during the Lease Term and at its own cost and
expense, promptly observe, conform to and comply with all Legal Requirements and
Insurance Requirements applicable to its occupancy of the Premises, and any
Tenant's Work and any work done or any change, alteration or improvement
thereto, ordinary or extraordinary, foreseen and unforeseen, whether or not such
compliance shall require structural repairs, additions, changes or alterations.
Tenant shall also procure each and every permit, license, certificate or other
authorization required in connection with the lawful occupancy of the Premises.
Tenant further agrees (i) to comply with all applicable covenants and
restrictions affecting the Premises, (ii) not to interfere materially and
adversely with the use and enjoyment of any other parties to the non-exclusive
easements set forth in Section 2.02, provided that the use and enjoyment of such
other parties does not interfere materially and adversely with the use and
enjoyment by Tenant of such easements, Landlord hereby agrees to use best
efforts to ensure that such other parties do not materially and adveresly
interfere with the use and enjoyment by Tenant of such easements; and (iii) to
use the easements set forth in Section 2.02 in a manner consistent with the
character of the Center from time to time.

                                   ARTICLE XI

                           UTILITIES AND TRASH REMOVAL

         Tenant shall be solely responsible for, and shall pay the cost of,
utilities services consumed on the Premises by Tenant to the furnishers of each
utility service when and as due. In 


                                      14


<PAGE>


addition, Tenant shall be solely responsible for and shall promptly pay for 
all services required for trash removal from the Premises.

                                   ARTICLE XII

                                   ALTERATIONS

         SECTION 12.01. ALTERATIONS BY TENANT. After Tenant's Work has been
completed and the Premises are open for business, Tenant shall have the right
without Landlord's approval to make such changes, alterations, or additions
(hereinafter "Alterations") to the interior of Premises of a non-structural
nature. Other Alterations, including those of a structural nature or which
impact the exterior of the Premises shall require Landlord's prior written
approval. Tenant shall submit complete working drawings and specifications to
Landlord at least ten (10) business days prior to the commencement of work for
any Alterations which require Landlord's approval and Landlord will promptly
review such drawings consistent with the time and manner set forth in 6.02 for
the Building Plans.


        SECTION 12.02. ADDITIONAL REQUIREMENTS. All Alterations shall be made
promptly (subject to Force Majeure), in a good and workmanlike manner, in
compliance with all Legal Requirements and Insurance Requirements and at
Tenant's cost and expense. No Alterations shall be undertaken until Tenant shall
have procured and paid for, so far as the same may be required, all necessary
Permits. Upon completion of any Alteration, Tenant shall obtain and deliver to
Landlord a copy of an amended Certificate of Occupancy, if required by Legal
Requirements, and a copy of the new Building Plans therefor.


                                  ARTICLE XIII

                                    INSURANCE

         SECTION 13.01.  FIRE AND CASUALTY COVERAGE

         Tenant, at its sole cost and expense, shall procure from responsible
insurance companies, and keep in full force and effect during the Lease Term,
insurance at full replacement value insuring Tenant's Building and the
inventory, merchandise, trade fixtures, furnishings, equipment and all other
items of personal property of Tenant located on or in the Premises (collectively
"Tenant's Personal Property"), including steam boiler insurance, if applicable
insured with responsible insurance companies (who are qualified to write
insurance and conduct business in the state in which the Premises are located
and has (have) at a minimum a rating of A in Bests Rating Guide, hereinafter
referred to as "Responsible Insurance Companies") against fire, extended
coverage, vandalism, malicious mischief, water damage which does not exclude
backup from sewers or drains and/or sprinkler leakage, and such other additional
perils as now are or hereafter may be included in a standard extended coverage
endorsement insuring in no event for less than one hundred percent (100%) of the
full replacement value of such improvements exclusive of the cost of
foundations, excavations, and footings below the lowest basement floor. Tenant
shall also maintain insurance boiler and machinery insurance located on the
Premises in an amount not less than Two Million Dollars ($2,000,000.00) per
accident written on a replacement basis and affording blanket coverage on all
boilers, fired and unfired pressure vessels, gas and steam turbines, electrical
generators, internal combustion engines, miscellaneous electrical apparatus,
refrigerating systems, and motors and compressors.

             SECTION 13.02. WAIVER OF RIGHT OF RECOVERY. Except as otherwise
provided in this Lease, neither Landlord nor Tenant shall be liable to the other
or to any insurance company (by way of subrogation or otherwise) insuring the
other party for any loss or damage to any building, structure or other tangible
property, or any resulting loss of income, or losses under worker's compensation
laws and benefits, even though such loss or damage might have been occasioned by
the negligence of such party, its agents or employees. The provisions of 


                                      15


<PAGE>

this Section 13.02 shall not limit the indemnification for liability to third 
parties pursuant to Section 13.05.

         SECTION 13.03. PAYMENT AND DISPOSITION OF INSURANCE PROCEEDS. The
insurance proceeds paid to Tenant by reason of damage to or destruction of
Tenant's Personal Property shall be used by Tenant to restore damage or
destruction to Tenant's Personal Property.

         SECTION 13.04.  LIABILITY COVERAGE.

         (a) Tenant shall carry or cause to be carried, at all times during the
Term hereof, with Responsible Insurance Companies, (1) comprehensive general
liability insurance or commercial general liability insurance, including motor
vehicle liability insurance, covering claims for injuries, death and property
damage to persons and property arising out of accidents or incidents occurring
in, upon or about the Premises, any other areas within the Shopping Center that
Tenant has rights to use thereof, (2) workers' compensation coverage as required
by law and (3) Employer's Liability Insurance in the amount of Two Million
Dollars ($2,000,000.00). All insurance policies evidencing the foregoing
insurance (and any other policies required to be carried by Tenant hereunder)
shall include Landlord and any other parties designated from time to time by
Landlord as additional named insureds with the exception of (2) hereinabove.

         (b) Landlord shall carry or cause to be carried, at all times after the
execution hereof, with Responsible Insurance Companies, comprehensive general
liability insurance or commercial general liability insurance, including motor
vehicle liability insurance, covering any and all claims for injuries, death and
property damage to persons and property arising out of accidents or incidents
occurring in, upon or about the Common Area and all structures and other
improvements (other than the Premises) situated in the Shopping Center.

         (c) Such insurance, as carried by each of Landlord and Tenant, shall
have a combined single limit of Three Million Dollars ($3,000,000.00) for
personal injury and property damage liability. Landlord and Tenant each further
agree to maintain Contractual Liability Insurance insuring their respective
obligations set forth in Section 13.05, with the same limits as provided in this
Section 13.04.

         (d) In the event Tenant retains any security guard to service the
Premises, Tenant shall cause Landlord to receive a customary waiver of
subrogation under the worker's compensation insurance policy covering such
security guard. No such security guard shall be permitted to carry a firearm
upon the Premises or Center, and Landlord shall have the right to impose
additional reasonable insurance requirements upon Tenant and/or such security
guard, which shall be complied with by Tenant and Tenant shall provide Landlord
with evidence of such compliance prior to the posting of such security guard at
the Premises.

         SECTION 13.05. INDEMNIFICATION. Tenant shall indemnify, protect, defend
and hold harmless Landlord, its partners, shareholders, representatives,
management company, agents and employees, from and against any and all claims,
costs, actions, expenses (including reasonable attorneys' fees), losses, damage,
injuries and liabilities of whatever kind or nature, known or unknown, foreseen
or unforeseen, contingent or otherwise (collectively called "Claims") arising
from or out of or in any way relating to (a) the death of or any accident,
occurrence, injury, loss or damage whatsoever caused to any natural person or to
the property of any Person as shall occur in any part of the Premises (except to
the extent such Claims arise from or in connection with any negligence or
willful misconduct of Landlord or its employees, servants or agents), (b) the
negligent acts or omissions or willful misconduct of Tenant or any of its
Permittees, including any product liability claim or any labor dispute involving
Tenant or any of its Permittees, and (c) Tenant's failure to comply with any
provision of this Lease.

         Landlord shall indemnify, protect, defend and hold Tenant harmless from
all Claims arising from or in connection with the death of or any accident,
occurrence, injury, loss or damage whatsoever caused to any natural person or to
the property of any Person as shall occur 


                                      16


<PAGE>



in any part of the Common Area (except to the extent such Claims arise from 
or in connection with Tenant's Fault).

         In the case of any third-party suit, proceeding, claim or assertion
being made against a party hereto, in respect of which indemnity may be sought
against the other party (the "indemnifying party"), the party against whom such
suit, proceeding, claim or assertion is made (the "indemnified party") shall
cooperate with the indemnifying party in determining the validity of such claim
or assertion. The indemnifying party shall have the right to control the conduct
of the defense of such matter with counsel reasonably satisfactory to the
indemnified party (it being understood that counsel approved by the indemnifying
party's insurer shall be deemed to be reasonably satisfactory counsel). The
indemnified party shall have the right, at its expense, to participate in such
defense with counsel of its choice; provided, however, that the indemnifying
party shall bear the reasonable fees and expenses of such counsel if
representation by such counsel is appropriate in view of possible or actual
conflicts of interest of counsel to the indemnifying party. The indemnified
party shall not settle or compromise any third-party suit, proceeding, claim or
assertion for which such party will seek indemnification hereunder from the
other party hereto without the prior consent of the indemnifying party (which
consent may be granted or withheld in the sole and absolute discretion of the
indemnifying party). The indemnifying party may not settle or compromise any
third party suit, proceeding, claim or assertion if such settlement involves
anything other than the payment of money, without the prior written consent of
the indemnified party (which consent may be granted or withheld in the sole and
absolute discretion of the indemnified party).

       SECTION 13.06. INSURANCE REQUIREMENTS. Each party shall deliver to the
other party from time to time upon request certificates of the insurance
required to be maintained under this Article. Each policy required to be carried
by Tenant pursuant to this Article XIII shall contain the following clauses and
provisions: (a) a provision that such policy and the coverage evidenced thereby
shall be primary and non-contributing with respect to any policies carried by
Landlord and that any coverage carried by Landlord be excess insurance; (b) a
provision including Landlord and any other party designated by Landlord from
time to time as additional insureds, as their interests may appear; at the
present time, such additional insureds are set forth on Exhibit D, attached
hereto and made a part hereof; (c) a waiver by the insurer of any right to
subrogation against Landlord and such other additional insured entities which
arises or might arise by reason of any payment under such policy or by reason of
any act or omission of Landlord, its agents, employees or representatives; (d) a
severability of interest clause or endorsement; (e) a provision that the insurer
will not cancel or change the coverage provided by such policy without giving
Landlord at least ten (10) days' prior written notice; and (f) such policy shall
be an "occurrence form" policy.

         SECTION 13.07. BUILDERS RISK INSURANCE. During any period of
construction, reconstruction, alteration, or remodeling of Premises, Tenant
shall at its sole expense, maintain or cause to be maintained, in full force and
effect, until completion of any construction, a policy of builders risk
insurance (on a non-reporting and completed value basis) covering respectively
Tenant's Work (or Alterations) as the same is constructed, such policy naming
Landlord as an additional insured.

         SECTION 13.08. SELF-INSURANCE; "BLANKET POLICIES". At any time, but
only for so long as the party obligated to carry insurance hereunder maintains a
tangible net worth of at least One Hundred Million Dollars ($100,000,000.00) (as
evidenced by that party's most recent financial statement prepared in accordance
with generally accepted accounting principles consistently applied), such party
may self-insure for any risk required to be insured hereunder, provided (a) that
such party's aggregate annual self-insurance retention for such party's
obligations hereunder shall not exceed five percent (5%) of its tangible net
worth, and (b) such party carries umbrella coverage in excess of its permitted
self-insurance retention, up to the limits required to be insured against by
such party under this Lease. Each of Tenant and Landlord may satisfy their
obligations under Sections 13.01, 13.04, 13.05, 13.06 and 13.07, in whole or in
part by means of a so-called blanket policy. Each blanket policy of a party
permitted hereunder shall specifically allocate to the liabilities required to
be insured by that party under this Article an amount not less than the amounts
of insurance required to be carried by that party by this Article.

         SECTION 13.09. INTENTIONALLY DELETED

                                      17

<PAGE>

         SECTION 13.10. PRODUCT LIABILITY COVERAGE. Tenant shall provide product
liability coverage for not less than Three Million Dollars ($3,000,000.00)
combined single limit, bodily injury and property damage.

         SECTION 13.11. INCREASE IN INSURANCE RATES. Tenant will not do or
suffer to be done, or keep or suffer to be kept, anything in, upon or about the
Premises which will violate Landlord's policies of hazard or liability insurance
or which will prevent Landlord from procuring such policies in companies
acceptable to Landlord. If anything done, omitted to be done or suffered by
Tenant to be kept in, upon or about the Premises shall cause the rate of fire or
other insurance on the Premises or on other property of Landlord or of others
within the Center to be increased beyond the minimum rate from time to time
applicable to the Premises or to any property for the use or uses made thereof,
Tenant will pay, as Additional Rent, the amount of any such increase upon
Landlord's demand.

       SECTION 13.12. POLICY LIMITS. Prior to the Option Period, Landlord and
Tenant shall review the policy limits for the coverage provided hereinabove and,
at that time, shall cause such limits to be adjusted in view of reasonable
exposure anticipated during the next five (5) years of the Lease Term; provided,
however, that in no event shall such limits be adjusted lower than the limits
stated above.




                                   ARTICLE XIV

                             DAMAGE AND DESTRUCTION

         SECTION 14.01.   DAMAGE AND DESTRUCTION.

         (a) In the event during the Lease Term the Tenant's Building shall be
partially damaged (as distinguished from "substantially damaged", as that term
is hereinafter defined) by fire or other casualty insured under the insurance
required to be carried by Tenant pursuant to this Lease, Tenant shall proceed
with reasonable dispatch to repair such damage and restore the Tenant's Building
to substantially its condition at the time immediately prior to damage and
Tenant shall similarly restore and/or replace Tenant's Personal Property.
Notwithstanding the foregoing, if such partial damage to the Tenant's Building
is caused by a casualty not insured or required to be insured by Tenant pursuant
to the provisions of this Lease, Tenant may elect to repair or rebuild the
Tenant's Building or terminate this Lease upon giving notice of such election to
Landlord within ninety (90) days of the date of such damage or destruction. If
said right of termination is exercised (and Landlord does not negate such
termination as hereunder provided), this Lease to the extent provided
hereinabove shall terminate effective (i) as of the date of such casualty, if
Tenant has been unable to conduct business in the Tenant's Building as a result
of such partial casualty or (ii) if Tenant has been able to conduct business,
then not later than thirty (30) days after such notice. If Tenant elects not to
so terminate this Lease, Tenant shall proceed as required in the first sentence
hereinabove. If Tenant elects to terminate this Lease as provided, Landlord may
nullify Tenant's termination by written notice to Tenant, within sixty (60) days
of receipt of Tenant's notice to terminate, in which event Landlord shall become
obligated to proceed and perform in the manner required of Tenant in the first
sentence hereinabove at Landlord's cost and expense, provided, if Landlord does
not so proceed as required to repair and restore Tenant's Building, as provided
above Tenant may again elect to terminate this lease as provided above without
Landlord having the right to nullify such termination.

         (b) In the event during the Lease Term Tenant's Building shall be 
substantially damaged or destroyed by fire or other casualty, insured under 
the insurance carried by Landlord pursuant to Section 14.01 of this Lease, 
Tenant may elect to repair or rebuild the Tenant's Building or terminate this 
Lease upon giving notice of such election to Landlord within sixty (60) days 
of the date of such damage or destruction. If Tenant elects not to so 
terminate this Lease, this Lease shall, except as hereinafter provided, 
remain if full force and effect, and Tenant shall, proceeding with reasonable 
dispatch, repair such damage and restore the Tenant's Building to 
substantially their condition at the time immediately preceding the 
occurrence of such damage or 

                                     18


<PAGE>


destruction. Notwithstanding the foregoing, if such substantial damage to the 
Tenant's Building is caused by a casualty not insured or required to be 
insured by Tenant pursuant to the provisions of this Lease, Tenant may elect 
to repair or rebuild the Tenant's Building or terminate this Lease upon 
giving notice of such election to Landlord within sixty (60) days of the date 
of such damage or destruction. If said right of termination is exercised (and 
Landlord does not negate such termination as hereinafter provided), this 
Lease to the extent provided hereinabove shall terminate effective (i) as to 
the date of such casualty, if Tenant has been unable to conduct business in 
the Tenant's Building as a result of such substantial casualty, or (ii) if 
Tenant has been able to conduct business then not later than thirty (30) days 
after such written notice. If Tenant elects not to so terminate this Lease, 
Tenant shall proceed with reasonable dispatch to repair or rebuild the 
Tenant's Building. Landlord may nullify Tenant's termination by written 
notice to Tenant, within sixty (60) days of receipt of Tenant's written 
notice to terminate, in which event Landlord shall become obligated to 
proceed and perform in the manner required of Tenant in the prior sentence 
hereinabove at Landlord's cost and expense, provided Tenant may again have 
termination rights if Landlord does not so perform as provided in (a) above.

         (c) If the Tenant's Building shall be substantially damaged or
destroyed by fire or other casualty, within the last three (3) years of the
Lease Term, either party shall have the right to terminate this Lease, provided
that written notice thereof is given to the other party not later than ninety
(90) days after the occurrence of such damage or destruction. If said right of
termination is exercised, this Lease, to the extent provided hereinabove, shall
cease and come to an end as of the date of such damage or destruction.

         (d) To the extent the Tenant's Building is rendered untenantable as a
result of damage or destruction provided in subsections (a) and (b) hereinabove
and this Lease is not terminated, there shall be an abatement or reduction in
the Fixed Rent, due under this Lease, in proportion to the Floor Area of the
Tenant's Building rendered untenantable, such abatement shall continue for the
period commencing on the date of such destruction or damage and shall end with
the earlier of (i) the completion by either party of such work of repair and/or
restoration as either partyis obligated to do and the expiration of a period of
ninety (90) days after completion of such work to enable Tenant to re-fixture
the Tenant's Building and reopen for business; or (ii) the date Tenant reopens
for business in the Tenant's Building, or any portion thereof, as the case may
be. In the event of the termination of this Lease pursuant to this ARTICLE XIV,
the Lease shall cease and come to an end as of the date of such damage or
destruction with respect to the terminated portion of the Tenant's Building, as
aforesaid. Any rent or other charges paid in advance by Tenant shall be promptly
refunded by Landlord.

         (e) The terms "substantially damaged" and "substantial damage" as used
in this ARTICLE XIV shall have reference to damage of such a character that the
cost of restoration would exceed twenty-five percent (25%) of the cost of
replacement of the Tenant's Building.

         (f) If more than -five percent (5%) of the Parking Area located within
the Protected Area shall be damaged or destroyed by fire or other casualty at
any time ,if Landlord elects not to repair or replace such Parking Area Tenant
may terminate this Lease by giving written notice to Landlord of Tenant'
selection so to terminate, such notice to be given within ninety (90) days after
the occurrence of such damage or destruction.

          (g) If Tenant is not required to repair or restore Tenant's Building
as provided hereinabove, then Tenant shall, promptly raze Tenant's Building and
clear the area of all debris and convert the area to Common Area as it was prior
to the construction of Tenant's Building. In all events, Tenant shall, following
such damage or destruction, promptly restore the Premises to a safe and secure
condition.

                                   ARTICLE XV

                                 EMINENT DOMAIN

         SECTION 15.01. CONDEMNATION.


                                      19


<PAGE>

         (a) The term "Condemnation" means the taking or appropriation of any
portion of the Center, other than temporary possession of six (6) months or
less, pursuant to an exercise of the power of eminent domain or by inverse
condemnation or any conveyance in lieu of condemnation under threat thereof to
satisfy a grantee having the power of condemnation, or the requisitioning by
military or other public authority for any purpose arising out of a temporary
emergency or other temporary circumstances.

         (b) During the Lease Term, if, as a result of a Condemnation, any
portion or interest in the Premises, or twenty percent (20%) or more of the
parking spaces located within the "Protected Area" (as defined in Section
25.1(c)), within thirty (30) days following the date of such taking, Tenant may
terminate this Lease upon written notice to Landlord and Tenant's obligation to
pay rent and perform all obligations set forth in this Lease shall terminate on
the date of taking, but Tenant's interest in the leasehold estate shall continue
until the taking is completed by deed, contract or order of final condemnation
and final award. Notwithstanding the foregoing, Tenant's election to terminate
shall be null and void if Landlord shall elect by notice given to Tenant within
thirty (30) days after receipt of Tenant's notice, to perform the obligations
set forth in subparagraph (c) below.

         If the event of a Condemnation, excluding the Premises or the Protected
Area, which Condemnation causes a material change in the Premises are operations
directly attributable to such Condemnation, Tenant may terminate this Lease upon
written notice to Landlord, such right of termination to be exercised by written
notice to Landlord and be effective not earlier than 120 days subsequent
thereto. In the event Landlord disagrees with Tenant regarding such termination,
resolution of such dispute shall be determined by binding arbitration in
accordance with Exhibit C.

         (c) In the event Tenant does not terminate this Lease, subject to Force
Majeure, Landlord shall promptly and diligently restore, to the extent of
available condemnation proceeds the parking spaces located within the Protected
Area, to as near their condition as existed prior to such taking as is
reasonably possible, and, during the course of such restoration, Tenant's
obligation for Fixed Rent shall thereafter be abated in the event of a
Condemnation of any portion of the Premises, in the amount of that fraction of
Fixed Rent the numerator of which is the Floor Area taken, and the denominator
of which is the Floor Area of the Premises prior to the Condemnation.

         (d) In the event Tenant does not terminate this Lease, Tenant shall
promptly repair, restore and rebuild Tenant's Building to a condition, as nearly
as practicable, to that which existed prior to the Condemnation, so as to effect
thereby an architectural and operating unit similar to that which existed before
the taking.

         (e) In the event of a Condemnation outside of the Premises, to the
extent Tenant's business is materially interrupted as a result of such
Condemnation, Fixed Rent will be abated as is fair and equitable under the
circumstances.
         (f) If as a result of the Condemnation, the whole or any part of
Tenant's Building shall be affected by such Condemnation, then Fixed Rent and
any Additional Rent based on Floor Area shall be reduced proportionately in an
amount which reflects the nature and extent of the injury to business conducted
in Tenant's Building at the time of such Condemnation. Such reduction shall be
calculated from the date of such Condemnation and shall continue until the
restoration of Tenant's Building has been restored to an architectural and
operating unit similar to that which existed before the Condemnation. In the
event the Floor Area of Tenant's Building after such restoration has been
reduced as a result of such Condemnation then Fixed Rent shall be
proportionately reduced.

         (g) With respect to an award for damages as a result of Condemnation to
any portion of the Center, including the Premises, such award shall be paid to
Landlord, except Tenant may prosecute, if permitted by law, a claim independent
of Landlord's for Tenant trade fixtures, furniture, equipment, merchandise and
other personal property, the unamortized value of improvements, including the
Tenant's Building, paid for solely by Tenant, damages for interruption or
dislocation of business in the Premises, and moving and remodeling expenses,
provided such claim shall have no adverse impact on any award to Landlord.


                                      20


<PAGE>

                                   ARTICLE XVI

                            BANKRUPTCY AND INSOLVENCY

         SECTION 16.01.  TENANT'S INTEREST NOT TRANSFERABLE.

         (a) Neither Tenant's interest in this Lease, nor any estate hereby
created in Tenant nor any interest herein or therein, shall pass to any trustee
or receiver or assignee for the benefit of creditors or otherwise by operation
of law except as may specifically be provided pursuant to the Federal Bankruptcy
Code.

         (b) In the event the interest or estate created in Tenant hereby shall
be taken in execution or by other process of law, or if Tenant executors,
administrators, or assigns, if any, shall be adjudicated insolvent or bankrupt
pursuant to the provisions of any state act or the Federal Bankruptcy Code or if
Tenant is adjudicated insolvent by a court of competent jurisdiction other than
the United States Bankruptcy Court, or if a receiver or trustee of the property
of Tenant shall be appointed by reason of the insolvency or inability of Tenant
to pay its debts as the same become due or if any assignment shall be made of
the property of Tenant for the benefit of creditors, then and in such event,
this Lease and all rights of Tenant hereunder shall automatically cease and
terminate with the same force and effect as though the date of such event were
the date originally set forth herein and fixed for the expiration of the Term,
and Tenant shall vacate and surrender the Premises but shall remain liable as
herein provided. Notwithstanding the foregoing, if Tenant shall continue to pay
Fixed Rent and Additional Rent provided for in this Lease in a timely manner and
shall cure such event within sixty (60) days after its occurrence, Landlord
shall not terminate this Lease.

                  (1) Upon the filing of a petition by or against Tenant under
the Federal Bankruptcy Code, Tenant, as debtor and debtor in possession, and any
trustee who may be appointed agree as follows: (i) to perform each and every
obligation of Tenant under this Lease including, but not limited to, the manner
of operations as provided in Article VII of this Lease until such time as this
Lease is either rejected or assumed by order of the United States Bankruptcy
Court; (ii) to pay monthly in advance on the first day of each month as
reasonable compensation for use or occupancy of Premises an amount equal to all
Fixed Rent, Additional Rent and due in accordance with the terms of this Lease.

                  (2) No uncured default of this Lease by Tenant, either prior
to or subsequent to the filing of such a petition, shall be deemed to have been
waived unless expressly done so in writing by Landlord.

                  (3) It is understood and agreed that this is a Lease of real
property in a shopping center as such a lease is described in Section 365(b)(3)
of the Federal Bankruptcy Code.

                  (4) Included within and in addition to any other conditions or
obligations imposed upon Tenant or its successor in the event of assumption
and/or assignment are the following: (1) the cure of any monetary defaults and
the reimbursement of pecuniary loss including the payment of all attorneys' fees
incurred by Landlord in connection with such proceedings as described in this
Article XVI, within not more than thirty (30) days of assumption and/or
assignment; and (2) the deposit of an additional sum equal to three (3) monthly
installments of Fixed Rent to be held as security pursuant to the terms of this
Lease; and (3) the use of the Premises to continue pursuant to Section 7.01 of
this Lease, and the quality, quantity and/or lines of merchandise of any goods
or services required to be offered for sale shall remain unchanged; and (4) the
reorganized debtor or assignee of such debtor in possession or of Tenant's
trustee demonstrates in writing that it has sufficient background including, but
not limited to, substantial retailing experience in shopping centers of
comparable size, and financial ability to operate a retail establishment out of
the Premises in the manner contemplated in this Lease, and the ability to meet
all other reasonable criteria of Landlord as did Tenant upon execution of this
Lease; and (5) the prior written consent of any mortgagee to which this Lease
has been assigned as collateral security; and (6) the Premises, at all times,
shall remain a single store and no


                                      21


<PAGE>

physical changes of any kind may be made to Premises unless in compliance 
with the applicable provisions of this Lease.

                                  ARTICLE XVII

                                     DEFAULT

         SECTION 17.01.  RIGHTS UPON DEFAULT.

         (a) Notwithstanding any provision herein to the contrary and
irrespective of whether all or any rights conferred upon Landlord by this
Article XVII are expressly or by implication conferred upon Landlord elsewhere
in this Lease, in the event of (i) any failure of Tenant to pay any Fixed Rent
or Percentage Rent or any other charges or sums whatsoever due hereunder
(including without limitation, amounts due as reimbursement to Landlord for
costs incurred by Landlord in performing obligations of Tenant hereunder upon
Tenant's failure so to perform) for more than ten (10) days after written notice
from Landlord to Tenant that such Fixed Rent or any other charges or sums
whatsoever due hereunder were not received on the date required for payment
pursuant to this Lease, or (ii) any default or failure by Tenant to perform any
other of the terms, conditions, or covenants of this Lease to be observed or
performed by Tenant for more than twenty (20) days after written notice from
Landlord to Tenant of such default unless such default cannot be cured within
said twenty (20) days in which event Tenant shall have commenced to cure said
default within twenty (20) days and shall proceed to cure the same with all
reasonable dispatch and diligently pursue same to completion, or (iii) Tenant
fails continuously to operate in the manner and during the hours established by
Landlord pursuant to Section 7.02 hereof or for the use specified in the Section
7.01, writ of execution or similar writ or order, then Landlord, in addition to
or in lieu of other rights or remedies it may have under this Lease or by law,
shall have the right to (a) immediately terminate this Lease and Tenant's right
to possession of the Premises by giving Tenant written notice that this Lease is
terminated, in which event, upon such termination, Landlord shall have the right
to recover from Tenant the sum of (1) the worth at the time of award of the
unpaid rental which had been earned at the time of termination; (2) the worth at
the time of award of the amount by which the unpaid rental which would have been
earned after termination until the time of award exceeds the amount of such
rental loss that Tenant affirmatively proves could have been reasonably avoided;
(3) the worth at the time of award of the amount by which the unpaid rental for
the balance of the Term after the time of award exceeds the amount of such
rental loss that Tenant affirmatively proves could be reasonably avoided; (4)
any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform Tenant's obligations under
this Lease or which in the ordinary course of things would be likely to result
therefrom; and (5) all such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time under applicable law; or (b)
have this Lease continue in effect for so long as Landlord does not terminate
this Lease and Tenant's right to possession of the Premises, in which event
Landlord shall have the right to enforce all of Landlord's rights and remedies
under this Lease including the right to recover the Fixed Rent, Percentage Rent
and other charges payable by Tenant under this Lease as they become due under
this Lease, and Tenant shall have the right to sublet the Premises or (at
Landlord's option) assign Tenant's interest in this Lease for a use permitted
under this Lease to a party determined by Landlord to be of good moral character
and sound financial responsibility; or (c) without terminating this Lease,
Landlord may pay or discharge any breach or violation hereof which amount so
expended shall be added to the next monthly incremental payment of Fixed Rent
due and treated in the same manner as rental hereunder; or (d) without
terminating this Lease, make such alterations and repairs as may be necessary in
order to relet the Premises, and relet the Premises or any part thereof for such
term or terms (which may be for a term extending beyond the Term of this Lease)
at such rental or rentals and upon such other terms and conditions as Landlord
in its sole discretion may deem advisable.

         (b) Upon such reletting all rental and other sums received by Landlord
from such reletting shall be applied, first, to the payment of any indebtedness
other than rental due hereunder from Tenant to Landlord; second, to the payment
of any costs and expenses of such reletting, including reasonable brokerage fees
and attorney fees and of costs of such alterations and repairs; third, to the
payment of Fixed Rent due and unpaid hereunder; and the residue, if 


                                      22


<PAGE>

any, shall be held by Landlord and applied in payment of future Fixed Rent 
payable by Tenant hereunder, as the same may become due and payable 
hereunder. If such Fixed Rent and other sums received from such reletting 
during any month are less than that to be paid during that month by Tenant 
hereunder, Tenant shall pay such deficiency to Landlord; if such rentals and 
sums shall be more, Tenant shall have no right to the excess. Such deficiency 
shall be calculated and paid monthly. No re-entry or taking possession of the 
Premises by Landlord shall be construed as an election on its part to 
terminate this Lease unless a written notice of such intention is given to 
Tenant or unless the termination thereof is decreed by a court of competent 
jurisdiction. Notwithstanding any such reletting without termination, 
Landlord may at any time thereafter elect to terminate this Lease for such 
previous breach. Should Landlord at any time terminate this Lease for any 
breach, in addition to any other remedies it may have, it may recover from 
Tenant all damages it may incur by reason of such breach, including the cost 
of recovering the Premises, all of which amount shall be immediately due and 
payable from Tenant to Landlord. Landlord shall use its best efforts to 
mitigate its damages hereunder; however, the failure or refusal of Landlord 
to relet the Premises shall not affect Tenant's liability. The terms "entry" 
and "re-entry" are not limited to their technical meanings. If Tenant shall 
default hereunder prior to the date fixed as the Opening of any renewal or 
extension of this Lease, Landlord may cancel and terminate such renewal or 
extension provision or agreement by written notice. In the event of re-entry 
by Landlord, Landlord may remove all persons and property from the Premises 
and such property may be stored in a public warehouse or elsewhere at the 
cost of, and for the account of Tenant, without notice or resort to legal 
process and without Landlord being deemed guilty of trespass, or becoming 
liable for any loss or damage which may be occasioned thereby. In the event 
Tenant shall not remove its property from the Premises within ten (10) days 
after Tenant has vacated the Premises, then such property shall be deemed 
abandoned by Tenant and Landlord may dispose of the same without liability to 
Tenant.

         (c) At any time that Tenant has either failed to pay Fixed Rent, or
other charges within ten (10) days after the same shall be due or shall have
delivered checks to Landlord for payments pursuant to this Lease which shall
have on at least three (3) occasions during the Term of this Lease (whether
consecutive or not or whether involving the same check or different checks) been
returned by Landlord's bank for any reason, Landlord shall not be obligated to
accept any payment from Tenant unless such payment is made by cashier's check or
in bank certified funds.

         (d) For purposes of Section 17.01(a), "worth at the time of award"
shall be computed by allowing interest at the "Interest Rate", as defined in
Section 26.08); the rental reserved in this Lease shall be deemed to be a
monthly rental arrived at (i) by adding to the monthly installment of Fixed Rent
payable under this Lease, plus (ii) one twelfth (1/12th) of the annual average
of all Percentage and Additional Rent payable by Tenant hereunder (such as, by
way of example, Tenant's share of Real Estate Taxes).

                                  ARTICLE XVIII

                        UNAVOIDABLE DELAYS, FORCE MAJEURE

         In the event either party hereto shall be delayed in the performance of
any obligation of this Lease, other than economic obligations, by reasons of
strikes, lockouts, labor troubles, inability to procure materials or reasons of
a similar nature not the fault of the party delayed in performing work or doing
acts required under the terms of the Lease (as the case may be, "Force
Majeure"), then performance of such act shall be excused for the period of the
delay and the period for the performance of any such act shall be extended for a
period equivalent to the period of such delay. The provisions of this Article
XVIII shall not operate to excuse Tenant from prompt payment of Fixed Rent or as
to Landlord or Tenant from any other payments required by the terms of this
Lease. It shall be a condition of Landlord and Tenant's right to claim an
extension of time as a result hereof that the delayed party notify the other
party in writing within ten (10) calendar days after the first occurrence of any
such event, and the cause, specifying the nature thereof and the period of time
contemplated or necessary for performance.

                                   ARTICLE XIX

                                      23


<PAGE>


                                     NOTICES

                  Any notice, demand, request, consent, approval or other
communication ("Notice") which either party hereto is required or desires to
give or make or communicate to the other hereunder shall be in writing and shall
be given or made or communicated either by personal delivery, reputable
overnight courier service or by United States registered or certified mail,
return receipt requested, postage prepaid, and addressed in the case of Landlord
to:


                  c/o Westfield Corporation, Inc.
                  11601 Wilshire Boulevard, 12th Floor
                  Los Angeles, California90025-1748
                  Attention:  President

with a copy thereof to:

                  Westfield Corporation, Inc.
                  11601 Wilshire Boulevard, 12th Floor
                  Los Angeles, California 90025-1748
                  Attention: Office of Legal Counsel

and addressed in the case of Tenant to:

                  Chicago Pizza & Brewery, Inc.
                  3780 Kilroy Avenue Suite 200
                  Long Beach, California  90806
                  Attn: President

                  with a copy thereof to: Chicago Pizza & Brewery, Inc.
                  26131 Marguerite Pkwy, Suite A
                  Mission Viejo, California  92692
                  Attn: Chief Executive Officer

Subject to the right of either party to designate different addresses by giving
notice as above provided. Any Notice hereunder shall be deemed to have been
given, made or communicated, as the case may be, (i) on the date received or the
date of the first attempted delivery thereof if the same was deposited in the
United States mail as registered or certified matter, with postage fully
prepaid, (ii) on the next business day, if delivered by reputable overnight
courier service (private or public), or (iii) on the date of delivery, if by
personal delivery. Notwithstanding anything herein to the contrary, neither
party may designate an address for delivery of Notices which does not indicate a
street address, which shall include a building name and/or number, street
designation, city, state and zip code.

                                   ARTICLE XX

                                     ACCESS

         After the Opening Date, Landlord and its designees shall have the right
to enter upon the Premises at reasonable hours accompanied by an employee of
Tenant for any reasonable purpose upon reasonable advance notice to Tenant,
including the inspection of the Premises, for the exhibition of prospective
purchasers and/or mortgagees, or during the period commencing three hundred
sixty five (365) days prior to the end of the Lease Term, for the purpose of
exhibiting same to prospective tenants. Landlord and its designees shall use
their best efforts to not interrupt Tenants business or interfere with Tenant's
customers.

                                   ARTICLE XXI

                                   END OF TERM

                                      24


<PAGE>



         SECTION 21.01. REMOVAL BY TENANT. Upon the expiration or other
termination of the Lease Term, Tenant shall peaceably and quietly quit and
surrender the Premises, and together with all Alterations which are then part of
the realty, broom clean, in good order and condition, reasonable wear and tear
and the provisions of Articles XIV and XV excepted. Notwithstanding the
foregoing to the contrary, Tenant's Personal Property, regardless of the manner
or mode of attachment, including, but not limited to, display cases, counters,
shelves, racks, and general restaurant fixtures, shall be and remain the
property of Tenant and may be removed by Tenant at any time during the Lease
Term or within the period of ten (10) days after the expiration or sooner
termination of this Lease. When Tenant vacates the Premises, Tenant shall not
remove from the Premises the then existing HVAC equipment, plumbing fixtures, ,
hydraulic lifts or any other items (other than trade fixtures) deemed to be real
estate by reason of affixation to improvements, except as Landlord and Tenant
may mutually agree. Tenant shall promptly repair all damage to Premises caused
by removal of any such Personal Property by Tenant or its subtenants or
licensees. Any Personal Property remaining in the Premises after the expiration
of such ten (10) day period shall be deemed abandoned and shall become the
property of Landlord without payment therefor, unless Landlord shall have
required removal by Tenant by notice given to Tenant not less than thirty (30)
days prior to the expiration date.


                                  ARTICLE XXII

                           HOLDING OVER AND SUCCESSORS

         SECTION 22.01. HOLDING OVER. If bona fide negotiations have commenced
between Landlord and Tenant for renewal of this Lease prior to the expiration of
the Lease Term, any holding over after the expiration of the Lease Term with the
consent of Landlord shall be construed to be a tenancy from month to month on
the same terms and conditions as herein specified so far as applicable. Any
other holding over after expiration of the Lease Term without the consent of the
Landlord, and after written demand from Landlord for surrender of the Premises,
shall be construed to be a tenancy from month to month at one-twelfth (1/12th)
of an amount equal to one hundred fifty percent (150%) of the Fixed Rent and
Additional Rent required to be paid by Tenant for the last full Lease Year of
the Lease Term, and shall otherwise be on the same terms and conditions as
herein specified so far as applicable. Any holding over without Landlord's
consent shall entitle Landlord to reenter the Premises as provided in Section
17.01 of this Lease

         SECTION 22.02. SUCCESSORS. All rights and liabilities herein given to,
or imposed upon the parties to this Lease shall inure to and be imposed upon the
respective heirs, executors, administrators, successors and assigns of the said
parties; and if there shall be more than one Tenant, they shall all be bound
jointly and severally by the terms, covenants and agreements herein. No rights,
however, shall inure to the benefit of any assignee of Tenant unless the
assignment to such assignee has been approved in advance by Landlord in writing
or permitted by Section 8.01.

                                  ARTICLE XXIII

                                     BROKERS

         Landlord and Tenant each represent that it dealt with no broker or
brokers or other person in connection with the negotiation, execution and
delivery of this Lease, except for Ira Spilkey, whom Tenant has agreed to
compensate per a separate agreement. Landlord and Tenant shall each defend,
indemnify and hold the other harmless from and against any claims or demands for
any other brokerage commissions, finder's fees and/or other compensation arising
out of the acts or omissions of the indemnifying party.


                                  ARTICLE XXIV

                ESTOPPEL STATEMENT, ATTORNMENT AND SUBORDINATION


                                      25


<PAGE>


       SECTION 24.01. ESTOPPEL STATEMENT. Within ten (10) days after request
therefor by either party. The requested party shall execute, in recordable form,
and deliver to the requesting party a statement, in writing, certifying (a) that
this Lease is in full force and effect, (b) the Commencement Date, the Rental
Commencement Date and the expiration date of this Lease, (c) that Rental and all
other charges hereunder are paid currently without any offset or defense
thereto, (d) the amount of Rental and all other charges hereunder, if any, paid
in advance, (e) whether this Lease has been modified and, if so, identifying the
modifications, (f) that there are no uncured defaults by either party or stating
in reasonable detail those claimed by Tenant (provided that, in fact, such
details are accurate and ascertainable), and (g) such other matters as may be
reasonably requested.. The requested parties failure or refusal to execute
timely such statement shall constitute an acknowledgment that the statements
contained in such statement are true and correct without exception, and may be
relied upon.


         SECTION 24.02.  ATTORNMENT.
         In the event any proceedings are brought for the foreclosure of, or in
the event of exercise of the power of sale under any mortgage and/or deed of
trust made by Landlord covering the Premises, or in the event Landlord sells,
conveys or otherwise transfers its interest in the Center or any portion thereof
containing the Premises, this Lease shall remain in full force and effect and
Tenant hereby automatically attorns to the new owner. Tenant covenants and
agrees, at such new owners request, to execute an instrument evidencing such
attornment reasonably satisfactory to the new owner, recognizing the new owner
as the landlord under this Lease. Tenant acknowledges that such new owner shall
not be bound by (i) any prepayment of more than one (1) month's Rent (except
rental deposit but only to the extent received by said successor) or (ii) any
material amendment of the Lease made after the later of the Opening Date, or the
date that such successor's lien or interest first arose, unless said successor
shall have consented to such amendment or (iii) any claims, offsets or defenses
of Tenant arising prior to such attornment, except for those specifically
provided in the Lease. Payment by or performance of this Lease by any person,
firm or corporation claiming an interest in this Lease or the Premises by,
through or under Tenant without Landlord's consent in writing shall not
constitute an attornment or create any interest in this Lease or the Premises.
At Tenant's request, the new owner shall acknowledge in writing that, subject to
the provisions of this Section, Tenant's interest in the Premises and rights
under this Lease shall not be disturbed so long as Tenant is not in default
under the terms of this Lease beyond the time permitted to cure such default.


         SECTION 24.03. SUBORDINATION. Tenant further agrees this Lease shall be
subject and subordinate to the lien and terms of any mortgage, deed of trust or
any ground lease that is now or may hereafter be placed upon the Premises or the
Center and to any and all advances to be made thereunder, and to the interest
thereon, and all renewals, modifications, replacement and extensions thereof.
The foregoing shall be self-operative and no further instruments shall be
required to effect such subordination of this Lease. Tenant also agrees that any
mortgagee, beneficiary or ground lessor may elect to have this Lease constitute
a prior lien to its mortgage, deed of trust or ground lease, and in the event of
such election and upon notification by such mortgagee, beneficiary or ground
lessor to Tenant to that effect, this Lease shall be deemed a prior lien to such
mortgage, deed of trust or ground lease, whether this Lease is dated prior to or
subsequent to the date of said mortgage, deed of trust or ground lease. Tenant
agrees that upon the demand of Landlord, or any mortgagee, beneficiary or ground
lessor, Tenant shall, within ten (10) days of the receipt of said demand,
execute whatever instruments may be required to carry out the intent of this
Section 24.03 in the form requested by Landlord or such mortgagee, beneficiary
or ground lessor, including, without limitation, an appropriate recordable
subordination agreement. In the event Tenant fails to execute such instruments
within as set forth in this Section 24.03 ten (10) days after demand, Tenant
does hereby irrevocably appoint Landlord as its attorney-in-fact and in its
place and stead so to do.



         SECTION 24.04.     NOTICE TO MORTGAGEE, BENEFICIARY OR GROUND LESSOR.
       If Tenant is given notice of the name and address of a mortgagee,
beneficiary or ground lessor, then Tenant shall give written notice of any
default by Landlord to such mortgagee, beneficiary or ground lessor specifying
the default in reasonable detail. Tenant shall afford any 


                                      26


<PAGE>


such mortgagee, beneficiary or ground lessor the right to cure such default 
and if such mortgagee, beneficiary or ground lessor does perform on behalf of 
Landlord, such default shall be deemed cured.

                                   ARTICLE XXV

                          COMMON AREA AND PARKING AREA
                           OPERATIONS AND MAINTENANCE

         SECTION 25.01.  RIGHTS OF LANDLORD.

         (a) Landlord hereby: (i) reserves the right at any time, and from time
to time, to make alterations or additions to, and to build additional stories on
any building except the Premises within the Center, (ii) reserves the right at
any time, and from time to time, to construct other buildings and improvements
in the Center to enlarge or reduce the area of the Center and to make
alterations therein or additions thereto, and to modify the existing layouts
thereof, and to build adjoining thereto and to construct decks or elevated
parking facilities, and to sell or lease any part of the land comprising the
Center, for the construction thereon of a building or buildings to be occupied
by one or more department stores which may or may not be part of the Center.
Landlord reserves the right at any time to relocate, expand, reduce or eliminate
Parking Areas and other Common Areas shown on Exhibit B. Landlord may at any
time close any Common Area and Parking Area to make repairs or changes, to
prevent the acquisition of public rights in such area or to discourage
non-customer parking, to use areas for attendant or valet parking, and may do
such other acts in and to the Common Areas as in its judgment may be desirable
to improve the convenience thereof. Landlord shall use commercially reasonable
efforts to cause any construction work undertaken in the exercise of Landlord's
rights under this Section to be performed in such manner as to minimize to the
extent practicable the interruption of Tenant's business; and not to materially
interfere with Tenant's use of Premises nor diminish access to Premises unless
no reasonable alternative exists. If Tenant's use of the Premises is reduced
during or as a result of any work performed pursuant to this section, Fixed Rent
and Tenant's proportionate payment of Common Area Maintenance Costs and Expenses
charges will be abated in a manner fair and equitable under the circumstances.


         (b) Landlord reserves the right, from time to time, to utilize portions
of the Common Areas, for carnival-type shows, rides and entertainment, outdoor
shows, displays, automobile and other product shows, the leasing of kiosks, or
such other uses which in Landlord's judgment tend to attract the public.
Further, Landlord reserves the right to utilize the lighting standards and other
areas in the Parking Area for advertising purposes.

         Notwithstanding anything to the contrary herein, any act by Landlord
pursuant to this section shall be; (a) done in good taste recognized in a first
class center, (b) done using best efforts not to interrupt Tenants business or
interfere with Tenant's customers and (c) not within the Protected Area.

         (c) Notwithstanding anything to the contrary contained herein, Landlord
represents, warrants and covenants, that Landlord shall not without Tenant's
written consent, which consent shall not be unreasonably withheld or delayed,
erect any buildings, structures or building improvements or materially alter the
layout and configuration of the parking areas, driveways, lighting, curb cuts
and other Common Areas within the "Protected Area" as shown on Exhibit B, It
would be reasonable for Tenant to withhold its consent to any of the foregoing,
if Tenant reasonably believes same would have a material, adverse affect on
conducting its business in the Premises.

         SECTION 25.02. OPERATION OF COMMON AREAS. Landlord shall, at its sole
cost and expense, operate, maintain, repair and replace the Common Areas in
accordance with the practices prevailing in regional shopping centers in the
proximate geographical area as the Center. In this connection, Landlord shall
clean and sweep the Common Areas, remove snow therefrom and treat ice thereon;
maintain, service and clear the storm drainage systems, except those that are
exclusive service the Premises; maintain and operate all utility services
(including 


                                      27


<PAGE>

electricity and lighting) serving the Common Areas to the extent the same is 
not an obligation of public utility companies.

                      [THIS SECTION INTENTIONALLY DELETED]












                      [THIS SECTION INTENTIONALLY DELETED]







                                      28


<PAGE>






                                  ARTICLE XXVI

                                  MISCELLANEOUS

         SECTION 26.01. WAIVER; ELECTION OF REMEDIES. One or more waivers of any
covenant or condition by any party hereto shall not be construed as a waiver of
a subsequent breach of the same covenant or condition, and the consent or
approval by any party hereto to or of any act by the other party requiring the
other party's consent or approval shall not be deemed to render unnecessary such
consent or approval to or of any subsequent similar act by the other party. No
breach by any party hereto of a covenant or condition of this Lease shall be
deemed to have been waived by the other party unless such waiver is in writing
signed by the other party. The rights and remedies of the other party under this
Lease or under any specific Section, subsection or clause hereof shall be
cumulative and in addition to any and all other remedies which the other party
has or may have elsewhere under this Lease or at law or equity, whether or not
such Section, subsection or clause expressly so states.

         SECTION 26.02. ENTIRE AGREEMENT. This Lease and the Exhibits attached
hereto and forming a part hereof, set forth all the covenants, promises,
agreements, conditions and understandings between Landlord and Tenant concerning
the subject matter hereof and there are no covenants, promises, agreements,
conditions or understandings heretofore made, either oral or written, between
the parties other than as herein set forth. No modification, amendment, change
or addition to this Lease shall be binding upon Landlord or Tenant unless
reduced to writing and signed by each party. Landlord has made no
representations or warranties regarding the profitability of the Premises or the
Center, and Tenant has not entered into this Lease in reliance on any such
representations, warranties or financial projections prepared or furnished to
Tenant by Landlord.


                                      29


<PAGE>



         SECTION 26.03. INTERPRETATION; USE OF PRONOUNS; AUTHORITY. Nothing
contained herein shall be deemed or construed by the parties hereto, nor by any
third party, as creating the relationship of principal and agent or of
partnership or of joint ventures between the parties hereto, it being understood
and agreed that neither the method of computation of Fixed Rent nor any other
provision contained herein, nor any acts of the parties herein, shall be deemed
to create any relationship between the parties hereto other than the
relationship of Landlord and Tenant. Whenever herein the singular number is used
the same shall include the plural, and the masculine gender shall include the
feminine and neuter genders. If this Lease is signed on behalf of a corporation,
partnership or other entity, the signer is duly authorized to execute this Lease
on behalf of such corporation, partnership or entity.

         SECTION 26.04. CAPTIONS AND SECTION NUMBERS. The captions, section
numbers, article numbers and index appearing in this Lease are inserted only as
a matter of convenience and in no way define, limit, construe or describe the
scope or intent of such sections or articles of this Lease nor in any way affect
this Lease.

         SECTION 26.05. RECORDING. Neither Landlord nor Tenant shall record this
Lease; however, upon the request of either party hereto, the other party shall
join in the execution of a memorandum or so-called "short form" of lease for the
purposes of recordation. Said memorandum or short form of lease shall describe
the parties, the Premises, the Lease Term, any subordination, any special
provisions other than those pertaining to rent, and shall contain such
additional information as may be required for recordation in the jurisdiction in
which the Premises is located and shall incorporate this Lease by reference.

         SECTION 26.06. FURNISHING OF FINANCIAL STATEMENTS. Tenant has provided
Landlord at or prior to the date of this Lease with statements reflecting its
financial condition as of a date within the last twelve (12) months as an
inducement to Landlord to enter into this Lease, and Tenant hereby represents
and warrants that its financial condition has not materially changed since the
date of those statements. Upon Landlord's written request, Tenant shall promptly
furnish Landlord, from time to time, but not more frequently than once in any
Lease Year with financial statements reflecting Tenant's financial condition as
of a date within twelve (12) months prior thereto. Landlord shall treat such
financial statements and information provided to it confidentially, and shall
not disclose them except to Landlord's lenders or otherwise as required by law.

         SECTION 26.07. TRANSFER OF LANDLORD'S INTEREST. In the event of any
transfer or transfers of Landlord's interest in the Center including a so-called
sale-leaseback, the transferor shall be automatically relieved of any and all
obligations on the part of Landlord accruing from and after the date of such
transfer, provided that (a) the interest shall be turned over, subject to such
interest, to the then transferee; (b) notice of such sale, transfer or lease
shall be given to Tenant as required by law; and (c) such transferee shall
assume in writing the obligations of Landlord under this Lease. Upon the
termination of any such Lease in a sale-leaseback transaction prior to
termination of this Lease, the former lessee thereunder shall become and remain
liable as Landlord hereunder until a further transfer. In addition to the
provisions of this Section, the transferor shall be automatically relieved of
any and all obligations on the part of Landlord accruing from and after the date
of such transfer, only provided the then transferee assumes in writing all of
Landlord's obligations under the Lease.

         SECTION 26.08. INTEREST ON PAST-DUE OBLIGATIONS. Any amount due from
either party to the other under this Lease which is not paid within ten (10)
days after written notice that such amount was not received when due (including,
without limitation, amounts due as reimbursement for costs incurred in
performing obligations of such party hereunder upon its failure to so perform)
shall bear interest at the prime rate of Bank of America N.A. ("Interest Rate")
from the date due until paid, unless otherwise specifically provided herein, but
the payment of such interest shall not excuse or cure any default by Tenant
under this Lease.

         SECTION 26.09. LIABILITY OF LANDLORD. If Landlord shall fail to perform
any covenant, term or condition of this Lease upon Landlord's part to be
performed, and if as a consequence of such default Tenant shall recover a money
judgment against Landlord, such judgment shall be satisfied only out of the
proceeds of sale received upon execution of such 


                                      30


<PAGE>

judgment and levied thereon against the right, title and interest of Landlord 
in the Center and out of rents or other income from such property receivable 
by Landlord, any insurance proceeds receivable by Landlord, or out of the 
consideration received by Landlord from the sale or other disposition of all 
or any part of Landlord's right, title and interest in the Center.

         SECTION 26.10. ACCORD AND SATISFACTION. Payment by any party or receipt
by the other party of a lesser amount than the rent or other charges herein
stipulated shall be deemed to be on account of the earliest rent or other
charges due from Tenant to Landlord. No endorsements or statement on any check
or letter accompanying any check or payment as rent or other charges shall be
deemed an accord and satisfaction, and any party may accept such check or
payment without prejudice to its right to recover the balance of such rent or
other charges or to pursue any other remedy provided in this Lease or by law.

         SECTION 26.11. EXECUTION OF LEASE; NO OPTION. The submission of this
Lease to Tenant shall be for examination purposes only, and does not and shall
not constitute a reservation of an option for Tenant to lease, or otherwise
create any interest by Tenant in the Center or any other premises in the Center.
Execution of this Lease by Tenant and the return of same to Landlord shall not
be binding upon Landlord, notwithstanding any time interval, until Landlord has
executed and delivered this Lease to Tenant.

         SECTION 26.12. GOVERNING LAW. This Lease shall be governed by and
construed in accordance with laws of the State of California. If any provision
of this Lease or the application thereof to any person or circumstances shall,
to any extent be invalid or unenforceable, such provision shall be adjusted
rather than voided, if possible, in order to achieve the intent of the parties,
to the extent possible; in any event, all other provisions of this Lease shall
be deemed valid and enforceable to the fullest extent.

         SECTION 26.13. SPECIFIC PERFORMANCE . Either of the parties hereto
shall have the right to obtain specific performance of any and all covenants or
obligations of the other under this Lease, and nothing contained in this Lease
shall be construed as or shall have the effect of abridging such right.

         SECTION 26.14. SURVIVAL OF TENANT'S OBLIGATIONS. All obligations under
this Lease which cannot be ascertained to have been fully performed prior to the
end of the Lease Term shall survive the expiration or termination of this Lease,
whichever occurs earlier.

         SECTION 26.15. CERTAIN RULES OF CONSTRUCTION. Notwithstanding the fact
that certain references elsewhere in this Lease to acts required to be performed
by either party hereunder, or to breaches or defaults of this Lease by either
party, omit to state that such acts shall be performed at such party's sole cost
and expense, or omit to state that such breaches or defaults are material,
unless the context clearly implies to the contrary, each and every act to be
performed or obligation to be fulfilled at such party's sole cost and expense,
and all breaches or defaults by either party hereunder shall be deemed material.
Tenant shall be fully responsible and liable for the observance and compliance
by concessionaires, licensees, subtenants or assignees (the "Additional
Parties") of and with all the terms and conditions of this Lease, which terms
and conditions shall be applicable to the Additional Parties as fully as if they
were the Tenant hereunder and failure by an Additional Party fully to observe
and comply with the terms and conditions of this Lease shall constitute a
default hereunder by Tenant. Nothing contained in the preceding sentence shall
constitute a consent by Landlord to any concession, subletting or other
arrangement proscribed by Article VIII.

         SECTION 26.16. HAZARDOUS MATERIALS. "Hazardous Materials" means any 
biologically or chemically active or other hazardous substances or materials 
in any manner regulated by Legal Requirement or Insurance Requirement, 
including without limitation, those described in the Comprehensive 
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C. 
Section 9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. 
Section 1801 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. 
Section 6901 et seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601 
et seq.), the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Federal 
Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), and any 
applicable state or local laws and the regulations adopted under these acts. 
Tenant shall not (either with or without negligence) 

                                       31


<PAGE>


cause or permit the escape, disposal or release of any Hazardous Materials in 
any manner not sanctioned by law and the highest standards prevailing in the 
shopping center industry of the storage and use of such materials, nor allow 
to be brought into the Shopping Center any Hazardous Materials except to use 
in the ordinary course of Tenant's business, and then only after written 
notice is given to Landlord of the identity of such materials provided, 
however, that such notice need not be given as to any Hazardous Materials 
normally used in the restaurant industry by operators or agents such as 
janitorial services, particularly restaurants similar to Tenants If any 
lender or governmental agency shall ever require testing of any materials to 
ascertain whether or not there has been any release of Hazardous Materials, 
then the reasonable costs thereof shall be reimbursed by Tenant to Landlord 
upon demand as Additional Rent if such requirement can be reasonably applied 
to Tenant's Work or other work or alterations Tenant performed on the 
Premises or the conduct of Tenant's business in the Premises. Tenant shall 
execute affidavits, representations and the like from time to time at 
Landlord's request concerning Tenant's best knowledge and belief regarding 
the presence of Hazardous Materials contained on or within the Premises. 
Tenant shall defend, indemnify, protect and hold harmless Landlord its 
affiliates, parent corporation, subsidiaries, partners, management company, 
successors and assigns, and the employees, agents, officers, directors of any 
of them from and against any and all Claims (including, without limitation, 
consultant, investigation and laboratory fees) directly or indirectly arising 
out of, or in any way related to (i) any breach by Tenant of any of the 
provisions of this Section; (ii) the presence, use, generation, 
transportation, disposal, spillage, discharge, emission, leakage, release, or 
threatened release of any Hazardous Materials which is at, in, on, under, 
about, from or affecting the Premises or the Shopping Center, to the extent 
proven to be caused by Tenant or any of its Permittees; (iii) any personal 
injury (including wrongful death) or property damage (real or personal) 
arising out of or related to any such Hazardous Materials; (iv) any lawsuit 
brought or threatened, settlement reached, or governmental order or directive 
relating to such Hazardous Materials; or (v) any violation of any 
Environmental Law relating to such Hazardous Materials. To the best knowledge 
and belief of Landlord there is no Hazardous Materials contained on or under 
the Premises as of the date of execution of this Lease and, further, Landlord 
indemnifies, protects and holds harmless Tenant its parent, affiliates, 
subsidiaries, directors, officers, employees, agents, successors and assigns 
from and against any and all claims, directly or indirectly, arising out of, 
or related to contamination which occurred prior to, or subsequent to, 
Tenant's occupancy of the Premises. This Section 26.16 shall survive the 
expiration or earlier termination of the term of this Lease.

         SECTION 26.17. CONFIDENTIALITY. Any and all information contained in
this Lease or provided to or by Tenant and/or Landlord by reason of the
covenants and conditions of this Lease, economic or otherwise, shall remain
confidential between Landlord and Tenant and shall not be divulged to third
parties; provided, however either party shall be permitted to divulge the
contents of this lease and of statements and reports derived and received in
connection with the provisions of Article VIII or the provision of Article IV in
connection with any contemplated sales, transfers, assignments, encumbrances or
financing arrangements of Landlord's interest in the Center. This section shall
not apply in connection with any administrative or judicial proceedings in which
either party may be required to divulge such information.

         SECTION 26.18. ATTORNEY FEES. If at any time after the date that this
Lease has been executed by Landlord and Tenant, either Landlord or Tenant
institutes any action or proceeding against the other relating to the provisions
of this Lease or any default hereunder, the non-prevailing party in such action
or proceeding shall reimburse the prevailing party for the reasonable expenses
of attorney fees and all costs and disbursements incurred therein by the
prevailing party, including, without limitation, any such fees, costs or
disbursements incurred on any appeal from such action or proceeding. Subject to
the provisions of local law, the prevailing party shall recover all such fees,
costs or disbursements as costs taxable by the court or arbiter in the action or
proceeding itself without the necessity for a cross-action by the prevailing
party.

         Notwithstanding anything to the contrary contained herein, if Landlord
is compelled to engage the services of attorneys (either outside counsel or
in-house counsel) to enforce the provisions of this Lease, to the extent that
Landlord incurs any cost or expense (including such reasonable attorney fees) in
connection with such enforcement, including instituting, prosecuting or
defending its rights in any action, proceeding or dispute by reason of any
default by Tenant, or as otherwise set forth in this Section 26.18 or elsewhere
in this Lease, the sum or sums so paid or 


                                      32


<PAGE>

billed to Landlord, together with all interest, costs and disbursements, 
shall be deemed Additional Rent and shall be due from Tenant immediately upon 
receipt of an invoice therefor following the occurrence of such expenses

       SECTION 26.19. REAL ESTATE INVESTMENT TRUST. If the ownership of the
Center is in a Real Estate Investment Trust, then Landlord and Tenant agree that
Fixed Rent and all Additional Rent paid to Landlord under this Lease
(collectively referred to in this Section as "Rent") shall qualify as "rents
from real property" within the meaning of Section 856(d) of the Internal Revenue
Code of 1986, as amended (the "Code") and the U.S. Department of Treasury
Regulations promulgated thereunder (the "Regulations"). Should the Code or the
Regulations, or interpretations thereof by the Internal Revenue Service
contained in Revenue Rulings, be changed so that any Rent no longer qualifies as
"rent from real property" for the purposes of Section 856(d) of the Code and the
Regulations promulgated thereunder, other than by reason of the application of
Section 856(d)(2)(B) or 856(d)(5) of the Code or the Regulations relating
thereto, such Rent shall be adjusted so that it will so qualify; provided,
however, that any adjustments required pursuant to this Section shall be made so
as to produce the equivalent (in economic terms) Rent as payable prior to such
adjustment.

         SECTION 26.20. TENANT'S PERSONAL PROPERTY. Tenant shall have the right
to finance and grant a security interest in Tenant's Personal Property. Landlord
acknowledges that, notwithstanding any provision to the contrary contained in
law or otherwise, it does not have any lien on Tenant's Personal Property.
Landlord shall execute and deliver any and all documentation reasonably required
by any lender thereof, including, without limitation, a waiver of any lien
Landlord may have thereon, within fifteen (15) days after request therefor by
Tenant or Tenant's lender.


                        [SIGNATURES APPEAR ON NEXT PAGE]

                                      33


<PAGE>




         IN WITNESS WHEREOF, Landlord and Tenant, personally or by their duly
authorized agents have executed this Lease as of the day and year first above
written.

Chicago Pizza & Brewery, Inc., a California    EASTLAND SHOPPING CENTER LLC, a
corporation                                    Delaware limited liability 
                                               company

By:_____________________________               By:  Eastland Manager LLC, a 
Its:____________________________               Delaware limited liability
                                               company, its managing member

                                               By:  Westfield America Investor
                                               L.P., a Delaware limited 
                                               partnership, its sole member

                                               By:  Westfield America, Inc., a
                                               Missouri corporation, its general
                                               partner
                          TENANT
                                               By:_______________________
                                               Its:_______________________



                                               LANDLORD






<PAGE>





                                    EXHIBIT A
                      LEGAL DESCRIPTION OF SHOPPING CENTER



<PAGE>



                                    EXHIBIT B
                                    SITE PLAN



<PAGE>



                                    EXHIBIT C

                                   ARBITRATION

         A. Any dispute that this Lease specifically makes subject to
arbitration shall be resolved by arbitration under this Exhibit; however,
nothing herein requires arbitration of any dispute arising under this Lease
which is not specifically herein made subject to arbitration.

         B. If Landlord and Tenant cannot reach an agreement, after the exercise
of their reasonable efforts, within thirty (30) days after notice of an
arbitrable dispute is given by either party to the other party, then either
Landlord or Tenant may at any time within ten (10) days after the end of said
thirty (30) day period refer the dispute to arbitration by giving written notice
of demand therefor to the other (the "Demand for Arbitration"), and the Landlord
and Tenant agree to cooperate in obtaining such arbitration. The party demanding
arbitration shall in its Demand for Arbitration designate one person, as
hereinafter provided, to represent it as an arbitrator. Within ten (10) days
after it has received such Demand for Arbitration, the other party shall, in its
"Response", designate one person, as hereinafter provided, to represent it as an
arbitrator. The arbitrators so appoint by landlord and Tenant shall within five
(5) business days after both have been designated, designate a third person as
arbitrator. If the first two are unable to select third arbitrator, the third
arbitrator shall be selected by the Chief Judge of the U.S. District Court of
the District where the Center is located, upon application of either Landlord or
Tenant. The three (3) arbitrators so selected shall constitute the "Board of
Arbitration." Any person designated as an arbitrator shall be neutral and
impartial and shall be knowledgeable and experienced in the matters sought to be
arbitrated, but shall not then be, and shall not have been at any time in the
employment of either Landlord or Tenant directly, indirectly or as an agent,
except in connection with the arbitration then proceeding or any prior
arbitration.

         C. The Demand for Arbitration, and the Response thereto, shall set
forth with particularity the facts, circumstances, lease provisions and law each
party in good faith deems relevant to its position on the disputed issue(s), as
well as such party's statement and binding offer as to the reasonable, fair and
proper settlement and resolution of such issue(s). The Board of Arbitration
shall meet or otherwise confer as deemed necessary by the arbitrators to resolve
the dispute and a decision of a majority of the arbitrators will be binding upon
Landlord and Tenant. In making its final determination, the Board of Arbitration
shall select the proposed settlement an resolution which most closely, in the
opinion of the majority of the arbitrators, approximates the issue(s), and shall
adopt such proffered resolution in its entirety without deviation therefrom or
modification thereto. The decision of the Board of Arbitration shall be in
writing, and shall be made as promptly as possibly after the designation of the
last additional arbitrator, but in no event later than thirty (30) days from the
date of the designation of the last additional arbitrator. A copy of the
decision of the arbitrators shall be signed by at least a majority of the
arbitrators and given to landlord and Tenant.

         D. All arbitration proceedings pursuant to this Section 27.21 shall be
conducted in accordance with the rules of the American Arbitration Association
relation to commercial arbitrations except to the extent such rules conflict
with the provisions hereof. The arbitrators shall have no authority to pass upon
the validity, enforceability or fairness of any provision of this Lease to any
person or to any situation. No person other than Landlord and Tenant shall be a
party to any arbitration proceeding without the consent of both Landlord and
Tenant, which consents Landlord and Tenant each may grant or deny in its sole
and absolute discretion. The arbitrators shall have no power to sub poena
witnesses or to order discovery; and Landlord and Tenant shall be entitled to
claim all privileges available to them in a judicial civil proceeding.

         E. For each arbitrable dispute the cost and expense of the arbitrators
as well as all reasonable attorney's fees and costs of arbitration to the
prevailing party, shall be paid by the non-prevailing party immediately upon
rendition of the Board of Arbitration's written decision.





<PAGE>



                                    EXHIBIT D
                           ADDITIONAL INSURED ENTITIES


         Additional insured entities pursuant to the requirements outlined in
the Lease to which this Exhibit is attached are as follows:


         1.       Eastland Shopping Center LLC.,
                  a Delaware limited liability company

         2.       Westfield America, Inc.,
                  a Missouri corporation

         3.       Westfield Corporation, Inc.,
                  a Delaware corporation

         4.       Westfield Services, Inc.,
                  a Delaware corporation

         5.       Westfield Management Company,
                  a California corporation


         The insurance certificate should be sent to:

                  General Manager
                  Eastland Center
                  112 Plaza Drive
                  West Covina, CA  91790




<PAGE>



                                    EXHIBIT E
                                      MENU







<TABLE> <S> <C>


<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENT OF OPERATIONS INCLUDED IN
THE COMPANY'S FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1999 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>                     <C>
<PERIOD-TYPE>                   YEAR                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1999             DEC-31-1998
<PERIOD-START>                             JAN-01-1999             JAN-01-1998
<PERIOD-END>                               DEC-31-1999             DEC-31-1998
<CASH>                                             189                   1,491
<SECURITIES>                                         0                       0
<RECEIVABLES>                                      142                     176
<ALLOWANCES>                                         0                       0
<INVENTORY>                                        456                     346
<CURRENT-ASSETS>                                 1,059                   2,307
<PP&E>                                          16,735                  12,558
<DEPRECIATION>                                   4,205                   2,990
<TOTAL-ASSETS>                                  19,144                  17,595
<CURRENT-LIABILITIES>                            3,608                   3,103
<BONDS>                                          2,079                   2,241
<PREFERRED-MANDATORY>                                0                       0
<PREFERRED>                                          0                       0
<COMMON>                                        16,076                  15,040
<OTHER-SE>                                     (2,977)                 (3,147)
<TOTAL-LIABILITY-AND-EQUITY>                    19,144                  17,595
<SALES>                                         37,393                  30,052
<TOTAL-REVENUES>                                37,393                  30,052
<CGS>                                           10,490                   8,459
<TOTAL-COSTS>                                   26,102                  21,234
<OTHER-EXPENSES>                                  (16)                       5
<LOSS-PROVISION>                                     0                       0
<INTEREST-EXPENSE>                                 315                     306
<INCOME-PRETAX>                                    522                      86
<INCOME-TAX>                                        26                       2
<INCOME-CONTINUING>                                496                      84
<DISCONTINUED>                                       0                       0
<EXTRAORDINARY>                                      0                       0
<CHANGES>                                        (106)                       0
<NET-INCOME>                                       390                      84
<EPS-BASIC>                                       0.05                    0.01
<EPS-DILUTED>                                     0.05                    0.01
        

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